Schlumberger acquires
Schlumberger Limited has acquired Ødegaard A/S, the Copenhagen-based supplier of advanced surface seismic data inversion software. Ødegaard, which will become part of WesternGeco, specializes in applications of seismic data to determine rock parameters critical to better reservoir characterization and improved oil and gas recovery.

Baker Hughes sells interest
Baker Hughes Inc. has sold its 30% minority interest in WesternGeco, a
seismic venture jointly owned with Schlumberger Limited, to Schlumberger for US $2.4 billion in cash. Baker Hughes expected to record a pre-tax gain of $1.74 billion ($1.05 billion, net of tax), subject to normal closing adjustments. Cash proceeds, net of tax, were approximately $1.8 billion. Baker Hughes was advised by Goldman, Sachs & Co.

Veritas debuts system
Veritas DGC Inc. announced that it has introduced the first Sercel 428XL recording system to the North American market. This technology allows Veritas to record much higher channel counts in real-time while increasing acquisition operational efficiency.

FireFly set for test
Input/Output Inc. announced that Apache Corp. will deploy and test the FireFly seismic acquisition system on key E&P assets around the world. Apache joins BP in becoming a launch partner for a multiyear field trial of a 10,000 station, cableless FireFly land imaging system from I/O.

RokDoc launched
Ikon Science Ltd. has launched a significantly upgraded version of its class leading RokDoc software. RokDoc v5.1i offers major performance enhancements for the user, ability to handle larger well and seismic datasets and to bring in pre and post stack data to compare against the RokDoc generated synthetic data. This provides the platform for Evidence Based Interpretation methods (EBI).

New surveys
PGS has announced two new multiclient surveys for offshore Cyprus and Lebanon. For offshore Cyprus, PGS and the Ministry of Commerce, Industry and Tourism, Cyprus, have signed an exclusive multiclient MC2D and MC3D seismic agreement. The acquisition involved 4,347 line-miles (7,000 line-km) of MC2D seismic data which covers an area of 23,166 sq miles (60,000 sq km) over the Eratosthenes seamount, Levant Basin and the prolific Nile Delta. The survey will be available late in the second quarter 2006 and ties all the wells in the deepwater Nemed block in Egypt. It will form the basis for a future licensing round at the end of 2006. For offshore Lebanon, PGS signed an agreement on multiclient MC3D seismic with the Ministry of Energy and Water. The Phase 1 acquisition will involve 386 sq miles (1,000 sq km) of MC3D seismic data in the fourth quarter 2006, which covers an area over the Levant Basin. This survey will be available late in the first quarter 2007 and lies within water depths of 4,920 ft (1,500 m). It will form the basis for a future licensing round to the industry late in the first quarter 2007.
TGS-Nopec Geophysical Company (TGS) will acquire a new multiclient 2-D seismic program in the Sea of Okhotsk near Sakhalin Island in partnership with Dalmorneftegeofizika (DMNG). Depending on strong pre-funding and industry interest, this season's program is targeted to be 9,375 miles (15,000 km). TGS plans to start acquisition in early July utilizing two vessels.

Contracts and awards
BP Exploration and OYO Geospace have signed a US $14.2 million sales contract. BP will acquire an OYO seabed data acquisition system for reservoir monitoring operations in the Azerbaijan sector of the Caspian Sea. Delivery of the system is expected to occur in the company's fiscal fourth quarter and revenue recognition of the sales contract is expected to occur in 2007.
Geotrace has been awarded the contracts for the processing of two major 3-D surveys for Petro-Canada. The seismic surveys have been conducted in Block 22 and blocks 1 a/b offshore Trinidad and Tobago.

Saudis boost exploration
Saudi Aramco will more than quadruple its investment in exploration and exploration technology during the next 5 years, according to Muhammad M. Al-Saggaf, chief geophysicist for the world's largest oil exporter. "The main focus will be on scouring the globe for the earth's locked up black gold," he told people attending an energy technology conference at the Center for Strategic and International Studies, according to a Greenwire report.

CNOOC looks deep
China's CNOOC will spend US $12.5 billion on exploration during the next
5 years as it increases partnerships with international investors and develops its own technology for better deepwater exploration. A Bloomberg News-International Herald Tribune report quoted a report presented at an oil conference in Shanghai by Tan Dongling, a development and planning engineer, who said, "China's coastal areas are resource rich. The aim is to accelerate exploration in the deeper waters offshore China to ensure steady increase in domestic oil and gas output."

Drilling

Two jackups join fleet
Maritime Industrial Services Co. Ltd. Inc. (MIS) contracted with Mosvold Jackup Ltd. to build two Friede & Goldman-designed Super M2 jackups in the MIS yard in Sharjah in the United Arab Emirates. The contract with the Norwegian-backed Cayman Island company, carries an option to build two more units in the future. MIS plans to deliver the units in June and October 2008. The Super M2 is an enhanced version of the 780 Mod 11 design, which is responsible for 35 working rigs around the world. The rigs will be able to work in 300 ft (92 m) of water and has a 50-ft (15-m) cantilever reach.

Production

US seeks more gas
The US Department of Energy started a US $50/year, 10-year program to develop new technologies to help the United States produce more energy at lower prices. The non-profit Research Partnership to Secure Energy for America will administer part of the program. Members of the organization represent 19 research universities, five national laboratories, other research institutions, large and small energy producers and consumers in 21 states. The organization plans to use competitive bidding to award research contracts to the institutions and energy company partners to promote gas and petroleum supply advances. According to the group, the nation has more than 55 years of technically recoverable gas reserves in the lower 48 states, but much of it can't be economically produced with existing technology. The government estimates a rapid technology investment plan would reduce gas prices by 20% or $18 billion.

China gets new jacket
J. Ray McDermott S.A. subsidiary Hydro Marine Services (HMS) has installed the largest offshore jacket ever built in China using its Intermac 650 barge. The jacket is 699 ft (213 m) tall and weighs 25,200 tons and was installed on the Panyu 30-1 gas field in the South China Sea. The companies used a fast-track program to modify the barge for float-off operations. China National Offshore Oil Corp. is developing the field and expects first production in September this year.

Apache stages BP raid
Apache Corp., which has made a substantial living buying and developing ex-Amoco and ex-BP properties, agreed to buy all of BP's remaining properties on the Gulf of Mexico shelf. The deal doesn't include deepwater assets such as Thunder Horse field. Apache will pay US $1.3 billion to buy 18 producing (11 operated) fields on 92 blocks in the Gulf of Mexico with an estimated 27 million bbl of liquid hydrocarbon reserves and 185 Bcf of gas. Apache already has identified 50 drilling locations on the properties and estimated another 4 million bbl of liquids and 26 Bcf of gas in probable and possible reserves.

Co-op targets FPSOs
Emerson Process Management and Wartsila Automation Norway have combined to supply complete electrical and instrumentation systems for floating production, storage and offloading (FPSO) vessels. Emerson will provide process management and automation technology and Wartsila will provide power and vessel automation technology. Together, they can provide turnkey automation systems to convert tankers to FPSOs.

New FPSO heads north
The fourth SSP floating production, storage and offloading system using a thick-hulled spar-type design has been ordered for an undisclosed North Sea location by 2009. The Sevan Marine SSP, with a US $540-million price tag will go to an international oil company for a minimum 10 years. The first SSP 300 has been committed for the Petrobras Piranema field offshore Brazil and the second is going to Venture Production for its Chestnut field in the North Sea.

General

Bolivia takes assets
Repercussions continue to pile up in response to Bolivian President Evo Morales' takeover to foreign oil and gas assets by armed troops in early May. The properties are 50% plus one share owned by Yacimientos Petroliferos Fiscales Bolivianos (YPFB), the state oil company. Bolivia has nearly 49 Tcf of gas reserves and is the major supplier to Brazil. It also has talked about supplying gas to Argentina. Properties include those previously controlled by Petrobras, Repsol YPF and BP. Under the new rules, the Bolivian government will get 82% of the production from all fields that produced more than 3.53 Bcf of gas a day last year. That brings BG, Total, ExxonMobil and El Paso Natural Gas into the equation. In response, Petrobras first said it would discontinue investments in Bolivia. On its own side of the border, it put liquefied natural gas imports on a fast track and organized the eighth bidding round of oil and gas properties to put a heavier emphasis on natural gas. Brazil already is independent in oil production, and it would like to break free of dependence on Bolivia for gas. More than two-thirds of Bolivia's 35 Bcf/d of gas now goes to Brazil. Brazil had planned to expand the main pipeline between the two countries by 530 MMcf/d over the next 4 years, but Petrobras has scrapped that plan. Petrobras also had been negotiating with YPFB to invest as much as US $6 billion to expand gas production, but that investment now is questionable.

High prices can't last
High oil prices are not sustainable over the long term, according to the International Energy Agency (IEA). IEA chief Claude Mandil told reporters at an Australian oil and gas conference US $70 oil was only beginning to throttle demand, according to a Dow Jones report. "The high oil prices are not consistent with the long-term trend just because they are much higher than the margin costs of an additional barrel, which is between $25 and $35," Mandil said. Supply still could be under pressure until 2010, particularly with the world refinery plant in need of upgrades. He said IEA studies show the world has 2 trillion bbl of economically recoverable oil at a price of $25/bbl and twice that much at a price of $45/bbl. He didn't offer a target average price for the future, but he did say the oil price could drop to $25/bbl, but it wouldn't sustain that price as an average.