Posted in Gulf of Mexico, Norway, Offshore Energy - General, UK, Uncategorized, tagged JL Daeschler, Marathon LeTourneau, North Sea, Ocean Viking, offshore art on April 16, 2024| Leave a Comment »
JL Daeschler is a pioneering subsea engineer and artist extraordinaire who is a native of France (Brittany) and lives in Scotland. He has shared 2 more of his exceptional drawings. (Click on the images to enlarge.)
Posted in Norway, Offshore Energy - General, Regulation, tagged Gunnar Berge, Magne Ognedal, Minerals Management Service, Norway, Odd Finnestad, Petroleum Safety Authority, Taf Powell on April 15, 2024| Leave a Comment »
Yesterday, I learned that Odd Bjerre Finnestad passed away on Christmas Eve, 2021. Odd was an international safety leader, a founder of the International Regulators’ Forum (IRF), and a driving force behind the IRF book, “A legacy of safety.”
In 2003, the US Minerals Management Service honored Odd, two other Norwegians, Magne Ognedal and Gunnar Berge, and Taf Powell from the UK, with International Leadership Awards for their outstanding leadership in facilitating the exchange of information among offshore regulatory agencies, encouraging cooperation on offshore safety and pollution prevention issues, coordinating participation in the development of international standards, cooperating on safety audits and research projects, compiling incident data, exchanging training information and discussing materials and equipment issues.
Odd was also an important contributor to this blog during the difficult times following the Montara and Macondo blowouts in 2009 and 2010.
Pasted below is the English language version of the excellent obituary that appeared in the Stavanger Aftenblad. RIP Odd; your impressive contributions to offshore safety are greatly appreciated.
Memorial: Odd Bjerre Finnestad died on Christmas Eve 2021, aged 79.
Odd was employed by the Norwegian Petroleum Directorate (OD) in 1980, later the Petroleum Safety Authority (Ptil) when resource and safety management was divided into two agencies in 2004. He worked there until his retirement in 2013.
Born in the maritime city of Stavanger, he chose a maritime career. As a young naval officer, he met his Anna Dorothy in Londonderry in Northern Ireland. They married in 1967, and our thoughts go out to her and the rest of the family today.
His maritime education and experience led Odd to a scholarship position at the Norwegian Institute of Maritime Research and a research program focusing on personal safety at sea. This was an important experience as head of the Section for Worker Protection and the Working Environment in NPD.
Even though most of the Working Environment Act had been applied to permanent installations on the Norwegian continental shelf as early as 1977, demands for employee participation and tripartite cooperation met resistance in parts of the industry.
Odd took on the big challenges with great commitment. On the drilling deck there was still something of the cowboy culture, where safety and the working environment had poor conditions. Several of the residential quarters appeared to be barrack-like accommodation and little had yet been arranged for women in the new industry.
He was concerned that the professional environment should have professional diversity, and that the work should be anchored in research and development. At a time when the share of women offshore was minimal, he was a driving force behind realizing the film project “Norwegian continental shelf – also for women”.
The major accidents with the Bravo blowout in 1977 and the Alexander L Kielland disaster in 1980 had documented the risks in the business in the worst possible way. With these as a backdrop, he participated in the work to develop a new supervision scheme with subsequent information work. This laid the foundation for a three-year engagement at the International Labor Organization (ILO) in Geneva from 1989, where he worked on a global study on various inspection regimes related to the working environment.
For the rest of his professional life, Odd was closely linked to international cooperation at government level. The most important arena was the International Regulators ́ Forum (IRF) where the Ptil director represented the Norwegian authorities. The forum meets annually, but much of the work takes place through ongoing contact between the participating countries. This is where Odd’s ability to see connections and make strategic contacts came in handy. He actively contributed to the IRF developing a culture for rapid and effective exchange of information on risk levels, regulations and supervision.
Odd monitored all channels almost around the clock, in order to convey news of interest. Often before these were picked up by the world press. He thereby also became an important contributor to Ptil’s information environment.
It is a pioneer in Ptil’s role as watchdog and promoter of safety and the working environment in the petroleum industry who has now passed away. We will remember Odd as a committed colleague and friend.
Posted in Uncategorized on April 13, 2024| Leave a Comment »
Posted in California, decommissioning, Gulf of Mexico, Offshore Energy - General, tagged BOEM, decommissioning, John B Smith, Platform Hogan, Platform Houchin, Santa Barbara Channel on April 12, 2024| Leave a Comment »
Posted in Gulf of Mexico, Offshore Energy - General, tagged bid rejections, Lease Sale 259, Lease Sale 261 on April 12, 2024| Leave a Comment »
The table in the Sale 259 bid rejections post has been corrected below. That table incorrectly reported that subsequent bids for Keathley Canyon Blocks 745 and 789 were rejected at Sale 261. Those bids were in fact accepted. Houston Energy was identified as the submitter rather than Beacon Offshore Energy, the company that, per the bidding data, had the largest ownership share. (See the bidding partnership pasted below.)
The acceptance of those 2 bids significantly increases the net gain to the government as a result of the Sale 259 bid rejections. See the corrections in red to the table:
| area and block | Sale 259 rejected high bid – company | Sale 261 high bid | bid accepted | govt gain (loss*) |
| DC 622 | 2,101,836 – Shell | 615,628 – Shell | yes | (1,486,208) |
| GC 173 | 307,107 – Woodside | no bid | NA | (307,107) |
| GC 547 | 1,783,498 – Chevron | no bid | NA | (1,783,498) |
| GC 591 | 1,291,993 – Chevron | no bid | NA | (1,291,993) |
| GC 642 | 605,505 – Anadarko | no bid | NA | (605,505) |
| GC 777 | 583,103 – bp | no bid | NA | (583,103) |
| AT 5 | 1,551,130 – Anadarko | 5,215,628 – Shell | yes | 3,664,498 |
| AT 133 | 607,107 – Woodside | no bid | NA | (607,107) |
| KC 745 | 707,777 – Beacon | 2,422,222 – | 1,714,445 | |
| KC 789 | 707,777 – Beacon | 2,143,299 – | 1,435,522 | |
| WR 794 | 724,744 – Beacon | 1,487,624 – Beacon | yes | 762,880 |
| WR 795 | 774,242 – Beacon | 5,301,107 – Woodside | yes | 4,526,865 |
| WR 796 | 774,242 – Beacon | 3,310,107 – Woodside | yes | 2,535,865 |
| WR 750 | 724,744 – Beacon | 1,498,555 – Beacon | yes | 773,811 |
| total govt. gain | 8,748,365 |
More on the Sale 261 bidding next week.
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged 2024 vs. 2001, deepwater rig capabilities, Diamond Offshore, Gulf of Mexico drilling, macondo, Marshall Islands, Noble Corp., regulatory fragmentation, rig counts, Stena, transocean, Valaris on April 11, 2024| Leave a Comment »
The active rig count in the GoM in 2001 was 148 (AL-4, LA-119, TX-25), which is >8 times the current Baker Hughes rig count of 18. The 2001 rig count was not a one year blip; the number of rigs active in the GoM exceeded 100 for the ten year period from 1994-2003.
While the current rig count is anemic by comparison, the capabilities of the fleet are anything but. Below is a list derived from drilling contractor status reports of deepwater rigs now operating in the Gulf.
All of these rigs are dynamically positioned and are capable of drilling in 12,000′ of water. They have dual derricks and 15,000 psi rated BOP rams (one has a 20,000 psi stack, and another can be upgraded to 20,000 psi). The annular preventers are rated at 10,000 psi. All have impressive storage and hook load capacities, the latest tubular handling equipment, advanced control systems, and efficient power generation.
Note that most of the rigs fly the flag of the Marshall Islands. This “flag of convenience” registration is preferred for reasons related to taxation and operational freedom. For the record, the fact that the Deepwater Horizon was registered in the Marshall Islands had little to do with the Macondo blowout. The DWH was subject to all Coast Guard and MMS regulations under the OCS Lands Act.
The main cause of the Macondo blowout was the poorly planned and executed well suspension operation. Certain equipment capability, maintenance, and employee training issues were contributing factors. However, with that said, the Marshall Islands report on the blowout candidly acknowledges that “the complexity of and interdependence between the drilling and marine systems and personnel suggests a need for increased communication and coordination between the flag State and coastal State drilling regulators.” Hopefully, that coordination is being achieved and the risks associated with the fragmented regulation of mobile drilling units are being effectively managed.
| Contractor | Rig | Operator | Est. end date | Flag |
| Transocean | Deepwater Titan | Chevron | 3/2028 | Marshall Islands |
| Transocean | Deepwater Atlas | Beacon | 4/2025 | Marshall Islands |
| Transocean | Deepwater Poseidon | Shell | 4/2028 | Marshall Islands |
| Transocean | Deepwater Pontus | Shell | 10/2027 | Marshall Islands |
| Transocean | Deepwater Conqueror | Chevron | 3/2025 | Marshall Islands |
| Transocean | Deepwater Proteus | Shell | 5/2026 | Marshall Islands |
| Transocean | Deepwater Thalassa | Shell | 2/2026 | Marshall Islands |
| Transocean | Deepwater Asgard | Hess | 4/2024 | Marshall Islands |
| Stena | Evolution | Shell | 4/2029 | Marshall Islands |
| Noble | Stanley Lafosse | ??? | 11/2024 | Liberia |
| Noble | Valiant | LLOG | 2/2025 | Marshall Islands |
| Noble | Globetrotter I | Shell | 5/2024 | Liberia |
| Noble | Globetrotter II | Shell | 5/2024 | Liberia |
| Valaris | DS-18 | Chevron | 8/2025 | Marshall Islands |
| Valaris | DS-16 | Oxy | 6/2026 | Marshall Islands |
| Diamond Offshore | BlackHawk | Oxy | 10/2024 | Marshall Islands |
| Diamond Offshore | BlackHornet | bp | 3/2027 | Marshall Islands |
| Diamond Offshore | BlackLion | bp | 9/2026 | Marshall Islands |
Short video about the Stena Evolution, the newest entry to the Gulf of Mexico fleet:
Posted in Gulf of Mexico, Offshore Energy - General, oil spill response, pipelines, tagged Coast Guard, Main Pass Oil Gathering, MPOG, NTSB, pipeline leak, sheen, unified command on April 10, 2024| Leave a Comment »
After 5 months of investigation, the Main Pass Oil Gathering (MPOG) system has finally been cleared for production. (The Coast Guard update only says that the pipeline passed the integrity test, but I assume the operators may resume production though the MPOG system.)
Only a small connector leak that was previously reported was identified during the extensive integrity testing. The Coast Guard had advised that the connector leak was not the source of the large sheen that was observed in November.
So what was the source of the November sheen and what was the basis for the 1.1 million gallon spill volume estimate? The sheen was not indicative of a spill of that magnitude. Did the Coast Guard et al assume a worst case loss from the MPOG system, even though no leak had been identified?
Is this the most oversight ever for a pipeline integrity test?
The removal and replacement of the spool piece and the subsequent integrity test of the MPOG line were conducted under the close supervision of the Unified Command and Pipeline and Hazardous Materials Safety Administration. During both operations, spill response vessels were on site, along with divers, remotely operated vehicles, helicopters equipped with trained oil observers and multi-spectral imaging cameras, and other containment and recovery equipment. No material discharge of oil was observed during these operations.
Unified Command
The NTSB has the lead in the investigation into the source of the sheen. Don’t expect any findings soon.
Posted in decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, well control incidents, tagged Beacon Offshore, GOM 1 Holdings, joint and several liability, macondo, New Zealand Oil and Gas, O.G. Oil & Gas Ltd, Ofer Global Group on April 9, 2024| Leave a Comment »
Houston, TX, March 29, 2024. Beacon Offshore Energy LLC (“Beacon”) announced today the completion of the divestment of its non-operated interests in certain fields in the deepwater Gulf of Mexico in accordance with a previously executed definitive agreement with GOM 1 Holdings Inc., an affiliate of O.G. Oil & Gas Limited. The divestment includes Beacon’s 18.7% interest in the Buckskin producing field, 17% interest in the Leon development, 16.15% interest in the Castile development, 0.5% interest in the Salamanca FPS/lateral infrastructure, and 32.83% interest in the Sicily discovery.
Beacon
According to BOEM records, GOM 1 HOLDINGS INC, a Delaware company, registered with BOEM effective 3/15/2024. The parent entity, O.G. Oil & Gas Limited, is a privately held E&P company incorporated in 2017 and based in Singapore.
O.G. Oil & Gas Ltd is part of the Ofer Global Group, “a private portfolio of international businesses active in maritime shipping, real estate and hotels, technology, banking, energy and large public investments.”
After a partial takeover by O.G Oil & Gas Limited in 2018, New Zealand Oil and Gas is now 70% owned by the Ofer Global Group. Among other interests, NZ Oil and Gas produces from fields offshore Taranaki, NZ.
Because they are jointly and severally liable for safe operations and decommissioning, minority investors should take a strong interest in safety management and financial assurance. Investors should remember that partners are adversely affected by the mistakes of the operating company. Anadarko and Mitsubishi took a hit following the Macondo blowout. To what extent had they been monitoring bp’s risk and safety management programs for drilling operations?
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Wind Energy, tagged climate change, deniers, Offshore Wind, solar eclipse, Texas on April 8, 2024| Leave a Comment »
… and you deniers are fully responsible. There’s a reason why Texas is the most affected state 😉
But fear not, we will line our shores with wind turbines, restrict offshore oil and gas leasing, and subsidize carbon disposal in the Gulf of Mexico. All of this “help” will have a negligible effect on the climate, which will continue to change as it always has and always will.
Posted in Guyana, Offshore Energy - General, tagged Chevron, CNOOC, Exxon, Guyana, Hess, ICC, SEC filing, Stabroek Block on April 5, 2024| Leave a Comment »
As we wait for the International Chamber of Commerce (ICC) arbitration panel to rule on the Exxon-CNOOC-Chevron-Hess Stabroek dispute, key excerpts from Chevron’s SEC filing about their merger with Hess are pasted below. The text highlighted in red is particularly interesting.
If the ICC arbitration panel rules that the right-of-first-refusal (ROFR) provision applies, the Chevron filing says that the merger is off and Hess continues as Stabroek’s 30% owner. If that statement is correct, Exxon and CNOOC cannot obtain the Hess share. Their only benefit from the challenge would be to deny their rival Chevron from participating in the block or to receive payment from Chevron for approving the ownership change.
It’s also noteworthy that Exxon initially showed support for the deal (quote below).
Excerpts from Chevron’s SEC filing:
p. 32: With respect to the Stabroek ROFR (as defined in the section entitled “The Merger—Stabroek JOA”), if the arbitration does not result in a confirmation that the Stabroek ROFR is inapplicable to the merger, and if Chevron, Hess, Exxon and/or CNOOC do not otherwise agree upon an acceptable resolution, then there would be a failure of a closing condition under the merger agreement, in which case the merger would not close. Some of these conditions are not in Hess’ or Chevron’s control.
Further, subject to any then ongoing arbitration relating to the Stabroek JOA, either Chevron or Hess may terminate the merger agreement if the merger has not been completed by October 22, 2024, (or April 22, 2025 or October 22, 2025, if the applicable end date is extended pursuant to the merger agreement) or by such later date as the parties may mutually agree.
p. 81: The Stabroek JOA contains a right of first refusal (the “Stabroek ROFR”) provision that, if applicable to a change of control transaction and properly exercised, provides the Stabroek Parties with a right to acquire the participating interest in the Stabroek Block held by the Stabroek Party subject to such transaction (at a value that is based on the portion of the value of the change of control transaction that reasonably should be allocated to such participating interest and is increased to reflect a tax gross-up) only after, and conditioned on, the closing of such transaction.
Chevron and Hess believe that the Stabroek ROFR does not apply to the merger due to the structure of the merger and the language of the Stabroek ROFR provisions.
p. 82: On October 24, 2023, shortly after the merger was announced, Exxon issued the following statement, indicating its support for the merger:
“Hess has been a valued partner in Guyana since 2014 and we look forward to continuing our successful operations in the Stabroek block with Chevron, pending the deal closing.”
However, Exxon and CNOOC subsequently informed Chevron and Hess that they believe the Stabroek ROFR applies to the merger. Hess, Chevron, Exxon and CNOOC subsequently engaged in discussions regarding the applicability of the Stabroek ROFR to the merger.
If the arbitration does not result in a confirmation that the Stabroek ROFR is inapplicable to the merger, and if Chevron, Hess, Exxon and/or CNOOC do not otherwise agree upon an acceptable resolution, then there would be a failure of a closing condition under the merger agreement, in which case the merger would not close, and, pursuant to the terms of the Stabroek JOA, the Exxon affiliate and the CNOOC affiliate would cease to have rights under the Stabroek ROFR with respect to the merger. In that event, Hess would remain an independent public company and would continue to own its participating interest in the Stabroek Block. Based on the express terms of the Stabroek JOA, Chevron and Hess do not believe there is any material likelihood that the circumstances described in this paragraph will occur.
p. 118: In addition, with respect to the Stabroek ROFR, if the arbitration does not result in a confirmation that the Stabroek ROFR does not apply to the merger, and if Chevron, Hess, Exxon and/or CNOOC do not otherwise agree upon an acceptable resolution, then there would be a failure of a closing condition under the merger agreement, in which case the merger would not close.
Bud's Offshore Energy (BOE) 