IN BRI EF NEW S UK
Oil&Gas UK has confirmed the start of manufacturing of a well capping device which will become a key ele- ment of the UK offshore oil and gas industry’s oil spill response contin- gency plans. Completion of the device is due this summer. The cap’s construc- tion follows the recommendation of the Oil Spill Prevention and Response Advisory Group (OSPRAG), the body set up by the industry, its regulators and trade unions immediately fol- lowing the blow-out in the Macondo well in April 2010. The cap is modular in design, with specifications which allow it to be deployed in the widest range of possible oil spill scenarios that could typically be encountered in the UK continental shelf, including West of Shetlands. The device, deployable from a multi-service vessel, can be attached to various parts of the subsea equipment in order to seal off or ‘cap’ the flow of oil. The new cap comple- ments other work being carried out by the UK industry in oil spill prevention.
EUROPE
The NorweiganMinistry of Petroleum and Energy is offering a total of 56 new blocks or parts of blocks in the Norwegian Sea and six in the North Sea in the latest Awards in Predefined Areas. Awards of new production licences are planned to take place late 2011/early 2012. The deadline for sub- mission of applications is 14 September 2011.
GdF Suez has awarded Technip a
€45mn engineering, procurement, construction and installation contract for the Gjøa field development located
Complete news update
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www.energyinst.org PETROLEUMREVIEW APRIL 2011
OPEC crude production has been climbing steadily alongside rising oil prices and the latest survey from Platts shows a 230,000 b/d jump to 29.8mn b/d in February – despite a 190,000 b/d average drop in Libyan production over the month. The past few months have seen increases here and there across the membership but, as the numbers show, it all comes down to Saudi Arabia, the only country in the world with any sig- nificant volume of surplus crude output capacity. Estimates of Saudi production in February vary. The Platts estimate is 8.7mn b/d, while the International Energy Agency (IEA) puts the figure at 8.9mn b/d. However, all the various esti- mates show that Saudi Arabia has been pumping up the volume. The Platts estimates, based on a
survey of OPEC and oil industry officials and analysts, show Saudi crude output rising by 480,000 b/d between November 2010 and February 2011. Saudi output has climbed further, with the Kingdom’s Oil Minister, Ali Naimi, indicating in early March that produc- tion had risen to 9mn b/d. There is little appetite within OPEC at
the moment for an emergency meeting that might seek to increase the official 24.845mn b/d target for the 11 mem- bers bound by quotas, states Platts, even though that figure already falls short of actual production – estimated by Platts at 27.1mn b/d in February. Some members argue that there is no actual shortage of crude at the moment, and one senior OPEC delegate on 14 March voiced concern that just to
upstream Saudi Arabia remains key OPEC producer
call an emergency meeting could con- tribute to speculative activity. However, again, it all comes back to
the fact that Saudi Arabia, with 3.5mn b/d of spare capacity, is the only country with the wherewithal to give its production a mighty boost, and Riyadh hasn’t bothered to wait for an OPEC meeting to take action, states Platts. According to Naimi, Saudi Arabia is building up storage at var- ious locations, including Rotterdam and Sidi Kerir on Egypt’s Mediterranean coast. It has also mixed its own crude streams to achieve two ‘special’ blends that are closer in quality to the lost Libyan supplies. The increase in Saudi production in
February more than offset the drop in Libyan volumes. However, Libyan pro- duction and exports were forecast to be negligible in March and, assuming the demand was there, Saudi Arabia and others were expected to be called upon to replace more than 1mn b/d of lost Libyan crude – leading to a further drop in Saudi surplus capacity. The IEA’s latest monthly oil market
report, released on 15 March, put spare capacity within OPEC at just above 4mn b/d – the lowest level since late 2008, with Saudi Arabia holding 80% of this volume. The Agency defines effective spare capacity as oil that can be pro- duced within 30 days and sustained at that level for 90 days. It excludes some nominal spare capacity in Iraq, Nigeria and Venezuela – and now Libya – which it considers to be ‘uncertain’ for technical or political reasons.
Norway-Mexico anti-flaring scheme
A joint initiative on reducing oilfield gas flaring, involving Mexico’s Pemex and Norway’s Statoil, has become the first Mexican project of its type to be registered under the UN’s clean development mechanism (CDM), reports Keith Nuthall. The project will pipe currently-flared gas from the Tres Hermanos field to a processing and treatment plant, then distribute it to local markets.
First deepwater GoM drilling permit approval
The US Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved on 28 February what it claimed was the first deepwater Gulf of Mexico drilling permit since the Deepwater Horizon explosion and resulting oil spill last April. Noble Energy’s application for a permit to bypass was for Well #2 in Mississippi Canyon block 519. Commenting on the award, BOEMRE Director Michael R Bromwich said: ‘This permit was issued for one simple reason – the operator successfully
demonstrated that it can drill its deep- water well safely and that it is capable of containing a subsea blowout if it were to occur. We expect further deep- water permits to be approved in coming weeks and months based on the same process that led to the approval of this permit.’ Initial drilling on the well began
16 April 2010, in 6,500-ft water depth. However, activities were suspended 12 June 2010, under the temporary drilling moratorium issued in the wake of the Deepwater Horizon spill.
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