The Bureau of Ocean Energy Management (BOEM) issued an Advanced Notice of Proposed Rulemaking (ANPR) on Risk Management, Financial Assurance, and Loss Prevention to seek public input as it considers modernizing its risk management program and bonding regulations for offshore oil and gas operations on the Outer Continental Shelf. This first step initiates a dialogue about BOEM’s existing regulations, which are approximately 20 years old and have not kept pace with offshore infrastructure developments, including deepwater operations, current industry practices, and the growing costs of decommissioning.

“We would like to work with industry and others to determine how to improve our regulatory regime to better align with the realities of aging offshore infrastructure, hazard risks, and increasing costs of decommissioning,” said BOEM acting Director Walter D. Cruickshank. “Today’s action is an important first step in initiating a dialogue on how to best enhance our risk management program to better match current practices, with the ultimate goal of ensuring that industry meets its decommissioning responsibilities and the burden of decommissioning a facility on the Outer Continental Shelf does not fall to taxpayers.”

Existing regulations require lessees on the Outer Continental Shelf to provide bonds or other alternative forms of financial assurance to cover current and future operations, such as decommissioning oil and gas infrastructure. Since the current bonding requirements were set nearly a quarter of a century ago, offshore operations have changed significantly, such as increased advancements in the scale and complexity of deepwater and subsea operations, and the costs of decommissioning have dramatically increased. In light of the infrastructure and operational changes, BOEM has recognized the need to update its requirements and develop a comprehensive program to assist in identifying, prioritizing, and managing the risks associated with industry activities on the Outer Continental Shelf.

BOEM is seeking stakeholder comments regarding various risk management and monitoring activities related to offshore energy development on the Outer Continental Shelf. The advanced notice of proposed rulemaking seeks comment on the bonding and financial assurance program for BOEM's offshore oil and gas program. The bureau is also accepting comments on the analogous bonding and financial assurance program for BOEM's offshore renewable energy and hard minerals programs. The notice also solicits comments on best practices to mitigate risks, as well as whether, or to what extent, the current forms of financial assurance are adequate and appropriate.

The Advanced Notice Proposed Rulemaking will be published in the Federal Register on Aug.19, 2014 and available for public viewing the day before. The ANPR includes a 60-day comment period which will close at midnight on Oct. 20, 2014. After the comment period closes, BOEM plans on continuing its outreach and hosting a workshop with stakeholders to have additional opportunities for discussion as it considers options for proposed regulations.

HOUSTON (Aug. 6, 2014) – Artificial Lift Company (ALC) has changed its name to AccessESP to better communicate the value proposition of the company’s unique and practical electric submersible pump (ESP) conveyance technologies. The company unveiled its name, logo and website.

AccessESP’s new name reflects the industry’s need to radically simplify the process of deploying ESPs while providing easy full bore access to the reservoir in ESP lifted wells.

For remote well sites with challenging logistics as well as offshore locations, maximizing the value of ESP wells while simplifying the conveyance of ESPs without a costly workover rig is crucial. Since 2008, AccessESP’s streamlined technological focus has provided simplified rigless conveyance solutions that greatly reduce intervention cost, non-productive time and lost production. The company has conveyed ESPs using its technology for international and national oil companies around the world.

“I am pleased to announce our company’s name change to AccessESP, a name that accurately reflects our unique technology. This also serves as an opportunity to reintroduce our approach where we partner with ESP providers to deliver a rigless, slickline deployable, through tubing, full bore access ESP solution that provides all the functionality of a conventional ESP,” said David Malone, president and chief executive officer (CEO), AccessESP.

AccessESP’s management team is based at its headquarters in Houston and includes seven executives including Malone; Ahmed Allouache, vice president and chief financial officer; Todd C. Wray, vice president of marketing and sales; Greg Nutter, vice president of operations and QHSE; Dwayne Leismer, vice president of engineering; Graham Anderson, region manager; and Dan Theriault, manufacturing manager.

Rice University experiments visualize methods for enhanced recovery from wells

A Rice University laboratory has provided proof that foam may be the right stuff to maximize enhanced oil recovery (EOR).

In tests, foam pumped into an experimental rig that mimicked the flow paths deep underground proved better at removing oil from formations with low permeability than common techniques involving water, gas, surfactants or combinations of the three.

The open-access paper led by Rice scientists Sibani Lisa Biswal and George Hirasaki was published online by the Royal Society of Chemistry journal Lab on a Chip.
Oil rarely sits in a pool underground waiting to be pumped out to energy-hungry surface dwellers. Often, it lives in formations of rock and sand and hides in small cracks and crevices that have proved devilishly difficult to tap. Drillers pump various substances downhole to loosen and either push or carry oil to the surface.

Biswal's lab has learned a great deal about how foam forms. Now, with an eye toward EOR, she and her colleagues created microfluidic models of formations -- they look something like children's ant farms -- to see how well foam stacks up against other materials in removing as much oil as possible.

Foam sent through a microfluidic model created at Rice University shows its ability to remove oil (pink) from low-permeability formations. Rice scientists conducted experiments to see how foam would compare with water, gas or combinations of the two for use in enhanced oil recovery. (Credit: Biswal Lab/Rice University)

The formations are not much bigger than a postage stamp and include wide channels, large cracks and small cracks. By pushing various fluids, including foam, into test formations, the researchers can visualize the ways by which foam is able to remove oil from hard-to-reach places. They can also measure the fluid's pressure gradient to see how it changes as it navigates the landscape.

The team determined the numbers are strongly in foam's favor. Foam dislodged all but 25.1 percent of oil from low-permeability regions after four minutes of pushing it through a test rig, versus 53 percent for water and gas and 98.3 percent for water flooding; this demonstrated efficient use of injected fluid with foam to recover oil.

The less-viscous fluids appear to displace oil in high-permeability regions while blowing right by the smaller cracks that retain their treasure. But foam offers mobility control, which means a higher resistance to flow near large pores.

"The foam's lamellae (the borders between individual bubbles) add extra resistance to the flow," said Biswal, an associate professor of chemical and biomolecular engineering. "Water and gas don't have that ability, so it's easy for them to find paths of least resistance and move straight through. Because foam acts like a more viscous fluid, it's better able to plug high-permeable regions and penetrate into less-permeable regions."

Charles Conn, a Rice graduate student and lead author of the paper, said foam tends to dry out as it progresses through the model. "The bubbles don't actually break. It's more that the liquid drains away and leaves them behind," he said.

Drying has two effects: It slows the progress of the foam even further and allows surfactant from the lamellae to drain into low-permeability zones, where it forces oil out. Foam may also cut the sheer amount of material that may have to be sent downhole.

One of the challenges will always be to get the foam to the underground formation intact. "It's nice to know that foam can do these things, but if you can't generate foam in the reservoir, then it's not going to be useful," Conn said. "If you lose the foam, it collapses into slugs of gas and liquid. You really want foam that can regenerate as it moves through the pores."

The lab plans to test foam on core samples that more closely mimic the environment underground, Biswal said.

Kun Ma, a Rice alumnus, co-authored the paper. The Department of Energy, the Abu Dhabi National Oil Co., the Abu Dhabi Oil R&D Sub-Committee, the Abu Dhabi Co. for Onshore Oil Operations, the Zakum Development Co., the Abu Dhabi Marine Operating Co. and the Petroleum Institute of the United Arab Emirates supported the research.

Successful Transformation from an Oil Trading, Transportation and Storage Company to a Resource-based Energy Enterprise

Brightoil Petroleum (Holdings) Limited ("Brightoil Petroleum" or the "Group"; stock code: 933.HK) announced the closing of a stock purchase agreement (the "Agreement") with Anadarko China Holdings 2 Company Limited ("Anadarko China"), a wholly-owned subsidiary of Anadarko Petroleum Corporation ("Anadarko Petroleum"), to acquire a participating interest in two oil producing blocks in Bohai Bay (Contract Area 04/36 and Unit Area 05/36) at a consideration of USD
1.046 billion.

Following the signing of the agreement on 18 February, the acquisition was successfully completed on
8 August after six months of efforts put together by both parties. After the closing of the Agreement, the Group now holds a 40.09% participating interest in the 124km2 offshore block (Contract Area 04/36) and a 29.18% participating interest in the 88 km2 offshore block (Unit Area 05/36). The operator of both blocks is CNOOC China Limited ("CCL").

As a result of this, the Company's oil and natural gas resources extend from the ground to offshore, and the Company's oil and natural gas storage and production will increase immensely. Together with its originally owned Dina1 and Tuzi natural gas field, the Company's interest in 2P storage is expected to reach approximately 86 million boe. When all these three areas are in operation, Dina1 and Tuzi and Bohai will reach a daily net production of approximately 25,000 boe, and an annual net production of approximately 9 million boe. Upon this successful Closing, the Company will reach a solid step-out and broaden its activities into energy resources supply and operation.

Dr. Sit Kwong Lam, Chairman of Brightoil Petroleum, said, "We believe that the closing of the acquisition marks the successful transformation of the Group in its aim to become a resource-based energy enterprise. The Group will continue to strengthen its development in the upstream business, aiming to achieve sustainable growth of its reserves, production volume and revenue in the long run. This will accelerate the Group's development into an international integrated oil & gas conglomerate and at the same time enhance our returns to investors and create further shareholders' value. "

About Brightoil Petroleum
Brightoil Petroleum (Holdings) Limited is a resource-based energy enterprise focusing on upstream oil and gas resources exploration, along with further developments downstream. The Group is principally engaged in the Exploitation and Production of Upstream Oil and Gas Fields, Marine Transportation, Oil Storage and Terminal Facilities and International Trading and Bunkering Business.

The Group has three oil and gas field projects in its portfolio, including Dina1 Gas Field, Tuzi Gas Field and Caofeidian Field in Bohai Bay. The Company's interest in 2P storage is expected to reach approximately 86 million boe. When all these three areas are in operation, Dina1 and Tuzi and Bohai will reach a daily net production of approximately 25,000 boe, and an annual net production of approximately 9 million boe.

The Group currently operates four Aframax Oil Tankers and five VLCCs, and has a marine transportation capacity that will exceed 2 million tons.

The Group's oil storage facility on Waidiao Island in Zhoushan, with a total capacity of 3.16 million cubic meters, is under construction. The facility will be equipped with 13 berths which can accommodate vessels from 1,000 to 300,000 DWT. Meanwhile, the Group's oil storage facility on Changxing Island in Dalian, with a total capacity of 7.19 million cubic meters, is also under construction. The facility will be equipped with 13 berths to accommodate vessels from 1,000 to 300,000 DWT.

The Group is one of the largest marine bunkering service providers in China with services expanded to global ports. The Group's tradable range of products is diversified into fuel oil, crude oil, gas oil, as well as petrochemical and the related petroleum products. The annual trading and supplying volume has reached approximately 20 million tons.

The Group will continue to develop its upstream business by stretching its tentacles into the exploration, exploitation and production of oil fields with a view to becoming one of the leading resources-based energy conglomerates in the world.

WASHINGTON, D.C., August 18, 2014 – Platts – Surging U.S. oil production is sending ripples through the crude oil market -- in prices, trade flows and the downstream, the International Energy Agency's (IEA) top oil official said Sunday on Platts Energy Week.

U.S. production is expected to reach 8.5 million barrels per day (b/d) this year and 9.3 million b/d in 2015, almost double 2008's output of 5 million b/d, said Antoine Halff, the head of the IEA's oil industry & markets division.

"On prices, the surge in production has really offset the production [loss] we've experienced in places like Libya, Iran, and so on," he said. "So that's why prices have not risen more than they have. They've been fairly stable, remarkably stable, given all the turmoil in the Middle East and elsewhere."

Crude oil that had been imported into the U.S. can now be imported by other countries, Halff said.

"There's been a tremendous remapping of the oil trade flows, if you like," he said. "And now Asia is supposed to really become the magnet for global crude traded internationally. That's a big change. China is now importing more crude than the U.S., for instance."

Downstream, new refineries under development in the U.S., increased refinery runs and the installation of more and more modern processing units, have resulted in a surge in output of U.S. product exports, Halff said.

"In U.S. refining, it's really been a revolution in a way," he said. "But these changes have taken place against a background of changes elsewhere as well for other reasons. Rapid growth in refining capacity in the Middle East, in India, in China, and so on."

Upstream, about 60% of the Organization of Petroleum Exporting Countries’ (OPEC) incremental capacity growth over the next five years is supposed to come from Iraq, the cartel's second-largest producer, according to the IEA. But that growth is "seriously at risk" because of the uncertainty and political strife in Iraq, Halff said.

"We have to wait and see," he said. "We took down our forecast of Iraqi production even before the surge in violence started earlier last month. So we've reduced our forecast of Iraqi production for the next five years by about half a million barrels."

The forecast does not take into account jihadist group Islamic State's campaign in Iraq, but "reflects other problems that Iraq has -- red tape, corruption, bottlenecks, lack of infrastructure, and so on," Halff said.

Should the expected Iraqi output not materialize, Saudi Arabia could step in, Halff said, but noted the country's current plans for capacity development likely won't result in higher net capacity for OPEC's largest producer, Halff said.

"What we've seen, our assessment of Saudi plans at this point, is that all the new capacity that will come online will essentially replace capacity that's being mothballed or that's being allowed to rest," he said. "But if Saudi chose to increase capacity, it would be able to do so."

While the IEA sees "some growth" in the United Arab Emirates, "elsewhere in OPEC we see problems," Halff said. "We see flat production growth. Or we see even declines in places like Algeria and Kuwait."

The "real game changer" has been oil production from shale reserves, starting with the U.S., Halff said.

"I think the shale revolution could not have happened anywhere else than in the U.S.," he said. "It's no accident that this happened in the U.S. Because the U.S. has a unique combination of assets, not only geological resources, but also business culture, enterprising spirit, infrastructure in place, a lot of technological know-how, skilled labor, the right environmental structure, the right investment climate. All these factors could not be found in the same combination in any other country.

"But there's nothing that prevents other countries now that the technology has been developed to adopt it and to try to replicate the success of the U.S.," he continued.

"Chief among them is Canada, of course," Halff said. "Mexico is a candidate. But [that would] probably be more in the next decade than in the next five years. We see a little bit of growth in the next five years. But not so much. We see more growth probably in Argentina, more growth in Russia and probably a little bit of growth in Australia towards the end of the decade."

The IEA sees U.S. crude oil production hitting a plateau over the next five to seven years, Halff said, adding that the surge in U.S. production is not going to be the answer to the world's energy needs.

"There's a need for investment in OPEC," he said. "There's a need for investment in the Middle East. So there's no room for complacency. This surge in production is phenomenal. It's a game-changer in many ways. But that doesn't mean that we don't need the traditional suppliers anymore. We need them very much."

Other Program Highlights

Also on the program, Katherine Hammack, the U.S. Army’s assistant secretary for installations, energy and environment, joined the program for an extended discussion on the dramatic transformation of the U.S. Army's energy consumption. View part 1 here and part 2 here.

During Sunday’s “Market Spotlight” segment, Platts Senior Managing Editor Richard Capuchino Jr. discussed the growing popularity of Vasconia, one of Colombia’s top-exported crude oil grades.

Platts Energy Week airs at 8 a.m. U.S. Eastern time Sunday mornings on WUSA9 in greater Washington, D.C., and in Houston on KUHT, a PBS affiliate, as well as on other PBS stations in cities throughout the U.S., including Anchorage, Billings, Houston, Juneau, Las Vegas, Minneapolis, San Francisco, Raleigh and Wichita. For online viewing, the program is accessible at www.plattstv.com.

The program features interviews with leading figures from government, industry, markets, think tanks and the financial community. Host Bill Loveless is an editorial director at Platts who brings 30 years of energy journalism experience to the anchor chair. The program also features veteran energy news editor and Platts Energy Week Senior Correspondent Chris Newkumet.

Platts Energy Week is produced by Platts, the world’s leading source of information and intelligence on energy and related commodities and a division of McGraw Hill Financial [NYSE: MHFI] and WUSA TV, the Washington, D.C., CBS affiliate and flagship television station of Gannett Company. [NYSE: GCI]. While the program is U.S. focused and produced in Washington, it reflects the global vantage point of Platts, whose correspondents are stationed in such major capitals as London, Dubai, Singapore, Tokyo and Moscow.

Guest booking for Platts Energy Week and related inquiries should be addressed to this email: This email address is being protected from spambots. You need JavaScript enabled to view it.. Additional information about Platts and the energy sector can be found at www.platts.com. 

Multiple contracts awarded with a total value of approx. NOK 830 million.

DOF Subsea, a subsidiary of DOF ASA, has been awarded multiple contracts, with a total value of approx. NOK 830 million.

In the Asia Pacific region, DOF Subsea has been awarded several contracts including project management and engineering, IMR services and subsea installation work. The contract awards will secure utilization of the vessels Skandi Singapore, Skandi Hercules and Skandi Hawk.

In the Atlantic region, DOF Subsea has been awarded several contracts, including a contract for completing two construction projects offshore West Africa, utilizing the Skandi Singapore. The contract awards will improve utilization of the regional vessels.

In the North America region, DOF Subsea has been awarded several contracts including IMR services and subsea installation work, increasing the utilization of the regional vessels.

CEO, Mons S. Aase stated "I am very pleased with the contract awards, improving utilization of our onshore engineering and project management teams as well our vessels for second half 2014 and Q1 2015."

Shell subsidiary in Nigeria, Shell Nigeria Exploration and Production Company Ltd (SNEPCo) started oil production from the first well at the Bonga North West deep-water development off the Nigerian coast on Tuesday 5 August 2014, another milestone for the country's energy industry.

"This is an excellent addition to our deep-water portfolio – a key growth theme for Shell's world-wide upstream business," said Andrew Brown, Shell's Upstream International Director. "It's also good news for Nigeria, as it is a new source of oil revenues and strengthens Nigeria's deep-water expertise, a key driver of economic development."

The Bonga project, which began producing oil and gas in 2005, was Nigeria's first deep-water development in water depths over 1,000 meters. Bonga North West represents a significant step forward for the project.

Oil from the Bonga North West sub-sea facilities is transported by a new undersea pipeline to the existing Bonga floating production, storage and offloading (FPSO) export facility. The Bonga FPSO has been upgraded to handle the additional oil flow from Bonga North West which, at peak production, is expected to contribute 40,000 barrels of oil equivalent per day, helping to maintain the facility's overall output.

Four oil producing wells and two water injection wells in the Bonga North West development will be connected to the FPSO, from where oil is loaded onto tankers for shipping around the world.

The Bonga North West project is part of Shell's long-standing commitment to developing deep-water engineering skills in Nigeria. The investments made by SNEPCo and its other project partners in the Bonga North West project include upgrades of local contractors' facilities and providing specialized training for Nigerians to work in the energy industry.

The Bonga project is operated by SNEPCo, which holds a 55% stake. The other project partners are Esso Exploration & Production Nigeria (Deepwater) Limited (20%), Total E&P Nigeria Limited (12.5%) and Nigerian Agip Exploration Limited (12.5%) under a Production Sharing Contract with the Nigerian National Petroleum Corporation.

Facts about the Bonga North West project:
• A number of new production manifolds, subsea umbilical systems, oil production and water injection flowlines and subsea tree systems were installed on the sea bed around 1,000 meters below the surface.
• A significant part of the project was carried out by Nigerian companies, including a local contractor that fabricated and installed the FPSO topsides.
• The project leadership and majority of staff working on the Bonga North West project are Nigerian – testament to the growth of deep-water engineering experience in SNEPCo.
• The project has been implemented according to high safety standards. SNEPCo and contractor staff worked in 10 locations in the USA, Europe and Nigeria on various aspects of the project.
SNEPCo was incorporated in 1993. The company holds interests in four deep-water blocks, two of which it operates: OML 118 (Bonga) and OML 135 (Bolia).
• More information on the Bonga project is available online here (PDF, 224 KB) - opens in new window

2H Offshore, an Acteon company, has been appointed by Heerema Marine Contractors (HMC) to engineer hybrid risers for Total's Kaombo Block 32 project. HMC, together with consortium partner Technip, were awarded the contract for the EPCI and pre-commissioning of the SURF scope for the Kaombo development by Total.

2H Offshore has been pioneering riser analysis, design and engineering for more than 20 years and with this capability and experience, 2H will perform part of the detailed engineering of the 18 Single Top Tensioner Risers (STTRs) selected for the Kaombo development. 2H will work closely with HMC as a part of an integrated design team, with 2H responsible for the engineering of the Buoyancy Tank, Upper Riser Assembly and Lower Riser Assembly packages together with Global Analysis and Systems Engineering of the risers.

The Kaombo development, located offshore Angola in water depths extending from 1425m to 1925m, will include the Gindungo, Gengibre, Canela, Louro, Mostarda west and Caril fields tied back to two turret-moored FPSOs. The selected concept consists of a number of production loops with one insulated production riser and one non-insulated service riser per field. Water injection risers will also be required.

The project is currently in the detailed engineering stage with 2H also contracted to support HMC through the procurement, fabrication and installation phases.

Alex Rimmer, director of 2H's Woking office, said "2H is proud and excited to be engineering the risers for the largest subsea field development project in the world. This award and other recent awards confirm 2H as the leading contractor for the engineering, design and analysis of a range of production riser technologies including hybrid, steel catenary, top tensioned and flexible riser systems. With a history of working together, we look forward to engaging with HMC on this and future projects."

Hoover Container SEA SDN BHS, a subsidiary of Hoover Group, Inc., has opened a new regional distribution center in Port Klang, Selangor, Malaysia, and relocated its Southeast Asia (SEA) office to Petaling Jaya, Selangor, Malaysia.

The new regional distribution center was opened to support customers in key markets such as Malaysia, Singapore, Indonesia, Thailand, Myanmar, Vietnam and China. This facility provides chemical tanks and cargo carrying units (CCU’s). Hoover has reduced its delivery time by an average of four weeks due to its close proximity to Port Klang, the largest port in Malaysia with trade connections to more than 210 countries and 500 international ports.

Previously located in Kuala Lumpur, Hoover’s new office in Petaling Jaya, Selangor, Malaysia, provides more room for operational growth. The floorplan is comprised of individual offices and an open-concept work space. Its new location still allows for easy access to the capital city as well as access to the Port, where Hoover’s yard is located.

“We are pleased to open a new regional distribution center in Port Klang as we seek to continually provide efficient and convenient support our Southeast Asia customers,” said Arash Hassanian, VP international sales. “This new facility, coupled with the new location of our Southeast Asia office, will allow our team to continue offering industry-leading containers and support to global clients while meeting international regulatory standards and providing cost-effective and customized solutions.”

Marathon Oil Corporation (NYSE: MRO), through its wholly owned subsidiary Marathon Oil Exploration Limited, announced today it has signed an exploration and production sharing contract (EPSC) for Gabon offshore Block G13, which was named Tchicuate upon signing, located in the deepwater, pre-salt play. The Company was the high-bidder on the block in Gabon's licensing round in October 2013.

"We're pleased to finalize the EPSC on the newly named Tchicuate Block, which is located in the high-potential, pre-salt play offshore Gabon," said Mitch Little, Marathon Oil vice president, International and Offshore Exploration and Production. "The addition of the Tchicuate Block aligns well with our strategic focus of capturing quality and material resource in proven and emerging oil provinces, and adds depth to the Company's exploration portfolio, following our 2013 Diaman-1B discovery on the Diaba Block offshore Gabon."

The Tchicuate Block encompasses 275,000 acres with water depths ranging from approximately 3,250 to 8,250 feet. It is located approximately 50 miles offshore the coast of Gabon and near proven shallow-water, pre-salt oil discoveries. Marathon Oil holds a 100 percent participating interest and operatorship in the block. In the event of development, the Republic of Gabon will assume a 20 percent financed interest in the contract upon commencement of production. The State holds additional rights to participate in the block in the future as a co-investor.

Marathon Oil also holds a 21.25 percent working interest in the non-operated Diaba License G4-223, encompassing 2.2 million gross acres, where the Diaman-1B discovery was made in 2013.

Woods Hole Group will work with its partner, the Conrad Blucher Institute (CBI) for Surveying and Science fromTexas A&M University-Corpus Christi on the work in Gulf of Mexico.  CBI (http://www.cbi.tamucc.edu) has a 20-year history of performing this type of work for NOAA and others.  CBI conducts innovative research and encourages scientists, Professional Engineers, and surveyors to develop accurate scientific spatial measurements; and apply technology solutions relevant to the geospatial sciences and issues associated with the Gulf of Mexico region.  CBI is home to the largest endowed Geographic Information Science (GISc) programin the United States.

This new work is in addition to the ongoing OperationsandMaintenance Woods Hole Group will continue to perform for JXPORTS (http://tidesandcurrents.noaa.gov/ports/index.html?port=jx), a joint private/public PORTS®network.  The Jacksonville Marine Transportation Exchange (JMTX) is the private partner and lead operator for JXPORTS.  Woods Hole Group designed, installed, and maintains JXPORTS under contract to JMTX, the second largest PORTS® installation in the country.

All of these systems provide invaluable information to users of the waterways, including the shipping industry, tug services, military personnel, cruise ships, commercial and recreational fisherman, and academic institutions.These systems provide access to real-time quality controlled data (every 6 minutes) that facilitate safe navigation, and promote greater understanding of the waterway system and itsenvironment for research and engineering purposes.  With knowledge of water depths, current speeds and direction, the distance fromthe water surface to overhead bridge superstructure ,and other information, ship pilots can navigate safely and more efficiently.  The PORTS®systems are intended to reduce the risk of accident and improve maritime commerce. Economic studies also demonstrate that PORTS® reduces groundings by 50% and generates more than $50million in annual efficiency benefits.

Woods Hole Group is the leading PORTS® management expert, currentlymaintainingmorethan one hundred PORTS®stations along the East Coast and Gulf of Mexico.

Vice President for Scientific Operation, Robert Catalano, says, “Woods Hole Group has a 20 year relationship with NOAA CO-OPS and a reputation for providing a high level of support to NOAA.  The confidence that NOAA placed in Woods Hole Group through this multi-year award is a testament to this.   NOAA PORTS®is a vital data sourceto maintain the maritime safety our nation’s waterways.  Weare confident themaritime community will depend on the PORTS®data streamfor value-added decision-making that will save time and money while improving safety.”

NOAA CO-OPS Director, Rich Edwing says about Woods Hole Group and the overall PORTS® program, “The Woods Hole Group is an integral partner for ensuring continuous collection of essential water level andother data at our PORTS®for Narragansett Bay, New York/New Jersey Harbor, Chesapeake Bay, DelawareBay and River, Pascagoula, and previously for Lake Charles. Through their annual inspections of our systemsand during emergency repair situations the Woods Hole Group has demonstrated performancesuccess. We are excited to continue this professional relationship withthe Woods Hole Group.”

Recent news headlines on the LNG sector in Australia seem to be centered around its unsustainable rising costs. Woodside Petroleum had to ditch plans last year for its Browse LNG plant, which had gone way over budget at an estimated cost of US$80bn. In the interest of continuing the development, Woodside and its partners have now turned to FLNG vessels as a practicable alternative. More recently, Santos and GDF Suez have also scrapped plans to build gas plants off the Northern Territory Coast of Australia. Projects that have gone ahead have seen significantly increased costs. At approximately 80% completion, the Gorgon LNG project is now estimated to cost US$54bn – a sharp contrast to the original budget of US$37bn (46% over-budget).

In the meantime, despite Australia's LNG cost challenges, the United States is moving forward with the possibility of bringing onstream an LNG plant that would cost between US$2.2bn and US$3.7bn. Magnolia LNG in Louisiana is expected to come onstream in 2018, potentially the nation's first LNG export plant with the capability of processing 8 million metric tons per annum. This shows the feasibility of constructing similar infrastructure at that price, but outside Australia!

Australia's Woodside is, at the same time, looking to make a move overseas in search of better economics. The country stands to lose US$97 billion of potential LNG projects to East Africa and North America unless radical cost reduction is applied. Furthermore, Russia and China's $400bn gas deal could possibly undermine several of Australia's gas projects.

Australia has actively been finding ways of implementing reforms in an attempt to reduce operating costs. Even with the recent Russia-China deal, pipeline gas from Russia will only be supporting 6% of China's gas demand by 2030. China cannot avoid seeking diversity in its energy sources. New technologies and innovations, such as the much-anticipated FLNG vessels, will present themselves as potential solutions. With these cost-reducing opportunities/ challenges, it proves to be interesting how the scenario will play out for Australia, new LNG producer entrants elsewhere and the potential for new gas pipeline suppliers to China.

www.douglas-westwood.com

NYC-based PIRA Energy Group reports that there was the largest 2Q stock build in the last 10 years. In the U.S., there was a modest U.S. stock build. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Largest 2Q Stock Build in Last 10 Years

Last week’s release of IEA stock data, combined with weekly data in the United States and Japan, show that commercial oil inventories in the three major OECD markets increased in the second quarter. Weak economic activity has undermined oil demand, forcing supplies into inventory. Higher inventories are undercutting PIRA’s confidence in its most recent oil price forecast. In contrast to Brent, front-month WTI remains well supported relative to further-out contracts by extraordinarily low inventories and strong September refinery demand.

Modest U.S. Stock Build

Overall commercial inventories increased this past week, keeping stocks relatively flat to last year’s level. The inventories of the four major products are 22 million barrels below last year, while crude is 6 million barrels higher.

PIRA Lowers Price Outlook

While we have not formally updated our detailed supply/demand balances, which will be done later this month, it is becoming clear that, because of weaker demand, inventories will be much higher than last month’s forecast. We should note that some of today’s downward price pressure could be coming from producer hedging.

2Q14 Tight Oil Operator Review

Second quarter results were positive across the board. There were no lingering effects from the harsh winter with considerable production gains in the Bakken, the Eagle Ford, the Niobrara and the Permian. Many operators cited renewed gains in completion efficiencies in mature plays, as well as growing success in smaller plays like the Powder River. Bakken and Eagle Ford operators increased frac sizes and laterals, leading to higher IPs and EURs. Yet the focus of the industry was centered on the delineation and development of the Permian basin, where the production potential continues to grow with the identification of further productive layers.

U.S. Ethanol Output Tumbles

For the week ending August 8, most U.S. ethanol prices rebounded from the lowest level in several months after the DOE reported production had plummeted and inventories decreased during the week ending August 1. Manufacturing margins declined slightly as the lower average price for ethanol and co-product DDG outweighed the fall in corn costs. U.S. Ethanol Inventories Fell to a 11-Week Low 17.8 Million Barrels Ethanol-blended gasoline production soared to a seven-week high 8,902 MB/D the week ending August 8, fairly close to the record 8,980 MB/D set earlier this year. As ethanol demand rose, inventories fell to an 11-week low of 17.8 million barrels, down 500 thousand barrels from the previous week.

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.

BP Trinidad and Tobago LLC has announced the sanction of its Juniper offshore gas project

The project will feature the construction of a normally unmanned platform together with corresponding subsea infrastructure, a first for BP Trinidad and Tobago. Fabrication is proposed to begin in 4th quarter, 2014.

The Juniper facility will take gas from the Corallita and Lantana fields located 50 miles off the south east coast of Trinidad in water-depth of approximately 360 feet. The development will include five subsea wells and will have a production capacity of approximately 590 million standard cubic feet a day (mmscfd). Gas from Juniper will flow to the Mahogany B hub via a new ten kilometer flowline.

Juniper will become bpTT's 14th offshore production facility. Drilling is due to commence in 2015 and first gas from the facility is expected in 2017.

BPTT Regional President Norman Christie said: "Juniper demonstrates bpTT's commitment to Trinidad and Tobago over the long-term. This development is an important part of the future for bpTT because it will assist the company in meeting its natural gas commitments to the market. It is also an important step change for bpTT as it introduces subsea infrastructure to continue the development of its resources in the Columbus Basin."

BPTT operates in 904,000 acres off Trinidad's east coast. BPTT has 13 offshore platforms and two onshore processing facilities.

The Juniper project has been undertaking Front End Engineering and Design (FEED) activities since 2012.

Successful sea trials of Rodi Marine's newest crewboat the M/V Riley Claire have given Marine Jet Power a breakthrough in the fiercely competitive Gulf of Mexico crewboat market. The trial results show that all performance predictions were reached and the product is ideal for this application.

Four MJP 650 CSU waterjets power the new 175' (53.34m) DP2 Certified Crewboat built for Rodi Marine in Lafayette, LA by Swiftships LLC in Morgan City, LA. During sea trials in June, the M/V Riley Claire reached a top speed of 30.3 knots in lightship condition and 24.0 knots fully laden. The vessel's MJP waterjets are powered by four Cummins QSK 50 engines each producing 1800HP at 1900RPM and connected through Twin Disc MGX 6848 gearboxes at a 2.03:1 Ratio.

M/V Riley Claire, a USCG Subchapter T and ABS-classed all aluminum fast crew boat is 175' in length, has a beam of 25' and a molded depth of 13'6". While working in the Gulf of Mexico and servicing the Offshore Oil Market she carries a total of 34,500 gallons of diesel and 20,500 gallons of water for operating and an additional 6,700 gallons of diesel and 1,230 gallons of freshwater for the rigs. She is certified to carry 70 passengers and 10 crewmembers.

Riley Claire and her sister which will shortly be delivered to Rodi Marine will be the largest and fastest vessels in the seven vessel fleet and represent an important achievement for MJP as the first Dynamic Positioning 2 (DP2) rated vessels. They are the first vessels with MJP waterjets operating in the Gulf of Mexico. "We are starting to enter the Gulf market. We've wanted to be there for a long time," said Jordan Tilton of Marine Jet Power Inc.. The two vessels also marked a return to the commercial sector for Swiftships being the first vessels built after a five year period concentrating on military production.

NYC-based PIRA Energy Group reports that the July stock decline at Cushing strengthens WTI.  In the U.S., there was largest weekly stock draw since January.  In Japan, crude runs and stocks rose. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

July Stock Decline at Cushing Strengthens WTI

Stock levels for crude oil at Cushing dropped below 20 million barrels last month, for the first time since 2008. With logistical constraints still in place throughout much of the Midcontinent, most crude grades weakened relative to WTI, and even the Dated Brent premium shrank. However, the LLS premium strengthened, as Gulf Coast crude stocks dropped due to higher refinery runs.

Largest Weekly Stock Draw Since January

Overall U.S. commercial oil inventories fell this past week with a large product stock decline (the first since March) and a crude inventory decline. Crude stocks have fallen for six consecutive weeks. The large product inventory decline was supported by the strongest reported demand of the year. Overall inventories are now back below last year by 1.3 million barrels, with gasoline and distillate down roughly 10 and 2 million barrels, respectively.

Japanese Crude Runs and Crude Stocks Rise

Runs continued to rise in line with declining maintenance activity. Crude imports increased and crude stocks posted a modest build. Finished product stocks rose slightly. Gasoline demand fell back but lower yield allowed for a small stock draw. Gasoil demand was higher, but stocks still built on higher yield. Refining margins remain quite weak with the gasoline crack posting another sharp decline.

A Statistical Analysis of Cushing Crude Stocks and Storage Capacity Utilization

Different expressions of Cushing fundamentals, such a percent of storage capacity utilized, can have better relationships to WTI 1st – 2nd spreads than outright Cushing stocks. Over time, the strength in the correlation between Cushing fundamentals and WTI spreads has changed. Cushing fill ratios at either extreme of the historical range drive non-linear spread behavior.

Aramco Announces Crude Price Differentials for September

Saudi Arabia's formula prices for September were just released. Prices into the U.S. were cut, against the ASCI benchmark, across the board after two straight months at record highs. Pricing into Europe and the Med against the Bwave benchmark was raised. In Asia, not surprisingly, terms were made more generous.

BULLETIN: Market Dynamics Reflecting a New Reality

There is currently a crude surplus in the Atlantic Basin which has weighed on relative prices and narrowed light-sweet crude premiums. The development of this surplus during peak season Atlantic Basin runs and North Sea maintenance has caught a market by surprise typically conditioned for tightness at this time. Many people trade off historical relationships and expect them to continue. But supply/demand changes transform markets, even though it takes time for these markets to fully absorb the new reality.

Mt Belvieu Prices Stay Strong

The U.S. LPG complex remained strong in the face of falling energy prices worldwide. Cash propane at Mt Belvieu strengthened by over 2% to 102.4¢/gal. Propane prices dipped below $1 early in the weak, falling in sympathy with oil prices. Prices have rallied since Wednesday’s stocks report, as inventory increases have been decreasing in size. The prospect of a large crop drying season is also acting as a tailwind for prices.

Ethanol Prices Plunge

U.S. ethanol prices fell sharply the week ending August 1 after the DOE’s latest supply report showed that inventories had risen to a 16-month high the prior week. As a result, ethanol manufacturing margins were slightly lower.

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.