Fewer seismic crews indicate producers saturated with data

The number of seismic crews working in the Gulf of Mexico has dipped dramatically. From a peak of 31 crews in February 1999, the number at work dropped steadily through 1999, and by early September, the crew count was eight.

During 1998, the smallest number of crews working was 20. Even with the expectation that oil prices would recover quickly, the dip in crew numbers appears excessive. Industry consensus seems to be that many operators already have more than enough data in the Gulf for their near-term needs, and will not buy more anytime soon. There were other factors influencing producers:

• Companies completed ambitious deepwater library programs during the year.
• Some indicated uncertainty about the stability of long-term commodity prices.

Because of decreased demand in the Gulf of Mexico, seismic companies earlier this year sent their crews to other, more exciting areas (Canada, Brazil). The crews that moved to Canada may come back to the Gulf once cold winter weather sets in, or they may move on to other promising moderate-climate areas until US Gulf demand rises once more. Some crews may never return to the relatively mature Gulf of Mexico.

MMS studying G&G impact on cetaceans

The US Minerals Management Service has awarded a $172,200 contract to Continental Shelf Associates to prepare an environmental assessment to help determine whether geological and geophysical activities in the Gulf of Mexico OCS have a significant environmental impact.

A particular concern is whether seismic survey collection operations affect ocean life, particularly cetaceans.

As scheduled, data collection will continue through December, a draft of the environmental assessment will be submitted to MMS in February, 2000, and the final assessment will be submitted in June.

A spokesman for the MMS has said that if the assessment indicates G&G exploration creates a significant impact under guidelines of the National Environmental Policy Act, the MMS will take further action. Although no action was specified, the MMS could require observers on seismic vessels to watch for cetaceans, for example, or require a slow ramp-up of work-related sound to encourage life to leave the area before the sound increases to a level that could damage sensitive cetacean hearing. Continental Shelf Associates is based in Jupiter, Florida.

Camden Hills gas find deepest turnkey well

Ocean Clipper drilled Mississippi Canyon 348 No. 1 well on the Camden Hills prospect to 15,080 ft and found more than 200 ft of gas pay. The well is located in 7,207 ft water depth, 140 miles southeast of New Orleans, slightly southwest of Amoco's King's Peak field on Mississippi Canyon 217. More appraisal drilling is planned for later this year. Diamond Offshore says the discovery is the world's deepest turnkey well. Marathon Oil operates the block with 50.03% interest; WI holds 33.3%; and Total Exploration & Production holds 16.67%.

Mariner's Pluto awarded royalty relief status

The US Minerals Management Service awarded deepwater royalty relief to Mariner Energy to develop the Pluto field, located on Mississippi Canyon 673, 674, 717, and 718 in 2,710 ft water depth. This is only the third royalty relief request to be granted since the Deepwater Royalty Relief Act of 1995 was signed in 1995. The act allows the Secretary of the Interior to suspend royalty payments on the first 87.5 million BOE produced from a field located in water deeper than 200 meters. The purpose is to encourage development and/or production from deepwater Gulf of Mexico leases.

The other three fields were Sunday Silence, King, and King's Peak.

Mariner operates the Pluto project with 37% working interest which will increase to 51% after final payout. Burlington Resources holds the remaining working interest. Mariner said drilling of the production well and installation of the flow line, control umbilical, and related facilities are underway. First production is anticipated this month according to Burlington Resources.

Brutus to be tied into Manta Ray line

Nemo Gathering, a newly formed company created by affiliates of Leviathan Gas Pipeline Partners and Tejas Energy, will construct a 24-mile, 20-in. gas gathering line connecting Shell's Brutus development with the existing Manta Ray Offshore Gathering System. Brutus is located on Green Canyon 158 in 2,980 ft water depth.

As planned, the new pipeline will transport up to 150 MMcf/d of Brutus gas to a Leviathan-owned platform on Ship Shoal 332, where it will be transferred into the 775 MMcf/d Manta Ray system.

The Brutus TLP could serve as a hub for other production - up to 300 MMcf/d, if necessary. J.Ray McDermott will construct the TLP topsides. The new Nemo pipeline will be fabricated to handle total hub platform output in order to compete for additional gas gathering business in this area. Nemo is owned 66.08% by Tejas and 33.92% by Leviathan. Manta Ray is owned by Tejas, 50%; Leviathan, 25.67%; and Marathon Oil, 24.33%.

Gas production from Brutus is expected to begin in late 2001. As originally envisioned, Tejas alone would have owned the new pipeline, but it will still operate the pipeline once deliveries begin.