Colette Hirstius, currently Executive Vice President, Gulf of America, will take on the responsibility of President, Shell USA, in addition to her current role as Executive Vice President, Gulf of America, effective August 1, 2025.
In a city where high school ties tend to be strong and enduring, Ms. Hirstius is a graduate of St. Mary’s Dominican HS. Supreme Court Justice Amy Coney Barrett, whose father was an attorney for Shell, and my former Minerals Management Service colleague Kathy Swiler, are also St. Mary’s Dominican graduates.
Ms. Hirstius stayed in New Orleans as an undergraduate, receiving a B.S. degree in geology from Tulane.
Shell is the no. 1 oil and gas producer in the Gulf of America. In 2024, the company produced 171.7 million bbls of oil (26.2% of the GoA total) and 167.4 bcf of gas (24.4% of the GoA total).
Farther in the past, there were noteworthy failures (below) like Mobil’s acquisition of Montgomery Ward, Exxon’s investment in Reliance Electric, and Gulf’s real estate ventures.
Mobil – Montgomery WardExxon – Reliance ElectricGulf Land – Reston
Finally, don’t expect the carbon sequestration boom that some are forecasting. As wind investors have discovered, industries dependent on mandates and subsidies are risky.
Not much unites climate activists and skeptics, but they are largely aligned in their opposition to carbon sequestration (euphemism for disposal), as are fiscal conservatives. The word chutzpah comes to mind when companies seek public funds to dispose of emissions associated with the combustion of their products.
199 oil and gas leases were wrongfully acquired at Sales 257, 259, and 261 with the intent of developing these leases for carbon disposal purposes. Repsol was the sole bidder at Sale 261 for 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
The 2024 Gulf of America Safety Compliance Leaders are ranked below according to the number of incidents of non-compliance (INCs) per facility inspection. To be ranked, a company must:
operate at least 2 production platforms
have drilled at least 2 wells during the year
average <1 INC for every 3 facility inspections (0.33 INCs/facility inspection)
average <1 INC for every 10 inspections (0.1 INCs/inspection). Note that each facility inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc). In 2024, there were on average 3.4 inspections for every facility inspection.
District investigation reports are more timely and provide additional insights into safety performance. Impressively, Hess had no incidents warranting a District investigation, and was the only ranked operator with this distinction. I will comment more on the District reports in a future post
Chevron’s 2024 compliance record was among the best in the history of the US OCS oil and gas program. Was it the absolute best? Were it not for the FSI INC at a Unocal (Chevron) facility, one could unequivocally assert that it was. Further evaluation of that INC would be helpful. However, details on specific INCs are not publicly available, so the significance of that violation cannot be evaluated.
operator
W
CSI
FSI
total INCs
facility insp
INCs/ fac insp
insp
INCs/ insp
Chevron
1
0
1
2
117
0.02
311
0.006
BP
2
3
0
5
93
0.05
251
0.02
Anadarko
8
9
1
18
143
0.13
344
0.05
Hess
2
3
0
5
26
0.19
67
0.07
Walter
6
4
1
11
50
0.22
161
0.07
Shell
23
17
5
45
199
0.23
495
0.09
Cantium
24
8
0
32
123
0.26
537
0.06
Murphy
8
9
1
18
70
0.26
191
0.09
Arena
29
28
3
60
189
0.32
803
0.07
Gulf-wide
957
398
109
1464
3133
0.47
10664
0.14
Notes: Numbers are from published BSEE data; INC=incident of non-compliance; W=warning INC; CSI=component shut-in INC; FSI=facility shut-in INC; INCs/fac insp= INCs issued per facility inspection; each facility-inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc), in 2024, there were on average 3.4 inspections for every facility inspection
Not meeting the production facilities requirement to be ranked among the top performers, but nonetheless noteworthy, was the compliance record of BOE Exploration & Production (no relation to the BOE blog 😀). See their impressive inspection results below:
W
CSI
FSI
total INCs
facility insp
INCs/ fac insp
insp
INCs/ insp
BOE
1
1
0
2
21
0.1
48
0.04
Transparency on inspections and incidents is important for a program that is dependent on public confidence. For independent observers to better evaluate industry-wide and company-specific safety performance, publication of the following information should be considered:
quarterly updates of the incident tables, as was once common practice
posting of violation summaries for inspections resulting in the issuance of one or more INCs
In the case of the Rosebank and Jackdaw fields, Lord Ericht ruled that the environmental assessment must take into account the climate effect of downstream emissions resulting from the consumption of oil and gas produced at those fields.
The Sale 257 decision was even more extreme in that Judge Contreras ruled that BOEM failed to consider the “positive” effect that higher prices (which might result from lower US offshore production) would have in reducing worldwide demand and the associated GHG emissions.
Regardless of one’s opinion on the extent to which GHGs affect the climate, halting UK and US projects will have virtually no effect on international oil and gas demand. That demand will be satisfied by other suppliers who will reap the economic benefits.
Presumably, revised environmental assessments, will allow the previously approved UK projects, for which some facilities have already been constructed and installed, to go forward. The UK government has been considering how to calculate downstream emissions. The model will no doubt yield outcomes that are highly uncertain.
In the meantime, the UK sector of the North Sea, unlike its Norwegian counterpart, continues to flounder.
“We need more of it because even the most ardent supporters of renewable energy, the most vocal proponents of net zero, quietly admit oil and, especially, gas will be needed for a couple of decades at least. That obvious truth, that inarguable necessity, is not, apparently, enough for ministers to encourage UK production, however, or temper their rhetoric around renewables.“
“Allowing our rigs and refineries to power down and relying on other countries to keep the lights on still seems a little, well, counter-intuitive. We will import oil and gas but not produce it while happily exporting contracts, skills and jobs overseas? The practical impact of Labour’s refusal to grant new exploration licences in the North Sea might remain unclear but the message it sent was absolutely crystal.“
estimated peak production:100,000 barrels of oil equivalent per day (boe/d)
water depth – 8600 ft
200 miles south of Houston
estimated recoverable resource: 480 million boe.
first oil only 7.5 years after discovery (includes COVID delay)
Vito clone: replicates 99% of the hull design and 80% of the topsides from Vito.
high efficiency gas turbines and compression systems
~ 30% lower greenhouse gas (GHG) intensity over its life cycle than the already efficient levels being achieved at Vito. (Why the push to run electric cables from shore to North Sea platforms with ample gas production?)
This is all good, but what is next? Will technological advances once again sustain GoM production? The short answer appears to be yes!
The efficiencies achieved with the simpler platform designs combined with the high pressure (>15,000 psi) technology developed over the past 2 decades will facilitate production from the highly prospective Paleogene (Wilcox) deepwater fans. (For those interested in learning more about the geology, see the excellent presentation by Dr. Mike Sweet, Univ. of Texas, that is embedded in this post.)
Four of the five simpler, safer, greener deepwater platforms featured on this blog are now producing. The 5th platform (Whale) is on location and scheduled to begin production later this year.
platform
operator
first production
King’s Quay
Murphy
April 2022
Vito
Shell
Feb 2023
Argos
bp
April 2023
Anchor
Chevron
Aug 2024
Whale
Shell
late 2024
These platforms are in 4000 to 8600′ of water, are expected to reach peak production rates of 100-150,000 boe/day, and have favorable emissions characteristics on a per barrel basis.
This is all good, but what is next? Will technological advances once again sustain GoM production? The short answer appears to be yes!
The efficiencies achieved with the simpler platform designs combined with the high pressure (>15,000 psi) technology developed over the past 2 decades will facilitate production from the highly prospective Paleogene (Wilcox) deepwater fans. (For those interested in learning more about the geology, see the excellent presentation by Dr. Mike Sweet, Univ. of Texas, that is embedded below.)
Chevron’s Anchor is the first deepwater, high-pressure development. Three similar deepwater hub platforms (table below) will begin production over the next 5 years. These host platforms will also facilitate additional production from nearby fields. Each will have production capacities of approximately 100,000 boe/day. Note the long lead times in achieving first production given the technological issues that had to be evaluated and addressed.
platform
operator
discovery date
first production
Kaskida
bp
2006
2029
Sparta
Shell
2012
2028
Shenandoah
Beacon
2009
2025
Wood Mackenzie sees these high pressure projects as the key to sustaining GoM production rates. Their projections for 2024 and 2025 seem optimistic based on 2024 YTD data, which adds to the importance of the projected new production.
Some of us remember the Brent Spar saga (1995). The subsequent Brent field decommissioning activities have been less controversial, including the removal of the Brent C topsides on July 9. The Allseas single lift technology is most impressive. Check out the video!
Canadian and US approvals were granted and CNOOC acquired Nexen (Canada) in 2013.
Nexen’s Guyana interest was not mentioned in the press announcement, and appears to have been a rather minor consideration in the acquisition.
So, an apparent afterthought in CNOOC’s takeover of Nexen has (1) proven to be extremely profitable, (2) given the company and the Chinese government leverage in the Exxon-Chevron supermajor dispute, and (3) opened the door for CNOOC to increase their interest in the massive Stabroek field.
The Honor Roll companies for 2023 (listed alphabetically) are Anadarko, bp, Cantium, Chevron, Eni, Hess, LLOG, Murphy, QuarterNorth, and Shell.
BOE Honor Roll criteria:
Must average <0.3 incidents of noncompliance (INCs) per facility-inspection.
Must average <0.1 INCs per inspection-type. (Note that each facility-inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc). On average, each facility-inspection included 3.3 types of inspections in 2023. Here is a list of the types of inspections that may be performed.
Must operate at least 3 production platforms and have drilled at least one well (i.e. you need operational activity to demonstrate compliance and safety achievement).
May not have a disqualifying event (e.g. fatal or life-threatening incident, significant fire, major oil spill). Due to the extreme lag in updates to BSEE’s incident tables, district investigations and media reports are used to make this determination.
platforms
2023 well starts
2023 (10 mos.) oil prod. (million bbls)
2023 (10 mos.) gas prod. (bcf)
Anadarko
10
11
66
60
BP
7
11
105
65
Cantium
96
10
5
6
Chevron
8
10
67
39
Eni
3
1
6
13
Hess
3
3
18
36
LLOG
10
7
25
35
Murphy
7
4
42
57
QuarterNorth
9
1
13
23
Shell
20
20
141
140
Also noteworthy:
Zero shut-in violations for Anadarko in 2023
<1 INC for every 10 facility inspections for Anadarko, Chevron, and Murphy
<1 INC for every 20 inspections (all types) for Anadarko, bp, Chevron, LLOG, Murphy, and QuarterNorth
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!
Bud's Offshore Energy (BOE) 