UK Govt, Oil Industry Attempt to Resolve North Sea Tax Issue

- UK Govt, Oil Industry Attempt to Resolve North Sea Tax Issue

Thursday, September 08, 2011
Dow Jones Newswires
ABERDEEN
by Alexis Flynn & Sarah Kent

The U.K. government and the North Sea oil and gas industry have set up a joint forum to discuss issues around the fiscal regime, although resolution on possible tax relief for the decommissioning of old fields and installations will likely take some time, Treasury Minister Justine Greening said Thursday.

North Sea oil and gas companies have been vocal in their criticism of Chancellor of the Exchequer George Osborne's decision to raise the top rate of tax on profits from offshore production in the last budget. They have argued that investment in what is a mature and declining basin risks being stymied by an unpredictable and onerous tax regime.

Greening, who was speaking at an industry conference here, said the new forum would include representatives from the Treasury, lobby group Oil and Gas UK and senior officials from the Department of Energy and Climate Change. By meeting on a regular basis, the forum would help the industry get more clarity on potential changes to the tax regime, and discuss possible future tax relief, such as decommissioning.

"What we will try to do is put some certainty in that. Now, obviously we can't always tie the hands of governments going forward, [but] I think what we can do is look to see to what extent we can find a way through this," said Greening.

Head of Oil and Gas UK Malcolm Webb said he was encouraged by the discussions.

"It was a very constructive meeting," said Webb.

However, Greening said it was impossible to say whether the issue around decommissioning would be resolved in time for the next budget

"I'm not going to put a timeline on it. What I can say is we've got a couple of working groups set up, one of them around decommissioning and we would like to very constructively work with the industry on that and we've been encouraged by the progress made. But let's be clear. If sorting out a long-term solution to decommissioning was easy it would have been sorted out a long time ago. We absolutely want to work on this as fast as we can. But what I think matters is getting the right long-term solution, one that stands on its own two feet," she said.

Webb said that although there was still lingering frustration over the unanticipated nature of the earlier tax increase, it was time for both industry and government to look to the future.

"There's some regret, but what the industry is determined to do is to turn the page to overcome the problems that the government has presented us with, and we really were encouraged [by the meeting] today."

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

Oil & Gas Post

Promote Your Page Too
LINK

RBG Clinches Apache Contract Extension in North Sea

- RBG Clinches Apache Contract Extension in North Sea

Thursday, September 08, 2011
RBG

RBG has secured a major £30 million two year contract extension to provide Apache North Sea Limited with fabric maintenance and deck crew services.

The contract, which RBG has held since 2008, will see the continued delivery of a wide range of integrated services, including coatings specification, application and repair, passive fire protection, thermal insulation, special access solutions and scaffolding, across the five Forties field platforms, located in the North Sea.

Working with Apache, RBG has established an excellent safety record over the past three years, recording more than 542,000 hours without a lost time incident. RBG deploys multi-disciplined teams that execute the complex workscopes whilst minimizing pressures on bed space and travel logistics.

Dave Workman, RBG, chief executive officer, said, "Securing this contract underlines our position as the leading support contractor of choice in the UKCS and highlights the benefits of our integrated service offering. The region is still a major growth area and securing this extension positions us well for our plans in the region in 2011 and beyond.

"Over the past 35 years we have established an unrivaled track record for delivering fabric maintenance services across the North Sea. Securing this extension is recognition of the great work our projects team carry out and the safe, quality service they deliver, both onshore and offshore."

Bill Logan, Apache North Sea's production manager, said, "RBG has delivered a high quality service over the past three years and we are happy to continue our working relationship with the company."

Oil & Gas Post

Promote Your Page Too
LINK

Premier Oil Granted Drilling Permit in North Sea

- Premier Oil Granted Drilling Permit in North Sea

Wednesday, September 07, 2011
Norwegian Petroleum Directorate

The Norwegian Petroleum Directorate has granted Premier Oil Norge AS a drilling permit for well 9/1-1 S.

Well 9/1-1 S will be drilled from the Bredford Dolphin drilling facility in position 57°35'37.02"N and 4°00'56.05"E.

The drilling program for well 9/1-1 S concerns the drilling of a wildcat well in production license 406. Premier Oil Norge AS is the operator with a 40 percent ownership interest. The other licensees are Skeie Energy AS with 40 percent and Spring Energy Exploration AS with 20 percent. Production license 406 was awarded in APA 2006.

The area in this production license is located in the southeastern part of the North Sea. It consists of parts of blocks 8/3, 9/1, 17/12, 18/10 and 18/11. Well 9/1-1 S is the first exploration well to be drilled in this production license.

The drilling permit is contingent upon the operator securing all permits and consents required by other authorities before commencing the drilling activity.

Oil & Gas Post

Promote Your Page Too
LINK

Coastal's Bua Ban North A-05 Encounters Net Pay

- Coastal Bua Ban North A-05 Encounters Net Pay

Wednesday, September 07, 2011
Coastal Energy Co.

Coastal Energy announced the successful results of the Bua Ban North A-05 well and provides an operations update.

The Bua Ban North A-05 well was drilled to a total depth of 5,650 feet TVD. The well encountered 81 feet of gross sand and 35 feet of net pay in the Miocene reservoir with 27 percent average porosity. The well tested the Miocene reservoir on the eastern flank of the Bua Ban North A field. The oil water contact in the well was seen at 3,770 feet. The results of the A-05 well add an additional 1,200 acres to the structural closure area. The Company is planning to drill five to six additional evaluation wells at Bua Ban North before moving the rig to G5/50.

The Bua Ban North B-02, B-03 and B-04 wells have all been completed and tied into the production facilities. The aggregate production rate from Bua Ban North B is approximately 8,200 bopd. Average production at Songkhla A is approximately 4,000 bopd, with production currently being constrained due to a temperature issue. The Company is installing additional cooling units to remedy this issue and restore production to 6,500 bopd. The installation is expected to be complete in approximately two weeks.

Aggregate offshore oil production is averaging 13,700 bopd, and total Company production is averaging 15,800 boepd.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "We are very pleased with the results of the Bua Ban North A-05 well. This well was drilled as far north as possible to test the presence of hydrocarbons between Bua Ban North A & B. We have several locations identified which are further south and up to 200 feet structurally higher which we plan to test with the upcoming wells.

"Total production from Bua Ban North B has come in above our expectations and the wells continue to perform better than expected. We are working to resolve mechanical production issues at Songkhla and expect to restore production to previous levels in the coming weeks.

"We expect production facilities to be on location at Bua Ban North A in late October."

Oil & Gas Post

Promote Your Page Too
LINK

BP Announces North Sea Development

- BP Announces North Sea Development



Sep 6, 2011

BP (NYSE:BP) announced an agreement to invest up to $1.1 billion to progress a project to develop the Kinnoul reservoir in the central North Sea.

Kinnoul contains 45 million barrels of oil equivalent which will be connected to BP's Andrew platform and enable production to be extended to 2020 and beyond. Production from Kinnoul is forecast to peak at 45,000 barrels per day.

BP (NYSE:BP) has a potential upside of 54.2% based on a current price of $35.9 and an average consensus analyst price target of $55.37.

Oil & Gas Post

Promote Your Page Too
LINK

Technip Scores Maersk Gig in North Sea

- Technip Scores Maersk Gig in North Sea

Tuesday, September 06, 2011
Technip

Technip was awarded an installation contract, worth approximately €40 million, by Maersk Oil North Sea UK Limited for the Gryphon Area Reinstatement Program – GARP, located about 320 kilometers North-East of Aberdeen in 110 meters of water.

This contract covers installation of 15 dynamic risers, 2 dynamic and 2 static umbilicals, 11 flexible flowlines as well as subsea equipment.

Technip's operating center in Aberdeen, Scotland will execute the contract, which is scheduled to be completed in the second semester of 2012. Vessels from the Technip fleet will be used for the campaign, including Skandi Arctic and Wellservicer.

Oil & Gas Post

Promote Your Page Too
LINK

GDF Suez Gets NPD Nod for North Sea Drilling

- GDF Suez Gets NPD Nod for North Sea Drilling

Wednesday, August 31, 2011
Norwegian Petroleum Directorate
by SubseaIQ

The Norwegian Petroleum Directorate has granted GDF Suez Norge AS a drilling permit for well 7124/4-1 S, cf. Section 8 of the Resource Management Regulations.

Well 7124/4-1 S will be drilled from the Aker Barents drilling facility at position 71°35'16.16" north and 24°5'56.84" east after completing the drilling of wildcat well 6508/1-2 for Det Norske Oljeselskap ASA in production license 482.

The drilling program for wellbore 7124/4-1 S relates to drilling a wildcat well in production license 530. GDF Suez Norge AS is the operator with a 30 percent ownership interest. The other licensees are Rocksource ASA (20 percent), Front Exploration AS (20 percent), North Energy ASA (20 percent) and Repsol Exploration Norge AS (10 percent).

The area in this license consists of the blocks 7123/6 and 7124/4. The well will be drilled about 100 kilometers north of Hammerfest and about 70 kilometers northeast of the Goliat field.

Production license 530 was awarded in the 20th licensing round. This is the first well to be drilled in the license.

The permit is contingent upon the operator securing all permits and consents required by other authorities prior to commencing drilling activity.

Oil & Gas Post

Promote Your Page Too
LINK

Petrofac Wins North Sea Contracts

- Petrofac Wins North Sea Contracts

Tuesday, August 30, 2011
GDF SUEZ

GDF SUEZ E&P UK Ltd has awarded two significant contracts to Petrofac Offshore Engineering & Operations (OE&O), which will create an estimated 100 new jobs in the North Sea over the next five years.

The integrated services contract (ISC) and engineering services contract (ESC), which start in August 2011, have a combined value of £30 million over three years, with a two year option. The work scope includes the provision of operations, maintenance, engineering and general support services to assist GDF SUEZ E&P UK as it becomes a UKCS (UK Continental Shelf) duty holder for its operated projects, which include notably Cygnus in the Southern North Sea.

Jean-Claude Perdigues, managing director at GDF SUEZ E&P UK, said: "These two new contracts represent a significant milestone for GDF SUEZ E&P UK and will help the company to conduct its North Sea operations safely, efficiently and cost effectively. I look forward to a long and productive relationship with Petrofac OE&O as we work together to generate production and employment in the UKCS."

About GDF SUEZ E&P UK Ltd

GDF SUEZ E&P UK Ltd is involved in the exploration for and production of oil and gas in the Southern and Central North Sea and West of Shetland area. In total, the company employs around 100 staff at the London office and the operations centre in Aberdeen. In the UK, GDF SUEZ E&P holds around 50 exploration licences (19 as an operator) and 16 producing fields located in the UK North Sea. With the ongoing Cygnus and Juliet development projects the proportion of operated production will rise to 50% by 2013. A total of 10 million boe per year is produced by GDF SUEZ E&P UK.

Cygnus is one of the most significant undeveloped gas fields in the United Kingdom Continental Shelf. Analysis of the results from the discovery well and six appraisal wells, together with 3-D seismic evaluations, has led to a preliminary ultimate recovery estimate of at least 15 billion m3 of natural gas and potentially up to 28 billion m3.The development plan is for a four platform complex with two drilling centres and up to 10 wells. Final negotiations are underway on the export route. Project sanction is expected for Q1 2012.

About GDF SUEZ

GDF SUEZ develops its businesses around a model based on responsible growth to take up today's major energy and environmental challenges: meeting energy needs, ensuring the security of supply, fighting against climate change and maximizing the use of resources.

The Group provides highly efficient and innovative solutions to individuals, cities and businesses by relying on diversified gas-supply sources, flexible and low-emission power generation as well as unique expertise in four key sectors: liquefied natural gas, energy efficiency services, independent power production and environmental services.

GDF SUEZ employs 218,350 people worldwide and achieved revenues of €84.5 billion in 2010.

The Group is listed on the Brussels, Luxembourg and Paris stock exchanges and is represented in the main international indices: CAC 40, BEL 20, DJ Stoxx 50, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe, ASPI Eurozone and ECPI Ethical Index EMU.

Oil & Gas Post

Promote Your Page Too
LINK

Statoil Makes Gas Find in North Sea

- Statoil Makes Gas Find in North Sea

Monday, August 29, 2011
Norwegian Petroleum Directorate
by SubseaIQ

Statoil Petroleum AS, operator of production license 569, is in the process of completing the drilling of wildcat well 16/7-10. The well proved gas/condensate.

The well was drilled 16 kilometers northeast of the Sleipner Øst field in the North Sea.

The purpose of the well was to prove petroleum in Paleocene reservoir rocks (the Ty formation). Only a thin gas/condensate column was encountered in a 115-meter thick reservoir with the expected reservoir quality. The licensees will evaluate the discovery together with other nearby discoveries.

The well was not formation tested, but data acquisition and sampling have been carried out.

The well was drilled to a vertical depth of 2487 meters below the sea surface and was terminated in the Shetland group in the Upper Cretaceous. The well will now be permanently plugged and abandoned.

The well is the first exploration well in production license 569, which was awarded in APA 2010.

Well 16/-10 was drilled by the Ocean Vanguard drilling facility, which will now proceed to production license 120 in the northern part of the North Sea to drill production wells at the Visund Sør field, where Statoil Petroleum AS is the operator.

Oil & Gas Post

Promote Your Page Too
LINK

Statoil Spuds Well at Aldous Major North Structure

- Statoil Spuds Well at Aldous Major North Structure

Wednesday, August 24, 2011
Lundin Petroleum AB
by SubseaIQ

Lundin announced that drilling of appraisal/exploration well 16/2-9S on the Aldous Major North structure has commenced. The well is located in license PL265 in the Norwegian North Sea.

The Aldous Major North structure is believed to be the north-westerly continuation of the Aldous Major South discovery in PL265 and the Lundin Petroleum operated PL501 Avaldsnes discovery with primary target in sandstone of Upper Jurassic age.

The planned total depth is 2,241 meters below mean sea level. The well will be drilled with the drilling rig Transocean Leader and the duration is expected to be 40 days.

Lundin Petroleum holds 10 percent interest in PL265. Partners are Statoil Petroleum AS (operator) with 40 percent interest, Petoro (30 percent) and Detnorskeoljeselskap ASA (20 percent).

Oil & Gas Post

Promote Your Page Too
LINK

Shell Announces It Closed Leak In North Sea

- Shell Announces It Closed Leak In North Sea



Aug 19, 2011

Royal Dutch Shell (NYSE:RDS.A) announced that it has closed a valve from which oil was spilling into the North Sea.

The company said that this is a "key step" in stopping the leak at its Gannet Alpha platform, the worst North Sea oil spill in more than a decade. The company also said that it will observe the flowline to make sure the valve remains sealed.

Over 1,000 barrels of oil has spewed into the sea since a pipeline was found to be leaking August 12, according to Shell, though it claims that after closing the well.

Royal Dutch Shell (NYSE:RDS.A) has a potential upside of 33.8% based on a current price of $62.67 and an average consensus analyst price target of $83.83.

Oil & Gas Post

Promote Your Page Too
LINK

Shell Stops North Sea Pipe Leak

- Shell Stops North Sea Pipe Leak

Friday, August 19, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

Shell has stopped a leak from an underwater pipe at its Gannet Alpha platform that had been spilling crude oil into the North Sea for more than a week, the Anglo-Dutch major said Friday.

"Today, Shell divers closed the relief valve from which oil had been seeping at a rate of less than one barrel a day," said Shell. "Now there will be a phase of monitoring the flowline [the pipe] to check that it remains sealed," it added.

Shell has been battling a leak at the 18-year-old installation since last Wednesday. It estimates some 218 tons of crude oil have already spilled into the sea since then, though this isn't expected to reach land. Shell and U.K. environmental authorities say they expect the oil to be naturally dispersed through wave action.

"Closing the valve is a key step," said Glen Cayley, technical director of Shell's exploration and production activities in Europe. "It was a careful and complex operation conducted by skilled divers, with support from our technical teams onshore. But we will be watching the line closely over the next 24 hours and beyond."

However, some 660 tons of residual oil remain in the depressurized pipe, which has been secured on the seabed with concrete mats. The next phase of the operation will be to remove this remaining oil from the pipe.

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

Oil & Gas Post

Promote Your Page Too
LINK

Statoil Primes Bit for North Sea Drilling

- Statoil Primes Bit for North Sea Drilling

Friday, August 19, 2011
Norwegian Petroleum Directorate

The Norwegian Petroleum Directorate (NPD) has granted Statoil Petroleum AS a drilling permit for well 15/8-2, cf. Section 8 of the Resource Management Regulations.

Well 15/8-2 will be drilled from the COSLPioneer drilling facility, at position 58°24'55.1"N 01°32'49.90"E. COSLPioneer is a new drilling facility that was built in China. The facility was docked at Sandnes this summer to be prepared for its first assignment on the Norwegian shelf.

The drilling program for well 15/8-2 concerns the drilling of a wildcat well in production license 303. Statoil Petroleum AS is the operator with a 100 percent ownership interest.

The area in this license consists of a part of block 15/2 and parts of blocks 15/3, 15/5, 15/6 and 15/8. The well will be drilled about ten kilometers west of the Sleipner Vest field in the central part of the North Sea.

Production license 303 was awarded on December 12, 2003 (APA 2003). This is the seventh well to be drilled in the license area.

The permit is contingent upon the operator securing all other permits and consents required by other authorities prior to commencing the drilling activity.

Oil & Gas Post

Promote Your Page Too
LINK

Royal Dutch Shell Trying to Stop Oil Leak in North Sea

- Royal Dutch Shell Trying to Stop Oil Leak in North Sea



Aug 18, 2011

Royal Dutch Shell (NYSE:RDS.A) is trying to stop an oil spill leak in the North Sea.

In the first phase of the operation to shut down the leak, engineers have lowered five giant concrete "blankets" on to a stretch of pipeline to place it back on the seabed after it lifted 4 feet off the sea floor.

Work is ongoing to lay concrete blankets to secure the pipeline, Shell spokesman Steve Harris said.

"First, we have to make a risk assessment ... to make sure that we can find a safe way to shut it off. We expect the result of the risk assessment very quickly and then divers will go down 300 feet (90 meters) and turn off the remaining amount of oil that is leaking into the sea."

Nearly 1,300 barrels of oil has leaked from its Gannet Alpha platform since August 12.

Royal Dutch Shell (NYSE:RDS.A) has a potential upside of 32.6% based on a current price of $63.21 and an average consensus analyst price target of $83.83.

Oil & Gas Post

Promote Your Page Too
LINK

Statoil Granted Drilling Permit in North Sea

- Statoil Granted Drilling Permit in North Sea

Thursday, August 18, 2011
Norwegian Petroleum Directorate

The Norwegian Petroleum Directorate has granted Statoil a drilling permit for well 16/2-9 S, cf. Section 8 of the Resource Management Regulations.

Well 16/2-9 S will be drilled from the Transocean Leader drilling facility at position 58°54'46.39"N 02°26'22.80"E following completion of drilling of wildcat well 16/2-8 for Statoil in production license 265.

The drilling program for well 16/2-9 S concerns the drilling of a wildcat well in production license 265. Statoil Petroleum AS is the operator with an ownership interest of 40 percent. The other licensees are Petoro AS with 30 percent, Det norske oljeselskap ASA with 20 percent and Lundin Norway AS with 10 percent.

The area in this license consists of part of block 16/2. The well will be drilled about 12 kilometers northwest of well 16/2-8 (Aldous Major South) in the central part of the North Sea.

Production license 265 was awarded on April 24, 2001 (North Sea Awards 2000). This is sixth well to be drilled in the license.

The permit is contingent upon the operator having secured all other permits and consents required by other authorities before the drilling starts.

Oil & Gas Post

Promote Your Page Too
LINK

Shell: 660 Tons of Oil Remain in Leaking Pipeline in North Sea

- Shell: 660 Tons of Oil Remain in Leaking Pipeline in North Sea

Wednesday, August 17, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

Some 660 tons of oil is still inside a leaking Shell pipeline in the U.K. North Sea, the Anglo-Dutch major said Wednesday, explaining that efforts to stop the relatively light flow of crude oil are taking a long time so as to minimize the risk of the remaining oil spilling out.

Shell has been attempting to stop a leaking flowline from its Gannet Alpha platform for the last seven days amid mounting public criticism of its perceived lack of transparency about the spill.

"I cannot stress enough the need to undertake detailed risk assessments and ensure any work considered is undertaken safely," Glen Cayley, technical director of Shell's exploration and production activities in Europe, told journalists at a joint press conference with a U.K. government representative.

Scottish Environment Secretary Richard Lochhead said Shell had been made aware of the need for better communication about what happened and what it was doing to address the leak.

"I have spoken with both Shell's senior management and the U.K. government's offshore-incident representative and I stressed, once again, the importance of clear communication on the current operation and the expectation people have for complete openness and transparency on the situation. I was assured by both that this point had been taken on board, and I'm pleased to see that steps have now been taken to put more information in the public domain. This must continue," said Lochhead.

Shell has estimated that around 216 tons--or 1,300 barrels--of oil have spilled from the Gannet Alpha platform since last week. By Wednesday afternoon, oil was continuing to leak at a rate of less than a barrel a day.

Shell declined to say how long it would take to finally close the leak.

If oil continued to leak from the pipeline, Cayley said, it was "inevitable" that it would cross the median line into the Norwegian North Sea. He said Shell had informed the Norwegian government of the possibility.

The Norwegian Petroleum Safety Authority wasn't immediately available for comment.

The Department of Energy and Climate Change official assigned to liaise with Shell and monitor the company's response to the spill said that, in his view, "the leak is under control and has now been greatly reduced." Hugh Shaw said the DECC and the Health and Safety Executive will thoroughly investigate the causes of the incident, after which a full report will be sent to Scottish Procurator Fiscal, or public prosecutor.

The Gannet platform will be shut down from Thursday, said Cayley, although he stressed that this was a long-planned maintenance halt. However, inspections would be carried out on the rest of Gannet's pipeline in light of this incident, he added.

Crude oil from the Gannet system is taken to Teesside, U.K., through the Fulmar pipeline as part of Ekofisk blend.

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

Oil & Gas Post

Promote Your Page Too
LINK

Bristow Appoints North Sea Development Manager

- Bristow Appoints North Sea Development Manager

Monday, August 15, 2011
Bristow Helicopters Ltd.

Bristow has appointed David Laskowski to oversee its operations in the busy northern North Sea energy sector. Based in Aberdeen, Scotland, Laskowski will serve as Development Manager responsible for day-to-day management of up to 250,000 passenger movements annually through the Integrated Aviation Consortium (IAC) contract. He will play a key role in ensuring delivery of Bristow's Target Zero program to achieve zero accidents, complaints and downtime.

Laskowski's experience includes management roles in safety, commercial and helicopter operations. He began his aviation career in his native Louisiana, obtaining his pilot's licence while at university pursuing a Bachelors of Science degree in Professional Aviation and Aviation Management. He joined Bristow in 2001 as a Facilities and Special Projects Officer in the Gulf of Mexico. He served as Base Manager of Bristow's airfield at Patterson, Louisiana before becoming a Safety Case Manager, travelling to Bristow operations in Alaska, Aberdeen in Scotland, Trinidad and Mexico. Most recently he served as Regional Sales Manager for Bristow's North American Business Unit.

Fiona MacLeod, Commercial Manager – Europe, who previously held responsibility for the northern North Sea sector, will continue to oversee existing client activity in central North Sea and expand to the Baltic region.

Mike Imlach, Bristow's European Operations Director said, "David's appointment means that we now have an executive dedicated solely to the management and development of our Northern North Sea business and in the Shetland Basin.

"Not only will this enhance our service to our IAC partners; it also will allow us to grow our business in the expanding markets in Denmark and the Baltic regions."

Oil & Gas Post

Promote Your Page Too
LINK

Shell: 1,300 Barrels of Oil Spilled from North Sea Leak

- Shell: 1,300 Barrels of Oil Spilled from North Sea Leak

Monday, August 15, 2011
Dow Jones Newswires
LONDO
by Alexis Flynn

Around 1,300 barrels of oil are estimated to have spilled into the U.K. North Sea from a leaking pipeline at a Shell platform since last Wednesday, the Anglo-Dutch major said Monday.

"It isn't easy to quantify the total volume spilled but we estimate so far that it is around 216 tons [1,300 barrels]," said Glen Cayley, technical director of Shell's exploration and production activities in Europe.

The current rate of leaking is less than five barrels a day, Shell said.

Shell said the volume of oil at the sea surface is estimated at around one ton, or around six barrels. Wave action and high winds over the weekend have led to a "substantial" reduction in the size of the visible oil sheen, Cayley said.

"This is a significant spill in the context of annual amounts of oil spilled in the North Sea," said Cayley. "We care about the environment and we regret that the spill happened. We have taken it very seriously and responded promptly to it."

An undersea pipe at the Gannet Alpha platform has been leaking oil into the ocean since last Wednesday. Shell said the leak is "under control" and that the well that feeds the pipeline, shut in since Wednesday, remains closed.

The Department of Energy and Climate Change said that while the spill was small in comparison with BP's Gulf of Mexico accident last year, it was "substantial" in the context of the U.K. continental shelf. DECC said its environmental inspectors will continue to monitor the situation and are working closely with the company and counterparts from the Health and Safety Executive, Maritime and Coastguard Agency and Marine Scotland.

The size of the sea surface affected is estimated to be some 31 kilometers by 4.3 kilometers at its widest point. A sheen, estimated at 0.5 kilometers in size, is currently moving west from the field.

The platform is located 180 kilometers east of Aberdeen, Scotland. Shell operates the platform along with partner ExxonMobil's U.K. unit Esso.

Oil from the Gannet system is taken to Teesside, U.K., through the Fulmar pipeline as part of Ekofisk blend. Production at the facility is estimated to be around 6,000 barrels a day, according to a trader.

The platform had 10 leak incidents in 2009 and 2010, according to an HSE document showing voluntarily declared spills. Only one of the incidents was described as "significant" while the others were logged as "minor."

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

Oil & Gas Post

Promote Your Page Too
LINK

BP Readies for Major North Sea Projects

- BP Readies for Major North Sea Projects

Thursday, August 11, 2011
The Herald
by Mark Williamson

The head of BP's North Sea business said the oil and gas giant expects to approve three more huge projects off Scotland this year despite the Budget's tax hike.

Trevor Garlick said BP expects to proceed with projects involving an outlay of billions of dollars within months, subject to winning Government approval.

The plans represent a huge vote of confidence in the mature province by BP, which expects to recruit hundreds of skilled staff to keep pace with increased activity in the North Sea.

Last month the firm confirmed it would proceed with the pound(s) 3 billion redevelopment of the giant Schiehallion field west of Shetland with partners. The field contains much more oil than originally expected.

The projects that Mr. Garlick expects to confirm include a plan to develop a new area of the huge Clair field west of Shetland. This could be on the same scale as the Schiehallion project.

BP expects to invest around $1B (pound(s) 610MM) each in developments on the Kinnoull oil field and the Devenick gas field, in the Central and Northern North Sea respectively.

Mr. Garlick said the oil and gas firms partnering BP on each of the schemes have given their approval, although final agreements have not been written. He believes there could be plenty of money to be made in the North Sea for years.

"People are ill-informed when they talk about this area being over," said Mr. Garlick, noting that there could be billions of barrels oil equivalent still to be recovered.

Mr. Garlick said BP could make big returns by boosting recovery rates on its extensive acreage and making the most of the huge network of production facilities it has in the North Sea. His responsibilities include the Norwegian North Sea.

Advances in technology, combined with the increase in oil prices in the last two years, have transformed the economics of some fields.

Mr. Garlick discounted the effect of the recent fall in crude prices, saying BP made decisions based on long-term expectations.

"Most predict supply and demand will keep the price reasonably high," he said.

Noting that the tax regime can have a big influence on investment decisions, Mr. Garlick said the changes in North Sea taxes in the Budget were unhelpful.

The 12 percentage point increase in tax rates will reduce returns from all projects. "Some of the fields that we are looking at will be even more marginal, a couple look more difficult," he said. But BP has not scrapped any projects as a result of the tax increase.

Mr. Garlick said BP is investing at record rates in the North Sea. The company is recruiting to help it grow. It plans to hire around 300 skilled workers this year for the North Sea business and the same again in 2012.

Some 3500 BP and agency staff work on its North Sea operations currently. BP's proposals will boost the Government's claims that the tax increase is likely to have only a marginal impact on investment in the province.

The industry body Oil & Gas UK has warned that the hike could threaten billions of pounds of investment in the North Sea.

It said concessions granted by the Government last month, intended to encourage investment, did not go far enough.

However, Mr. Garlick, a board member of Oil and Gas UK, said the industry wants limited changes. He said Oil and Gas UK is lobbying for stability in the fiscal regime. It wants further allowances for difficult fields and predictability about costs of decommissioning assets.

Copyright (c) 2011 The Herald. via ProQuest Information and Learning Company; All Rights Reserved

Oil & Gas Post

Promote Your Page Too
LINK

North Atlantic Drilling Takes Delivery of Jackup West Elara

- North Atlantic Drilling Takes Delivery of Jackup West Elara

Tuesday, August 09, 2011
Seadrill Ltd.

North Atlantic Drilling Ltd., in which Seadrill has a 75 percent ownership, has taken delivery of the new harsh environment jackup drilling rig, West Elara from Jurong Shipyard in Singapore. The rig is expected to depart Singapore on August 11th and arrive at Westcon Shipyard in Olen, Norway in early October in order to undertake final contract preparation activities. The West Elara is expected to begin operations for Statoil on a five- year contract during late November 2011.

The West Elara is the first of two Gusto MSC CJ70 150A rigs to be constructed for North Atlantic Drilling Ltd. The rig is an advanced, ultra large, harsh environment, high specification drilling unit, specifically built for Norwegian requirements and matching the specifications of the largest jackup drilling units in the world. The unit can operate in water depth up to 150 meters with a higher variable deck load and a higher operating efficiency compared to earlier generation jackups. The size of the unit allows for additional opportunities in terms of logistics, well testing and early production.

Alf C. Thorkildsen, Chief Executive Officer in Seadrill Management AS and Chairman of North Atlantic Drilling Ltd, said, "We are pleased to take delivery of the West Elara, the first of two new ultra large and harsh environment jackups to be added to the North Atlantic Drilling fleet. We look forward to seeing this new and advanced drilling unit operating on the Norwegian Continental Shelf, creating growth for North Atlantic Drilling ahead of its listing on the Oslo Stock Exchange, increasing our presence in this key region and further strengthening our relationship with Statoil, one of our most important customers."

Oil & Gas Post


Promote Your Page Too
LINK