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June news and analysis.
SCAN receives LOI
SCAN Geophysical ASA received confirmation and a Letter of Intent (LOI) from PetroVietnam Exploration Production Corp. for its new ice class, four-streamer, dual-purpose vessel, the M/V SCAN Stigandi. The vessel is scheduled to acquire approximately 2,435 miles (4,000 km) of 2-D data for PetroVietnam in the Caribbean region. The company also confirmed receipt of a contract award from Amerada Hess Libya Exploration Limited (HESS) for approximately 2,435 miles of 2-D marine seismic work off Libya, to be acquired by the high-capacity seismic
2-D vessel M/V Geo Searcher.
Ascend Geo LLC, a provider of land-based, cable-free seismic recording equipment, donated its Ultra G5 System to the Exploration Geophysics Laboratory (EGL), a research group at the Bureau of Economic Geology, University of Texas in Austin. The cable-free recording system will be used to research 3-C seismic data collection in acquisition projects undertaken by the EGL as part of its research in seismic vector-wavefield technology. Ascend will participate as a member associate in the EGL as a result of the donation.
Knowledge Reservoir LLC (KR), a geoscience and engineering consulting company, and 3GiG LP (3GiG), a provider of upstream business process, knowledge, decision, and project information management technology, have formed a strategic alliance to offer business process and well life-cycle management services. The alliance offers the combination of KR’s experienced upstream industry consulting teams with 3GiG’s expertise to help solve some of the industry’s biggest challenges.
New services launched
GeoMechanics International Inc. has announced the launch of a new service that provides 3-D mechanical simulations of the stress field around salt structures. This new service avoids unrealistic assumptions that are generally used for wellbore stability analyses such as the vertical stress being a principal stress and thus is capable of providing a far more reliable prediction of safe mud weights than a standard analysis. Recent application of this service in exploration wells in the Gulf of Mexico showed that the prediction of the fracture gradient was significantly improved and the salt exit location could be optimized from a stability aspect.
ARKeX has recently completed a multiclient airborne gravity gradiometry survey of the geologically complex Utah Hingeline using its proprietary BlueQube survey technology. The Utah Hingeline, part of the North American thrust belt, is a complex trend that begins northeast of Salt Lake City and runs southwest across the state. There has been a lot of interest in this highly prospective area following Wolverine’s significant discovery of the Covenant field in 2003, which is expected to produce 70 million bbl of oil. ARKeX’s BlueQube data and interpretation report have highlighted how airborne gradiometry can be used as a blueprint for exploration along the thrust and fold belt.
Interpretation solution launched
TerraSpark Geosciences LP launched its Insight Earth, the company’s latest suite of interpretation software. Insight Earth leverages the company’s integrated technologies — automated fault extraction, surface wrapping, and domain transformation — to significantly improve geoscientists’ seismic interpretation results.
3-D contract awarded
Wavefield Inseis has been awarded its first 3-D contract for Geowave Endeavour by BG Norge Ltd. M/V Geowave Endeavour, the new purpose-built 16-streamer vessel,
will be delivered from the Fosen Yard in Norway at the end of June this year and after sea trials will go straight onto the 3-D survey in the North Sea.
Drilling boom forecasted
According the World Offshore Drilling Spend Forecast 2008-2012 published by Douglas-Westwood and Energyfiles, investment in offshore drilling will hit US $380 billion over the next five years. This represents a rise of nearly 60% compared to the $240 billion spent from 2003 through 2007. Data suggests that nearly 18,000 offshore wells were drilled in the previous five years. Currently, Asia is seeing the highest activity, followed by North America and then Western Europe. Due to the consistent rise of oil price over the past five years, drilling rig use has reached close to 100% with maximum day rates increasing to more than $520,000, which is up from $225,000 in the past five years. A latest-generation deepwater rig now carries a future contract agreed at $637,000. Deepwater activity is also expected to rise. In 2007, the report noted that an estimated $50 billion was spent on shallow-water drilling compared to $18 billion in deep waters. By 2012, deepwater expenditure is expected to increase by 40% compared to just 6% for shallow-water prospects.
Rig work secured
Bermuda-based MPF landed a three-year contract worth an estimated
US $630 million with Brazil’s state-owned Petrobras. The contract is for the use of its Multi Purpose Floater 01 vessel. Initially, it will be used as a deepwater drilling unit. The MPF-01 contract carries a possible two-year extension, which would increase its value to approximately $965 million. Currently, the vessel is under construction at the Dragados yard in Cadiz, Spain. The contract could include production work, and it is expected to start in early 2009.
Brazil deal awarded
An estimated US $4.12 billion worth of contracts were awarded to Seadrill by Brazil’s state-owned Petrobras. The contracts cover 18 rig years for three newbuild sixth generation deepwater semisubmersibles. The three separate contracts are for the West Eminence, West Taurus, and West Orion rig vessels. Each contract has a six-year duration for work in water depths of 7,874 ft (2,400 m) offshore Brazil. The West Eminence is under construction at the Samsung yard in South Korea, and is scheduled for delivery during the fourth quarter of this year. The West Taurus and West Orion are both under construction at the Jurong yard in Singapore. The West Taurus is scheduled for delivery later this year with West Orion scheduled for delivery in the second quarter of 2010.
Subsea system researched
StatoilHydro, Chevron, and Petrobras will jointly develop a new, compact subsea separation plant that is smaller and lighter than existing solutions. The CompactSep research project will help the operators move into deeper waters. It will be managed by StatoilHydro with the three companies acting as equal partners. The alliance is based on a technology cooperation agreement that was recently signed by all three. The project has a cost limit of US $10.7 million and will run until 2011, with aims to develop a plant that will work in water depths down to 8,203 to 9,843 ft (2,500 to 3,000 m).
ROV deals made
Brazil’s state-owned Petrobras awarded three contracts to Subsea 7’s i-Tech division worth an estimated US $30 million. The company has been chosen to provide remotely operated vehicles (ROVs) onboard three drilling units, with a combined term of 15 years. The newbuild QX 125hp ROV system will be for one of the three rigs. The system is rated to operate at water depths up to 6,562 ft (2,000 m) as standard with options to upgrade to 9,843 ft (3,000 m) and deeper.
Spill order issued
StatoilHydro was issued an order after a ruptured loading hose pumped an estimated 27,000 bbl of oil into the sea on the Statfjord A platform, which is the second largest oil spill in Norwegian petroleum history. Norway’s Petroleum Safety Authority, the Norwegian Pollution Control Authority and the Norwegian National Coastal Administration investigated the incident, finding several deviations from the health, safety, and environmental regulations in parts of StatoilHydro’s management system.
Deeper market sought
China Oilfield Services plans to invest US $430 million within the next three years to increase its standing in the deepwater drilling market. After boosting its profit by 98.3% to $318 million last year due to rising rig rates, the company now seeks to expand its foothold in overseas markets, both onshore and in deep water. The investment includes construction of two working vessels and one seismic vessel that are set for delivery in 2010 and 2011 at a cost of $100 million.
New construction started
Italy-based Saipem kicked off construction work at its new fabrication yard in the Riau Islands, Indonesia. The US $270 million project will be the company’s largest production facility of its kind. Expected to start operations in 2010, the yard will have a production capacity of 30,000 tonnes covering some 140 hectares of land. Karimun Island was chosen for the site due to its deepwater access.
According to Hannon Westwood, an estimated 70 exploration prospects will offer short, medium, long-term farm-in investment opportunities on the UK Continental Shelf through 2010. The consultancy’s UKCS Farm-in Report highlights opportunities in more than 180 planned UKCS exploration and appraisal wells. The ventures will require a gross investment of more than US $1 billion a year over the next two or more years. Of the 180 wells, 89 are planned through traditional joint ventures, 25 will be fully funded through farm-in agreements, and 12 wells are partially funded through farm-in agreements to date. UKCS drilling units can support around 75 exploration and appraisal wells a year.
Oilexco purchased Svenska Petroleum for US $25 million in cash. The agreement gives the company a 1.66% unitized equity interest in the Nelson field and platform, a 6.45% working interest in the Janice and James fields and floating production vessel and a 40% stake in Block 30/23b, southeast of Janice.