John Waggoner • Houston
LAGCOE shows strength of GoM service industry
All signs at the Louisiana Gulf Coast Oil Exposition (LAGCOE) in Lafayette, Louisiana, this October were that the US oil and gas service industry looks forward to modest recovery in 2010. The mood at the second largest oil industry expo in the US was buoyant, with an eye toward the Gulf of Mexico lease sale in March, 2010.
This proposed sale encompasses about 6,800 unleased blocks covering some 35.9 million acres offshore Louisiana, Mississippi, and Alabama states, areas considered the heartland of the US offshore oil and gas industry.
This sale could result in production of up to 1.3 Bbbl of oil and 5.4 tcf of natural gas, MMS says. The acreage is 3 to 230 mi (5 to 370 km) offshore in water depths ranging from 10 ft (3 m) to more than 11,200 ft (3,400 m).
The notice of sale included a proposed revision of the lease terms for blocks in water depths of 1,312 ft to 5,249 ft (400 m to 1,600 m). Blocks in 1,312 ft to 2,625 ft (400 m to 800 m) change from an eight-year lease term to a five-year initial lease term, with an additional eight years for exploratory drilling.
Blocks in 2,625 ft (800 m) to less than 1,312 ft (1,600 m) change from a 10-year initial lease term to a seven-year initial lease term, where commencement of an exploratory well would extend the lease term to 10 years.
The presentations at LAGCOE were notable for the high level speakers from major oil and gas operators. International visitors included speakers from Kuwait Petroleum Corp., Ecopetrol of Colombia, Pemex, and others.
Kuwait Oil Co.’s deputy chairman, Mohammed Husain, spoke with Offshore informally about the pace of new technologies. He and other executives pointed to incremental breakthroughs in monitoring and other refinements in the precision of drilling and production technology as signs that R&D activity continues to shrug off the world’s current economic malaise.
Among the highlights of the show was a keynote address by Plains Exploration & Production Company’s president and CEO, James Flores, who opined on the likelihood of oil prices rising to $250/bbl in the next few years. Although gas inventories are currently near all time highs, Flores also said that gas prices could bounce back next year more than some analysts expect. He mentioned that new refining and petrochemical projects in Asia and overall economic growth are helping to narrow the discount between Asian crude imported to Long Beach and West Coast crude.
Besides the GoM, conference attendees got an update on activity in West Africa and Latin America, where, besides Brazil, offshore activity is heating up in Colombia and especially Mexico, where the largest ever deepwater seismic survey of Mexican deepwater acreage is under way.
Ali Moshiri, president of Chevron Africa and Latin America Exploration and Production, spoke about the dynamics of partnering with national oil company Petrobras and the future of pre-salt plays in Brazil. Under new rules, Brazil intends to pursue production sharing agreements with Petrobras as the operator of all pre-salt concessions.
Elsewhere in Latin America, operators also expressed interest in joint projects offshore Mexico with Pemex. A presentation by Pedro Silva, sub-director of Pemex Exploration and Production, indicated new opportunities opening up in Mexican waters.
Moshiri said West Africa could one day replicate the scale of pre-salt hydrocarbons discovered by Petrobras in Brazil. While cautioning that true volumes are still unknown in Brazil, Moshiri’s answer to an audience question was an unequivocal “yes,” that West Africa has similar potential.
The most encouraging sign of the show was that enthusiasm has returned to the Louisiana Gulf Coast industry. Comments from many attendees show that good times may be around the corner again.
Experimental chelant makes field trial in Brazil
An experimental chelant has been used successfully for the first time in the Campos basin, offshore Brazil, according to M-I Swaco. The chelant was used to help clean a filter cake in an injection well with a planned open-hole, gravel-pack completion. The purpose was to dissolve the calcum carbonate component of the filter cake. Soon after completion, the well was put on injection and the injection rate and pressures met targeted expectations.
Norway calls for licensing round nominations
Norwegian Minister of Petroleum and Energy Terje Riis-Johansen has invited oil companies to nominate blocks for the 21st licensing round on the Norwegian continental shelf. “With the 21st licensing round, I seek to give the oil industry access to attractive areas which are less explored,” says Riis-Johansen. The deadline for nominations is noon on Jan. 13, 2010.
Akpo subsea pipeline pre-commissioning completed off Nigeria
BJ Services has completed a subsea pipeline pre-commissioning operation for Saipem on the Akpo field, offshore Nigeria using the deepwater vesselBourboun Trieste and FPSO Akpo. The field water depth is 3,936 ft to 4,593 ft (1,200 m to 1,400 m). Phase 1 of the operation involved pre-commissioning of a 91-mi (147-km) gas export pipeline. During Phase 2, the company pre-commissioned production, water injection, gas injection, and oil offloading lines.
Deepwater operations are very expensive and often require significant amounts of time between initial exploration and first production. This map of deepwater discoveries by year in the Gulf of Mexico shows a shift toward deeper water over time and the steady pace of deepwater discoveries in the region. Image courtesy the US Mineral Management Service (MMS).
