Shell’s Perdido spar was launched from Pori, Finland, on its 8,200-mile (13,194-km) journey to the Gulf of Mexico. Nearly as tall as the Eiffel Tower, the massive steel structure will become one of the world’s deepest oil production facilities when it begins production in 8,000 ft (2,440 m) of water about 220 miles (354 km) off Galveston Island on the Texas coast. (Image courtesy of Shell)

Exploration

Seismic completed

Lansdowne Oil & Gas has successfully completed its 2-D seismic acquisition program on License 5/08 in the Celtic Sea offshore Ireland. The survey was carried by Wavefield Inseis using its M/V Malene Ostervold vessel. The 304-mile (489-km) 2-D seismic program was completed ahead of schedule and under budget covering two large structures — Amergin and Eremon. The structures were originally identified in 1986. Amergin is considered to have the best case for recoverable resources. It is thought to contain a potential 62 million boe.

Exploration projected
UAE-based Dana Gas will spend US $500 million for exploration projects in Egypt, northern Iraq, and the UAE. The company took revenue of more than $1 billion in 2007, with an additional acquisition of another $1 billion through an international Islamic bond offering. The company is expanding its drilling program in Egypt, and it said more than 80% of the construction on its $650 million joint venture gas project in Iraq’s Kurdistan region is complete. The project, which is now placed on a fast track status, is projected to flow 300 MMcf/d by the end of the year, doubling the company’s current total production in Egypt.

Contracts awarded
Two separate contracts were awarded to Weatherford for reservoir monitoring systems with StatoilHydro. The multimillion dollar contracts cover specific technologies such as advanced downhole optical monitoring equipment, including pressure and temperature sensing systems and downhole multiphase flow measurement for both platform and subsea wells.

Drilling

Round rig fully funded
The Sevan Voyageur round rig has been fully funded through a deal between Sevan Marine and GE Capital Markets. The contract involves US $300 million of senior debt project finance with mandated lead arrangers GE Energy Financial Services and GE Transportation Finance. The debt is structured as a limited recourse finance with a pre- and post-completion construction financing of up to $300 million converted into a five-year amortizing term loan. The vessel is scheduled for delivery to Oilexco for its
Shelley field in UK North Sea.

Drilling deals signed
A series of drilling contracts have been signed by Aberdeen-based Senergy totaling US $150 million. The semisubmersibles are from Dophin Drilling and Stena Drilling. The Byford Dolphin started work in the UK North Sea. It is slated for drilling operations with several companies including Granby Oil and Gas, Chryaor, and Century.
New study forecasts spending

Analysts Douglas-Westwood released its Middle East and North Africa (MENA) Oilfield Services Report, which forecasts spending for drilling and workover segments in these regions to jump to US $12.4 billion per year by 2012. This is up from $7.7 billion in 2007. According to the report, drilling activity, both on and offshore must grow at a dramatic rate to increase demand for rigs and associated drilling services. MENA accounts for two thirds of proven global oil reserves and is regarded as the world’s most influential oil province, said an official with Douglas-Westwood.

Deepwater rigs hired
Brazil’s state-owned Petrobras have leased about 80% of the world’s deepest offshore drilling rigs for exploration prospects, including the Western Hemisphere’s biggest discovery in decades — Tupi, according to a report by Bloomberg News. The Rio de Janeiro-based company is hiring rigs that can drill in waters of at least 9,800 ft (3,000 m). Of the 21 vessels capable of drilling in these depths, Petrobras is currently negotiating for as many as 17 more to develop its Tupi discovery and neighboring fields. The current demand is forcing other majors such as ExxonMobil Corp. and BP to pay more. Operators who do not have rigs under contract may delay projects or pay rents in the amount of US $600,000 per day.

Production

Norway reaps benefits
According to Norway’s Ministry of Petroleum and Energy, the state will earn US $70 billion from the petroleum sector in 2008. Due to increasing oil and gas prices, the figure is $10 billion more than earlier estimates. Revenues from oil and gas provide the state with 32% of its total income. Norway’s total oil production
in 2008 is estimated at 2.4 million b/d, which is down from 2007 with an expected gradual decrease in coming years. Gas production is up, with expected sales estimated at 3.53 Tcf in 2008 — about a 10% increase from last year.

Legal actions launched
According to the Financial Times, BP is caught in a struggle over the ownership of its Russian oil venture, TNK-BP, which announced that a Russian regional court issued an injunction against the company’s employment of 148 BP specialists. The company was raided in March by Russian security services, and an employee was briefly arrested on charges of industrial espionage. Samotlor, which is the company’s biggest oil field, is being analyzed for possible environmental violations and the company has been hit with a US $255.3 million back tax claim. The company is owned jointly by BP (50%) and a clutch of Russian billionaires (50%). Bankers familiar with the situation link the turmoil to infighting among the company’s Russian shareholders before a share sale. The increased legal attack is delaying a deal to sell its Kovykta gas field to Gazprom, but some industry insiders feel that the deal could be extended into a larger operation giving Gazprom a stake in TNK-BP.

Consortium defers Kashagan
According to Platts Online, AGIP-KCO wants to delay first production at the giant Kashagan oil field in Kazakhstan to 2012. The Eni-led consortium postponed start-up of the project after recent negotiations with Kazakhstan’s energy ministry. In the latest agreement the Kazakhstan government raised its stake in the field to 16.81% from 8.33%. The stakes of Eni, ExxonMobil, Shell, and Total will be reduced to 16.81% each from 18.52%. ConocoPhillips will hold an 8.39% stake and Inpex Holding’s stake will also be reduced to 7.56%. Originally expected to come on stream in 2005, Kashagan field has experienced a number of delays.

Volcano may hold key
Malcolm Wicks, UK energy minister, visited Jackson, Mississippi, to see how carbon dioxide is extracted deep underground and piped 60 miles (97 km) to artificially lift oil from an older field. The deposit stems from an extinct volcano, which Denbury Resources has successfully exploited to inject into mature fields. Wicks’ visit was to ascertain this project’s feasibility for declining North Sea operations. With an estimated 25 billion boe left in the UK North Sea, it is believed that the UK may capture carbon from industrial plants for similar purposes.

General

Gas project abandoned
Due to political pressure from the United States, Royal Dutch Shell and its Spain-based partner, Repsol, will not move ahead with phase 13 of Iran’s giant South Pars gas field on the border with Qatar. The US $10 billion deal for development of phases 13 and 14 was signed last year with the Iranian national oil company, and both have agreed on a principle of substitution of alternative later phases — namely phases 20 and 21. France-based Total is maintaining its interest in the project despite the withdrawal by Shell and Repsol.

Offshore Wi-Fi installed
Schlumberger and BT Openzone installed the world’s first public wireless broadband service for offshore and remote oil and gas drilling rigs and production platforms on the Byford Dolphin rig in the North Sea. During a three-month trial, the new service was provided over the rig’s main satellite link and allowed the 100 plus workers to use laptops and PDAs throughout the rig accommodation area to communicate with friends and family using e-mail, instant messaging, and Web cam. The rig is managed by Dolphin Drilling Ltd., and workers have been able to use the wireless broadband despite rig moves and distances.

Platforms decommissioned
Proserv Abandonment & Decommissioning (A&D) won two major platform decommissioning projects in the Gulf of Mexico. The contracts are valued at US $7 million, and involve decommissioning of two platforms with associated wells, pipelines, and subsea tie-ins. The company was also selected to take on project management and contracting for the venture to ensure safety and efficiency throughout the abandonment and decommissioning process. One project area is in 37 ft (11 m) of water in the Ship Shoal area, with the other in 194 ft (59 m) of water in the High Island quadrant.