The Gulf of Mexico and Norwegian branches of the offshore family have a long record of technological innovation and production leadership.
As a followup to our last GoM-Norway update, the respective oil production rates are presented below. The Gulf of Mexico now has a small edge as a result of new production from deepwater facilities.
Natural gas is a different story, and Norway’s offshore gas production is much higher. US gas production (second chart below) has been dominated by the onshore sector since advances in horizontal drilling and well stimulation procedures triggered the shale gas revolution twenty years ago.
If you get a chance to visit Stavanger, the Norwegian Oil Museum is highly recommended. See the short video below.
This should be an interesting sale. Below are some of the questions that may be answered:
Will the Rice’s whale issues affect bidding for deepwater leases? The 5th Circuit’s ruling removes the Rice’s whale lease stipulation. However, BOEM’s Notice to Lessees and Operators (NTL) includes the same provisions and still stands pending further consultations with NOAA. Although the NTL is a “guidance document” (wink-wink), there are ways of making it stick through the plan approval process. Even without binding requirements, companies might choose to fully comply with the NTL to minimize legal risks.
Will the uncertainty about future sales spur or constrain bidding? Absent legislative action, no sale will be held in 2025.
Will the 14 blocks with rejected high bids at Sale 259 receive bids at Sale 261? If so, will the bids be higher or lower? Is it prudent to reject high bids without knowing when the next sale might be held?
Will bp, Chevron, Shell, Equinor, Oxy, and Woodside continue to be bullish on the GoM?
Will Red Willow Offshore, owned by the Southern Ute tribe, again be an active bidder?
Regardless of one’s opinion about the causes of climate change, minimizing methane emissions makes good safety, conservation, and environmental sense. The emerging international consensus on methane emission reductions thus merits broad industry and governmental support.
Because of the resource conservation mandate in the OCS Lands Act, minimizing the waste of natural gas has been a point of emphasis in the US offshore program for 50+ years. If you couldn’t utilize or market the natural gas, your project wouldn’t be approved. This requirement delayed the entry of some floating production systems into the Gulf of Mexico, but the pipeline network ultimately expanded to support deepwater development with floating units. Those associated with the offshore program are rightfully proud of their success in prohibiting the waste of gas and minimizing flaring and venting.
Despite the historical commitment to restricting flaring and venting, the data suggest that further improvement may be needed. The concerns listed below are based on the compilation and review of flaring and venting data that operators are required to report to ONRR.
The % of US OCS gas produced that is flared or vented is trending upward (first chart below).
Both the gas flaring and venting volumes were higher in 2022 (vs. 2021) despite lower gas production.
More regulator/industry transparency on flaring episodes is needed, particularly in light of the PNAS paper and the June 2022 Inspector General Report.
In particular, there should be a process for explaining large spikes in monthly flaring and venting volumes. Were these spikes associated with production startups, major compressor issues, administrative corrections, or other factors?
Venting, which is a more significant environmental concern than flaring, increased by 407 million cu ft (21%) in 2023 vs. 2022. Although the overall venting trend is still favorable (second chart), the 2022 jump should be explained.
As summarized in the third chart below, deepwater facility methane emissions are consistent with the reported inventories, but shelf emissions in State and Federal waters differ significantly.
Regulating venting from older shelf platforms is difficult. About 15 years ago, the Federal government (MMS) considered requiring that older production platforms be retrofitted with flare booms, but safety, space limitations, and cost considerations precluded such a regulation. Instead, additional flaring/venting limits, and measurement and reporting requirements were imposed. What is next for these facilities?
Compiling and posting flaring and venting data should be a priority for BOEM/BSEE.
vented oil-well gas (VOWG) and vented gas-well gas (VGWG) vs. timeTotal CH4 emissions for the GOM from inventories and observations for federal waters (Left) and state waters (Right). Observationally informed emissions are shown for the resampling of absolute flux rates (resampling approach A), with a mean and 95% confidence interval. The inventory estimates represent values adjusted for the year 2021.PNAS, 2023
Postaccident investigation determined that the containerships MSC Danit and Beijing had dragged anchor near the pipeline months before the oil release, on January 25, 2021.
How can the US be relaxing sanctions on this thug?
Venezuela’s state-run companies will “immediately… proceed to give operating licenses for the exploration and exploitation of oil, gas and mines in our Guayana Esequiba,” Maduro said.
Any other firms operating in the area will have three months to withdraw from the territory, he explained, adding that a zone of integral defense of ‘Guayana Esequiba’ would be created.
Below is a report summary that was referenced in the Office of the Inspector General, Dept. of the Interior, Semiannual Report to Congress (9/30/2023). The summary does not identify the company that committed the violations.
Failing to identify the responsible company is not in the best interest of the OCS program or the many operators and contractors that are committed to safe operations and compliance with the regulations.
Presumably, BSEE has issued civil penalties, so we may be able to piece this case together when those penalties have finally been paid.
Summary: Offshore Servicing Company Failed to Conduct Mandated Safety Tests and Submitted False Information to BSEE Report Date: August 29, 2023 Report Number: 20-0425
The OIG investigated allegations that an offshore oil and gas servicing company bypassed safety valves and falsified mandated safety tests associated with an oil and gas production platform located in the Gulf of Mexico. The safety tests are required by Federal regulations enforced by the Bureau of Safety and Environmental Enforcement (BSEE) to ensure that equipment aboard the platform functions properly and prevents the discharge of hydrocarbons into Federal waters.
We found that the servicing company did not perform the mandated safety tests but submitted documentation to BSEE that falsely represented that the safety tests had been conducted. We also determined that multiple safety valves aboard the offshore platform were bypassed and remained in that condition for at least 59 days but potentially as long as 223 days. We presented our findings to the U.S. Department of Justice, which declined prosecution.
This is a summary of an investigative report we issued to the Director of BSEE for action as deemed appropriate.
Per AP, The National Electoral Council claimed to have counted more than 10.5 million votes even though few voters could be seen at polling sites throughout the voting period for the five-question referendum.
This claim sees like a joke, but President Maduro’s intentions are not:
“It has been a total success for our country, for our democracy,” Maduro told supporters gathered in Caracas, the capital, after results were announced.
“We are solving through constitutional, peaceful and democratic means an imperial dispossession of 150 years,” President Nicolás Maduro said after voting in a military complex in Caracas
Venezuela’s government promoted the referendum for weeks, framing participation as an act of patriotism, and often conflating it with a show of support for Maduro.
International court president Joan E. Donoghue said statements from Venezuela’s government suggest it “is taking steps with a view toward acquiring control over and administering the territory in dispute.”
Venezuela is taking concrete measures to build an airstrip to serve as a ‘logistical support point for the integral development of the Essequibo.”
The 61,600-square-mile territory accounts for two-thirds of Guyana and also borders Brazil.
Brazil has boosted its military presence in the region as a result of the dispute.
The District Court of Amsterdam has ordered Greenpeace International to immediately disembark from the research vessel commissioned by TMC subsidiary Nauru Ocean Resources Inc (NORI) to conduct legally-mandated environmental impact assessments requested by the Legal and Technical Commission of the International Seabed Authority (ISA)
Since November 23rd, Greenpeace’s unsafe and unlawful activities have hindered independent scientists in conducting environmental and scientific studies to assess ecosystem function and recovery one year on from NORI’s pilot nodule collection system test
A bit of history: We experienced Greenpeace protesters on Georges Bank way back in 1981. They were dispatched from the Rainbow Warrior which visited the Zapata Saratoga, 155 miles SE of Nantucket. Given the remote location, the protest was unexpected. However, the drilling operation was not disrupted and no action was taken against Greenpeace. Four years later, the Rainbow Warrior was bombed by French commandos while in port in Auckland, NZ prior to planned protests against French nuclear testing in the South Pacific. Sadly, one crew member was killed during this incident.
Greenpeace protesters at the Zapata Saratoga on Georges Bank, 1981
Per EIA, September Gulf of Mexico production averaged 2 million bopd on the button! New production from Vito and Argos were no doubt contributors, as production reached the 2 million bopd mark for only the third month in the history of the OCS program. The other 2 months were in 2019.
Imagine what US offshore production might be if the OCS oil and gas program was actually managed to succeed!
Also, as the official hurricane season comes to a close today, we are fortunate in that there have been no production shut-ins from tropical storms in 2023.
Bud's Offshore Energy (BOE) 
