http://getenergyevent.com News Template RSS feed en-us Sun, 05 Feb 2012 21:25:52 GMT “The Moccasin discovery underscores the importance of the deepwater Gulf of Mexico as a source of domestic energy for the United States and as a focus area for Chevron’s worldwide exploration portfolio” The Keathley Canyon Block 736 Well No. 1 encountered more than 380 feet of net pay in the Lower Tertiary Wilcox Sands. The well is located approximately 216 miles off the Louisiana coast in 6,759 feet of water and was drilled to a depth of 31,545 feet. “The Moccasin discovery underscores the importance of the deepwater Gulf of Mexico as a source of domestic energy for the United States and as a focus area for Chevron’s worldwide exploration portfolio,” said George Kirkland, vice chairman, Chevron Corporation. “Moccasin is an important addition to our queue of high-quality opportunities around the globe.” Chevron began drilling the Moccasin well in March 2010. That activity was stopped in June 2010 when the U.S. government imposed a moratorium on deepwater drilling in the Gulf of Mexico. Drilling resumed in March 2011 after the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement approved Chevron’s revised drilling permit application. The well results are still being evaluated, and additional work will be needed to determine the extent of the resource. Chevron, with a 43.75 percent working interest in the prospect, was the operator of the Moccasin discovery well. Other Moccasin owners are BP, with 43.75 percent, and Samson Offshore Company, with 12.5 percent. Chevron is one of the largest leaseholders in the Gulf of Mexico and is currently developing the $7.5 billion Jack/St. Malo and the $4.1 billion Big Foot projects. Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available atwww.chevron.com.Source: Business Wire http://getenergyevent.com/News/Oil_and_Gas_Training_News/Chevron_Announces_Discovery_in_GoM Wed, 07 Sep 2011 00:00:00 GMT The current drilling programme, using the Ocean Sovereign jack-up rig located on the Bualuang Wellhead Platform ("WHP"), includes three new horizontal production wells, two horizontal sidetracks of existing wells and a pilot hole to test the East Terrace prospect. To date, two producers have been drilled and completed and the East Terrace exploration pilot hole drilled. East Terrace Oil DiscoveryA long reach well was drilled from the WHP to 2,961m measured depth to test the East Terrace fault block. This well encountered approximately 35 metres of net oil pay within three zones. Over 6 metres of net pay was encountered in the upper T5 sandstone interval. In the deeper T4 interval (the main reservoir unit in the Bualuang oil field) an additional 18 metres of net oil pay was encountered, while in the lower T3 interval a further 11 metres of net pay was found. A full evaluation programme including pressure measurements and fluid sampling was conducted over the intervals of interest, confirming the East Terrace as being a separate accumulation to the main field, with a different oil viscosity, gas/oil ratio and oil-water contact than the main Bualuang field. The preliminary evaluation of the data indicate a mid-case estimate of 50 MMbo in-place and a most likely recoverable volume in the range 8 - 14 MMbo. This range represents the high end of pre-drill estimates. Bualuang Development DrillingThe development drilling programme commenced on April 22nd, having been delayed due to administrative issues and necessary repairs to the rig's legs. To date, two of the five development wells planned for this phase of development have been completed and brought on stream, including a long-reach well into the previously undrilled northern area of the Bualuang structure. At this location the top T4 main reservoir came in some 4 metres high to prognosis, offering  scope for an upgrade to gross rock volume and hence reserves for the field overall. The next two development wells in the Bualuang field are to be completed, as planned. The final horizontal producer will be completed either in the East Terrace or in main body of the field, subject to a decision based on analysis of data acquired from the East Terrace exploration pilot hole. Following this development drilling campaign, the Ocean Sovereign jack-up rig will be moving off location for a scheduled inspection and certification. During the fourth quarter of 2011, a sidetrack of an existing well will be conducted with a workover rig (under an existing contract). In addition, Salamander is currently preparing to tender for another jack up rig to complete the exploration campaign in B8/38, which is now anticipated to take place in 4Q 2011. Block L15/50 (Salamander 50%, operator)The Dao Ruang-3 appraisal well was spudded on 25th April and to date has reached a depth of approximately 1,590 m measured depth. The well encountered difficulties while drilling the Kuchinarai shale interval. The well has been sidetracked twice in order to by-pass the shale which it has now done. With the challenging shale formation now behind casing, drilling will continue to the planned total depth of approximately 2,565 m MD in order to test the Pha Nok Khao target interval. Approximately 14 days of additional drilling time is anticipated in order to complete the well. Source: Salamander Energy http://getenergyevent.com/News/Oil_and_Gas_Training_News/Salamander_Energy_Thai_update Mon, 27 Jun 2011 00:00:00 GMT The region is likely to see output climb 1.5 million barrels a day to 15.6 million by 2016 mostly because of increased output from Canadian oil sands and U.S. onshore shale formations, the Paris-based adviser to oil-consuming nations said today in its Medium-Term Oil and Gas Markets report. Exxon Mobil Corp. (XOM)’s Canadian unit is investing C$10 billion ($10.2 billion) on the Kearl oil sands project in Canada, and companies including EOG Resources Inc., Chesapeake Energy Corp. and SandRidge Energy Inc. have committed about $1 billion each in the past two years to produce oil from U.S. geological formations such as the Bakken Shale in North Dakota. “North America is now seen as the strongest-growing non- OPEC region,” the report said, citing “upward revisions to U.S. onshore crude from tight oil formations” and higher projections from Canadian natural gas liquids and oil sands. Total production from Canada was forecast to rise by 1.3 million barrels a day to 4.7 million.In the IEA’s last medium-term outlook in December, the largest downward revision to production outside the Organization of Petroleum Exporting Countries came from the Canadian oil sands. The Dec. 10 report cut almost 400,000 barrels a day from previously forecast output saying “a degree of slippage is evident.” Today’s report says projections “are seen higher.” The IEA also said U.S. production is forecast to grow a “healthy” 500,000 barrels a day to 8.3 million barrels a day by 2016. U.S. production of “light tight” oil, also known as shale oil, is likely to grow by 1 million barrels a day to 1.36 million by 2016 from estimated output of 370,000 barrels a day in 2010, the report said. U.S. shale formations such as the Bakken, Eagle Ford in Texas and Marcellus in Pennsylvania require a mix of horizontal drilling and hydraulic fracturing to produce oil and natural gas from dense rock formations. Rising output from shale formations may trim U.S. imports of low-sulfur crude oil by 500,000 barrels a day within five years as new pipelines carry the oil to refineries along the Gulf of Mexico, according to a study released yesterday by analysts at Purvin & Gertz Inc. Shale production should rise to about 900,000 barrels a day by 2015 and to more than 1.3 million barrels a day by 2020, displacing imports, Geoff Houlton, a vice president at the Houston-based energy company, said yesterday in an interview. The IEA also said Mexican production would be slightly higher than previously forecast, though it’s still estimated to decline by 400,000 barrels a day to 2.6 million by 2016 because “Mexico so far lacks substantial new projects in the pipeline to boost production.” Source: www.bloomberg.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Canada_becoming_major_oil_player Fri, 17 Jun 2011 00:00:00 GMT In the 2nd Indonesian International Bid Round 2010, Eni has been awarded the 100% participation interest and operatorship of Block Arguni I located on and offshore in the West Papua Province, Eastern Indonesia. The Block Arguni I covers an area of 5,386 square km in the Bintuni Basin, a mainly gas prone, prolific hydrocarbon province, with several giant gas discoveries already in production. The deal involves the drilling of 2 wells and the carrying out of 500 km of 2D and 200 square km of 3D seismic surveys during the first 3 years of exploration. The Tangguh LNG processing facility is located about 10 km west of the Arguni I acreage. This award confirms Eni as one of the major oil companies committed to invest in E&P activities in Indonesia. Eni has recently made an important discovery at Jangkrik in the offshore Kutei (Muara Bakau PSC), which has been successfully appraised and whose POD is currently being submitted. Eni has been operating in Indonesia since 2001. The company holds working interests in twelve permits and operates six of them. The offshore activities are located in the Tarakan and Kutei Basins, offshore Kalimantan, north of Sumatra and West Timor. In the Kutei Basin, Eni is also participating in the development of the significant gas reserves located in the Ganal and Rapak blocks. Other activities are located in the Mahakam River Delta, East Kalimantan. Eni has an equity production of approximately 20,000 boed in this area and has been awarded an interest in Sanga Sanga CBM, a new coal-bed methane production sharing contract (PSC), through its operated joint venture affiliate VICO CBM Limited (Eni 50%, BP 50%). The coal-bed methane coming from Sanga Sanga would be liquefied at the Bontang plant, representing the first LNG facility to be supplied with CBM. Source: http://www.eni.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Eni_Awarded_Arguni_I_License Thu, 26 May 2011 00:00:00 GMT The well reached a total depth of 3285 metres. The discovery has been confirmed by wireline logging, including the establishment of a gas pressure gradient and the recovery of gas samples to surface. Woodside is the operator and 90% equity owner of WA-34-L. Woodside has a 100% equity interest in the Xeres-1 well and Woodside’s joint venture participants in WA-34-L, Tokyo Gas and Kansai Electric, each have the right to acquire a 5% equity interest in the well. Source: http://www.woodside.com.au http://getenergyevent.com/News/Oil_and_Gas_Training_News/Woodside_discovers_gas_at_Xeres-1 Mon, 23 May 2011 11:40:28 GMT Petronor has been given the go-ahead by the Iraqi Oil Ministry and state-run South Oil Co., Iraq's largest oil utility, to build the city over 500,000 square meters for the first phase, consisting of warehouses, offices, workshops, residential units and a training center. It gave no details on the value of the contract. Iraq has awarded mega oil deals worth more than $200 billion in the last two years to firms such as BP PLC (BP), Exxon Mobil Corp. (XOM), Italy's giant producer Eni SpA, Russia's second largest firm OAO Lukoil (LKOH.RS) and China National Petroleum Corp., known as CNPC. Petronor's energy city is located near the South Oil Co.'s Bergessia base and Basra Airport on land leased from the Oil Ministry and the SOC. It has a future capacity of 5,000 residents and it is already home to several international companies, said the statement, without naming them. Source: www.dowjones.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Petronor_in_Iraq_Energy_City_Role Tue, 17 May 2011 00:00:00 GMT Under the terms of the agreement, ExxonMobil and Total will form a partnership operated by ExxonMobil, which retains a 51% interest. The entry into these concessions reflects Total’s commitment to expanding activities in unconventional gas, notably in Europe, a growth segment of the Group.Awarded for a period of five years from March 2009 and December 2008 respectively, the Chelm and Werbkowice exploration concessions are located in the Lublin Basin in southeastern Poland and cover 1,162 square kilometres and 995 square kilometres. The work program for each concession comprises acquisition of seismic data, drilling of an exploratory well and a production test if drilling results are encouraging. To date ExxonMobil has already performed seismic acquisition works, as well as the drilling of an exploratory well on the Chelm concession currently being evaluated. In Poland, as in all countries where Total is present, safety and environmental protection are core concerns for the Group as it strives to reduce its environmental footprint as part of its commitment to sustainable development. Source: www.total.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Total_farms_into_Chelm_and_Werbkowice_ Mon, 16 May 2011 00:00:00 GMT Iraq has struggled for years with power blackouts and risks years more of electricity shortages. Using associated gas is a centrepiece of its master plan to boost electricity production to keep up with demand that is double the rate of supply. Deputy Oil Minister Ahmed al-Shamma said he expected a final draft of the agreement to be ready by next week but could not give a timeframe for when it would be presented to the Iraqi cabinet for approval and signing. "I just came back from meetings with Shell in Istanbul. We have found satisfactory solutions for all the issues that we (disagreed) upon before," Shamma said. "We have reached a common agreement." The deal has suffered a series of setbacks including legal hurdles and political opposition. On Monday Deputy Prime Minister Hussain al-Shahristani said the oil ministry had reached a final draft contract on the gas deal and sent it to Iraq's cabinet for approval. But Shamma said legal advisers from both parties were still trying to finalise a final draft, a positive step towards ending the saga. "We left it now to the lawyers to draft the final agreement," he told reporters. "The deal has been delayed because the country does not have instructions or laws that govern gas (production). There is not enough understanding. Gas is more difficult than oil in processing," he added. If a deal is reached, more than 700 million cubic feet per day of gas could be captured at southern fields to help deal with power shortages. Source: www.ordons.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Iraq,_Shell_inch_closer_to_$12bn_deal Fri, 13 May 2011 00:00:00 GMT The well is located in block 30/11 around 26 kilometres south of the Oseberg South field. Based on preliminary calculations the size of the discovery is between 12.5 and 56.5 million barrels of recoverable oil equivalent. "Statoil has had great exploration success in mature areas during the last years," said Gro Gunleiksrud Haatvedt, Statoil’s head of exploration on the Norwegian continental shelf (NCS). "The North Sea is a strategically important area to Statoil, and this discovery on Krafla confirms once again that the company can still find interesting volumes close to established infrastructure." "These discoveries can quickly be put on stream and help extend the life of our installations." Drilled by the Ocean Vanguard rig the well proved a column of around 200 metres in good quality reservoir rocks. "Previously six exploration wells have been drilled in block 30/11 without commercial success, so we are very pleased that Statoil seems to have made a fast track discovery in our first operated well in this license," said Tom Dreyer, exploration manager for the Northern North Sea. "Although data collection is still ongoing, the results so far clearly indicate that this is an oil discovery. If this is the case then we have unlocked the exploration potential of this area and have several follow-up opportunities." When the Krafla well is completed, the Ocean Vanguard will start drilling the planned sidetrack well on Krafla West, which is located west of the recently drilled well. The find will probably be developed and produced by tie-back to one of the subsea installations in the Oseberg area. The licensees in PL035/PL272 are: Statoil (operator) (50%), Det norske oljeselskap ASA (25%) and Svenska Petroleum Exploration AS (25%). Source: www.energyme.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Statoil_North_Sea_oil_discovery Thu, 12 May 2011 00:00:00 GMT Drilled in a water depth of 445 meters, the Canna-1 well discovered hydrocarbons in reservoir of Miocene age and produced more than 5,000 barrels per day of high quality oil (33° API) during a production test.Sociedade Nacional de Combustíveis de Angola (Sonangol) is the concessionaire of the Block 17/06. TEPA (Block 17/06) Limited is the operator of the Block 17/06 with a 30% stake. Total’s partners in the block are Sonangol Pesquisa e Produção S.A. (30%), Sonangol Sinopec International (SSI) Seventeen Limited (27.5%), ACREP Bloco 17 S.A. (5%), Falcon Oil Holding Angola S.A. (5%) and PARTEX Oil and Gas (Holdings) Corporation (2.5%).Source: http://www.energyme.com/ http://getenergyevent.com/News/Oil_and_Gas_Training_News/Total_makes_Angolan_discovery Mon, 09 May 2011 00:00:00 GMT The construction project includes building a new lubes hydrocracker and a lube dewaxing / hydrofinishing unit, KBR said. KBR intends to hire staff locally for the project execution, it said. Work is expected to begin in May 2011, and upon completion, the facility is expected to be one of the largest premium base oil plants in the world. "We are proud to have been selected to execute the delivery of this project, helping Chevron become one of the world's largest producers of premium base oil," said David Zimmerman, president of KBR Services. "KBR has a long history of executing major construction projects in this region and at this refinery," he added. "We look forward to continuing this tradition, using local resources to deliver a project that meets schedule and cost targets while maintaining KBR's absolute commitment to safety excellence." Source: www.ordons.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Chevron_awards_$65mn_contract_to_KBR Thu, 05 May 2011 00:00:00 GMT Plansal's current review strengthens the trend of reducing the investments necessary to develop the area, today estimated at 45% with regard to the original Master Plan of 2008 and around 32% with regard to last year's Master Plan, which is the result of the optimization achieved in the conception of the production projects, mainly due to higher well productivity (average increase of around 20%) and better understanding of the areas with production potential. Additionally, the expectation of the recoverable volume potential for the Lula and Cernambi areas was extended beyond 8 billion barrels. There was also a significant increase considering the 5 billion barrels of recoverable oil equivalent (broe) recently acquired in the Transfer of Rights, which will enable Petrobras to take advantage of great synergies with projects which are under development. The current vision allows Petrobras to predict that the total investments to develop the projects present in the Santos Basin Pre-salt Area, through 2015, will reach 73 billion dollars, of which 74% will be carried out directly by Petrobras. These investments will lead to significant pre-salt production increases and will create the basis for the production increase in the post-2015 period. As a result of this great company effort, the company expects the contribution of the areas, operated by Petrobras, in terms of total production, to reach 613 thousand barrels of oil per day in 2015, an increase of 108 thousand barrels per day with regard to the previous plan. Of this total, around 60% belongs to Petrobras and the remaining 40% belongs to non-partners. In 2017, the previously disclosed production target of 1 million barrels of oil per day will be surpassed. Another highlight of Plansal was Petrobras's high performance capacity. Many of the initiatives established in the first Master Plan, in 2008, have already become reality in 2011, with highlight to the start of operations of: Two FPSOs (BW Sao Vicente and Dynamic Producer) to perform Long-Duration Tests (LDTs) programd for the area; A higher number of drilling rigs (8 are currently in operation and another 5 will begin activities in the next 3 months); The first definitive production system, installed in Lula field (FPSO Cidade Angra dos Reis); The gas pipeline between Lula Pilot and the Mexilhao platform (200 km of submarine pipelines in ultra-deep waters); The gas pipeline between Caraguatatuba and Taubate (Gastau).   Besides the events above, also representative are the start of construction of eight FPSOs at the Rio Grande Shipyard, the contracting for the construction of up to 28 drilling rigs in Brazil, the first batch of seven rigs of which has already been defined and the development of studies for a Gas FSO, designed to provide a new alternative for the flow through its liquefaction in the open sea. With regard to the development of the Transfer of Rights areas, the Inhama Shipyard is already being fitted out for the construction of the first four units, to be installed by 2016. The need to implement alternative routes for the flow of oil and gas of the Santos Basin Pre-salt Area, based on the forecast of the huge production volumes, was identified. These alternatives, which are in an advanced stage of maturation, will allow an adequate logistics network to take on the future forecast of the area's production. Source: www.ordons.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Petrobras_Predicts_$73B_Plansal_Spend Wed, 04 May 2011 00:00:00 GMT The projects in Block 15, approximately 90 miles off the coast of Angola, established industry benchmarks for completion time and unit development costs for deepwater projects of their size and complexity. To date, over one billion of the five billion barrels discovered on the block have been produced. Current production is approximately 500,000 barrels per day. The company received the award at the annual dinner for the world's largest conference for offshore development at the George R. Brown Convention Center in Houston. Susan Cunningham, chair of the OTC Board of Directors, said, "Each year, OTC recognizes individuals and companies that have made outstanding contributions to the offshore industry. ExxonMobil Development earned this honor for its industry-leading approach to Angola deepwater project development." "The success of our Design One, Build Multiple strategy in Angola would not have been possible without the collaboration in a shared vision among ExxonMobil, Sonangol and the Statoil Angola Block 15 A/S contractor group," said Jeff Woodbury, executive vice president of ExxonMobil Development Company. "The timely and cost-efficient development of Angola Block 15 helped position Angola as a key supplier to the world's demand for energy." Between 2003 and 2008, ExxonMobil Development applied the "Design One, Build Multiple" strategy to deliver two tension leg platforms and five of the world's largest floating production, storage and offloading vessels to Block 15. The use of many of the same suppliers, service providers and workers, including Angolans, to build and install the facilities enhanced safety, quality, efficiency and reliability. Source: www.ordons.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/ExxonMobil_Angola_DW_Recognised Mon, 02 May 2011 00:00:00 GMT   But China may have more energy riches under its own soil than policy makers in the world's second-largest economy ever dared imagine. Just over a year ago, Beijing awakened to a technology revolution that has unlocked massive reserves of gas trapped within shale rock formations in the United States. Once deemed too costly to extract, shale gas has turned around U.S. dependence on foreign gas imports. Just a few years ago, the United States was building scores of expensive facilities to import liquefied natural gas (LNG), looking at booming long-term demand forecasts and wondering which countries would supply the huge volume of imports it needed. Instead, the United States is turning import facilities into export terminals, because its shale gas reserves are estimated to be big enough to meet domestic demand for 30 years. This is an American dream that China wants to emulate. "America's shale gas production alone has exceeded that of total Chinese gas output. That gives us a lot of confidence," said Zhang Dawei, deputy director of the Strategic Research Center for Oil and Gas in the Ministry of Land and Resources(MLR). China's confidence has been bolstered by a new report of its estimated reserves of shale gas, which shows them to be, by far, the largest in the world. The U.S. Energy Information Agency in a report last month estimates China holds 36.1 trillion cubic meters (1,275 trillion cubic feet) of technically recoverable shale gas reserves -- significantly higher than the 24.4 tcm (862 trillion cubic feet) in the United States, which has the second-most. Industry estimates in China peg shale gas resources slightly lower -- but still huge -- at 26 trillion cubic meters (tcm), although they have yet to give their own forecasts of how much of that is recoverable. China's imminent shale rush comes at a critical point. It will soon overtake the United States as the world's top energy user and is already the world's biggest coal burner. China also pumps more carbon dioxide into the atmosphere than any other country. Beijing's bureaucrats thus face a daunting challenge: how to clean up its brown skies while meeting the world's fastest growing energy demand. Natural gas burns more cleanly than other fossil fuels and installing gas-fired power generation is cheaper and easier than building nuclear plants. The problem is China cannot meet its rising demand for gas with its limited reserves of conventional gas. It faces the prospect of becoming as dependent on international markets for gas as it is for oil, where China is the world's second-largest importer. But shale gas may not be as clean as advertised, according to a study released last week by Cornell University in New York. This study argues that significant amounts of methane -- a potent greenhouse gas -- escape into the atmosphere during production in wells and distribution in pipelines. Regardless, China is racing to find out how much shale gas it can exploit -- and how quickly it can get the technology and build the infrastructure it needs to pump it to market -- to reduce its dependence on foreign sources of gas. AUCTION ACTION The starting gun for that race is about to fire any day now. The MLR said it would hold the first auction of shale gas blocks by the end of the first quarter of this year, so it is already overdue. The ministry had previously delayed the auction, initially scheduled last November, to open up the bidding to more domestic companies -- inject more competition into the process and quicken the pace of shale development. The auction is for eight exploration blocks covering 18,000 square kilometers in four inland provinces: southwest Sichuan, Chongqing and Guizhou, and central Hubei province. "We are aiming for major breakthroughs in locating the reserves in five years, and in eight years shale gas should take a significant position in China's energy mix," said Zhang at the land ministry. He talked of having shale gas account for one-tenth of China's total gas output by 2020. China has identified shale gas as one of the country's top targets for technological breakthroughs in the 2011-2015 five-year plan, which means that Beijing will be opening the funding faucets for shale gas research. China's National Energy Administration is setting up a shale gas laboratory in Langfang, near Beijing, to be financed mostly by PetroChina, and that will become China's national shale gas research center, officials say. Experts say shale, which needs intensive drilling and many wells, plays to China's strengths. "Shale gas projects are sometimes referred to as manufacturing operations. Which countries globally are particularly good at manufacturing?" said Robert Clarke, global head of unconventional gas research for Wood Mackenzie. "China certainly comes to the forefront of your mind -- good in controlling costs, looking at efficiencies, and continually learning from earlier mistakes." PetroChina, which produces nearly 80 percent of China's total gas output, just last month completed its first horizontal shale gas well in the Weiyuan block of Sichuan province. Its parent company and China's biggest oil and gas firm, China National Petroleum Corporation (CNPC), said it aimed to have unconventional gas, mostly shale, account for about a fifth of total gas production by 2030. CNPC predicts China's overall gas production will more than triple to 300 billion cubic meters by 2030 from 94 bcm in 2010. That would put shale gas output up near 60 billion bcm in 20 years, or more gas than India currently consumes. That's quite a jump, because right now, China is pumping nothing at all from its shale gas reserves. OBAMA'S VISIT The shale rush only really began in China when President Barack Obama signed a cooperation pact on shale gas in November 2009 during a state visit to Beijing, just weeks before the Copenhagen climate talks. Washington thought that if China could increase gas usage at the expense of dirty coal, it would reduce the carbon footprint of the world's biggest greenhouse gas polluter. U.S. firms had hoped the pact would help them leverage their technology to gain rare access to China's tightly controlled oil and gas reserves. China may have hoped to acquire some of that technology to help develop its fledgling shale industry. Neither has materialized to any great extent so far. But the pact has undoubtedly helped smooth out any political objections to acquisitions by cash-rich Chinese energy giants of stakes in North American shale assets. In a flurry of recent deals, they have effectively purchased the technology and expertise they lack back home. China's third-largest oil and gas firm CNOOC struck two deals with leading U.S. shale gas player Chesapeake over the last several months, giving it access to drilling leases in Texas, Wyoming and Colorado. The deals marked CNOOC's triumphant entry into the United States after its 2005 bid for Unocal Corp was killed by strident political opposition over the involvement of Chinese state companies in the U.S. energy sector. Chevron later acquired the U.S. oil firm instead. "Chesapeake has accumulated abundant experience in drilling and completion in various U.S. shale plays," CNOOC said in a statement e-mailed to Reuters. "The techniques and experiences we learn from the U.S. shale projects will benefit our potential participation in other areas in the future." PetroChina, the world's second-most valuable energy company, announced in February it would buy a $5.4 billion (3.3 billion pounds) stake in Calgary-based Encana Corp's shale gas assets. Analysts say PetroChina paid a fat premium for that deal. But a CNPC executive said it was all about gaining expertise for shale. "We don't care much about whether the market believes it's a good or bad price. The top priority is gaining access to a resource and mature technology," he said. "Price is only a secondary consideration." U.S. companies, on the other hand, have had little luck getting their foot in China's door. Majors like Exxon Mobil and ConocoPhilips, and smaller independents like Hess and Newfield, are looking for opportunities but Beijing-based international industry executives lamented the door was at best ajar. In fact, ever since the failed Unocal bid, dealmaking between the world's two largest economies has been largely in limbo. A series of planned acquisitions has died in the hands of bureaucrats or politicians in Beijing and Washington, and other ideas haven't seen the light of day for fear they will also be blocked. The energy sector has been a case in point. Six months after Obama's visit, China and the United States set up a shale gas task force and agreed to jointly conduct a shale gas project -- assessing the Lower Liaohe basin in northeastern Liaoning province. The block is part of an aging oil basin and fell short of U.S. expectations that it would cover a much wider area. While the U.S. government and companies have invited Chinese geologists for technical workshops and field trips, Chinese firms have been more lukewarm about sharing technical information, or opening up new blocks for resource studies, industry officials said. China remains wary about letting foreigners prowl too much around the interior. SECRETIVE ENERGY APPROACH "It's no secret China has a secretive approach to energy security ... Some in the government have a deep mistrust of U.S. motives," said a Beijing-based diplomat who requested anonymity. China last year sentenced U.S. geologist Xue Feng to eight years in jail for leaking state secrets after he arranged the sale of an industry database to his then employer, Colorado-based consultancy IHS Energy. China's notoriously vague state secrets laws drew international attention last year when Australian citizen Stern Hu and three colleagues working for mining giant Rio Tinto were detained for stealing state secrets during the course of tense iron ore negotiations. China is especially sensitive when it comes to onshore oil and gas projects, which account for most of its domestic production. Several rounds of onshore concessions in the 1990s attracted firms such as Exxon Mobil, BP, Royal Dutch Shell and Chevron. But the companies were largely disappointed by how little they found after spending hundreds of millions of dollar drilling. Royal Dutch Shell, whose current and previous greater China Chief Executive Officers are both Malaysian Chinese, has so far won the biggest access to China's onshore sector among international firms. The first among international majors to win an onshore gas contract in northwest China's Changbei field in 2005, Shell is now drilling at least two shale gas wells in Sichuan's Fushun block under an agreement with PetroChina. "It's too early to say that shale gas is a game-changer (in China) but I have great expectations," Shell CEO Peter Voser told Reuters last month in Beijing. Shell is drilling 17 wells this year, which should give it a good idea about the potential, he said. "If we are successful, we are aiming to spend $1 billion a year over the next five years on shale gas (in China)," said Voser, adding the firm was spending $400 million this year. China is the world's second-largest oil consumer and the fifth-largest producer. But a cap on domestic gas prices to support the domestic fertilizing sector meant gas reserves were neglected until the last decade, when rapid urbanization and industrial growth spurred demand for the fuel. Rising demand has sparked pressure to open up the upstream gas industry to smaller state-run firms or even foreign investment. The land ministry's Zhang, one of the officials organizing the shale gas block auction, has repeatedly delivered the same message: a diversified body of investors and an open market were key to the U.S. shale gas rush once the technological breakthrough was made, and the same holds for China. "Money, technology is not a problem, but the (Chinese) monopoly system is," Zhang told Reuters after returning from a tour of government agencies and shale gas companies in the United States. The Barnett shale deposit in Texas, he noted, attracted more than 100 individual operators, each drilling a few wells and looking to sell to bigger companies. FRACKING CONTROVERSIAL In Yuanba, a green hilly county dotted with rice paddies and vegetable farms about 500 kilometers from Sichuan province's capital of Chengdu in China's southwest, Sinopec Corp drilled its first shale gas test well last December. Using a vertical exploration well, the type designed for conventional gas, it struck a shale formation about 4,100 meters deep yielding a daily gas flow of 11,500 cubic meters. It was a start. But for commercial production, shale gas needs a different type of well -- one drilled horizontally and used to pump in torrents of sand, water and chemicals to crack open channels in the rock for the gas to flow through. The technique is called hydraulic fracturing, or "fracking", and it has opened up gas reserves trapped in rocks with little permeability -- reserves hitherto seen as too difficult and too expensive to exploit. Sinopec plans to drill its first horizontal shale gas well around June in Fuling, not far from Yuanba and in the same geological Sichuan basin -- China's most prolific gas producing region. Hydraulic fracking has provoked opposition from environmentalists who say the injection of chemicals contaminates water tables, concerns that are vividly depicted in the documentary Gasland. The Oscar-nominated film showed tap water in the homes of families living near drilling sites in Pennsylvania turning a foul color and catching fire when touched with a lighter.(www.gaslandthemovie.com/). Energy companies say there is no evidence that fracking has contaminated water supplies. But the U.S. Environmental Protection Agency said in March it would begin to take a closer look at the impact of shale gas drilling on both human health and the environment. Shale's green credentials have also been questioned. A study released last week by professors at Cornell said that while shale gas burns much cleaner than coal, it also leaks more methane in production, whether accidentally or through releases designed to relieve well pressure. The research, led by Cornell University ecology professor Robert Howarth and published in the journal Climatic Change Letters, raised howls of protest from the gas industry, which said the study used flawed data and the document was political. "Compared to coal, the footprint of shale gas is at least 20 percent greater and perhaps more than twice as great on the 20-year horizon ...", the study says. The gas industry says producers already have the means to eliminate the bulk of these emissions, and the incentive to do so -- sales of trapped methane were worth $344 million in 2009. CHINESE LEARN FAST Indeed, much is yet to be learned about shale gas, especially in China, which has little expertise in interpreting shale data, a shoddy environmental record, and has only just begun to acquire operational experience with fracking. "I have a lot of difficulty understanding the shale resource ... struggling to figure out where are the exact spaces in the rocks that trap the gas and oil," said Wei Zhihong, a shale gas project manager with Chengdu-based Sinopec South Exploration Corp, an exploration unit of number-two energy firm Sinopec Corp. It worries him a little because his bosses are so eager to get the latest news on their shale projects in Sichuan. "In a little over six months, I was called to take more than 10 trips to Beijing to update the management on shale gas," Wei said. "The company's very top boss on upstream listened in on many of the meetings. I have the feeling our big bosses are very keen on shale gas." China's energy giants believe they can pick up the technology fast. "We will develop and build our own knowledge based on what the international companies have showed us... we will compare that to our own gas basins and pick and choose the knowledge that is relevant to our own geological conditions," Wei said. The United States is home to mostly shallow, broad marine basins, while China has a mix of lake, marine and continent-based structures. The difference in geology may initially result in a higher exploration cost for China and it will need to fine-tune existing fracking techniques. "The question remains as to whether U.S. technology can easily be replicated in China. China's geological conditions are more complicated," said Song Yan, a senior researcher with PetroChina. It took nearly two decades for U.S. companies to perfect shale gas technology, which requires many more wells being drilled than conventional reservoirs and often lots of failed early wells. "Unconventional gas plays need hundreds, and sometimes thousands, of wells. It will be interesting to see if management fatigue develops in large companies -- are they going to continue investing in a statistical project if maybe the first 10 wells don't work?" Wood Mackenzie's Clarke said. Chinese firms say they are undaunted by the technical hurdles. "You should have confidence in Chinese companies... If many small U.S. firms can do the job, why not big Chinese companies? They simply have not tried it before. Chinese (companies) are extremely good in emulating and imitating, they will get there very quickly," said Zhang at the land ministry. Companies may also choose to pick up the know-how from service companies such as Baker Hughes, Halliburton and Schlumberger, probably a quicker route than undergoing the lengthy negotiations that go with sharing equity with energy companies, analysts said. Schlumberger, for instance, won a contract to supply Sinopec with long-term, on-demand service on well appraisals that covers both conventional and shale gas, said Sinopec's Wei. "Is it a huge opportunity to service companies, or is it just an area in which the Chinese just want to learn what they need to do and then do it on their own?" said Gavin Thompson, Beijing-based head of China gas research of Wood Mackenzie. This shale game will largely play out in Sichuan, one of the largest and most inaccessible provinces in China, just north of Tibet, with 87 million people. SICHUAN'S GAS FRONTIER Sichuan province is about four times the size of Pennsylvania, the U.S. state which holds the huge Marcellus shale deposit. Sichuan is where China's Song Dynasty people invented bamboo wells to drill for salt about 1,000 years ago. Today, the province pumps nearly a quarter of China's total natural gas production. One of China's main rice-growing provinces, Sichuan has rich water sources, sitting at the upper reaches of China's longest river, the Yangtze. Access to water is key to shale development because fracking is so water-intensive. "If there are any major breakthroughs, they should come from Sichuan," said Guo Tonglou, chief geologist of Sinopec South Exploration Company. "We've done lots of work in the basin." Explorers have sunk wells over 7 kms deep and made major discoveries such as Puguang, a conventional gas reservoir with proven reserves of 400 billion cubic meters, one of the country's largest gas fields. Geologists believe shale deposits normally sit close to big conventional reservoirs. Few at Chinese firms think money will be a problem once companies prove sizeable reserves can be tapped. "Decisions on spending come really quick nowadays if you can convince management it's a good project," said Sinopec's Wei. The rising cost of importing gas is imparting some urgency to those decisions. China is set to secure nearly a third of its gas consumption through imports by 2020, much of it from costly sources such as gas piped from Turkmenistan and a string of long-term purchase agreements for liquefied natural gas (LNG) from Australia, Qatar and Indonesia. The price of the gas in those contracts is indexed to oil, making them relatively expensive when oil prices are high compared to other fuels. A rapid rise in domestic gas reserves, boosted by shale development, would be likely to depress domestic prices and may make China think twice about those LNG deals. PetroChina's Chief Financial Officer Zhou Mingchun said in March the company lost 3.7 billion yuan in marketing 4.3 bcm of imported gas last year, mostly from Central Asia, because domestic gas prices were capped lower than import costs. Still, China faces huge development costs in bringing shale gas supplies online. It only has 49,000 kms of gas pipeline grids, barely a tenth of the U.S. system, and would need to spend billions of dollars to build infrastructure to pump the gas to market. Farmers such as Cui Jinlian, who is planting peas and eggplants by a conventional gas well near Yuanba county in Sichuan, say they've never heard of "shale gas" -- or had any idea it could contaminate the water they use for cooking and farming. But Cui is aware the gas under their land has a poisonous component -- hydrogen sulphide (H2S)-- that can kill people. Gas pumped from the Sichuan basin, both conventional and unconventional, is mostly sour gas that contains H2S. "It is no good for immediate use. The gas needs to be sent somewhere for processing first," said Cui in her musical Sichuan dialect, while resting by her small vegetable field. Piling up at the backyard of her simple one-story brick house were the dried tree twigs her family uses for cooking. She knew also that hydrogen sulphide leaked from an explosion at a PetroChina exploration well in 2004 in Chongqing, killing hundreds of villagers in their sleep. "Shale gas is a bit controversial, it can have a negative impact if done improperly," said Johnny Browaeys of CH2M, a U.S. consulting firm providing environmental and engineering services with an office in Shanghai. "It's something we need to do right from the very start," said Browaeys, a fluent mandarin speaker who once lived in western China. "You don't want to get into a reputation issue." Source: www.reuters.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/China_set_to_unearth_shale_power Tue, 26 Apr 2011 00:00:00 GMT Activity in the Gulf of Mexico remains slow following the Macondo disaster – but it is moving again. And despite all the talk about how the US risked driving away the industry by tightening up processes and procedures, just about everyone is still here. Seahawk Drilling was forced into bankruptcy and Plains Exploration & Production is moving to exit the deepwater, but, for the most part, it is the same people, working for the same companies (BP was even among the first companies to get permission to resume drilling in the deepwater), using the same technology. Even the much maligned blowout preventer that got jammed and failed in the Macondo disaster is still here as the last line of defence. And the gulf coast economy has remained pretty resilient. Michael Hecht, chief executive of the Greater New Orleans economic development agency, said the local economy received a boost from BP’s spill response effort that gave work to fishermen and tour boat workers who had lost jobs with the spill. That false economy is only now ending in some places, leaving the real economic cost still to be seen. It might, for example, take two or three years to know if the offspring of sea creatures who laid their eggs in the path of the oil and dispersants will be impacted – the adult fish were able to swim away, but the babies had to stay put. So, he says, the fishermen must get through the next few seasons to know for sure whether their livelihoods will be impacted. New rulesIn the oil industry, regulators have imposed new rules and tightened up approvals. Companies themselves have increased oversight. Everybody is focused on process safety and the provisions in contracts for force majeure, indemnification and insurance coverage, according to Stephen Gates, special counsel at law firm Mayer Brown: They have revisited and are retooling contracts as new arrangements are entered into. Jorge Leis, a partner in Bain’s Houston office and co-head of the North American oil and gas practice, said as companies go through their risk-management practices, they are not only working through their own processes but how they evaluate partners, service providers and contractors. You’re going to see much more scrutiny, not only who can do the project for the right cost but who can do it with a focus on safety and compliance. Back to workCharles Swanson, Houston managing partner at  Ernst & Young, the professional services firm, said: Those kind of incremental, evolutionary changes are what we’re going to see, and they can be effective. There is always someone who wants the third coat of paint to be applied before they operate a machine. But that is not realistic given the demands on the oil and gas industry. The country needs to get back to drilling. That is the prevailing attitude among oil and gas companies and explains why almost everyone has seen out the moratorium on new deepwater drilling. In the words of Gary Adams, US oil and gas leader at Deloitte, the consultancy: There is still a great prize in the Gulf of Mexico. That said, he expects it might not be until 2014 that the industry sees 2009 production levels again. Status quo prevailedBruce Vincent, chairman of the Independent Petroleum Association of America (IPAA) and president of Swift Energy, said 10 permits had been issued this year, signaling the industry is getting back on track. He noted, however: It’s been an extremely difficult and tortuous path to get to that point. That is certainly what the industry believes. But in the end it appears the status quo has, for the most part, prevailed. Robert A. Kessler, head of global integrated oil research at Tudor, Pickering, Holt, said Gulf of Mexico production already was peaking before Macondo, and is now down 14 per cent from the peak in September, 2009. While there is a resurgence in the lower tertiary of the gulf, the growth in production there will be a long time coming given the deeper and more challenging reservoir conditions. He notes: The incremental production benefit was already going to be spread out over a number of years. In January, production from the gulf was down 10 per cent year-on-year. He attributed much of the drop to the moratorium but said some of the big projects, such as Thunder Horse, Tahiti, Shenzi, Blind Faith and Atlantis, had hit their stride and already were beginning to fall off their highs. To compare, gulf production in March 2010, just before Macondo, he said, already had declined 9 per cent from the September 2009 high. The more things change, the more they stay the same. Source: www.ft.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/A_year_after_Macondo,_oil_industry_returns_to_normal Wed, 20 Apr 2011 00:00:00 GMT Income from continuing operations for the latest quarter jumped to $512 million from $212 million a year earlier. Adjusted net income attributable to company for the three months ended March 31, 2011 was $557 million or $0.61 per share, excluding the Libya charge of $46 million, after-tax, or $0.05 per diluted share, related primarily to reserving certain assets as a result of recent political sanctions. On average, 36 analysts polled by Thomson Reuters expected earnings per share of $0.58 for the quarter. Analysts' estimates typically exclude one-time items. Halliburton's consolidated revenue in the first quarter of 2011 was $5.28 billion compared with $3.76 billion in the first quarter of 2010. Twenty-three analysts estimated revenues of $4.89 billion for the quarter. Source: www.ordons.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Halliburton_Q1_Profit_Climbs Tue, 19 Apr 2011 00:00:00 GMT Successful Tweneboa-4 appraisal wellThe Tweneboa-4 appraisal well in the Deepwater Tano licence offshore Ghana has successfully encountered gas condensate in good quality sandstone reservoirs. Results of drilling, wireline logs and samples of reservoir fluids have confirmed the western extent of the Tweneboa gas condensate accumulation. The well, located 3.9 kilometres southwest of the Tweneboa-2 appraisal well was drilled in the western flank of the accumulation to complete the appraisal of the Tweneboa gas-condensate discovery. The well encountered 18 metres of net gas condensate pay in high quality stacked reservoir sandstones which are in static pressure communication with both the Tweneboa-1 and Tweneboa-2 wells. The Deepwater Millennium dynamically positioned drillship drilled Tweneboa-4 to a total depth of 4,007 metres in water depths of 1,436 metres. On completion of operations, the well will be suspended for future use in field appraisal and development. The rig will then move to perform drill stem tests on the Tweneboa-2 oil and gas-condensate accumulations. Tullow (49.95%) operates the Deepwater Tano licence and is partnered by Kosmos Energy Ghana (18%), Anadarko Petroleum (18%), Sabre Oil & Gas (4.05%) and the Ghana National Petroleum Corporation (GNPC) (10% carried interest). Uganda exploration and appraisal campaign commencesFollowing the signing of the SPAs for the farmdown to CNOOC and Total on 29 March 2011, the exploration and appraisal programme has been reactivated and two wells are expected to commence drilling in Exploration Area 1 (EA 1) within the next two weeks. The OGEC 600 rig is preparing to spud the high-impact Jobi-East prospect and the OGEC 750 rig is getting ready to drill the first Mpyo exploratory appraisal well to test its upside potential. These wells are the start of a major programme of exploration and appraisal drilling, seismic acquisition, and well testing to access the significant remaining upside potential in the basin and further expand the resource base for development. "Tweneboa-4 is an important milestone as it is the final well to be drilled in the Tweneboa appraisal programme," said Angus McCoss, Exploration Director. "The upcoming programme of well testing in the Tweneboa field, along with drilling and well testing in the Enyenra field, will provide essential information on well deliverability, dynamic reservoir connectivity and hydrocarbon volumes, which will be used to optimise our development plans for these major fields. We are also delighted to be starting drilling activities again in EA 1 in Uganda and are now gearing up for a five-rig drill-out campaign in the second half of the year." Source: www.energyme.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Tullow_Ghana_and_Uganda_exploration Fri, 15 Apr 2011 00:00:00 GMT The plans, which have angered environmentalists, are a coup for Bob Dudley, BP's new American chief executive, who replaced Tony Hayward after he was criticised for his handling of the crisis. Meanwhile Transocean, the world's largest offshore rig company – which leased the Deepwater Horizon rig to BP – has awarded "safety" bonuses to senior executives for achieving "the best year in safety performance in our company's history", in spite of the disaster. Nine of the workers killed were Transocean employees. "Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record as measured by our total recordable incident rate and total potential severity rate," Transocean said. "As measured by these standards, we recorded the best year in safety performance in our company's history, which is a reflection on our commitment to achieving an incident-free environment, all the time, everywhere." BP is spending £25.4bn cleaning up the spill and paying damages. US prosecutors were last week reportedly considering pursuing manslaughter charges against its managers. BP confirmed it had pledged to meet strict safety standards as part of negotiations to resume drilling. It has also agreed to allow 24-hour access to the US government. The permission only allows BP to maintain or increase production on existing wells. But the British company may seek approval to start exploratory drilling later in the year. A presidential commission concluded the explosion had been caused by cost-cutting and directly blamed Transocean, BP and Halliburton. Source: www.independent.co.uk http://getenergyevent.com/News/Oil_and_Gas_Training_News/BP_back_in_business_in_Gulf_of_Mexico Wed, 06 Apr 2011 00:00:00 GMT The country expects domestic power demand to triple over the next two decades and wants to develop a more sustainable mixture of energy sources, Khalid Al Sulaiman, vice president for renewable energy at King Abdullah City for Atomic and Renewable Energy, said at a conference in Riyadh today. King Abdullah City is the agency in charge of developing green energy. “Saudi Arabia’s demand for petroleum products -- demand for energy -- is rising at a high and very alarming rate,” Al Sulaiman said in a speech at the Saudi Solar Forum. “Population growth and robust economic development and many reasons drive that demand.” The country currently gets almost all of its energy from fossil fuels, he said. Persian Gulf oil producers are seeking new ways to generate power because they prefer exporting valuable crude to maximize income and allocating natural gas to make petrochemicals. Energy other than oil, gas and other fossil fuels may account for more than half of the kingdom’s supply by 2030, Al Sulaiman said. Future sources will include solar and wind power as well as nuclear plants, according to the plan, which needs government approval to become policy. The expansion into renewables and nuclear power will be part of a $100 billion spending drive aimed at meeting the expected jump in demand and curbing dependence on crude, government officials said last week at a conference in Abu Dhabi, the capital of the neighboring United Arab Emirates. Insufficient Gas Saudi Arabia, the largest producer in OPEC, uses crude and refined products as fuel for power stations because the country doesn’t have enough gas to generate all the power it needs and also supply industry. Liquid fuels generate about half of its power now, with the rest coming from gas, according to the state-run utility Saudi Electricity Co. (SECO) Saudi Arabia has about 45,000 megawatts of generating capacity, with power demand also reaching that level during times of peak consumption, according to Saudi Electricity. Al Sulaiman’s forecasts suggest that demand will triple by 2030. Saudi Arabia already burns some 800,000 barrels a day of oil equivalent to satisfy domestic demand, Khalid Al Senani, the gas supply director at the Ministry of Petroleum and Mineral Resources, said in Doha, Qatar, on Nov. 30. Crude Price Gains Crude oil rose 17 percent last quarter to $106.72 a barrel in New York trading in the three months through March 31, as armed conflict in Libya cut off exports from the North African country and a March 11 earthquake and tsunami knocked nuclear power plants offline and released radiation into the atmosphere. Saudi Arabia’s break-even oil price, the level at which it must sell crude to finance government spending, may be as high as $85 a barrel since ruler King Abdullah ordered $103 billion in additional benefits for its citizens, economists including John Sfakianakis of Banque Saudi Fransi said last week. The government hopes the increased spending will help prevent unrest sweeping the Middle East from spreading to the kingdom. “Moving into renewables for Saudi Arabia is a necessity not a luxury,” Sfakianakis said in Riyadh today. “Saudi Arabia has oil and the more it uses domestically going forward the less it will have to export for a growing population.” Role for Renewables The nation sees solar power and other non-hydrocarbon sources as vital for boosting generating capacity by 50 percent in this decade, Abdullah al-Shehri, governor of the Electricity and Co-Generation Regulatory Authority, said in Abu Dhabi on March 28. Given consumption forecasts, Saudi Aramco Chief Executive Officer Khalid Al-Falih warned last April that national daily energy demand would more than double to 8.3 million barrels of oil equivalent in 2028 from 3.4 million barrels in 2009. To expand generating capacity and the transmission grid, the country will need to invest more than $100 billion over the next ten years, al-Shehri of the electricity authority said on March 28. A third of that amount will go to building power plants, including those using sources of renewable energy, he said in Abu Dhabi. Current capacity is likely to increase to 75,000 megawatts by 2018 and to more than 120,000 megawatts by 2030, al-Shehri said. Saudi Arabia agreed with France in February to cooperate in developing nuclear energy and announced on Feb. 22 that it would also make use of geothermal, wind and solar power. Source: http://www.bloomberg.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Saudi_Arabia_Looks_to_Solar,_Nuclear Wed, 06 Apr 2011 00:00:00 GMT The three successful wells so far drilled by the joint venture of BG Group (60%) and Ophir Energy plc (40% operator) form part of an initial work programme planned for Blocks 1, 3 and 4 offshore Tanzania. The initial work programme also includes the acquisition of a minimum of 4 000 square kilometres of 3D seismic data. BG Group has the option to assume operatorship of all three blocks upon completion of the initial work programme. To date in 2011, a 3 200 square kilometre 3D seismic survey has been acquired in Blocks 3 and 4, and a second 3D survey of 1 800 square kilometres is nearing completion in Block 1. It is intended that a second drilling campaign will commence in late 2011. In May 2010, BG Group received consent from the government of the United Republic of Tanzania to farm-in to interests held by Ophir Energy plc offshore southern Tanzania in Blocks 1, 3 & 4 of the Mafia Deep Offshore Basin and the northern portion of the Ruvuma basin. In December 2010 BG Group announced that its second Tanzanian exploration well, Chewa-1, had also discovered gas. The well, located in Block 4 approximately 80 kilometres offshore southern Tanzania in a water depth of around 1 300 metres, is some eight kilometres north-west of BG Group's Pweza-1 gas discovery announced in October 2010. Source: www.bg-group.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/BG_Group_in_third_Tanzanian_discovery Tue, 05 Apr 2011 00:00:00 GMT Petrofac said work on the project began in mid-2010 and it expects to complete the project during fourth-quarter 2012. In 2010, Iraq's Ministry of Oil signed a 20-year contract with Royal Dutch Shell PLC and Malaysia's Petronas to provide technical assistance in the development of the Majnoon oil field (OGJ, Jan. 25, 2010, Newsletter). The consortium targets a production plateau of 1.8 million b/d of oil, up from 45,000 b/d prior to the technical assistance contract. Majnoon, which lies in southern Iraq, is one of the world's largest oil fields. Operator Shell holds a 45% share, with partner Petronas holding 30%. The Iraqi state holds 25%. Source: www.ogj.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Shell_Iraq_lets_contract_for_Majnoon_production_facilities Mon, 04 Apr 2011 00:00:00 GMT Other Gulf oil exporters such as the UAE, Saudi Arabia and Qatar, are streaking ahead of Kuwait in terms of economic development. That is despite the nation's vast oil endowment, which has already transformed its living standards for its citizens who now enjoy an annual income averaging more than US$43,000 (Dh157,928) per head. But Kuwait is the least popular destination in the GCC for foreign investment, and it ranked lowest in the World Bank's ease of doing business index for this year. Many development projects are on hold, leaving Kuwaitis short of vital infrastructure such as power plants and hospitals. "We did not have a new hospital built over the last 30 years, we are still teaching in schools that were built 40 years ago," said Dr Abbas al Mejren, an associate professor and the director of the energy and environment unit at Kuwait University. The government's long-term plans to boost oil production capacity are in disarray at a time when the Opec exporter should be reaping huge financial benefits from buoyant oil prices and increasing demand for Gulf crude to replace curtailed Libyan exports. Oil output from Libya, the biggest holder of African crude reserves, has fallen by more than three quarters because of the armed conflict there. Today, at the start of a two-day oil and gas summit in Kuwait City, Sheikh Ahmad al Abdullah Al Sabah, Kuwait's oil and information minister, will unveil a plan for restructuring the state's oil industry, with the aim of enhancing global business opportunities. A major element of the programme is expected to be a government investment initiative aimed at promoting Kuwait's involvement in foreign oil and gas development. Farouk al Zanki, whose appointment last autumn as the chief executive of Kuwait Petroleum Company heralded a strategy overhaul at the national oil company, is to lay out his 20-year vision tomorrow for the company's future. The conference is being held against a backdrop of renewed political crisis in Kuwait, which is the only GCC country with an elected parliament. On Thursday, the 16-member cabinet resigned after politicians sought to question three ministers. That followed demonstrations organised by youth groups and others opposed to the government and to Kuwait's participation in the recent GCC intervention in Bahrain. Parliament has been dissolved three times since 2006. Source: http://www.thenational.ae   http://getenergyevent.com/News/Oil_and_Gas_Training_News/Kuwait_to_overhaul_oil_industry Mon, 04 Apr 2011 00:00:00 GMT One of the early challenges of developing the gasfield is to establish a base amid a sea of shifting desert dunes from which deep deposits of sour gas can be safely exploited. "Because of the dunes, we are building the main plant on three large, connected sabkhas," David Schulte, a technical consultant to the project, told an industry conference in Abu Dhabi this week. He was referring to salt flats deep in the Empty Quarter where there used to be lakes. An army of earth-moving equipment is working to free the chosen site, about 180km south of Abu Dhabi near the border with Saudi Arabia, from encroaching dunes that are among the highest in the world. Under the terms of the US$10 billion (Dh36.67bn) agreement signed yesterday in the capital, Abu Dhabi National Oil Company (Adnoc) and the US group Occidental Petroleum will share the cost of development. Adnoc holds a 60 per cent interest in Al Hosn Gas, a UAE company formed last year to manage and operate the Shah project. Occidental is a 40 per cent shareholder in Al Hosn, replacing its US rival ConocoPhillips, which withdrew from the project last April. After a nine-month search by Adnoc for a new partner, Occidental agreed in January to join Al Hosn. Despite the change of partners, the Shah gas project was still on track for completion in September 2014, said Tareq Sahoo, the senior vice president of Al Hosn. "Actually, we're ahead [of schedule]," he said. Before Occidental joined the project, Adnoc had issued contracts for eight of 10 major development packages for Shah. A contract for a further work package to develop $2bn of sulphur storage and export facilities at the port of Ruwais was previously opened for bidding and was awaiting Adnoc's decision. That leaves only the final package for construction of the project's power and water plants to be tendered, Mr Sahoo said. Because of the decision to divide work at the main Shah site into eight execution packages, several contractors are working at the site simultaneously, Mr Schulte said. Mr Sahoo said a high-quality four-lane road had been completed to allow the transport of heavy equipment to the site. It would also facilitate rapid evacuation of workers in the case of any future emergency involving a gas leak. Before the 27km road was laid, Mr Sahoo's car became bogged 11 times in the soft mud underlying the salt flats during the course of a single site visit, the executive said. To safeguard employees once the gas starts flowing, almost all the equipment used to produce and process the gas laced with as much as 23 per cent toxic hydrogen sulphide would be segregated in a "red zone" on just one of the sabkhas, Mr Schulte said. Everyone entering the zone would be required to don self-contained breathing apparatus, similar to that used by divers, with a 45-minute supply of air. Workers would set aside the apparatus on reaching an indoor environment with a central supply of clean air. Facilities in the red zone will be equipped with staircases instead of ladders to make it easier for workers carrying air tanks to move around, and all metal components will be made from corrosion-resistant alloys. Although the safeguards added significantly to the construction cost, the design features were necessary because "a big percentage of the plant is considered lethal", Mr Schulte said. Before any sour gas is produced, the integrity of the plant will be tested by running "sweet gas" through it from Adnoc's existing supply of gas from which all traces of hydrogen sulphide have been removed. Source: www.thenational.ae   http://getenergyevent.com/News/Oil_and_Gas_Training_News/Work_starts_on_$10bn_energy_project Fri, 01 Apr 2011 00:00:00 GMT The project aims at increasing by 2015 the oil production of the Upper Zakum field (located in the Gulf, 84 kilometers offshore Abu Dhabi) to 750,000 barrels of oil per day and to sustain this production target for at least 25 years. The contract covers: Front-end engineering design for process units on four artificial islands, including gas separation, gas lift compression, booster gas compression, as well as power generation, utilities, interconnecting pipelines and modification of existing facilities, Procurement services for long lead items. This contract follows the conceptual engineering, which has been successfully completed by Technip. Front-end engineering design is scheduled to be completed by the second semester of 2011. It will be executed by Technip’s operating center in Abu Dhabi, as a new milestone in its continued support to Middle East clients in the early phases of their developments. Source: EnergyMe http://getenergyevent.com/News/Oil_and_Gas_Training_News/Technip_awarded_UAE_offshore_contract Wed, 30 Mar 2011 00:00:00 GMT The pace of deep-water permits has accelerated since the first such permission was granted to Noble Energy Inc.  (NBL 97.42, +1.34, +1.39%) on Feb. 28. Statoil's permit is third that the Bureau of Ocean Energy Management, Regulation and Enforcement has issued this week. Chevron Corp. (CVX 106.78, +1.40, +1.33%) and Exxon Mobil Corp. (XOM 83.62, +0.89, +1.08%) also won drilling permits this week. Five of the six permits, including Statoil's, have been issued to companies that were either drilling or lining up equipment to do so when the government shut down deep-water operations. In all 16 companies had permits to drill wells at depths greater than 1,000 feet when the government announced its moratorium in May. Statoil had hired a rig but not yet begun drilling its new well in 7,134 feet of water 216 miles offshore of Texas City, Texas, when the ban was enacted, according to regulators. According to federal offshore lease data, Statoil is a 90% owner of the well, with OOGC America Inc., a subsidiary of China's national offshore oil company, CNOOC Ltd. (CEO 241.05, -2.49, -1.02%) , holding the remaining 10% interest. Michael Bromwich, who heads the offshore agency, said on Tuesday that while regulators would issue more permits in the subsequent week, he could not predict the pace at which permits would be issued thereafter. "Some say we are now proceeding too quickly; some say we are still proceeding too slowly," Bromwich said Friday. "The truth is, we are proceeding as quickly as our resources allow to approve permit applications that satisfy our rigorous safety and environmental standards." Source: www.ordons.com http://getenergyevent.com/News/Oil_and_Gas_Training_News/Statoil_awarded_U.S._deep-water_permit Mon, 28 Mar 2011 00:00:00 GMT