Posted in Mexico, Offshore Energy - General, Uncategorized, tagged California, Hidden Gem, Manzanillo, nodules, seafloor mining, TMC on March 21, 2023| Leave a Comment »
Relax; just kidding about the California part (or am I? 😉).
BOE’s Mexican correspondent, Andrew Konczvald, took pictures of what looks like a deepwater drillship parked near the beautiful Pacific coast resort town of Manzanillo. Upon further review, our crack investigators determined that the rig is the Hidden Gem, a deepsea mining vessel, owned by The Metals Company (TMC). Last year, TMC conducted a pilot nodule collection program in the Clarion Clipperton Zone between Hawaii and Mexico.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged lease terms, rental, royalty rate, sale 259, sale 261 on March 20, 2023| Leave a Comment »
The terms for congressionally mandated Gulf of Mexico Sale 261 have been proposed. As is also the case for Sale 259, the royalty for leases in <200 m or water is 50% higher than for prior sales. This is partly because of the royalty floor (16 2/3%) established in the Inflation Reduction Act, and partly because the Dept. of the Interior opted for the highest royalty allowed (18 3/4%). The royalty for shelf leases is thus the same as for deepwater leases with much greater production potential.
Rental terms for leases in <200 meters of water are higher and more punitive (for delayed development) than for previous sales and for deepwater leases.
Minimum bid requirements are unchanged from sales 256 and 257, and are higher for deepwater leases ($25/acre for <400m and $100/acre for >400m).
Bottom line: While the terms for deepwater leases are unchanged from Sales 256 and 257, that is far from the case for shelf leases where royalty rates were increased by 50% and rentals were increased by 43% for all lease years.
| Sale | Date | % royalty (<200m) | year 1-5/6/7/8+ rentals ($/acre, <200m) | year 8+ rentals for leases in 400m+ ($/acre) |
| 256 | 11/18/2020 | 12.5 | 7/14/21/28 | 16 |
| 257 | 11/17/2021 | 12.5 | 7/14/21/28 | 16 |
| 259 | 3/29/2023 | 18.75 | 10/20/30/40 | 22 |
| 261 | 9/27/2023 | 18.75 | 10/20/30/40 | 22 |
Posted in climate, energy policy, Uncategorized, tagged BBB, elections, farmers, Netherlands on March 19, 2023| Leave a Comment »
The BBB or BoerBurgerBeweging (Farmer-Citizen Movement) party won 17 seats in the Senate, more than any other party.
Posted in drilling, Uncategorized, tagged Golden Driller, NCAA Wrestling, Tulsa on March 18, 2023| Leave a Comment »
Far from golden, but this was me 53 years ago! Lots of safety lessons, good and bad, were learned. Bud
Posted in energy, energy policy, natural gas, tagged EIA, Energy Outlook 2023, natural gas production, oil production on March 17, 2023| Leave a Comment »
Yesterday, Lars Herbst attended the EIA’s Annual Energy Outlook presentation. The slides are attached.
Below is a custom chart from the EIA data tables. While EIA predicts growth in renewable generating capacity, US oil and gas production are nonetheless projected to increase slightly through 2050.
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged active leases, areas excluded from leasing, drilling, OCS Leasing Program, producing leases on March 16, 2023| 1 Comment »
Of the 1.7 billion acres of Federal land on the US Outer Continental Shelf, only about 73 million acres in the Gulf of Mexico and 1 million acres in the Cook Inlet may be offered for oil and gas leasing. Official or de facto exclusions prohibit leasing in the entire US Atlantic, the entire US Pacific, all Alaska areas except the Cook Inlet, and most of the Eastern Gulf of Mexico. No other coastal nation has restricted access to oil and gas resources to this extent.
As demonstrated in recent sales, many of the tracts being offered have little or no production potential. Only 308 tracts (1.7 million acres) received bids in GoM Sale 257. 94 of the high bids were for sequestration purposes and were arguably invalid. Sale 258 in the Cook Inlet only received a single bid.
The number of active leases, currently 2153, has been at a historically low level for the past 2 years. Only 0.7% of our OCS is leased and thus open to exploration. 26% (552) of these leases are already producing, leaving a historically low number of nonproducing leases.
Oil is where you find it, not where you wish it was or want it to be. Denying access to all but a small portion of the OCS limits exploration strategies and prevents publicly owned resources from supporting our economy in the manner intended by the OCS Lands Act.
Posted in Alaska, energy policy, tagged Alaska, Beaufort Sea, Hilcorp, Kulluk, Liberty, Mukluk, Northstar, Presidential withdrawal, Willow Project on March 15, 2023| Leave a Comment »
The shrinking of the OCS oil and gas program continues. In an attempt to placate opponents of the Willow project, the President has removed the entire Beaufort Sea from oil and gas leasing consideration. Unsurprisingly, the opponents of Willow are no less irate.
Under the authority granted to me in section 12(a) of the Outer Continental Shelf Lands Act, 43 U.S.C. 1341(a), I hereby withdraw from disposition by oil or gas leasing for a time period without specific expiration the areas designated by the Bureau of Ocean Energy Management as the Beaufort Planning Area of the Outer Continental Shelf that have not previously been withdrawn.
Posted in accidents, Gulf of Mexico, Offshore Energy - General, well control incidents, tagged falls, fires and explosions, helicopter incidents, OCS fatalities, struck by equipment on March 14, 2023| Leave a Comment »
Per yesterday’s post, below are US OCS fatality data from a 2014 presentation. Ten year intervals were selected for 1975-2004. The longer 1953-1974 era was selected so the activity indicators (well starts and production) would be comparable with the next 3 intervals. The last interval (2005-2013) was limited because the presentation was prepared in 2014.
Fire/explosion fatalities exceeded fall/struck fatalities only in the first interval (1953-1974). As one would expect, the fire/explosion deaths were associated with a limited number of better known incidents (e.g. Main Pass 41, Bay Marchand, Macondo). While the overall trend is favorable, fall/struck incidents and helicopter fatalities at offshore platforms have proven to be more chronic.
I hope to update these data in the not too distant future.
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Posted in accidents, drilling, Gulf of Mexico, Offshore Energy - General, tagged BSEE, falls, Pacific Khamsin, Safety Alert, safety culture, struck by equipment on March 13, 2023| Leave a Comment »
The most common causes of offshore fatalities and serious injuries, falls and being struck by equipment, receive little media attention because there is no blowout, oil spill, or fire. However, these are often the most difficult types of incidents to understand and prevent. Human and organizational factors predominate, and prevention is dependent on a strong culture that emphasizes worker engagement, awareness, teamwork and mutual support, effective training and employee development, risk assessment at the job, facility, company, and industry levels, stop-work authority, innovation, and continuous improvement.
This new BSEE Safety Alert addresses such a fatal incident on the Pacific Khamsin drilling rig, and makes recommendations that have widespread applicability.
Incident summary:
While unlatching the lower Marine Riser Package from the Blowout Preventor in preparation for ship relocation, a crewmember was lifted into the air after being struck by a hydraulic torque wrench (HTW), hitting a riser clamp approximately six feet above the elevated work deck before falling to the rig floor. The crew member was given first aid and transported to the drillship’s hospital, where he was later pronounced deceased.
In an upcoming post, BOE will provide historical fatality data by cause and operations category.
Posted in climate, energy policy, Offshore Energy - General, tagged Biden administration, fossil fuels phase out, offshore program on March 11, 2023| Leave a Comment »
HOUSTON — Oil and gas industry leaders say they’ve seen a big shift in tone from the Biden administration over the past year, helping to smooth over one of the president’s rockiest relationships.
Washington Post
Perhaps the Washington Post reporter is correct, but the “big shift in tone” is not apparent in the offshore sector. The only lease sales have been mandated by Congress, the 5 year plan is still 9 months from completion, the lease sale terms have been less than favorable, and language in the draft 5 year plan does in fact express the intent to phase out oil and gas.
Bud's Offshore Energy (BOE) 