Oil & Gas News

Proposal would strengthen oversight capacity for offshore oil and gas development under the President's all-of-the-above energy strategy

BSSEPresident Obama's fiscal year 2016 budget request for the Bureau of Safety and Environmental Enforcement (BSEE) is $204.7 million, providing robust support that will enable BSEE to keep pace with industry activity and the technology developments that are helping to drive deepwater oil and gas development on the U.S. Outer Continental Shelf.

The Administration's proposal sustains funding increases received in previous years and provides critically needed resources to further strengthen BSEE's regulatory and oversight capabilities for OCS oil and gas development, as the Administration works to responsibly expand domestic energy production through the President's all-of-the-above energy strategy.

"The President's 2016 request fully reflects the Administration's continued emphasis by ensuring that development of the Nation's vast offshore energy resources is conducted in a safe and environmentally responsible manner," said BSEE Director Brian Salerno. "Funds will be used to recruit expert engineers, scientists, inspectors and oil spill prevention specialists to support the development of risk-based approaches to oversight and compliance on the Outer Continental Shelf."

By the end of 2014, there were 69 deepwater rigs and non-rig units working in the Gulf of Mexico, up from 40 at the start of the year. The Energy Information Administration projects offshore production will continue to grow through 2040, as the pace of development activity quickens and new, large development projects, predominantly in the deepwater and ultra-deepwater areas of the Gulf of Mexico, are brought into production.

The 2016 budget will continue to build a robust culture of safety, with a strong focus on risk reduction. The Bureau will bolster its capacity for analyzing data gained through incident reporting requirements, near-miss reporting, and real-time monitoring. The Bureau will also continue to work with industry to better understand their safety processes, so that BSEE can mitigate and reduce risk. Through these initiatives and others, BSEE will continue to ensure that offshore development occurs in a safe and environmentally responsible way.

The 2016 budget request includes an increase of $1.7 million to establish the Engineering Technology Assessment Center to support the evaluation of new and emerging technologies and develop associated safety and oversight protocols. The increased funding will add greater depth and capacity to the BSEE, so that as industry continues to innovate and develop new capabilities, the BSEE will be able to keep pace. The Center will provide a Bureau-wide focal point for emerging technology evaluation. The FY 2016 request also better aligns inspection fees with BSEE's risk-based approach to inspections and compliance.

The 2016 request also includes a program increase of $750,000 for establishing the Renewable Energy Inspection Program. The funding will support the development of regulations, inspection guidelines, procedures, and criteria for inspections of offshore renewable energy facilities so that the appropriate regulatory structure will be in place to protect the safety of these facilities as well as the environment.

Anticipated fixed cost increases are funded at $1.4 million. BSEE's targeted funding increases are largely offset by anticipated savings from continued management efficiency efforts (-$2.4 million) and a reduction in offsetting collections funding (-$1.4 million), for a net funding increase of $46,000 over the 2015 enacted level.

The President's budget proposes $14.9 million for Oil Spill Research, equal to the 2015 enacted level. The Oil Spill Research program plays a pivotal role in initiating applied research used to support decision-making on methods and equipment to prevent or mitigate oil spills, which is a critical component of the offshore permitting process. The request will address key knowledge and technology gaps in oil spill response, focusing on deepwater and Arctic environments.

Additional details on the President's FY 2016 budget request are available online at http://www.doi.gov/budget/index.cfm.

Outer Continental Shelf mapRegionally-tailored plan continues balanced approach to leasing, development; Draft proposal would protect sensitive resources—makes available nearly 80% of estimated undiscovered technically recoverable oil and gas resources on US Outer Continental Shelf

Map: US outer contintal shelf

As part of President Obama's all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper announces the next step in the development of the nation's Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022.

The Draft Proposed Program (DPP) includes 14 potential lease sales in eight planning areas – 10 sales in the Gulf of Mexico, three off the coast of Alaska, and one in a portion of the Mid- and South Atlantic.

"The safe and responsible development of our nation's domestic energy resources is a key part of the President's efforts to support American jobs and reduce our dependence on foreign oil," said Secretary Jewell. "This is a balanced proposal that would make available nearly 80 percent of the undiscovered technically recoverable resources, while protecting areas that are simply too special to develop."

Release of the draft is an early step in a multi-year process to develop a final offshore leasing program for 2017-2022. Before the program is finalized, the public will continue to have multiple opportunities to provide input. Today's draft proposal was informed by more than 500,000 comments from a wide variety of stakeholders and states.

"The draft proposal prioritizes development in the Gulf of Mexico, which is rich in resources and has well-established infrastructure to support offshore oil and gas programs," added Jewell. "We continue to consider oil and gas exploration in the Arctic and propose for further consideration a new area in the Atlantic Ocean, and we are committed to gathering the necessary science and information to develop resources the right way and in the right places. We look forward to continuing to hear from the public as we work to finalize the proposal."

The OCS Lands Act requires the Secretary of the Interior to prepare a five-year program that includes a schedule of potential oil and gas lease sales and indicates the size, timing and location of proposed leasing activity as determined to best meet national energy needs, while addressing a range of economic, environmental and social considerations.

BOEM currently manages about 6,000 active OCS leases, covering more than 32 million acres – the vast majority in the Gulf of Mexico. In 2013, OCS oil and gas leases accounted for about 18 percent of domestic oil production and 5 percent of domestic natural gas production. This production generates billions of dollars in revenue for state and local governments and the U.S. taxpayer, while supporting hundreds of thousands of jobs.

A REGIONALLY TAILORED APPROACH
The draft proposal reflects a continuation of the regionally tailored leasing strategies employed in the current 2012-2017 Program that are specific to each planning area. The options in the draft proposal involve sales in offshore areas that have the highest oil and gas resource potential, highest industry interest, or are off the coasts of states that expressed a strong interest in potential energy exploration, while still considering potential environmental impacts, stakeholder concerns, and competing uses of ocean and coastal areas.

Gulf of Mexico:
The draft proposal includes ten sales in the Gulf of Mexico, one of the most productive basins in the world and where oil and gas infrastructure is well established. The draft proposal includes a new approach to lease sales in the Gulf of Mexico by proposing two annual lease sales in the Western, Central, and the portion of the Eastern Gulf of Mexico that is not subject to Congressional moratoria. This shifts from the traditional approach of one sale in the Western and a separate sale in the Central Gulf each year.

"This new approach will allow for BOEM to more effectively balance the sales while providing greater flexibility to industry to invest in the Gulf, particularly given the significant energy reforms recently adopted by the Mexican government," said BOEM Director Hopper.

Alaska:
In Alaska, the draft proposal continues to take a careful approach by utilizing the targeted leasing strategy set forth in the current program, which recognizes the substantial environmental, social and ecological concerns in the Arctic. The draft proposal proposes one sale each in the Chukchi Sea, Beaufort Sea, and Cook Inlet areas.

Also today, President Obama – using his authorities under the OCS Lands Act – designated portions of the Beaufort and Chukchi Seas as off limits from consideration for future oil and gas leasing in order to protect areas of critical importance to subsistence use by Alaska Natives, as well as for their unique and sensitive environmental resources. In December, President Obama used this same authority to place the waters of Bristol Bay off limits to oil and gas development, protecting an area known for its world-class fisheries and stunning beauty.

"We know the Arctic is an incredibly unique environment, so we're continuing to take a balanced and careful approach to development," said Jewell. "At the same time, the President is taking thoughtful action to protect areas that are critical to the needs of Alaska Natives and wildlife."

Four of the five areas withdrawn today by President Obama were previously excluded from leasing in the current 2012-2017 oil and gas program; three of the five were also excluded by the prior Administration. Those areas include the Barrow and Kaktovik whaling areas in the Beaufort Sea, and a 25-mile coastal buffer and subsistence areas in the Chukchi Sea. The withdrawal also includes the biologically rich Hanna Shoal area in the Chukchi Sea, which has not previously been excluded from leasing. Extensive scientific research has found this area to be of critical importance to many marine species, including Pacific walruses and bearded seals.

The proposed Alaska sales would be scheduled late in the program to provide additional opportunity to gather and evaluate information regarding environmental issues, subsistence use needs, infrastructure capabilities, and results from any exploration activity associated with existing leases from previous sales.

Atlantic:
The draft proposal invites public comment on one potential lease sale late in the program for a portion of the Mid- and South Atlantic OCS, which includes areas offshore Virginia, North and South Carolina and Georgia.

"At this early stage in considering a lease sale in the Atlantic, we are looking to build up our understanding of resource potential, as well as risks to the environment and other uses," said Jewell.

The potential lease sale would require a 50-mile coastal buffer to minimize multiple use conflicts, such as those from Department of Defense and NASA activities, renewable energy activities, commercial and recreational fishing, critical habitat needs for wildlife and other environmental concerns.

The July 2014 Programmatic Environmental Impact Statement on Atlantic Geological and Geophysical activities furthered the Atlantic area strategy by establishing a path forward to update information on the region's offshore oil and gas resources, which is more than 30 years old. Today's proposal is in line with comments received from adjacent states and reflects the Administration's thoughtful approach to potential lease sales in new areas, pending further public review and comment.

Pacific:
Areas off the Pacific coast are not included in this draft proposal, consistent with the long-standing position of the Pacific coast states opposed to oil and gas development off their coast.

NEXT STEPS
"Public input is a critical part of our process and we encourage citizens and groups to provide comments to help guide our decisions," said Hopper. "We anticipate robust dialogue with stakeholders in the coming months that will help us prepare a program that emphasizes protection of the marine environment and coastal economies and uses the best available science and technology to inform our decision-making.

In conjunction with the announcement of the DPP, the Department is also publishing a Notice of Intent to Develop a Draft Environmental Impact Statement (EIS), in accordance with the National Environmental Policy Act (NEPA). Following significant public comment and environmental review, the Department will prepare a Draft EIS and Proposed Program, and a Final EIS with the Proposed Final Program (PFP).

The Request for Information, published on June 16, 2014, began a process of broad consideration of all 26 areas of the OCS that are available for leasing and gradually narrows as a result of many stages of public comment and environmental analysis. This DPP is the first such narrowing. Prior to any individual lease sale in the future, BOEM will continue to incorporate new scientific information and stakeholder feedback in its environmental reviews to further refine the geographic scope of the lease areas.

The Draft Proposed Program and the Notice of Intent to Develop a Draft Environmental Impact Statement will be available for public comment for 60 days following the publication of the documents in the Federal Register.
For more information, including maps, please visit: http://www.boem.gov/Five-Year-Program/

Subsea products and equipment manufacturer Ennsub has successfully completed the design, manufacture, testing and installation of bespoke sealing systems for the Wheatstone Liquefied Natural Gas (LNG) platform off the coast of Australia.
The company was approached by a tier-one marine contractor to design two different systems to provide an external and internal sealing system for 64-off 8" NS ballasting pipes located at each corner of the platform.

WheatstoneThe Wheatstone LNG Project is being developed in Australia.

Ennsub was responsible for the design and supply of all equipment, including downline recovery winches, remote disconnect heads and isolation plugs. Following an intensive factory-acceptance test programme, which simulated the offshore conditions, four Ennsub engineers were mobilised to Australia to perform the installation of the 128-off bespoke sealing systems.

The solution presented by Ennsub replaced the alternative grouting solution which was being considered by the end user and the success of the operation exceeded all parties' planned timescales with Ennsub's engineers successfully completing the installation in half the time allocated.

Scott Macknocher, managing director of Ennsub, said: "This was a great opportunity to demonstrate our design, innovation and supply capability on such a prestigious project. Our experienced design team gained a real understanding of the industry and project application.

"We are very pleased with the success of the operation and performance of both the equipment and our experienced offshore technicians. The solution significantly reduced the planned installation time and had major cost saving benefits for the end user. This project is an excellent example of our capability to deliver bespoke solutions on similar projects."
Aberdeen-headquartered Ennsub recently opened a new production facility and office in Teesside, adjacent to the area's highly capable supply chain and with access to a large skilled workforce and excellent transport links.

StatoilIn the Awards in Predefined Areas 2014, Statoil has been awarded interests in 15 licenses on the NCS, 8 of those as operator. Today, the government has also announced the blocks in the 23rd concession round.

Drill rig Transocean Barents in the Barents Sea. (Photo: Harald Pettersen)

"These are very positive news for Statoil and the whole industry. Access to new quality acreage is essential to ensure continued exploration activity and value creation on the NCS," says Irene Rummelhoff, senior vice president for NCS exploration in Statoil.

"We are pleased with the APA 2014 award of new acreage in mature areas enabling us to prove additional time-critical resources around existing production hubs. We also welcome the announcement of blocks in the 23rd concession round, in particular the new acreage in the Barents Sea South-East which is an important contribution to further exploration in frontier areas of the NCS," says Rummelhoff.

Statoil is positive to the work the authorities are now initiating in order to expand the knowledge base related to sea ice data.

In APA 2014, Statoil has been awarded new licenses in all three NCS provinces:

North Sea
• 80% ownership and operatorship in PL783 and 20% ownership in PL782S west of Balder. This is new acreage with significant volume potential on the eastern flank of the South Viking Graben in a prolific oil prone area. The location and size of the main prospect makes it a very interesting candidate in Statoil's portfolio. PL782S is stratigraphically split and limited upwards by Base Cretaceous.

• 50% ownership and operatorship in PL772. This is new acreage in a prolific area to the north of the King Lear discovery.
• 51% ownership and operatorship in license extension PL025B.
• 30% ownership in license extension PL044C.
• 62% ownership and operatorship in license extension PL046E.
• 50% ownership and operatorship in license extension PL072E.
Norwegian Sea

• 40% ownership and operatorship in PL794 and 20% ownership in PL795. These are exciting licenses in the vicinity of Njord with prospectivity of various play models.
• 40% ownership and operatorship in PL796. This is a new near infrastructure license east of Mikkel. Acreage around Njord and Mikkel is important for feeding existing infrastructure with new volumes as tie-in developments. We also see significant upside potential in the area.
• 20% ownership in PL798 and PL799. This is promising gas prone acreage west of Skarv with follow-up possibilities.
• 42% ownership and operatorship in license extension PL159E.
• 50% ownership in license extension PL127B.
Barents Sea

50% ownership in PL803 - a new license in the Tromsø basin. We see exciting opportunities in the area, particularly in some of the more under-explored plays.

USGSReflects robust Administration support for science-based decision-making in managing natural resources

The President's fiscal year 2016 budget request for the U.S. Geological Survey is $1.2 billion, an increase of nearly $150 million above the FY 2015 enacted level. The FY16 budget reflects the vital role the USGS plays in advancing the President's ongoing commitment to scientific discovery and innovation to support a robust economy, sustainable economic growth, natural resource management, and science-based decision-making for critical societal needs.

The budget request includes increases that ensure the USGS is at the leading edge of earth sciences research. It includes robust funding for science to inform land and resource management decisions, advance a landscape-level understanding of ecosystems, and develop new information and strategies to support communities in responding to climate change, historic drought, water quality issues, and natural hazards. The budget also funds science to support the Nation's energy strategy, to help identify critical mineral resources, and to address the impacts of energy and mineral development on the environment.

"The USGS has a strong 136-year legacy of providing reliable science to decision-makers," said Suzette Kimball, Acting USGS Director. "This budget request recognizes our unique capabilities with multi-disciplinary earth science research and will allow the USGS to meet societal needs for our Nation now and in the future."

Key increases in the FY 2016 Budget are summarized below. For more detailed information on the President's 2016 budget, visit the USGS Budget, Planning, and Integration website.

Meeting Water Challenges in the 21st Century
The FY16 budget provides an increase of $14.5 million above the FY 2015 enacted level for science to support sustainable water management. Meeting the Nation's water resource needs poses increasing challenges for resource managers, who must contend with changes in the frequency and magnitude of floods and droughts. As competition for water resources grows for activities such as farming, energy production, and community water supplies, so does the need for information and tools to aid decision-makers. The budget provides increased funding across several USGS mission areas to support resource managers in understanding and managing competing demands related to water availability and quality and to enable adaptive management of watersheds to support the resilience of the communities and ecosystems that depend on them. This includes a $3.2 million increase for science to understand and respond to drought, a $4 million increase for water use information and research, a $2.5 million increase to study ecological water flows, a $1.3 million increase for stream flow information, and a $1.0 million increase to advance the National Groundwater Monitoring Network.

Powering Our Future and Supporting Sustainable Energy and Mineral Development
The 2016 USGS budget provides $9.6 million in program increases across the energy, minerals and environmental health portfolio for science to support the sustainable development of unconventional oil and gas resources, renewable energy sources such as geothermal, wind, and solar, critical minerals such as rare earth elements, and to address the environmental impacts of uranium mining.

Specifically, the budget includes a program increase of $1 million for mineral resources science to continue life-cycle analysis for critical minerals such as rare earth elements and to develop new science and tools to reduce the impacts of minerals extraction, production, and recycling on the global environment and human health. A life-cycle analysis will trace the flow of critical minerals from generation and occurrence through the consequences of human activity to ultimate disposition and disposal. The Nation faces key economic decisions within each stage of the resource life cycle. Scientific understanding is an essential input to these decisions. The program change will support new workforce capability to address the main thrusts of the President's four working groups in the Office of Science and Technology Policy that are currently focused on critical and strategic materials essential to national security, economic vitality, and environmental protection.

Responding to Natural Hazards
The budget provides an increase of more than $6.6 million above the FY 2015 enacted level for natural hazard science. This includes an increase of $4.9 million to expand the Global Seismic Network used for worldwide earthquake monitoring, tsunami warning, and nuclear treaty verification monitoring and research in partnership with the Department of Energy and the Department of Defense. It also includes a $1.7 million increase to support space weather (solar flare) geomagnetic monitoring. The increase will also support the installation and operation of rapid-deployable streamgages and expand the library of flood-inundation maps to help manage flood response activities. The proposed increase will also support landslide, wildfire, and sinkhole response capabilities as well as provide disaster scenario planning products for emergency managers. Included in the request is funding to build on investments to continue development of an earthquake early warning system, with the goal of implementing a limited public warning system for the U.S. west coast by 2018, as well as continued investments in volcano monitoring networks and science.

Building a Landscape-Level Understanding of Our Resources
The budget includes $15.6 million to expand, enhance, and initiate ecosystem science activities to increase the understanding of the Nation's landscapes and how they work. This includes budget increases of $6.7 million in support of critical landscapes. Specifically it provides a $4.2 million increase for the Arctic, a $1 million increase to study sagebrush landscapes that provide habitat for survival of greater sage-grouse, and a $1.5 million increase that supports science for Puget Sound, Columbia River, and the upper Mississippi River. USGS research will continue to support restoration of other priority ecosystems, such as Chesapeake Bay, Everglades, Great Lakes, California Bay Delta, and the Gulf Coast. The budget request also provides an increase of $2.2 million for research on invasive plants and animals that cause significant economic losses in the U.S. and transmit diseases to wildlife and people, and $1.6 million to study the decline of insects, birds, and mammals that pollinate agricultural and other plants. Finally, the budget increases funding by $5.1 million to support coastal resilience to hazards and adaptation to long-term change from sea-level rise and coastal erosion.

Foundations for Land Management
The President's budget request includes an increase of $37.8 million to provide data and tools to help land and resource managers make informed decisions across the landscape and provide data and information to the public for use in a wide variety of applications. The budgets of USGS and NASA provide complementary funding to sustain the Landsat data stream, which is critical to understanding global landscapes. An increase of $24.3 million in the USGS budget supports the ground system portion of the Sustained Land Imaging Program, including funding for ground systems development for a Thermal Instrument Free Flyer, Landsat 9 (a rebuild of Landsat 8), and to receive data from internal partners. The increase also will enhance the accessibility and usability of data. Specifically, the budget includes a $4 million increase for Landsat science products for climate and resource assessments.

The budget provides increases for other foundational data and tools needed to support landscape-level understanding. For example, an increase of $3.7 million will expand three-dimensional elevation data collection using ifsar (interferometric synthetic aperture radar) for Alaska and lidar (light detection and ranging) elsewhere in the U.S. in response to growing needs for high-quality, high-resolution elevation data to improve aviation safety, to understand and mitigate the effects of coastal erosion, storms, and other hazards, and to support many other critical activities. A $1.8 million increase will enhance understanding of the benefits of the Nation's ecosystem services, and a $1.1 million increase for the Big Earth Data Initiative will make high-value data sets easier to discover, access and use. The accessibility and usability of these data are critical for land management, hazard mitigation, and building a landscape-level understanding of our resources.

Supporting Community Resilience in the Face of a Changing Climate
The USGS plays an important role in conducting research and developing information and tools to support communities in understanding, preparing for, and responding to the impacts of global change. The budget includes an increase of $32 million above the FY 2015 enacted level for science to support climate resilience and adaptation. Climate change requires the Nation to prepare for more intense drought, heatwaves, wildfire, flooding, and sea level rise. These challenges are already impacting infrastructure, food and water supplies, and physical safety in communities across the Nation.

Understanding potential impacts to communities, ecosystems, water, plant and animal species, and other resources is crucial to federal, state, tribal, local, and international partners as they develop adaptive and resilient strategies in response to climate change. The budget includes a $6.8 million increase in science for adaptation and resilience planning, an increase of $2.3 million for the USGS to provide interagency coordination of regional climate science activities across the Nation, an increase of $8.7 million to support biological carbon sequestration, and an increase of $11 million for the USGS to support the community resilience toolkit, which is a web-based clearinghouse of data, tools, shared applications, and best practices for resource managers, decision-makers, and the public.

KeathtleyCanyonUnder new ownership structure, BP, Chevron and ConocoPhillips will combine expertise and resources to unlock Tiber and Gila discoveries and pursue development of a new production hub in Keathley Canyon (see map)

BP has announced it has formed a new ownership and operating model with Chevron and ConocoPhillips to focus on moving two significant BP Paleogene discoveries closer to development and provide expanded exploration access in the emerging geologic trend in the deepwater Gulf of Mexico.

Under the agreements, BP will sell to Chevron approximately half of its current equity interests in the Gila and Tiber fields. BP, Chevron and ConocoPhillips also have agreed to joint ownership interests in exploration blocks east of Gila known as Gibson, where they plan to drill in 2015.

As a result of the agreements, BP, Chevron and ConocoPhillips will have the same working interests across Gila and Gibson and any future centralized production facility. Chevron will hold equity interest of 36 percent, BP 34 percent and ConocoPhillips 30 percent. In Tiber, BP and Chevron will each hold equity interest of 31 percent, Petrobras 20 percent and ConocoPhillips 18 percent.

Chevron will operate Tiber, Gila and Gibson, building on its recent success in starting up the Jack/St. Malo oil production platform in the Paleogene/Lower Tertiary on time and on budget. Operatorship is expected to be transferred after BP finishes drilling appraisal wells at Gila and Tiber.

BP believes combining the technical strengths and financial resources of these three companies will provide greater efficiency through scale, reduce subsurface risk and increase the likelihood of achieving a future commercial development.

"Completing these agreements will enable BP to do three things that are at the core of our strategy in the deepwater Gulf of Mexico," said Richard Morrison, president of BP's Gulf of Mexico business. "It will support continued exploration and development in the Paleogene, which we expect to be a key part of our future in the region. It will allow us to manage and maintain capital discipline by sharing development costs. And transferring operatorship of these assets to Chevron will allow BP to increase our focus on maximizing production at our four existing producing hubs in the Gulf, each of which is still in the early stages of development."

BP discovered Tiber in 2009 and Gila in 2013, and in October 2014 participated as a co-owner in the Chevron-operated Guadalupe discovery.

BP believes that development of portions of the Paleogene trend will require next-generation tools and systems for operating in high-pressure, high-temperature reservoirs. BP continues to pursue development of these technologies through its Project 20KTM initiative, announced in 2012, and will work with co-owners to continue this progress.

Prior to the transactions, BP had a 62 percent working interest in Tiber, with Petrobras owning 20 percent and ConocoPhillips 18 percent. In Gila, BP previously had a 65 percent working interest and ConocoPhillips 35 percent. In Gibson, ownership in the six- lease area varied based on lease, with Chevron, BP and ConocoPhillips all holding stakes.

BP operates four large production platforms in the deepwater Gulf – Thunder Horse, Atlantis, Mad Dog and Na Kika – and holds interest in four non-operated hubs known as Ursa, Great White, Mars and Mars B.

BP is the largest investor and leaseholder in the Gulf of Mexico and a leading oil and gas producer in the region.
Since early 2013, BP has had four major project start-ups in the deepwater Gulf: Atlantis North, Mars B (operated by Shell), Na Kika Phase 3 and Atlantis North Expansion Phase 2.

JohanSvedrupOn behalf of the Johan Sverdrup partnership Statoil will sign a detail engineering contract for the Johan Sverdrup development with Aker Solutions.

Worth NOK 4.5 billion the contract includes engineering and procurement management (EPma) until the scheduled production start in 2019.

The contract includes engineering and procurement management for the riser and processing platform topsides for the Johan Sverdrup field, phase one, in addition to hook-up work and gangways for the entire field.

Aker Solutions has so far been responsible for the front-end engineering of all four platforms that constitute the field center, a contract signed at the end of 2013.

"In light of the Johan Sverdrup project's ambitious progress plan having competent cooperation partners that share our goals is essential. Through the front-end engineering phase several hundred Statoil employees have been stationed at Aker Solutions. Together we have formed the basis for a seamless transition to detail engineering which will ensure a cost-effective progress plan," says Arne Sigve Nylund, Statoil's executive vice president for Development and Production Norway.

"The Johan Sverdrup field development is of great importance, not just to Statoil and our partners, but also to the supply industry and society. At plateau, the production from this field will account for 25% of the combined production on the Norwegian continental shelf. Although the prospects for the future of the field are very good maintaining the right focus on costs both in the construction and operations phase is essential," Nylund concludes.

"Targeted efforts have been made to cut costs and improve the efficiency of the deliveries. We are therefore pleased to see that Norwegian suppliers are competitive and that we can sign this contract with Aker Solutions. They have started their own improvement work and their deliveries on our integrated cooperation at Sverdrup are progressing well. This is an important contract for the project, and our expectations for the implementation are high", says Margareth Øvrum, Statoil's executive vice president for Technology, Projects and Drilling.

"As the EPma supplier Aker Solutions gets a key role in the Johan Sverdrup project, and is thus an important contributor to a successful project. We look forward to a close and good partnership," she ends.

This contract award is conditional on an investment decision for the Johan Sverdrup development in February 2015, and is subject to the approval of the Plan for Development and Operation for the field in Parliament in 2015.

rowan-renaissance-canarias--644x362• The samples obtained in the exploratory survey known as Sandia confirmed the existence of gas, although without the necessary volume nor quality to consider future extraction.
• The Rowan Renaissance drillship will return to Angola to continue with Repsol's exploration program in that country.
• Around 750 professionals from more than 50 companies, some based in the Canary Islands, have worked on the research project, applying the maximum safety and environmental protection standards.

Repsol has completed the exploratory well, which began on 18 November 2014 in the Atlantic Ocean about 60 kilometers from Lanzarote and Fuerteventura, to analyze the possible existence of hydrocarbons. The analysis of samples obtained showed the presence of gas (from methane to hexane) but without the necessary volume nor quality to consider future extraction.

The exploratory survey confirmed that oil and gas have been generated in the basin, although the deposits found have been saturated with water and the hydrocarbons present are in very thin, non-exploitable layers.

No further exploratory activity will be carried out in this area, and the Rowan Renaissance dynamically-positioned drillship will return to Angola to continue Repsol's exploration campaign in that country.

On 11 January, a total depth of 3,093 meters (882 meters of water depth and 2,211 meters of subsoil) was reached and the collection of data on the traversed geological formations was completed.

The well will be sealed throughout the next week under the strictest safety protocols, the same that have been applied during the entire exploratory drilling campaign.

Around 750 professionals from over 50 companies have worked on the research project, applying the highest safety and environmental protection standards at all times. At the start of this campaign, Repsol estimated the possibility of finding hydrocarbons at between 15% and 20%. The company carried out the campaign in the belief that a discovery of hydrocarbons would be beneficial for the Spanish economy.

The excellence of all operations related to this campaign was achieved thanks to the deployment of top professionals – not only from Repsol, but also from other contracted companies, some of them from the Canary Islands – and the use of cutting-edge technology such as the Rowan Renaissance dynamically-positioned UDW drillship, which was supported by four other vessels.

Repsol has great experience in offshore exploration. The company's reserve replacement ratio (the amount of reserves added by the company compared to the production) was 204% in 2012 and 275% in 2013, among the highest in the industry.

shellA thirty day public consultation on plans to commence decommissioning of the Brent oil and gas field in the North Sea will begin week commencing Monday February 16. The field has produced around 10% of all UK North Sea oil and gas and generated more than £20 billion of tax revenue for the UK since production began in 1976.

The decommissioning program, submitted by Shell, for the Brent Delta platform (one of four installations located in the field) recommends that the 23,500 ton 'topside' of the platform is removed in one piece by a heavy-lift dedicated vessel that arrived in Rotterdam in January. Work is underway to strengthen the topside in anticipation of the lift, which will be one of the heaviest the North Sea has ever seen. This single lift technique will substantially reduce the risk, cost and environmental impact of the operation.

BrentDeltaShell Photographic Services, Shell International Ltd

If the decommissioning program is formally approved by the Department of Energy and Climate Change (DECC), the topside will be taken to Able UK, a specialized decommissioning company in Teesside, where more than 97% of the material will be reused or recycled.
Alistair Hope, Brent Decommissioning Project Director, Shell, said: "The Brent field has been a prolific national asset for many years, creating and sustaining thousands of jobs and contributing billions of pounds to the UK government. The engineering and planning skills which led to the discovery and subsequent successful production of oil and gas over four decades are essential during decommissioning, which is the natural next stage of the field's life. We hope many people will play an active part in the consultation."

A second decommissioning program for the remaining infrastructure in the Brent field, including Brent Delta's legs, three other sets of topsides and legs, 140 wells and 28 pipelines, will be submitted when Shell is confident the proposals are safe, technically achievable, environmentally sound and financially responsible. It will be subject to a separate consultation. Brent Delta stopped production in 2011 and Brent Alpha and Bravo ceased in November 2014. Production from the field continues through Brent Charlie.

Stakeholders from over 180 organizations, including NGOs, academic institutions including the University of Aberdeen and independent scientific experts have been engaged in the development of the Decommissioning Program since 2007.

APIlogoNearly two-thirds of voters in Florida support offshore drilling for domestic oil and natural gas resources, according to a new poll conducted by Harris Poll for API's "What America is Thinking on Energy Issues" series.

"Florida has an opportunity to expand its energy portfolio and access the jobs and government revenue currently locked away in America's large offshore energy reserves," said Dave Mica, executive director of the Florida Petroleum Council. "We could bring good-paying jobs to Floridians and lift our economy simply by allowing more oil and natural gas production off our shores."

Areas throughout the Atlantic Outer Continental Shelf (OCS) could be made available for oil and natural gas development, creating more than 280,000 jobs, $200 billion in government revenue and 3.5 million barrels of oil equivalent per day, according to a recent study by Quest Offshore Resources.

The state-wide telephone poll, conducted for API by Harris Poll among 610 registered Florida voters also found that:

· 90 percent agree increased oil and natural gas production could strengthen America's energy security.
· 85 percent say increased oil and natural gas production could help lower energy costs for consumers.
· 80 percent say increased oil and natural gas production could benefit federal and state budgets through lease payments, royalty fees and other sources of revenue.
· 58 percent say that the federal government does not do enough to encourage U.S. oil and natural gas development.

The Florida Petroleum Council is a division of API, which represents all segments of America's technology-driven oil and natural gas industry. Its more than 625 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation's energy. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy.

Methodology
The telephone study was conducted by telephone on January 15-19, 2015 by Harris Poll on behalf of the American Petroleum Institute among 610 registered voters in Florida, with a sampling error of +/- 4 percent. A full methodology is available upon request.

"What America is Thinking on Energy Issues" is a public opinion series provided by API, offering data to inform policy discussions and ensure policymakers and others know Americans' perspectives on key energy issues.

NOIAlogoNOIA-RandallLuthi highNOIA President Randall Luthi(photo) issued the following statement in response to President Obama's 2015 State of the Union Address:2015 State of the Union Address:

"While the President highlighted America's energy renaissance in his address to Congress tonight, he failed to note that the increase in the supply of American-made energy is occurring on state and private lands, not the federal lands under his control. The President was certainly right about one thing: low energy costs and gas prices have given American families and small businesses relief and have contributed to the recovering economy; however, the increased supply of oil and natural gas and lower energy costs have occurred in spite of, not because of, the Administration's energy policies.

"The President and his Administration have a prime opportunity in the coming months to take positive action to support a true all-of-the-above energy strategy that strengthens America's economy, creates thousands of new jobs, and enhances our energy and national security. This opportunity lies within the next 5-Year Outer Continental Shelf (OCS) leasing program. More than 85 percent of the OCS remains shuttered to exploration and development, including the entire Atlantic Coast, Pacific Coast, and the Eastern Gulf of Mexico. Changing the current policy to one that would open new areas of the OCS would be a positive step in the right direction toward a truly all-of-the-above energy approach that recognizes the opportunity in developing all offshore energy resources, including oil, natural gas and wind. In fact, another good American story is the progress toward harnessing the potential of offshore wind power, particularly in the Atlantic. NOIA supports all offshore energy sources, but it only makes sense for the Administration to devote similar efforts toward moving forward on offshore oil and natural gas leasing in new areas as well.

"Other nations, including Canada, Cuba, Mexico, Norway, Greenland, Brazil and Ghana, have recognized these opportunities and are exploring new offshore areas. A recent study shows that by opening the Atlantic, Pacific, and Eastern Gulf of Mexico, America could, by 2035, create more than 838,000 jobs annually, spur nearly $449 billion in new private sector spending, generate more than $200 billion in new revenue for the government, contribute more than $70 billion per year to the U.S. economy, and add more than 3.5 million barrels of oil equivalent per day to domestic energy production.

"As the President knows, this issue is not a partisan one. Congressional Democrats and Republicans and the vast majority of the American public have stated their support for the safe exploration and production of America's offshore energy resources. We have an opportunity to leave future generations with a stronger economy and strengthened national and energy security for decades to come, and NOIA urges the President to help put America on this course by putting forward a 5-year OCS leasing program that opens new offshore areas for energy exploration and development."

ABOUT NOIA
NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation's outer continental shelf. NOIA's mission is to secure reliable access and a fair regulatory and economic environment for the companies that develop the nation's valuable offshore energy resources in an environmentally responsible manner. The NOIA membership comprises more than 325 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance, and renewable energy.

Eni owns a working interest of 8.5% in the field operated by Anadarko and holds also a 30% working interest in the nearby Hadrian South gas field.

Eni announces the production start-up from the Lucius Field in the Gulf of Mexico deepwater, 240 miles south of the Louisiana coast, United States.

Lucius-First-Oil-1Photo courtesy: Anadarko

Lucius, which is in approximately 7,000 feet of water, has a production secured through 6 subsea wells tied back to a moored production handling spar connected to the shore via dedicated oil and gas pipelines. The spar has a design capacity of 80,000 barrels of oil per day (bopd) and 450 million standard cubic feet per day (MMscfd) of gas. Once all wells are ramped up, Eni's share of the Lucius daily production is expected to be approximately 7,000 boed.

The Lucius field was discovered in November 2009 and the subsequent development project was sanctioned in late 2011. Eni owns a working interest of 8.5% in the field operated by Anadarko. Eni also holds a 30% working interest in the nearby Hadrian South gas field operated by ExxonMobil, which is a subsea development tied back to Lucius spar, and is expected to produce 300 MMscf/d at plateau, with startup expected in early 2015.

The Greater Hadrian area, which includes the Lucius and Hadrian South fields, represents a core asset for Eni's future production, since it is expected to provide approximately 20,000 boed equity of combined production at its peak.

In the US, Eni owns interests in 200 leases in the Gulf of Mexico and 530 leases in unconventional plays (shale gas and shale oil) onshore Texas. In addition, Eni owns interests in 100 leases in the North Slope of Alaska, which include 100% of Nikaitchuq and 30% of the Oooguruk oil fields.

Eni's current net production in the US is approximately 100,000 boed, 75% of which is operated

enscologoFor the fifth consecutive year, Ensco plc (NYSE: ESV) earned first place for total customer satisfaction in the Oilfield Products & Services Customer Satisfaction Survey. Conducted by EnergyPoint Research, the annual survey is the industry benchmark for customer satisfaction in the global oilfield.

Ensco led all offshore drilling contractors in the survey by receiving top honors in 10 of 16 categories including total customer satisfaction; health, safety and environment; technology; deepwater drilling; harsh climate applications; shelf wells; horizontal and directional wells; and special applications. Ensco also rated first in the North Sea, Latin America and Mexico.

CEO and President Carl Trowell stated, "Success for customers is a core value of our company and we remain committed to delivering the highest levels of safety and operational excellence." He added, "Our ongoing pursuit of world-class operating systems is aimed at being number one in service quality and delivering an incident-free workplace. Therefore, we are gratified to be recognized as the best offshore driller in terms of total customer satisfaction. Our top scores across a breadth of categories also reflect the excellent uptime performance and drilling efficiencies that our offshore crews and onshore personnel provide to customers."

The independent survey was conducted as part of EnergyPoint Research's 2014 industry-wide Oilfield Products & Services Survey, comprising thousands of in-depth evaluations performed over a 24-month period.

Juniper-gas-project-offshore-Trinidad-and-TobagoInterMoor, an Acteon company, has successfully completed a mooring and foundation installation campaign for bpTT's Juniper gas project offshore Trinidad and Tobago. This is the largest foundation installation campaign offshore Trinidad and Tobago to date.

InterMoor provided engineering and design services to identify the most reliable and cost-effective mooring solution and performed configuration studies as part of the mooring analysis. The company designed and fabricated eight piles (4 ft in diameter by 128 ft long) at its facility in Morgan City, Louisiana, and provided offshore project management services for the mooring preset campaign. This included installing the driven piles using H-Links and 1,000 ft of ground chain per leg from the Boa Deep C construction vessel.

Trinidad restricts boat-to-boat transfers, so transporting the piles offshore using a single boat presented a challenge. However, InterMoor was able to complete the installation with the eight piles and additional equipment on the vessel's deck. The Juniper project was carried out in a water depth of 330 ft, with strong water currents.

The mooring solution engineering began in 2011 with the initial front-end engineering and design (FEED) study, and offshore installation was completed in early November 2014. Jacob Heikes, project manager at InterMoor, said, "Despite numerous logistical obstacles to overcome as well as the expedited schedule necessary to complete installation engineering and pile, chain and H-Link fabrication, the foundations and pre-set mooring lines were installed successfully and on time."

Tom Fulton, InterMoor's global president, added, "This project demonstrates InterMoor's strategic involvement in the region and highlights our superior capacity in oil and gas industry projects in the Caribbean / South America."

During the installation campaign, InterMoor's sister group company MENCK was also involved, providing the hydraulic hammer. InterMoor's locations in Aberdeen, Scotland; Stavanger, Norway; Morgan City, Louisiana; and Houston all contributed to the project.

InterMoor was an ideal candidate for the project given previous successful driven-pile and conductor campaigns in Brazil. The company provided a turnkey service for the mooring presets in Shell's BC-10 Parque das Conchas offshore development and the Papa Terra field for Petrobras and Chevron.

SkandiSantosAt the end of last year, Petrobras deployed its first wet Christmas tree (equipment installed on a wellhead, composed of a set of remotely operated valves designed to control the flow of fluids such as oil, water and natural gas from a reservoir to the surface) using cables in the pre-salt area. The main change involved was the use of a subsea equipment support vessel (SESV) to install the equipment rather than a traditional drilling ship. This resulted in a time saving of approximately 10 days, generating a gain of more than US$5 million. The well on which the Christmas tree was installed using this technique, called 7-SPH-2D-SP, is located in Sapinhoá field, in the pre-salt layer of Santos Basin, at a depth of 2,130 meters.

The operation, which involved lowering the Christmas tree into position and installing it on the wellhead using a suspended cable, was carried out from an SESV using a subsea equipment guidance system. This installation technique replaces the use of drilling ships, which are much more expensive to charter. SESVs have some other major advantages in relation to traditional drilling ships. For example, using a drilling ship it takes around 10 hours to lower a "riser" (a kind of pipe) 1,000 meters in the open sea. Consequently, the time taken to lower a Christmas tree for installation on a well at a water depth of 2,300 meters is 40 hours on average. SESVs, on the other hand, can perform the same maneuver in less than four hours, due to the cable launch and return speed.

Petrobras had already used this technology at depths of up to 2,000 meters. Following engineering studies, some adaptations were made to the SESV Skandi Santos, enabling the vessel to install equipment at depths of up to 2,300 meters. After the success of this first experience, the use of SESVs has now been proven as a viable option for the pre-salt layer, and this will help reduce operating costs and times. Petrobras has now chartered a second SESV, which is being adapted for depths of up to 2,500 meters and which should start operating in the second half of 2016.

Sapinhoá field is operated by Petrobras (45%), in partnership with BG E&P Brasil Ltda (30%) and Repsol Sinopec Brasil S.A. (25%).

Claxton-jackup-drilling1Claxton, an Acteon company, is extending its large surface riser inventory to meet operators' needs as more heavy-duty jackup rigs enter the North Sea. The company, which already has more than 560 feet of rapid call-off surface riser stock, is adding new joints in the size and pressure required to interface with the blowout preventer (BOP) stacks on the new rigs.

Martin Jolley, vice president sales and commercial, Claxton, said, "Soon there will be six ultra heavy-duty jackups operating alongside the 44 other jackups in the North Sea. The new rigs all require surface risers with 18.3/4" ID and 15 k pressure ratings. We are bolstering our inventory in this area to support our clients.

"Our surface riser supply capability has always been broad; we cover 13.3/5" through to 21.1/4" internal diameter options, which are available in a range of low and high pressure options up to 15 k ratings. Our new 18.3/4" 15 k stock will further strengthen our position as a leading supplier of surface risers for the North Sea and beyond.

"Claxton has a broad range of supporting rental equipment to manage riser interfaces, so we're confident that our surface riser packages and rapid mobilisation capability will continue to meet the needs of operators and drilling contractors. Claxton's full riser capability covers subsea and surface risers, riser handling and tensioning. The complete range of bore, pressure and system options we supply is unmatched in the North Sea."

Claxton provides the vast majority of well control interfaces, with more than 4,000 surface riser and associated range of rental adaptors, connectors, handling tooling and ancillary items.

Working alongside sister riser businesses in the Acteon group, Claxton's surface and subsea riser supply capability is used by operators in the North Sea and beyond. Claxton supplied the first 10,000 psi subsea riser system to a North Sea operator and delivered a complete riser system for the deepest waters ever tackled from a jackup, in Statoil's Gullfaks field.

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