The CNLOPB has announced contingent resources of 340 million bbls for the Cambriol discovery which would be co-developed with 2 nearby discoveries as part of Equinor’s Bay du Nord project. Per CNLOPB estimates, this brings the Bay du Nord resource total to 1.132 billion bbls. Equinor has announced that 2 exploratory wells will be spudded this summer. Positive results would further strengthen the case for Bay du Nord development.
contingent resources per CNLOPB (million bbls)
Bay du Nord
407
Cappahayden
385
Cambriol
340
project areatotal
1132
“Contingent Resources” are volumes of hydrocarbons, expressed at 50% probability, assessed to be technically recoverable that have not been delineated and have unknown economic viability.
Meanwhile, Terra Nova production is ramping up after a long hiatus for FPSO refurbishment, remarkable Hibernia has produced more than double the original resource estimate of 520 million bbls and is still producing about 60,000-70,000 bopd, and Hebron is impressively producing about 120,000 bopd on average.
There is indeed reason for optimism about North America’s only Atlantic production in what is arguably the continent’s (world’s?) most challenging operating environment.
It’s prudent, if not imperative, to tow floating wind turbines to sheltered coastal locations for major maintenance. For that reason, Hywind, the world’s first floating wind farm will be offline for up to 4 months this summer.
Hywind Scotland‘s operator, Norwegian power giant Equinor, says that operational data has indicated that its wind turbines need work. The pilot project has been in operation since 2017.
The five Siemens Gamesa turbines will be towed to Norway this summer. An Equinor spokesperson said, “This is the first such operation for a floating farm, and the safest method to do this is to tow the turbines to shore and execute the operations in sheltered conditions.”
Published data indicate that Hywind has been the UK’s best performing offshore wind farm. Performance data for Hywind, and a chart illustrating the capacity factors since commissioning, are posted below. The 2024 capacity factor will, of course, be substantially reduced as a result of the essential offsite maintenance.
capacity factor = total energy generated/(hours since commissioning x capacity)
The first US floating turbines are expected to be at these California offshore leases, and Hywind operator Equinor is one of the lessees:
Given the financial challenges facing the offshore wind industry, the still emerging technology, and the risks inherent in California offshore development, the amounts bid on these leases only 13 months ago are stunning.
Some Central Coast residents are not enamoured with “another attempt to industrialize the coast.” Although the turbines will be >20 miles offshore, they will have to be towed to shore for major maintenance. For the Central California leases, nearby harbor areas like Morro Bay (pictured below) would be overwhelmed by the large structures and the maintenance and repair operations. Towing the towers to LA/Long Beach, albeit rather distant from the leases, would seem to be the preferred option for such work.
Ironically, a report for BOEM, points to synergies between the offshore wind industry and oil and gas decommissioning industry. Such synergies will only be possible if longstanding oil and gas decommissioning obstacles are satisfactorily addressed and the offshore wind projects proceed as planned.
Which will come first – platform decommissioning or wind turbine commissioning? For those young enough to find out, what is the over-under for the years until (1) half of those platforms are decommissioned, and (2) half of the wind turbines commissioned? Any number <10 is unrealistic for either.
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
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!
The Tiberius exploration well tested a four-way structural trap in the outboard Wilcox trend, located in Keathley Canyon Block 964. The well encountered approximately 250 feet (~75 meters) of net oil pay in the primary Wilcox target. Wireline logging has been completed and casing is currently being run to the target depth to enable the well to be used as a future oil producer. The Tiberius well is located in approximately 7,500 feet (2,300 meters) of water and was drilled to a total vertical depth of approximately 25,800 feet (7,800 meters).
BSEE data indicate that Kosmos has an excellent compliance record, having been cited for only 3 violations during 44 facility inspections (83 inspection types) since 1/1/2018.
One quibble: the Kosmos news release does not name the drilling unit or drilling contractor. The rig crew is the group most responsible for safely drilling the well.
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.
Only Equinor is a familiar name to the offshore oil and gas industry, so here are some blurbs about the other high bidders.
California North Floating, LLC, is a subsidiary of Copenhagen Infrastructure Partners (CIP). Since entering the US offshore market in 2016, CIP has built a leading offshore wind position through its affiliate Vineyard Offshore. This includes Vineyard Wind 1, the country’s first commercial scale offshore wind project which is currently under construction, as well as two lease areas under development totaling approximately 5.0 GW off the coast of Massachusetts and New York.
Central California Offshore Wind is managed by an East Coast offshore wind energy company, Ocean Winds North America LLC, which formed a joint venture with the Canada Pension Plan Investment Board to win the lease. Ocean Winds has more than 10 years of experience in floating offshore wind, most notably through the development and operation of Windfloat Atlantic (offshore Portugal), the world’s first fully commercially operational floating offshore wind farm
Equinor, a Norwegian company, is a major international oil and gas producer, an important wind energy investor, and a leader in the development of floating wind turbine technology. Equinor operates the Hywind Tampen floating offshore wind farm which will supply power to Norwegian offshore oil and gas fields.
Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas, Europe and Asia. Invenergy’s home office is located in Chicago, and it has regional development offices in the United States, Canada, Mexico, Spain, Japan, Poland, and Scotland.
RWE Renewables has experience covering the offshore and onshore wind energy value chain from development to construction and operation. These activities are the responsibility of two functional units, “Unit Renewables Europe & Australia” and “Unit Offshore Wind”, as well as the subsidiary RWE Renewables Americas. RWE Renewables also invests in large-scale solar projects and supports power producers, plant operators and other stakeholders in the development, construction and operation of photovoltaic and solar energy plants as well as in the construction of battery storage systems. The focus is on large-scale industrial projects.
This is a good example of the interconnectivity of deepwater projects with major Shell, Chevron, and Equinor facilities shut-in as a result of a relatively minor downstream pipeline incident.
Mars crude price appears to have reacted to the shut-in news:
Bay du Nord FPSO planned for 500 km offshore St. John’s in 1200 m water depth
Federal Environment Minister Steven Guilbeault formally approved the Bay du Nord offshore oil megaproject Wednesday, making a decision that will infuriate environmentalists but boost the Newfoundland and Labrador economy.
A decision on the proposed Bay du Nord oil project off the coast of Newfoundland will be delayed by another 40 days, according to Federal Environment Minister Steven Guilbeault.
Ottawa’s decision for the project was set for Sunday, but was originally scheduled for Dec. 6. The 40-day delay means a decision could come by April 13.
The project has reportedly caused a division within Prime Minister Justin Trudeau’s cabinet, according to Radio-Canada, which reported in February that several Liberal ministers from Ontario, Quebec and British Columbia want to reject Bay du Nord.
The delays in Ottawa are disappointing for the following reasons:
Recent polling indicates very strong support among Newfoundlanders for offshore oil and gas operations and the Bay du Nord project. Newfoundland Premier Andrew Fury fully supports the project.
The Impact Assessment Agency of Canada concluded that “the Bay du Nord Development Project is not likely to cause significant adverse environmental effects, taking into account the implementation of mitigation measures.”
Equinor is a responsible offshore operator with a strong track record in Norway and elsewhere.
The importance of “free world” oil and gas production has never been more obvious. That will continue to be the case for the life of this project and beyond.
Bud's Offshore Energy (BOE) 