BP, Weatherford In Settlement on Deepwater Horizon

- BP, Weatherford In Settlement on Deepwater Horizon

Monday, June 20, 2011
Dow Jones Newswires
by Drew FitzGerald

BP on Monday reached a settlement with Weatherford's U.S. subsidiary that indemnifies the oil-services company from future Deepwater Horizon-related disaster claims.

Under the deal, Weatherford agreed to pay BP $75 million to spend on its Gulf Coast recovery fund. The entire cost of the settlement is being funded by insurance policies Weatherford had in place when the disaster happened.

The deal ties up another end in a web of litigation for companies that worked on the drilling rig, which exploded last year and caused one of the largest oil spills in U.S. history. Weatherford provided BP with products and services for the Macondo oil well, along with rig-owner Transocean and contractor Halliburton.

Under the latest agreement, BP indemnified Weatherford from all current and future environmental, pollution, personal, business, property and economic loss claims arising from the accident.

Separately, Transocean said Friday that insurers of its sunken rig have asked a federal judge to decide if BP and other owners of the doomed Macondo well are entitled to any coverage for the accident.

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

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HWCG Expands Deepwater Capabilities

HWCG Expands Deepwater Capabilities

Wednesday, March 30, 2011
The Helix Well Containment Group

The Helix Well Containment Group (HWCG) announced it will substantially increase its subsea well containment capabilities this year by expanding its ability to control and contain a release in water depths up to 10,000 feet.

HWCG is a consortium of 22 deepwater operators in the Gulf of Mexico that has come together with the common goal of expanding capabilities to quickly and comprehensively respond to such an incident to protect employees, communities and the environment. HWCG's current system is capable of facilitating control and containment of spills in water depths up to 5,600 feet and will utilize Helix Energy Solutions Group's Q4000, the intervention vessel effectively used during the Deepwater Horizon response.

The system features a 10,000 psig capping stack.

By April 8, 2011, the system is expected to have increased containment capacity and capabilities for water depths up to 8,000 feet, as well as capture and processing capabilities of 55,000 barrels of oil per day and 95 million cubic feet of natural gas per day. In the coming weeks, HWCG will also add a 15,000 psig capping stack.

Full operational capability for water depths of up to 10,000 feet is anticipated mid-summer 2011.

"Our enhanced response and containment capabilities would exceed the depth of any well currently drilled or planned by the consortium's 22 members and would allow operators to control capping and containment stacks at the greater depths," said Roger Scheuermann, commercial director for HWCG.

Building upon equipment effectively used in the Deepwater Horizon response, HWCG has signed an agreement with Helix Energy Solutions Group to provide the primary components of the response. Additionally, HWCG has agreements in place with more than 30 service providers who will provide additional services, products and personnel, if needed.

Keppel Delivers Rig Four Months Ahead of Schedule

Keppel Delivers Rig Four Months Ahead of Schedule

Tuesday, March 29, 2011
Keppel Corp. Ltd.

Keppel FELS has delivered Alpha Star, the second of two DSSTM 38 semisubmersible rigs, to Brazil's Queiroz Galvão Óleo e Gás (QGOG) four months ahead of schedule and with zero lost time incidents.

This continues Keppel FELS track record of delivering its rigs on time or ahead of schedule. It is the third early delivery this year, following the early delivery of the semisubmersible drilling tender, West Jaya, to Seadrill and of the KFELS N Class rig, Rowan Stavanger, for Rowan Companies.

Mr. Tong Chong Heong, CEO of Keppel Offshore & Marine, said, "This is our second safe and early delivery to QGOG and a sterling record for our company. This outstanding achievement is a demonstration of the great teamwork and synergy we have built with QGOG. It brings to fore the excellence of our efficient processes, project management, innovative methods and the Can-Do spirit which we apply on all our projects.

"We are glad to be able to send Alpha Star off early to contribute to Brazil's exploration and production efforts, enabling QGOG to anticipate its service from Petrobras. Our philosophy is to provide maximum value to our customers and we look forward to supporting QGOG as they expand their foothold in the deepwater drilling segment."

The rig has been chartered by Petrobras for six years to support exploration and production activities offshore Brazil.

Mr. Leduvy Gouvea, Chef Executive Officer of Queiroz Galvão Óleo e Gás said, "With this early delivery, we are able to start work earlier for Petrobras, and reinforce our status as the premier drilling operator in Brazil. We are confident that Alpha Star will be just as successful as its sister rig, the DSSTM 38 Gold Star, which is performing successfully for Petrobras in Brazil.

"Through the various projects we have been working on, they have proven to be an exceptional partner, delivering projects which exceed expectations and enabling us to efficiently serve the fast-growing oil and gas exploration industry. They share our commitment to provide technologically advanced and high quality products to our customers in a reliable and safe manner."

Jointly developed and owned by Keppel's Deepwater Technology Group and Marine Structure Consultants, the DSSTM 38 design is in the league of some of the world's most advanced drilling semisubmersibles.

Designed to maximize uptime with reduced emissions and discharges, a DSSTM 38 rig is well-suited to handle the operational requirements in the deepwater "Golden Triangle" region, which comprises Brazil, Africa and the Gulf of Mexico.

Gauging the Gulf: Anticipated Production Declines

Gauging the Gulf: Anticipated Production Declines

Monday, March 28, 2011
Rigzone Staf
by  Trey Cowan

As of the most recent data provided by the EIA (October 2010), crude oil production coming from the Gulf of Mexico makes up approximately 29% of total U.S. daily production. We would note that this is a drop from the month of May when the Gulf contributed to 31% of all crude production.

In the U.S. Energy Information Administration's July Short-term Energy Outlook, the EIA projected that the moratorium would result in lost production of approximately 82,000 bbl/d on average during 2011 or a cumulative 30 million barrels.

Given how early in the game it was when the government made these projections, we doubt they fully considered how slowly the permitting process would resume once they rescinded the moratorium. Using average decline rates, taking the slow resumption into account, we believe the average lost production in 2011 will approximate 95,700 bbl/d or 35 million barrels in total.

The chart above illustrates that after the hurricanes of 2004 & 2005, it took several years to regain production crippled by the storms. The years 2009 and 2010 benefit from projects started in the previous six years that resulted in Gulf of Mexico production exceeding the prior peak set early in the decade.

The impact from suppressed drilling in the Gulf of Mexico over the next two years will be mitigated by operators exploiting horizontal drilling for oil in regions like the Bakken and Eagle Ford shale. This boost in the lower 48, along with the anticipated declines in production from the gulf, suggests the percentage of production from offshore sources will drop. We are anticipating that the Gulf of Mexico's annual contribution will drop from 30% to approximately 26% in U.S. supplies over the next two years.

Begich Proposes Federal Coordinator for OCS

Begich Proposes Federal Coordinator for OCS

Monday, March 28, 2011
Alaska Journal of Commerce
by  Tim Bradner

Alaska U.S. Sen. Mark Begich told the Alaska Legislature he will introduce legislation establishing an Arctic outer continental shelf federal coordinator and creating a joint regional lease and permit processing office for Alaska's OCS region, modeled after the federal gas pipeline coordinator position.

The new federal coordinator would have authority to work across many agencies involved in permitting, including the U.S. Environmental Protection Agency, U.S. Army Corps of Engineers and the Interior Department.

The bill would be introduced soon, Begich spokeswoman Julie Hasquet said.

Begich spoke in Juneau in his annual address to the Legislature.

"The federal OCS coordinator would work with the state of Alaska and affected local governments to streamline development in the Chukchi and Beaufort seas, which hold such promise for future oil and gas development," Begich said.

He also urged serious discussion of which federal agency should have jurisdiction over air permitting.

Begich argued for federal air quality permit authority in the Arctic OCS region to be brought under the Department of the Interior, which now has jurisdiction over air permits in the Gulf of Mexico.

This would take away the U.S. Environmental Protection Agency's current authority for air quality permits in the Arctic OCS.

An air quality permit for Shell's proposed exploration in the Beaufort Sea is now bogged down in appeals before the Environmental Review Board, an internal EPA appeals panel.

"We need to address the two different air permitting systems in the country. There are currently two processes and two different federal agencies overseeing air permits -- one for the Gulf of Mexico and one for everyone else -- including the Arctic," Begich said in his speech. "This makes no sense. It's not fair and it puts companies with projects in the Arctic at a competitive disadvantage. We need to level the playing field. It's time to move all air permitting under the Interior Department."

Shell reacted favorably to Begich's suggestions.

"The senator clearly understands the challenges facing responsible operators, like Shell, as well as the need for a regulatory process that is predictable and accountable," company spokesman Curtis Smith said in a statement. "A federal OCS regional coordinator for Alaska could go a long way in making that happen. Shell has already spent five years and over $50 million trying to secure an air permit for our drilling rig but with no success. The Senator's effort to align Arctic air permitting under the Department of Interior, as it is in the Gulf of Mexico, is one Shell supports."

Anadarko to Mobilize Rig to W. Africa

Anadarko to Mobilize Rig to W. Africa

Monday, March 28, 2011

Anadarko Petroleum Corp.

 

Anadarko has finalized plans for its previously announced 2011 drilling campaign in the Liberian Basin. To carry out this program,
Anadarko intends to mobilize the Discoverer Spirit drillship from the Gulf of Mexico to West Africa after it finishes completion activities
on the third Caesar/Tonga well. Subject to the finalization of a contract amendment with the rig owner, the Discoverer Spirit is expected to begin drilling in West Africa during the third quarter.

As part of this program, Anadarko plans to drill its first Mercury appraisal well, located approximately seven miles west of the Mercury
discovery well offshore Sierra Leone in Block SL-07B-10. In addition, the company plans to drill the Jupiter exploration prospect on the
same block later in the year. Anadarko operates Block SL-07B-10 with a 65-percent working interest.

Offshore Liberia, the company plans to drill the Montserrado exploration well on Block 15, which is operated by Anadarko with a
57.5-percent working interest. Further to the east, on Block 10, Anadarko recently completed the acquisition of a 2,400-square-kilometer 3D seismic survey. Processing of the survey is expected to take approximately six to nine months, and with the
acquisition of this data, Anadarko will have 3D seismic information covering virtually all of its acreage in the Liberian Basin.

"Mobilizing the Discoverer Spirit to West Africa ensures our ability to deliver upon our exploration and appraisal programs in a timely
fashion in an area that offers tremendous potential with more than 30 identified Jubilee-like prospects on our acreage," said Al Walker,
Anadarko President and Chief Operating Officer. "We plan to keep the ENSCO 8500 rig in the Gulf of Mexico to conduct an extended well test at Lucius and, once we receive drilling permits, we are confident that we will be able to utilize the ENSCO 8500 and contract a
deepwater rig of opportunity to resume our development and exploration programs in the Gulf."

Statoil Wraps Up Ops Offshore Egypt

Statoil Wraps Up Ops Offshore Egypt

Monday, March 28, 2011
Statoil
by  SubseaIQ

The Kiwi well in the Egypt's El Dabaa License (Block 9) was completed this week and the Discoverer Americas drillship will soon head back to the US Gulf of Mexico.

The exploration well targeted the Kiwi prospect in the El Dabaa license, located in the Mediterranean west of the Nile Delta, with a water depth of around 2,700 meters at the drill site.

Extensive logging has been performed in the well, and preliminary results show that the well is dry.

The offshore operations were completed safely and the results of the well will now be further evaluated and integrated into the understanding of the area before any new decisions about the acreage are made.

Statoil is the operator and holds 80% equity in the license. Sonatrach International Petroleum E&P, a wholly owned subsidiary of the Algerian state oil and gas company, holds the remaining 20%.