Feeds:
Posts
Comments

Archive for the ‘Offshore Energy – General’ Category

Jamaica: Can United Oil & Gas make it to the starting line (exploration well)?

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

United’s massive Walton-Morant license is the size of 896 Gulf of America lease blocks! That’s half the total number of active Gulf leases!

United O&G 2025 Financial Summary:

  • Loss after tax: ($1.25m) (2024: $2.44m loss)
  • Group cash balances at 31 December 2025: $1.7m (2024: $0.8m)

“The company currently has no revenue and is operating at an annual loss and shows a current net liability as at 31 December 2025. Its only funding options are through warrant exercises, a Jamaican farmout deal covering back and future work program costs, or equity financing.”

The company’s future is dependent on finding a partner to fund an exploratory well. In that regard, United’s optimism has yet to result in a farmout deal after years of trying. The discovery risks seem comparable to those of other prospective frontier wildcats. So why have they been unable to find a partner? Are their terms unreasonable?

This outsider continues to wonder why United has been granted multiple license extensions, the latest through 1/31/2008. Does the govt have that much confidence in a company that is dependent on finding a partner to fund an exploration well? Should the Govt of Jamaica have allowed the license to expire and negotiated directly with larger companies? Was the govt concerned about administrative or political constraints associated with re-offering the massive license area?

I have been following this story for 5 years, and am still hopeful for a positive outcome for Jamaica.

Read Full Post »

As Lease Sale BBG3 approaches (Aug. 12, 2026), Gulf production is high, drilling is low

Posted in drilling, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , on July 9, 2026| 2 Comments »

Lease sale Big Beautiful Gulf 3 (BBG3) will be held on 8/12/2026. The Final Notice of Sale is attached.

Given the rather tepid BBG1 and BBG2 results and the high sale frequency, robust bidding is not expected. Nonetheless, the BBG bidding patterns and tract evaluations have been interesting, most notably BOEM’s rejection of LLOG’s bid for Keathley Canyon 828, an expired lease block in the their Buckskin field.

Keathley Canyon 828 is not among the blocks listed for sale at BBG3. Per the Notice of Sale (p. 4), “any lease blocks whose high bids were rejected and not appealed in the immediately preceding Big Beautiful Gulf lease sale, are expected to be included as eligible for lease.” Can we therefore assume that either the KC 828 bid rejection or the prior lease expiration is being appealed?

The legislatively mandated BBG lease terms are attractive – 10 years and 12.5% royalty for deepwater blocks. A more recent legislative directive requires (wrongly in my opinion) the approval of downhole commingling requests. This accelerates the return on investments in deepwater, high pressure reservoirs. Such commingling has presumably contributed to record Gulf oil production in 2025. The longer term concern is the impact on ultimate oil and gas recovery.

Meanwhile, the Gulf rig count and well start numbers continue to disappoint. Baker Hughes (7/2/2026) lists only 4 active rigs in the deepwater Gulf – one each in the Alaminos and Mississippi Canyon areas and two in the Green Canyon Area. BSEE’s borehole file lists only 15 new deepwater exploratory well starts YTD.

GOA Lease Sale BBG3 FNOS – Final Notice of SaleDownload

Read Full Post »

ONRR sets the record straight – 2025 was in fact a record OCS production year. Large discrepancy between ONRR and EIA.

Posted in Gulf of Mexico, Offshore Energy - General, tagged , , , , , on July 7, 2026| Leave a Comment »

Six months after the year ended, the Office of Natural Resources Revenue (ONRR) has completed their precise, to the barrel, production accounting. BOEM was correct – 2025 was a record OCS oil production year by a considerable amount. Total OCS production, nearly 714 million bbls, exceeded the 2019 record by 14 million bbls. EIA data still favor 2019 by a slight margin.

The 16+ million barrel difference between the 2025 ONRR and EIA OCS production totals is much larger than any such differential in recent years and warrants an explanation. Below are the 2025 OCS totals (first table) and the 2019 to 2025 Gulf totals (2nd table). As indicated in the second table, all other differentials between ONRR and EIA were <2 million bbls, and only the 2024 differential was >1 million bbls.

2025 OCS total – ONRR2025 OCS total – EIA2025 Gulf only – ONRR2025 Gulf only – EIA
713,673,419697,020,000708,803,859692,634,000
Table 1

Gulf oil production (bbls)ONRREIA
2019692,681,301692,831,000
2020609,704,101610,064,000
2021623,586,734623,167,000
2022632,639,739631,900,000
2023680,868,936680,400,000
2024656,217,605654,223,000
2025708,803,859692,634,000
Table 2

Read Full Post »

38 years ago today, fires and explosions destroyed the Piper Alpha platform in the North Sea and killed 167 workers. We must never forget this tragedy.

Posted in accidents, Offshore Energy - General, Regulation, tagged , , , , , , on July 6, 2026| Leave a Comment »

The Piper Alpha fire (July 6, 1988) was the worst disaster in the history of offshore oil and gas operations and sent shock waves around the world. Eight months later another interactive pipeline-platform fire killed 7 workers at the South Pass 60 “B” facility in the Gulf of Mexico. A US Minerals Management Service task group reviewed the investigation reports for both fires and recommended regulatory changes with regard to:

  1. the identification and notification procedures for out-of-service safety devices and systems,
  2. location and protection of pipeline risers,
  3. diesel and helicopter fuel storage areas and tanks,
  4. approval of pipeline repairs, and
  5. location of ESD valves on pipelines.

Paul Schneider and I wrote a paper on the task group’s findings and that paper was published in Offshore Operations Post Piper Alpha (Institute of Marine Engineers,1991). The proposed regulations that followed summarized these findings and can be be found at this Federal Register link.

Lord Cullen’s comprehensive inquiry into the Piper Alpha tragedy challenged traditional thinking about regulation and how safety objectives could best be achieved, and was perhaps the most important report in the history of offshore oil and gas operations. Per Cullen:

“Many current safety regulations are unduly restrictive because they impose solutions rather than objectives. They also are out of date in relation to technological advances. Guidance notes lend themselves to interpretations that discourage alternatives. There is a danger that compliance takes precedence over wider safety considerations and that sound innovations are discouraged.“

Cullen advocated management systems that describe the safety objectives, the system by which those objectives were to be achieved, the performance standards to be met, and the means by which adherence to those standards was to be monitored. He called for safety cases that describe major hazards on an installation and provide appropriate safety measures. Per Cullen, each operator should be required in the safety case to demonstrate that the safety management systems of the company and the installation are adequate to assure that design and operation of the platform and its equipment are safe.

Full Piper Alpha Inquiry – 2 parts.

Read Full Post »

New Gulf oil production record set in April; Sable boosts Pacific production

Posted in California, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , on June 30, 2026| Leave a Comment »

Per the preliminary EIA data for April, Gulf of America OCS facilities produced an average of 2.107 million bopd in April. This surpasses the previous record of 2.060 million bopd set in January.

Meanwhile, the Sable bump is now evident in the EIA’s Pacific OCS production data with a ~50% March-April increase from January-February. A bigger increase should be apparent when the May numbers are posted. How will Sable fare in the upcoming court battles?

Read Full Post »

Part 2: Gulf of America flaring and venting (2019-2025) – charts and summary table

Posted in climate, flaring and venting, Gulf of Mexico, natural gas, Offshore Energy - General, tagged , , , , , , on June 29, 2026| Leave a Comment »

Part 1

Gulf of America flaring and venting data for 2019-2025 are summarized in the attached table. The preferred performance indicators are the percentages of produced gas that are flared and vented both for oil-well gas (OWG, also known as associated or casinghead gas) and gas-well gas (GWG or non-associated gas).

The flaring and venting table was compiled using monthly data submitted to the Office of Natural Resources Revenue (ONRR). This is the best data source because reporting is mandatory and strictly enforced, and flaring and venting are accounted for separately. All volumes are in millions of cubic feet (MMCF).

The venting and flaring volumes are segmented for both OWG and GWG production. Venting produced gas (mostly methane) is a more significant environmental concern from both air quality and greenhouse gas (GHG) perspectives.

Observations and Comments:

  • The total volume of gas flared and vented in 2025 was 9.7 bcf (chart 1). 80% of that volume was flared, leaving 20% vented. OWG flaring (chart 5) reached a new high of 7.785 bcf in 2025, a near record oil production year for the Gulf.
  • Total venting and flaring in 2025 increased by 819 million cubic feet vs. 2024. However, the 7-year trend line remains favorable (chart 1).
  • Thinking that 2019, a record year for total flaring and venting, may have biased the trend line, I extended the chart back to 2015, the first year for which I have ONRR data. As you can see in chart 2, the overall trend is still favorable.
  • The % of produced gas that was flared or vented remains persistently above the historical 1.0% target (chart 3). Flared/vented volumes were below 1% of production prior to 2018.
  • The higher flaring/venting % may be because most gas production is now from oil wells, which typically have higher flaring rates associated with processing upsets.
  • The flaring and venting gap between GWG and OWG has narrowed, largely because of an increase in GWG flaring/venting. The combined rate for GWG more than doubled over the 7 year period, rising to 0.81% vs. 1.34% for OWG. (chart 3)
  • Total venting rose to 1.7 bcf in 2025, the highest venting volume in 3 years.
  • The % of GWG being vented doubled over the past 5 years to over 0.50% (chart 4). The growth in venting warrants further investigation.
  • The % of OWG vented increased slightly to 0.20%. Further reduction in OWG venting had been expected given that OWG production is increasingly from deepwater facilities with modern flaring systems.
  • A 2020 Univ. of Michigan study found “Large, older facilities situated in shallow waters tended to produce episodic, disproportionally high spikes of methane emissions. These facilities, which have more than seven platforms apiece, contribute to nearly 40% of emissions, yet consist of less than 1% of total platforms.” 
  • Platform specific data would be helpful in further assessing flaring/venting sources and trends.
chart 1
chart 2
chart 3
chart 4
chart 5

2025 flaring_venting – Sheet3Download

Read Full Post »

Sable’s production ramp-up stats

Posted in California, Offshore Energy - General, pipelines, Regulation, tagged , , , , , , on June 26, 2026| Leave a Comment »

Sable Offshore began ramping up production at Platform Harmony last May delivering oil and gas to their Los Flores Canyon Processing Facility. In March, they resumed transportation to the Pentland pipeline segments and achieved first sales.

Below are BOEM production data for Harmony through March 2026. Harmony production was expected to increase to 22,000 bopd in May. Similarly, Sable forecasted Heritage production of 30,000 bopd for that month. The actual production numbers should be available in a month or two.

Nothing in the March production data for Harmony is particularly surprising. The gas-oil ratio (GOR) of ~1000 cu ft/bbl is rather typical for oil production in the region, as is the water cut, although less water production would be preferred. Produced water is not discharged from the platform, but is injected subsurface through disposal wells.

Read Full Post »

Lease Sale BBG2 decision matrix; BOEM’s KC Block 828 bid rejection is interesting

Posted in Offshore Energy - General, Gulf of Mexico, energy policy, tagged , , , , , , , , on June 24, 2026| Leave a Comment »

The Buckskin field (LLOG) is located in Keathley Canyon blocks 785, 828, 829, 830, 871, and 872 in 6,800 ft (2,073 m) of water. The KC 828 lease expired last year and LLOG’s bid for that block at the BBG2 sale was rejected.

BOEM’s Decision Information Matrix for Sale BBG2 is attached. As previously noted, 2 of the 25 high bids were rejected: Keathley Canyon Block 828 ($1,101,202) and Atwater Valley Block 63 ($650,018).

The rejected bids were significantly below both BOEM’s Mean of the Range-of-Value and Lower Bound Confidence Interval for these single bid tracts (table below).

Block No.Companyno. of bidsbidMROVLBCI
AT 63LLOG1$650,018$2,400,000$1,800,000
KC 828LLOG1$1,101,202$24,000,000$23,000,000
MROV=Mean of the Range-of-Value; LBCI=Lower Bound Confidence Interval

In the case of Keathley Canyon 828, BOEM’s valuation is more than 20 times the high bid. BOEM valued this block far higher than any other block in the sale.

KC 828 had been previously leased and that lease expired on 9/3/2025. The lease block was part of LLOG’s Buckskin field. Apparently, the lease expired due to inactivity given that the last well reached total depth more than a year prior to the expiration date. LLOG wanted the lease back. BOEM’s rejection sends a message that the price went up (by a lot 😉).

Finally, why didn’t any other company bid on KC 828, a block that has been publicly reported as being part of the Buckskin field?

BBG2-Phase-2-Decision-MatrixDownload

Read Full Post »

Grateful for the Miocene!

Posted in Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , on June 23, 2026| Leave a Comment »

My colleague Keith Meekins shared an informative AAPG article about the importance of Miocene reservoirs in offshore oil and gas production worldwide.

“The Miocene delivered a significant amount of sand with excellent reservoir characteristics around the world,” noted Erik Scott, exploration geologist and consulting geologist/sedimentologist.

“Generally, hydrocarbons are coming from deeper, older rock – the Cretaceous, the Jurassic. By the time these source rocks get to the (hydrocarbon) generation window, the Miocene reservoirs are in place,” Scott said.

“Generally, the Miocene deposits are surrounded by fine-grained muds that produced sealing potential,” he noted.

More:

  • Miocene reservoirs account for more than 40 percent of established hydrocarbon reserves in the deepwater Gulf. The Bureau of Ocean Energy Management identifies more than 9 billion barrels of undiscovered, technically recoverable Miocene resources.
  • Recently, Eni found a giant Miocene natural gas accumulation in the Kutei Basin offshore Indonesia with an estimated 5 trillion cubic feet of gas and 300 million barrels of condensate in place.
  • Azule Energy, equally owned by Eni and BP, made a recent Miocene oil discovery with an estimated 500 million barrels of crude offshore Angola.

Keith points to RTM (reverse-time migration) as an important factor in helping to unlock Miocene resources. RTM produces dramatically improved images below salt bodies and in areas of complex overburden. Per AAPG, Talos Energy used reprocessed RTM seismic to identify a bypassed Miocene fault-block closure in the Green Canyon Area of the Gulf. This structure had previously been invisible.

Read Full Post »

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!” 😉

Read Full Post »

Older Posts »