Posts Tagged ‘offshore oil and gas’

Did you miss the boat on Guyana?😉 This may be a good opportunity. The risk-reward ratio looks pretty favorable.

Per the Energy Advisors Group:

  • Gaffney, Cline & Associates have audited the drill-ready target prospect with mean resources of 400 MMbbls
  • Standalone success on hitting the mean target is expected to achieve NPV10 of $2.5 billion at $60 oil
  • The test well cost is estimated to be $30 million and provides exposure to own a material interest in the entire license
  • The initial target is a carbonate platform and shows strong evidence of reservoir trap and intact seal, Cretaceous kitchen source and live oil seeps
  • Recent advanced seismic relative dispersion technical work provides further evidence of reservoir porosity and permeability, the presence of a seal, and additional reservoir potential
  • The License, formerly owned by Tullow, is well-supported by the Jamaican government with attractive fiscal terms

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Good read.

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While it’s highly unlikely that wind turbine siting activities are responsible for the alarming number of whale deaths, some of the vociferous wind industry defenders would have been among the first to point the finger at oil and gas operations if there were any in the US Atlantic.

Some quotes from a recent USA Today article followed by BOE comments:

It’s just a cynical disinformation campaign,” said Greenpeace’s oceans director John Hocevar. “It doesn’t seem to worry them that it’s not based in any kind of evidence.” (Comment: World class chutzpah on the part of Greenpeace, the master of disinformation.)

Gib Brogan, a campaign director with Oceana, an international ocean advocacy group, said those opposed to wind power are using a spate of whale deaths in the area as an opportunity. (Comment: Does Oceana suddenly find this type of opportunism to be shocking?)

Groups opposed to clean energy projects spread baseless misinformation that has been debunked by scientists and experts,” said JC Sandberg, chief advocacy officer with the American Clean Power Association, a renewable energy trade group. (Comments: Use of the term “clean energy” is clever advocacy that serves to discredit other forms of energy. All energy sources have pros and cons, environmentally and otherwise. Wind and solar have significant visual, space preemption, navigation, wildlife risk, and intermittency issues, and are heavily dependent on subsidies and mandates. When all issues are considered, one could argue, as we have, that offshore gas, particularly nonassociated gas, is perhaps the environmentally preferred energy alternative.)

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Liz is an experienced attorney and leader in clean energy, climate change, and environmental law and policy. A member of the Biden-Harris administration since January 20, 2021, Liz has served as Senior Counselor to Secretary Haaland with an emphasis on water policy and climate change resilience. In this role, Liz also served as Chair of the Indian Water Rights Working Group, which manages, negotiates and implements settlements of water rights claims.

Prior to joining the Administration, Liz was Deputy Director of the non-partisan State Energy & Environmental Impact Center at NYU School of Law, which supports state Attorneys General addressing clean energy, climate, and environmental initiatives of regional and national importance. President Biden is the third President under which Liz has served at Interior, having worked for both the Clinton and Obama administrations. Under Secretaries Ken Salazar and Sally Jewell, Liz served as Interior’s Associate Deputy Secretary as well as Principal Deputy Assistant Secretary in the Office of Policy, Management and Budget. She was a key architect of the Obama Administration’s work to create a new offshore wind industry and leasing program.


Congratulations to Ms. Klein on being appointed to lead the Bureau of Ocean Energy Management. In addition to her commendable support for offshore wind energy, I trust that she appreciates the national importance of the OCS oil and gas program and the need for regular lease sales.

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“Mom” (US govt) strongly and openly favors one child (offshore wind) over the other (offshore oil and gas). As a result, beneficial family synergy is not realized, and neither “child” reaches her full potential.

The wind program was intended to complement the oil and gas program, not replace it.

These articles highlight some of the challenges facing offshore wind:

  • WSJ: Soaring Costs Threaten U.S. Offshore-Wind Buildout
  • Bloomberg: US Ignored Own Scientists’ Warning in Backing Atlantic Wind Farm
  • NJ.com: Offshore wind is on N.J.’s horizon but activists worry of impact to whales, economy, the view

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Operating companies (listed alphabetically): Arena, Anadarko (Oxy), BHP, bp, Cantium, Chevron, Hess, Murphy, Shell, and Walter


  • 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.


  • 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.

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WASHINGTON (May 19, 2022) — During testimony before the U.S Senate Committee on Energy and Natural Resources today, Secretary of the Interior Deb Haaland confirmed that, despite delays in implementation from the previous Administration, the Interior Department will release the Proposed Program – the next step in the five-year offshore energy planning process – by June 30, 2022, which is the expiration of the current program. A Proposed Program is not a decision to issue specific leases or to authorize any drilling or development.


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There won’t be a deal without significant energy production provisions and Manchin is on the record regarding the need for action on offshore oil and gas leasing. We’ll see what happens.

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500 days (and counting) since the last US offshore oil and gas lease sale. Abbreviated chronology:

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In addition to the obvious concerns about depleting the strategic petroleum reserve, further mortgaging our economic future, and increasing national security risks, the directive to withdrawal 1 million BOPD from the Strategic Petroleum Reserve for 6 months raises a few comments specific to US offshore production:

  • The 1 million BOPD withdrawal is equivalent to ~60% of the daily production from the entire Gulf of Mexico offshore sector. How will this massive 6-month withdrawal will effect regional markets and logistics?
  • Will the Dept. of Energy have to assess the GHG effects associated with their withdrawal of oil from the SPR? More specifically, will DOE be required to assess the increase in GHG emissions as a result of the increased foreign oil consumption that will result from the reduction in oil prices? This is what Judge Contreras ordered BOEM to do when he vacated Gulf of Mexico sale 257.
  • If it’s okay to produce and consume oil from the SPR facilities (mapped below), why is new leasing and exploration being constrained in the adjacent Gulf of Mexico?

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