Hydrocarbons occupy a vital role in our life and continue to play an important role for many more years to come. We need to follow all technological innovations to continue our productivity standards to achieve our production targets. Let us extend our vision to achieve this mission.

Friday, December 31, 2010

NEW YEAR TO BECOME NEW YOU!

NEW YEAR TO BECOME NEW YOU!

This is new day of New Year.

I wish you must become new.

Please

*      Forget unpleasant things that may have happened in the past.

*      Begin with what you have. Do not wait for conditions to change.

*      Now is the time, here is the place. Begin.

*      Expect the best and you will have it. Be positive.

*      Sow good seeds in the field of your life. Think good thoughts, speak good words and perform good deeds.

*      Appreciate every one whom you deal with today and all the days.

*      Decide to forgive, and more importantly to forget, a hurt offered to you.

*      Just for today, decide that you will not get angry or lose your temper at all and try to continue.

*      Approach any of your elders, bow down to them and thank them for all that they have done for you.

*      Today, count your blessings! Express your gratitude to God for all the things you take for granted: the air you breathe, the movement of your limbs, your sense of sight and sound.

*      Maintain your equilibrium and your silence even if you are accused wrongly of anything.

*      Do not argue your opinion in any discussion. Listen patiently to the other's view. Then, if necessary you may gently explain yours.

*      Begin and end your day with a long and loving chat with God, your Eternal friend and companion.

Try and put these ideas into practice, and write down how you did it in your diary. If you succeed in following even a few of these ideas, you are well on your way to becoming a New you.  And you will be well on your way to a peaceful and beautiful 2012.
 
With Prayers 
N. Sivanandam
 

 

 

Meet 10 Self-Made Oil & Gas Billionaires


Petroleum is also known as black gold. So it is no surprise that a number of the world's wealthiest people can trace their roots to the oil and gas industry.

Though some of these folks inherited their wealth and have invested wisely, it is the self-made billionaires that we're interested in highlighting.

Their paths to riches are varied but the results are the same for these ten pioneers -- billions:

 

10 Self-Made Oil & Gas Billionaires: Eike Batista
EIKE BATISTA
NET WORTH: $27B
 
Citizenship: Brazil
Age: 53
Education: Studied engineering at Aachen University, but dropped out.
Family: Divorced from former Playboy cover girl; 2 children

How he made his fortune: Batista has founded companies in different business sectors, mainly in mining. He made a significant amount of his money by founding OGX oil and gas exploration company in 2007. In addition, his new IPO for shipping business (OSX) is the world's largest IPO this year and is said to have contributed as much as $5.6 billion to his fortune. Batista is the 8th richest person in the world.

 

10 Self-Made Oil & Gas Billionaires: Mikhail Fridman
MIKHAIL FRIDMAN
NET WORTH: $12.7B
 
Citizenship: Russia
Age: 46
Family: Divorced; 2 children

How he made his fortune: Fridman founded Alfa Group in the early 1990s with partner Peter Aven. The Alfa Group grew into a diverse oil, retail, telecom, and banking conglomerate. In 2003 he sold half his oil company, TNK, to BP for $6.15 billion, which freed him to focus on his telecom business and his political career. In 2005, he became a Russian representative on the International Advisory Board of the Council on Foreign Relations. He's also a member of the Public Chamber of Russia. Fridman is currently the 3rd richest man in Russia and the 45th richest man in the world.

 

10 Self-Made Oil & Gas Billionaires: Vagit Alekperov
VAGIT ALEKPEROV
NET WORTH: $10.6B
 
Citizenship: Russia
Age: 60
Education: Azerbaijan Oil and Chemistry Institute
Family: Married; 1 child

How he made his fortune: Alekperov got his start as an offshore rig worker. In 1990, Alekperov was appointed deputy minister of the Oil and Gas Industry of the Soviet Union. He was the youngest deputy energy minister in Soviet history. In 1991 he launched Lukoil with three ministry-controlled oil fields. Today he is the president of Lukoil and owns a 20% stake in the company. Lukoil is Russia's largest independent energy company and the world's second largest reserve holder after ExxonMobil. Alekperov is the sixth richest person in Russia and the 58th richest person in the world.

 

10 Self-Made Oil & Gas Billionaires: George Kaiser
GEORGE KAISER
NET WORTH: $10B
 
Citizenship: United States
Age: 68
Education: Harvard MBA
Family: Married; 3 children

How he made his fortune: Kaiser's parents developed an oil and gas operation in Oklahoma, Kaiser-Francis Oil Co. in 1940s, which he took over in 1969. Today it is among the world's biggest private energy producers. He bought the Bank of Oklahoma from the FDIC in 1990. Kaiser is one of the top 50 richest people in the world and among the top 50 American philanthropists.

 

10 Self-Made Oil & Gas Billionaires: Harold G. Hamm
HAROLD G. HAMM
NET WORTH: $5.5B
 
Citizenship: United States
Age: 64
Family: Youngest of 13 children
Passion: Finding cure for diabetes

How he made his fortune: Hamm started in the oil industry pumping gas. In 1965 he bought a truck, and in 1966 he founded Harold Hamm Tank Truck Service. He quickly became one of Oklahoma's most successful oilfield fluid transporters. Hamm founded Continental Resources in 1967 and took Hiland Partners and Hiland Holdings, gas-processing firms, private in 2009. Hamm owns more oil and gas than any other American.

 

10 Self-Made Oil & Gas Billionaires: Trevor Rees-Jones
TREVOR REES-JONES
NET WORTH: $3B
 
Citizenship: United States
Age: 59
Education: Dartmouth (undergrad) and Southern Methodist University (Law)
Family: Married; 2 children

How he made his fortune: Rees-Jones worked as a bankruptcy attorney out of college and practiced oil and gas reorganization law, which inspired him to pursue oil and gas investments. He formed Chief Oil and Gas in 1994 and made a number of good investments and sales over the last 16 years, primarily in shale.

 

10 Self-Made Oil & Gas Billionaires: Tim Headington
TIM HEADINGTON
NET WORTH: $2.65B
 
Citizenship: United States
Age: 60
Education: BA/BS University
of Oklahoma
Family: Single

How he made his fortune: Headington took over his father's oil and gas business in 1977 and 30 years later sold acreage in the Bakken Shale oil play to XTO Energy for $1.8 billion in 2008. Though he's taken that money and reinvested in moviemaking, Headington Oil still produces 15,000 b/d.

 

10 Self-Made Oil & Gas Billionaires: Jeffrey Hildebrand
JEFFREY HILDEBRAND
NET WORTH: $1.9B
 
Citizenship: United States
Age: 51
Education: BA/BS University
of Texas
Family: Married; 3 children

How he made his fortune: Hildebrand is a former Exxon geologist who founded Hilcorp in 1989 with partner Thomas Hook who he bought out in 2003 for $500 million. In 2010 he sold a 40% stake in his Hilcorp Energy's acreage in South Texas' Eagle Ford for $400 million to Kohlberg, Kravis, Roberts.

 

10 Self-Made Oil & Gas Billionaires: Kenneth
KENNETH "BUD" ADAMS
NET WORTH: $1.15B
 
Citizenship: United States
Age: 88
Education: University of Kansas, engineering
Family: Widower; 3 children

How he made his fortune: As a former wildcatter, Adams established his own wildcatting firm, ADA Oil Company in 1947, which became Adams Resources & Energy. Adams success as an oilman allowed him to finance his passion for football. He helped Lamar Hunt establish the American Football League in 1959 and bought the Houston Oilers for $25 k in 1960. He later moved the team to Tennessee and renamed it the Titans, which he still owns. Adams is the former owner of the Nashville Kats arena football team, and the Houston Mavericks. Adams is an enrolled member of the Cherokee Nation of Oklahoma.

 

10 Self-Made Oil & Gas Billionaires: T. Boone Pickens
T. BOONE PICKENS
NET WORTH: $1.4B
 
Citizenship: United States
Age: 82
Education: Oklahoma A&M (State University)
Family: Married 4 times;
4 children with first wife
How he made his fortune: After graduating in 1951, he worked for Phillips Petroleum for three years. He left Phillips and worked as a wildcatter before founding Mesa Petroleum in 1956. By 1981, Mesa had grown into one of the largest independent oil companies in the world. Through a number of acquisitions and takeovers, Pickens grew his self-wealth. He left Mesa in 1996. In 1997, Pickens founded BP (Boone Pickens) Capital Management, in which he holds a 46% interest. The company runs two hedge funds Capital Commodity and Capital Equity, which invest in oil, natural gas and nuclear power companies.


Thursday, December 30, 2010

Another oil rig explodes in Gulf of Mexico

Another oil rig explodes in Gulf of Mexico

 

Picture - 1

An offshore oil platform explodes in the Gulf of Mexico south of the Louisiana coast.Fire engulfed the offshore platform and massive plumes of gray smoke billowed into the sky. (Xinhua/AFP Photo)

 

Picture - 2

13 workers from the offshore oil platform wait for rescue after they jumped into the sea. All 13 crew members are rescued, September 2, 2010. (Xinhua/AFP Photo)

 

Picture-3

Boats are seen spraying water on an oil and gas platform that exploded in the Gulf of Mexico, off the coast of Louisiana, September 2, 2010. (Xinhua/Reuters Photo) 

 

U.S. rig count shrinks to 1,694

HOUSTON, Dec.30 (Xinhua) -- The number of operating oil and natural gas rigs in the United States shrank from 1,714 to 1,694 this week, according to a weekly count released here Thursday.

Of the total, 919 rigs were exploring for natural gas, down by 12 rigs from last week's 931, and 765 were exploring for oil, compared with last week's 771, with another 10 rigs listed as miscellaneous, according to figures compiled by Houston-based oil service company Baker Hughes Inc.

The rig count stood at 1,189 a year ago. The weekly count is usually released on Friday, but it was released one day earlier this week because of the New Year's Day.

The Baker Hughes rig counts, first issued in 1944, act as an important business barometer for drilling firms and their suppliers to gauge the overall business environment of the oil and gas industry.

The U.S. rig count peaked at 4,530 in 1981 as the result of the oil boom. It plummeted to a record low of 488 in 1999.
 

Sunday, December 26, 2010

Oil rig blast that shook the world

Oil rig blast that shook the world

 
The worst of the explosions gutted the Deepwater Horizon stem to stern. Crew members were cut down by shrapnel, hurled across rooms and buried under smoking wreckage. Some were swallowed by fireballs that raced through the oil rig's shattered interior.

Dazed and battered survivors, half-naked and dripping in highly combustible gas, crawled inch by inch in pitch darkness, willing themselves to the lifeboat deck.It was no better there.

That same explosion had ignited a firestorm that enveloped the rig's derrick. Searing heat baked the lifeboat deck. Crew members, certain they were about to be cooked alive, scrambled into enclosed lifeboats for shelter, only to find them like smoke-filled ovens.

Men admired for their toughness wept. Several said their prayers and jumped into the oily seas 60 feet below. An overwhelmed young crew member, Andrea Fleytas finally screamed what so many were thinking: "We're going to die!"

It has been eight months since the Macondo well erupted below the Deepwater Horizon, creating one of the worst environmental catastrophes in US history. With government inquiries under way and billions of dollars in environmental fines at stake, most of the attention has focused on what caused the blowout. Investigators have dissected BP's well design and Halliburton's cementing work, uncovering problem after problem.

But this was a disaster with two distinct parts — first a blowout, then the destruction of the Horizon. The second part, which killed 11 people and injured dozens, has escaped intense scrutiny, as if it were an inevitable casualty of the blowout.

It was not.

Nearly 400 feet long, the Horizon had formidable and redundant defences against even the worst blowout. It was equipped to divert surging oil and gas safely away from the rig. It had devices to quickly seal off a well blowout or to break free from it. It had systems to prevent gas from exploding and sophisticated alarms that would quickly warn the crew at the slightest trace of gas. The crew itself routinely practiced responding to alarms, fires and blowouts, and it was blessed with experienced leaders who clearly cared about safety.

On paper, experts and investigators agree, the Deepwater Horizon should have weathered this blowout.

Based on interviews with 21 Horizon crew members and on sworn testimony and written statements from nearly all of the other 94 people who escaped the rig, what emerges is a stark and singular fact: crew members died and suffered terrible injuries because every one of the Horizon's defences failed on April 20. Some were deployed but did not work. Some were activated too late, after they had almost certainly been damaged by fire or explosions. Some were never deployed at all.

At critical moments that night, members of the crew hesitated and did not take the decisive steps needed. Communications fell apart, warning signs were missed and crew members in critical areas failed to coordinate a response. The result was paralysis. For nine long minutes, as the drilling crew battled the blowout and gas alarms eventually sounded on the bridge, no warning was given to the rest of the crew. For many, the first hint of crisis came in the form of a blast wave.

The paralysis had two main sources, the examination by The Times shows. The first was a failure to train for the worst. The Horizon was like a Gulf Coast town that regularly rehearsed for Category 1 hurricanes but never contemplated the hundred-year storm. The crew members, though expert in responding to the usual range of well problems, were unprepared for a major blowout followed by explosions, fires and a total loss of power.

They were also frozen by the sheer complexity of the Horizon's defences, and by the policies that explained when they were to be deployed. One emergency system alone was controlled by 30 buttons.

In the end, though, many lives were saved by simple acts of bravery, the interviews and records show. All over the rig, in the most hellish of circumstances, men and women helped one another find a way to live

Friday, December 24, 2010

Seadrill Newbuild to Drill Off Trinidad and Tobago

Seadrill has entered into a conditional agreement with BP Trinidad and Tobago LLC for a firm two year contract plus further one year option period for the newbuild semi-tender West Jaya offshore Trinidad and Tobago. Contract value for the firm period is approximately US$140 million including a mobilization fee for the transit. In addition, BP will compensate Seadrill for minor equipment upgrades related to the assignment.

West Jaya is currently under construction at Keppel Shipyard in Singapore and delivery is scheduled for the end of March 2011. The unit will subsequently commence transit to Trinidad/Tobago and start-up on the contract with BP is expected early July 2011.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, says, "This is the first tender rig assignement for Seadrill in the Americas expanding the geographical footprint of our tender rig operations. Furthermore, this is our first tender rig contract with BP. We consider this as an excellent opportunity to further develop our strong operational relationship with BP the Americas."

FMC, Shell Sign International Subsea Agreement

FMC Technologies has signed a five-year Enterprise Framework Agreement (EFA) with Shell with an option to extend the agreement for an additional five years. This agreement facilitates to international projects the same mutual benefits that Shell and FMC have enjoyed through a strategic Gulf of Mexico relationship that has existed over the past 17 years.

Under the agreement, Shell's business units in the Americas intend to utilize FMC for all deepwater subsea equipment projects within the scope of the agreement, unless tendering is otherwise required. Specific scope of supply includes subsea trees, mounted controls, processing equipment, manifolds, sled components, jumpers and various other hydraulic, chemical, electrical and control systems. This agreement for deepwater subsea equipment is also available for use by other Shell global business units as may be allowed by local commercial and legal requirements.

"FMC Technologies has had a longstanding alliance with Shell for projects in the Gulf of Mexico," said John Gremp, President and Chief Operating Officer of FMC Technologies. "In addition, we have supported a variety of Shell's international projects, such as Parque das Conchas, Gumusut and a number of other offshore and surface developments. This agreement is a significant addition to our relationship and we are excited about the future prospects it holds."

FMC Technologies to Supply Subsea Systems for Cardamom Deep Project

FMC Technologies has signed an agreement with Shell to supply subsea and topside systems for the Cardamom Deep project in the Gulf of Mexico.

Cardamom Deep is a subsea tie-back to Shell's Auger Tension Leg Platform. The field is located in Garden Banks Block 426 in the eastern Gulf of Mexico in water depths of approximately 2,860 feet (872 meters). FMC's scope of supply includes five subsea production trees, each rated at 15,000 psi. The company will also manufacture and provide subsea and topside controls, manifold and tie-in equipment, and other systems and services. Deliveries will commence in the third quarter of 2011.

"FMC has supported several recent Shell projects in this area, including the Serrano, Oregano, Habanero, and Llano projects," said John Gremp, President and Chief Operating Officer of FMC Technologies. "We are pleased to support the Cardamom Deep field, the latest project awarded under our Gulf of Mexico alliance with Shell."

Tuesday, December 21, 2010

Radiation Hazards from Cell Phones/Cell Towers

Radiation Hazards from Cell Phones/Cell Towers

 

Prof. Girish Kumar, Electrical Engineering Department, IIT Bombay, Powai, Mumbai, India, (+9122) 2576 7436  gkumar@ee.iitb.ac.in

 

RF sources

Radiation Pattern of Cell tower

Antenna

EMF exposure Safety norms

Radiation measurements near cell towers

Review Biological effects

Case Studies

Radiation emitted from Cell Phones, Cell phone towers, Wi-Fi, TV and FM towers, microwave ovens, etc. are called Electromagnetic radiations (EMR). EMR causes significant health hazards (biological effects) on human, animals, birds, plants and environment.

 

Read full report and investigation reports in the following link:

 

http://www.ziddu.com/download/13079218/eandmobilephonetowersRadiationanditseffectonhumans.pdf.html

 

We are living in dangerous exposure limit of this radiation which is affecting not only our health, but also impacting on our DNA. Aware the facts and fight against this ill effects.

 

What's New for Artificial Lift, Natural Gas





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Monday, December 20, 2010

Offshore Brazil


The discovery of the nation's Tupi oil field in 2006, which Brazil's national petroleum agency (ANP) estimated could hold 8bn barrels of oil, could already have been surpassed by the announcement in October of a new field, dubbed Libra, which could hold up to 15bn barrels of oil.

In the space of a couple of decades these finds and others could catapult Brazil up the league of global oil producers to feature the nation prominently in the top ten.

ANP is erring on the side of caution however with Libra, saying "The volume of recoverable oil belonging to the nation could vary from 3.7bn to 15bn barrels, with the most likely estimate being 7.9bn barrels." The test well has yet to be completed and there is seemingly a lot of wriggle room in the estimates, nonetheless, Brazil's recoverable oil reserves are going to be around the 15bn barrels mark and possibly much, much more.

Deepwater drilling is the name of the game here and that requires the implementation of lessons learned from the Gulf of Mexico spill and also a large amount of local infrastructure and offshore manufacturing capacity.

Boom town

"Nonetheless, Brazil has been in the oil industry's sights for some time."Brazil's newly elected president, Dilma Rousseff, potentially has an oil boom town situation on her hands, which can create problems if it is not managed carefully.

Nonetheless, Brazil has been in the oil industry's sights for some time and companies have already set up shop in offshore manufacturing. More will likely come, especially with Brazilian contracts requiring a major input of local content.

BP has already built a presence in Brazil and expects the trend to follow, according to new BP CEO Robert Dudley. While undoubtedly, manufacturing for offshore projects will still take place away from Brazil in centres such as Houston and Singapore and the shipbuilding yards in China and South Korea, increasingly there is a drive towards a Brazilian home based industry. With big deals such as the $7.1bn alliance between Sinopec and Repsol in October 2010, this is surely a question of when and not if.

Doing business in another country can be fraught with difficulties, however, as a company navigates the learning curves of regulations and the customs and practices of doing business that the locals probably know inside out. There are shortcuts to circumnavigate these areas such as, partnerships, joint ventures or even outright acquisitions, which appear to be occurring already.

"The FPSO was upgraded at Keppel's shipyard in Singapore and completed in Brazil."Wellstream International, for instance, set up shop in 2007 at its Niteroi manufacturing facility in Brazil. The Newcastle-based company is the world's biggest manufacturer of flexible pipes that are used by energy companies in deep water. GE is in the market to acquire Wellstream and reportedly had a bid of around $1.2bn rejected in November 2010.

It is not known if a higher bid will be forthcoming from GE. However, media reports have indicated that other suitors could well be in the frame for Wellstream.

The oil rush

In October 2010, conforming to its turnkey supply contract between SBM and Petrobras Netherlands B.V (Petrobras) for the Jubarte field, offshore Espirito Santo to fulfil the local content to 68 per cent, Keppel Offshore and Marine (Keppel) delivered the P-57 Floating Production Storage and Offloading (FPSO) vessel to SBM early and within budget.

The FPSO was upgraded and converted at Keppel's shipyard in Singapore and completed in Brazil at the company's BrasFELS yard in Angra dos Reis; it is set to be deployed in 2010 and will have a production capacity of 180,000 barrels of heavy oil per day (bopd).

Keppel has now converted 12 FPSO's for the Brazilian offshore industry and is also set to move more of its production from Singapore to Brazil. "We have been equipping our yards and training our workers to take on more sophisticated jobs over the years, transferring expertise, technology and systems from our Singapore yards to Brazil in the process," said Choo Chiau Beng, chairman of Keppel and non-resident Ambassador of Singapore to Brazil.

"As a result, our BrasFELS yard is today the most comprehensive offshore and marine facility in Latin America, and has been able to help to meet Brazil's requirements for greater local content," said Choo. "Our operations in the country will soon be augmented by our newest addition, the Keppel Singmarine Brasil shipyard in Santa Catarina, by the first half of 2011."

Digging together

"This arrangement with Brastec offers the perfect opportunity to overcome all these challenges."Joint ventures and partnerships are another way to hit the ground running in Brazil's offshore manufacturing industry. During the last quarter of 2009, Express Engineering, a leading sub-contract manufacturing company in the UK, linked up in a joint venture with offshore engineering manufacturing specialist, Brastec Technologies (Brastec) to form Petrotec Components de Precisão Ltda. (Petrotec). The new venture is already targeting business in oil, gas, aerospace and defence.

"We have been looking to establish a specialist manufacturing capacity in Brazil for some time but the challenges posed by language, culture and distance are considerable," said Express Engineering's managing director, Nigel Davison.

"This arrangement with Brastec offers the perfect opportunity to overcome all these challenges." Maurice Russel is Brastec's director of business development and R&D, "There is a very big market in South America and our clients asked us to look at trying to supply them with more value added components," said Russel.

"Our clients are already working in Europe with Express Engineering and they said why don't good companies that we are already working with on different areas get together and help us?" Brazilian contracts have a heavy percentage of local content requirements to stimulate companies to go to Brazil and it would appear that major energy companies may be encouraging a shift too. "The big problem with international companies," said Russel, "is knowing the country, knowing all the extremely difficult fiscal regulations and culture; being a Brazilian company we can help them with that."

The lessons to be taken on board by companies wishing to establish an offshore manufacturing unit in Brazil seems to be that to get that local content and therefore a chance of a contract then the local knowledge and expertise must be working for you and with you. It is little wonder that there is so much activity in the sector and that should continue in the upward direction until the demand by the major energy companies is met.


http://www.offshore-technology.com

Friday, December 17, 2010

Upstream Construction, Operating Costs Rise

Upstream Construction, Operating Costs Rise

 

The costs of both building and operating upstream oil and gas facilities have regained upward momentum in the past six months after falling the previous year, according to two cost indexes developed by IHS.

 

The IHS CERA Upstream Capital Costs Index (UCCI), which tracks costs associated with the construction of new oil and gas facilities rose 3 percent after bottoming out during the previous six month tracking period. Its index score is now 207. The UCCI's counterpart, the IHS CERA Upstream Operating Costs Index (UOCI), which measures the operating costs for those facilities, rose 1 percent over the same period to register an index score of 173.

 

The results reflect costs from second quarter 2010 to third quarter 2010 and are the first results since the oil well blowout in the U.S. Gulf of Mexico. The federally-imposed moratorium on offshore drilling issued in the wake of the spill had a significant impact in the Gulf.

 

"The fact that overall upstream costs are trending upwards points to the increase in oil and gas activities worldwide," said IHS CERA Chairman and author of the Pulitzer Prize-winning book, The Prize, Daniel Yergin. "While the oil spill in the U.S. Gulf of Mexico and the resulting moratorium has had significant impact on that region, its ramifications have, thus far, shown little impact on deepwater activity elsewhere. However, increased certification and regulations will likely push up total project costs globally in the future."

 

Upstream steel costs rose 7 percent, continuing its rebound after falling nearly 34 percent from the third quarter of 2008 to the third quarter of 2009. Increased activity levels and raw materials costs drove the rise. As demand for steel good returns and supply increases the delicate balance between supply and demand, combined with the industry move to quarterly iron ore contracts, has introduced increased volatility in steel products going forward.

 

The costs of labor and engineering and project management showed little movement outside of regions such as Australia, where the construction labor market remains tight due to activity related to liquid natural gas (LNG) and has stretched capacity. While other regions did show some upward movement, this was driven by the weakness of the U.S. dollar rather than local currency movement.

 

Offshore rig and offshore installation vessel markets were the only UCCI markets to register decreases for the first quarter of 2010 through the third quarter of 2010 period due to increased supply entering the market and number of rigs and vessels remaining idle in the U.S. Gulf of Mexico.

 

"Several rigs left the Gulf during the moratorium but most deepwater rigs with long-term contracts remained in the region idle," said Pritesh Patel, director of the IHS CERA Upstream Capital Costs Analysis Forum. "This combined with new rigs leaving the construction yards will bring a softening to the rig market for the time being."

 

The aircraft market—particularly helicopter rates for transferring personnel offshore—was one of the few other markets to show definitive growth, according to the index. Aircraft costs rose 2 percent in the past six months. Marine inspection and maintenance also saw a 2 percent increase from higher vessel day rates.

 

IHS concludes that upstream costs are likely to experience escalation at an increased rate in the near term as trends towards deepwater production point to higher rates for offshore services and the exploration and the development of new territories creates the need for new infrastructure and places additional stress on supply chains.

 

Thursday, December 16, 2010

Obama administration sues BP, others over Gulf spill

WASHINGTON (Reuters) -
 
 The Obama administration sued BP Plc and four other companies over the Gulf of Mexico oil spill on Wednesday, charging violations of U.S. environmental laws, in the opening salvo in what will likely be a lengthy legal battle.
 
The lawsuit seeks damages from BP, Transocean Ltd, Anadarko Petroleum Corp, Mitsui & Co Ltd unit MOEX and BP's insurer Lloyds of London] for their roles in the worst offshore oil spill disaster in U.S. history.
 
The lawsuit did not name Halliburton, which did the cementing for the Macondo Well, or Cameron International which provided equipment for the well, but the Justice Department said the investigation was continuing and more defendants and charges could be added later.
 
"We intend to prove that these defendants are responsible for government removal costs, economic losses and environmental damages without limitation," U.S. Attorney General Eric Holder said in a statement.
 
"Both our civil and criminal investigations continue."
 
The lawsuit charges the companies under the U.S. Clean Water Act and Oil Pollution Act but it does not request a specific amount of damages.
 
The Deepwater Horizon drilling rig blowout in April killed 11 workers and spilled about 4.9 million barrels of oil over several months. It fouled resort beaches and fishing grounds and led to hundreds of lawsuits over lost revenues and wages.
 
For every barrel of oil spilled into the Gulf of Mexico, there could be a fine of up to $4,300 if gross negligence is found. That would equal a fine of at least $21 billion. If no gross negligence is found, the fine could be up to $1,100 per barrel or almost $5.4 billion.
 
(Reporting by Jeremy Pelofsky and James Vicini; Editing by David Storey)

Wednesday, December 15, 2010

Obama freezes until 2017 the expansion of offshore drilling areas

Obama freezes until 2017 the expansion of offshore drilling areas
 
WASHINGTON – The administration of President Barack Obama said Wednesday his decision to freeze until at least 2017 the expansion of offshore drilling areas as a result of the spill of spring in the Gulf of Mexico.

The decision, announced by Interior Secretary Ken Salazar, banned until 2017 the oil and gas development in areas where no drilling activity is currently authorized as the eastern Gulf of Mexico coast Central and southern Atlantic.

The Obama administration is making an about-face: it was announced on March 31, three weeks before the spill, the opening of new oil exploration areas off the coast, a "difficult" choice that the president had then defended the need to ensure energy independence of the United States.

Among the places affected were areas off the coast of Virginia (east) and new areas of the Gulf of Mexico (south), especially its eastern part, near the coast of Florida.

"We have seen our announcement in March initials (…) to direct our resources to areas where drilling permits are already in force," said Salazar.

In the Arctic, where only the company Shell has applied for authorization of offshore drilling in Alaska, oil production will be done with "the utmost precautions," said Salazar.

The freeze announced Wednesday is part of the operation for the Gulf of Mexico which was the scene of the worst oil spill in the history of the United States, triggered by the explosion of a platform operated by BP on April 20 south of Louisiana. The oil will continue in this area where dozens of platforms are in operation.

Some 4.9 million barrels of crude oil were spilled into the Gulf of Mexico until the summer, when the well flowed directly to the bottom of the sea.

Drilling permits already granted in this part of the Gulf will be "subjected to rigorous ecological analysis," but the drilling will be allowed, " said Salazar.

Reacting to the announcement, the Democratic senator from Florida (southeast), Bill Nelson, a fierce opponent of offshore drilling, welcomed the decision of the administration. "I am pleased that the White House listens to the people of Florida," he said, adding that drilling would ruin the economy of his state that relies on tourism.

The Democratic senator from New Jersey (east), Robert Menendez, also welcomed the decision, adding that a "permanent ban" on the Atlantic coast drilling was necessary.

But environmentalists with the Natural Resources Defense Council estimated that the decision did "not go far enough."

Republican Representative John Culberson of Texas (South) blasted the decision, saying it would "drive up energy prices, would reduce the economic recovery, and would send American jobs overseas."

Oil giant ExxonMobil has also condemned the announcement.

"This decision is very unfortunate and will eliminate the money that the government badly needs, prevent the increase of employment and increase dependence on imports," said Kenneth Cohen, head of public affairs group.

For Chevron, which said it was "disappointed" the decision is "a step in the wrong direction."

http://ffog.net/obama-freezes-until-2017-the-expansion-of-offshore-drilling-areas-20107338.html

GOM Offshore Industry Faces Infrastructure Challengeby Ben Casselman|The Wall Street Journal|Wednesday, December 15, 2010

GOM Offshore Industry Faces Infrastructure Challenge
 
On June 10, 1947, Stanolind Oil & Gas Co. won an auction for the right to drill for oil on a plot seven miles off the Louisiana coast. The company built a spindly steel platform and drilled a well in shallow waters. It struck oil, and in 1950, Stanolind sold its first Louisiana sweet crude for $2.67 a barrel.

More than 60 years later, the West Cameron 45-A platform is, according to government records, the oldest functioning platform in federal waters in the Gulf of Mexico. One of more than 100 structures built in the 1940s and 1950s still in operation, the platform has survived seven Category 2 hurricanes and a major fire.

The platform's age may have taken a toll, however.

On Dec. 4, 2009, a severely corroded pipe connecting the structure to a high-pressure gas well gave way during routine maintenance, releasing explosive natural gas into the air. Unlike most modern platforms, this one had no remote shut-off switch. Emergency valves that should have cut off the flow of gas automatically didn't close properly -- in part, a subsequent investigation found, because a control panel was caked in bird droppings. Workers who had fled by boat to a nearby platform were finally able to shut down the well.

The deadly explosion of the Deepwater Horizon drilling rig in April set off a fierce battle over deep-sea oil drilling aboard huge, state-of-the art vessels. But that debate has largely ignored what many experts say could be a bigger threat: The troubled state of offshore infrastructure that remains in place long after wells are drilled.

High-tech drilling rigs make up only a small piece of the Gulf's energy infrastructure, a vast network of tens of thousands of fixed wells, hundreds of permanent platforms and thousands of miles of undersea pipelines. This network together accounts for nearly a third of the oil produced in the U.S. and more than 10% of the natural gas.

Much of that infrastructure is decades old. Roughly half of the Gulf's more than 3,000 production platforms are 20 years old or more, and a third date back to the 1970s or earlier, long before the development of modern construction standards. More than half have been operating longer than their designers intended, according to federal regulators.

Older structures are more prone to accidents, especially fires, and more dangerous for workers. According to a Wall Street Journal analysis of federal accident records, platforms that are 20 years old or more accounted for more than 60% of fires and nearly 60% of serious injuries aboard platforms in 2009.

"There is an infrastructure issue confronting the industry," says Charles Swanson, a managing partner with Ernst & Young's Oil & Gas Center in Houston. "We're reaching a point now where we're not going to be able to ignore it any longer."

Platforms are subjected to extreme ocean currents, corrosive salt water and frequent hurricanes. Unlike drilling rigs, which are mobile, platforms can't be brought to shore for repairs. Many are so old or have changed hands so many times, that maintenance records are missing or unreliable. And experts say that maintenance work has often gotten short shrift in an industry focused on new discoveries rather than old, declining fields.

Federal regulators investigated 81 accidents at oil-and-gas facilities in the Gulf of Mexico over the past three years in which equipment failure, the most common cause of accidents, was blamed. In more than a quarter of such cases, according to the Journal analysis, investigators found that age or issues that are often age-related, such as corrosion or rust, contributed to the incident.

The government hasn't conducted any studies specifically on the correlation between platform age and incident rates. But in 1998, a broader study on the industry commissioned by regulators and conducted by researchers at Louisiana State University found what they called a statistically significant correlation: A 1% increase in platform age leads to a 0.3632% increase in the rate of accidents. "Thus, we conclude that older platforms indeed pose a greater risk for accidents," the authors concluded.

Pipelines, too, are often decades old and have a history of spills and leaks due to corrosion. Yet offshore lines are subject to lower inspection standards than those onshore; the vast majority of them aren't designed to hold the internal inspection equipment that looks for corrosion, according to federal regulators.

After last year's pipeline rupture on the 1940s platform, federal investigators found there was "extensive metal loss [and] heavy corrosion build-up on the exterior of the pipe" due to "lack of maintenance."

Stone Energy Corp., which bought the platform in 2001, said in a statement that "the overall age of the equipment and infrastructure was not considered to be a factor in the failure." The company said that "as a general rule, older facilities require more upkeep and maintenance than newer facilities," adding, "We prioritize maintenance . . . with safety of personnel as top priority."

On Tuesday, Stone said it disagreed with investigators' findings and believed its safety devices worked as designed. The company said all its systems met regulators' standards.

Mike Hiner, a deep-water drilling veteran with the engineering firm Hamilton Group, likens old platforms to classic cars, saying they require more maintenance, but can still be run safely. "If it's well maintained, it works," he said.

But industry workers say companies will sometimes cut corners. "Some of the platforms, the catwalks are so rusty you can't get up on them," says Randal Harryman, who worked on platforms in the Gulf for 12 years before retiring when he broke his back on the job in 2005 for reasons unrelated to the age of the platform. "I've been afraid of some of the equipment I've used."

Mr. Harryman, who reached an undisclosed settlement with his employer, says he was mostly stationed on old platforms, many dating to the 1950s and 1960s. He did so-called workover jobs: cleaning out wells, replacing worn-out pipes and plugging up old wells. He says pipes inside wells were routinely so corroded that they broke in two when his crew tried to pull them out.

On a recent Monday in November, a blue-and-white helicopter took off from a small air base here on the southern edge of Louisiana, and flew out over the Gulf. Below, dozens of platforms and structures of all ages and sizes poked out of the water. Rusting tanks sat on wooden docks next to marshland oil wells. Larger, manned platforms stood on steel legs in the shallow water. Farther out, newer platforms floated in deep water.

"You can see the entire history of the offshore industry down there," said Paul Bulmahn, chairman and CEO of ATP Oil & Gas, a relatively small oil company in the Gulf.

Mr. Bulmahn was on his way to ATP's Titan, one of the newest platforms. Designed to operate for 40 years, the 64,000-ton Titan is built to withstand powerful hurricanes, as well as swirling ocean currents that can strain the platform's moorings and eat away at its hull. Every three days, remote-controlled submarines with cameras survey the pipes that connect the platform to wells, looking for wear. The 12 polyester ropes that anchor the Titan to the sea floor contain sections that can be removed and inspected.

Many of the platforms Mr. Bulmahn's helicopter flew over en route to the Titan, however, didn't have such rigorous standards in place when they were installed. Few companies have invested in adding advanced monitoring technology to alert them about corrosion or other developing problems. That means the first sign of trouble is often when a valve blows out or a pipe bursts. Such alarms are common. In 2009 there were 133 fires aboard Gulf rigs, 10 oil spills of more than 50 barrels and 17 releases of natural gas that forced facilities to shut down, according to government data. This past April, two weeks before the Deepwater Horizon explosion, an engine-room fire on a shallow-water rig off Louisiana was blamed on a 33-year-old generator that was "prone to failure due to the engine's service life," according to a federal investigation.

In September, the federal government came out with a new policy on aging infrastructure, announcing that it would step up enforcement of existing rules requiring companies to plug dried-up wells and dismantle unused platforms.

The rules, however, don't do anything to address wells that are still in operation -- no matter how old they are.

Nor do they address aging offshore pipelines. While recent onshore pipeline disasters have led to calls for beefed-up regulations onshore, the 25,000 miles of underwater lines that crisscross the Gulf have essentially been ignored. Most of these pipelines are exempt from the kinds of inspections required for pipelines that run through cities and towns.

Yet, ruptured and leaking underwater pipelines have spilled more than 70,000 gallons of oil and other pollutants into the Gulf in more than a dozen incidents in the past three years. A 2007 study found that corrosion is by far the leading cause of offshore pipeline failure.

A 2007 attempt by federal regulators to impose tougher rules for maintaining offshore pipelines was abandoned after opposition from industry groups. In a 232-page rebuttal of the proposed rules, the Offshore Operators Committee argued they were time-consuming, expensive and unnecessary, and questioned the authority of the regulatory agency, the Minerals Management Service, to impose them.

Critics say the failure to adopt new rules on pipelines hints at a broader failure by regulators to force oil companies to maintain their offshore facilities.

"You're exposing people and you're exposing the environment to unmanaged risk," says Tony Hall, CEO of Welaptega Marine Ltd., a Canada-based company that inspects offshore platforms.

Federal regulators say they are strengthening their standards and toughening enforcement of all offshore operations, including those on aging platforms.

"We are aggressively pursuing substantial reforms of our offshore program, including our inspection program," says Michael Bromwich, director of the renamed Bureau of Ocean Energy Management, Regulation and Enforcement, said in a statement. He says his agency needs more funding to ensure compliance.

The extent of the problem was highlighted after Hurricanes Katrina and Rita barreled through the Gulf of Mexico in 2005, leaving behind a tangle of twisted pipelines, toppled platforms and flooded refineries.

Older structures were particularly hard-hit by the storms. Of the 116 fixed platforms destroyed by Katrina and Rita, half were built in the 1960s or earlier and more than 70% were built before 1980.

The storms served as a wake-up call for the industry. Companies stepped up spending on maintenance and monitoring of older structures, and started removing facilities that were no longer profitable.

But experts generally agree that restoring all the old or outdated U.S. energy infrastructure onshore and off is a multi-trillion-dollar problem. And there are forces pushing companies to keep their facilities going for as long as possible. New technologies have allowed companies to pump more oil out of old fields, extending the lives of the platforms and pipelines that serve them. And high oil prices have led companies to try to continue operating fields that, in the past, would have been considered too old to operate profitably.

Says Sampat Prakash, head of the oil and gas division for consulting firm Deloitte: "High prices give people an incentive to keep at it."

Copyright (c) 2010 Dow Jones & Company, Inc.

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