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Posts Tagged ‘Anadarko’

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The 2024 Gulf of America Safety Compliance Leaders are ranked below according to the number of incidents of non-compliance (INCs) per facility inspection. To be ranked, a company must:

  • operate at least 2 production platforms
  • have drilled at least 2 wells during the year
  • average <1 INC for every 3 facility inspections (0.33 INCs/facility inspection)
  • average <1 INC for every 10 inspections (0.1 INCs/inspection). Note that each facility inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc). In 2024, there were on average 3.4 inspections for every facility inspection.

This ranking is based solely on BSEE’s published compliance data. The absence of timely public information on safety incidents (e.g. injuries, fires, pollution, gas releases, property damage) precludes inclusion of these data.

District investigation reports are more timely and provide additional insights into safety performance. Impressively, Hess had no incidents warranting a District investigation, and was the only ranked operator with this distinction. I will comment more on the District reports in a future post

Chevron’s 2024 compliance record was among the best in the history of the US OCS oil and gas program. Was it the absolute best? Were it not for the FSI INC at a Unocal (Chevron) facility, one could unequivocally assert that it was. Further evaluation of that INC would be helpful. However, details on specific INCs are not publicly available, so the significance of that violation cannot be evaluated.

operatorWCSIFSItotal INCsfacility inspINCs/
fac insp
inspINCs/
insp
Chevron10121170.023110.006
BP2305930.052510.02
Anadarko891181430.133440.05
Hess2305260.19670.07
Walter64111500.221610.07
Shell23175451990.234950.09
Cantium2480321230.265370.06
Murphy89118700.261910.09
Arena29283601890.328030.07
Gulf-wide957398109146431330.47106640.14
Notes: Numbers are from published BSEE data; INC=incident of non-compliance; W=warning INC; CSI=component shut-in INC; FSI=facility shut-in INC; INCs/fac insp= INCs issued per facility inspection; each facility-inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc), in 2024, there were on average 3.4 inspections for every facility inspection

Not meeting the production facilities requirement to be ranked among the top performers, but nonetheless noteworthy, was the compliance record of BOE Exploration & Production (no relation to the BOE blog 😀). See their impressive inspection results below:

WCSIFSItotal INCsfacility inspINCs/
fac insp
inspINCs/
insp
BOE1102210.1480.04

Transparency on inspections and incidents is important for a program that is dependent on public confidence. For independent observers to better evaluate industry-wide and company-specific safety performance, publication of the following information should be considered:

  • quarterly updates of the incident tables, as was once common practice
  • posting of violation summaries for inspections resulting in the issuance of one or more INCs
  • more timely publication of panel reports for more serious incidents
  • real time list of ongoing investigations including the reason for each investigation
  • status summary for civil penalties that have been proposed, including the violations and responsible parties

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Diamond Ocean Blackhawk is drilling MC 40 well for Anadarko

Following up on last year’s deepwater diligence post, 4 recent deepwater exploratory wells (table below) were spudded within 4.5 years of the effective date of their leases.

Particularly noteworthy is Anadarko’s well on newly acquired Mississippi Canyon Block 40, which was spudded only 18 months after the lease was acquired. Everything has to be in place for such an outcome: corporate priority, data gathering and analysis, well plan, permitting, and rig contract/availability.

The well was apparently a high priority not just for Anadarko, but also for Chevron and Murphy. MC 40 was acquired by Chevron (bidding alone) at Sale 257 for $4,409,990, the third highest bid at the sale. Murphy had submitted a losing bid of $3 million, but was assigned a 33% share of the lease by Chevron on 12/15/2023. One month earlier, Anadarko had been assigned a 33% interest and became lease operator.

Interestingly, BOEM’s Mean Range of Value (MROV) estimate for the block was only $576,000, so the three companies are seeing something that BOEM doesn’t. We’ll see how this plays out.

According to rig tracker data the Ocean Blackhawk is still on location at MC 40. Per BSEE permitting data, the well was approved to be bypassed in mid-May.

Lease No.BlockOperatorWater Depth
(feet)
lease date
spud date
elapsed time
(months)
EP received
EP approved
G37199MC 40Anadarko470410/1/2022
4/9/2024
1810/20/20233/7/2024
G36924AT 453Chevron56987/1/2020
1/23/2024
429/25/2023
11/21/2023
G36676AT 138Murphy34447/1/2019
11/14/2023
5210/3/2023
11/7/2023
G36558MC 801Shell33031/27/2024
7/1/2019
548/6/2021
1/19/2023
EP= Exploration Plan

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BOE Honor Roll criteria:

  • Must average <0.3 incidents of noncompliance (INCs) per facility-inspection.
  • Must average <0.1 INCs per inspection-type. (Note that each facility-inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc). On average, each facility-inspection included 3.3 types of inspections in 2023. Here is a list of the types of inspections that may be performed.
  • Must operate at least 3 production platforms and have drilled at least one well (i.e. you need operational activity to demonstrate compliance and safety achievement).
  • May not have a disqualifying event (e.g. fatal or life-threatening incident, significant fire, major oil spill). Due to the extreme lag in updates to BSEE’s incident tables, district investigations and media reports are used to make this determination.
platforms2023 well starts2023 (10 mos.) oil prod. (million bbls)2023 (10 mos.) gas prod. (bcf)
Anadarko10116660
BP71110565
Cantium961056
Chevron8106739
Eni31613
Hess331836
LLOG1072535
Murphy744257
QuarterNorth911323
Shell2020141140

Also noteworthy:

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  • Biggest prize at the holiday party went to Anadarko: Mississippi Canyon 389 – 5 bids, $25.5 million high bid
  • Biggest holiday shopping spree: Shell’s 65 high bids accounted for 24% of the sale’s high bids (excluding CCS bids).
  • Big spender award: Hess – $88.3 million on only 20 high bids. Does Chevron approve? 😀
  • Aussie, Aussie, Aussie, Oi, Oi, Oi: Strong performance by Woodside. 18 high bids, $24.8 million
  • Heia Norge!: Equinor continues to shine in the GoM! 13 high bids, $20.6 million
  • Spirit of America award to Red Willow Offshore which is owned by the Southern Ute tribe. 22 high bids!
  • Deepwater independents for (energy) independence: Beacon, Murphy, LLOG, Kosmos, Talos, Houston Energy, Ridgewood, QuarterNorth, Alta Mar, CSL, CL&F, and Westlawn
  • Smart shelf shoppers: Arena, Byron, Focus, Cantium
  • Even pace wins the race: Another solid lease sale for bp – 24 high bids.
  • So happy together 😀: Chevron and Hess combined for 48 high bids, $114 million
  • Coal in their stockings? Repsol (Sale 261) and Exxon (Sales 257 and 259) made up their own rules for acquiring carbon dumping leases. Perhaps some solid carbon in their Christmas stockings would be appropriate.
  • Christmas in July?: A lease sale in 2024 is needed. Sometime near the 4th of July holiday would be good. It’s up to you Congress!

Holiday greetings to our friends around the world!

Stocking stuffer for that special person! 😉

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It was revealed on Friday that Warren Buffett’s Berkshire Hathaway (NYSE: BRK-A) has received Federal Energy Regulatory Commission approval to acquire up to 50% of Occidental Petroleum’s (NYSE: OXY) common stock.

StreetInsider.com

Oxy (Andarko) fared very well in BOE’s mid-year review and apparently the “Oracle of Omaha” noticed. 😉

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While the Fieldwood Energy violations drove up the number of Incidents of Non-Compliance (INCs) in the Gulf of Mexico in 2021, most operating companies appear to have had good compliance records. Among companies that were subjected to at least 10 facility inspection and drilled at least one well, BHP Billiton, Eni US, and Murphy (listed alphabetically) had the most impressive compliance records. These three operators were cited for 7 or fewer INCs, none of which required a facility to be shut-in. Other operators that exceeded those activity thresholds and had excellent compliance records were (listed alphabetically) Anadarko, ANKOR Energy, Chevron, EnVen, Shell, and Walter Oil and Gas.

In the Pacific Region, Beta Operating Co., Chevron (now overseeing the former Signal Hill properties), and Exxon had excellent compliance records, although none of these facilities produced for the full year. In Alaska, Hillcorp had an excellent record at the Northstar Unit. (This is a gravel island facility in the State waters of the Beaufort Sea, but some of the wells produce from portions of the reservoir that are in the Federal sector).

Unfortunately, only summary inspection data are posted online. Without knowing the specific violations and circumstances, it’s not possible to fully assess the risk exposure. These oil and gas operations are conducted on public lands and are monitored by Federal employees. Inspection data and reports should be publicly accessible without having to submit Freedom of Information Act requests.

As has previously been discussed, incident updates should also be posted in a timely manner. Reference is made to this important recommendation in the 2016 National Academies report entitled Strengthening the Safety Culture of the Offshore Oil and Gas Industry:

Recommendation 4.2.2: Because accident, incident, and inspection data all are needed to identify and understand safety risks and corrective actions, the committee recommends full transparency such that regulators make all these data readily available to the public in a timely way, taking into consideration applicable confidentiality requirements.

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