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30 EQUIPMENT
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GENERAL INTEREST
18 CSB expects to issue final Macondo
report in early 2013
Nick Snow
29 EXPLORATION/DEVELOPMENT BRIEFS
Nick Snow
21 WATCHING GOVERNMENT
29 EDITORS PERSPECTIVE
YPF expropriation clouds the allure of Argentine shale
COVER
Total UK Ltd. stopped production on Elgin and
Franklin gas fields following a Mar. 25 gas leak on
the wellhead platform 240 km east of Aberdeen in
the North Sea. Total said contractor Transocean Ltd.
has started drilling a relief well to stop the leak from
well G4 on the Elgin platform. (See story, p. 19.)
Photo from Total UK.
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On a recent unconventional
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10
OGJ
Newsletter
International News
for oil and gas professionals
GENERAL INTEREST Q U IC K TA K E S
Nova Scotia puts fracing on 2-year hold
The Nova Scotia government said it needs 2 more years to study
hydraulic fracturing, a practice that has raised concerns about
potential contamination of drinking water in some US areas
where it has been used on unconventional plays.
No fracing will be approved until the extended review is
completed, Nova Scotia officials said. Previously, Nova Scotia
was slated to release a fracturing report this year, but officials
announced Apr. 16 that the report was delayed until mid-2014.
Energy Minister Charlie Parker said the province wants time
to review emerging regulations by the US Environmental Protection Agency and Environment Canada.
We think its important to get the best possible information thats out there and make an informed decision after weve
learned all that, said Parker.
Premier Darrell Dexter said the province was conducting a
scientific review and coming up with the right decision on it
based on the science.
No comment was immediately available from the Canadian
Society for Unconventional Resources in Calgary.
Apr. 18
Apr. 19
Apr. 20
Apr. 23
Motor gasoline
Distillate
Jet fuel
Residual
Other products
Apr. 24
Crude production
NGL production2
Crude imports
Product imports
Other supply2 3
TOTAL SUPPLY
Net product imports
Apr. 19
Apr. 20
Apr. 23
Apr. 24
8,991
3,805
1,360
507
4,417
19,080
2.8
0.5
3.7
7.1
5.8
2.7
8,370
3,641
1,364
416
4,492
18,283
8,896
3,796
1,389
563
4,550
19,194
5.9
4.1
1.8
26.1
1.3
4.7
5,988
2,364
9,071
1,828
2,314
21,565
866
5,617
2,043
8,676
2,515
2,067
20,918
245
6.6
15.7
4.6
27.3
11.9
3.1
5,843
2,333
8,866
1,918
2,272
21,232
975
5,553
2,057
8,682
2,523
2,123
20,938
307
5.2
13.4
2.1
24.0
7.0
1.4
14,503
14,657
84.7
14,383
14,733
83.1
0.8
0.5
14,539
14,760
83.8
14,248
14,653
82.7
2.0
0.7
Latest
week
Previous
week1
369,046
213,965
128,977
39,226
33,528
365,190
217,636
131,885
39,282
34,849
Same week
year ago1 Change
Change
3,856
3,671
2,908
56
1,321
Apr. 19
Apr. 20
Apr. 23
Apr. 24
356,969
208,096
148,335
41,203
36,894
Change,
%
12,077
5,869
19,358
1,977
3,366
Change, %
Crude
Motor gasoline
Distillate
Propane
Futures prices5 4/20
25.4
24.5
34.1
43.9
25.2
25.2
36.8
42.2
103.02
1.95
102.53
2.02
3.4
2.8
13.1
4.8
9.1
Change, %
0.8
2.8
7.3
4.0
25.1
23.1
39.0
25.7
1.2
6.1
12.6
70.8
Change
Change
0.49
0.07
108.21
4.15
5.19
2.20
4.8
53.0
Based on revised figures. 2OGJ estimates. 3Includes other liquids, refinery processing gain, and unaccounted for crude oil. 4Stocks
divided by average daily product supplied for the prior 4 weeks. 5Weekly average of daily closing futures prices.
Source: Energy Information Administration, Wall Street Journal
Apr. 18
Apr. 19
Apr. 20
Apr. 23
Apr. 24
BAKER HUGHES INTERNATIONAL RIG COUNT: TOTAL WORLD / TOTAL ONSHORE / TOTAL OFFSHORE
3,900
3,600
3,300
3,000
2,700
2,400
2,100
1,800
1,500
300
0
3,663
3,316
346
Mar. 11
Apr. 18
Apr. 19
Apr. 20
Apr. 23
Apr. 24
Apr. 11
May. 11
Jun. 11
Jul. 11
Aug. 11 Sept. 11
Oct. 11
Nov. 11
Dec. 11
Jan. 12
Feb. 12
Mar. 12
1,972
2,000
1,800
1,800
1,600
1,400
700
500
300
Apr. 18
1Reformulated
Apr. 19
Apr. 20
Apr. 23
8,737
3,785
1,410
471
4,162
18,565
Crude oil
Motor gasoline
Distillate
Jet fuelkerosine
Residual
Change,
%
YTD avg.
year ago1
YTD
average1
Change,
%
4 wk. avg.
year ago1
Apr. 24
100
146
143
2/4/11
2/18/11
2/11/11
3/4/11
2/25/11
3/18/11
3/11/11
4/1/11
3/25/11
4/15/11
4/8/11
2/3/12
4/22/11
2/17/12
2/10/12
3/2/12
2/24/12
3/16/12
3/9/12
3/30/12
3/23/12
4/13/12
4/6/12
4/20/12
THE
OF LINE PIPE
UV Resistant
Shield
PE Liner
Steel
Reinforcements
The West African Transform Margin remains highly prospective despite two Anadarko Petroleum Corp.-operated exploratory wells that encountered water-bearing reservoirs with oil
shows off Sierra Leone and Ivory Coast, said Tullow Oil PLC.
Mercury-2, on Block SL-07B-11 off Sierra Leone 12 km
northwest of the Mercury-1 oil discovery, targeted an area
where the extensive 3D seismic coverage indicated a high probability of finding thick reservoir quality sandstones. It intersected more than 270 m of reservoir quality sandstones that
were water bearing with oil shows at this location, Tullow said.
Mercury-2 went to 5,142 m in 1,815 m of water. Anadarko
operates the block with 55% interest, Repsol YPF has 25%, and
Tullow has 20%.
Kosrou-1 went to 5,241 m in 2,275 m of water on Block CI105 off Ivory Coast 17 km east-southeast of the previous South
Grand Lahou-1 well. Kosrou-1 targeted a channel system identified on 3D seismic survey shot in 2010. The well cut 90 m
of reservoir quality sandstones with oil shows in the primary
target and more than 120 m in total in the well.
On completion of operations the rig will return to the Paon1 location to finish drilling that well. Paon-1 is a high-impact
prospect geologically independent from Kosrou and closer to
recent discoveries in Ghana. Anadarko operates CI-105 with
50% interest. Tullow has 22%, Petroci 15%, and Thani 13%.
Tullow said it will integrate data from the two wells into its
regional models to improve the chances of making a hub-class
discovery with the ongoing exploratory campaign that includes
the Strontium-1 well off Liberia and Paon-1 off Ivory Coast.
PROCESSING Q U IC K TA K E S
Oneok plans more processing Cana-Woodford shale
Oneok Partners LP, Tulsa, reported it will invest $340-360 million through first-quarter 2014 to expand natural gas gathering and build new processing in the Cana-Woodford shale in
Oklahoma.
10
TRANSPORTATION Q U IC K TA K E S
Enbridge files application to twin Athabasca line
Enbridge Pipelines (Athabasca) Inc. applied with Canadas Energy Resources Conservation Board for licenses to build a crude
oil pipeline with two pump stations from Kirby Lake Terminal south to Battle River Terminal, in the Hardisty, Alta., crude
hub. The 344-km pipeline would transport hydrogen sulfidefree crude using new pump stations at the existing Kirby Lake
and at Bonnyville Station facilities.
The construction is part of Enbridges Athabasca Pipeline
Twinning Project and will generally follow the existing Athabasca Pipeline right-of-way, using 36-in. OD pipe. The twin
line initially will add about 450,000 b/d of capacity between
these points, with low-cost expansion potential to 800,000 b/d,
according to Enbridge (OGJ Online, Sept. 13, 2011).
Enbridge expects to start work on the project in late 2013
pending regulatory approvals, starting with pump station construction in October 2013 and continuing with clearing ROW
and building the pipeline once frozen ground conditions exist
in December 2013. Enbridge expect initial shipments by early
2015 and full initial capacity to be available by 2016.
Enbridge described the new line as addressing the need for
additional capacity to serve Kirby area oil sands growth, beyond already announced plans to expand the existing 30-in.
OD pipeline to its maximum 570,000 b/d capacity.
LNG project. It will now receive a total of 2.5 million tpy from
both developments over a 20-year period. Chevron says 70% of
its equity LNG entitlements from Wheatstone are now covered
by long-term contracts with Asian customers.
The plant is being constructed at Ashburton North about
7 km west of Onslow. Initially it will comprise two LNG
trains with a combined capacity of 8.9 million tpy as well as
production from a domestic gas plant.
The project is a joint venture of Chevron 72.14%, Apache Energy 13%, Kufpec 7%, Shell 6.4%, and Kyushu Electric 1.46%.
11
DBDM4600 / 4800
Toll Free
866.95J.FLOW
www.jflowcontrols.com
Annual International
School of Hydrocarbon
MidContinent GPA An- Measurement (ISHM),
nual Meeting, Oklahoma Norman, Okla., (405)
City, (918) 493-3872,
325-1217, (405) 325(918) 493-3875 (fax),
1388 (fax), e-mail:
e-mail: gpa@GPAglobal. icrowley@ou.edu,
org, website: http://
website: www.ishm.info.
gpaglobal.org/chapter/ 15-17.
midcontinent. 10.
OGU Uzbekistan
APPEA Annual Confer- International Oil & Gas
ence and Exhibition,
Exhibition & ConferAdelaide, 02 6247
ence, Tashkent, +44 (0)
0960, 02 6247 0548
20 7596 5173, e-mail:
(fax), e-mail: appea@
oilgas@ite-exhibitions.
appea.com.au, website: com, website: www.
www.appea.com.au.
oguzbekistan.com.
13-16.
15-17.
SPE International
Production & OperaPermian Basin GPA An- tions Conference and
nual Meeting, Odessa, Exhibition, Doha, +971
4 457 5800, +971 4
MAY 2012
12
IDTC International
IADC Drilling OnDownstream Techshore Conference &
nology and Strategy
Exhibition, Houston,
(713) 292-1945, (713) Conference, Rome, +44
292-1946 (fax), e-mail: (0) 20 7357 8394, +44
info@iadc.org, website: (0) 20 7357 8395 (fax),
e-mail: Enquiries@
www.iadc.org/conferEuropetro.com, website:
ences. 17.
www.europetro.com.
NPRA National Oc21-22
SPE UK Woman in
cupational & Process
Energy Annual SemiSafety Conference &
PIRA London Energy
nar, London, 07736
Exhibition, San Antonio, 070066, e-mail:
Conference, London,
(202) 457-0480, (202)
(212) 686-6808,
(212) 686-6628 (fax),
e-mail: sales@pira.com,
website: www.pira.com.
21-22.
Annual Global Refining
Summit, Barcelona,
+44 (0)20 7202 7690,
+44 (0)20 7202 7600
(fax), website: www.
refiningsummit.com.
21-23.
ILTA Annual International Operating Conference
and Trade Show, Houston, (703) 875-2011,
(703) 875-2018 (fax),
e-mail: info@ilta.org,
website: www.ilta.org.
21-23.
Deep & Ultra-deepwater
Pipeline Conference,
London, 44 207 017
5518, 44 207 017 4745
(fax), e-mail: energy-
CERI Petrochemical
Conference, Kananaskia, Alta., (403) 2202380), (403) 289-2344
(fax), e-mail: conference@ceri.ca, website:
www.ceri.ca. 3-5.
site: http://petroleumshow.com/our-events.
20-21.
Secondary Biogenic
Coal Bed Natural Gas
International Conference, Laramie, Wyo.,
IADC World Drill(307) 766-4295,
ing Conference &
e-mail: ser@uwyo.edu,
Exhibition, Barcelona, website: www.uwyo.
(713) 292-1945, (713) edu/cbng/biogenic292-1946 (fax), e-mail: cbng/index.html. 20-21.
info@iadc.org, website:
www.iadc.org/conferSPE Deepwater Drillences. 13-14.
ing and Completions
Conference, Galveston,
AAPL Annual MeetTexas, (972) 952-9393.
ing, San Francisco,
(972) 952-9435 (fax),
(817) 847-7700, (817) e-mail: spedal@spe.org,
847-7704 (fax), e-mail: website: www.spe.org/
aapl@landman.org,
events. 20-21.
website: www.landman.
org. 13-16.
MIOGE Moscow
International Oil & Gas
SPE Managed Pressure Exhibition, Moscow,
Drilling Seminar, Aber- +44 (0) 20 7596
deen, 01224 495051, 5173, e-mail: oilgas@
e-mail: spe@rodgerand- ite-exhibitions.com,
co.com, website: www. website: www.mioge.
spe-uk.org. 14.
com/RPGC-Conference/
About-the-Conference.
aspcx. 25-29.
SPWLA Annual Symposium, Cartagena,
(713) 947-8727, (713) Neftegaz Exhibition,
947-7181 (fax), website: Moscow, +44 (0) 20
www.spwla.org. 16-20. 7596 5173, e-mail:
oilgas@ite-exhibitions.
com, website: www.
ISOPE International
oilgas-events.com/
Ocean and Polar
pages/Neftegaz.html.
Engineering Conference, Rhodes, Greece, 25-29.
(650) 254-1871, (650)
254-2038 (fax), e-mail: RPGC Russian
meetings@isope.
Petroleum and Gas
org, website: www.
Congress, Moscow,
isope2012.org. 17-22. +44 (0) 20 7596
5173, e-mail: oilgas@
ite-exhibitions.com,
Shale Gas World Asia
website: www.mioge.
Trade Show, Beijing,
com/RPGC-Conference/
+65 6222 8550, +65
6226 3264 (fax), web- About-the-Conference.
aspc. 26-28.
site: www.tradeshowalerts.com. 19-22.
IPAA Midyear Meeting,
Atlantic Canada Petro- Colorado Springs,
leum Show, St. Johns, Colo., (202) 857-4722,
Newfoundland & Lab- (202) 857-4799 (fax),
rador, (888) 799-2545, website: www.ipaa.org/
(403) 245-8649 (fax), meetings. 27-29.
e-mail: paulaarnold@
dmgevents.com, web-
13
JOURNALLY SPEAKING
Revisions to data
Readers of OGJs US Industry Scoreboard may have
noticed a recent addition to that table. At the suggestion of a long-time reader, the line disclosing US
net product imports has been added, starting with
the Apr. 16 issue.
Figures from the US Energy Information Administration show that recently, the US became a
net exporter of oil products, mostly gasoline and
distillate, as gross exports of products exceeded
gross imports of the same. While gasoline demand
has weakened since 2009, year-on-year comparisons have been skewed, as EIA was underestimating US exports.
Distorted comparisons
MARILYN RADLER
Senior Editor-Economics Last month, EIA posted on its web site as follows:
New methodology
EIA noted that after observing this phenomenon
over several months, it decided to revamp its methodology. EIA identified that the WPSRs modelbased gasoline export estimate, which used 5 years
14
OUT HERE,
FAILURE
IS NOT AN
OPTION
rajant.com/solutions/oil-gas
2012 Rajant Corporation. All rights reserved.
EDITORIAL
Murdering cap-and-trade
If US President Barack Obama wins reelection he
will try to revive cap-and-trade regulation. He
made fighting global warming and rushing exotic
energy forms to market twin priorities of his first
term. But a legislative push to make cap-and-trade
the core mechanism for pursuing his goals failed.
Now a fallback administrative strategy faces legal
challenges. Given a second term, therefore, the
president would renew his quest for a legislative
program to cap greenhouse gas emissions and allow trading in allowances for the right to exceed
the limits. He would try even though he murdered
the program intellectually in his last campaign for
political office.
Obama foreswore legitimacy of a recidivous
cap-and-trade campaign on Apr. 17 when he
called for a crackdown on speculators who hurt
consumers by illegally manipulating or rigging
the energy markets for their own gain. The presidents words imply manipulation of the oil market is rampant. Beyond coincident increases in oil
prices and trading activity, however, no reason exists to think thats so.
More cops?
The oil market is global, fluid, and transparent.
It has millions of participants, all watching price.
Manipulating such a market isnt easy. Would-be
manipulators must elude aggressive oversight of
the market. A relatively few miscreants might try
anyway. But they dont trade oil in numbers or volumes sufficient to move prices meaningfully. Putting more cops on the beat, as the president asked
Congress to do, would be as wasteful as proposing
to do so is unabashedly political. Already, the proposed toughening of market regulation is all but
forgotten amid other campaign bluster. But the oil
and gas industry shouldnt forget its implications for
cap-and-trade.
If mere suspicion about market manipulation
justifies an enforcement crackdown, the government should have a large posse ready if cap-andtrade ever becomes law. Markets for emission allowances are structurally suspicious. Theyre not
global. Their trading occurs among a relatively few
specialists. They exist for political rather than economic reasons. Indeed, theyre not really markets.
16
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GENERAL INTEREST
The US Chemical Safety Board is moving ahead with its investigation of the Macondo deepwater well blowout, explosion, and fire and expects to complete its final report in early
2013, it announced this month on the second anniversary of
the incident. Initial findings indicate a need for companies
and regulators to institute more rigorous incident prevention
programs similar to those used overseas, it said.
CSB said its investigators have determined that process
safety regulations and standards used by US oil companies
in refineries and process plants have a stronger major incident prevention focus, are more rigorous, and apply to operators and key contractors alike.
In our view, while previous investigations of the Macondo blowout have produced useful information and recommendations, important opportunities for change have not
been fully addressed, said CSB Chairman Rafael MoureEraso.
CSB noted that, to date, it has conducted numerous interviews, examined tens of thousands of documents from more
than 15 companies and parties, gathered data from two
phases of blowout preventer (BOP) testing, and conducted
a public hearing on international regulatory approaches. It
said it could release recommendations targeting specific reforms as early as August.
Don Holmstrom, manager of CSBs western regional office in Denver, whose team is conducting the investigation,
said the agency likely will hold the first of several public
meetings in July. CSB anticipates releasing preliminary findings and safety recommendations at the meeting, and to hear
experts testify on the need for the offshore drilling industry
to use safety performance indicators like hydrocarbon leaks
and maintenance of safety critical equipment to drive safety
improvements and to prevent major incidents, according to
Holmstrom.
Moure-Eraso said CSBs investigation is taking a broad
look at the Macondo blowouts causes and hydrocarbon release prompting the subsequent explosion. These issues include the manner in which the industry and the regulating
agencies learn or did not learn from previous incidents. They
also include a lack of human factors guidance, and organiza-
18
BP agrees to pay
$7.8 billion
in Macondo settlements
Paula Dittrick
Senior Staff Writer
instead, it indicated.
The charges were filed and unsealed in US District Court for Eastern
Louisiana on Apr. 24. If convicted, Mix
faces up to 20 years in prison and a
$125,000 fine on each count, DOJ
said.
Holder said that the federal taskforce will continue its investigation and
hold accountable anyone it finds broke
the law in connection with the case.
Total, Transocean
drilling relief well
to stem Elgin gas leak
Paula Dittrick
Senior Staff Writer
19
GENERAL INTEREST
tions on nearby West Franklin field and will be available to
be deployed by early May, Total said. The Gorilla V will drill
a backup relief well if needed.
In parallel, plans are being finalized for the positioning of
the pumping vessel required for the well intervention alongside the Elgin complex. The West Phoenix semi is on standby just outside a 2 nautical mile Elgin exclusion zone.
Total has mobilized the Skandi Aker intervention vessel,
currently in the Scottish port of Peterhead, which also will
be used to support the well intervention operation.
Total and Wild Well Control teams have made numerous
trips via helicopter to the Elgin platform.
Workers are positioning equipment and ensuring the
platform systems required to support the intervention are
functional.
20
Proposals in House
House GOP energy leaders did not immediately respond,
but bills before the two key energy committees there reflect
some of their thinking.
WATCHING GOVERNMENT
The Energy and Commerce Committee was scheduled to begin debate
on Apr. 25 on a bill that would require opening of more federal acreage
for oil and gas activity in response to
any release from the Strategic Petroleum Reserve; and a bill to establish a
committee to analyze potential gasoline, diesel fuel, and natural gas price
impacts of proposed US Environmental Protection Agency regulations.
The measures would go before the
full House as proposed amendments
to a pending transportation appropriations bill.
The Natural Resources Committee, meanwhile, has scheduled a hearing for Apr. 26 on seven bills, three of
which directly involve oil and gas. HR
4381 would direct the Interior secretary to establish energy production
goals on all DOI and US Forest Service
lands; HR 4382 would aim to assure
that leasing occurs by eliminating redundant bureaucracy; and HR 4383
aims to streamline the federal drilling
permit application process.
Salazar suggested that such measures arent necessary. Over the past
3 years, we have worked to restore certainty and reduce conflict, he said.
Our onshore leasing reforms have
helped bring the public into the leasing process earlier, so that fewer leases
end up in court. Weve worked to resolve the controversies on some of the
largest oil and gas projects in the West,
including for more than 3,500 new
wells on Anadarkos Greater Natural
Buttes project in Utah.
Through an interagency team led
by Deputy Sec. David J. Hayes, the
US government isfor the first time
everclosely coordinating its energy
permitting activities in the Alaska, to
good result, he continued. And we
are working to deploy a new system for
processing drilling permits on [US Bureau of Land Management] lands. We
expect to reduce permitting times by
two-thirds.
NICK
SNOW
Other problems
The power swivel skid was equipped
with two, 3-ft long tag lines which
required riggers to be close to the
load. The lines were attached to the
power swivel in a way that made
them drag across the deck opening
as the skid was moved.
Other P&A equipment on the
platform was positioned poorly, and
interfered with the crane lift and
move operation. There was no clearly
designated, direct supervision of the
lift probably because of the supervisors multiple responsibilities.
BSEEs recommendations included prominently displaying medevac
procedures and contacts and making
sure all crew members know the
information; reviewing organization of
multiple simultaneous tasks; making
fall protection available and using
it near open holes; evaluating each
lifts risks and reviewing appropriate
tag lines and their use; and assigning
enough supervision during P&A and
platform decommissioning.
BSEE said it would consider all
the recommendations before taking
enforcement actions.
21
GENERAL INTEREST
The US Geological Survey estimates that the worlds undiscovered, technically recoverable conventional oil and gas
resources outside the US total 565 billion bbl of oil, 5,606
tcf of natural gas, and 167 billion bbl of natural gas liquids,
it said on Apr. 18. The assessment, which is the first since
2000, excludes the US where USGS is continuously assessing oil, gas, and NGL resources, the US Department of the
Interior agency said.
The report includes mean estimates of resources in 171
onshore and offshore geologic provinces, USGS said. In the
12 years since the last assessment, the steady progress in
technology now allows additional resources to be regarded as technically recoverable, said Marcia K. McNutt, the
agencys director. By placing this information in the public
domain, government leaders, investors, public and private
corporations, and citizens have a common information base
for planning and decisions.
22
MAPSearch
A PennWell Company
GENERAL INTEREST
and global energy policy and resource management, US Interior Sec. Ken Salazar said.
In particular, this assessment underscores the importance of continuing to strengthen our energy partnerships in
the Western Hemisphere with nations like Brazil, where we
are working closely with industry and government to share
best practices on offshore drilling safety and to enhance the
energy security of both our countries, Salazar said.
24
Royal Dutch Shell PLC announced plans for one of its subsidiaries to buy Cove Energy PLC for $1.81 billion in a transaction marking Shells entry into Mozambique and Kenya.
Shell said the acquisition would provide major LNG project
potential from recent gas discoveries offshore Mozambique.
Cove Energys board recommended that its shareholders
accept the latest offer from Shell, which is 12% higher than
an offer Shell made in February (OGJ Online, Feb. 22, 2012).
Shell faces competitors seeking to buy Cove Energy. The
latest offer matched Thailands PTT Exploration & Production PCLs offer made in February. Indias Oil & Natural Gas
Corp. and Gail (India) Ltd. also reportedly were considering
trying to acquire Cove Energy.
Finalization of the Cove Energy acquisition by Shell Exploration & Production BV, also known as Shell Bidco, remains subject to conditions, including written consent from
Mozambiques Minister of Mineral Resources.
East Africa is a major prospective hydrocarbon province,
which has seen a significant increase in exploration activity
in recent years, Shell said, noting it already has interests in
Tanzania.
In Mozambique, the Rovuma offshore basin is a frontier
area believed to hold large gas reserves suitable for LNG
projects. Cove, which has offices in London and Dublin,
holds 8.5% interest in the 2.6-million-acre Offshore Area 1
off Mozambique.
Anadarko Petroleum Corp. operates the Offshore Area
1 with a 36.5% interest, and Anadarko has estimated the
deepwater Rovuma basin has at least 10 tcf of recoverable
gas.
Shell said its willing to work with the Mozambique government, which wants to see the gas brought on stream to
boost the countrys economy.
Shell joint ventures supplied more than 30% of worldwide
LNG volumes during 2011. Shell produces LNG in Australia,
Brunei, Malaysia, Nigeria, Oman, Russia, and Qatar.
Cove also has a 10% working interest in the Mozambique
Rovuma onshore concession covering 12,000 sq km. The
company plans seismic surveys this year to be followed by a
2-well drilling program next year.
Off Kenya, Cove has a 10% working interest in Blocks L5,
L7, L11A, L11B, and L12. These assets cover 30,682 sq km.
Cove plans to drill its first exploratory well off Kenya yet
this year.
GENERAL INTEREST
The companies estimated recoverable resources in the license areas at 36 billion boe.
Holding a 33.33% interest, Eni will finance comprehensive geological exploration work to confirm the commercial
value of the fields, said Rosneft, which remains the license
holder.
25
GENERAL INTEREST
data by 2018. The first well is to be drilled by 2021 and a
provisional second well by 2026.
The 8,000-sq-km Western Chernomorsky area in the
Black Sea has water depths of 600-2,250 m. Rosneft has
identified six prospective formations with seismic surveys
with recoverable resources estimated at 10 billion boe. Two
exploration wells are due in 2015-16.
Washington Editor
26
17th Edition
Conference & Exhibition
DEEPWATER DISCOVERIES
EMERGING
OPPORTUNITIES
The 17th edition of Offshore West Africa will return to Accra, Ghana on 19-21 March 2013, delivering the premier
technical forum focused exclusively on West African offshore exploration and production. The conference will
deliver the latest technological innovations, solutions and lessons learned from leading industry professionals.
Offshore West Africa Conference and Exhibition remains the leading source of information on new technology
and operating expertise for this booming deepwater and subsea market.
Presented by:
Supporting Publication:
GENERAL INTEREST
Station 210 and then southward on the mainline terminating at Transcos existing Station 85.
The Leidy West Path will move an incremental 200
MMcfd in Transcos Zone 6 beginning at any existing interconnect on the Leidy Line west of the existing Station 515
at MP 68.9 in Luzerne County, Pa., and extending westward
to existing interconnects with Dominion Transmission and
National Fuel Gas and a proposed, new interconnect with
Texas Eastern Transmission near Leidy Storage at MP 206.8
in Clinton County, Pa.
Transco received insufficient binding commitments in
the original open season for the Natrium Path and continues
to offer firm transportation capacity on it, reducing capacity
for the supplemental open season to 700 MMcfd from 900
MMcfd. Natrium runs from Transcos Zone 6 to Transcos
Zone 3 beginning at a proposed interconnection with Dominion Transmissions gas treatment plant near the existing Natrium plant in Marshall County, W.Va., and extending
through a new line to be constructed by Transco eastward
across southern Pennsylvania to an interconnection with
Transcos mainline at Station 195 in York County, Pa., and
then continuing southward on Transcos mainline to Transcos existing interconnection with Liberty Gas Storage at MP
469.4 in Beauregard Parish, La., the western-most nominatable point in Transcos Zone 3.
The Butler Path and Rivervale Path were fully subscribed
during the original open season. Transco may, however,
under terms of the original open season, allow shippers to
voluntarily reduce or revise their requested transportation
contract quantities (TCQ) on these paths to accommodate
other shippers, starting with the shipper with the largest
requested TCQ. Transco will therefore accept additional
requests on these paths during the current open season,
subject to the existing shippers voluntarily reducing their
TCQs.
A shippers TCQ under the project will be equal to the
sum of the capacity subscribed on the various project paths.
Transco is also evaluating an extension of its existing
Leidy Line westward to a point in Elk County, or an extension from its proposed Butler Lateral northward to a point
in Elk County, to provide additional firm transportation to
Transco markets. Timing and level of shipper interest will
determine if Transco completes this project as part of the
Atlantic Access or pursues it independently.
The Atlantic Access project will be subject to approval by
the US Federal Energy Regulatory Commission and other
agencies. The revised open season ends July 13.
28
governments give the Shah Deniz consortium the confidence to embark upon this FEED phase.
The consortium signed gas sales and transit agreements
with Turkish pipeline company BOTAS and the Turkish
government last October under an intergovernmental agreement between Turkey and Azerbaijan.
Since then, BP noted in a press statement, agreements
have been signed allowing engineering studies for the Trans
Anatolia Pipeline transiting Turkey (OGJ Online, Dec. 1,
2011).
Options for gas transportation to Europe, BP said, are the
Trans Adriatic Pipeline to Italy, the Nabucco West pipeline
through Eastern Europe, and South East Europe Pipeline
through Hungary, Bulgaria, and Romania.
The Shan Deniz consortium will make a final route selection in 2013, BP said.
BP operates Shah Deniz II with 25.5% interest. Statoil
also holds 25.5% interest, with the balance divided among
State Oil Company of Azerbaijan Republic, Lukoil, Total,
and Naftiran Intertrade Co., 10% each, and Turkish Petroleum AO 9%.
GENERAL INTEREST
Alaska
Texas
Kansas
Castle Resources Inc. has completed
an Arbuckle oil well in Rice County,
Kan., and partner AusTex Oil Ltd.,
Sydney, said 3D seismic indicates that
three drillable locations remain on the
four-way closure. The next well was to
spud Apr. 28.
The Ludwig-1, in 35-19s-10w,
pumped 240 bbl of 42 gravity oil in 8
hr each day the past week without water from the Arbuckle at about 3,250
ft.
The well is to produce 5-8 hr/day
until the rod pump is hooked to a permanent electricity connection by the
end of April.
Castle Resources and AusTex are
working interest partners in 3,200
acres in Ellsworth and Rice counties.
TGS Nopec Geophysical Co. is shooting a 161-sq-mile multiclient 3D seismic survey at Wellington in southcentral Kansas to illuminate the
Mississippi lime horizontal oil play.
The Sumner County survey complements the previously announced
Bucklin survey is being acquired utilizing a high channel count Vibroseis
crew.
Final deliverable products will be
processed through pre-stack time migration.
Utah
Resolute Energy Corp. and the Navajo
Nation Oil & Gas Co. have acquired
nonoperated assets in giant Greater
Aneth oil field in the Paradox basin
of Utah from Denbury Resources Inc.,
Plano, Tex., for $75 million.
Denbury estimated the proved reserves related to the assets sold at 6.4
million bbl of oil equivalent, 98% oil
and 58% proved developed producing,
at the end of 2011. The companys previously issued 2012 production guidance assumed production from the assets to be 650 boe/d.
At the end of February, Denbury
completed the previously announced
sale of noncore Gulf Coast assets for
$155 million.
Taking into account their respective closing dates, the asset sales will
reduce Denburys 2012 production
guidance by 1,625 boe/d.
The company also sold Vanguard
Natural Resources units in January for
$83.5 million.
YPF expropriation
clouds the allure
of Argentine shale
by Bob Tippee, Editor
On its way down the proverbial slippery
slope toward economic statism, Argentina
has laid claim to oil and gas assets worth,
oh, $18 billion or so. Thats the value Repsol of Spain assigns YPF, its 57%-owned
Argentine oil and gas subsidiary.
President Cristina Ferandez de Kirchner
on Apr. 16 announced plans to expropriate 51% of YPFjust before authorities
promptly entered YPFs office in Buenos
Aires and expelled the staff.
Repsol bought YPF, formerly the national oil company in 1999, 6 years after it
was privatized. In a sense, the government
is reclaiming what once belonged to it, apparently without feeling obliged to pay.
This all happens during a period of
rising interest in Argentinas potential for
production of natural gas from shale.
Repsol has said the country could
double its production by investing $25 billion/year in shale exploration and development for 10 years.
But Argentine oil and gas prospects are
much less attractive to foreign investors
than they were the day before Apr. 20.
Nationalization is serious.
Thanks to heavy-handedness by the
Kirchner governmentmanifest in moves
like import controls and raids on private
pension funds and central bank reserves
the countrys allure to outside capital
already was fading.
Now private property is in jeopardy.
Pundits in Buenos Aires complain
Repsol hadnt fulfilled promises to raise
the countrys oil and gas production. They
overlook unhelpful moves the government
has made since the Repsol-YPF merger,
such as the imposition in 2001 of price
controls on natural gas.
Repsol isnt chastened by the criticism.
On Apr. 17 it promised to fight what it
called the unlawful expropriation of YPF.
The Spanish company received support
on Apr. 20 from the European Parliament,
which passed a resolution calling Argentinas move a unilateral and arbitrary
decision which entails an attack on the
exercise of free enterprise and the principle
of legal certainty, thus causing the investment environment for [European Union]
businesses in Argentina to deteriorate.
Indeed. Larceny by governments always
has that effect.
ONLINE APR. 20, 2012 | bobt@ogjonline.com
29
HIGH PERFORMANCE
OIL FIELD POLYMERS
Fortron polyphenylene sulfide (PPS)
grades and Celstran continuous fiberreinforced thermoplastic (CFR-TP)
composites are available for onshore and
offshore oil and gas operations.
As a liner, Fortron PPS can help
CUSTOM
REPRINTS
prolong the life of steel and offers costeffective features as an overall metal
replacement. It offers high temperature
resistance, chemical resistance, low
permeation properties, dimensional stability, high strength and modulus, wear
resistance, corrosion resistance, flame
resistance, and hydrolytic stability.
Celstran composite products are
available as unidirectional tapes, which
can increase the in-line burst and operating pressures of thermoplastic pipe
when wound around and joined to piping
systems for reinforcement, or as continuous rods, shapes, and profiles that can
replace steel tensile members in ropes
and cabling applications. CFR-TP tape
can also be used in service lines, risers,
and umbilicals. These composite pipes
are lightweight, flexible, durable, and
spoolable, allowing for installation speeds
of as much as 500 m/hr.
Source: Ticona Engineering Polymers, 8040
Dixie Highway, Florence, KY 41042.
ADVERTISERS INDEX
COMPANY NAME
PAGE
Baker Hughes
www.bakerhughes.com
Chevron
www.chevron.com
DOT 2012
31
www.deepoffshoretechnology.com
12
www.jflowcontrols.com
MTU
Digital Cover
mtu-online.com
27
www.offshorewestafrica.com
23
www.pennwell.com/index/oil-gas2.html
www.flexsteelpipe.com
17
www.protech-ie.com
Rajant Corporation
15
www.rajant.com
27 29 November 2012
Perth Convention Exhibition Centre | Perth, Australia
Show Guide
Event website
On-site signage
*Operators Partner Program registration is checked to conrm applicant is from an approved operating company in order to qualify for the discount
www.deepoffshoretechnology.com
Presented By:
Supported By:
Hosted By:
STATISTICS
IMPORTS OF CRUDE AND PRODUCTS
Districts 14
District 5
4-13
4-6
4-13
4-6
2012
2012
2012
2012
1,000 b/d
Total US
4-13
4-6
4-15*
2012
2012
2011
421
406
119
172
41
53
283
606
582
47
281
0
52
57
7
7
0
46
57
19
44
99
99
17
0
11
6
(29)
428
413
119
218
98
72
327
705
681
64
281
11
58
28
853
752
292
375
79
58
194
1,495
1,625
180
203
1,675
1,828
2,603
7,680
7,660
1,038
862
8,718
8,522
8,053
9,175
9,285
1,218
1,065
10,393
10,350
10,656
*Revised.
Source: US Energy Information Administration
Data available at PennEnergy Research Center.
Liquefaction plant
Algeria
Malaysia
Nigeria
Austr. NW Shelf
Qatar
Trinidad
$/MMbtu
Barcelona
Everett
Isle of Grain
Lake Charles
Sodegaura
Zeebrugge
11.87
1.05
7.60
0.58
8.13
10.82
9.05
1.29
4.71
2.76
11.04
7.76
10.71
0.60
6.73
0.86
8.33
9.86
8.93
1.22
4.59
2.53
10.63
7.60
9.86
0.74
5.51
2.24
9.64
8.63
10.60
1.39
6.77
0.15
7.12
9.95
132.09 133.06
117.24 122.75
14.86 10.32
0.97
5.51
4.54
0.7
4.5
44.0
135.95
2.81
2.1
109.75
26.20
6.73
3.92
6.1
14.9
130.51
5.34
4.1
110.80
19.71
6.03
0.69
5.4
3.5
District
PADD 1 .....................................
PADD 2 .....................................
PADD 3 .....................................
PADD 4 .....................................
PADD 5 .....................................
9,433
102,682
180,269
16,698
59,964
54,633
51,452
71,544
6,600
29,737
46,051
28,067
57,124
2,420
25,711
9,977
7,800
12,289
628
8,532
44,500
31,956
36,115
4,240
12,167
8,760
1,472
18,773
193
4,330
3,060
18,445
23,537
1
993
369,046
365,190
356,969
213,966
217,637
208,096
159,373
161,247
147,844
39,226
39,282
41,203
128,978
131,885
148,335
33,528
34,849
36,894
46,035
45,443
26,387
District
REFINERY OUTPUT
Total
motor
Jet fuel,
Fuel oils
Propane
gasoline
kerosine
Distillate
Residual
propylene
1,000 b/d
PADD 1 ..............................................
PADD 2 ..............................................
PADD 3 ..............................................
PADD 4 ..............................................
PADD 5 ..............................................
967
3,578
7,302
548
2,256
965
3,561
7,275
543
2,110
2,920
2,260
1,878
268
1,556
51
239
732
28
346
381
1,072
2,366
199
408
45
46
359
11
89
66
259
780
1
123
14,651
14,508
14,594
14,454
14,355
14,103
8,882
8,620
9,156
1,396
1,376
1,410
4,426
4,253
4,162
550
538
522
1,228
1,190
1,032
32
STATISTICS
OGJ GASOLINE PRICES
Price
Pump
Pump
ex tax
price*
price
4-18-12
4-18-12
4-20-11
/gal
(Approx. prices for self-service unleaded gasoline)
Atlanta ..........................
347.5
395.3
Baltimore ......................
345.5
387.4
Boston ...........................
372.4
414.3
Buffalo ..........................
330.3
397.7
Miami ............................
333.0
386.4
Newark ..........................
351.2
384.1
New York........................
348.3
415.7
Norfolk...........................
341.1
379.3
Philadelphia ..................
344.9
395.6
Pittsburgh .....................
333.6
384.3
Wash., DC......................
348.3
390.2
PAD I avg ..................
345.1
393.7
373.9
375.6
395.3
392.5
411.9
355.6
363.5
366.1
376.7
373.7
380.9
378.7
Chicago .........................
Cleveland ......................
Des Moines ....................
Detroit ...........................
Indianapolis ..................
Kansas City ...................
Louisville .......................
Memphis .......................
Milwaukee .....................
Minn.-St. Paul ...............
Oklahoma City ...............
Omaha ..........................
St. Louis ........................
Tulsa .............................
Wichita ..........................
PAD II avg .................
399.0
339.0
345.9
340.6
328.1
339.6
335.1
336.5
335.1
326.8
337.0
339.4
340.7
335.0
332.0
340.7
456.3
385.4
386.3
398.4
385.4
375.3
381.3
376.3
386.4
373.3
372.4
385.4
376.4
370.4
375.4
385.6
431.8
379.4
370.9
390.9
389.2
370.8
380.5
362.6
388.4
391.0
366.8
378.5
388.5
361.9
358.2
380.6
Albuquerque ..................
Birmingham ..................
Dallas-Fort Worth ..........
Houston .........................
Little Rock .....................
New Orleans ..................
San Antonio ...................
PAD III avg ................
338.9
349.9
344.3
338.8
342.1
342.9
338.8
342.2
376.2
389.2
382.7
377.2
382.3
381.3
377.2
380.9
363.1
371.5
379.7
370.5
373.9
370.6
363.8
370.4
Cheyenne.......................
Denver ...........................
Salt Lake City ................
PAD IV avg ................
339.7
336.8
349.3
342.0
372.1
377.2
392.2
380.5
354.6
367.7
362.1
361.4
371.6
345.8
351.8
365.6
375.6
361.3
361.9
345.2
334.7
303.6
315.1
289.4
438.6
383.2
401.2
432.6
442.6
417.2
419.2
391.4
380.9
350.0
361.5
334.7
423.7
368.2
390.7
418.3
435.2
396.2
405.4
380.6
351.7
312.3
4-13-12
/gal
327.10
325.10
325.30
326.30
Propane
No. 2 heating oil
New York Harbor ......... 316.20 Mt. Belvieu ................. 120.90
4-20-12
4-22-11
Alabama............................................
Alaska ...............................................
Arkansas ...........................................
California ..........................................
Land................................................
Offshore ..........................................
Colorado ............................................
Florida ...............................................
Illinois ...............................................
Indiana..............................................
Kansas ..............................................
Kentucky............................................
Louisiana ..........................................
N. Land ...........................................
S. Inland waters ..............................
S. Land............................................
Offshore ..........................................
Maryland ...........................................
Michigan ...........................................
Mississippi ........................................
Montana ............................................
Nebraska ...........................................
New Mexico........................................
New York............................................
North Dakota .....................................
Ohio...................................................
Oklahoma ..........................................
Pennsylvania .....................................
South Dakota.....................................
Texas .................................................
Offshore ..........................................
Inland waters ..................................
Dist. 1 .............................................
Dist. 2 .............................................
Dist. 3 .............................................
Dist. 4 .............................................
Dist. 5 .............................................
Dist. 6 .............................................
Dist. 7B ...........................................
Dist. 7C ...........................................
Dist. 8 .............................................
Dist. 8A ...........................................
Dist. 9 .............................................
Dist. 10 ...........................................
Utah ..................................................
West Virginia .....................................
Wyoming............................................
Others HI-1; NV-1; OR-1; VA-1 ......
5
7
26
45
45
0
68
1
1
0
26
3
131
41
21
28
41
0
1
10
17
1
85
0
195
12
201
101
1
929
4
1
136
92
40
52
30
41
14
84
304
30
26
75
40
22
40
4
5
5
34
41
41
0
72
1
1
2
28
5
170
110
17
17
26
0
2
11
10
2
73
0
161
9
174
104
0
801
1
1
93
54
48
39
63
51
11
63
237
30
38
72
29
14
41
5
Total US ........................................
Total Canada ................................
1,972
146
1,800
143
2,118
1,337
631
45
1,985
1,943
913
878
28
1,733
US CRUDE PRICES
Alaska-North Slope 27 .........................................
South Louisiana Sweet ..........................................
California-Midway Sunset 13 ..............................
Lost Hills 30 ........................................................
Wyoming Sweet .....................................................
East Texas Sweet ...................................................
West Texas Sour 34 ..............................................
West Texas Intermediate........................................
Oklahoma Sweet....................................................
Texas Upper Gulf Coast .........................................
Michigan Sour .......................................................
Kansas Common ...................................................
North Dakota Sweet ...............................................
0-2,500
2,501-5,000
5,001-7,500
7,501-10,000
10,001-12,500
12,501-15,000
15,001-17,500
17,501-20,000
20,001-over
Total
285
79
145
288
495
314
140
119
64
1,929
1.4
50.6
17.9
2.0
4.6
1.5
5.3
INLAND
LAND
OFFSHORE
20
1,870
39
4-22-11
Rig Percent
count footage*
185
61
123
287
404
267
162
154
60
1,703
20
1,667
16
2.1
55.7
20.3
2.4
9.6
1.4
0.6
6.6
$/bbl
Wkly. avg. 42012
116.46
Mo. avg., $/bbl
Feb. 12 Mar. 12
4-20-12
$/bbl*
113.64
122.50
112.30
119.15
92.55
102.50
94.50
99.50
99.50
92.50
91.50
98.50
81.08
Rig
count
22
607
597
88
6
24
114
1,383
12
64
64
187
353
196
1,590
71
137
51
5,566
Proposed depth,
ft
2
4-20-12
4-22-11
1,000 b/d
117.48
118.01
116.21
122.36
120.26
120.51
116.51
116.79
116.99
109.26
119.31
112.44
120.36
122.97
123.43
121.96
127.98
126.03
126.30
122.46
122.32
122.80
112.07
125.61
118.26
126.13
126.31
116.17
114.42
112.36
119.56
118.50
133.85
122.47
120.46
118.41
125.33
122.41
17.21
3.39
19.02
2.86
4-6-12
4-13-11
bcf
1,049
1,042
775
1,105
1,092
644
358
353
222
2,512
2,487 1,641
Change,
Jan. 11
Jan. 10
%
2,916
2,308
Change,
%
35.4
71.6
61.3
53.1
26.3
33