Subsea 7 S.A. (Oslo Børs: SUBC) today announced a contract award by Stone Energy valued in excess of US$70 million for the development of the Cardona field in the U.S. Gulf of Mexico.

The contract scope includes engineering, procurement, installation and commissioning of flowlines, risers, pipeline structures, and a gas lift umbilical.

Project management and engineering work will commence immediately at Subsea 7’s offices in Houston. Offshore operations are due to commence in the third quarter 2014, with stalking of the risers and flowlines and welding being performed at Subsea 7’s Port Isabel spoolbase.

Ian Cobban, Subsea 7’s Vice President for the Gulf of Mexico, commented that “We are pleased to be awarded this contract and look forward to working collaboratively with Stone Energy. This is an important project for both Stone Energy and Subsea 7, and we look forward to delivering the project in a safe and timely manner, and to building a strong relationship.”

Unique System FZE, a Unique Maritime Group company and one of the world’s leading integrated turnkey subsea and offshore solution providers, has been contracted by ADNATCO-NGSCO to deliver ship performance monitoring solutions that will help to optimize vessel performance and subsequently aim to reduce fuel consumption and carbon emissions. The entire project will be carried out by Unique System FZE, acting as agents for the Iceland based energy management company Marorka ehf. Commissioning and technical support will be provided by Unique Marorka Support Services which is a joint venture set up by Marorka ehf and Unique System FZE.

National Gas Shipping Company (NGSCO), an ADNOC Group Company, was formed in December 1993 to transport liquefied natural gas (LNG) on behalf of Abu Dhabi Gas Liquefaction Company (ADGAS). In 2009, the company’s supporting services were merged with ADNATCO under a single management umbrella. The merger boosted both companies’ positions and created a pool of versatile and experienced manpower in the lead up to the expansion stage under the auspices of Abu Dhabi National Oil Company (ADNOC).

Marorka is a leading provider of energy management solutions for the international shipping industry. Marorka products and services enable vessel operators to optimize fuel consumption by maximizing the energy efficiency of their vessel or fleet. The results are minimized harmful emissions and reduced costs.

The project’s objective is to implement energy management systems for ADNATCO-NGSCO’s entire fleet. The first stage of the project includes the installation of ship performance monitoring systems on board ADNATCO’s six vessels: two LNG vessels, two bulk carriers and two oil tankers. The principal objective will be to improve the vessel’s performance and to eliminate environmental concerns such as excessive fuel consumption and carbon emission in the long term. Marorka’s Onboard Energy Management System and Marorka Online, a fleet reporting tool, have been selected for this purpose. The system gathers data from the required instrumentation points and presents the overall efficiency of the vessel in a user-friendly interface. The main advantage of this system is its ability to provide real-time information from each vessel in fleet, thereby facilitating informed decisions related to energy efficiency.

Wood Group Mustang announces Mark Brett director of business development for its Process Plants & Industrial Business Unit for its Martinez, Calif. location.  Brett will oversee the company's West Coast business development, expanding brand presence and strategic direction for the California and Pacific Northwest regions.

Brett brings 25 years of oil & gas expertise with concentrations in the upstream and downstream sectors to Wood Group Mustang.  His success includes operations management, business development, sales and marketing, and revenue and profit optimization.

Wood Group Mustang President, Process Plants & Industrial Curt Watson said, "Mark brings a wealth of knowledge to Wood Group Mustang's Process Plants & Industrial Business Unit, and I look forward to him taking our current and future West coast relationships to the next level."

NYC-based PIRA Energy Group believes that burgeoning momentum to own oil seems poised to push oil prices higher for now. On the week, U.S commercial stocks built led by crude, while Japanese crude stocks drew strongly. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Bullish Oil Prices

It is hard not to be bullish oil prices with the global economy gradually improving, tight physical oil markets and MENA turmoil, which is already substantially reducing global oil supplies and has the potential to reduce supplies further. Current positioning and likely September deflationary type headlines, due in part to a challenging calendar, but also the startup of Iranian nuclear negotiations, pose downside risks to oil prices. Yet, the burgeoning momentum to own oil seems poised to push oil prices higher for now with SPR chatter somewhat limiting the upside.

U.S. Commercial Stocks Build Led by Crude

Overall U.S. commercial oil inventories increased for the week ending August 23 according to the latest weekly DOE data with the entire build occurring in crude, while product inventories declined. Overall U.S. oil inventories are in the upper end of their historic range, in part because of high "other" products. Crude and the four major products stocks (gasoline, distillate, jet and resid) are at the average of their historic range, although crude stocks are indeed relatively high. The stock increase for the same week last year was higher, thereby narrowing the year-on-year stock excess. Nearly the entire excess is in gasoline.  

Strong Crude Stock Draw in Japan, Refinery Margins Very Weak

Crude runs were little changed, but a very low crude import figure drew stocks strongly. Gasoline demand remained strong and gasoil demand rebounded from abnormally low levels. The kerosene stock build rate moderated. Refinery margins collapsed to very weak levels as all cracks gave ground. While cracking margins are weak, topping margins are even worse. 

Withdrawal of Half of Libya’s Oil From the Market

Crude oil trade flows have been significantly altered in 3Q13 by the withdrawal of nearly half of Libya’s 1.4 MMB/D of oil from the market and the subsequent increase in production from Saudi Arabia to record levels to compensate for these losses and to accommodate growing global demand over the second half of the year. Tanker markets are adjusting with more West African crude staying in the Atlantic Basin, which is shifting tonnage demand to smaller vessels. More sour crude production has also benefited ship operators by lowering bunker prices, which have risen less than crude. 

LPG Market Appears Tight

The slow pace of propane stock building has pushed prices higher and will keep prices supported as crop drying and winter heating demand are approaching.  Gasoline blending season is starting, increasing the pull on butanes. Prompt European LPG markets are relatively tight given low arrivals in August and North Sea maintenance. More imports will be attracted from the USGC and West Africa.

Ethanol Output Drops to 21-Week Low

Ethanol output fell to a 21-week low of 820 MB/D the week ending August 30 from 844 MB/D in the preceding week, while imports dropped to 4 MB/D from 19 MB/D over the same period.  Inventories decreased by 232 thousand barrels to 16.3 million barrels as PADD II stocks fell below 5.0 million barrels for the first time since the DOE began reporting weekly ethanol data in June 2010. 

The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.

Patrick Lagrange will lead the charge to build the investment arm of CSA

Continental Shelf Investment Capital, Inc. (CSIC) is pleased to announce that Patrick Lagrange is joining the firm as its new Managing Director. Lagrange will help manage CSIC’s existing investments in the coastal, ocean, and subsea industries and look for new opportunities.  Working with fledgling and established entrepreneurs alike, Lagrange and CSIC will work to help entrepreneurs develop their concepts and ideas into great businesses.   “CSIC’s mission of supporting and growing companies with the capital needed to get to the next stage is exciting.  I’m thrilled to be part of this effort,” said Lagrange.

Hailing from New Orleans, Lagrange brings with him nearly two decades of experience investing in and advising companies in a variety of capital markets, M&A, and restructuring transactions.  Lagrange began his career as an attorney working for the oil industry through the early 1990s.  He then made a career shift that would allow him to pursue his interest in finance by earning an MBA from New York University.  After that he worked with several leading investment and financial advisory firms in the Northeast.  He joins CSIC from Carl Marks Advisory Group LLC, a leading middle market New York-based investment bank and financial advisory firm where he served as CEO of the firm’s broker/dealer affiliate and head of its strategic research unit.

Lagrange has played a leading role in the corporate restructuring industry.  In 2009 – 2010, he served as President and Chairman of the Turnaround Management Association, the premier global professional organization dedicated to corporate renewal with over 9000 members in 47 chapters in the Americas, Europe, Asia and Africa. 

In addition to his work at CSIC, Mr. Lagrange will serve as President of Pelagic Strategic Partners LLC (Pelagic).  Pelagic is a newly formed CSA affiliate that will bring high-quality strategic and management consulting services to small-growth stage companies in the coastal, ocean, and subsea industries.  “Pelagic will work in partnership with CSIC to help entrepreneurs build great companies by combining its capital with Pelagic’s management services,” said Lagrange.

Business Monitor has just released its latest findings on Mexico’s oil & gas sector in its newly-published Mexico Oil & Gas Report.

Never before has Mexican energy sector reform been both more critical and more attainable. Business Monitor note that without reform and a resulting uptick in foreign investment, the country is set to switch from being one of the largest oil exporters in the world to a net importer by the latter part of its 10-year forecast period. However, while Mexico's ruling Partido Revolucionario Institucional has recently introduced a proposal to remove long-standing limits on private sector involvement in upstream activity - a key first step - Business Monitor believe that whether there is substantial interest from the major international oil companies will be largely determined by the wording of secondary legislation and specific contractual details. As such, although the Mexico Oil & Gas Report highlights substantial upside risks, for now Business Monitor retains its relatively pessimistic forecasts for the sector.

The report forecasts a steady decline in both Mexican proven oil reserves and production over the next decade, with the country likely to become a net importer rather than one of the world's largest net exporters - as is the case at the moment - by the end of its forecast period. This is on the back of several years of declining production, combined with the recognition that it will take a significant amount of time for any new production to come online. Furthermore, the country's most productive fields, especially Cantarell, are maturing at a rapid rate, resulting in a steady trend of reserve depletion. Business Monitor forecast 2013 oil production of 2.94mn barrels per day (b/d), falling to 2.82mn b/d in 2017. Production will end the forecast period in 2022 at 2.59mn b/d.

Business Monitor’s bearish view of Mexican oil production is reinforced by several interconnected fundamentals, including Pemex's relative inexperience in deepwater drilling as well as high tax and debt burdens. Also, the current inability for the company to work with foreign partners also prevents it from spreading capital risk, while also not being able to capitalize on foreign expertise and technology.

The report remarks that Mexican pipeline imports of natural gas have grown almost in parallel with the US natural gas production boom over the last few years. Importantly, because the imported gas is priced at the US Henry Hub benchmark, imports remain cheap despite surging demand growth. These price dynamics have a reinforcing effect, and therefore will support future demand growth. As such, Business Monitor expect this trend to remain in place for the foreseeable future - with its associated negative implications for Mexican domestic natural gas production, underpinning its forecast for Mexican gas production to grow at a modest 1% per annum for the long-term.

The stakes for energy sector liberalisation have therefore never been higher. At the time of writing the report, the ruling Partido Revolucionario Institucional (PRI) has put forward a reform proposal which would amend the constitution to allow private sector actors to play a more significant role in upstream activity. While an important step though, there is some risk that the government party's proposed reform may still not be sufficient to reverse the country's declining oil production as it centres on a profit-sharing model - less attractive to international oil companies (IOCs) than concessions or production-sharing frameworks.

Indeed, given the PRI's more moderate proposal, Business Monitor believe the extent to which Mexico is able to boost investment will be largely dependent on whether forthcoming secondary legislation is favourably written and how lucrative the contract terms on offer are - something that will not become apparent for several more quarters at least. As such, while Business Monitor sees some increased upside potential, for now it maintain its pessimistic forecasts.

Follow Business Monitor's Oil and Gas insights here

A standard program template for UK offshore decommissioning projects has been credited with heralding a step-change for the industry after being formally endorsed by the UK regulators and successfully trialled by three international operators for different types of asset.

Decommissioning industry body Decom North Sea (DNS) developed the template in partnership with the Department of Energy and Climate Change (DECC).  The new template will help streamline and standardize the format for decommissioning programmes throughout the UKCS whilst still fully satisfying regulatory requirements.

The template is already allowing industry to compile decommissioning programs more quickly and easily by presenting information in a consistent and standardised format, reducing time spent on redrafts, improving efficiency and reducing costs.

First to trial the template was BP with the Schiehallion Decommissioning Programme, whilst CNRI is currently trialling it to set out its plans for the Murchison Platform (Photo). Perenco is also using the template for the Thames Project. All of the operators had positive feedback on the template, noting significant changes and a reduced number of drafts.

An initial draft of the workgroup’s template was circulated to government departments, industry and other stakeholders via DNS members, Oil & Gas UK and DECC. More than 50 responses were received and the comments were collated into a final draft document by DECC and DNS, which was reviewed again by the workgroup before being finalised.

The resulting template allows future decommissioning programs to be prepared and assessed in a more consistent fashion. Operators are being encouraged to trial it during 2013 and feedback from those users will be used to further improve the template.  It is hoped that the template’s use for non-derogation cases will become mandatory in 2014. A streamlined template for derogation cases is also under development.

DNS Chief Executive Brian Nixon said: “We are delighted to have been instrumental in such a major project and the rapid uptake of the template by operators shows very clearly that the approach taken by DNS and partners was a success. We are now building on the collaborative working model to tackle other key industry challenges.

“The members of the working group gave generously of their time to design and deliver the template and this has been an excellent early example of DNS members working collaboratively with Government to deliver a substantial piece of work already showing significant demonstrable benefits. Ultimately, it will reduce costs to the public purse whilst maintaining the integrity and transparency of the decommissioning process.”

A DECC spokesman said: “This is a great example of DECC and industry working together on a project with the potential to achieve considerable savings and efficiencies to operators, the regulator, consultants and contractors.’’

Alistair Corbett, BP’s Decommissioning Projects Manager, said: “The Schiehallion Decommissioning Program was approved in June by DECC, using the new Standard Decommissioning Programme Template. Though it was only officially issued for use in January 2013, we were given permission in December 2012 to trial it.

“That meant seven months from initiation to approval, compared to up to three years in the case of Miller – also the document ended up only 42 pages in length. This equates to a major saving in man-hours and project delivery schedule and demonstrates the success of a joint oil industry and Governmental co-operation project.”

Roy Aspden, Decommissioning Projects Manager, CNRI, said:  “We are delighted to have been part of the team responsible for producing the standard decommissioning template as well as pioneering its use. 

“The template’s format has enabled us to set out our proposals for the Murchison platform clearly and concisely, making the decommissioning programme easily accessible to our stakeholders and significantly reducing the reading burden without compromising essential information.  It has also provided a helpful focus for CNRI’s meetings with the regulator during the development of the program.

“Overall, the initiative to develop the new template is a great example of what can be achieved through teamwork.  It represents a step-change in the simplification and standardisation of data vital to those considering and commenting upon decommissioning programs and augurs well for the future development of the decommissioning capability and cooperation across the range of interested parties.”

Perenco’s Operations Manager Keith Tucker, added: “Perenco's experience of a recent submission of a draft decommissioning program on the standard template has proven very successful. It demonstrates a significant step change improvement on the previous process, achieved jointly by DNS and DECC collaboration.”

It is hoped that, in time, the template could also be adopted for use in other European countries (albeit with some minor alterations perhaps being needed), helping operators and contractors alike to standardise their efforts across the North Sea.

Building on the success, DNS has established a projects sub-committee looking to move forward similar projects. They are currently canvassing ideas from the membership.

The forum is also continuing its focus on synergy and knowledge share at its annual Offshore Decommissioning Conference, in partnership with Oil & Gas UK, at St. Andrews from 1-3 October. With a number of panel discussions and networking opportunities, the event will focus on collaboration and promoting knowledge share and best practices among decommissioning operators and supply chain members. 

FoundOcean, the largest dedicated offshore construction grouting company in the world, today announced the opening of its newest office in Houston, Texas to support its expansion overseas.


"Houston is recognized as the energy capital of the world, with almost half of its economic activity driven by the energy industry - particularly oil & gas. It provides a perfect base for FoundOcean to continue with its growing activities in the Americas," says Managing Director Jim Bell. 



FoundOcean has completed more than 100 offshore projects in US and Canadian waters for world-class installation contractors including McDermott, Cal Dive, Heerema, Saipem, Subsea 7, and Technip. These range from compliant tower foundation grouting, to record-breaking deep-water fabric formwork deployments for pipeline repair installations. 



The DNV-accredited company has invested heavily in its grout mixing technology to ensure fast, efficient, and safe offshore operations. 



Amir R. Mirza, International Business Development Manager, will be based at the Houston site supporting the organization’s clients in the region and developing business opportunities in the North, Central and South American oil & gas markets.

Statoil has together with partners in PL128 made an oil discovery in the Svale North prospect in the Norwegian Sea, approximately nine kilometers northeast of the Norne field.

Exploration well 6608/10-15, drilled by the Songa Trym drilling rig (Photo), has proven a 45 meter oil column in the Åre formation and a 45 meter oil column in the Melke formation. The reservoir properties were as expected in both targets.

The preliminary estimated volume of the discovery is in the range of 6 to 19 million barrels of recoverable oil. It will be considered if the discovery can be tied to the Norne field.

"We are very pleased with the discovery," says Gro G. Haatvedt, Statoil senior vice president for Exploration Norway.

"With last month's announcement of the Smørbukk North discovery near Åsgard, this is the second discovery in the Norwegian Sea in three weeks. Timely near-field exploration provides valuable resources to Statoil and the discoveries show that there is still exciting potential in the Norwegian Sea."

"We work continuously on increasing the recovery and extending the life of the Norne field. The Svale Nord discovery confirms the prospectivity and Statoil's exploration success in the area. The discovery could lead to a further extension of the Norne field production life," says Hans Jakob Hegge, senior vice president for the operations north cluster in Statoil.

Exploration well 6608/10-15 is situated in PL128 in the Norwegian Sea. Statoil is operator with an interest of 63.95455%. The partners are Petoro AS (24.54546%) and Eni Norge AS (11.5%).

NYC-based PIRA Energy Group reports that Brent crude prices have moved higher and are likely to stay strong. On the week, U.S. commercial stocks increased. In Japan, crude imports rose sufficiently to produce a moderate stock build. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Bullish Oil Prices

It is hard not to be bullish oil prices with the global economy gradually improving, tight physical oil markets and MENA turmoil, which is already substantially reducing global oil supplies and has the potential to reduce supplies further. Current positioning and likely September deflationary type headlines, due in part to a challenging calendar, but also the startup of Iranian nuclear negotiations, pose downside risks to oil prices. Yet, the burgeoning momentum to own oil seems poised to push oil prices higher for now with SPR chatter somewhat limiting the upside.

Slight U.S. Commercial Stock Build

Commercial inventories increased for the week ending August 30 as product stocks swung from a draw the week before to a build. Added supply resulted from reported product demand weakening and product output increasing. This more than offset a product import decline. Last year for the same week, product stocks declined as refinery operations were curtailed by Hurricane Isaac. Hence the year on year product stock excess widened with the bulk of the excess in gasoline and other products.

Japanese Crude Runs Decline as Turnarounds Gear Up

Crude runs began to decline as turnarounds started to gear up and crude imports rose sufficiently to produce a moderate crude stock build. Gasoline demand eased modestly, while gasoil demand remained strong. Stocks of both posted only modest changes on the week. Kerosene demand perked up and with a lower yield the stock build rate slowed. Refinery margins remain very poor.

Saudi Formula Crude Prices for October Tightens for Asia, Less Aggressive in Europe

Saudi’s formula prices for October were recently released. In Asia, differentials were raised most aggressively on lighter grades, but the differential for Arab heavy was left unchanged. While the price adjustment was termed "less aggressive" than market expectations, refiners still cannot be too pleased given the woefully weak refining margins, particularly for topping configurations.

Cushing Stocks Drop 15 Million Barrels in Last 9 Weeks

Crude stocks at Cushing, Oklahoma have fallen for nine consecutive weeks – a total of 15 million barrels since late June. Southern price spreads remained tight, with WTI discounts to Atlantic Basin light crudes averaging $4-5/Bbl in August. Northern spreads were mixed, as oil sands upgrader maintenance restricted synthetic crude supplies while raising bitumen production.

Slow Stock Building in U.S.

Propane building season continues but at a slow pace, despite the latest week's surge, in the U.S. as exports remain quite high, petchem feed usage is ongoing and the crop drying season is just weeks away. Europe is starting to attract cargoes as North Sea maintenance continues and petchem feedstock usage is quite favorable. The Northern Hemisphere needs to start preparing for the upcoming heating season.

U.S. Ethanol Prices Soar

U.S. ethanol prices rose to a two-month the week ending August 30. The jump was primarily due to the scarcity of corn in the Midwest, causing ethanol production to drop to a 21-week low. Also providing support were petroleum prices which rose to a two-year high.

The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.

Statoil has started the build-up of its Aberdeen operating organization and reported at SPE Offshore Europe 2013 that the company and its partners are on track with the Mariner field development project.

The Mariner heavy oil field was discovered in 1981. Statoil entered the license as operator in 2007 with the aim of finally unlocking the resources.

 The company and its partners took the final investment decision in December 2012 and the UK government's Department of Energy and Climate Change announced their approval of the field development plan in February 2013.

"This is the largest new offshore field development in the UK in over a decade. It has been 30 years in the making, and now we are on track developing the field and preparing for 30 years of production," says Lars Christian Bacher, Statoil's executive vice president for Development and Production International.

Statoil expects to start production from Mariner in 2017. The average production is estimated at around 55,000 barrels of oil per day over the plateau period from 2017 to 2020.   Expected recoverable oil volumes are estimated to more than 250 million barrels.

 Statoil has started the build-up of its local organization in Aberdeen and is planning to have a new operations center in place by 2016.

"The project will lead to substantial job creation in the region with more than 700 long-term, full-time positions," Bacher says.

Statoil aims to recruit most of these positions locally, and is now launching a branding campaign in Aberdeen to support recruitment efforts.

"We started the year with one employee in Aberdeen and expect to have a 75-person strong organization by year end," Bacher says.

Statoil has utilized its extensive heavy oil experience from Norway, Brazil and Canada in its efforts to find a viable development solution for the Mariner heavy oil field.

The field will be developed with a production, drilling and quarters platform based on a steel jacket with 50 active well slots, and a floating storage unit of 850,000 barrels capacity. In addition a jack-up drilling rig will be used to assist the drilling for the first four to five years.

The UK and global supplier industry will play a central role in the development of the Mariner project. The majority of facility contracts have been awarded, in addition to the contracts for drilling from the fixed platform and the jack-up rig.

Contracts within operations and maintenance, drilling and well services, and business support will be tendered from 2013 to 2016.

The majority of suppliers within these areas will be based in the UK, generating many long-term, UK-based jobs with contractors. Statoil has established an Aberdeen procurement organization, and is actively informing UK suppliers of its plans and activities.

Following the award of the major facilities contracts Statoil is currently ramping up activities at the construction yards. Offshore installation of the platform jacket is scheduled for mid-2015, followed by topsides during 2016.

Statoil is also the operator for the Bressay heavy oil field on the UK continental shelf where expected recoverable oil volume is 200-300 million barrels.

"We have chosen a stepwise approach starting with Mariner to ensure experience transfer and learning before we move forward with Bressay. The Bressay field's reservoir characteristics make it even more challenging than Mariner. Our focus is now on making the required preparations for project decision and execution, including necessary preparations for authority approval," says Bacher.

Statoil and its partners have selected a development concept with clear similarities to the Mariner project, but with some differences due to subsurface characteristics. The Mariner contracts include options for Bressay, and execution planning is in progress.

The Bureau of Safety and Environmental Enforcement (BSEE) and the Department of Energy (DOE) Office of Fossil Energy signed a Memorandum of Collaboration this week that will coordinate the ongoing efforts of the two agencies on offshore research and technological improvement projects. Through this collaboration, BSEE and DOE will continue to work together to ensure safe, sustainable offshore production of oil and natural gas.

“This Memorandum of Collaboration will ensure that the ongoing activities of our two agencies will continue to be appropriately coordinated,” said BSEE Director James Watson. “We will continue to prevent duplication and increase the effectiveness of our ability to create a regulatory environment that fosters the safe and responsible development of the Nation’s energy resources.”

“This Memorandum of Collaboration formalizes the interaction between our two agencies, and will help ensure that research and development executed by the Department of Energy is directly relevant to BSEE’s regulatory challenges.” said DOE Assistant Secretary Christopher Smith. “This is research that makes offshore oil and gas operations safer and environmentally sustainable while promoting our Nation’s energy security.”

The lead office within DOE that will work with BSEE is the Office of Fossil Energy, which supports research and development to ensure the Nation can continue to rely on clean, affordable energy from traditional fuel sources.

The agencies will continue to collaborate in support of three primary objectives: building safety through technological improvements; supporting research and development for offshore operations; and working together to support the implementation of recommendations arising from various investigations and studies related to Deepwater Horizon tragedy.

BSEE and the Office of Fossil Energy will engage in quarterly meetings to share near-term goals and track key milestones. Each year, the two agencies will prepare a joint progress report summarizing ongoing collaboration.

Click here for a copy of the Memorandum of Collaboration.

Shell and Baker Hughes has announced a software license and joint development agreement to produce a high-end platform for geological and reservoir modeling. The new platform will bring enhanced evaluation and visualization capabilities to Shell allowing geoscience and petroleum engineering experts to better plan and manage the extraction of oil and gas resources, realizing their full potential.

“High-quality modeling of complex reservoirs is a major factor in creating additional value in our industry,” said Arjen Dorland, Shell’s EVP for Technical and Competitive IT. “Today’s announcement underlines Shell’s commitment to developing innovative technologies that give us and our partners a competitive edge.”

The system will be optimized for resource modeling and production in tight/shale gas and liquids rich shale reservoirs, and is based on the Baker Hughes JewelEarth™ software platform, which has a strong track record of delivering integrated, data-driven workflows for optimizing these types of plays.

The world is now thought to have around 230 years of recoverable gas resources at current production levels – of which roughly half is tight gas, shale gas, and coalbed methane. Shell is producing these gas resources in locations including the US, China and Australia.

The new platform will complement Shell’s existing applications, including GeoSigns, Shell’s proprietary software used to visualize and interpret seismic data, and will form part of an integrated working environment for Shell’s exploration and modeling experts.

“The JewelEarthTM platform can handle multiple solutions – from basin to wellbore scale – using one generic data source,” said Mario Ruscev, Chief Technology Officer at Baker Hughes. “This capability will provide an innovative modeling and optimization platform for the fast-growing Shell user community”

Seatronics Limited, an Acteon company, and Zetechtics Limited have signed a global representative agreement for the Jupiter range of subsea ROV intervention control systems and associated products.

The agreement includes the provision of rental equipment that will be held in all Seatronics’ locations: Brazil, Singapore, Australia and the UK. In addition to extensive pools of rental equipment, each location will hold a substantial sales stock, thereby offering a flexible and rapid response to all client requirements.

David Currie, managing director, Seatronics says: “Seatronics is a market leader in the rental and sale of marine electronic equipment and continues to offer the finest products and solutions to the subsea services sector. The Zetechtics agreement demonstrates our commitment to widening our portfolio of specialist ROV equipment and will further complement the Seatronics range. Both companies embody the quality-driven, market-leading approach demanded by customers in today’s subsea oil, gas and renewables sectors. The global coverage, in-house knowledge and enhanced value-added services that Seatronics can provide will, I am sure, lead to an increased level of interest in the Zetechtics product range.”

Tim Overfield, managing director, Zetechtics says: “This agreement provides professional worldwide availability of Jupiter products and services. As a result of the agreement Seatronics and Zetechtics clients can expect enhanced service and support across the entire range of Jupiter products.”

A large number of recent offshore natural gas discoveries in Israel have led to significant changes to the country’s fiscal terms, including the introduction of a windfall tax, and now a court decision could potentially add months to the current period of uncertainty surrounding authorization of gas exports, says a new report from research and consulting firm GlobalData.

According to the company’s  latest report*, the new roadblock to natural gas exports, caused by the High Court of Justices decision to freeze the Israeli cabinet’s agreement on the revised export policy, will have serious implications for Israel’s upstream operators.

Following the report of the Tzemach Committee in September 2012, which suggested capping exports at 53% of proven and probable (2P) reserves, the Israeli cabinet made the decision in late June to set the cap at just 40% in order to ensure domestic supply for the next 25 years.

However, as many parties, including environmentalist groups, dispute the calculations on which such supply projections are based and wish to retain a higher percentage for domestic use, challenges have been brought against the policy on the basis that it was only decided upon by the cabinet, not the full Knesset (Israel’s parliament). The High Court of Justice took the decision on 1 August to freeze the Israeli cabinet’s decision, pending a Supreme Court hearing which will commence on 17 September.

Rabie Khellafi, GlobalData's Lead Analyst for the MENA region, says: “This ruling is a blow both to the government and to operators, such as Noble Energy Inc., which have made significant discoveries in Israel’s offshore waters.”

The analyst continues: Although some fields, such as Tamar, have already commenced production, others, including Leviathan the largest discovery in the area are still having development plans finalized. The export regulations will have a significant bearing on these plans and the deals which relate to them. For instance, Woodside Petroleum Ltd has agreed in principle to acquire a share in the Leviathan field, but the details of the final agreement depend on export plans.”

In addition to these recent decisions, the Supreme Court could potentially rule that the Knesset will be responsible for approving any future decisions regarding the country’s  natural gas export policy a move which Khellafi anticipates would cause further uncertainty within the sector.

Not only is Israel’s export policy not yet finalized, but if the court rules that final decisions on natural gas exports must lie with the Knesset, then further delays will ensue. Given the complications of projecting the country’s supply needs, renewed debate on the subject could be a lengthy process, and although export policy will probably be finalized within the next year, we can expect a considerably high level of uncertainty to remain within the sector for months to come,” the analyst concludes.

*Israel Upstream Fiscal and Regulatory Report

As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, the Department of the Interior’s Bureau of Ocean Energy Management on Wednesday held Western Gulf of Mexico Lease Sale 233, which offered 20.7 million acres and attracted $102,351,712 in high bids for 53 tracts covering 301,006 acres on the U.S. Outer Continental Shelf (OCS) offshore Texas. A total of 12 offshore energy companies submitted 61 bids.

The Western Gulf of Mexico Lease Sale builds on the first two auctions in the current Five Year Program – a 39-million-acre Central Gulf offering held in March, which netted almost $1.2 billion high bids and a 20-million-acre Western Gulf offering held last November that netted nearly $134 million.

“This offshore oil and gas lease sale supports continued growth in safe and responsible domestic oil and gas production,” said Acting Assistant Secretary for Land and Minerals Management and BOEM Director Tommy P. Beaudreau. “Over the past fourteen months, the offshore oil and gas industry has invested well over $3 billion in new federal leases in the Gulf of Mexico.”

Today’s sale offered all unleased and non-protected areas in the Western Gulf of Mexico planning area, including 3,864 tracts from nine to more than 250 miles off the coast, in depths ranging from 16 to more than 10,975 feet (five to 3,346 meters). BOEM estimates the lease sale could result in the production of 116 to 200 million barrels of oil and 538 to 938 billion cubic feet of natural gas.

Sale 233 was the third held under the Administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012–2017 (Five Year Program), which makes available for exploration and development all of the offshore areas with the highest conventional resource potential that together include more than 75 percent of the Nation’s undiscovered, technically recoverable offshore oil and gas resources.

Domestic oil and gas production has grown each year the President has been in office, with domestic oil production currently higher than any time in two decades; natural gas production at its highest level ever; and renewable electricity generation from wind, solar, and geothermal sources having doubled. Combined with recent declines in oil consumption, foreign oil imports now account for less than 40 percent of the oil consumed in America – the lowest level since 1988.

Today’s highest bid on a single tract was $30,583,560 submitted by ConocoPhillips Company for Alaminos Canyon Block 475. ConocoPhilips Company also submitted the highest total amount in bonus bids, totaling $50,323,180 on 29 tracts.

BOEM received at least one bid within the three statute mile boundary area north of the continental shelf boundary between the United States and Mexico. Any bids submitted on blocks in the area will not be opened until on or before 30 days following the approval by the U.S. Congress of the agreement between the U.S. and Mexico or February 28, 2014, at which time the Secretary of the Interior may determine whether it is in the best interest of the United States either to open any such bids or to return the bid unopened.

BOEM established the terms for this sale after extensive environmental analysis, public comment and consideration of the best scientific information available. These terms include measures to protect the environment, such as stipulations requiring that operators protect biologically sensitive features and provide trained observers to monitor marine mammals and sea turtles to ensure compliance and restrict operations when conditions warrant.

The terms also continue a range of incentives to encourage diligent development and ensure a fair return to taxpayers, including an increased minimum bid for deepwater tracts, escalating rental rates and tiered durational terms with relatively short base periods followed by additional time under the same lease if the operator drills a well during the initial period.

Following the sale, each bid will now go through a strict evaluation process within BOEM to ensure the public receives fair market value before a lease is awarded. Sale statistics for Sale 233 are available at:  http://www.boem.gov/Sale-233.