Following its success with the Zebedee target, the rig Eirik Raude is today moving a short distance to start the second well of the latest Falkland Islands exploration campaign.
The next target of the current four targets exploration campaign is Isobel Deep, later followed by Jayne East and finally Chatham.
For the first three of these wells, operator Premier Oil (36%) and Rockhopper, (24%), is joined by Falkland Oil and Gas, which holds 40% as a result of its 2013 takeover of Desire Petroleum.
Isobel Deep sits in an untested area around 40km to the south of Sea Lion, and the prospect could unlock the greatest potential of the wells in the rig’s North Falklands Basin ng schedule.
The oil price slump grinds on and the North Sea remains in crisis, but Wood Group’s chief executive Bob Keiller is clear that people, the UK offshore industry’s primary resource, must still be valued.
During last month’s UK Oil & Gas roadshow ahead of the budget, Keiller made it clear that talk about “we’re going to have to get rid of a few people” was unacceptable.
“Unless you’re in the Mafia you don’t get rid of people,” he warned an Aberdeen audience.
“You may take away their jobs, you may take away their self-esteem, their dignity, their reason for getting up in the morning; there will still be a person there; there will still be a family behind them.
“The impact of job losses shouldn’t be underestimated.”
If one believes the headlines, then the UK sector of the North Sea oil & gas industry is about to be crippled by strikes . . . the first for over 25 years.
The catalyst . . . last straw . . . is the apparent decision among at least some operating oil companies to impose a new offshore rota of three weeks on and three weeks off as a means of cutting costs.
This would replace the current two weeks on/three weeks off practice that grew out of previous friction between offshore workers and their employers and which was encapsulated in an agreement forged about 10 years ago for a raft of reasons deemed sensible at the time, including four weeks paid leave, an entitlement now being revoked.
One is given to understand that the corporates driving the 3:3 agenda are Apache and CNR. It is said they are applying North American boot camp tactics; a style that simply does not work in Europe.
Trade unions Unite and GMB have claimed that their offshore members are overwhelmingly in favour of striking. RMT is poised to ballot, though officials have indicated there may be a more pragmatic approach.
The most recent press statement carried on the Pemex website about its Gulf of Mexico disaster in which four workers were killed and many more injured was issued yesterday morning and apparently last modified at 15.39 in the afternoon.
There has been nothing posted since that I can see.
The April Fool’s Day statement reads: “Early this morning (now yesterday morning) the dehydration and pumping area caught fire in the Permanent Abkatun platform in the Bay of Campeche.
“Pemex’s Emergency Response Plan was immediately put in action and approximately 300 workers were evacuated and transferred to other platforms in the area.
“It is with deep regret that we inform the death of a worker from the company Cotemar.
“At least 16 workers from PEMEX and other companies have been reported to be injured, two of them in serious condition.”
Etcetera, not that there was much more.
The Treasury certainly has been listening to the woes of the UK’s offshore industry, battered by the deadly impacts of collapsed global oil prices global oil prices and a fiscal regime that was totally unfit for purpose.
Osborne, Alexander & Co have come up with a package of fiscal changes that definitely improve the situation. But do they go far enough?
Oil & Gas UK’s chief executive Malcolm Webb certainly comes across as pleased in his initial statement; whether that view will be tempered once the measures have been fully digested remains to be seen.
However, Alan McCrae, head of energy tax at PwC is an example of someone who is less sure. While acknowledging that the changes are for the better, his view matches mine ... that more should have been offered.
As the 2015 budget is announced by Chancellor George Osborne, Energy's Editor Jeremy Cresswell gives his initial reaction to the measures which will be put into place for the North Sea oil and gas industry
Looks like Treasury was listening.
Obviously the single, basin-wide tax allowance was expected. So too the seismic survey allowance, which could prove a strategically shrewd move.
The news that Total has apparently put its controlling stake in the Laggan-Tormore project in the West of Shetland sector up for sale at a reported £1billion is very serious.
That the company might be offering the 80% interest in this pioneering gas-condensate project seems nuts, given the sheer cost of getting the development thus far and so near to first production.
Check the internet and a variety of figures are given for the capital cost of Laggan-Tormore ... as much as £5billion, though the Total Fast Facts currently sitting at the top of the heap on Google says £3.5billion.
Statoil is preparing to drill two UKCS wells in the Spring . . . one in the Catcher area of the Central North Sea and the other in the Northern North Sea immediately to the west of the company’s Mariner field.
The Catcher prospect, known as Wall, is a sizeable target which, if the pre-drill estimate is achieved, could be the herald of a standalone development.
The Mariner area prospect is known as Boatswain and could add around 40million barrels of recoverable oil (median case), so enhancing the economics of the current Mariner development. Moreover, it could open up a fairway to the west and offer the potential for further reserves upgrades.
London listed, but still North American at its core, drilling contractor Noble Corporation is disposing of three of its older rigs . . . the semi-submersibles Noble Paul Wolff, Noble Driller and Noble Jim Thompson. What has not been stated is whether they will be scrapped.
In the case of the last named, the company will be substituting another semi-, the Noble Paul Romano to execute a previously announced contract covering four wells, or a primary term of up to one year in the US Gulf of Mexico.
The Paul Romano is in the Canary Islands and is expected to start operations on or around September 1.
The deteriorating drilling market is behind the decision with DavidWilliams, chairman, president and CEO of the company, reporting last month: “Rapidly declining crude oil prices during the fourth quarter further aggravated the offshore supply imbalance and contributed to an increasingly difficult environment for securing new contract commitments from our customers.
Oil at $50 a barrel or less is having a huge impact on the North Sea industry. Thousands of jobs have been shed already or are vulnerable.
Cutbacks are to the fore . . . capex and opex and while it is claimed that safety will never be compromised, offshore workers are worried and, as should be clear from this exclusive Q&A with Susan Mackenzie, director of the Hazardous Installations Directorate, the HSE will be uncompromising.
Mackenzie: Our basic approach won’t change. The key objectives in our strategy including asset integrity, competence, workforce engagement and leadership are as important now as they have ever been.
Operators and contractors must still control risks to their workers, especially those risks that could give rise to a major accident. Failure to do so threatens workers, production and profitability.
My inspectors will continue to focus on major accident risk control and take action if they find standards are inadequate. I want to see safe production maintained, and I believe my inspectors have a key role in stimulating the industry to achieve this.
It is hard to believe that the North Sea oil & gas industry has been a part of the Aberdeen and north-east Scottish economy for half a century.
From early tentative beginnings starting with Shell renting yard space in Torry and offices on Market Street it has become the linchpin and more besides for this city-region.
Take oil out of the equation and our economy would collapse. There is no obvious sunrise successor, though maritime renewables could be made to work, if the oil & gas supply chain goes after the opportunity and Donald Trump is trumped over the European Offshore Wind Deployment Centre project.
But really grabbing that opportunity is something it has been poor at, despite the efforts of Aberdeen Renewable Energy Group and the launching at the turn of the millennium of what became the very successful All-Energy show, but which was last year swiped by Glasgow in a manner that angers me still.
‘Big-metal’ contracts are being issued; development of the massive Johan Sverdrup field has started; Norway can look forward to the future with renewed confidence.
It was in September 2010 when Lundin disclosed that it had made an oil discovery with exploratory well 16/2-6 on the Avaldsnes prospect in the Norwegian part of the North Sea.
Drilled to a vertical depth of 2,132m (6,995ft), the well encountered a 17m column of oil in the Draupne and Hugin formation in the Upper to Middle Jurassic.
As of January 28, some 12 E&A wells were active on the UKCS, representing an increase of two on last month.
Of these 12, four are exploration, the remaining eight appraisal; one West of Shetland, one in the Northern North Sea, two in the Southern North Sea and the lion’s share (eight) in the Central North Sea.
To date this year, three wells have spudded, while two side-tracks have also been started from wells that were initiated last year.
The massive drop in oil prices, combined with cost and cash flow issues among petroleum companies, is expected to exert further downward pressure on offshore jack-up and semi-submersible rig charters this year.
In a nutshell, a lot of rigs are going to become idle over the next couple of years. That will depress rig rates significantly.
According to analysts RS Platou, rig demand will slacken sharply, dropping an additional 30% based on a $75 oil price over and above last year’s decline.
The US is setting up a new national research facility centred on Houston with the purpose of reducing the risk of offshore drilling oil spills and disasters.
A kick-off purse of $4million, drawn from monies paid by BP to the State of Texas as a result of the Macondo disaster has been made available to get the Subsea Systems Institute established.
That funding will be channelled through the RESTORE Act (Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States), which is intended to provide funding for similar centres in the five states that were harmed by the BP oil spill.
Long-standing UK North Sea trade union leader, Jake Molloy of the RMT, is warning bosses against sacrificing the workforce or compromising safety in their re-found zeal to slash costs in the face of collapsed oil prices coupled with a fiscal regime judged unfit for purpose.
He accuses managers of not learning from the past, being short-sighted, of destroying hard-won trust among the workforce and warns that offshore safety will be compromised.
Not only that, such actions will cost the industry dear in financial terms.
It seems that a measure of common sense has prevailed over the future potential fracking of shale gas & oil wells in the UK.
After a failed attempt by a group of MPs to get a moratorium imposed on the practice under the Infrastructure Bill currently making its way through parliament, some sort of compromise position appears to be emerging.
So long as the Bill isn’t derailed in the House of Lords, it looks as if the UK’s putative shale gas & oil industry will get a green light giving access to large tracts of England.
But I am pleased that relevant ministers have accepted the need for a do not touch approach when it comes to national parks, areas of outstanding natural beauty and where drinking water is collected.
I’ve been told that scores of companies in and around Aberdeen are now letting go of people as the oil price-driven depression deepens in high cost oil & gas provinces around the globe.
The likelihood is that several thousand jobs in our area have either gone or are about to be axed.
Remember, it’s not just the UKCS that’s being hammered.
A multi-disciplinary engineering team at the University of California, San Diego, have developed a new nanoparticle-based material for concentrating solar power plants designed to absorb and convert to heat more than 90% of the sunlight it captures.
It is said the new material can also withstand temperatures greater than 700C and survive many years outdoors in spite of exposure to air and humidity.
By contrast, current solar absorber material functions at lower temperatures and needs to be overhauled almost every year for high temperature operations.
While debate rages as to whether Opec’s decision not to defend the oil price is aimed at the fast growing US shale-derived gas and oil industries, two North American companies, both headquartered in Calgary, have put the brakes on further land-rig construction.
Ensign Energy Services is “pausing” plans to build 17 new high-tech drilling rigs, despite the fact that winter is traditionally the busiest season for exploration and development in Canada.
Precision Drilling now plans to “idle” rig-building activity once it has completed delivery of 16 previously announced rigs.
Today, the price of Brent bland passed to the dark side, falling below $50 a barrel though it did cheer up a little later.
Given the now colossal slide from $115 on June 19 and the determination of OPEC to stick to its decision made in November to defend market share, it is hard to know when and where bottom might be reached.
Gradually, it is dawning that this won’t be a short-sharp nasty event.
Norwegian marine architect Marin Teknikk has revealed that it has the contract with Shanghai Zhenhua Heavy Industries (ZPMC) covering the design and engineering delivery for a large multi-purpose diving support and construction vessel for Singapore-based subsea contractor Ultra Deep Solutions (UDS).
Delivery is planned for early 2017.
The Canadian Association of Oilwell Drilling Contractors (CAODC) has released its 2015 Drilling Activity Forecast, which projects a 10% decrease in activity.
The forecast is that Canadian land-based drilling rigs will drill 10,354 wells next year.
The uncertainty around pipeline construction was a determining factor in the activity outlook.
Petrobas has moved the hull of P-66, the first of a series of eight sister FPSOs (floating production, storage and offloading units) being constructed to meet oil production demands offshore Brazil.
It is also the first FPSO hull completely built in the country.
Noble Drilling has been charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012.
Under the terms of a plea agreement filed in the Alaskan federal court early last month, Noble Drilling (US) is pleading guilty to eight felony offences, will pay $12.2million in fines and community service payments, implement a comprehensive “environmental compliance plan”, and will be placed on probation for four years.
In addition, Noble’s parent, Noble Corporation plc which is headquartered in London, has agreed to implement an environmental management system covering its fleet of offshore rigs, wherever they operate in the world.
