Posted in Canada, drilling, Offshore Energy - General, tagged Bay du Nord, Equinor, Exxon, Flemish Pass, Odfjell Hercules, Orphan basin, Persephone well, Sitka well on July 24, 2024| Leave a Comment »
Per the CNLOPB weekly activities report, Equinor spudded the important Sitka C-02 well in the Flemish Pass area on July 10, 2024. This well will help clarify the resource potential in the Bay du Nord project area with the goal of better defining development plans.
Meanwhile, operations on Exxon’s important Persephone well in the Orphan Basin have now been ongoing for 2 months. Some type of announcement by Exxon is expected after operations are completed and the well has been plugged.
Posted in California, energy policy, Offshore Energy - General, tagged California Fire Marshall, Catch22, Exxon, pipeline valves, Sable Offshore, Santa Barbara County, Santa Ynez Unit on July 18, 2024| Leave a Comment »
Earlier this month we awarded a Chutzpah Award to groups that helped block every attempt to resume production in the Santa Ynez Unit and are now suing to terminate the leases for non-production.
We now learn that the State Fire Marshall has rejected the resumption of production because Sable, the current operator, is not installing automatic shutdown valves on the oil pipeline. The catch is that Sable was denied permits needed to install the valves. So, on the one hand the Fire Marshall is requiring shutdown valves (a reasonable requirement), and on the other hand the County is prohibiting the installation of those valves!
According to the Fire Marshall’s office, this is the first time a company has been denied permits to install valves mandated by the State – yet another dubious distinction for the Santa Ynez Unit.
Posted in California, energy policy, Offshore Energy - General, Regulation, Uncategorized, tagged BSEE, chutzpah, Exxon, law suit, lease extensions, Santa Ynez Unit on July 2, 2024| Leave a Comment »
Followers of the US OCS oil and gas program have observed some impressive chutzpah over the years, but a new law suit challenging the extension of Santa Ynez Unit leases raises the bar.
Groups that helped block every attempt to resume production in the Santa Ynez Unit are now suing to terminate the leases for non-production. Brilliant!🥇
“Without these extensions, each of the leases would have expired and ExxonMobil would have been required to permanently cease its oil and gas operations, plug its wells, and decommission its other infrastructure.” See the full text of the law suit.
More posts on the Santa Ynez Unit saga.
Posted in California, Offshore Energy - General, tagged Exxon, production restart, Sable Offshore, Santa Barbara County, Santa Ynez Unit on June 24, 2024| Leave a Comment »
Sable Offshore is still planning to resume Santa Ynez Unit production by October. However, according to John Smith, production in 2024 is not a possibility. The following permitting gauntlet remains:
According to John, the question is not whether production will resume in 2024, but whether it will ever resume. And John reminds us that as of 1/1/2026, the SYU and all of the headaches revert to Exxon. See the SYU overview below:
Posted in CCS, climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged BOEM, carbon disposal, CCS, Exxon, Gulf of Mexico, infrastructure bill, Ocean Dumping, Repsol on June 18, 2024| Leave a Comment »
Closing comment: “Sequestration” is a euphemism that is being incorrectly applied to soften the reality of disposing carbon beneath the Gulf of Mexico. Sequestration implies storage for later use and that is clearly not the intent. Because carbon disposal is arguably dumping, a special exemption from the Marine Protection, Research, and Sanctuaries (Ocean Dumping) Act of 1972 had to be added to the Infrastructure Bill.
Posted in Canada, drilling, Offshore Energy - General, tagged Exxon, Newfoundland, Orphan basin, resource assessment, Stena Drillmax on May 23, 2024| Leave a Comment »
Per rig tracker data, the Stena DrillMAX has been on location at Exxon’s Orphan Basin wellsite since Sunday (19 May). The site is 317 miles (510 km) NE of St. John’s in Block 1169 (~3000 m water depth).
Per this very good resource assessment report for the Govt. of Newfoundland and Labrador, “the Orphan Basin area demonstrates a potentially prolific petroleum system with four main plays (reservoirs and associated seals) sourced by various source rocks (Upper Jurassic, Cretaceous, and Paleogene).“
Unrisked resource estimates (theoretical pending confirmation by drilling) at the 90, 50, and 10% probability levels for the Orphan Basin blocks offered for licensing in Nov. 2022:
Taking into account the risks of the geologic model not accurately reflecting the reservoir, seal, charging, and trap components of the petroleum system, the probability of finding 13.5 billion drops to 16% (see plot below). This is still a high probability for a massive wildcat discovery.
This is why you move a state-of-the-art drillship thousands of miles to drill a single exploratory well at a remote location in the North Atlantic. The most likely outcome is negative or inconclusive findings, but the potential for such a major discovery justifies the investment.
Posted in Canada, drilling, Offshore Energy - General, tagged exploratory drilling, Exxon, Orphan basin, Stena Drillmax on May 18, 2024| Leave a Comment »
The DrillMAX has exited Bulls Bay and is en route to the Orphan Basin, where Exxon will drill a high potential exploratory well. As of this morning at ~1000 GMT, the drillship was headed north at 7.7 kts (see map).
Posted in Canada, drilling, Offshore Energy - General, tagged Bay Bulls, exploratory drilling, Exxon, Orphan basin, Stena Drillmax on May 9, 2024| Leave a Comment »
According to rig locator data, the DrillMAX is moored in Bay Bulls, Newfoundland in preparation for transit to the site of Exxon’s high potential exploratory well in the Orphan Basin.
Posted in CCS, climate, energy policy, Gulf of Mexico, Regulation, tagged carbon disposal, CCS, Energy Intelligence, Exxon, infrastructure bill on May 8, 2024| Leave a Comment »
“Exxon Mobil has led a persistent and apparently successful lobbying campaign behind the scenes to push the US federal government to adopt rules that would allow the conversion of existing oil and gas leases in the Gulf of Mexico into offshore carbon capture and storage (CCS) acreage, according to documents seen by Energy Intelligence and numerous interviews with industry players.” Energy Intelligence
The Energy Intelligence article documents the ongoing carbon disposal lobbying by Exxon and others. Those meetings are okay prior to publishing a Notice of Proposed Rulemaking (NPRM) for public comment. However, the article implies that the next step is a final rule: “Whether or not Exxon succeeds will become fully clear when the US issues final rules guiding CCS leasing, expected sometime this year.”
A final rule this year is unlikely, because an NPRM has to be published first for public comment. The only exception would be if BOEM was able to establish “good cause” criteria for a direct final or interim final rule in accordance with the Administrative Procedures Act. Such an attempt at corner cutting seems unlikely, especially in an election year when all regulatory actions are subject to additional scrutiny.
Exxon must have thought they had a clear path forward after 11th hour additions to the “Infrastructure Bill” authorized carbon disposal on the OCS, exempted such disposal from the Ocean Dumping Act, and provided $billions for CCS projects. Keep in mind that the Infrastructure Bill was signed just two days before OCS Oil and Gas Lease Sale 257, at which Exxon acquired 94 leases for carbon disposal purposes.
What the Infrastructure Bill did not provide is authority to acquire carbon disposal leases at an oil and gas lease sale. Now the lobbyists are apparently scrambling to overcome that obstacle administratively.
BOEM, which arguably made a mistake in accepting irregular carbon disposal bids at the last 3 oil and gas sales, should not amplify Exxon’s unfair advantage (also Repsol at Sale 261) by allowing the conversion of these leases (map below). This is not a small matter given that Exxon has publicly projected that carbon disposal is a $4 trillion market opportunity.
A single company or small group of companies should not be dictating the path forward for the Gulf of Mexico. Super-major Exxon is a relative minnow in the Gulf of Mexico OCS. They have not drilled an exploratory well since 2018, not drilled a development well since 2019, operate only one platform (Hoover, installed in 2000), ranked 11th in 2023 oil production, and ranked 29th in 2023 gas production.
Lastly, and most importantly, public comment on the myriad of technical, financial, and policy issues associated with GoM carbon disposal is imperative. That input is essential before final regulations are promulgated.
Posted in Guyana, Offshore Energy - General, tagged Chevron, CNOOC, Exxon, Hess, Q1 oil production, Stabroek on May 3, 2024| Leave a Comment »
Chevron wants in, Exxon and China want bigger pieces, and Venezuela claims it all.
Exxon CEO Darren Woods sums it up:“I believe Guyana will go down as one of the most successful deepwater developments in the history of the industry.”
Nice production growth and this is just the beginning:
Bud's Offshore Energy (BOE) 