Industry Leaders Warn of Skill Shortage in O&G

Industry Leaders Warn of Skill Shortage in O&G

Friday, April 01, 2011

GL Noble Denton

A group of European oil and gas industry leaders have agreed that 2011 will see a positive upturn in investment into the sector, but warn that they still face significant challenges if they are to take advantage of the strong growth opportunities ahead of them.

The comments were made at an exclusive round table event organized by GL Noble Denton, the leading independent technical adviser to the oil and gas industry, to discuss key findings from a recent report on the future of the sector from the Economist Intelligence Unit. The event, which was held in London, was attended by more than 25 of Europe's oil and gas industry leaders.

The report, which was sponsored by GL Noble Denton, comprises the views of nearly 200 board-level executives and policymakers on a range crucial industry affairs, from new investment opportunities to future regulatory challenges and the rise of a new breed of 'internationalized' national oil companies over the next decade.
Each of the participants at the round table discussion - including representatives from well-known oil companies, energy distribution
corporations, technical suppliers and industry associations - offered strong opinion on where the industry is heading and the challenges that await.
Key findings from the discussion were:

• More needs to be done to develop the next generation of oil and gas professionals. Faced with a period of investment and expansion, the sector will come against challenges as a result of its failure to attract, recruit and retain highly talented people. The industry needs to work more closely together to address the skills problem, rather than trying to pursue each others' technical staff. With activity set to rise in the sector, companies need to focus on introducing and developing technical resource now, ensuring that the right talent is in place for the future.
• Increased regulation post Macondo should be "non prescriptive." While the majority of attendees agreed that government regulatory intervention in North America may leave the small players struggling to survive, none thought that the industry should be left to self-regulate; indeed the majority felt that the US should follow the non-prescriptive approach taken by European and other governments following the Piper Alpha disaster in 1988.
• In these instances, governments restructured their approach to offshore oil industry regulation completely by separating the regulator from the commercial operators, asking them to identify and reduce risks to "as low as reasonably practicable" and justify their actions to the an independent regulatory regime.
• Natural gas prices set to rise. Respondents to the Economist Intelligence Unit's research on the outlook for the sector agreed that the emergence of unconventional natural gas sources has caused gas to gain widespread credibility as a low-carbon "transition fuel", especially for electricity generation. Participants in the round-table discussions generally agreed that the industry will experience an increase of at least 10% in gas prices over the coming years, fuelled by the increasing demand for energy in Asia. While some attendees felt that unconventional natural gas' position as an industry "game changer" in the Economist Intelligence Unit report may be overstated, others agreed strongly with the study that gas will play a key role in the transition to greater dependence on renewable energy sources.
• Cautious optimism for the future. In the Economist Intelligence Unit's 2011 report on the outlook for the industry, executives expect to see an upturn in investment into the sector, despite fears of tougher regulation and a more costly operating environment. While this feeling of cautious optimism was matched at the round-table discussions in London this month, it was also clear that the industry still has hurdles to overcome if it is to take big steps forward.

"It is clear from the these round-table discussions that the oil and gas industry is focused on its future challenges and understands the need to find more innovative solutions to operating more efficiently and sustainably," said John Wishart, President of GL Noble Denton, who hosted the event.

"But in the face of uncertainty about the impact of post-Macondo regulation, anticipation over the true role of natural gas in future
energy economics and ambiguity over resourcing future projects, the oil and gas industry finds itself holding its breath over how these tough challenges will come to pass."

Statoil Reports Significant Barents Sea Oil Discovery (STO,E,RIG)

Statoil Reports Significant Barents Sea Oil Discovery (STO,E,RIG)



The Norwegian Energy Company Statoil ASA (NYSE:STO) along with its Italian partner Eni SpA (NYSE:E) and fellow Norwegian state-owned Petoro reported a "major" oil discovery of an estimated 500 million barrels of oil equivalent in the Barents Sea.

Statoil said the breakthrough find is one of the most important discoveries on the Norwegian continental shelf in the last 10 years. Norway's oil production, most of which is extracted from the North Sea, peaked in 2001.

Statoil said the reserves were found at the Skrugard prospect in the Barents Sea. The well was drilled by Transocean's (NYSE:RIG) Polar Pioneer rig.

"The oil is expected to be easily producible," Statoil said.

Shares of StatoilHydro are trading up 3.36% at $28.57.

Oiltanking Partners Files For $200 Million IPO (OTLP)

Oiltanking Partners Files For $200 Million IPO (OTLP)



Oiltanking Partners LP plans to offer up to $200 million in common units in an initial public offering.

The limited partnership was formed in March, and will serve as a growth vehicle in the U.S. for the Hamburg, Germany based Oiltanking GmbH, the indirect owner of the company's general partner, according to the company's filing with the SEC.

Oiltanking GmbH is the world's second largest independent storage provider for crude, refined products, and liquid chemicals and gases. Oiltanking Partners has terminating, storage, and pipeline operations in Texas and the upper Gulf Coast.

Oiltanking Partners plans to apply to list on the New York Stock Exchange under the symbol OTLP.

Ford's March Sales Outpace GM's (F,GM)

Ford's March Sales Outpace GM's (F,GM)



Ford Motor Co (NYSE:F) posted a 19% increase in vehicle sales for the month of March, driven by strong growth for its Fiesta, Fusion, Escape, and Explorer, as well as the F-Series, which saw year-over-year sales growth of 25%.

Ford's monthly total of 212,777 surpassed that of General Motors (NYSE:GM), which reported selling 206,621 vehicles in the month, though GM outsold Ford for the quarter, 592,545 to 496,720.

Ken Czubay, vice president of Ford U.S. marketing, sales and service, said, "With gasoline prices eclipsing $3.50 a gallon, consumers are placing a high priority on fuel efficiency in every size and kind of vehicle. Customers are rewarding Ford for our investment in new products as well as more efficient engines and transmissions, which save them money at the pump whether they drive Fiestas or F-Series trucks."

Centrica Increases Canadian Gas Assets with Wildcat Hills Acquisition

Centrica Increases Canadian Gas Assets with Wildcat Hills Acquisition

Friday, April 01, 2011
Centrica plc

Centrica announced that its North American subsidiary, Direct Energy, has acquired further natural gas assets located in the Wildcat Hills region of Alberta, from Shell Canada Energy for C$47m (£30m) in cash. The acquisition will give Direct Energy a 100% working interest in certain Wildcat Hills assets and gas processing facilities, which it has operated since October 2010.

It will provide Direct Energy with an additional 45 billion cubic feet equivalent (bcfe) of proven and probable natural gas reserves and an incremental 10 million cubic feet per day (mmcfe) of natural gas production. Following the transaction the company will be able to meet approximately 35% of its enlarged customer gas demand from its own resources and the transaction will lower overall production costs as no additional field or office staffing will be required.

The acquisition marks the latest stage in Direct Energy's strategy of creating a more integrated North American business, with leading positions in deregulated markets. In 2010, as well as acquiring an operated interest in the Wildcat Hills assets, the company established itself as a leading player in the North American home services market with the acquisition of Clockwork Home Services. In March 2011, Direct Energy agreed to buy the New York-based gas and power retailer Gateway Energy Services, adding another 275,000 customer accounts in the US Northeast.

Chris Weston, President and CEO of Direct Energy said, "We are very pleased to have acquired an enlarged interest in the Wildcat Hills region. Growing our upstream business is important in ensuring that we remain a stable, long-term partner to the millions of residential and business customers we serve across North America. We will continue to explore opportunities in both gas and power, to enhance the scale of the business and to support Direct Energy's expanding retail businesses."

VAALCO Shuts-In Portion of Production Offshore Gabon

VAALCO Shuts-In Portion of Production Offshore Gabon

Friday, April 01, 2011
VAALCO Energy Inc.

VAALCO provided an update on its operations following the commencement of industrial action in Gabon by the National Organization of Oil Employees (ONEP), which began at midnight, March 31, 2011. ONEP launched the action against the Gabonese government as part of a dispute over the government's labor regulations. ONEP is requesting the publication of a decree from the government of Gabon regulating the employment of foreign labor.

Reportedly, ONEP represents approximately 4,000 of the 5,000 workers in the industry, including approximately 45 VAALCO employees in Gabon.

VAALCO is in the process of shutting in a portion of the daily gross production in the Etame Marin block offshore Gabon, which has been recently averaging approximately 23,500 barrels of oil per day. Shutting-in is a staged process due to the configuration of the block containing two platforms, subsea wells, several miles of pipelines and the FPSO facility where the oil from the block is transported for processing and storage.

The impact to the daily gross production amount could be substantial in the upcoming days if the strike were to continue. The remaining production is required for power to provide for safe conditions aboard the FPSO facility. The Company is continuing to monitor the ONEP action.

VAALCO believes it is in compliance with all Gabon labor laws and the agreements to which the Company is a party.

Oil is the main export of Gabon, which VAALCO believes is approximately 220,000 to 240,000 barrels per day according to recent reports. Oil revenues constitute approximately 60% of the Gabon budget.

VAALCO believes the government of Gabon and ONEP will reach an amicable position in this matter quickly such that the Company can restore production to normal output levels.

The Company's subsidiary VAALCO Gabon Etame, Inc. operates the Etame Marin Permit in which it holds a 28.07% net interest in the Etame Field. Other participants in the permit are Sinopec Group (31.36%) through its subsidiary, Addax Petroleum Etame Inc., Sasol Petroleum Etame Limited (27.75%), Sojitz Etame Limited (2.98%), PetroEnergy Resources Corp. (2.34%) and Tullow Oil Gabon SA (7.5%).

General Motors Q1 Sales Up 24.1% YoY (GM)

General Motors Q1 Sales Up 24.1% YoY (GM)

General Motors Co (NYSE:GM) reported Friday that its U.S. sales rose 9.6% year-over-year in March, to 206,621 vehicles.

First quarter sales rose at a blistering 24.1% year-over-year pace, to 592,545 vehicles.

Don Johnson, GM's vice president of U.S. sales operations, said, "Our plan was to get out of the gates quickly in the first quarter and we succeeded."

Chevy's Cruze sedan performed especially well, with sales increasing 287% over the compact car it replaced.

Shares of General Motors are trading down 0.16% at $30.98.

Lucas Energy Up on JV With Marathon Oil Unit in Texas

Lucas Energy Up on JV With Marathon Oil Unit in Texas



Lucas Energy (LEI) is up after it says it entered into a Joint Venture agreement with Marathon Oil (East Texas) LP, a subsidiary of Marathon Oil Corporation (MRO) to develop the Eagle Ford and Buda formations in Wilson County, Texas.

The Marathon affiliate has acquired 50% of the leasehold interest rights, representing approximately 1,000 net acres (below the base of the Austin Chalk formation) held by Lucas in a majority of Lucas' leases in Wilson County, Texas.

Marathon Oil Corporation's subsidiary will be the operator of the joint venture, but Lucas will still own and operate rights above the Eagle Ford, primarily the Austin Chalk formation.

Bowleven Agrees to Option Agreement Extension for Etinde Permit

Bowleven Agrees to Option Agreement Extension for Etinde Permit

Friday, April 01, 2011

BowLeven plc

Bowleven has agreed an extension to the option agreement with Vitol E&P Limited (Vitol) in respect of the Etinde Permit (Etinde) in exchange for Vitol agreeing to fund 50 percent of a planned high specification seismic program over the IE and IF fields.

Under the agreement, Vitol retains the option to acquire an additional 10 percent beneficial interest in block MLHP-7, Etinde, in return for funding an agreed $50 million gross appraisal work program. The option now expires on the earlier of (i) 1 month following delivery of the finalized dataset acquired under a planned 3D Four Component Ocean Bottom Cable (4C OBC) seismic program over IE and IF and (ii) 31 March 2012, subject to the continuation of the exploration phase of the Etinde PSC. The option arrangement excludes blocks MLHP-5 and MLHP-6, Etinde, where the Sapele-1ST and Sapele-2 appraisal wells are currently being drilled. Bowleven will retain operatorship of all three blocks.

Bowleven and Vitol currently have participating interests of 75 percent and 25 percent respectively in the Etinde Permit. However, as part of the agreement for the revised option exercise period, Vitol will fund 50 percent of the planned 4C OBC seismic program. Data acquisition is expected to commence in April 2011, subject to contract finalization and SNH approval.

The opportunity for the 4C OBC survey has arisen due to an in-country seismic crew becoming available at short notice. This will enable the joint venture to acquire high specification seismic over IE and IF in a fast timescale and on economically attractive terms.

The data is expected to provide enhanced imaging, with significant additional upfront benefits in planning appraisal activities and the possible facilitation of a fast track development on block MLHP-7. Final processed volumes are expected to be delivered Q3/Q4 2011.

The new option arrangement with Vitol also recognizes the requirement for further technical work to be completed prior to programming firm future appraisal and development activity for the IE and IF field areas. In this regard, work is continuing to integrate the results of the IE-3 appraisal well, including developing a dynamic reservoir model over IE, and in evaluating the 3D seismic acquired over the IF field area during 2010. Vitol have been actively involved in these joint venture activities.

With the exception of the agreed 50:50 sharing of the 4C OBC costs, each party continues to fund activities on the Permit in accordance with its participating interest. In the event of option exercise, Bowleven's beneficial interest in block MLHP-7 would be 65 percent with effect from the date of exercise, with its beneficial interest in blocks MLHP-5 and MLHP-6 remaining at 75 percent. All interests are expressed prior to the exercise of any state back-in rights.

Kevin Hart, Chief Executive of Bowleven commented, "This is an excellent opportunity to acquire high quality seismic as we progress towards our objective of converting resources to reserves. The new 4C OBC seismic over the IE and IF fields at this stage will augment ongoing appraisal activities and potentially assist a fast track development on the block."

Cooper Confirms Oil Column at Parsons Well

Cooper Confirms Oil Column at Parsons Well

Friday, April 01, 2011

Cooper Energy

Cooper announced that Parsons-4, the second well in the 2011 PEL92 area drilling campaign, was drilled to a total depth of 1,413 meters and wireline logs have confirmed that it has intersected a 5.5 meter oil column in excellent quality Namur sandstone, which is in line with pre-drill expectations.

Preparations are currently underway to case and suspend the well. The well will be tied-back to the Parsons production facilities at a later date and will provide an additional drainage point for the Namur oil reservoir to the south of the Parsons-1 discovery well.

The impact on production rates and reserves will be assessed once the full results of the current Parsons appraisal/development drilling program have been evaluated and production rates from the new development wells have been established.

The next well in the eleven well drilling program is Butlers-2, an appraisal/development well located about 1 km to the northeast of the Butlers-1 discovery well. The details pertaining to Butlers-2 will be announced when the well spuds.

Eni Gets BOEMRE Nod for GOM Drilling

Eni Gets BOEMRE Nod for GOM Drilling

Friday, April 01, 2011
BOEMRE

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved a deepwater permit for the drilling of an eighth well that complies with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a permit to sidetrack for ENI US Operating Co Inc.'s Well #SS001 in Mississippi Canyon Block 460 in 2,823 ft. water depth, approximately 57 miles southeast of Venice, La.

"This is the eighth deepwater well permitted to drill since February 17, when industry demonstrated that it had the capacity to handle subsea blowouts and spills," said BOEMRE Director Michael R. Bromwich. "The progress in permitting deepwater drilling is directly related to industry's ability to meet and satisfy the enhanced safety requirements associated with deepwater drilling, including the capability to contain a deepwater loss of well control and blowout."

ENI's Well #SS001 is a sidetrack well. A sidetrack well is drilled to a new geologic target or a new location within the original target from the existing wellbore. The operator had a rig on location when drilling preparation activities were halted due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill.

As part of its approval process, the bureau reviewed ENI's containment capability available for the specific well proposed in the permit application. ENI has contracted with the Helix Well Containment Group (HWCG)to use HWCG's capping stack to stop the flow of oil should a blowout occur. The capabilities of the capping stack meet the requirements that are specific to the characteristics of the proposed well.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees (NTL) N06 and N10, and the Interim Final Safety Rule.

PetroVietnam Explores Overseas Options

PetroVietnam Explores Overseas Options

Friday, April 01, 2011
Knight Ridder/Tribune Business News

The PetroVietnam Group will spend US $2.35 billion developing 25 petroleum projects in countries of the former Soviet Union, as well as Venezuela and elsewhere in Latin America. Oil and gas exploitation overseas would eventually reach 2-3 million tonnes per year, with reserves as high as 15 million tonnes.

The group made the announcement at a conference in Ha Noi this week held by the ministry of industry and trade to discuss opportunities for the development of Viet Nam's oil and gas industry with Dutch companies.

PetroVietnam was also intending to invest a total of $84 billion between now and 2015 in strengthening oil and gas exploitation, petrochemicals production and other related lines of business, the group said.

Nguyen Thanh Tung, an official from the ministry of industry and trade, told the conference that the potential for the oil and gas industry and the energy sector overall in Vietnam remained great. However, he said, foreign investment and technology was needed to develop a domestic gas processing industry.

Tung said that, to attract investment in the petroleum sector, the Vietnamese government had offered incentives and created opportunities for foreign investors and joint ventures to develop various projects in the nation's oil industry.

Gas exploration and exploitation, particularly in the southern part of the continental shelf, remained in the beginning stages, he said. The nation's untapped gas reserves have been estimated at 682 billion cubic meters, offering a greater potential for exploitation than oil.

According to PetroVietnam, Vietnam's crude oil reserves stood at 4.4 billion barrels at the end of 2010, while crude oil productivity last year reached 15.1 million tonnes. Gas production reached 9.4 billion cubic meters.

The Dung Quat oil refinery has been in operation for two years with a capacity of 6.5 million tonnes per year, corresponding to approximately 148,000 barrels a day and meeting 30 percent of domestic demand for refined petroleum products.

PetroVietnam has plans to build additional refineries in the provinces of Thanh Hoa and Ba Ria-Vung Tau.

BP Inks 4 CBM Production Sharing Contracts in Indonesia

BP Inks 4 CBM Production Sharing Contracts in Indonesia

Friday, April 01, 2011

BP plc

BP has signed four new coalbed methane (CBM) production sharing contracts (PSCs) in the Barito basin of South Kalimantan, Indonesia.

BP and co-owner Pertamina were jointly awarded the Tanjung IV CBM PSC through a direct award from the Government of Indonesia. BP will hold a 44 percent participating interest in the PSC with Pertamina holding the remaining 56 percent.

BP and co-owner PT Sugico Graha (Sugico) were jointly awarded the Kapuas I, II and III CBM PSCs through a direct offer from the Government of Indonesia. BP will hold a 45 percent participating interest in the PSCs with Sugico holding the remaining 55 percent.

Bob Dudley, BP group chief executive, said, "Today's agreements follow on from BP's recent agreements to access new resources in Indonesia, China, India and Australia. BP has significant experience and expertise in the development of unconventional gas, including coalbed methane, and we look forward to working with our partners to apply this to the potential of Indonesia's coal resources."

Together, the four PSCs cover an area of approximately 4,800 square kilometers.
"BP is very pleased to be extending our working relationship with Pertamina in the development of Indonesian CBM resources, and also to cooperate with Sugico in creating a material CBM position in a highly prospective basin. These four PSCs complement BP's existing CBM position in Indonesia, allowing us to leverage our 30-plus years of CBM experience to deepen our portfolio in Kalimantan," said William Lin, BP's President of Asia Pacific Exploration & Production.

These awards mark BP's first CBM access in Indonesia outside its joint venture with ENI, VICO, which in late 2009 was awarded the Sanga Sanga CBM PSC near the Bontang LNG plant in East Kalimantan.

Det norske Delays Froy Field Development

Det norske Delays Froy Field Development

Friday, April 01, 2011

Det norske oljeselskap ASA

As a result of the decision made by Det norske, a plan for development and operations (PDO) for the Froy field will not be filed this year, and it has not been decided when such a plan will be submitted.

Froy Platform

The plan was to submit a PDO in the autumn 2010 with a FPSO concept. However, this was delayed in order to evaluate the possibility of using simultaneous water and gas injection, rather than water injection only as a production strategy. The results from these studies indicated that SWAG only had a marginal impact on project economics.

The Froy field development, where the partnership already in January 2008 decided to push forward with the project, has been delayed several times. These delays have opened new development alternatives, which Det norske finds prudent to explore.

COO Oyvind Bratsberg said that the company has major field developments ahead as an operator, "Det norske will over the coming years develop from a pure exploration company into a exploration, field development and production company. Going forward the company will concentrate its resources on the Draupne field development and smaller developments, such as Jetta. Froy will be developed at a later stage, and possibly with a different development solution."

Froy holds about 60 million barrels of recoverable oil. Det norske is operator for Froy and holds 50 percent. Premier Oil Norge is the only partner in the license with 50 percent.

Max Petroleum Spies Oil Pay at Kazakh Prospect

Max Petroleum Spies Oil Pay at Kazakh Prospect

Friday, April 01, 2011
Max Petroleum plc

Max Petroleum updated its activities in the Blocks A&E License area in the Republic of Kazakhstan.

Kazakstan

Preliminary Drilling Results at Asanketken

The ASK-1 exploration well on the Asanketken prospect in Block E has reached an intermediate depth of 2,000 meters with electric logs indicating 24 meters of net oil pay at depths from 1,230 to 1,302 meters in the Jurassic Formation. Reservoir quality is excellent with porosities ranging from 17% to 33%. A fluid sample taken from a depth of 1,278 meters yielded 45 degree API oil. Current mapping and pressure data suggest that reserves in this accumulation are limited by the proximity of a trapping fault, but the Jurassic reservoirs, a secondary objective in the well, are expected to be commercially viable.

The Company will run casing over this portion of the well as planned and continue to drill ahead to a total depth of approximately 3,300 meters to evaluate the primary exploration targets in the lower Triassic section.

Procurement of two additional drilling rigs

The Company has entered into a two-year contract with PM Lucas Enterprises Limited for an IDECO 8055 Rambler rig capable of drilling to 3,200 meters (the "IDECO Rig").

Due to recent weather conditions limiting access to the Uytas Field, the IDECO rig is currently mobilizing to drill the NARS-1 exploration well on the Narmundanak South prospect in Block E, which is expected to spud on or around 20 April 2011.

The Company intends to drill three confirmation wells at Uytas with the IDECO Rig subsequent to drilling the NARS-1 well.

The Company has also awarded a tender to Saipem, a subsidiary of Eni, S.p.A, for a rig to drill its deep pre-salt exploration program and expects to execute a drilling contract shortly.

The Company plans to commence drilling the first pre-salt well, NUR-1, in Block E during August 2011, targeting unrisked mean resource potential of 467 million barrels of oil equivalent (mmboe) distributed over a probable range (P90 to P10) of 170 million to 817 million mmboe with a 29% geological chance of success.

Trial Production at Borkyldakty

The Central Committee for Exploration and Development (CCED) has recommended the trial production project for the Borkyldakty Field to the Committee of Geology for final approval.

This final approval and the issuance of required gas flaring and emissions permits are expected in the next 30-45 days. The Company intends to drill at least one appraisal well at Borkyldakty during the first half of 2011 using the ZJ-30 rig that is currently drilling the first of two Triassic appraisal wells in the Zhana Makat Field.

Robert Holland, Executive Co-Chairman, commented, "We are encouraged to see high quality oil pay in the Jurassic section in Asanketken, which lowers the risk of charge for the well's primary objectives in the lower Triassic. Adding additional rigs, including the deep rig for our pre-salt exploration program, is a key step in our plans to significantly ramp up our exploration, appraisal and development activity in 2011.

We also expect a substantial increase in production and revenues in the near-term as we bring on additional appraisal and development wells in Zhana Makat, Borkyldakty and Uytas."

Drilling Commences at Urals' Petrosakh Field

Drilling Commences at Urals' Petrosakh Field

Friday, April 01, 2011

Urals Energy Public Co. Ltd.

Urals announced that Well #51 on the Petrosakh field, in Russia, has been successfully spudded.
As part of the Company's updated drilling strategy to capture the full potential of the Petrosakh field, Well #51 is a large diameter vertical well designed to maximize flow rates.
The Directors expect production to begin before the end of May and further announcements will be made at the appropriate time.

AED Recommences Retesting Preps at Lempuyang Well

AED Recommences Retesting Preps at Lempuyang Well

Friday, April 01, 2011

AED Oil Ltd.

AED Oil updated on its current testing program at Brunei Block L and its forward plans for the Block. 

Testing Update – Lempuyang-1

During the last few days, AED recommenced work in preparation for retesting of the Lempuyang-1 well. During this process, we have continued to experience mechanical and equipment issues with the well and have shut in the well. We will continue to assess the situation and will update the market once further information is available.

Lempuyang Testing Analysis

While the test results have not allowed a complete assessment of the Lempuyang-1 well thus far, AED is still encouraged by the results to date, including:

• identification of mobile gas in the two target intervals;
• gas produced to surface; and
• interpretation of a drainage area consistent with geological mapping supporting the trap integrity and structural interpretation of the Lempuyang prospect. 

Phase-2 Exploration update 

AED remains optimistic that the southern area remains a significant exploration objective. A recent evaluation of the Vertical Seismic Profile (VSP) data from the Lempuyang-1 well has shown that two potential reservoir horizons below the Total Depth of the well have not been intersected and remain untested. The recently acquired aerial gravity and magnetic survey over Block L highlights potential updip prospectivity east of our current 3D seismic.

We intend to focus on acquiring seismic over the Jerudong Field with the potential for oil development.


Phase 2 Work Program, 2011

In addition to the current testing program, AED currently anticipates that the following exploration activity will occur at Block L in the near term:

• Seismic acquisition at West Jerudong. AED plans to capitalize on the current high oil prices by shooting 130km2 3D seismic over the Jerudong oil field. This field was previously produced and shut-in without being fully depleted. The area has only limited 2D seismic coverage and AED intends to acquire 3D seismic to delineate additional potential oil pools.
• A 3D seismic patch (13km2) and 2D seismic line (13km) east of the Lempuyang-1 well will be acquired to confirm structural rollover, as a precursor to a contingent extension to the 3D seismic program of up to 150km2.

The Block L Joint Venture is made up of AED SEA (50% operating interest), Kulczyk Oil Ventures (40%) and QAF Brunei (10%).

Pride Extends Option for Construction with Samsung Heavy

Pride Extends Option for Construction with Samsung Heavy

Friday, April 01, 2011

Pride International Inc.

Pride has reached agreement with Samsung Heavy Industries, Ltd. to extend Pride's option for the construction of a sixth ultra-deepwater drillship by 30 days. The extension of the option period does not impact the estimated unit construction cost or delivery schedule determined in December 2010, upon the order by Pride of a fifth ultra-deepwater drillship. The option may be exercised by the company on or before April 30, 2011, unless further extended on mutually agreed terms.

Alaska Governor Asks Govt to Expedite Offshore Drilling Projects

Alaska Governor Asks Govt to Expedite Offshore Drilling Projects

Friday, April 01, 2011
Dow Jones Newswires

by  Cassandra Sweet

Alaska's governor asked federal regulators to move ahead in allowing new oil development in the Arctic Ocean, as the state looks for ways to shore up declining production.

In a letter sent Thursday to U.S. Interior Secretary Ken Salazar, Gov. Sean Parnell wrote that "Alaska is the United States' most important and abundant domestic source of future oil and gas." He cited a 2008 U.S. Geological Survey report that estimated more than 10 billion barrels of oil and more than 100 trillion cubic feet of natural gas lay beneath the surface of Alaska's Beaufort and Chukchi Seas. Parnell seized on current concerns in the U.S. about the stability of foreign sources of oil, amid turmoil in the Middle East and rising oil prices.

"We need to develop and increase our domestic supply of oil and gas," Parnell wrote.
Parnell and other Alaska officials have been working to streamline oil production taxes and take other measures to attract more onshore and offshore oil and natural gas development in Alaska. Parnell has introduced legislation, currently working its way through the state legislature, that would slash oil production taxes put in place by his predecessor, former Alaska Gov. Sarah Palin.

Parnell said Wednesday that he had set a "new goal for Alaska" of 1 million barrels of oil production per day through the Trans Alaska Pipeline System within ten years. Current oil production shipped from Alaska's North Slope 800 miles to the port of Valdez through the pipeline system is about 600,000 barrels per day, down from its peak of about 2 million barrels a day 20 years ago.

While the state has encouraged production on state lands and in state waters, for which the state would earn production royalties, officials are also keen to see new offshore drilling in the Outer Continental Shelf, as Alaska collects fees from oil shipped through the Trans Alaska Pipeline.
Alaska's government has also encouraged development of a natural gas pipeline that would ship gas from the North Slope to Canada and the Continental U.S. An alternative project would entail building a liquefied natural gas terminal that would export Alaska gas to overseas markets.

TransCanada and ExxonMobil are developing a $41 billion gas pipeline that would stretch 1,700 miles (2,700 kilometers) from the North Slope to a network of pipelines that connect Alberta, Canada, to the Midwest. A joint venture owned by BP and ConocoPhillips called Denali, has a rival Alaska pipeline plan, with a similar price-tag. Both sets of developers have held open seasons to determine interest by gas shippers in their projects. The companies have not yet released the results of their open seasons.

Bills Requiring US Action on Oil Leases, Permits Gain Support

Bills Requiring US Action on Oil Leases, Permits Gain Support

Friday, April 01, 2011
Dow Jones Newswires

by  Ryan Tracy

A proposal to require the Obama administration to sell offshore oil leases and act on drilling permits within a set time frame gained more supporters Thursday, with Senate Republicans introducing legislation to do so a day after House Republicans backed the idea.

The bills announced by Senate Republicans also took a far broader approach than the House proposals and included a grab bag of initiatives. The Senate bills would open up the Arctic National Wildlife Refuge in Alaska for drilling and direct royalty monies on those lands to "renewable energy development," according to a summary of the legislation distributed by the office of Sen. David Vitter (R., La.).

They would direct the Environmental Protection Agency to reissue a permit to a much-debated coal mine project operated by Arch Coal Inc. (ACI) in West Virginia, direct the State Department to issue permits for TransCanada Corp.'s (TRP) proposed pipeline connecting producers extracting oil from sands in Alberta, Canada, to the central U.S., and prevent the administration from considering greenhouse gases linked to climate change if the administration moves to protect endangered fish or wildlife.

The set of bills announced Thursday by Vitter, John Barrasso (R., Wyo.), and 26 other senators would also require the administration to conduct lease sales in the outer continental shelf, including in the Gulf of Mexico and Virginia.

The bills would require the Interior Department, which oversees offshore oil and gas drilling, to act on permits within 40 days, including a 10-day period for the applicant to respond to possible problems. The House Republicans' bill would require action within 60 days, depending on the application.

The bills have support from many Republicans, but at least one has expressed concern that they outline too rigid a framework.

Sen. Lisa Murkowski, (R., Alaska), the ranking Republican on the Senate Energy Committee, which oversees the Interior Department, told reporters Wednesday that she had "reservations" about rigid timetables for permitting and leasing.

"I think it's important to understand that not all permits may be equal and all leases are not equal," Murkowski said, explaining that permits and leases in less explored areas in Alaska might take longer than permits in "well-established" areas in the Gulf.
"If what we are doing is putting in place a more efficient permitting process, I'm all over it, but I think you need to give yourself a little bit of leeway in the event that it's not a 'one size fits all' type of approach," Murkowski said.

Noble Halts Drilling Ops Offshore Israel

Noble Halts Drilling Ops Offshore Israel

Friday, April 01, 2011
Noble Energy Inc.

Noble has suspended drilling operations at the Leviathan #1 location, which was testing deeper potential in the well, offshore Israel. The Company identified wear on the wellbore casing, requiring additional material and equipment necessary to complete the drilling of the well. Noble Energy is working to secure the needed items, which are not available in Israel.

Sedco Express

As a result, the Company is preparing to move the Sedco Express rig to the Tamar field, where development drilling is anticipated to commence in approximately one week.

The development of Tamar remains on schedule for commissioning in late 2012.
Noble Energy operates Leviathan, offshore Israel in the Rachel license, with a 39.66 percent working interest. Other interest owners are Derek Drilling and Aver Oil Exploration with 22.67 percent each and Ratio Oil Exploration with the remaining 15 percent.

The Company is also the operator of Tamar, offshore Israel in the Matan license, with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling and Avner Oil Exploration with 15.625 percent each and Dor Gas Exploration with the remaining four percent.

Bahamas Petroleum Contracts CGGVeritas for Seismic Services

Bahamas Petroleum Contracts CGGVeritas for Seismic Services

Friday, April 01, 2011
Bahamas Petroleum Co. plc

Bahamas Petroleum has signed a Letter of Award with CGGVeritas to carry out a minimum of 1500 km2 3D seismic survey across its Southern license area. The details of the contract are to be finalized in April 2011 with commencement of operations in May 2011. Bahamas Petroleum Company will engage the ship 'Veritas Viking' to acquire the seismic 3D survey. The Veritas Viking will use ten seismic streamers incorporating CGGVeritas' new BroadSeis technology for the first time in the Americas.

Paul Crevello, Chief Executive of Bahamas Petroleum Company, said, "I am very pleased to announce the award of this 3D seismic contract to CGGVeritas. CGGVeritas is one of the world's most proficient seismic survey providers and its BroadSeis technology is regarded as being one of the most advanced systems. We are looking forward to commencing operations in May 2011. Fast track interpretation of the data will follow with results to be announced thereafter. The Government of the Bahamas are fully supportive of this program and we are working closely with them to put regulations and protocols in place for further exploration."

Providence Sells GOM Assets

Providence Sells GOM Assets

Friday, April 01, 2011

Providence Resources plc

Providence announced the immediate sale of its US oil and gas portfolio in the Gulf of Mexico to Dynamic Offshore Resources LLC ("Dynamic") for a consideration of up to $22 million. The consideration comprises an initial cash payment of $15 million, and potentially an additional $7 million deferred cash payment.

This deferred cash payment is dependent on Dynamic reaching certain production levels from any new wells drilled on Ship Shoal 252, 253 and 267 prior to January 2013. Total current production from Providence's Gulf of Mexico portfolio amounts to c. 700 BOEPD.

The proceeds of the sale, which closed on March 31, 2011, are to be applied to a reduction of the Company's Reserve Backed Lending Facility with BNP Paribas. The sale will result in the impairment of the carrying value of the assets, and will necessitate a non-cash write-off to be taken in Providence's 2010 accounts. CIBC World Markets Plc acted as exclusive financial adviser to Providence on this transaction.

Commenting, Mr. Tony O'Reilly, Chief Executive of Providence said, "While the production from the Gulf of Mexico has played an important role in the development of the Company over the past 3 years, it is now less material going forward. With our major multi-year, multi-basin drilling program offshore Ireland starting, combined with our ongoing investment program at Singleton, the investment focus for the Company is now very clear. As such, the opportunity to realise cash from the Gulf of Mexico portfolio, and to deleverage the core business, made sense."

Statoil Wins Big at Skrugard

Statoil Wins Big at Skrugard

Friday, April 01, 2011

Statoil

Statoil, along with partners Eni Norway and Petoro, has made a significant oil discovery on the Skrugard prospect in the Barents Sea. The breakthrough discovery is one of the most important finds on the Norwegian continental shelf in the last decade.

      Transocean Polar Pioneer

Statoil and its partners are in the process of concluding drilling operations on the Skrugard prospect, which is located approximately 100 kilometers north of the Snohvit gas field in the Barents Sea.

The well was drilled with the Polar Pioneer rig, and has proven gas column of 33 meters and an oil column of 90 meters. The oil is anticipated to be easily producible.

The estimated volume of the discovery is between 150–250 million recoverable barrels of oil equivalent (boe), while Statoil sees opportunities for further upside in the license of up to 250 million barrels – for a potential total of 500 million boe.

"The Skrugard find is significant and a break-through for frontier exploration in the Barents Sea. This opens a new oil province that can provide additional resource growth," said Tim Dodson, executive vice president for Exploration in Statoil.

He emphasizes that it is too early to say something concrete about the total potential of the area, but ventures to characterize the Skrugard find as the most important exploration event on the Norwegian continental shelf in the last decade. The discovery is vital in order to maintain the technology and technical environments in the oil and gas industry in Norway in the future.

Statoil has plans for both the drilling of a new prospect in the same license next year, and a possible appraisal drilling at Skrugard.

The Skrugard prospect was Statoil's first priority in the 20th licensing round on the Norwegian continental shelf, which was awarded in April 2009. Over the course of the spring the Norwegian government will allocate acreage in the 21st licensing round. Acreage in areas nearby Skrugard is expected to be assigned during the round.

Drilling operations have been conducted in a safe, efficient and environmentally friendly manner. Several core samples have been taken in order to understand reservoir properties, and some data collection in the well still remains.

In total there have been over 80 wells drilled in the southern Barents Sea, and Statoil has been the operator for more than 60 of these. The Snøhvit gas field, which is operated by Statoil, is the only field center established so far in the Barents Sea, while Eni's Goliat field is under development.

"The Barents Sea is large, and we can not say that we have cracked the code for the entire area yet. But we have confirmed that our exploration model is correct. This is a break-through, and an important step in understanding how the geology – and thus the hydrocarbon systems in the Barents Sea – works," said Dodson.

"If the volume estimates are confirmed, then this discovery could provide a basis for an independent development. Given that it takes between five to 10 years from discovery to production, we are planning for the future now. Our ambition is to put this find into production as quickly as possible," he added.

Statoil is the operator of license 532 with a 50% share. The license partners are Eni (30%) and Petoro (20%).