The Valaris DS-17 drillship is now on location to drill the Algerich-1 well for Equinor 315 km from Mar del Plata in 1527 m of water at Block CAN 100.
Concurrently, at the opposite end of the Pan American continents, the Stena DrillMAX is closing in on Exxon’s Orphan Basin location offshore Newfoundland to drill another high potential well.
As reported in January, United Oil and Gas received a 2 year extension from the Government of Jamaica on their Walker Morant License. Below is a United video produced for prospective partners.
While the investment risk is undeniable, the reward potential is high.
Below is an interesting slide from the United presentation that compares the government’s take of production revenues for various African and S. American nations.
The Adjusted Delayed Value (ADV), which takes into account the effects of delaying bonuses and future royalty payments, ranged from 1.3 to 9.2 times the high bids.
Perhaps the closest calls were Chevron’s two Walker Ridge bids which had ADV to bid ratios of only 1.3 to 1.4.
The main concern going forward is the absence of a consistent, predictable leasing schedule for the 3.7% of the OCSthat may be considered for leasing. BOEM’s new methodology, which will be applied at the next lease sale (whenever that might be), does not require the bureau to estimate the delay period between the sale being evaluated and the projected next lease sale. Given that the new 5 year plan calls for a maximum of 3 lease sales, the gap between sales has become a much more significant factor just as the new guidance is being implemented.
The new 5 year “leasing plan” is intended to restrain OCS production in deference to “net zero” pathways. This strategy discourages interest from exploration and production companies. US offshore leases, which are by far the world’s smallest, are even less attractive when you don’t know if and when you will be able to acquire the nearby tracts that may be needed for economical deepwater development. This is not the way to obtain fair market value for public resources.
Block
No. of bids
High Bid ($)
MROV($) ADV($)
High Bidder
MROV/bid ADV/bid
MC 711
1
584,700
6,600,000 2,400,000
bp
11.3 4.1
MC 896
1
641,628
6,100,000 1,600,000
Shell
9.5 2.5
GC 182
1
800,085
3,900,000 2,600,000
Anadarko
4.9 3.2
GC 183
1
800,085
9,100,000 6,000,000
Anadarko
11.4 7.5
GC 226
1
800,085
2,100,000 1,600,000
Anadarko
2.6 2.0
GC 227
2
974,628
13,000,000 9,000,000
Shell
13.3 9.2
GC 345
1
1,095,615
13,000,000 5,300,000
Murphy
11.9 4.8
GC 346
1
845,815
5,100,000 2,000,000
Murphy
6.4 2.4
GC 549
1
800,085
15,000,000 6,900,000
Anadarko
18.7 8.6
AT 237
1
909,899
8,300,000 3,000,000
Equinor
9.1 3.3
WR 285
1
859,837
6,200,000 1,200,000
Chevron
7.2 1.4
WR 329
1
595,837
4,400,000 770,000
Chevron
5.7 1.3
MROV=Mean of the Range-of-Value ADV=Adjusted Delayed Value, which takes into account delaying bonuses and royalties
The DrillMAX is en route from Guyana to drill the Persephone wildcat well 500 km NE of Newfoundland in the highly prospective Orphan basin (3000 m water depth). This looks like the farthest from shore any well has been drilled in the Atlantic. The late spring date is prudent.This is definitely a well to watch because of the resource potential and difficult operating conditions.
Our last Nord Stream pipeline post discussed the Nord Stream AG suit to recover damage costs from insurers Lloyd’s and Arch.
In a court document (excerpt below) obtained by Swedish engineer Erik Andersson, Lloyd’s and Arch assert that the damage was inflicted by, or under order of, a government , and therefore the insurers are not liable.
Given that the suspect governments have denied responsibility, shouldn’t the insurers have to prove that a government did it, and identify the government? That is what Nord Stream AG is asserting in their filing (except below).
Decommissioning specialist John Smith has summarized the major provisions of BOEM’s decommissioning financial assurance rule for OCS oil and gas operations. He has highlighted his comments in red.
Every year since 1978, Safety in Seas Awards have been presented at NOIA’s Annual Meeting. This is the world’s oldest, and in my opinion, most prestigious safety award program for the offshore energy industry.
“We commend SLB and LLOG for their outstanding entries, which exemplify a shared commitment to enhancing the human element of safety, among other things. From leveraging neuroscience and behavioral sciences to fostering a culture of empowered safety, their respective initiatives are marked by compelling success metrics. I extend my gratitude to SLB, LLOG, and all Safety in Seas entrants for their robust submissions and steadfast dedication to safety and innovation.”
As a Safety in Seas judge for many years, I can assure you that the selections are based solely on the award criteria and supporting data, and that the process is free from interference or campaigning. As is normally the case, there were many outstanding nominations for the 2024 awards. However, the judges agreed fully on the selections.
I recommend that you review NOIA’s announcement for more information. If you want to learn more about the specific LLOG and SLB achievements, I suggest that you contact the companies directly. They would no doubt be happy to provide further information about their safety programs.
I had the pleasure of working with Jason Mathews when he was a young MMS engineer. He truly cared about our safety mission and has taken that commitment to the next level at BSEE. Jason shared this important, heartfelt message on the anniversary of the Macondo blowout.
One of the greatest gifts I ever received in life is having a little girl and having the opportunity to go home every evening and spending time with her at cheer, softball, doing homework, etc. I have a great deal of respect for the men and women who work offshore and put their lives on hold for 14-28 days to deliver much needed OCS production to meet US demand. Undoubtedly, they are better / tougher people than me.
Over the last year, my team has seen multiple incidents that had a high potential severity that could have led to a fatal / serious injury or major incident in the GOM. Although we can sit and debate the causal factors for hours, one that jumps to the top of the discussion is the Human Factor – Complacency. Of all the things a leader should fear, complacency heads the list. There is no doubt success breeds complacency, and complacency breeds failure.
To this day, I am still shook by the mindset and complacency of many onboard the Deepwater Horizon prior to the incident. During testimony in the public hearings, John Guide, the BP well team leader for the Horizon, believed that the rig crew had become “too comfortable” because of its good track record for drilling difficult wells. Ross Skidmore, a BP contractor on the rig on April 20, testified that the crew became complacent after completing drilling because “when you get to that point, everybody goes to the mindset that weʹre through, this job is done.” To me, the complacency on the Deepwater Horizon could be attributable to the crew not having access to all of the well data (OptiCem reports – cement job risk) available to BP personnel onshore and the well site leaders on the rig. Our investigation concluded, the overall complacency of the Deepwater Horizon crew was a possible contributing cause of the kick detection failure.
As regulators, we have special roles in the GOM as it relates to safety:
Driving the avoidance of complacency and risk-free mindsets of the offshore employees
Understanding we can’t be selfish – Our success is not our individual personal growth / gains, but it is being unwavering in your promotion of offshore safety to ensure all offshore employees return home to their families safely
Holding each other (internally) and industry (externally) accountable when necessary
In order to achieve greatness offshore, we ,as a regulator, have to believe we can, and never sit still until we achieve it.
Everyone on this email has a very critical function and role. Never underestimate the value of what you do, have the proper mindset, and avoid complacency.
Do whatever it takes to ensure the people offshore are gifted the same gift we receive every day – going home to our families.
All In –
Jason P. Mathews, Petroleum Engineer, Field Operations – OSM
Friday Night LIghts: Coach Mathews and his daughter
I am again sharing this touching tribute to the 11 men who lost their lives on the Deepwater Horizon on April 20, 2010. The video is introduced by country singer Trace Atkins, a former Gulf of Mexico rig worker. The video and Trace’s song serve as a memorial to the 11 Deepwater Horizon workers and others who have died exploring for and producing oil and gas around the world. Please take a moment to watch.
Bud's Offshore Energy (BOE) 