General Interest —Quick Takes
Indian semi sinks off eastern Venezuela
A semisubmersible rig sank in the Caribbean off Venezuela's eastern coast, but the crew of nearly 100 was reported safe.
Aban Offshore, Chennai, said the Aban Pearl sank "following an incident" and that a decision was made to abandon the vessel. The Aban Pearl was built in 1977.
The drilling contractor identifies the rig as being a twin-hull, column-stabilized unit capable of drilling to 25,000 ft in 1,250 ft of water. The rig was working for state Petroleos de Venezuela SA in 160 m of water. It was assigned to Campo Dragon gas field, part of the Mariscal Sucre project.
Alas. lawmakers oppose review in ANWR update
The Arctic National Wildlife Refuge's 22-year-old comprehensive conservation plan needs to be updated, Alaska's congressional delegation conceded on May 4. That should not include further wilderness reviews since such designations can only be made by Congress, it continued in a letter submitted at a US Fish & Wildlife Service scoping hearing on the matter.
"The Fish & Wildlife Service's limited financial resources–and taxpayer dollars–should not be wasted on such an unproductive exercise," US Sens. Lisa Murkowski (R) and Mark Begich (D), and Rep. Don Young (R) said in their letter.
"Since the plan revision clearly will not decide this issue, we strongly urge you to take the wilderness review off the table as part of the CCP revision," they continued. "We believe this will save [FWS] considerable time and money and allow [ANWR] personnel to focus on other critical issues, such as managing increased visitor use and changing habitat conditions."
FWS said on Apr. 10 that the update, which normally occurs every 15 years for each federally designated wilderness area, would include a wilderness review. It expects to complete a new comprehensive conservation plan for ANWR by April 2012, starting with seven public meetings.
The three federal lawmakers also urged the US Department of the Interior agency to consider oil and gas exploration with directional drilling and other new technologies as part of the plan.
"As much as the advance of time may have changed habitat and wildlife management concerns, new technology can now facilitate both a better understanding of the oil and gas reserves within [ANWR's] 1002 area as well as enable more environmentally responsible development," they said.
"Directional drilling techniques would allow extraction of oil and gas from some of the 1002 area with no surface disturbance," said Murkowski, Begich, and Young. "We request you meaningfully consider both of these technological advances and their application in future planning for the 1002 area of ANWR."
FWS already has held public meetings in Alaska at Fort Yukon, Venetie, and Arctic Village in addition to Washington. It has three more schedules in Alaska on May 11 in Anchorage, May 13 in Fairbanks, and May 20 in Kaktovik.
BLM considers trade for acreage near Casper
The US Bureau of Land Management's Casper, Wyo., field office is considering a proposal to exchange about 3,500 acres of BLM-administered public land for 160 acres of private land owned by Howell Petroleum Corp.
BLM said the federally managed acreage is within the Salt Creek oil field in north-central Natrona County, where Howell, which Anadarko Petroleum Corp. acquired in 2002, has used enhanced recovery to increase production. Under the proposal, the US Department of the Interior agency would exchange this land for a parcel adjoining its environmental education area on Muddy Mountain south of Casper.
BLM would receive sand and gravel rights on the mountain property, while the state of Wyoming would retain all other mineral rights. The federal government would retain all mineral rights on public land within the Salt Creek field, BLM said.
"We realize there is a very large disparity in acreages under consideration," said Joy Meyer, BLM Casper field office manager, on May 7. "By law, land exchanges must be completed on an equal-value basis, so the market value of mountain property sharply affects the acreages involved."
Meyer said acquisition of the mountain property would provide additional public recreational access and afford opportunities to protect Muddy Mountain area natural resources. The Howell acreage is an undisturbed mountain area with a combination of forest, a spring-fed pond, streams with associated riparian areas, and sagebrush and grassland.
BLM's Casper field office has scheduled public meetings on the proposal on May 19 in Midwest, Wyo., and May 20 in Casper. Comments will be accepted at those meetings as well as until June 19 at the agency's Casper field office.
Shell seeks to sell most LPG retailing
Royal Dutch Shell PLC hopes to sell much of its LPG retail business as part of a strategy announced in March to lower downstream exposure (OGJ Online, Mar. 29, 2010).
The company said it is "in discussions with third parties as part of a review of ownership options for most of the company's LPG businesses." It called sale of the businesses "the preferred outcome of the review."
The review covers Shell Gas (LPG) units in France, Belgium, the Netherlands, Luxembourg, Denmark, Finland, Sweden, Norway, Hungary, Poland, the UK, Malaysia, Pakistan, Sri Lanka, the Philippines, Singapore, and Argentina. Also under discussion are Shell Gas (LPG) businesses working through Shell Oil Products Africa in Morocco, Tunisia, South Africa, and Botswana.
Excluded from the review are Shell Gas (LPG) units in Canada, Turkey, Brunei, Vietnam, Hong Kong, and Macau. The company has sold its LPG business in India and has confirmed it wants to sell its major shareholding in an LPG operation in Pakistan.
Shell plans to lower global refining capacity by 15% and retail operations by 35%.
Exploration & Development — Quick Takes
Marathon reports deepwater gulf discovery
Marathon Oil Corp. reported a discovery on the Flying Dutchman prospect on Green Canyon Block 511 in the Gulf of Mexico about 100 miles south of New Orleans.
The well, drilled in 3,700 ft of water, reached 30,000 ft TD. It encountered 100 ft of net hydrocarbon-bearing sands in an Upper Miocene reservoir. A Marathon spokeswoman declined to elaborate on the type of hydrocarbons.
The results of Flying Dutchman will be evaluated along with additional potential drilling on GC Block 511 to determine overall commerciality.
In the second quarter, Marathon expects to expense $45 million pretax related to a lower zone that was unsuccessful. Marathon holds 63% working interest and operates the block as well as being responsible for 100% of drilling costs.
Murphy discovers oil in De Soto gas area
Murphy Oil Corp. said its DC4 well in De Soto Canyon Block 4 cut 156 ft of oil pay in three zones enroute to a total depth of 13,195 ft.
The well offsets Murphy's 2009 gas discovery at Dalmation. Dalmation, with a bottomhole location in Block 48, found 120 ft measured depth of gas pay in nearly 5,900 ft of water.
Murphy is Block 4 operator with 64.2% working interest.
Bridge-Paramax testing finds in Idaho
Calgary independents Bridge Resources Corp. and Paramax Resources Ltd. plan a multiwell development program starting in the third quarter to achieve early production from gas discoveries near Boise in western Idaho.
The companies' five-well exploratory drilling program has resulted in two confirmed discoveries and two more possible discoveries pending tests, said Bridge Resources.
"The drilling results were at the top end of expectations, comprising two discoveries confirmed by production testing, the M.L. Investments 1-10 and Espino 1-2, and two potential discoveries pending production test confirmation, the Island Capitol 1-19 and State 1-17," Bridge Resources said.
The Espino 1-2 well has been perforated in Pliocene sands below 1,600 ft and has cleaned up to start producing water-free gas. Flow rate tests will be conducted over several days.
The completion rig will move from the Espino well to next test comparable shallow gas sands in the State well located 7 km southwest. The two wells straddle the interstate gas pipeline and provide the earliest production opportunity.
The companies are preparing to shoot detailed seismic over the structures tested by the M.L. Investments and Island Capitol wells prior to development drilling.
The fifth well, Schwartz 1-10, was a test of a different trap type in a more remote part of the basin. Gas shows while drilling were deemed noncommercial, and the well has been abandoned.
ConocoPhillips to test Kronos-1
A joint venture of ConocoPhillips and Karoon Gas Australia Ltd. discovered pay sands with interpreted gas content and good reservoir parameters in the Kronos-1 wildcat in the Browse basin permit WA-398-P off Western Australia.
The latest discovery is about 15 km from the JV's 2009 Poseidon gas discovery in adjacent permit WA-315-P to the north. Both finds are about 480 km north of Broome on trend with the Woodside Petroleum group's Torosa gas-condensate field and north-northwest of the Inpex Corp. group's Ichthys gas-condensate field.
ConocoPhillips, operator with 60% interest, plans to production test the Kronos discovery following completion of coring and a full suite of wireline logs, including pressure measurements in the well. The petrophysical interpretation suggested a potential gas discovery.
Kronos-1 is on a horst feature in the southwest of the greater Poseidon trend.
The well was drilled by Transocean Inc.'s Transocean Legend semisubmersible rig to 5,329 m TD. Workers are installing a liner for the production test, which is expected to take as long as 20 days. Although untested due to mechanical problems when found last year, Poseidon is thought to contain 3-15 tcf of gas.
Drilling & Production – Quick Takes
Beach's Brownlow gas field on stream
Beach Energy Ltd., Adelaide, and its Sydney-based partner Drillsearch Energy Ltd. have brought on stream their Brownlow gas-condensate field in the Cooper basin of South Australia.
The field, discovered last year in permit PEL 106B, is currently flowing at 18 MMcfd of gas and 120 b/d of condensate from one well on extended production test.
Beach farmed into the permit and took operatorship of the Brownlow-1 exploration well as part of its obligations to earn a 50% interest.
The well confirmed gas pay in a 7-m thick sand in the Permian-age Patchawarra formation.
The extended production test is aimed at confirming the overall potential gas resources within the discovery, along with the quality of the reservoir sands and the long-term deliverability of the field.
Brownlow lies about 55 km northwest of Moomba and in close proximity to previous wet gas fields Raven and Middleton.
Iraq's SOC seeks bids for Iraq export facilities
Iraq's state-owned South Oil Co. (SOC), aiming to boost the country's export capacity, invited international contractors to submit expressions of interest by May 5 for an offshore crude oil export facility reconstruction project at the port of Basra on the Persian Gulf.
"This is part of an extensive plan to raise the export capacity from Basra ports to more than 4 million b/d in 4 years, up from 1.8 million b/d now," said an SOC spokesperson. The project is to be financed by a loan from the Japan International Cooperation Agency.
The upgrade is to include construction of a 10-km, 48-in. onshore pipeline; a 60-km, 48-in. offshore pipeline; and installation of valve stations at the Basra and Khor al-Amaya oil terminals.
The project also includes installation of a single-point mooring buoy with a pipeline end manifold near the Basra terminal, as well as construction of tie-in branch pipelines, composite cables, and auxiliary facilities.
Analyst BMI expects this most recent tender announcement "will be the first of many as the country seeks to repair, upgrade, and expand its export infrastructure."
The announcement coincided with reports that oil exports from the Basra terminal fell to 960,000 b/d on Apr. 27 from 1.512 million b/d on Apr. 26, due to low quantities of crude in storage.
A shipping source said the volume of crude in the main storage tanks decreased due to problems in the pumping process but did not elaborate.
The decline followed an earlier report that, due to a combination of sabotage and bad weather, Iraq's crude exports for the first 25 days of April stood at 1.7 million b/d, compared with 1.84 million b/d in March.
"We have had several power cuts and bad weather in the southern oil ports, and that has reduced our normal exports," said one Iraqi official.
In the north, Iraq's oil exports for Apr. 1-25 averaged 300,000 b/d after saboteurs destroyed part of the northern export pipeline and created a 4-day stoppage in the flow of oil, normally around 450,000 b/d, from the Kirkuk oil fields to the Turkish export terminal in Ceyhan (OGJ Online, Apr. 23, 2010).
However, on Apr. 26, Iraq's Oil Ministry said it resumed crude exports through Ceyhan after repairing the key northern pipeline. A spokesman said the damage was repaired in "record time" and that oil would be pumped at full pressure to make up for the 4-day interruption in service.
Processing – Quick Takes
Shell unveils Singapore petrochemical complex
Royal Dutch Shell PLC announced the successful completion of the Shell Eastern Petrochemicals Complex (SEPC) project in Singapore, underlining the firm's aim of remaining a leading player in the region's expanding petrochemicals market.
"Our ambition is to grow in the dynamic Asian petrochemicals market, where we are already a leading player," said Shell Chief Executive Officer Peter Voser, adding that the project "clearly demonstrates Shell's strategy to focus on growth markets and to integrate oil and chemicals manufacturing to gain efficiencies."
Shell said it designed the new facilities to maximize the benefits of locating refining and petrochemicals production within a single manufacturing hub on Bukom and Jurong islands, just off the coast of Singapore.
According to Shell, Jurong Island is a major petrochemical zone that provides opportunities for further integration with current and potential customers, as well as in Shell's own operations. The firm said that each of its new chemical production units started up as planned. They include a world-scale ethylene cracker, which started up in March, and one of the world's largest monoethylene glycol plants, which has been producing since November 2009.
The project also included modifications to the Shell Pulau Bukom refinery, enabling it to process a wider range of crudes to supply feedstock to the cracker. A new ethylene jetty and cryogenic terminal enable the import and export of ethylene.
Shell said the additional capacity brought on stream by the SEPC project includes: ethylene, 800,000 tonnes/year; monoethylene glycol, 750,000 tpy; propylene, 450,000 tpy; benzene, 230,000 tpy; and butadiene, 155,000 tpy.
SEPC is Shell's second major petrochemicals project in Asia in 4 years. In 2006 China National Offshore Oil Corp. and Shell Petrochemicals Co. Ltd. started up the 2.3 million tpy Nanhai 50-50 joint venture complex in China's Guangdong province.
In July 2009, reports said the Nanhai venture planned to expand its refinery near Huizhou in southern China by 20% by mid-2010, since demand for its products is on the rise.
CNOOC and Shell Petrochemicals said the expansion would add 160,000 tonnes of ethylene to the plant's existing capacity of 800,000 tonnes and would require a total investment of $147 million.
CenterPoint to expand in Haynesville
CenterPoint Energy Field Services Inc., Houston, will add more gathering and treating for Haynesville shale gas production being developed by subsidiaries of Encana and Shell.
The 250-MMcfd expansion on the company's Magnolia system, announced last week, along with 750 MMcfd announced in September 2009 and currently under construction, will add 1 bcfd covered under long-term agreements executed in September 2009 between CenterPoint Field Services and those subsidiaries.
The agreements are with Encana Oil & Gas (USA) Inc., an indirect, wholly-owned subsidiary of Encana Corp., and SWEPI LP, an indirect wholly-owned subsidiary of Royal Dutch Shell PLC.
CenterPoint Field Services' announcement cited 200 MMcfd and its 2009 announcement 700 MMcfd. Responding to questions from OGJ, however, CenterPoint Field Services' Kerri Selsor, vice-president of engineering and construction, revised those target volumes to actual volumes of 250 MMcfd and 750 MMcfd.
The company's total gathering and treating for DeSota and Red River parishes will reach 1.2 bcfd when all expansions are in service by mid-2011.
CenterPoint estimates the cost for the 250 MMcfd expansion will be $50-$70 million and includes 1,000 gpm of amine treating at the company's Magnolia plant, an additional 5 miles looping, and about 8,000 hp at its Hall Summit compressor station, all on the east side of the Red River.
As part of expansion announced in September 2009, CenterPoint Field Services is installing about 25 miles of pipe east of the Red River and another 30 miles on the west side, also in Red River Parish.
The work is also installing about 3,000 gpm of additional amine treating for the 750 MMcfd incremental volumes: 2,000 gpm at the Magnolia plant east of the river and 1,000 gpm at CenterPoint Field Services Clear Lake plant west of the river. All the work is in Red River parish.
And the project announced last year is installing about 30,000 hp of additional compression, 20,000 hp at the Hall Summit station east of the river, and 10,000 hp at the Clear Lake plant on the west side.
CenterPoint's latest announcement said construction of the 750 MMcfd is running ahead of schedule with "substantial volumes flowing" and will be in service be yearend.
Transportation – Quick Takes
Dolphin Energy expands gas pipeline
Abu Dhabi's privately held Dolphin Energy has expanded its natural gas pipeline system in the United Arab Emirates after completing its 128-km, 48-in. Taweelah-Fujairah Pipeline (TFP).
"By completing this important milestone, Dolphin Energy demonstrated its commitment to support its customers," said Ibrahim Ahmed Al Ansari, the firm's general manager.
The new construction is the second of three milestones for the project, which has a further 116 km of pipelay scheduled for completion by this year's third quarter. The complete line will extend 244 km.
The line "will help boost industrial development and economic growth in the east coast of our country," said Ibrahim, who noted that the firm supplies 30% of the UAE's energy requirements.
Dolphin's customers include Abu Dhabi Water & Electricity Co., Dubai Supply Authority, and Oman Oil Co., which have signed 25-year gas purchase and supply agreements.
The firm's Dolphin Project involves the production and processing of gas from Qatar's North field, along with transport of the dry gas by an underwater export pipeline to the UAE from Qatar.
Last November, it was reported that Abu Dhabi currently imports 740 MMscfd of gas from Qatar via the Dolphin line and likely would buy more if the Qatari gas moratorium were lifted, according to FACTS Global Energy, which said the Dolphin line has extra capacity of 1.2 bscfd.
"If the Qatari gas moratorium is lifted, the UAE would be an easy source of incremental exports if the price is right. Given that Abu Dhabi is developing high-cost domestic gas and considering using oil for power generation, there is likely an increasing willingness to pay higher gas prices," FGE said (OGJ, Nov. 16, 2009).
Dolphin is owned 51% by Mubadala Development Co. on behalf of the Government of Abu Dhabi and 24.5% each by Total SA and Occidental Petroleum Corp.
French, Belgian lawmakers okay gas connector
French and Belgian energy regulators have approved a new interconnection point that will enable bidirectional flows of natural gas between the two European neighbors.
France's CRE and Belgium's CREG approved the interconnection point at the Belgian border town of Veurne.
Currently, France receives gas from Belgium, which is reselling supplies produced by Dutch fields or imported as LNG at the Zeebrugge LNG terminal.
Following CRE and CREG approval, however, the Veurne interconnector will connect nonodorized gas coming from France with the Belgian grid, allowing 8.4-11.3 billion cu m (bcm) of imports beginning in late 2014 or early 2015.
The Franpipe from Norway currently terminates at Dunkirk in France, while a new 10-13 bcm capacity LNG terminal owned by EDF is also due to come on stream in the area in 2014.
EDF received an operating permit for its LNG terminal project in Dunkirk from the local authorities in April. Within days of the permit, Total SA reserved regasification capacity in the planned terminal and also will acquire a 10% stake in the operating company, Dunkirk LNG. With its regasification capacity of 10-13 bcm/year, the new Dunkirk LNG terminal is expected to meet more than 20% of French gas demand. Dunkirk LNG is expected to makes its final investment decision this summer.
According to analyst BMI, the new interconnector at Veurne will provide "a potential outlet for utility EDF's planned Dunkirk LNG terminal in northern France and forms part of broader moves towards closer European energy integration."
Santos to delay CSG-LNG project decision
Santos Ltd., Adelaide, may defer for 6 months its decision on whether to go ahead with its Gladstone, Queensland, coal seam gas-LNG project after the Australian government announced a resource "super tax" on the mining industry.
Speaking after Santos' annual meeting, Chief Executive David Knox said the final investment decision on the project would be pushed back. He said the new tax is an additional risk that needs to be evaluated prior to a decision.
Knox was referring to the government's plan to hit resources profits with a 40% tax, which sent shock waves through the CSG industry. Shares in CSG companies fell sharply last week following the government announcement.
Despite delaying the go-ahead decision, Knox said there has been no revision of the anticipated 2014 start-up date for the project to pipe CSG from the Surat-Bowen basin to a proposed LNG plant at Gladstone.
The Santos-Petronas joint venture plans a 1-train, 3.6 million tonne/year plant. Santos has a 60% interest and Petronas has 40%. There is also a binding agreement with Petronas to purchase 2 million tpy of LNG from the project.
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