On my favorite holiday, I’m sending best wishes to BOE readers of all persuasions. Offshore energy issues can be divisive, even among friends, and I’m grateful for the opportunity to share information and opinions.
My wife and I will be spending Thanksgiving with my daughter’s family including our 6 grandchildren, none of whom have expressed interest in being offshore safety regulators (no higher calling 😉).
Belated holiday wishes to our friends in Canada where Thanksgiving is celebrated in October, and cheers to those living where a similar fall holiday is observed.
Nobel Peace Prize winner Maria Corina Machado wisely calls for privatizing Venezuela’s oil and gas industry, which was highly respected prior to the Chavez regime. The national oil company, Petróleos de Venezuela (PDVSA), is now a corrupt arm of the Maduro government.
“The whole Board is responsible for the loss of about 800,000 barrels per day of oil production; for the fraudulent certification of “proven oil reserves” in the Orinoco heavy oil region; for the irregular contracting, with a ghost company, of the offshore drilling barge Aban Pearl for twice the amount really paid to the owners of the barge; for the importing of 180,000 tons of food that later went to rot in Venezuelan ports but provided some of the members of the board with millions of dollars in criminal profits; and in numerous other corrupt practices that are well documented.“
Machado’s oil and gas platform is pasted below. She has a good perspective on the proper role of govt.
Privatization and reactivation of oil and gas production by attracting specialized international and national companies. Venezuela has one of the world’s largest reserves of oil and natural gas. As per the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), the country has reserves of over 300 billion barrels of oil and 200 trillion cubic feet of natural gas. The goal in this area is to steadily increase oil and gas production in order to leverage the window of opportunity that exists in today’s global demand for hydrocarbons. Achieving this objective will require enormous investments that the Venezuelan State cannot undertake. The solution is to attract private capital, and the strategy to achieve this end is the industry’s privatization. Where appropriate, all the industry’s productive activities will be privatized in order to secure massive private investments and a sustained increase in production, under conditions that guarantee legal certainty and an environment that is attractive for investors. The State will continue to receive fiscal income in the form of royalties and taxes, and will ensure that an operational framework exists in which private companies can increase production in the shortest possible timeframe. A Venezuelan Energy and Petroleum Agency will be established to exercise the role of industry regulator. Oil privatization will allow Venezuela to regain its position as a safe and reliable supplier, and will provide unparalleled investment opportunities in the industry.
Trinidad’s Prime Minister Kamla Persad Bissesar: “Trinidad will not wait for the end of any energy era,” she said. “Our principle is simple: investment goes where it is welcomed and stays where it is well treated.”
The PM of a country with an oil production history that predates the Drake well in Pennsylvania leaves no doubt about her support for deepwater development. Her candid and clear messaging is most refreshing.
Consistent with her policy guidance, T&T signed a Production Sharing Contract with Exxon for a massive deepwater tract (Block Trinidad and Tobago Ultra Deep 1, map below). Per Ms. Persad Bissessar:
“Today’s signing underscores our government’s commitment to strengthening national energy security and to unlocking the full value of our hydrocarbon resources through discipline, policy, competitive terms and trusted partnerships.”
Although another Guyana is unlikely, the enormous lease block presents a great opportunity for Exxon. The consolidated block spans 7,765 square kilometers in the Eastern Tobago Basin in water depths exceeding 2,000 meters. By comparison, Trinidad and Tobago’s total surface area is about 5,128 square kilometers and a typical Gulf of America lease block is only 23 sq km. (Think about that! The size of US offshore lease blocks, which are the world’s smallest, needs to be reconsidered.)
Based on press reports, Exxon will carry out seismic acquisition within 12 months, followed by geological and geophysical studies, and drill up to 2 exploratory wells during the initial phases of the contract. (Reports differ as to whether one of those wells is mandatory, but presumably that won’t be an issue.)
Does this impressive deal reduce the likelihood that America’s largest oil company, which has essentially abandoned the Gulf of America except for its (fading?) carbon disposal ambitions, will participate in the upcoming Gulf lease sale? Politically, failure to participate would not seem to be very astute given the Administration’s promotion of domestic production and energy dominance.
We preferred the House version, but the Senate Parliamentarian killed the provisions that reduced the risk of litigation and processing delays.
Whether justified or not, the royalty rate is now capped at 1/6 and a 10-year deepwater lease term is locked in.
The favorable terms and assurance of regular GOA lease sales put the ball squarely in industry’s court. We are looking for a good showing at Sale 262, including some new bidders and the return of some prominent companies.
Our Scottish contributor, JL Daeschler, brought this brilliant Sunday Times piece by Gillian Blowditch (pictured) to my attention. A few excerpts follow, but I recommend that you read the entire column.
“I’m writing this column from Applecross in the Scottish Highlands, where the view from the window is of the Cuillins. These immutable behemoths squat beneath an expanse of sky in which the light is invariably diffuse. It never gets old.” (I second that emotion!)
“Renewables are a vital part of our energy mix, but they require gas-fired back-ups. Yet, instead of tapping into our North Sea reserves, we’re committed to importing foreign gas. It’s not just an issue around energy security and cost, it affects our trade deficit and competitiveness against countries using cheaper, home-grown supplies. It increases our dependence on foreign supply chains.”
“Meanwhile, we risk losing the valuable skills and expertise we have built up over 50 years of North Sea exploration. We are all paying the price for this obsession through higher energy bills and job losses.”
“It is difficult to imagine a world in which it makes sense to import oil and gas but not produce it, while forcing our skilled workforce to work offshore in far flung corners of the globe, especially when we are importing from Norway, which is extracting oil and gas from the same seabed for which we are refusing to grant licences.”
“According to a Survation poll commissioned by the Aberdeen & Grampian Chamber of Commerce and published last week, 68 per cent of voters want the country’s demand for oil and gas to be produced domestically, rather than imported.”
“We all want to protect our environment and Scotland, with its vast natural resources and expertise in energy, should be leading the way. Instead, we have squandered an opportunity in favour of a facile show of moral posturing.”
The announcement was during an interview this morning (4/4/2025) with Lawrence Jones on Fox News, and is consistent with expectations and the current 5 year leasing plan.
Industry sources tell us, authoritatively, that the North Sea could produce around half of all the oil and gas the UK will need up until at least 2050 – if new projects are developed. Meanwhile, as instead we shut down our existing wealth, China continues burning dirty coal and making us more dependent on their products.
As it stands, Offshore Energies UK (OEUK) says the UK is on track to produce just four billion of the 13-15bn barrels of oil and gas the country will need over the next 25 years.
It is time for those making decisions in London and Edinburgh to put away all the green zealotry nonsense and get the UK powerhouse moving again. Given 25 years they could make a good start on installing small, clean, nuclear plants dotted across the UK to help in great part to pick up the load.
We need planning, not zealotry. It is now even more clear the green emperor is not wearing clothes. When will Energy Secretary David Miliband be convinced?
As someone who actually works in the North Sea on oil rigs I have heard almost all my life how the oil and gas will be gone in 10 years. 35 years in this industry and the first time I am likely to be unemployed is because of the government. Not the end of oil fields.
The nominally conservative CDU has vowed not to form a coalition with the “far-right” (actually conservative libertarian) AfD, and will thus have to join hands with the left-leaning SPD and Greens. This doesn’t bode well for the significant changes many believe are needed.
On the plus side for AfD supporters, the party’s growth in just 8 years has been most impressive:
2017: AfD – 0 seats (4%)
2021: AfD – 94 seats (12%)
2025: AfD – 150+ seats (20%)
AfD was dominant in the East which fears a return of the Marxism they experienced prior to the “Wende.”
AfD’s energy policy (p.77) seems pretty sensible given the supply and cost challenges facing Germany. A few highlights:
The AfD supports “Protection of the Environment”, but not the “German Climate Protection Policy” and plans for “decarbonization” and the “Transformation of Society”. They want to end the perception of CO² as an exclusively harmful substance and stop Germany’s maverick policy in the reduction of CO² emissions.
Because the average output is so variable, renewable energy generators are not viable replacements for conventional large power stations.
Renewable sources necessitate a massive expansion of the electric grid systems and jeopardize grid stability.
Fracking: Explore Opportunities and Risks, Involve Citizens
Nuclear Energy: Explore Alternatives, Grant Lifetime Extensions in the Interim
Withdrawal from the Paris Climate Change Agreement:The US Ambassador to the UN shall immediately submit formal written notification of the US withdrawal from the Paris Agreement under the United Nations Framework Convention on Climate Change.
Regulatory Freeze: Agencies may not propose or issue a rule until approved by a Presidential appointee. OMB may exempt emergency or urgent rules (déjà vu for regulators 😉).
Alaska: Withdraws a Secretarial Order intended to halt ANWR oil and gas leasing. Rescinds cancellation of ANWR leases.
Encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf.
Eliminate the electric vehicle (EV) mandate.
Requires immediate review of actions that could burden the development of energy resources.
Develop and begin implementing action plans to suspend, revise, or rescind all unduly burdensome agency actions.
Revoke climate change and “clean energy” EOs.
Terminate all activities, programs, and operations associated with the American Climate Corps (RIP 😉).
Expedite and simplify permitting processes.
Facilitate the permitting and construction of interstate energy transportation and other critical energy infrastructure, including pipelines.
Disband the Interagency Working Group on the Social Cost of Greenhouse Gases.
Terminate the Green New Deal.All agencies must immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act (Public Law 117-58).
The Secretary of Energy is directed to restart reviews of applications for LNG export projects as expeditiously as possible.
Bud's Offshore Energy (BOE) 