| company | no. of Sale 259 high bids (Sale 257 in parentheses) | total Sale 259 high bids ($ millions) |
| Chevron | 75 (34) | 108 |
| BP | 37 (46) | 46.7 |
| Shell | 21 (20) | 20.1 |
| Equinor | 16 (1) | 18.3 |
| Beacon | 13 (4) | 9.0 |
| Anadarko (Oxy) | 13 (30) | 8.6 |
| Red Willow | 13 (5) | 3.8 |
| Hess | 12 (2) | 8.3 |
| Woodside | 12 (8) | 6.3 |
| Houston Energy | 8 (5) | 11.6 |
Posts Tagged ‘bp’
Lease Sale 259 Top Ten: Chevron’s surges, BP is bullish on the GoM, Shell steady, Equinor awakens, Beacon sees the light, OK for Oxy, Red Willow surprises, Hess rebounds, Woodside has BHP, Houston means Energy!
Posted in Gulf of Mexico, Offshore Energy - General, tagged Beacon, bp, Chevron, Equinor, Gulf of Mexico, Hess, Houston Energy, Lease Sale 259, Oxy, Red Willow, Shell, Top Ten, Woodside on March 31, 2023| Leave a Comment »
Interesting Sale 259 items
Posted in CCS, Gulf of Mexico, Offshore Energy - General, tagged bp, Exxon, Focus Exploration, Gulf of Mexico, Lease Sale 257, Lease Sale 259 on March 30, 2023| Leave a Comment »
- In the previous Gulf of Mexico sale (257), the $1.8 million bid submitted by BP and Talos for Green Canyon Block 777 was rejected. BP bid again for this block in Sale 259, but their bid was only $583,000. One would assume that this bid will also be rejected, but perhaps there is more to the story (new geologic data?).
- Green Canyon 79 received a bid of $3.6 million at Sale 257, but no lease was ever issued. No explanation was provided and there were no bids for this block at Sale 259.
- There was actually a second bidder, Focus Exploration, for one of the 69 “CCS blocks,” that Exxon seeks to acquire (see below). Exxon’s bid was higher. Does this mean that Focus, a company that is presumably interested in exploring for oil and gas, will lose the block to a company that bid on the block for purposes not authorized in the Notice of Sale?
OCS Lease Sale 259: more unusual bidding by Exxon, otherwise an impressive sale
Posted in CCS, Gulf of Mexico, Offshore Energy - General, tagged BOEM, bp, Chevron, Exxon, Lease Sale 259, Liz Klein, Red Willow, results, Shell on March 29, 2023| Leave a Comment »
- 313 blocks receiving bids
- 353 bids
- 32 companies submitting bids
- High bids totaled $263.8 million
Exxon doubled down on their strategic CCS bidding; their only bids (69 in total) again appeared to be solely for carbon sequestration purposes. As previously noted, acquiring tracts for CCS purposes is not authorized in an oil and gas sale. Arguably, these bids should be rejected.
The other super-majors, BP, Chevron, and Shell, were active participants as were many independents.
It was good to see BOEM Director Liz Klein announcing bids. This shows respect for the OCS oil and gas program.
It was also good to hear that Red Willow, a native American corporation, was again an active participant.
More to follow.
Reality check for supermajors
Posted in climate, energy, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged bp, oil and gas production, Shell on March 6, 2023| Leave a Comment »
“I am of a firm view that the world will need oil and gas for a long time to come,” (Shell Chief Executive) Sawan, who started the job on Jan. 1, told Times Radio in the U.K. on Friday. “As such, cutting oil and gas production is not healthy.”
Back in 2021, Shell predicted that its own oil production would decline every year and drop by as much as 18% by 2030. BP had a similar outlook, but CEO Bernard Looney rolled back its climate targets this year and said it will increase investment in exploration and production.
BP and Shell have trailed their U.S. peers in price to earnings ratios. Analysts have said investors interested in exposure to oil and gas have shunned them for putting more money into renewables, while investors focusing on environmental concerns haven’t rewarded them. That’s kept European energy firms trading at a discount.
Barron’s
It will never happen, but a separate company composed of BP and/or Shell upstream US assets would be very attractive to investors.
Bid rejection and lingering Lease Sale 257 mysteries
Posted in CCS, energy policy, Gulf of Mexico, Offshore Energy - General, tagged BHP, BOEM, bp, carbon sequestration, Chevron, Exxon, Lease Sale 257, Lease Sale 259, rejected bid, Talos on February 27, 2023| Leave a Comment »
BOEM published their Sale 257 Decision Matrix on Friday (2/24/2023), and my previous speculation regarding the rejected Sale 257 high bid has proven to be partially incorrect. The rejected high bid was submitted by BP and Talos and was for Green Canyon Block 777. BOEM’s analytics assigned a Mean of the Range-of-Value (MROV) of $4.4 million to that tract, which tied for the highest MROV for any tract receiving a bid. The BP/Talos bid was $1.8 million or just 40% of BOEM’s MROV. BOEM’s tract evaluation is interesting given that the other bid on this wildcat tract (by Chevron, $1.185 million) was considerably lower than the rejected BP/Talos bid.
The Sale 257 bid that I thought might have been rejected was for lease G37261. This lease was never issued per the lease inquiry data base and the final bid recap. BHP’s bid of $3.6 million for that tract (Green Canyon Block 79) was more than 5 times BOEM’s MROV of $576,000, and was accepted per the decision matrix. Why was the lease never issued?
Both Green Canyon 79 and 777 should again be for sale in legislatively mandated Sale 259, which will be held in just a few weeks on March 29, 2023, just 2 days prior to the deadline. It will be interesting to see what the bidding on those tracts looks like.
Meanwhile, Exxon and BOEM are still mum about the 94 Sale 257 oil and gas leases that Exxon acquired for carbon sequestration purposes. Note the large patches of blue just offshore Texas on the map above. These leases were all valued by BOEM at only $144,000 each, which is equivalent to the minimum bid of $25/acre. This valuation reflects the absence of perceived value for oil and gas production purposes. Exxon bid $158,400 for each tract, $27.50/acre or 10% higher than the minimum bid. Given that (1) the Notice of Sale only provided for lease acquisition for oil and gas exploration and production purposes, and (2) it was common knowledge that these tracts were acquired for carbon sequestration, should these bids have been rejected?
Simpler, safer, greener: Vito takes center stage!
Posted in Gulf of Mexico, Offshore Energy - General, tagged Anchor, Argos, bp, Chevron, deepwater platform, King's Quay, Murphy, Shell, simpler safer greener, Vito, Whale on February 16, 2023| Leave a Comment »
Last year, BOE featured 5 deepwater platforms that were under construction: Shell’s Vito and Whale, Murphy’s King’s Quay, bp’s Argos, and Chevron’s Anchor. These floating production units are noteworthy for their lighter, smaller designs. King’s Quay was the first to produce, beginning last April. The spotlight is now on Vito which began producing today. Vito’s peak production should reach 100,000 boe. The other 3 platforms are expected to begin production this year or next.
2022 Safety Honor Roll: Gulf of Mexico operators
Posted in Gulf of Mexico, Offshore Energy - General, Regulation, tagged AnadarkoOxy, bp, Cantium, Chevron, compliance leaders, Contango, Gulf of Mexico, Hess, LLOG, Murphy Oil, offshore oil and gas operations, Safety Honor Roll, Shell on January 24, 2023| 1 Comment »
The Honor Roll companies for 2022 (listed alphabetically) are Anadarko (Oxy), bp, Cantium, Chevron, Contango, Hess, LLOG, Murphy, and Shell.
Our 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 3.25 types of inspections in 2022. 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, investigation and news reports are used to make this determination.
- Pacific and Alaska operations will be considered separately.
| oil (million bbls) | gas (BCF) | |
| Shell | 145.8 | 163.5 |
| bp | 82.4 | 57.1 |
| Chevron | 79.4 | 45.2 |
| Anadarko | 59.6 | 50.8 |
| Murphy | 28.1 | 45.5 |
| LLOG | 19.6 | 34.3 |
| Hess | 17.9 | 39 |
| Cantium | 3.9 | 5.3 |
| Contango | 0.02 | 3.5 |
Stemming the decline in deepwater Gulf of Mexico exploration?
Posted in Gulf of Mexico, Offshore Energy - General, tagged bp, Chevron, ConocoPhillips, deepwater exploration, Exxon, Gulf of Mexico, Hess, LLOG, Murphy, Shell, Talos, Woodside on November 18, 2022| Leave a Comment »
Was 2021 the low point? Hopefully that is the case, but consistent leasing is essential.
Looks like Woodside is now officially the GoM operator of record (was BHP prior to merger). Kudos to them.
Shell continues to be the GoM bellwether. There is no OCS program without them.
What’s up with BP and Chevron? Big declines from both.
US super-majors Exxon and ConocoPhillips remain out of the picture, both in terms of lease acquisition and exploration. Disappointing.
Tip of the hat to Hess, LLOG, Murphy, and Talos – independents committed to deepwater production.
GoM exploration is insufficient to support sustained production at current levels
Posted in drilling, energy policy, Gulf of Mexico, Offshore Energy - General, tagged bp, ConocoPhillips, Deepwater, exploratory drilling, Exxon, Gulf of Mexico, oil and gas leasing, oil reserves on July 26, 2022| Leave a Comment »
Foremost energy experts like Daniel Yergin understand that oil and gas will be critical to our economy and security for decades, and that offshore production is an important component of our energy supply chain. Unfortunately, our massive outer continental shelf has, from an oil and gas standpoint, been effectively reduced to the central and western GoM.
Opportunities in the GoM are being seriously constrained by the extended pause in leasing. A lease sale has not been held for 615 days, the longest US offshore leasing gap since the 1950’s.
Reserve replacement and sustained production are dependent on exploration. The charts below illustrate the decline in GoM exploratory drilling and the reduced activity by some of the more important operating companies.
Per BSEE data, the number of exploratory well starts averaged only 3/month for the last 18 months (chart 2). This level of activity is the lowest since the early days of deepwater operations (chart 1). There was even more drilling during the post-Macondo moratorium (2010-2011).
ConocoPhillips and Exxon have not drilled a GoM exploratory well since 2016 and 2018 respectively. Activity by other operators has also declined significantly (chart 3). BP has not spudded an exploratory well since Sept. 2021.
No one should be surprised by the sharp decline in reserves and the dearth of recent field discoveries. Hopefully, government and industry will engage in a more thorough discussion of these trends and measures that might improve the intermediate and longer term production outlook.
2022 mid-year Compliance Honor Roll: US Offshore
Posted in Gulf of Mexico, Offshore Energy - General, tagged Arena, BHP, bp, Cantium, Chevron, compliance honor roll, Gulf of Mexico, Hess, Murphy, offshore oil and gas, Oxy, safety, Shell, Walter on July 20, 2022| Leave a Comment »
Operating companies (listed alphabetically): Arena, Anadarko (Oxy), BHP, bp, Cantium, Chevron, Hess, Murphy, Shell, and Walter
Criteria:
- Must average <0.3 incidents of compliance (INCs) per inspection. (This is less than half the GoM 2022 YTD average of 0.64 INCs/inspection.)
- Must operate at least 3 production platforms.
- Must have drilled at least one well.
- Pacific and Alaska operations will be considered in a separate post.
Comments:
- Impressive performance by Hess: 21 inspections and no INCs
- Cantium and Walter averaged less than 0.1 INCs/inspection. The INC rates for Anadarko (Oxy), BHP, and BP were only slightly higher.
- Among the Honor Roll companies, Shell (highest production, 9 deepwater platforms, and 13 well starts) and Arena (115 shelf platforms and 12 well starts) were the deepwater and shelf activity leaders.They thus had the highest INC exposure.
- Although CSI and FSI INCs are typically more significant than W INCs, that is not always the case, so the INCs have not been weighted by type.
- As has been previously noted, more inspection data should be readily available online. At a minimum, the specific INC (type) numbers (e.g. P-103, G-110, etc) should be posted so the public can better assess performance. Absent this information, interested parties are left to speculate about the significance of the violations.
- Incident data should also be considered in performance assessments. Unfortunately, the inexplicable lag in the posting of BSEE incident tables, precludes the use of these data in our analysis.
Compliance vs. Safety
While compliance is not synonymous with safety, most experienced observers believe there is a strong correlation. In the 1990’s, John Shultz, a PhD candidate at Carnegie Mellon Univ., studied US offshore facilities and safety data and developed expert and regression models to predict the likelihood of accidents and spills. That was a data rich era in that there were ~4000 US offshore platforms (more than twice the current number) and ~100 well starts/month (>10 times the current rate). In John’s thesis, he found that INCs are a very good predictor of accidents and spills. The offshore world has changed and further study of the correlation between compliance and safety performance is highly recommended.
Bud's Offshore Energy (BOE) 