Posted in energy policy, Offshore Energy - General, Uncategorized, tagged 9/11, energy security, offshore production, shale revolution on September 11, 2022| Leave a Comment »
Despite continuous legal and policy headwinds, and the absence of some historically important US companies, technological innovation is sustaining US offshore production at about 1.7 to 1.8 million BOPD. BOE will continue to monitor drilling, production, and safety performance and draw attention to the leading companies.
Think about where we would be today without the shale revolution and onshore production on private lands. Grateful!
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged bp ad, Gulf of Mexico production, Lease Sale 257 on September 9, 2022| Leave a Comment »
Is bp apologizing for the pictured workers and platform? With the demand for oil and gas expected to increase through 2050, and worldwide concerns about energy supply and security, ads like this make neither good business nor good social sense.
Moving away from oil and gas and becoming a “very different” company in the 2030’s won’t make bp the “leading energy company in the world.” On the contrary, a “very different” bp will likely be less influential, less profitable, and more dependent on government mandates and subsidies.
Contrary to the ad (and to the company’s credit), bp seems committed to Gulf of Mexico production well beyond the 2030’s. They are the number 2 oil producer in the Gulf (behind Shell), continue to drill exploration and development wells, and were the most active participant at Lease Sale 257. Bp was the high bidder on 46 tracts, 12 more than no. 2 Chevron. The Department of the Interior has been legislatively directed to award Sale 257 leases by 9/15/2022, but has yet to comment publicly on the matter.
Posted in Offshore Energy - General, tagged Barbados, BHP, oil and gas exploration on September 8, 2022| Leave a Comment »
Barbados is opening a licensing round for 22 offshore blocks. Interested companies may begin sending in offers on November 1 for a duration of 11 months. Blocks will be awarded to successful applicants on December 11, 2023. The BOE bid is being drafted; partners are welcome.😉
Under-explored acreage.
Untapped potential.
Good prospectivity.
Large potential structures with stacked targets and DHI support.
Good data coverage.
Proven onshore petroleum system.
Stable government.
Strong legal, fiscal and regulatory framework.
Great place to live and work.
Posted in Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged Artemis, Musk, SLS, space vs. offshore, Space X Raptor on September 6, 2022| Leave a Comment »
Here is a good article, endorsed by Elon Musk among others, about the foreseeable problems NASA is facing with the Space Launch System rockets. SLS rockets use hydrogen which, at super-chilled temperatures and high pressures, easily oozes out of any available opening. Space X Raptor engines are fueled with methane (imagine that) which Musk and his engineers think is the best combination of high efficiency and ease of operation. Methane is also easier to produce on Mars where Musk hopes to develop a self-sustaining city.
In light of their respective frontier exploration accomplishments, space exploration and deepwater production are sometimes compared. In that spirit, NASA’s inspector general estimates the Artemis campaign will cost $93 billion between 2012 and 2025, $4.1 billion for a single launch. Each Artemis launch will thus cost approximately as much as developing and producing a 100 million barrel deepwater oil field in the Gulf of Mexico. And, of course, the Artemis program is fully funded by the government, while deepwater oil and gas development is not only privately funded but is an important source of government revenue.
Posted in decommissioning, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged decommissioning, financial assurance, Gerald D. Rhodes, MMS, USGS on September 5, 2022| Leave a Comment »
An important figure in the history of the US offshore program passed away last week. Gerry Rhodes was a petroleum engineer with an attorney’s gift for understanding laws and regulations. Among other leadership roles in the offshore regulatory program, Gerry was Chief of the Minerals Management Service’s Branch of Rules, Orders, and Standards in the 1990’s.
Gerry was among the first in the Federal government to fully understand the financial responsibility risks associated with the decommissioning of offshore facilities and the urgent need to update requirements for the plugging of wells and removal of platforms. The enormity of this challenge is described in the 1991 Forbes article pasted below. Despite sharp divisions within the offshore industry and the resulting political pressure, Gerry succeeded in finalizing regulations (including this 1995 rule) that are the basis for the current financial responsibility programs in BOEM and BSEE. Without Gerry’s resolve, subsequent financial assurance challenges and government outlays would have been far greater.
RIP Gerry. You were a true gentleman, a dedicated father and grandfather, and a diligent and highly accomplished colleague.
Posted in Offshore Energy - General, Regulation, tagged BOEM, BSEE, DC Court of Appeals, Lease Sales 250 and 251 on September 2, 2022| Leave a Comment »
The U.S. Court of Appeals for the D.C. Circuit ruled that BOEM “unreasonably refused to consider possible deficiencies in environmental enforcement” in their Supplemental EIS for Sales 250 and 251. The court found that BOEM did not adequately consider a 2016 Government Accountability Office (GAO) report that was critical of BSEE’s oversight of offshore activities.
More positively, the court chose not to vacate the sales or the EIS:
Moreover, vacatur would be highly disruptive for the lessees. They have paid millions of dollars to obtain their leases and have acted for some four years in reliance on them—including by investing substantial additional sums and by executing contracts with third parties. Moreover, any redo of the lease sales “would be tainted by prior publication of [the] lessees’ proprietary valuation of the leases” following the original sales.
Comments:
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, BOEM forecast, EIA, Gulf of Mexico production on September 1, 2022| Leave a Comment »
GoM oil production for June increased (see chart below) with King’s Quay and Spruance contributing to the uptick. Other anticipated 2022 startups are not yet producing.
The EIA production forecast for 2022 is proving to be pretty accurate. Kudos to them. However, BOEM’s 2022 forecast of 1.9 million bopd is not achievable and concerns about the intermediate and longer term persist. Unfortunately, BOEM’s highly optimistic forecast for 2022 and beyond, along with unrealistic expectations regarding the energy transition, have significant policy implications. This stunning quote from the 5 year leasing plan explains why so few lease sales were proposed:
“BOEM’s short-term (20-year) production forecast for existing leases shows steady growth from 2022 through 2024 and declining thereafter (see Section 5.2.1). The long-term nature of OCS oil and gas development, such that production on a lease can continue for decades makes consideration of future climate pathways relevant to the Secretary’s determinations with respect to how the OCS leasing program best meets the Nation’s energy needs.“
5 Year Leasing Program, p.3
Posted in CCS, climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged CCS, fair market value, Inflation Reduction Act, Lease Sale 257 on August 31, 2022| Leave a Comment »
Per legislation signed by the President on Aug. 16, 2022:
(b) LEASE SALE 257 REINSTATEMENT.—
(1) ACCEPTANCE OF BIDS.—Not later 30 days after the date of enactment of this Act, the Secretary shall, without modification or delay—
(A) accept the highest valid bid for each tract or bidding unit of Lease Sale 257 for which a valid bid was received on November 17, 2021; and
(B) provide the appropriate lease form to the winning bidder to execute and return.
The Department of the Interior has been silent on their implementation of this provision. We are particularly interested in:
Posted in Offshore Energy - General, Offshore Wind, rigs-to-reefs, tagged North Sea, rigs-to-reefs, Rigs-to-Roosts, Wenlock platform on August 29, 2022| Leave a Comment »
GUILDFORD, UK — Alpha Petroleum Resources, Energean UK and Orsted Hornsea Project Four will consider repurposing the Wenlock gas platform in the UK southern North Sea, which is nearing the end of its productive life.
One possibility is to reuse the facility as an artificial nesting site to offset the impact on certain bird species of offshore wind developments in the area.
Black-legged kittiwakes have set up nests on various North Sea platforms, according to Orsted’s recent surveys. Repurposing an existing platform as an artificial nesting structure is seen as an alternative to building a new artificial nesting structure to support the local development of the Hornsea Four offshore wind farm.
Offshore Magazine
Posted in accidents, California, Offshore Energy - General, pipelines, tagged Amplify, Huntington Beach, pipeline spill on August 26, 2022| Leave a Comment »
Martyn Willsher, Amplify’s President and Chief Executive Officer, commented, “We are pleased to have reached an agreement in principle regarding the civil litigation resulting from the Southern California Pipeline Incident last October. Although we are unable to provide additional detail at this time, we negotiated in good faith and believe we have come to a reasonable and fair resolution. We will continue to vigorously pursue our substantial claims for damages against the ships that struck our pipeline, and the Marine Exchange of Southern California that failed to notify us of the anchor strikes.”
Amplify Energy
Bud's Offshore Energy (BOE) 