Archive for the ‘Offshore Energy – General’ Category
Gulf of Mexico rig count unchanged
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged Baker Hughes rig count, Gulf of Mexico on June 24, 2022| Leave a Comment »
Update on the Sale 257 appeal
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged API, DOI, Lease Sale 257, Louisiana on June 24, 2022| Leave a Comment »
Per a very good OGJ update, API, Louisiana, Chevron, bp, Shell, NOIA, the EnerGeo trade group of geophysical contractors, 14 states filing jointly, and the US Chamber of Commerce have submitted briefs to the US Court of Appeals for the District of Columbia Circuit.
Don’t expect a decision soon. The environmental advocacy groups are not scheduled to file their responses until Aug. 26, after which replies can be filed. No decision is expected before November at the earliest.
Previous posts and background information on Lease Sale 257.
Alleged missile attack on Black Sea platforms
Posted in Offshore Energy - General, Russia, tagged Black Sea platforms, Crimea, missile attack, Russia, Ukraine on June 23, 2022| Leave a Comment »
Following an alleged missile strike on three platforms operated by the Crimea-based oil and gas company Chernomorneftegaz, satellite images indicate the fire is still visible at the site in the Black Sea. Russian official claims that the strike left behind several injured and missing persons.
offshore-energy.biz
Contrast the investigation of even minor offshore incidents with the (non)investigation into the origins of a virus that has killed 18 million (est.)
Posted in accidents, Offshore Energy - General, tagged investigations, origin of Covid, safety culture, WHO on June 23, 2022| Leave a Comment »
As we should and must, offshore operators, contractors, and regulators suffer over every injury, leak, or potentially hazardous event. This is also true for onshore oil and gas operations and most other industries. Yet for the past 2 years, we have been waiting for a proper investigation into the origins of the Covid virus. The Daily Mail is reporting that the Director-General of the WHO now believes that the virus was released from the Wuhan lab.
How can a company have a proper safety culture in a world where this level of malfeasance and stonewalling are tolerated and rewarded?
EIA short term production forecast for the Gulf of Mexico looks about right
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged EIA short term forecast, gas production, Gulf of Mexico, longer term concerns, oil production on June 23, 2022| Leave a Comment »
The EIA forecast looks about right. Production from new projects should offset existing field declines and maintain relatively stable volumes over the next 2-3 years. In the intermediate and longer terms we have problems given the dearth of exploratory drilling and new discoveries, and the complete absence of leasing.
Will the proposed 5 Year Leasing Program (US offshore) be released by June 30? How many regions will have sales? Total number of sales?
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, Alaska, DOI, Gulf of Mexico, Secretary Haaland on June 22, 2022| Leave a Comment »
- Secretary of the Interior Haaland committed to releasing the Proposed Program by June 30, 2022. Will that deadline be met? BOE’s guess is that the deadline will be met. However, the White House Climate Policy Office, which seems to control energy policy, may have other ideas.
- Number of regions in which lease sales will be proposed: BOE thinks 2, the Gulf of Mexico and Alaska. There is no chance of >2. A GoM only proposed program is possible, but we doubt that Alaska will be eliminated at this early stage.
- Number of lease sales proposed: BOE guesses a total of 7 sales, 5 in the GoM and 2 in Alaska. The “under” is probably a better bet than the “over,” unless they eschew area-wide GoM sales and propose an increased number of more targeted sales.
For comparison, the previous six 5-Year Programs have included 10-12 GoM sales (11.3 average), 1-8 Alaska sales (4.3 ave.), 0-1 Atlantic sales (0.3 ave.), and no Pacific sales.
SPR update and the offshore leasing gap
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged offshore leasing, oil reserves, SPR on June 21, 2022| Leave a Comment »
Meanwhile, no new leases have been issued in Federal waters immediately offshore from the SPR sites (see map below) for 580 days, the longest leasing gap since 1958.
Gulf of Mexico rig count back up to 15
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged Baker Hughes rig count, Gulf of Mexico on June 17, 2022| Leave a Comment »
Exxon and API responses to White House letters to refiners
Posted in energy policy, Offshore Energy - General, Regulation, tagged API, Exxon, letter to refiners, refiners response on June 17, 2022| Leave a Comment »
Good response from Exxon to the White House letter.
In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies. Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.
Exxon
Perhaps Exxon will return to the Gulf of Mexico if the Administration commits to regular and predictable oil and gas lease sales. The company hasn’t drilled a well in the Gulf since 2019.
The longer API letter comments on the fundamentals of refining markets and operations while also addressing the Administration’s “end fossil fuel rhetoric” and negative regulatory signals. Who would want to make major refinery investments under these circumstances?
Inspector General reports on Gulf of Mexico flaring violator
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged flaring, flaring data, Gulf of Mexico, OIG report, reporting on June 16, 2022| Leave a Comment »
We determined that over approximately 5 years, the energy company’s venting and flaring activities exceeded regulatory limits without the required approvals, resulting in a loss of Federal mineral royalties and resources. More specifically, we identified approximately 229,066 MCF of vented and flared natural gas as suspicious or exceeding the allowable amount across four platforms in the Gulf of Mexico between January 2014 and April 2020. We presented our findings to ONRR, which assisted us in analyzing the energy company’s venting and flaring activities and determining the amount of lost Federal mineral royalties. Based on this analysis, ONRR submitted and secured a proof of claim in the amount of $712,857.82 for unpaid mineral royalties during the energy company’s bankruptcy proceeding.
OIG report 6/13/2022
Comments:
- The report doesn’t name the company, but one can make an educated guess based on some of the information provided (e.g. number of platforms the company operated, bankruptcy proceedings, etc.)
- The regulator usually finds out about false or misleading recordkeeping. Reports from employees, anonymous or otherwise, are a common source of such charges, as was the case here. (In my District in California, a toolpusher informed us that BOP pressure test records were being falsified. This led to multiple felony convictions.)
- The IG’s recommendations to BSEE and ONRR are reasonable and appropriate:
- Examine venting and flaring reports for patterns that may reflect violations or amounts that exceed permissible limits.
- Develop a process to ensure that royalties are being paid for improperly flared or vented gas.
- As BOE has previously reported, available public flaring data do not match. These data inconsistencies should be addressed.
- BSEE/ONRR should make more detailed flaring/venting data publicly available so differences between facilities and sectors (e.g. deepwater vs. shelf) can be assessed. Efforts should also be made to post these data in a more timely manner. Data for 2021 are still not available.
Bud's Offshore Energy (BOE) 