Posted in Gulf of Mexico, Offshore Energy - General, tagged Argos, bp, Deepwater, Gulf of Mexico production, July 2023, Shell, Vito on October 2, 2023| Leave a Comment »
This is presumably due to the new production at Vito and Argos. Will we see 2 million bopd again? Perhaps later this year or next, but production increases are unlikely beyond that given the current state of the offshore leasing program. You can’t efficiently develop and supplement new discoveries without consistent, predictable leasing.
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged bp, Chevron, deepwater drilling, diligence, Gulf of Mexico, Hess, Shell, Talos, transocean on September 27, 2023| Leave a Comment »
Seven of the deepwater exploratory wells drilled in the Gulf of Mexico in 2023 (YTD) were spudded within 4.5 years of the effective date of their leases. Three of these wells were spudded within 3 years of their lease effective dates (see table below).
These are impressive achievements when you consider the time required for consultation with partners (if any) and contractors, site surveys, exploration plan development and approval, well planning, and drilling permit preparation and approval.
The subject wells accounted for 28% of the deepwater exploratory well starts in 2023 (25 net YTD wells after subtracting restarts at the same location).
| date lease effective | spud date | elapsed time (months) | water depth (ft) | operator |
| 3/1/2021 | 8/27/2023 | 30 | 6498 | Shell |
| 8/1/2020 | 5/21/2023 | 34 | 2211 | Talos |
| 8/1/2020 | 3/15/2023 | 31 | 3338 | Talos |
| 12/1/2019 | 6/5/2023 | 42 | 4228 | Chevron |
| 11/1/2019 | 6/1/2023 | 43 | 4603 | Hess |
| 7/1/2019 | 7/11/2023 | 48 | 7486 | Kosmos |
| 12/1/2018 | 6/6/2023 | 54 | 4127 | bp |
Below are the exploration plan (EP) and permit (APD) approval timeframes for these 7 wells. With the exception of the Kosmos EP which required a number of modifications, the regulator actions appear to have been timely. For the bp, Shell, and Chevron wells, only 4-6 months elapsed between EP submittal and APD approval.
| operator | block | date EP received | date EP approved | APD received | APD approved |
| Shell | WR 365 | 3/1/2023 | 5/17/2023 | 5/11/2023 | 8/8/2023 |
| Talos | GC 78 | 1/19/2021 | 4/16/2021 | 3/8/2023 | 5/26/2023 |
| Talos | MC 162 | 4/1/2022 | 7/13/2022 | 8/2/2022 | 3/2/2023 |
| Chevron | MC 937 | 12/7/2022 | 5/19/2023 | 4/21/2023 | 5/21/2023 |
| Hess | MC 727 | 8/30/2022 | 11/3/2022 | 12/21/2022 | 4/24/2023 |
| Kosmos | KC 964 | 1/3/2020 | 10/12/2022 | 4/18/2023 | 7/3/2023 |
| bp | GC 436 | 1/18/2023 | 4/14/2023 | 3/29/2023 | 6/5/2023 |
Posted in climate, energy policy, Offshore Wind, tagged Beacon Wind, bp, Empire Wind, Equinor, rate increase on September 5, 2023| Leave a Comment »
In the wake of the disappointing Gulf of Mexico wind sale and Orsted’s recent financial announcement, Equinor and bp have requested a massive increase in the price of electricity to be generated at Empire Wind 1, Empire Wind 2, and Beacon Wind (see map above).
According to the New York State Energy Research and Development Authority, this would result in an average 54% price hike across their portfolio. The strike prices would rise from $118.38 to $159.64/MWh for Empire Wind 1, from $107.50 to $177.84/MWh for Empire Wind 2, and from $118.00 to $190.82/MWh for Beacon Wind.
Posted in Canada, drilling, Offshore Energy - General, tagged bp, Ephesus well, Newfoundland, Trove on August 28, 2023| Leave a Comment »
Newfoundlander Howard Pike shared this interesting video.
Posted in Gulf of Mexico, Offshore Energy - General, tagged bid rejections, BOEM, bp, Chevron, Lease Sale 257, Lease Sale 259, resource evaluation on July 20, 2023| Leave a Comment »
As previously posted, 14 of the 244 (not counting the 69 CCS bids) Sale 259 high bids were rejected. BOEM has published their bid evaluations for all of the tracts, and the 14 rejections are listed below.
| lease # | block | high bid ($) | BOEM MROV ($) | no. of bids |
| G37496 | DC 622 | 2,101,836 | 9,100,000 | 1 |
| G37515 | GC 173 | 307,107 | 1,300,000 | 1 |
| G37534 | GC 547 | 1,783,498 | 12,000,000 | 1 |
| G37538 | GC 591 | 1,291,993 | 5,200,000 | 1 |
| G37543 | GC 642 | 605,505 | 3,400,000 | 1 |
| G37548 | GC 777 | 583,103 | 4,200,000 | 1 |
| G37562 | AT 5 | 1,551,130 | 4,700,000 | 3 |
| G37565 | AT 133 | 607,107 | 2,600,000 | 1 |
| G37616 | KC 745 | 707,777 | 3,600,000 | 1 |
| G37617 | KC 789 | 707,777 | 2,100,000 | 1 |
| G37647 | WR 750 | 724,744 | 3,500,000 | 1 |
| G37646 | WR 794 | 724,744 | 3,200,000 | 1 |
| G37648 | WR 795 | 774,242 | 5,000,000 | 1 |
| G37649 | WR 796 | 774,242 | 4,000,000 | 1 |
Observations:
Posted in Gulf of Mexico, Offshore Energy - General, tagged bid rejections, bp, Lease Sale 259, sequestration on July 5, 2023| Leave a Comment »
This is a surprisingly high number of rejections given that only one Sale 257 bid was rejected and all 69 of the carbon sequestration bids were accepted (even though such bidding was not authorized).
Specifics on the Sale 259 rejections have not yet been posted, but one of the rejections was bp’s bid for Green Canyon Block 777. This is not terribly surprising given that the bp/Talos GC 777 bid was the sole Sale 257 rejection, and bp’s sale 259 bid was less than 1/3 of their Sale 257 bid.
Posted in accidents, Guyana, Offshore Energy - General, oil spill response, Regulation, well control incidents, tagged bp, Exxon, Guyana, macondo, oil spill iiability, Supreme Court on May 10, 2023| 6 Comments »
There are a number of recent articles related to the Guyana Supreme Court ruling on Exxon’s financial assurance obligations. An Oil Now piece (quoted below) is the most informative. It seems that the Supreme Court decision is based on a provision of Exxon’s EPA permit and that EPA is siding with Exxon in this dispute.
The Guyana government and the Environmental Protection Agency (EPA) are set to appeal a recent Guyana Supreme Court ruling that determined that the EPA and ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL), breached the terms of the Liza 1 environmental permit. The permit was revised and granted to EEPGL last year for operations in the Stabroek Block, offshore Guyana.
Justice Sandil Kissoon granted several declarations, including that the EPA failed to enforce compliance by EEPGL of its Financial Assurance obligations to provide an unlimited Parent Company Guarantee Agreement and/or Affiliate Company Guarantee Agreement to indemnify and keep indemnified the EPA and the Government of Guyana against all environmental obligations of the Permit Holder (EEPGL) and Co-Venturers (Hess and CNOOC) within the Stabroek Block.
While acknowledging the court’s ruling, the Government of Guyana, as a major stakeholder, maintained in a statement that the Environmental Permit imposes no obligation on the Permit Holder to provide an unlimited Parent Company Guarantee Agreement and/or Affiliate Company Guarantee Agreement. The government believes that Justice Kissoon erred in his findings and that the ruling could have significant economic and other impacts on the public interest and national development.
OIlNow
Unlimited liability is a rather daunting and open-ended obligation that would trouble permittees in any industry.
In the US, the liability for oil spill cleanup costs is unlimited for offshore facilities, but there is a liability cap for the resulting damages. That cap is currently $167.8 million after a recent inflation adjustment. BP, of course, paid far more than that for damages associated with the Macondo blowout. BP’s costs, which amounted to an astounding $61.6Â billion, were both voluntary and compulsory as a result of agreements and settlements. Keep in mind that the damage liability limit was only $75 million at the time. One can imagine what would have happened if a company with less financial strength or more inclination to fight had been responsible for the spill.
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged Beacon, bp, Chevron, deepwater drilling, Diamond Offshore, Gulf of Mexico, Kosmos, LLOG, Murphy, Noble, Oxy, QuarterNorth, Shell, transocean, Valeris, Woodside on April 27, 2023| Leave a Comment »
Based on drilling contractor rig activity reports, the table below lists 19 deepwater MODUs under or soon to begin contracts in the GoM. (Further details are pasted at the end of this post.) Per the Valeris report, platform rigs are operating on bp’s Thunder Horse and Mad Dog platforms. Per the BSEE borehole file, Arena and Cantium continue to drill development wells on the GoM shelf.
| Rig Name | Operator |
| Deepwater Titan | Chevron |
| Deepwater Atlas | Beacon |
| Deepwater Poseidon | Shell |
| Deepwater Pontus | Shell |
| Deepwater Proteus | Shell |
| Deepwater Conqueror | not disclosed |
| Deepwater Thalassa | Shell |
| Deepwater Asgard | Murphy |
| Deepwater Invictus | Woodside |
| Globetrotter I | Shell |
| Globetrotter II | Shell |
| Faye Kozack | QuarterNorth LLOG Kosmos |
| Stanley Lafosse | Murphy |
| Valaris DS-18 | Chevron |
| Valaris DS-16 | Oxy |
| Ocean BlackHornet | bp |
| Ocean Black Lion | bp |
| Auriga | bp |
| Vela | bp Beacon |
Excerpts from rig activity reports:
Posted in Gulf of Mexico, Offshore Energy - General, tagged Anchor, Argos, bp, Chevron, King's Quay, Murphy, Shell, Vito, Whale on April 19, 2023| Leave a Comment »
With the announcement of first oil at Argos, 3 of the 5 next generation deepwater platforms (simpler, safer, and greener) are now producing oil and gas in the Gulf of Mexico. The other 2 platforms are expected to begin production in 2024.
Prior to the installation of these platforms, the last deepwater platform addition was Shell’s Appomattox in 2018. That gap in deepwater platform installations was the longest since Bullwinkle was installed in 1988.
The 5 new structures will increase the deepwater platform count by 9% from 56 to 61, and in the next few years should account for approximately 1/4 of GoM oil production.
| platform | operator | water depth (feet) | first production | design production (boe) |
| King’s Quay | Murphy | 3725 | April 2022 | 100,000 |
| Vito | Shell | 4000 | Feb 2023 | 100,000 |
| Argos | bp | 4500 | April 2023 | 140,000 |
| Anchor | Chevron | 5000 | 2024 (est.) | 80,000 |
| Whale | Shell | 8600 | 2024 (est.) | 100,000 |
Posted in accidents, Gulf of Mexico, Offshore Energy - General, tagged bp, Gulf of Mexico, listing, Thunder Horse on April 14, 2023| Leave a Comment »
This picture was posted by MaritmePhoto. The”Blue Marlin” heavy lift vessel is arriving in Texas (2005) with the massive semisubmersible production platform “Thunder Horse” on board.
Above (from BOE archives): Pre-commissioning inspection of Thunder Horse
Thunder Horse has a most interesting history. The project was initially named Crazy Horse, but the name was changed out of respect for concerns raised by the Lakota nation. The massive structure is 136 m in length and 113 m in width, and is located in 6300′ of water in the Mississippi Canyon area of the Gulf of Mexico.
Many of you no doubt remember the near disaster during Hurricane Dennis (2005) when the platform was being commissioned. In light of the extensive pre-production hype for the “world’s largest production platform,” this was a costly and embarrassing incident for BP and the OCS program.
Per the findings of the MMS investigation team led by my former colleague David Dykes:
Findings indicate that failures associated with the hydraulic control system and its isolation on evacuation led to the partial opening of multiple hydraulically actuated valves in the ballast and bilge systems of the vessel. This allowed ballast water migration to take place, causing the initial listing (to approximately 16 degrees) of the vessel shortly after the hydraulic system was isolated.
The findings also indicate that ballast water migrated into manned spaces in the lower hull, via faulty and improperly installed check valves in the integrated ballast/bilge piping system. As the degree of list increased beyond the 16 degree mark, downflooding of seawater occurred, initially through overboard discharge lines and/or vents, and possibly later through the deck box as it entered the water. Since the PDQ was already listing at a 16 degree angle prior to the passage of Hurricane Dennis, wave action associated with the passage of the hurricane may also have contributed to the downflooding of seawater.
Although not an initiating event, failed Multiple Cable Transits (MCTs) and two unintended openings in the bulkheads allowed water transfer between watertight compartments, which led to extensive flooding and water damage in the lower hull.
Fortunately, there were no injuries. Repairs were made and production was finally initiated in June 2008.
After recent subsea tieback expansions, Thunder Horse is reported to be producing 200,000+ boe/d. OPEC’s Monthly Market Report for April 2023 cites the Thunder Horse expansion as a key driver in the January 2023 GoM production increase (see excerpt below).
Bud's Offshore Energy (BOE) 