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Archive for the ‘Offshore Energy – General’ Category

Are the days of big offshore finds over? No!

Posted in Offshore Energy - General, tagged , , , , , , , , on June 22, 2026| Leave a Comment »

Norwegian Minister of Petroleum and Energy, Terje Aasland, officially opened Johan Sverdrup Phase 2 – Equinor photo

JL Daeschler shared an interesting opinion piece. He and I are in general agreement with the author, Steve Sasanow. Key points:

  • Steve finds Equinor’s recent comment that the days of big offshore finds are over to be disingenuous. He correctly notes that this view has been echoed for decades. (Although the end of Gulf of America oil production has been predicted for 40 years, 2025 was a near record year.)
  • Offshore Norway, it was only in 2010 that the giant Johan Sverdrup field was ‘found’ by Equinor. Two super-majors – Exxon and Total – missed the reservoir and abandoned further exploration in the area. (How many times have we heard similar stories in the oil patch?) Equinor, then Statoil, made a relatively small find in the middle of the reservoir and was planning a limited subsea development. Geophysicists from partner Lundin created a better picture of what was in place – nearly 3 billion barrels with peak production of 750,000 b/d three years ago. Just this week, Equinor announced Phase 4 of production through further subsea development.
  • Who heard much about Guyana a decade ago?
  • How about the major new discoveries offshore Brazil? See the video below.
  • New production offshore Namibia, South Africa, and Mozambique looms. Finds off Indonesia and Timor Leste, and even the Falklands, await development.
  • “So guys, stop making out that life is tough. It might be challenging, but it has always been thus. Big risks and big rewards.”
  • On BP’s announcement that they were reorganizing into upstream and downstream divisions: “Wow – what a great idea! How come no one ever thought of this before? Imagine this scenario – oil companies making money on both sides of the price cycle – upstream when the price of oil is high and downstream when it is lower. Amazing – NOT!” 😉

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Chevron gets Stabroek; US employees get pink slips

Posted in energy policy, Guyana, Offshore Energy - General, tagged , , , , , , , on June 16, 2026| Leave a Comment »

The oil patch is known for booms, busts, mergers, and acquisitions. Hess is now among the once important offshore operators that no longer exist as separate companies. Others include Amoco, Arco, Texaco, Getty, Gulf, Unocal, Sun, Anadarko, BHP, Mobil, Phillips, Noble Energy, Pennzoil, Kerr-McGee, Superior, Nexen, and Newfield.

Hess would probably not have been a Chevron target had they not taken a chance in 2014 when they obtained a 30% position in Exxon’s Stabroek block offshore Guyana. The rest is history, and Stabroek is now the world’s most prized offshore block. Hess had other nice assets in the Gulf, Bakken Shale, and elsewhere, but Stabroek was Chevron’s primary target.

Paying the price for the Hess acquisition are up to 8,000 employees who will be axed by the end of 2026, starting with 575 cuts at the former Hess Tower in Houston on September 26 and matched reductions in Texas, California and North Dakota. The cuts also have to be disappointing to the Federal, Texas and North Dakota governments, given their strong support for oil and gas production. Mass layoffs don’t equate to energy dominance.

Why is the loss of Hess is significant:

  • Hess was a safety compliance leader in both 2023 and 2024.
  • Hess was an active participant in pre-merger lease sales.
  • The combined company is unlikely to be greater than the sum of the parts in terms of US lease acquisition, exploration, and development.
  • Combining companies limits the diversity of geological assessments and exploration strategies.
  • Consolidation limits participation on committees engaged in assessing technology and developing standards. Declining industry participation in these activities, which are critical to offshore safety, has been a historical concern of OCS program leadership.

When the merger was announced, Chevron’s CEO Mike Wirth was quoted as saying “We’ve got too many CEOs per BOE, so consolidation is natural.” That comment makes sense from the perspective of an acquiring CEO. Employees of the companies being acquired have a somewhat different view. They would prefer increasing exploration and production rather than reducing employees.

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Lars Herbst: “What a beautiful sight!”

Posted in drilling, Gulf of Mexico, Mexico, Offshore Energy - General, Uncategorized, tagged , , , , , on June 12, 2026| 1 Comment »

Lars Herbst saw this “beauty” while sitting at a rooftop “establishment” in Pensacola. Reminded him of our temporary Pensacola office and Destin Dome drilling. Lars had visions of returning to work as Pensacola District Manager! 😉

Upon returning to his senses, Lars reports that it’s the Borr jack-up rig Odin purchased from Noble’s fleet. The rig was brought from Mexico to Pensacola for modifications, and will be under contract to Cantium to drill in the GOA, but not the Eastern GOA!

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More Sable drama: CNN visits Platform Harmony, Coastal Commission threatens to shut it down

Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged , , , , on June 12, 2026| Leave a Comment »

Meanwhile, the California Coastal Commission notified Sable Offshore that it intends to issue a cease and desist order aimed at shutting down crude oil extraction in the Santa Barbara Channel.

Sable responds: “Sable Offshore Corp. (“Sable”) through its subsidiary, Pacific Pipeline Company (“PPC”), continues to lawfully operate through its existing coastal development permits which were issued in 1986.”

California cage fight! Who ya’ got?

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Newfoundland: Hibernia keeps on chugging!

Posted in Canada, Offshore Energy - General, tagged , , , , , on June 11, 2026| Leave a Comment »

I had the pleasure of visiting the Hibernia gravity-based structure while it was still under construction in Bull Arm, Newfoundland (photo). This pioneering facility, where Newfoundland’s offshore production began in Nov. 1997, continues to impress.

In April, Hibernia posted its highest monthly production since August 2021 – 3.1 million barrels or 103,000 bopd. Exxon attributes the production growth to a recent 6-well drilling program. The Hibernia field has produced more than double the original resource estimate of 520 million barrels.

Offshore Newfoundland’s total April production, increased to 9.4 million barrels, with a sharp increase in the value of production (see figure below). This is the highest monthly production level for the province since March 2020, and the second highest monthly production value on record, only behind July 2008.

Meanwhile, production at Hebron, another Exxon GBS structure, has reached record levels this year (chart below). The facility is producing more than 5 million bbls/month.

Finally, Suncor’s decision to refurbish the Terra Nova FPSO and resume production may be paying off given production levels of ~1 million bbls/month.

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AI to geophysicists: “You’re fired!”😉

Posted in drilling, Offshore Energy - General, tagged , , , , , , , on June 10, 2026| Leave a Comment »

Offshore Guyana seismic line

Oil Now Guyana reports that an Exxon artificial intelligence model built using Guyana’s offshore seismic data was able to identify already-discovered crude oil accumulations with a 90% success rate.

Neil Chapman, Exxon: “…in Guyana, we have built an agent, a model…which if we give it the seismic data that we’ve run and we say, go find the crude oil, it can find all the crude oil that we’ve already found with a 90% success rate.”

(Note: Humans are also great at identifying discoveries after the fact 😉. How many false positives were there?)

Chapman said the company has also used artificial intelligence to review well data from across the industry.

“We have analyzed the well data from 50,000 wells that have been drilled in the industry all over the world, 50,000,” Chapman said. “It would have taken us 15 years to do that analysis. We’ve done it in a matter of weeks.” 

Despite the many advances in exploration technology over the years, one caveat remains unchanged: “We don’t know if they’re going to be successful or not until you drill a hole, you can never be sure,” Chapman said. 

AI should enhance not just geophysical interpretations, but all aspects of offshore exploration and production including site surveys, well planning and construction, drilling, well control, structure designs, production and pipeline monitoring, and safety management. Hopefully, the net result will be increased production at lower cost with improved safety and environmental performance, and that the workforce will not be reduced, but will become more efficient.

Stunning picture taken offshore Guyana

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West of Shetland – let’s go!

Posted in energy policy, Offshore Energy - General, UK, tagged , , , , , , , , on June 9, 2026| Leave a Comment »

North Sea pioneer JL Daeschler is among those lamenting the sad state of UK exploration and development, commenting that he is “green” with envy of Norway’s long term management of their oil and gas resources.

Researchers at the University of Aberdeen may be showing the way for exploitation of the West of Shetland area’s estimated 4.7 billion bbls of oil equivalent (boe). They are advocating a tailored management regime for this challenging area. Per the researchers:

“West of Shetland is not a depleted frontier – it is a technically demanding but strategically important energy province,” said Nick Schofield, Professor of Igneous & Petroleum Geology at the University of Aberdeen. “Our study highlights the remaining oil and gas potential in the area, which could extend the life of the UK’s oil and gas sector.”

John Underhill, Aberdeen University’s Director for Energy Transition said: “Failing to develop these domestic resources risks increasing the UK’s dependence on imports, with implications for emissions, costs, jobs, tax revenues and energy security.” 

The researchers argue that a “one-size-fits-all” approach to UKCS taxation fails to reflect the unique risks and costs associated with West of Shetland exploration, appraisal and development. As a result, they say projects that are technically viable may remain economically marginal under current conditions.

The University of Aberdeen paper (linked) advocates a tailored regime that would:

  • Recognize higher exploration and development costs
  • Account for increased geological and operational risk
  • Encourage investment in challenging projects
  • Enable tie-backs to existing infrastructure that would provide energy security, tax revenues, retain jobs and be better for the global climate than importing liquified natural gas (LNG), which carries a higher carbon footprint.
  • Support the development of already identified prospects within licensed areas

Rosebank update:

The West of Shetland area includes the controversial Rosebank project (map above), which has yet to receive environmental consent from the UK govt. Following a court ruling, Equinor (operator) was given permission to proceed with the project, including preparatory engineering and construction work, but no production is allowed pending final govt approval.

The PetoJarl Rosebank Floating Production Storage and Offloading (PFSO) vessel recently left its dry dock in Norway and has arrived in the West of Shetland basin. The vessel will undergo commissioning to be ready for production by the end of the year.

PetroJari Rosebank FPSO

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Lackluster ANWR sale. Implications for Arctic offshore leasing?

Posted in Alaska, energy policy, Offshore Energy - General, tagged , , , , , on June 6, 2026| Leave a Comment »

The Canning River, seen here in 2018, flows from the Brooks Range into the Beaufort Sea along the western edge of the Arctic National Wildlife Refuge. The river marks the boundary between the refuge, which is managed by the U.S. Bureau of Land Management, and state land on the North Slope. Results of an oil lease sale that offered 58 tracts in the refuge’s coastal plan drew bids on five tracts. The highest-dollar bid was for a tract right at the Canning River edge of the refuge’s border with state land. (Photo by Lisa Hupp/U.S. Fish and Wildlife Service)

Yesterday’s mandated One Big Beautiful Bill sale in the Arctic National Wildlife Refuge turned out to be a one-on-one competition between an Alaskan independent and a State agency! Only 5 of the 58 tracts received bids, and the high bid was $1.7 million.

The competitors:

  • HEX Energy, an Alaskan independent: 4 bids, 2 high bids
  • Alaska Industrial Development and Export Authority (AIDEA), the state government’s economic development agency: 5 bids, 1 high bid

Full sale results

The implications for Arctic offshore sales are not good, but oil companies can be fickle, and opinions and investment strategies are subject to change, especially in the Arctic.

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As expected, Secretaries Burgum and Wright visited Sable’s onshore facilities today

Posted in California, energy policy, Offshore Energy - General, tagged , , , , , on June 5, 2026| Leave a Comment »

Sable posts

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The events that led to the Strategic Petroleum Reserve also drove the rapid expansion of the offshore program

Posted in Alaska, California, energy policy, Georges Bank, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , on June 5, 2026| 2 Comments »

Nothing tilts public opinion more than high gasoline prices, or worse yet shortages! Hence the 1975 legislation establishing the SPR, the massive SPR drawdown in 2022, and this year’s withdrawals.

Looking back to the halcyon days of the US offshore program, it was the gas lines in the 1970s that drove the remarkable and rather unlikely growth in the program during the Carter Administration (1977-1981). A few highlights from those four years:

  • 15 lease sales including 3 offshore Alaska, 3 in the Atlantic, and 1 offshore California
  • Drilling activity in all 4 regions: GoM, Pacific, Alaska, and Atlantic
  • Natural gas discovery in the Mid Atlantic (Hudson Canyon Unit)
  • North, Mid, and South Atlantic District offices for permitting and inspections
  • 5300 well starts including 97 in water depths > 1000′
  • 314 new platforms including Cognac, the world’s first platform in > 1000′ of water

Perhaps unthinkable today, the Governor of Massachusetts from 1979-1983, Ed King, was a strong supporter of offshore drilling. Absent that support, the exploratory drilling on Georges Bank would probably have never occurred. /s/ Nostalgic Old Man 😉

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