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Archive for the ‘Offshore Energy – General’ Category

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.
  • 2022 oil well gas (OWG) flaring volume increased by 18% vs. 2022 despite nearly identical total oil 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.
  • The previously noted inconsistencies in flaring data sets remain a concern.
  • The fact that more gas-well gas (GWG) is being vented then flared implies that most such venting is on older shelf platforms (where there are more gas wells).
  • 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. time
Total 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

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NTSB findings; no surprises.

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.

previous posts on this incident

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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.

lianglj0.hott.es

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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.

The subject violations were on the Federal OCS and were serious enough to be investigated by the IG. The public has a right to see the full report. (See also the discussion about the failure to release the IG report on the misuse of the decommissioning account for Platforms Hogan and Houchin.)

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.

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AP photo

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. 

AP News

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Per AP:

  • “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.

This is very troubling.

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  • 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
TMC

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

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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.

Vito

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Linking a good article from our friends in Guyana.

Nestled on the northern tip of South America, the small nation of Guyana, now the fastest growing economy in the world, will become the continent’s second biggest oil producer by 2027.

OilNow Guyana

Neighboring countries in the Caribbean region including Jamaica, Barbados, and Grenada are taking notice. And then there is Venezuela ….

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Walton Morant License

Further to the announcement of 9th November, the Company has been informed by the counterparty that had been identified as a preferred potential partner, that they no longer wish to pursue further discussions in relation to participation in the Walton Morant Licence. The Company will now focus on the recent positive interest that has been shown by other parties in potentially participating in this high impact exploration opportunity and United and our advisors will continue in our efforts to secure a partner. The Board believes that the renewed interest in exploration opportunities worldwide which is being driven by the strong future demand for oil and gas, will support our farmout efforts.

The Company continues to engage with the Jamaican authorities to secure an extension to the current licence period which expires at the end of January 2024, with a negotiated work programme that comprises additional technical work that would further de-risk the licence prior to the drilling of the exploration well. This work is aimed at materially enhancing the risked value of the Company’s interest in the Licence. Additional updates on both the farmout process and licence extension will be provided in due course

United Oil and Gas

Comments:

  • I’m very curious about the companies that United has been talking to, but that information is understandably being withheld. I would hope that the Jamaican government is being kept informed, since they will presumably have to approve the farmout.
  • Conducting “additional technical work” is a common lease/license extension tactic. It will be interesting to see how the Jamaican government responds, particularly if a firm date for an exploratory well has not been provided.

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