Posted in energy policy, Jamaica, Offshore Energy - General, tagged Jamaica, United Oil and Gas, Walton Morant License on April 29, 2024| Leave a Comment »
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.
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, Alaska, BOEM, Gulf of Mexico, NPR-A, sanctions, Senator Dan Sullivan on April 26, 2024| Leave a Comment »
After the announcement of further restrictions on resource development in the National Petroleum Reserve of Alaska (NPR-A), Senator Sullivan (AK) called on the administration to stop sanctioning Alaska and to instead restore sanctions on Iran.
The US OCS is being similarly sanctioned by its own government. The 5 year OCS “leasing plan” not only excludes all areas except the Gulf of Mexico, but authorizes a maximum of only 3 sales, the fewest ever for a 5 year program. The number of sales may well have been zero were it not for the requirement to hold an oil and gas sale during the year prior to the issuance of a lease for wind development.
| 2024–2029 Proposed Final Program Lease Sale Schedule | |||
|---|---|---|---|
| Count | Sale Number | Sale Year | OCS Region and Program Area |
| 1 | 262 | 2025 | Gulf of Mexico: GOM Program Area |
| 2 | 263 | 2027 | Gulf of Mexico: GOM Program Area |
| 3 | 264 | 2029 | Gulf of Mexico: GOM Program Area |
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, fair market value, Lease Sale 261, rejected bids on April 25, 2024| Leave a Comment »
Given the current guidance for implementing the OCS Lands Act’s “fair market value” mandate, all 12 of BOEM’s Sale 261 bid rejections (table below) were warranted:
The main concern going forward is the absence of a consistent, predictable leasing schedule for the 3.7% of the OCS that 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 |
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 climate, energy policy, natural gas, Wind Energy, tagged Denmark power grid, dunkelflaute, Jens Christiansen, kryptonite, natural gas, wind and solar power on April 4, 2024| Leave a Comment »
Add Dunkelflaute to the list of interesting and expressive compound German words. Die Dunkelflaute is a dark lull, a period of time in which minimal energy can be generated by the sun or wind. More specifically in German:
Die Dunkelflaute als sogenanntes Kofferwort beschreibt das gleichzeitige Auftreten von Dunkelheit und Windflaute. Diese Wetterlage entsteht typischerweise im Winter und sorgt für geringe Erträge aus Solar- und Windenergie bei gleichzeitig saisonal hohem Strombedarf. Eine Dunkelflaute kann mehrere Tage andauern. Kommen zu Dunkelheit und Windflaute noch niedrige Temperaturen hinzu, die für gewöhnlich den Strombedarf weiter ansteigen lassen, spricht man auch von “kalter Dunkelflaute.”
Note the prolonged Dunkelflaute (below) during which renewables provided minimal power in the middle of winter.
Unsurprisingly, wind and solar output are the lowest when the temperatures are the coldest. See the Danish summary for 2023 below. Note that wind output was also low when temperatures were above 15 deg. C.
Regional wind energy grids are not always an effective solution as Danish physicist Jens Christiansen, a nuclear energy advocate, has illustrated:
‘The wind always blows somewhere.’ Is that really true though? Here I’ve looked at the capacity factors of wind from five northern European countries in August The winds seem highly correlated, and there is almost a week-long period without significant wind anywhere.
Christiansen illustrates Denmark’s reliance on imported electricity:
Paraphrasing Margaret Thatcher: “The problem with electricity imports is that you eventually run out of other people’s electricity.” In the U.S., California imports more electricity than any other state and typically receives between one-fifth and one-third of its electricity supply from outside of the state.
Given that massive battery storage is well beyond current capabilities and restrictions on electricity consumption and economic growth are undesirable, redundant or complementary power sources are essential for a reliable grid. Natural gas power generation is most responsive to variable demand, and is thus a good complement to variable sources like wind turbines and solar panels.
Posted in energy policy, tagged DOE, SPR deficit, SPR refill, Strategic Petroleum Reserve on April 3, 2024| Leave a Comment »
After announcing that the planned 40 million barrel SPR refill would be the equivalent of the massive 180 million barrel withdrawal, DOE has halted the refill at < half the planned amount. There is no end in sight for the SPR deficit (chart below).
Citing rising oil prices, the DOE said, “We will not award the current solicitations for the Bayou Choctaw SPR site and will solicit available capacity as market conditions allow.” Three million barrels of oil had been slated for delivery to the Bayou Choctaw SPR site in August and September.
Forbes
Posted in CCS, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, bid rejections, Gulf of Mexico, Lease Sale 259, Lease Sale 261, revenue gain on April 2, 2024| Leave a Comment »
14 of the high bids at Gulf of Mexico Lease Sale 259 were rejected. Did those tracts receive bids at sale 261? What was the net gain or loss of revenue? See the summary bullets and table below
For a net bonus revenue gain to date of only 1/4 of one per cent, 8 of the 14 sale 259 tracts with rejected high bids remain closed to exploration. The timing of any future sales is very much in doubt given the minimalist 5 year leasing plan and the associated legal challenges.
Current bid evaluation practices only make sense if regular lease sales are held on a predictable schedule, as has historically been the case.
Meanwhile, 100% of the improper CCS bids (199/199) were accepted at the last 3 oil and gas lease sales.
| 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 – Beacon | no | (2,422,222) |
| KC 789 | 707,777 – Beacon | 2,143,299 – Beacon | no | (2,143,299) |
| 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 | 1,032,877 |
Posted in climate, energy policy, natural gas, Offshore Energy - General, tagged Energy Report Card, Grading the Grid, MCPP, natural gas, NWU on March 26, 2024| 2 Comments »
Unsurprisingly, the winner is natural gas.
A new report ranks eight key energy industry sectors based on their ability to meet the growing demand for affordable, reliable, and clean electric power generation.
As governments around the nation attempt to impose a transition from traditional energy resources to energy sources open referred to as renewables, natural gas is the energy source that is best suited to integrate with the intermittency inherent in the use of wind and solar. Gas provides a reliable, affordable, and increasingly clean source of energy in both traditional and “carbon-constrained” applications.
Gas faces headwinds in the form of increasingly extreme net zero energy policies that will constrict supplies if implemented as proposed. Gas could also improve overall reliability if onsite storage was prioritized to help avoid supply disruptions that can occur in just-in-time pipeline deliveries during periods of extreme weather and demand.
MCPP-NWU Report Card
This blog has been saluting natural gas for years, most recently in this post. From an environmental standpoint, offshore natural gas production is particularly attractive, especially nonassociated gas-well gas.
Bud's Offshore Energy (BOE) 