Weather Watch: 7 of 10 Missing Workers Rescued Alive in Gulf

- Weather Watch: 7 of 10 Missing Workers Rescued Alive in Gulf

Monday, September 12, 2011
Dow Jones Newswires
by Anthony Harrup

Mexican state oil company Petroleos Mexicanos, or PEMEX, said Sunday that seven of 10 workers missing after abandoning a vessel in the Gulf damaged by Tropical Storm Nate have been rescued alive, and that the bodies of two others who died were also recovered.

Pemex said of the seven who were rescued alive are four Mexicans, a Bangladeshi and two U.S. citizens. It said the bodies of the two dead workers had yet to be identified.

The 10 workers, three employees of U.S. seismic data company Geokinetics Inc. (GOK) and seven contract workers went missing Thursday after the vessel Trinity II was disabled by the storm off the coast of Tabasco state, and they evacuated into a life raft.

PEMEX said the workers were located off the coast of Campeche state, 51 miles from the Cayo Arcas offshore oil export terminal.

The rescued workers were being transported by helicopter to a PEMEX hospital in Cuidad del Carmen, and the search continues for the 10th worker, PEMEX added.

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Salamander Farms Into Gulf of Thailand Block

- Salamander Farms Into Gulf of Thailand Block

Friday, September 09, 2011
Salamander Energy

Salamander Energy plc announced that its fully owned subsidiary, Salamander Energy (Bualuang) Ltd has agreed to farm-in to Block G4/50 in the Gulf of Thailand, earning equity in the acreage from Mitsui Oil Exploration Co Ltd (“MOECO”). Following the completion of the transaction, Salamander will hold a 100% working interest in and operatorship of the acreage, while MOECO will retain certain commercial options in the case of a future discovery. Block G4/50 is located in the western Gulf of Thailand and surrounds the Company’s B8/38 licence that contains the Bualuang oil field and Bualuang East Terrace oil discovery. The farm-in is subject to Thai government and regulatory approval.

Key Points:

G4/50, at over 11,650 sq km, is one of the largest blocks of prospective acreage offshore Thailand. The block surrounds the Salamander-operated B8/38 licence in the western Gulf of Thailand

It consolidates Salamander’s acreage position in an area where it has extensive operating experience and geological knowledge

Major programme of 3D seismic in 2H 2011 will be followed by a multiple well exploration programme

As part of the farm-in agreement MOECO will retain certain commercial options in the case of a future discovery

Exploration expenditures incurred in G4/50 are deductible against tax payable on production revenue from the Bualuang oil field in B8/38

James Menzies, Chief Executive, Salamander Energy, said:

“We are delighted to secure a very substantial area of prospective acreage surrounding our Bualuang operations. Block G4/50 has been of growing interest to Salamander as our geological and subsurface understanding of the immediate play has developed. The region remains under-explored to date and we are looking forward to implementing our work programme, starting with an extensive 3D seismic campaign of over 2,900 sq. km on G4/50 in the fourth quarter of this year.”

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Gulf Keystone All Smiles over Shaikan Appraisal Program

- Gulf Keystone All Smiles over Shaikan Appraisal Program

Monday, September 05, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its ongoing exploration and appraisal program for the Shaikan block in the Kurdistan Region of Iraq. Shaikan is a major discovery with independently audited gross oil-in-place volumes of between 4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis with a mean value of 7.5 billion barrels.

Shaikan-2 Well Test Update

Further to the announcement on the new Triassic discovery with the Shaikan-2 Appraisal Well, the Company has completed a flow test in the lower section of the Kurre Chine B zone in the Upper Triassic zone of the Shaikan-2 Appraisal Well drilled approximately nine km to the south-east of the Shaikan-1 discovery well.

The Kurre Chine B flow test in Shaikan-2 achieved flow rates of 2,600 barrels of 40 degree API oil per day with associated gas of 5.4 MMcf per day through a 48/64"choke.

So far, the Company has conducted three wells tests on Shaikan-2 with the maximum aggregate flow rate in excess of 15,000 barrels of oil per day ("bopd") with up to five additional tests still to be performed as part of the ongoing Shaikan-2 testing program in the Triassic and Jurassic. The next test will be conducted on the upper section of the Kurre Chine B.

Shaikan-4 Drilling Update

The Shaikan-4 Appraisal Well, drilled six km to the west of the Shaikan-1 discovery well, is currently drilling ahead at a measured depth (MD) of 2,580 meters. Preliminary well logs through the upper Jurassic (down to the top of the Butmah formation) indicate that the net pay count on this well for the upper Jurassic reservoirs is significantly better than those achieved with either Shaikan-1 or Shaikan-2.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "This latest in a series of successful Shaikan-2 well tests follows the announcement of the new Triassic discovery made with this well earlier this month. Together with the progress in the Shaikan-4 drilling operations and the oncoming spudding of Shaikan-5, it is a confirmation of Gulf Keystone's success in both drilling and proving the value of the giant Shaikan field, which is our immediate focus".

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Weather Watch: Producers Evacuate Workers as Storms Threaten Gulf of Mexico

- Weather Watch: Producers Evacuate Workers as Storms Threaten Gulf of Mexico

Thursday, September 01, 2011
Rigzone Staff
by Karen Boman

Oil and gas exploration and production companies have begun evacuating workers from Gulf of Mexico operations and shutting in production due to the storm system that could turn into the 12th tropical cyclone of this year's hurricane season.

Shell reported it was moving forward with a plan to reduce the number of employees from most of its operations, but weather conditions are already impairing staff movement. "We are using all available resources to safely evacuate employees," said Shell. The number of evacuated personnel will depend on weather condition; personnel will only be moved if safe to do so.

Shell has taken steps to begin shutting in production, focusing on subsea fields that require specific treatments to ensure production can be restored after the storm passes. "The impacts are minimal at this point and we are monitoring Shell non-operated downstream infrastructure for further impacts to our production that may occur," Shell said.

ExxonMobil is evacuating approximately 140 employees and contractors from its Gulf Coast offshore platforms expected to be in the path of the storm. Gross production of approximately 11,000 b/d of liquids and 60 MMcf/d of natural gas has been shut in. "Our primary focus continues to be the safety of our workforce," ExxonMobil said.

BP has begun evacuations of all personnel from its operated assets in the Gulf of Mexico. On Wednesday, 500 non-essential workers had been evacuated. That activity will continue through Thursday and potentially into Friday.

BP operated assets included in this evacuation include Mad Dog, Holstein, Atlantis, Nakika, Pampano, and Thunder Horse. "We will continue monitoring weather conditions and will re-staff these facilities when it is deemed safe to do so," a BP spokesperson said.

Anadarko Petroleum Corp. reported Thursday that it had removed approximately 100 employees from and was shutting in production at all eight of its operated Gulf facilities, including Independence Hub, Constitution, Marco Polo, Red Hawk, Nansen, Boomvang, Gunnison and Neptune. "We will continue to monitor the path of the weather in the Gulf and will return our workers and restore production only when it is safe to do so," the company said in a statement.

Apache Corp. has begun moving some non-essential employees out of the Gulf ahead of the hurricane, a company spokesperson said. Chevron is closely monitoring the tropical disturbance in the Gulf of Mexico. Non-essential personnel are being evacuated and no production has been affected.

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) reported that personnel have been evacuated from nine production platforms as of 11:30 a.m. CDT Thursday, equivalent to 1.6 percent of the 617 manned platforms in the Gulf. None of the 62 rigs currently operating in the Gulf have been evacuated.

BOEMRE estimated that approximately 5.7 percent of current Gulf oil production, or 79,989 b/d, has been shut in, and approximately 2.4 percent of Gulf natural gas production, or 127 MMcf/d, has been shut in. BOEMRE's survey information is based on seven companies' reports as of 11:30 a.m. CDT Thursday.

The National Hurricane Center (NHC) is monitoring a broad area of low pressure in the central Gulf of Mexico 200 miles south of the Louisiana coast that is producing a large area of cloudiness, thunderstorms and gusty winds over the eastern and central Gulf. NHC forecasts upper-level winds to become more conducive for development, and the system could become a tropical depression during the next day or so.

NHC said the system has an 80 percent chance of becoming a tropical cyclone, which would be named Lee, according to the NHC website, as it moves slowly to the northwest. A National Oceanic and Atmospheric Administration hurricane hunter aircraft is scheduled to investigate the area later this afternoon. "Interests along the entire northern Gulf of Mexico coast should monitor the storm's progress," NHC said.

NHC also is tracking Hurricane Katia, which is churning across the Atlantic Ocean towards the U.S. Currently a Category 1 hurricane with maximum sustained winds or near 75 mph, Katia is expected to strengthen over the next 48 hours, and could become a major hurricane by the weekend.

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Gulf Shores Reports Bakken Oil Discovery in Saskatchewan

- Gulf Shores Reports Bakken Oil Discovery in Saskatchewan

Thursday, September 01, 2011
Gulf Shores Resources Ltd.

Gulf Shores reported that the 3-34-14-33W1 well in the Coothill area of Southeast Saskatchewan has been drilled and is being cased as a new Bakken oil discovery.

Gulf Shores Resources Ltd. is paying 60% of the cost of the well to earn a 39% working interest in 160 acres with an option on an additional contiguous 320 acres under the same terms.

The rig will now move to the 9-16-15-32W1 location in the Welwyn area west of the Rocanville Field in Southeast Saskatchewan.

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Completion Ops Underway at Gulf Shores' Saskatchewan Well

- Completion Ops Underway at Gulf Shores' Saskatchewan Well

Thursday, August 25, 2011
Gulf Shores Resources Ltd.

Completion operations are underway on the 4-2-15-33W1 well in the Wapella area of Southeast Saskatchewan in which Gulf Shores Resources has earned a 47.5% working interest. This new oil well offsets the producing 5-2-15-33W1 Bakken oil well in which Gulf Shores also owns a 47.5% working interest.

The rig will now move to the 3-34-14-33W1 location in the Coothill area of Southeast Saskatchewan where drilling is expected to commence within a few days.

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$5 Billion in Claims Paid Out By BP For Gulf Coast Damage

- $5 Billion in Claims Paid Out By BP For Gulf Coast Damage



Aug 23, 2011

"BP says it has paid out $5 billion dollars of the $20 billion set aside for the recovery efforts involved in the Gulf of Mexico spill last year. The pay out is going to Gulf Coast businesses and residents for damages caused by the catastrophe.

According to a summary by the Gulf Coast Claims Facility, which took over the claims process from BP last August, has approved 38% of the 947,892 claims submitted.

The enormous majority of the claims paid have gone to five states. Residents in Florida have been paid $2 billion; more than any other state while residents of Louisiana were paid $1.5 billion. Recipients from Alabama, Mississippi and Texas round out the top five, respectively.

BP (NYSE:BP) has a potential upside of 41.3% based on a current price of $39.44 and an average consensus analyst price target of $55.74."

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Mexico's Pemex Finds Light Crude in Shallow Gulf Waters

- Mexico's Pemex Finds Light Crude in Shallow Gulf Waters

Monday, August 22, 2011
Dow Jones Newswires
MEXICO CITY
by Laurence Iliff

Mexico's state-owned oil company Petroleos Mexicanos, or Pemex, said Monday that it successfully carried out production tests at new oil field in the southern Gulf of Mexico.

Pemex said the Kinbe-1 well reached an initial average production of 5,600 barrels of light crude per day. The well took more than a year to drill, and was finished Aug. 9. Kinbe-1 also has reached natural gas production of 9 million cubic feet per day on average, the oil monopoly said.

Pemex said "this new discovery increases the petroleum potential of the zone comprised by the fields Tsimin, Xux and Kab" as part of the company's light-crude marine project. Kinbe-1 was drilled in 22 meters of water.

After six years of steady declines in crude-oil production, Pemex is trying to ramp up output in order to break the slide, but has struggled due to declines at the Cantarell offshore fields that once accounted for more than half of the company's total production. Cantarell's decline has brought Pemex's overall production down to just under 2.6 million barrels a day currently from nearly 3.4 million barrels a day in 2004.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Gulf Shores Starts Drilling Ops in Southeast Saskatchewan

- Gulf Shores Starts Drilling Ops in Southeast Saskatchewan

Friday, August 19, 201
Gulf Shores Resources Ltd.

Drilling has commenced on the 4-2-15-33W1 well in the Wapella area of Southeast Saskatchewan, said Gulf Shore Resources. Gulf Shores Resources Ltd. is paying 47.5% of the cost of this well to earn a 47.5% working interest. The well offsets the producing 5-2-15-33W1 Bakken oil well in which the Company also owns a 47.5% working interest.

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Gulf Keystone Unlocks Discovery at Shaikan-2 Appraisal

- Gulf Keystone Unlocks Discovery at Shaikan-2 Appraisal

Thursday, August 18, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone has made a new Triassic discovery with the Shaikan-2 Appraisal Well, drilled approximately nine km to the south-east of the Shaikan-1 discovery well in the Kurdistan Region of Iraq.

Gulf Keystone has completed drilling of the Shaikan-2 Appraisal Well to a TD (total depth) of 3,300 meters in the middle Triassic, following which a flow test has been performed in the newly discovered Kurre Chine C zone over a 80 meter interval (3,195m to 3,275m). This new zone is highly pressured and correlates with the high pressure zone penetrated at the bottom of Shaikan-1.

The Kurre Chine C flow test in Shaikan-2 has achieved variable flow rates up to a maximum recorded rate of 4,450 barrels of 36 degree API oil per day with associated gas of 813,000 scf per day through a 36/64" choke.

After success with this first test, the Company plans to continue with its program of Shaikan-2 testing in the Triassic and Jurassic.

The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "The new Triassic discovery is yet another chapter in our Shaikan success story. As a result of these successful Shaikan-2 well test results, oil volumes that will eventually be attributed to this zone, will be in addition to the already impressive 4.86 to 10.8 billion barrels of gross oil-in-place already discovered in the Shaikan field."

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Sheen Seen Emanating from BP Thunderhorse Platform in US Gulf

- Sheen Seen Emanating from BP Thunderhorse Platform in US Gulf

Wednesday, August 17, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

A band of silvery sheen was spotted emanating from BP's Thunderhorse platform Tuesday in the U.S. Gulf of Mexico, though the company said that it has taken action to prevent further discharges, according to a government filing.

A two-foot-wide band of sheen stretching 30 feet from the platform, which is located in deep water south of the Mississippi-Alabama state line, was reported to the National Response Center on Tuesday.

BP told federal pollution regulators that the unspecified substance came from a discharge pipe and that it was adjusting waste treatment chemicals on the platform to remediate the problem, according to the filing.

A BP spokesman did not immediately respond to a request for comment.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Gulf Keystone Bumps Up Resources at Sheikh Adi

- Gulf Keystone Bumps Up Resources at Sheikh Adi

Wednesday, August 10, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone announced results of an independent preliminary evaluation of the Sheikh Adi resources by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants.

The DGA report, based on Sheikh Adi-1 wireline logging data, core samples, 2D and 3D seismic and regional data, has indicated a significant range of between 1 billion barrels and 3 billion barrels of gross oil-in-place volumes calculated on the P90 to P10 basis, with a P50 estimate of 1.9 billion barrels.

Gulf Keystone has completed drilling of Sheikh Adi-1, the first exploration well to be drilled on the Sheikh Adi structure, to a TD (total depth) of 3,780 meters in the Triassic zone. A series of flow tests will now be performed on a number of Jurassic zones in the Sheikh Adi-1 well. Testing in the Triassic zone will not be possible due to issues relating to casing integrity at these depths.

The Sheikh Adi block is located immediately to the west of the Company's Shaikan block, where a major discovery was made in 2009. Gulf Keystone is the Operator of the Sheikh Adi block with an 80 percent working interest and is carrying the Kurdistan Regional Government's 20 percent working interest in the block.

DGA's previous assessments of assets on behalf of Gulf Keystone included independent evaluation of the Shaikan discovery, including a major revision of the gross oil-in-place volumes (4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis) announced in April 2011.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "This independent report demonstrates the potential of the Sheikh Adi block with between 1 and 3 billion barrels of gross oil-in-place. This report reinforces our belief in having encountered yet another potential world class oil source. We plan to further evaluate the Sheikh Adi structure and define and assess this complicated geological structure. The Sheikh Adi oil-in-place numbers are all the more significant due to our 80 percent interest in the block. These numbers are in addition to 7.5 billion barrels of P50 oil-in-place at Shaikan, 2.4 billion barrels of P50 oil-in-place at Akri-Bijeel and 1.9 billion barrels of estimated petroleum-initially-in-place at Ber Bahr. This report further demonstrates the world class nature of Gulf Keystone's assets in the Kurdistan Region of Iraq".

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Gulf Weather System Upgraded to Tropical Storm Don

- Gulf Weather System Upgraded to Tropical Storm Don

Thursday, July 28, 2011
Rigzone Staff

The tropical disturbance that has been forming in the Gulf of Mexico has been upgraded to Tropical Storm Don. The National Hurricane Center reported that the storm is moving toward the west-northwest at approximately 10 mph and an increase in forward speed is expected through Friday. As of Thursday morning, the storm's location is approximately 495 miles east-southeast of Brownsville, Texas

Should the storm stay on its present track, its center would move through the southern and central Gulf of Mexico Thursday and approach the Texas coast on Friday. Maximum sustained winds remain near 40 mph and tropical storm force winds extend outward up to 45 miles from the center.

Oil companies have begun evacuating non-essential personnel from offshore installations in the path of the storm. Shell, Apache, Chevron, BP and BHP have said that while evacuations have started, production has not been impacted.

BP has evacuated non-essential personnel from the Atlantis, Mad Dog, and Holstein production facilities located in the southern Green Canyon area. Shell has begun securing well operations and evacuating personnel from the Perdido Spar, Auger platform and the Noble Danny Adkins ultra-deepwater semisub. BHP Billiton has evacuated non-essential personnel from Shenzi which is located in Green Canyon 609 and Neptune which is located in the Atwater Valley area.

Anadarko has evacuated approximately 185 employees and contractors from their Nansen, Boomvang, Gunnison, Red Hawk and Constitution spars as well as the Marco Polo facility in the western Gulf of Mexico. As a precaution, Anadarko is also shutting in production at these facilities.

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Gulf Weather System Nearly Certain To Become A Tropical Cyclone

- Gulf Weather System Nearly Certain To Become A Tropical Cyclone

Wednesday, July 27, 2011
Dow Jones Newswires
HOUSTON
by Isabel Ordonez & Ryan Dezember

U.S. forecasters said a weather system rumbling into the southwestern Gulf of Mexico will almost certainly become a tropical cyclone by Friday afternoon.

The National Hurricane Center said satellite imagery indicates a tropical depression or tropical storm could be forming 90 miles north of Cancun, Mexico. The system, passing through the channel between the Yucatan peninsula and Cuba's western tip, is moving west-northwest at 15 miles per hour, forecasters said.

The Hurricane Center has dispatched a Hurricane Hunter airplane to the area to investigate conditions. The storm has a "near 100%" chance of becoming a tropical cyclone by midday Friday, forecasters said.

The Gulf accounted for about 30% of all U.S. oil production last year, with more than 606 million barrels. Gulf wells also account for about 7.2% of U.S. natural gas production.

Shell, one of the largest producers in the Gulf of Mexico, said it has evacuated some non-essential personnel from its southwest operations due to the threat of a possible storm.

The company said it evacuated about 70 people and that production isn't affected. Evacuation started Tuesday and continued Wednesday, the company said.

"These personnel are not essential to core producing," the company said.

Shell said it began securing operations on the Perdido platform, which it operates in partnership with Chevron and BP. About 200 miles south of Galveston, Texas, in about 8,000 feet of water, the Perdido platform is the world's deepest drilling and production platform. Its peak production is the equivalent of about 100,000 barrels of oil per day.

Shell also said it is securing operations on the Noble Danny Adkins, a deep-water drill ship it is leasing from Noble which is working in the vicinity of the Perdido platform. Noble spokesman John Breed said the company isn't evacuating workers from the rig but is "securing operations" aboard the ship.

Other major Gulf of Mexico producers BP, Chevron and ConocoPhillips said Wednesday they are monitoring the weather and developing plans should it threaten their operations.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Transocean Briefs Investigation Report on Causes of Macondo Incident

- Transocean Briefs Investigation Report on Causes of Macondo Incident

Wednesday, June 22, 2011
Transocean Ltd.

Transocean announced the release of an internal investigation report on the causes of the April 20, 2010, Macondo well incident in the Gulf of Mexico.

Following the incident, Transocean commissioned an internal investigation team comprised of experts from relevant technical fields and specialists in accident investigation to gather, review, and analyze the facts and information surrounding the incident to determine its causes.

The report concludes that the Macondo incident was the result of a succession of interrelated well design, construction, and temporary abandonment decisions that compromised the integrity of the well and compounded the likelihood of its failure. The decisions, many made by the operator, BP, in the two weeks leading up to the incident, were driven by BP's knowledge that the geological window for safe drilling was becoming increasingly narrow. Specifically, BP was concerned that downhole pressure -- whether exerted by heavy drilling mud used to maintain well control or by pumping cement to seal the well -- would exceed the fracture gradient and result in fluid losses to the formation, thus costing money and jeopardizing future production of oil.

The Transocean investigation team traced the causes of the Macondo incident to four overarching issues:

• Risk Management and Communication: Evidence indicates that BP failed to properly assess, manage and communicate risk to its contractors. For example, it did not properly communicate to the drill crew the absence of adequate testing on the cement or the uncertainty surrounding critical tests and procedures used to confirm the integrity of the barriers intended to inhibit the flow of hydrocarbons into the well. It is the view of the investigation team that the actions of the drill crew on April 20, 2010, reflected the crew's understanding that the well had been properly cemented and successfully tested.
• Well Design and Construction: The precipitating cause of the Macondo incident was the failure of the downhole cement to isolate the reservoir, which allowed hydrocarbons to enter the wellbore. Without the failure of the cement barrier, hydrocarbons would not have entered the well or reached the rig. While drilling the Macondo well, BP experienced both lost circulation events and kicks and stopped short of the well's planned total depth because of an increasingly narrow window for safe drilling, specifically a limited margin between the pore pressure and fracture gradients. In the context of these delicate conditions, cementing a long-string casing would increase the risk of exceeding the margin for safe drilling. But rather than adjusting the production casing design to avoid this risk, BP adopted a technically complex nitrogen foam cement program that allowed it to retain its original casing design. The resulting cement program was of minimal quantity, left little margin for error, and was not tested adequately before or after the cementing operation. Further, the integrity of the cement may have been compromised by contamination, instability and an inadequate number of devices used to center the casing in the wellbore.
• Risk Assessment and Process Safety: Based on the evidence, the investigation team determined that BP failed to properly require or confirm critical cement tests or conduct adequate risk assessments during various operations at Macondo. Halliburton and BP did not adequately test the cement slurry program, despite the inherent complexity, difficulties and risks associated with the design and implementation of the program and some test data showing that the cement would not be stable. BP also failed to assess the risk of the temporary abandonment procedure used at Macondo, generating at least five different temporary abandonment plans for the Macondo well between April 12, 2010 and April 20, 2010. After this series of last-minute alterations, BP proceeded with a temporary abandonment plan that created unnecessary risk and did not have the required approval by the MMS. Most significantly, the final plan called for underbalancing the well before conducting a negative pressure test to verify the integrity of the downhole cement or setting a cement plug to act as an additional barrier to flow. It does not appear that BP used risk assessment procedures or prepared Management of Change documents for these decisions or otherwise addressed these risks and the potential adverse effects on personnel and process safety.

Operations

• Negative Pressure Test: The results of the critical negative pressure test were misinterpreted. Post-incident investigation determined that the negative test was inadequately set up because of displacement calculation errors, a lack of adequate fluid volume monitoring, and a lack of management of change discipline when the well monitoring arrangements were switched during the test. It is now apparent that the negative pressure test results should not have been approved, but no one involved in the negative pressure test recognized the errors. BP approved the negative pressure test results and decided to move forward with temporary abandonment. The well became underbalanced during the final displacement, and hydrocarbons began entering the wellbore through the faulty cement barrier and a float collar that likely failed to convert. None of the individuals monitoring the well, including the Transocean drill crew, initially detected the influx.
• Well Control: With the benefit of hindsight and a thorough analysis of the data available to the investigation team, several indications of an influx during final displacement operations can be identified. Given the death of the members of the drill crew and the loss of the rig and its monitoring systems, it is not known which information the drill crew was monitoring or why the drill crew did not detect a pressure anomaly until approximately 9:30 p.m. on April 20, 2010. At 9:30 p.m., the drill crew acted to evaluate an anomaly. Upon detecting an influx of hydrocarbon by use of the trip tank, the drill crew undertook well-control activities that were consistent with their training including the activation of various components of the BOP. By the time actions were taken, hydrocarbons had risen above the blowout preventer and into the riser, resulting in a massive release of gas and other fluids that overwhelmed the mud gas separator system and released high volumes of gas onto the aft deck of the rig. The resulting ignition of this gas cloud was inevitable.
• Blowout Preventer (BOP): Forensic evidence from independent post-incident testing by Det Norske Veritas (DNV) and evaluation by the Transocean investigation team confirm that the Deepwater Horizon BOP was properly maintained and operated. However, it was overcome by the extreme dynamic flow, the force of which pushed the drill pipe upward, washed or eroded the drill pipe and other rubber and metal elements, and forced the drill pipe to bow within the BOP. This prevented the BOP from completely shearing the drill pipe and sealing the well.
• Alarms, Muster, and Evacuation: In the explosions and fire, the general alarm was activated, and appropriate emergency actions were taken by the Deepwater Horizon marine crew. The 115 personnel who survived the initial blast mustered and evacuated the rig to the offshore supply vessel Damon B. Bankston.

The Transocean internal investigation team began its work in the days immediately following the incident. Through an extensive investigation, the team interviewed witnesses, reviewed available information regarding well design and execution, examined well monitoring data that had been transmitted real-time from the rig to BP, consulted industry and technical experts, and evaluated available physical evidence and third-party testing reports.

The loss of evidence with the rig and the unavailability of certain witnesses limited the investigation and analysis in some areas. The team used its cumulative years of experience but did not speculate in the absence of evidence. The report of the team does not represent the legal position of Transocean, nor does it attempt to assign legal responsibility or fault.

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Gulf Keystone Focused on Adding Volumes to Iraqi Blocks

- Gulf Keystone Focused on Adding Volumes to Iraqi Blocks

Thursday, June 16, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its operations in the Kurdistan Region of Iraq highlighting that:

• Shaikan-2 deep appraisal well is currently at a depth of 3,166 meters with the final total depth (TD) still planned for the lower Triassic or the upper Permian
• Sheikh Adi-1 exploration well is currently at a depth of 3,515 meters in the Triassic Kurre Chine B and a cased hole testing program will be undertaken once the drilling has reached TD
• After spudding on May 27, 2011, the Shaikan-4 deep appraisal well is currently at a depth of 462 meters
• Preliminary results of the Shaikan 3D seismic data interpretation suggest a larger structure (by 5-10%) than originally mapped based on the earlier 2D seismic data
• Bekhme-1 exploration well on the Akri-Bijeel block is drilling ahead at a depth of 2,828 meters.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "With three Gulf Keystone wells underway on the Shaikan and Sheikh Adi blocks, the second exploration well being drilled in partnership with MOL on the Akri-Bijeel block, and the first exploration well expected to be drilled on the Ber Bahr block in partnership with Genel later in 2011, we are firmly focused on adding further oil-in-place volumes in all four blocks in the Kurdistan Region of Iraq."

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NZOG Granted Permit in Gulf of Gabes

- NZOG Granted Permit in Gulf of Gabes

Wednesday, June 15, 2011
New Zealand O&G Ltd.

NZOG (New Zealand Oil & Gas Ltd) has been granted a permit in the Mediterranean's Gulf of Gabes, an established oil and gas producing region off the coast of Tunisia.

A formal signing agreement involving Tunisia's Minister of Industry and Technology, the Director-General of Energy, and the Chairman of the state owned petroleum company, took place in Tunis this morning.

NZOG Chief Executive David Salisbury traveled to Tunis for the signing ceremony. He says NZOG has been assessing opportunities in Tunisia since 2008.

"NZOG's strategy is to grow our business through exploration and acquisition in New Zealand and by establishing a couple of new core areas outside of New Zealand.

"During NZOG's search for suitable overseas opportunities, our attention has returned repeatedly to Tunisia due to its combination of good prospectivity, established exploration and production activity levels, reasonable fiscal terms, and ease of doing business.

"Through our screening process we identified an attractive overlooked oil prospect in an open area of the Gulf of Gabes. In August last year we submitted a permit application and have been working with the Tunisian authorities since then to finalize arrangements. I'm delighted that we have been successful and can now further assess this opportunity."

A two year prospecting permit has been awarded, with priority rights to apply for a subsequent four year exploration permit.

The Diodore permit extends over an area of 1,236 sq km in the relatively shallow (<100 meters) water depth of the southern Gulf of Gabes.

The permit is surrounded on all sides by discovered and producing oil and gas fields. David Salisbury said it is a very productive region which will add diversity to NZOG's exploration portfolio through access to lower risk opportunities. "Tunisia gives us diversity, by adding a lower risk/smaller reward core area to our portfolio.

The exploration targets tend to be of moderate size - so do not generally attract the interest of the really big industry players - but the likelihood of striking oil is typically higher than what we experience in New Zealand.

"In particular, with our newly acquired permit, adjacent producing fields prove that there is an active regional oil source - what we need to do is identify the structures where oil may be trapped."

David Salisbury says the move towards more open democracy in Tunisia enhances its attractiveness as an investment destination.

"We have made a number of visits to Tunisia, engaged very capable local representatives and are already well linked in with government agencies and other oil companies that already have a presence in the region. We are appointing an experienced explorationist as our country manager and are in the process of opening a Tunis office."

The Prospecting Permit provides an exclusive right for two years, requires no well commitment, and gives NZOG a priority right to apply for an Exploration Permit but with no commitment to do so.

NZOG's work program during the two year Prospecting Permit period is focused on processing and analyzing existing data and acquiring 350km of new 2D seismic data. The cost commitment for NZOG is approximately US $3MM. David Salisbury said the permit provides an entry point to assess other Tunisian opportunities.

"This is a further step in a long term growth strategy. We are already in discussions with other companies regarding their Tunisian interests. Establishing an initial foothold in Tunisia allows us to focus on identifying further opportunities for exploration or asset acquisition."

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Gulf Keystone Updates Ops at Shaikan Wells

- Gulf Keystone Updates Ops at Shaikan Wells

Tuesday, June 14, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone is currently in the commissioning phase of oil export operations from its Extended Well Test (EWT) facility close to Shaikan-1 and Shaikan-3.

The commissioning phase, involving final preparations and customary checks and tests on all elements of the process, including loading and transportation logistics, as well as metering and receiving facilities, is underway in order to enable the Company to steadily ramp up export volumes to 5,000 barrels of oil per day (bopd) with an eight month target of over 10,000 bopd. To date just over 3,700 barrels of oil have been delivered to the storage tank facilities at the export pipeline injection point.

Prior to commencing the commissioning phase the storage tank at the EWT facility was emptied of approximately 21,000 barrels of oil, which have been sold into the domestic market in order to allow preparations for oil export to commence.

All volumes of oil are in addition to those previously reported in the Annual Results on April 11, 2011.

The Company will provide a further update on oil export operations once the commissioning phase is complete and stabilized export volumes have been injected into the Kirkuk-Ceyhan pipeline.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "Gulf Keystone is making good progress toward commencing oil exports from our Shaikan facilities at the initial intended rate of 5,000 bopd following the current commissioning phase. We look forward to delivering stabilized export volumes of Shaikan crude for shipment via the Kirkuk-Ceyhan pipeline."

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US Challenged over Approval of Shell Gulf Drilling Plan

- US Challenged over Approval of Shell Gulf Drilling Plan

Friday, June 10, 2011
Dow Jones Newswires
WASHINGTON (Dow Jones Newswires)
by Ryan Tracy

Environmental groups Thursday sued the Obama administration over its approval of a Shell plan to drill for oil deep under the Gulf of Mexico.

The suit was the opening salvo in what could be a lengthy legal fight over U.S. drilling policy following the resumption of oil and gas exploration after the Deepwater Horizon disaster. It came a day after ExxonMobil announced one of the largest oil discoveries ever in the Gulf, signaling that as oil companies use newly issued federal permits to return to the area after last year's oil spill, they are also likely to face more legal battles.

"Before new deepwater Gulf drilling occurs, the government must make a realistic assessment of the risk to the Gulf's ecosystem, its communities, and the many jobs that depend on tourism, fishing and recreation. It has utterly failed to do so here," said David Guest, an attorney with Earthjustice, which filed the suit on behalf of the Sierra Club, the Gulf Restoration Network and the Florida Wildlife Federation.

The groups alleged that federal regulators violated environmental laws when they approved Shell's plan to drill eight wells about 72 miles off the Louisiana coast last month and asked the Eleventh Circuit of the U.S. Court of Appeals in Atlanta to nix the approval.

The review of Shell's proposal was conducted under a new regulatory regime that was instituted after Deepwater Horizon and designed to improve safety and strengthen environmental protection. It found no evidence that the plan would significantly affect the quality of the "human environment."

The environmental groups say the government underestimated the likelihood of a major oil spill and failed to account for weaknesses in the company's plan to contain or prevent a blowout like the one that occurred in the Gulf last year.

A spokeswoman for the Bureau of Ocean Energy Management, Regulation, and Enforcement, which approved Shell's plan, declined to comment.

Shell spokeswoman Kayla Macke said in an email that Thursday's legal filings "fail to take into account the comprehensive nature of the approved exploration plan," which "reflects numerous improvements to enhance safety and to protect the environment."

"We will fully assist the government in defending this plan," Macke said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Exxon Mobil announces three discoveries in deepwater Gulf of Mexico

- Exxon Mobil announces three discoveries in deepwater Gulf of Mexico



Jun 8, 2011

Exxon Mobil (NYSE:XOM) announced two major oil discoveries and a gas discovery in the deepwater Gulf of Mexico after drilling the company's first post-moratorium deepwater exploration well. Steve Greenlee, president of ExxonMobil Exploration Company said, "We estimate a recoverable resource of more than 700 million barrels of oil equivalent combined in our Keathley Canyon blocks. This is one of the largest discoveries in the Gulf of Mexico in the last decade. More than 85 percent of the resource is oil with additional upside potential."

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