Feeds:
Posts
Comments

Posts Tagged ‘Chevron’

2022 mid-year Compliance Honor Roll: US Offshore

Posted in Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , , , , , 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.

Read Full Post »

Chevron helicopters

Posted in accidents, Gulf of Mexico, Offshore Energy - General, tagged , , , on July 19, 2022| 2 Comments »

Chevron may be the only GoM operator to own its helicopter fleet. Data on their safety performance relative to GoM helicopter contractors do not appear to be available online.

Their news release focuses on hurricane preparedness and the benefits of owning their fleet. I’m not sure how significant these advantages are given that other companies can ensure similar availability through their contracts. A comparative analysis would be of interest.

“Other companies that depend on contracted helicopters to evacuate can’t create their own schedule and might have to start departing the platform days in advance,” said Jose Jaramillo, manager of Chevron’s aircraft operations in the Gulf of Mexico. “With our own helicopters on standby, we have more flexibility in determining when to safely shut down the platform, and after the storm passes, we can quickly remobilize, assess our facilities and bring production back online days faster.”

Chevron.com

The Helicopter Safety Advisory Conference (HSAC) does a very good job of identifying and addressing Gulf of Mexico helicopter safety issues. Per HSAC (report attached):

The leading causes, not all inclusive, of the accidents since 1999 are listed below, and secondary causes of these events include 13 related to helideck size or design related issues.
• 21 engine related,
• 25 loss of control or improper procedures,
• 18 helideck obstacle strikes,
• 13 controlled flight into terrain, and
• 12 other technical failures

hsac-2020-statisticsDownload

Read Full Post »

Letter from Chevron CEO Mike Wirth to President Biden

Posted in energy policy, tagged , , on June 22, 2022| Leave a Comment »

Kudos to Mike Wirth. It’s nice to see a CEO with some backbone. Most importantly, he defended his employees and their vital contribution to society.

“Chevron and its 37,000 employees work every day to help provide the world with the energy it demands and to lift up the lives of billions of people who rely on these supplies. Notwithstanding these efforts, your Administration has largely sought to criticize, and at times vilify, our industry. These actions are not beneficial to meeting the challenges we face and are not what the American people deserve.”

The comment that follows is interesting. Perhaps he wants to hear from the Climate Policy Office?

“Chevron will engage in this week’s meeting with Secretary Granholm. I encourage you to also send your senior advisors to this meeting, so they too can engage in a robust conversation.”

Here is the full letter.

Read Full Post »

Chevron sanctions Ballymore; BSEE conducts pre-production inspection of Shell’s Vito platform

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on May 19, 2022| Leave a Comment »

Ballymore will be produced with 3 seafloor wells (6540′ water depth) that are expected to transport 75,000 bopd via a three-mile subsea tieback to Chevron’s Blind Faith floating production unit. Per BOEM, the Ballymore field was discovered in December, 2017. First production is expected to be in 2025.

Pre-production inspection, Shell Vito
Vito

Shell’s Vito floating production unit was inspected last week by BSEE personnel. Vito is expected to begin production later this year or early next year and produce up to 100,000 bopd. Per BOEM data, the Vito field was discovered in 2010.

As these projects demonstrate, deepwater development takes time and is often dependent on related projects on other leases. This is why future production is dependent on regular, predictable lease sales.

Read Full Post »

Interesting shareholder votes

Posted in climate, energy policy, Uncategorized, tagged , , , , , , , , on May 17, 2022| Leave a Comment »

From Reuters article:

  • bp: Only 15% of shareholder votes backed a call for the company to accelerate its energy transition, compared with the 21% in favor in a similar vote last year.
  • Oxy: Only 17% of investors backed a call for emissions-reduction targets. (I wonder how Buffett voted 😀)
  • Marathon: 16% supported a measure calling for the company to report on how its transition plans affected workers and communities
  • ConocoPhillips: 42% supported an emissions-reductions targeting measure vs. 58% last year.

Exxon, Shell, and Chevron are on deck!

Read Full Post »

Gulf of Mexico scoreboard

Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , , , , , , , , on May 10, 2022| Leave a Comment »

  • Operating companies that produced >1 million bbls of oil or >1 BCF of gas in 2021 are listed in descending order based on oil production.
  • Both the total number of well starts and the number of exploratory wells are indicated
  • An INC is an Incident of Noncompliance (i.e. a violation). W=warning, CSI=component shut-in, and FSI=facility shut-in are the enforcement actions.
  • All of the below data are publicly available on the BSEE-BOEM websites.
2021
oil (MMbbls)		2021
gas (BCF)		2021/22
well starts
total-expl		2021/22
INCs
W-CSI-FSI
Shell149.8190.828-1211-14-4
bp114.082.75-26-3-4
Chevron83.742.28-81-1-3
Anadarko (Oxy)67.757.88-68-5-1
Hess27.561.72-27-4-0
Murphy25.150.07-74-8-1
LLOG20.429.03-01-1-1
Talos17.723.05-025-26-14
BHP14.55.93-22-3-0
Exxon13.22.3–1-1-1
Beacon10.515.71-00-0-0
Fieldwood10.424.7–685-235-91
EnVen9.612.66-02-6-3
Kosmos9.48.41-11-0-0
Arena8.627.932-068-45-19
Walter8.136.22-23-1-2
Cox6.230.3–237-169-3
Eni4.713.62-08-0-2
W&T5.027.21-065-40-7
Cantium4.55.518-023-15-2
QuarterNorth4.28.3–no data
GoM Shelf2.34.8–52-5-2
ANKOR1.42.5–0-0-1
Byron1.04.4–5-8-2
Renaissance0.71.6–20-9-3
Sanare0.34.5–38-20-3
Helis0.21.2–1-0-2
Contango0.035.0–4-0-0
Samchully0.021.2–no data

Comments:

  • “Energy transition” companies Shell and bp still love the Gulf of Mexico, which is a good thing for them and us. Together they accounted for 42.4% of the 2021 oil production.
  • The top 4 producers, Shell, bp, Chevron (includes Unocal), and Anadarko accounted for 2/3 of GoM oil production, nearly all of which was from deepwater leases.
  • Those are impressive production numbers for Anadarko (Oxy). No wonder Warren Buffett likes Oxy stock.
  • The relative number of deepwater exploratory wells is mildly encouraging given our concerns about sustaining production.
  • Exploratory well determinations are rather subjective and may not be entirely consistent.
  • Understandably, no exploratory wells were drilled by Arena or Cantium, the companies responsible for most well operations on shelf (shallow water) leases.
  • Overall, the INC numbers are impressively low for the deepwater operators, with Chevron and LLOG standing out. BSEE does not post the specific violation information (more on this in an upcoming post), so it’s difficult to properly assess a company’s compliance record.
  • Unfortunately, incident data could not be included on the scoreboard. BSEE’s incident tables are badly out of date, and no 2021/2022 summaries have been posted.
  • Fieldwood’s disturbing INC numbers were discussed earlier this year. High INC rates for 3 other operators have also were noted last month.
  • Exxon production is limited to the Hoover Diana spar, which was installed 22 years ago. The largest US oil company has only drilled one GoM exploratory well (2018) in the past 5 years. Currently, their main GoM interest seems to be the sequestration (disposal) of onshore emissions. (More on this topic in an upcoming post.)

Read Full Post »

Build the EastMed Gas Pipeline!

Posted in energy policy, gas, Offshore Energy - General, pipelines, tagged , , , on March 9, 2022| Leave a Comment »

Leviathan platform, offshore Israel

Gas reserves in the Eastern Mediterranean Basin are enormous:

Now the U.S. Geological Survey estimates that as much as 122 trillion cubic feet of gas and 1.7 billion barrels of oil lie in the eastern Mediterranean basin. That amount of gas is equivalent to about 76 years of gas consumption in the European Union.

Forbes

Another US energy/foreign policy blunder?

Last January, the US informed Israel, Greece and Cyprus that they no longer supported the proposed EastMed natural-gas pipeline from Israel to Europe citing the need to “(allow) for future exports of electricity produced by renewable energy sources, benefiting nations in the region.”

Jerusalem Post

It’s time to move forward with this strategically important energy project. Chevron is now the main player in the Eastern Mediterranean after their 2020 acquisition of Noble Energy.

Read Full Post »

More on 2021 compliance (US offshore oil and gas operations)

Posted in Alaska, California, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , , , , , , , , , , , on January 20, 2022| Leave a Comment »

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.

Read Full Post »

Gulf of Mexico violations surged in 2021; one company is largely responsible

Posted in accidents, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , on January 20, 2022| Leave a Comment »

Per BSEE’s Incidents of Non-Compliance (INC) data base, the number of violations surged in 2021, both in terms of the total number of INCs and the INCs/inspection ratio (see chart below). Remarkably, a single company – Fieldwood Energy – was responsible for 845 INCs or 44% of the total number issued. Normalizing for the number of inspections, Fieldwood facilities were cited for 1.46 INCs/inspection versus 0.46 INCs/inspection for all other companies. An unprecedented 61 of Fieldwood’s 2021 INCs called for facility shut-ins, many times more than any other operator. Through the first 17 days of 2022, Fieldwood has already been cited for 21 INCs, 5 of which required facilities to be shut-in.

Fieldwood and its affiliates have experienced multiple bankruptcies and the company has once again been reorganized with the blessing of the courts. Chevron’s comprehensive objection to the reorganization plan asserted that Fieldwood has $9 billion in current and anticipated decommissioning obligations. These enormous decommissioning liabilities and their implications for predecessor lessees (former facility owners) and the Federal government were the main issue in these proceedings, and the bankruptcy plan includes settlements with predecessor companies and the government.

Even more significant than the financial matters and INCs are the following:

While BSEE regulations provide for the removal of operating rights for poor safety performance, companies can reorganize and problem managers can reappear elsewhere. As a result, marginally financed and ineffective operating companies are a major challenge for BSEE as evidenced by the INCs, civil penalties, and investigations. (See the related saga of Platforms Hogan and Houchin in the Pacific Region.)

Poor safety performers drag down the entire industry. The costs of mega-disasters like the Santa Barbara and Macondo blowouts have been widely discussed. However, chronic poor performance and the associated incidents also weaken the industry and damage the integrity of the offshore oil and gas program. These performance issues can’t be left entirely to BSEE and the Coast Guard to resolve. The industry needs to do a better job of self-evaluation, calling out poor performers, and exercising judgement in the assignment of offshore properties.

Read Full Post »

A truly remarkable lease sale: OCS Sale 53, Pacific Region, May 28, 1981

Posted in California, decommissioning, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on November 23, 2021| Leave a Comment »

Were it not for the surprising CCS bidding, which was accomplished without public notice, last week’s Gulf of Mexico sale would have been pretty ordinary – $177 million on 214 tracts.

A 1981 lease sale offshore California was quite another matter. That sale (no. 53) set records that will never be surpassed. A single lease (OCS-P 0450) encompassing a little more than 5000 acres was sold to Chevron and Phillips for an astounding $333 million. This equates to $1.013 billion in 2021 dollars. That single bid (in 1981 dollars) exceeds the total high bids for any Gulf of Mexico sale since 2015.

High bids for Sale 53 totaled $2.3 billion ($7.0 billion in 2021 dollars!) for only 81 tracts. A GoM sale in 2008 received $3.7 billion in high bids, but that was for 603 tracts.

Unfortunately, production from lease 0450 never met expectations. Platform Hidalgo (0450) and the other two Pt. Arguello field platforms (Harvest and Hermosa) are no longer producing and are in the process of being decommissioned. An interesting criminal case involving Platform Harvest, then operated by Texaco, will be discussed at a later date.

Pt. Arguello Field

OCS Sale data

Pacific only data

John Smith’s Pacific decommissioning update

Read Full Post »

« Newer Posts - Older Posts »