Individual contractors have their own rules that tell them when to give up on deteriorating rigs regardless of age, but until now, no consistent rules have been available for the industry. Det Norske Veritas has introduced rules and calculations that contractors can show regulators and operators as evidence of an offshore rig's suitability for work. The calculations focus on a fatigue utilization index - the ratio of effective operational time and documented fatigue life. As the ratio rises above one, the rules look more closely at critical repairs, design improvements and more thorough inspections. After 2 years of trials, the Norwegian organization has found that operation beyond calculated fatigue life isn't a safety problem as long as the contractor abides by the new rules.

New rig arrives

GlobalSantaFe took delivery of its GSF Development Driller II, a semisubmersible rig capable of drilling in ultradeep water. After taking delivery of the rig in Singapore earlier this year, the company will begin sea trials in the Gulf of Mexico in late May and start a 3-year contract with BP on Atlantis field development in July. It also took delivery of the GSF Development Driller I, and that, too, will go through sea trials in the Gulf of Mexico before going to work for BHP Billiton on a 2-year contract in July.

Team sets record

Offshore drilling contractor Transocean and Australian independent Santos set a drilling record offshore Indonesia as they used a surface blowout preventer (BOP) on a managed-pressure drilling job in 2,240 ft (683.2 m) of water using the semisubmersible Sedco 601. This job marked the first use of a rotating control head, built by Weatherford, with a surface BOP to control pressure in the well's annulus from a floating rig. The companies used the system in 145 ft (44.2 m) of water to make sure they maintained control while drilling an abnormally pressured well.

Veritas gets promote license farm-out

Veritas DGC Inc. has successfully farmed out its Promote License for UKCS Central North Sea Block 16/21d to Kerr-McGee. This is a new step for Veritas, which has previously acquired and licensed geophysical data and offered reservoir evaluation services. The company is now taking that expertise and applying it to prospect evaluation. Veritas also announced that it has concluded an agreement with Maersk Oil (UK) Ltd. to evaluate UK Central North Sea promote Block 30/1d.

Deepwater Gulf no 'dead sea'

The US Minerals Management Service (MMS) recently reported 12 new deepwater discoveries and 14 new deepwater startups in 2004. Some of the discoveries, such as Atlas and San Jacinto in the Eastern Gulf of Mexico, are bringing economic viability to the planned Independence Hub in that area. The Paleogene play in the area is showing promise through discoveries such as ChevronTexaco's Tiger, Silvertip and Jack and Unocal's Tobago discovery.

Survey awards and agreements

• CGG will conduct a major land seismic acquisition survey in Indonesia over the Tunu field for Elnusa.

• Endeavour International Corp. will obtain data under PGS's Holland MegaSurvey covering approximately 5,790 sq miles (15,000 sq km) in the Dutch North Sea.

• IHS Energy has reached a data exchange agreement with Perupetro, the government promotional and regulatory agency for upstream oil and gas activity in Peru, which is completing plans for a promotional campaign for nine newly designated exploration blocks.

TGS expands multi-client offerings

TGS Nopec Geophysical Co. has secured additional client pre-funding to expand again its ongoing Deep Resolve Survey, located in the heart of the deep gas exploration play in the Gulf of Mexico. The project is now double its originally announced size and covers an equivalent area of 400 Outer Continental Shelf blocks in the Ship Shoal, South Timbalier, Grand Isle and Ewing Bank areas offshore Lousiana.

TGS also has begun a multi-client 2-D survey in waters off of Sri Lanka in South Asia. The 3,000-mile (4,750-km) SL05 survey will complement data acquired in the earlier SL01 survey. TGS is collaborating with Fugro Geoteam on the survey.

Approve an energy policy

"Until recently, I didn't particularly think we needed an energy policy in the United States. But in light of our changing circumstances, I now feel the administration must refocus our nation's energy policy to meet the new energy equation," said David J. O'Reilly, chairman and chief executive officer of ChevronTexaco Corp., in a keynote speech at Cambridge Energy Research Associates' annual CERA Week in Houston. A policy that creates reliable energy supplies doesn't have to be complicated, just transparent and aligned, and the alignment must unite foreign policy, trade and the environment around the sensible and safe development of energy.

Plentiful oil returns

The oil shortage is disappearing and worldwide production could rise by as much as 16 million b/d by 2010 to a world total of more than 100 million b/d, said Peter Jackson, director of oil industry activity with Cambridge Energy Research Associates. The world won't reach peak oil production until at least 2020, and it has "many decades" ahead of it with no serious supply problems, he added. The world will add about 20 big projects a year with a potential production of 2 million to 2.5 million b/d from places such as Karachaganak and Kashagan in Kazakhstan, Thunder Horse in the Gulf of Mexico and Kikeh, offshore Sabah, Malaysia. Those increasing supplies should drive prices lower as early as 2006 or 2007.

Independent boosts exploration

As high prices continue, more than one independent has kicked up its exploration budget for the coming year. Australia's Santos is putting some US $153 million into a 25-well exploration program. In addition to work at home, it has programs in the Kutei and East Java basins of Indonesia, the Gulf of Suez in Egypt and the Cougar prospect in the Gulf of Mexico.

East Timor moves to leasing

Even though Australia and East Timor can't seem to reach a boundary agreement in the Timor Sea off northwestern Australia, the nation is getting interest from some big companies in advance of its first licensing round in June. Seismic work is already under way even though the new nation's parliament still hasn't passed the legislation that sets the legality of an oil and gas industry. The proposed law calls for a production-sharing contract arrangement with a 50-50 split. Road shows for the licensing round are planned, probably starting in May, in Houston, London, Tokyo, Singapore and possibly Perth.

Aussies draw bidders

Work programs totaling US $172 million are planned for the 11 blocks awarded offshore Australia in the latest licensing round. The blocks are off the coasts of Western Australia and Tasmania. Winners included Galveston Mining and Exoil, Benaris Petroleum, Apache Northwest and Apache with BHP Billiton and again with Kufpec Australia, Nippon Oil with Tap Oil, OMV, and Cue Exploration in separate licenses with Exoil and Gascorp Australia.

Seychelles potential rises

Following almost a decade without activity, the Seychelle Islands off the east coast of Africa accepted an exploration proposal from Louisiana, US-basedPetroQuest International. The program will target some 11,600 sq miles (30,000 sq km) on the southern shelf. Specific areas include the Constant and Topaz banks and waters around the Farquhar and Coetivy islands.

East Coast exploration proposed

A bill has passed out of a Virginia legislative committee with a 14-0 vote that could lead to oil and gas exploration offshore Virginia on the East Coast of the United States. State Sen. Frank W. Wagner offered a proposal that would exempt Virginia from the 15-year-old federal moratorium on offshore oil and gas exploration. Chances of passage are slim. The Sierra Club's state direction, Mike Town, already has started rallying the troops in opposition to the proposal, saying gas exploration might lead to drilling, which might lead to leaks and trash washing ashore from offshore platforms.

Dispute arises over border dispute

The boundary disagreement in the Caspian Sea is far from dead. In the latest turn of events, Turkmenistan said it was frustrated by the slow resolution in dividing the sea, and if the five bordering countries didn't reach an agreement soon, it was going to go to the United Nations. Turkmenistan and Iran, with the smallest coast lines, would like the sea divided evenly among the five nations. Azerbaijan, Kazakhstan and Russia want boundaries roughly aligned with their coasts. The newest episode in the row erupted when Azerbaijan said it would not let Turkmenistan develop Serdar field in territory under dispute with Turkmenistan. Azerbaijan countered Turkmenistan's UN threat by saying negotiations still are under way over boundaries.