Flood Waters Throw a Spanner to Metgasco's CSG Drilling Program

Australia's Metgasco confirmed Tuesday that its coal seam gas (CSG) drilling program in the onshore Clarence Moreton Basin will be delayed due to heavy flooding on the road network servicing the PEL 426 permit.

Speaking to Rigzone in an interview on Tuesday, a spokesperson representing Metgasco said that while drilling works at the Thornbill E04 exploration have been completed, the company is not able to move to the drilling rig to its next location due to slippery road conditions.

"We are aiming to move the rig to its drilling location either at the end of this week or early next week," the spokesperson said.

Metgasco said in a statement on Tuesday that it has completed drilling the Thornbill E04 CSG well with the rig, AJ Lucas Rig 103. The well, drilled to a depth of 2,297 feet (700 meters), was designed to investigate the thickness and reservoir characteristics of coal seams within the Walloon Coal Measures in PEL 426.

"The well has now been back filled with cement to the surface and abandoned as per Metgasco's well program. Restoration of the site will soon commence, returning the site to its predrill condition," the company noted in its statement.

Metgasco's drilling program for this year include completing two CSG core wells, three CSG lateral wells and a conventional exploration well. At present, Metgasco have 411 billion cubic feet (bcf) of 2P and 2.4 trillion cubic feet of 3P CSG reserves.

Parallel with its drilling program, Metgasco is seeking approval from the state government to allow it to sell gas locally.

Metgasco's drilling program this year is likely to be fraught with difficulties due to an anti-CSG movement taking place in New South Wales and Queensland. Last year, several protests which took place at the company's Glenugie site escalated into threatening situations. In one of the protests, demonstrators chained themselves to a truck and physically threaten contractors based on-site.

"We do not expect the on-going protest to affect our drilling program. At present, we have the police on-site to ensure the safety of our employees and the security our equipment," the spokesperson said.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Offshore Ghana Focus of Kosmos 2013 Spending

Kosmos Energy's development plans for 2013 focus primarily offshore Ghana, approximately 55 percent of the total anticipated amount, with the remaining 45 percent allocated for exploration and appraisal activities across Kosmos' global exploration portfolio, the company said in a statement.

Kosmos expects for Jubilee's field production to average between 105,000 and 115,000 barrels of oil per day in 2013, with the midpoint of the range representing an increase of greater than 50 percent from last year’s average. This estimate includes the operator's plans for a two-week shut-down of Jubilee's FPSO for regular maintenance.

"Our plans for the year include advancing the development of the world-class Jubilee field, as well as further progress our other discoveries offshore Ghana," stated Brian F. Maxted, Chief Executive Officer. "Jubilee continues to demonstrate outstanding performance, with current field deliverability substantially above the FPSO capacity."

Kosmos plans to further develop the Jubilee field, with majority of the focus on the ongoing implementation of Phase 1A at the field. It estimates finalizing the drilling and completion of all Jubilee Phase 1A production and water injection wells by the middle part of the year.

The company is also allocating funds for the initiation of development at TEN (Tweneboa, Enyenra, and Ntomme), as well as additional appraisal activities and development studies for Mahogany, Teak and Akasa. The TEN plan of development, which represents Kosmos’ second major project development, has been submitted to the government of Ghana and is awaiting approval.

Furthermore, the operator plans to participate in two near-term exploration wells – the Sapele prospect and the Sipo-1 prospect. The Sapele prospect is currently being drilled on the Deepwater Tano Block offshore Ghana with results expected by the end of February 2013. Sipo-1, which is located onshore Cameroon on the Ndian River Block is expected for spudding in early February. Results from this well are anticipated around the end of the first quarter 2013.

Kosmos’ planned capital program provides for additional geologic studies, as well as further processing and interpreting of 3D data already acquired on the Agadir Basin Blocks offshore Morocco. Included in the 2013 capital program are funds for the completion of the company’s acquisition of an additional 37.5 percent interest in the Essaouira Block, which was previously announced. First drilling offshore Morocco is targeted to commence as early as late 2013.

In Mauritania, Kosmos anticipates commencing a large 2D seismic survey in the first half of this year, to be followed by a 3D seismic program later in 2013. Offshore Suriname, the company anticipates additional spending related to the processing and interpreting of a 3D seismic survey which was acquired in late 2012.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Inspection, Rectification Works to Start at Patricia-Baleen Gas Processing

Nexus disclosed Tuesday that a vessel with the capability to inspect and potentially rectify electrical faults is scheduled to arrive at Santos' Patricia-Baleen gas processing facility on Feb.1, 2013.

Earlier on Jan.14, Nexus revealed that an electrical outage which had taken place at an offshore facility caused operation works at the Longtom field to be suspended. A Santos spokesperson clarified on the same day that the affected facility is the Patricia-Baleen gas processing unit.

The facility, sited in the Gippsland Basin, 15 miles (23 kilometers) offshore the northeastern coast of Victoria, processes gas from Nexus’ offshore Longtom development in the VIC/L23 permit.

Nexus added in its disclosure issued Tuesday that the vessel is slated to start inspection and rectification works on arrival, weather permitting.

"All parties are working cooperatively to identify and remedy the fault and return the plant to continuous production as quickly as possible," Nexus said in its disclosure.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Shell, Kinder Morgan Announce Plans To Export LNG From U.S.

HOUSTON--A Royal Dutch Shell PLC (RDSA) unit struck a deal with a Kinder Morgan Inc (KMI) company to export liquefied natural gas out of an existing import terminal near Savannah, Ga., the companies said Monday.

The move, which comes in the wake of a recent report commissioned by the U.S. Department of Energy that came out in favor of LNG exports, is the latest among major energy companies seeking to capitalize on North America's the newly found abundance of natural gas from shale. Exxon Mobil Corp. (XOM) last year announced it wanted to turn an existing import terminal in Texas into a facility than can also export, and Chevron Corp. (CVX) last month partnered with Apache Corp. (APA) to liquefy and export natural gas out of western Canada. Shell is also working on a competing Western Canada LNG export project.

To be sure, the Georgia export project faces hurdles: it still must receive U.S. permission to export to countries with which the U.S. doesn't have free trade agreements, and the companies must finalize investment decisions. But it is likely to strengthen the project's chances of standing out amid 20 or so different projects awaiting for permits to sell LNG to non-FTA countries, due to Shell's big pockets and its experience in the LNG business. So far only one project, Cheniere Energy Inc. (LNG)'s Louisiana terminal, is authorized for exports and is under construction.

The companies said that they would seek to modify El Paso Pipeline Partners LP (EPB)'s Elba Express Pipeline Unit and the Elba Island LNG Terminal to move natural gas to the terminal, liquefy it and ship it. El Paso, a Kinder Morgan unit, will own 51% of the partnership and run the facility, and Shell will own 49% and have rights to 100% of the liquefaction capacity of the terminal. The project is expected to be able to ship 350 million cubic feet of gas per day.

"This project will facilitate further development of the abundant natural gas resources in the United States and will be a positive factor in the overall balance of trade between the U.S. and other countries," said Kinder Morgan Chief Executive Richard Kinder in a statement.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Heavy Storms Disrupts Pertamina's, Hess's Operations Offshore Java

Newly formed task force SKSP Migas confirmed Wednesday that Pertamina Hulu Energi (PHE) West Madura Offshore (WMO) is still experiencing production problems at the Production Sharing Contract (PSC) sited offshore East Java, due to storms which have been plaguing the region in the recent weeks.

"Over the last week, there has been a variety of operating problems due to bad weather. Waves in the Java Sea reached six to seven feet high, causing the storage anchor rope in the offshore field to rupture. As a result of this incident, PHE WMO could only produce lessthan 2,000 barrels of oil per day (bopd)," SKSP Migas said in its disclosure. PHE WMO's production target is 25,000 bopd.

At present, repair works on the ruptured hose are ongoing, and production levels at PHEWMO's PSC are at around 6,000 to 7,000 bopd.

Pertamina's Director of Upstream Operations, Muhamad Husen, confirmed with Rigzone over several telephone interviews on Jan.17 that despite extreme wet weather conditions, the WMO PSC was still producing and processing oil.

Last week, operations at the Pangkah PSC, located off the northeast coast of Java, were also adversely affected. Hess, the operator of the Pangkah PSC, was forced to remove the rig drilling at the offshore site, as well as shut down its liquefied petroleum gas (LPG) production plant near its offshore facilities.

SKSP Migas disclosed in its statement that oil production at the Pangkah PSC has resumed this week, with a production capacity of 5,000 bopd achieved on Monday. The Pangkah PSC has a production target of 14,000 bopd. SKSP Migas also said that the LPG plant will start operations.

Indonesia is at present battling with an annual monsoon season. The rainy season, which has started since early January, caused frequent landslides and flash floods throughout Indonesia and has displaced hundreds of people living in Java.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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BP Kicks Off Production from New Valhall Facilities

BP announced Monday the successful start-up of oil production from new facilities at the Valhall field in the southern part of the Norwegian North Sea.

Production started on Jan. 26.

"The Valhall Re-Development Project is another significant milestone for BP and is an important investment in our North Sea portfolio," said Bob Dudley, BP group chief executive. "It is one of BP’s most complex field expansion developments and gives Valhall a further 40-year design life with the capacity to handle 120,000 barrels of oil and 143 million cubic feet of gas per day."

Production from Valhall is expected to build up to around 65,000 barrels of oil equivalent per day in the second half of 2013. The redevelopment includes a new production, utilities and accommodation platform mounted on a fixed steel jacket, an external system of bridges and walkways linking the new platform to the existing Valhall complex, a power-from-shore system, and an integrated operating environment linking onshore and offshore personnel.

Rebecca Wiles, BP Norway managing director, said: "The re-development of this giant field over the past few years underpins a long future for Valhall. It is a further demonstration of our commitment to our business here in Norway."

Valhall is now 100 per cent powered from shore, via a 182-mile (294-kilometer) direct-current cable from Lista – the first field offshore Norway and within BP to use such a power-from-shore system. This will make direct emissions to air from the Valhall field close to zero.

Including the new platform, the Valhall field complex now has six separate manned platforms: quarters; drilling; production; wellheads; water injection; and the new combined process and hotel platform. In addition it has two unmanned flank platforms, each approximately 3.7 miles (six kilometers) from the main facilities.

Discovered in 1975, first production from the Valhall field came in 1982. The redevelopment project is expected to extend production from the field to 2050.

BP Norway is the operator of Valhall with a 35.9 per cent interest. Hess Norge owns the remaining 64.1 per cent.

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BP Names New Safety, Operational Risk EVP

BP announced Tuesday it has named Bob Fryar as executive vice-president for Safety and Operational Risk (S&OR), reporting directly to Bob Dudley, group chief executive.

Fryar, who is currently executive vice president for production in BP’s upstream business will take up his new position from Feb. 15.

The appointment follows the decision of Mark Bly, who has headed BP’s safety functions since March 2008, to retire from BP in the summer.

"Mark has played a key role in advancing BP’s safety agenda, ensuring that we are heading towards industry-leading safety performance and processes, and helping to drive safe, reliable and compliant operations across BP’s operating businesses.

"I thank him wholeheartedly for his tremendous efforts,” said Dudley. “And Bob Fryar’s deep technical expertise, profound knowledge of our operations and commitment to our values will serve him well in his new role on my executive team."

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Court Accepts BP Plea Resolving All Macondo Criminal Claims

The U.S. District Court for the Eastern District of Louisiana has accepted BP's plea resolving all federal criminal charges against the company stemming from the Deepwater Horizon accident, oil spill and response.

Under the plea agreement that BP reached with the U.S. Department of Justice (DOJ) last November, BP will pay $4 billion over a five-year period and will serve five years' probation. The court also ordered certain equitable relief, including additional actions related to BP's risk management processes as well as several initiatives with academia and regulators to develop new technologies related to deepwater drilling safety.

Additionally, the company will appoint a process safety monitor and an ethics monitor, both with a term of four years, and an independent auditor will report annually on BP's compliance with the remedial terms of probation.

"Our guilty plea makes clear, BP understands and acknowledges it role in that tragedy, and we apologize – BP apologizes – to all those injured and especially to the families of the lost loved ones," said Luke Keller, vice president of BP America, during the court hearing Tuesday in New Orleans.

BP faced charges that included 11 felony counts of manslaughter for each of the workers killed in the incident, one misdemeanor count of violating the Clean Water Act (CWA), one misdemeanor count of violating the Migratory Bird Treaty Act and one felony count of obstruction of a congressional investigation. If BP had rejected the agreement, the court would have had to allow the company to withdraw its agreement to plead guilty.

Since the Deepwater Horizon incident in April 2010, BP has made significant changes to enhance safety throughout its global operations, the company said in a statement. These changes include launching an internal investigation immediately after the accident and implementing the investigation's 26 recommendations.

"The company also made key leadership changes, reorganized its upstream business, created a centralized Safety and Operational Risk organization, and adopted voluntary deepwater drilling standards in the Gulf that exceed current regulatory requirements," BP said in a statement.

The misdemeanor count under the CWA triggered a mandatory debarment following the sentencing. Mandatory debarment prevents a company from entering into new contracts or new leases with the U.S. government that would be performed at the facility where the Clean Water Act violation occurred. Existing contracts between BP and the government would not be impacted.

In November 2012, the U.S. Environmental Protection Agency (EPA) announced a temporary suspension of numerous BP entities after BP entered into a plea agreement with DOJ, which prevents BP from entering into new government contracts, grants or other transactions.

Following the court's acceptance of the plea, the suspension may be maintained or converted into a proposed discretionary debarment of these entities. In additional to mandatory debarment of the violating facility itself, that continues the ineligibility of those entities while negotiations with the EPA continue. The process for resolving both mandatory and discretionary debarments is essentially the same as for resolving the temporary suspension.

"While BP's discussions with the EPA have been taking place in parallel to the court proceedings on the criminal plea, the company's work toward reaching an administrative agreement with the EPA is a separate process, and it may take some time to resolve issues relating to such an agreement," BP said in a statement.

BP reported it is the largest investor and deepwater leaseholder in the Gulf of Mexico, with more than 700 gross blocks and seven rigs currently operating in the region. The U.S. government has awarded BP more than 50 federal leases since the Deepwater Horizon incident and since the government moratorium that followed Deepwater Horizon was lifted.

The Deepwater Horizon semisubmersible had been drilling BP's Macondo well. On the evening of April 20, 2010, control of the well was lost. The natural gas that blew with oil and mud from the well at tremendous pressure ignited on board the rig, killing the 11 workers -- all subcontractors assisting in the drilling for BP.

Earlier this month, drilling contractor Transocean and DOJ settled outstanding civil and potential criminal claims related to the April 2010 Deepwater Horizon incident. That settlement concluded DOJ's criminal investigation of Transocean's role in the largest offshore oil spill in U.S. history.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Heavy Storms Disrupts Pertamina's, Hess's Operations Offshore Java

Newly formed task force SKSP Migas confirmed Wednesday that Pertamina Hulu Energi (PHE) West Madura Offshore (WMO) is still experiencing production problems at the Production Sharing Contract (PSC) sited offshore East Java, due to storms which have been plaguing the region in the recent weeks.

"Over the last week, there has been a variety of operating problems due to bad weather. Waves in the Java Sea reached six to seven feet high, causing the storage anchor rope in the offshore field to rupture. As a result of this incident, PHE WMO could only produce lessthan 2,000 barrels of oil per day (bopd)," SKSP Migas said in its disclosure. PHE WMO's production target is 25,000 bopd.

At present, repair works on the ruptured hose are ongoing, and production levels at PHEWMO's PSC are at around 6,000 to 7,000 bopd.

Pertamina's Director of Upstream Operations, Muhamad Husen, confirmed with Rigzone over several telephone interviews on Jan.17 that despite extreme wet weather conditions, the WMO PSC was still producing and processing oil.

Last week, operations at the Pangkah PSC, located off the northeast coast of Java, were also adversely affected. Hess, the operator of the Pangkah PSC, was forced to remove the rig drilling at the offshore site, as well as shut down its liquefied petroleum gas (LPG) production plant near its offshore facilities.

SKSP Migas disclosed in its statement that oil production at the Pangkah PSC has resumed this week, with a production capacity of 5,000 bopd achieved on Monday. The Pangkah PSC has a production target of 14,000 bopd. SKSP Migas also said that the LPG plant will start operations.

Indonesia is at present battling with an annual monsoon season. The rainy season, which has started since early January, caused frequent landslides and flash floods throughout Indonesia and has displaced hundreds of people living in Java.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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BP Names New Safety, Operational Risk EVP

BP announced Tuesday it has named Bob Fryar as executive vice-president for Safety and Operational Risk (S&OR), reporting directly to Bob Dudley, group chief executive.

Fryar, who is currently executive vice president for production in BP’s upstream business will take up his new position from Feb. 15.

The appointment follows the decision of Mark Bly, who has headed BP’s safety functions since March 2008, to retire from BP in the summer.

"Mark has played a key role in advancing BP’s safety agenda, ensuring that we are heading towards industry-leading safety performance and processes, and helping to drive safe, reliable and compliant operations across BP’s operating businesses.

"I thank him wholeheartedly for his tremendous efforts,” said Dudley. “And Bob Fryar’s deep technical expertise, profound knowledge of our operations and commitment to our values will serve him well in his new role on my executive team."

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