Current structure count:1438 (Per BSEE’s platform structures online query, the number of non-removed structures is 1554. The reason for the discrepancy is unclear; perhaps the dashboard number is more current.)
Structures with decom application submittal: 291
Total structures on terminated leases: 318
Structures on terminated leases with decom application submittal: 196
Planned disposition of the 291 pending removals (25% of the structures to be reefed):
Karoon Energy, an Australian company, has entered the Gulf of Mexico in a big way by acquiring an interest in the Who Dat field (winner of BOE’s best field name award!) from LLOG. For more information on the acquisition, see Karoon’s slide at the end of this post. The full presentation is here.
To learn more about the cultural importance of ‘Who Dat,’ see the youtube clip below, or read this article. For more in-depth ‘Who dat’ history, this wiki page is quite good.
An excellent compliance and incident update by Jason Mathews is attached. BSEE’s focus on risk assessment, compliance and incident trends, high potential near-misses, medivac capabilities, hot work safety, lifting operations, and gas releases is encouraging. Good work by the folks in BSEE’s Gulf of Mexico Region.
Observations:
Zero 2023 occupational fatalities through Q3. Hoping this holds through the end of the year and beyond.
INCs/component are down but INCs/inspection are slightly higher. This may imply a relative increase in the inspection of high component deepwater facilities.
No. of hours worked is increasing; good sign for the offshore program.
Hand and finger injuries are driving up the injury count.
Well control incidents are stable at a low level.
Improved fire data help facilitate risk assessments
No YTD explosions
No. of collisions is down
10 YTD spills> 1 barrel (total volume not specified)
Some evidence of decline in lifting incidents in Q2 and Q3
Gas releases are up (aging facilities, decommissioning related?)
As a result of the order issued by the United States Court of Appeals for the Fifth Circuit on Nov. 14, 2023, the Bureau of Ocean Energy Management (BOEM) has scheduled Lease Sale 261 for Dec. 20, 2023.
The Gulf of Mexico oil and gas lease sale was originally scheduled for Sept. 27, 2023, and later scheduled for Nov. 8, 2023, in response to judicial orders.
Pursuant to direction from the Court, BOEM will include lease blocks that were previously excluded due to concerns regarding potential impacts to the Rice’s whale population in the Gulf of Mexico. BOEM will also remove portions of a related stipulation meant to address those potential impacts from the lease terms for any leases that may result from Lease Sale 261.
A Final Notice of Sale will be published in the Federal Register on Nov. 20, 2023, and will be available for public inspection on Nov. 17, 2023.
BOEM will live stream the opening of bids at 9 am CDT on Dec. 20, 2023. All terms and conditions of the lease sale are listed in the FNOS. For more information, go to: www.boem.gov/sale-261.
I take it that since the 5th Circuit stayed both the 9/21 and 9/25 orders, the mandate to hold the sale by 11/8 is also stayed. Ergo, it is assumed that the sale will be delayed pending a decision on the merits of the injunction. Oral arguments are scheduled for 11/13.
If the 5th Circuit’s decision facilitates timely resolution of the Rice’s whale deletions and stipulations, delaying the sale is probably the best outcome. Otherwise, the level of uncertainty would be unacceptable for many bidders.
“Stampede,” Gulf of Mexico: Hess 25% owner and operator, Chevron 25% owner
Most importantly, both companies have excellent safety and compliance records as evidenced by their Honor Roll achievements.
Hess is an attractive company with impressive assets. Were there other suitors?
Chevron is currently a partner on the Stampede, Esox, and Tubular Bells deepwater projects that are operated by Hess. There is thus an established deepwater development relationship.
The acquisition of Hess means that Exxon and Chevron will now be partners in Guyana. That should be interesting.
Chevron’s CEO Mike Wirth is quoted as saying “We’ve got too many CEOs per BOE, so consolidation is natural.” That comment seems a bit self-serving, but makes sense from the perspective of an acquiring CEO. Employees of the companies being acquired may have a somewhat different view.
In the Gulf of Mexico, will the combined company be greater than the sum of the parts in terms of lease acquisition, exploration, and development?
Will combining the companies limit the diversity of geological assessments and exploration strategies?
Consolidation affects participation in workshops and on committees engaged in assessing technology and developing standards. More limited participation in these activities, which are critical to offshore safety, was a justified concern of my former boss, the late Carolita Kallaur.
Add Hess to the list of important offshore operators that, for all intents and purposes, no longer exist. This list includes (among others): Amoco, Arco, Texaco, Getty, Gulf, Unocal, Sun, Anadarko, BHP, Mobil, Phillips (or Conoco), Noble Energy, Pennzoil, Kerr-McGee, and Newfield.
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.
The acquisition will increase their Permian resource to an estimated 16 billion barrels of oil equivalent.
Exxon’s Permian production volume will more than double to 1.3 million barrels of oil equivalent per day, and is expected to increase to approximately 2 MOEBD in 2027.
If Exxon believes the consumption of oil and gas is harmful to society, as suggested by their CO2 disposal plans, perhaps they should be curtailing their oil and gas production business rather than expanding it.
Deepwater Gulf of Mexico production, which Exxon has shunned, has much lower carbon intensity than Permian production, but Exxon’s sole GoM interest is CO2 disposal. Shouldn’t a company that is intent on reducing upstream GHG emissions be active in the leading offshore region in that regard, the region that is adjacent to their world headquarters?
Bud's Offshore Energy (BOE) 