Monday, March 4, 2013

JKX Begins Acid Treatment Program on Russian Wells

Eastern Europe-focused JKX Oil & Gas announced Thursday that work has begun on the hydrochloric acid treatment of three wells on its Koshebkhablskoye field in the Republic of Adygea, Russia.

JKX said the objective of the acid treatment program is to enhance well productivity by improving conditions in the near wellbore and the removal of residual drilling solids in the open-hole sections.

The first well in the program, well-25, had a side track completed on it in January and flowed during clean-up at a rate of 13 million cubic feet per day. Improved stable production rates should result from the current acid treatment, said JKX.

JKX Chief Executive Dr. Paul Davies commented in a statement:

"We are pleased to have the hydrochloric acidization program underway and look forward to having all three wells in production by mid-March."

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New Standard Energy Terminates Drilling Contract Citing Safety Concerns

New Standard Energy (NES) disclosed Friday that, as operator of the Goldwyer joint venture (GJV) with ConocoPhillips, it has terminated its drilling contract with Century Energy Services (MB Century) with immediate effect.

NSE noted that the decision to terminate the drilling services agreement (DSA) was made based on concerns relating to safety, competency and operational performance, and reliability grounds; with the latter supported by an independent audit of the drill rig.

Rig down and demobilization of MBC Rig-14 is on-going, a spokesperson representing confirmed with Rigzone Friday.

Both ConocoPhillips and NSE also noted that although this will delay the drilling of the onshore Gibb Maitland-1 well, the GJV farm-in remains on track. The first phase of the drilling program will resume at the suspended Gibb Maitland well-site once current efforts to identify and secure suitable drilling rig alternatives are completed.

The spokesperson said that NSE will not be able to provide further information about its discussions with other rig contractors, as talks are still in their preliminary stages.

Australian regulators have assured NSE that the drilling delay will not jeopardize the tenure of the GJV permits.

NSE earlier on Jan. 29 revealed that the GJV was encountering "recurring electrical issues" with MBC Rig-14's power controller unit. The rig was undergoing repairs during that week, and was operating at "zero rate."

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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ABB Bags $160M Worth of Electrical Systems for Drillship Orders in Brazil

ABB disclosed Friday that it has won orders worth $160 million from Jurong Shipyard for the design, supply, supervision of installation, testing and commissioning of the main electrical systems for seven next generation drill ships that will operate in the deep water oil and gas fields off the coast of Brazil. The orders were booked in 4Q 2012 and 1Q 2013.

The ships will be used to drill wells in the enormous offshore pre-salt fields off the southeast coast of Brazil. ABB's integrated electrical package will provide a reliable power supply to subsystems onboard ships and help the operators maximize their energy efficiencies.

 The seven vessels are the first in a series of high-efficiency drill ships designed for ultra-deep water operations and built by Estaleiro Jurong Aracruz at their shipyard on the central eastern coast of Espirito Santo, Brazil. It is a wholly-owned shipyard of the Jurong Shipyard based in Singapore.

"ABB's ability to provide locally produced content for this project and the expertise of our local organization were important factors in winning this order. This represents a breakthrough for ABB in the Brazilian market," said Veli-Matti Reinikkala, Head of ABB’s Process Automation division.

"ABB has a great record of project execution for similar projects with Jurong’s shipyard in Singapore; the trust achieved over time with the shipyard was crucial for us in closing this agreement," added Haider Rashid, region manager for ABB in South Asia and country manager of Singapore.

ABB's scope of supply includes complete electrical systems including generators, distribution switchboards, transformers, drives and motors to power the ships' thrusters and drilling systems. Equipment deliveries to the shipyard are scheduled for this year, with the first vessel to be delivered to the ship-owner in the second quarter of 2015.

Equipment deliveries to the shipyard are scheduled for 2013, with the first vessel to be delivered to the ship-owner in the second quarter of 2015.

The ships will be delivered to Sete Brazil, a company established in 2010 by various Brazilian and international investors. On delivery, the seven drill-ships will be chartered to Petrobras for 15 years. Three of the ships will be partially owned and operated for Petrobas by Odfjell and three by Seadrill, both Norwegian based companies.

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Australian Oil, Gas Workers World's Best Paid at $163,600/Year

Australian Oil, Gas Workers World's Best Paid at $163,600/Year

SYDNEY - Workers in Australia's oil and gas sector are the highest paid in the world and earn 25% more than U.S. counterparts, according to a new survey that lays bare the pressures facing companies like Chevron Corp. as they invest billions of dollars to meet Asia's booming energy demand.

Australian workers pocket an average of $163,600 a year to work on projects that range from platforms drilling for natural gas in deep water off the northern coast to onshore rigs seeking to unlock deposits of unconventional gas in the sweltering heat of the Australian Outback, the survey by recruitment firm Hays found.

The labor market has tightened as more than $160 billion is invested in Australia's natural gas industry, which has to compete with big mining projects for pipe layers, welders and engineers. As a result, Hays said the bulging pay-packets offered Down Under are even higher for imported workers--coming in at $171,00 a year.

A combination of vast natural gas reserves, a stable political environment and proximity to fast-growing Asian economies have put Australia on course to overtake Qatar as the world's biggest exporter of liquefied natural gas, or LNG, by the end of the decade. Around 12 multi-billion LNG projects are either under construction on its coastline or on the drawing board.

With a population of around 23 million people--less than ten times smaller than the U.S.-- Australia lacks a deep labor pool for major projects and large salaries are often required to entice workers to remote corners of the country.

Spiralling labor costs have already contributed to a series of budget overruns at Australian gas-export projects operated by Chevron, BG Group PLC and Australia's Santos Ltd. In the largest example, Chevron said higher labor costs were partly to blame for a 21% increase in the cost of building the Gorgon liquefied natural gas development to 52 billion Australian dollars ($53.5 billion).

But in a mild positive for developers, the average Australian salary in the oil and gas sector fell 0.7% in 2012 compared to 2011.

Norway is the second most expensive country to hire local workers, with an average annual salary of $152,600 needed for recruitment, Hays said. New Zealand ranks third with a median pay packet of $127,600.

The survey was based on the responses of 25,000 people working across 53 countries. The U.S. ranked fifth with $121,400 for local workers, while Sudan brought up the rear with $31,100.

"The guide does reveal signs of a slowdown in salary growth for both imported and local labour in Australia, which may be a sign that the market has passed its peak in terms of demand for specialist oil and gas skills," said Matt Underhill, managing director of Hays Oil & Gas.

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

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Report: 47 Tcf Gas Potential at Buru's Canning Permits

Buru Energy revealed Friday that RISC, an independent evaluation group, has completed an assessment of the prospective resources for all of the company's onshore permit areas in the Canning Superbasin.

The evaluation report confirmed that the Basin Centred Gas System in the Laurel Formation, spanning around 6,708 square miles (17,373 square kilometers), contains an unrisked gross recoverable volume of 47 trillion cubic feet of gas and 1,177 million barrels of condensate.

RISC has only considered the reservoirs in the overpressured part of the Laurel Formation in their analysis, Buru noted in a statement.

More work is required to quantify the resources in the extensive overlyinggas accumulation in the normally pressured section, generally above 8,202 feet (2,500 meters), Buru added.

RISC also stated its view that the existing analysis identified reservoirs which are a combination of conventional and unconventional reservoirs; the latter will likely to require stimulation.

Buru, in a joint agreement with Mitsubishi Corp, owns five permits that lie on the onshore Canning Superbasin. In November last year, the company signed an agreement with Western Australia's state government for EP 71, 391, 428, 431 and 436. The contract runs for 25 years, and comes with a separate 25-year extension option.

Buru said in November last year that the agreement provides a framework for the development of a project to deliver gas to a liquefied natural gas facility in the Pilbara, once sufficient gas has been identified to sustain domestic consumption. The JV is required to submit a proposal for the development of a domestic gas project and pipeline by June 30, 2016.

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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Sembcorp Marine to Build $725M Topside for Ivar Aasen Project

Sembcorp Marine disclosed late Thursday that it build a $725 million (SGD900 million) offshore platform integrated topside, which will be bound for the Ivar Aasen development in the North Sea.

The floating productions unit of Sembcorp Marine, SMOE, inked a letter of intent with Det Norske Oljeselskap (DNO) - a Norwegian exploration and production company - to undertake the engineering, procurement and construction (EPC) work of the topside.

The 13,700 tonne topside, which is designed to house 70 people and to be installed at a water depth of 367 feet (112 meters), will be equipped with a living quarters module and a helideck. It will also include modules for process, gas compression, separation, water injection, flare boom, metering and utilities.

SMOE will start construction in December this year, with sail-away scheduled in March 2016.

The Ivar Aasen project is situated west of the Johan Sverdrup field in the Norwegian Continental Shelf, 112 miles (180 kilometers) west of Stavanger, containing approximately 150 million barrels of oil equivalents. First oil from the project is expected to start in the fourth quarter of 2016. The anticipated life span of Ivar Aasen can reach 20 years.

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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Trapoil Buys 33.33% of Trent East Terrace Area

UK North Sea-focused junior Trapoil announced Friday that it has agreed to buy one-third of the Trent East Terrace (TET) Area license in the southern North Sea from Perenco UK.

In return for its 33.33-percent share in Block 43.24a, where the TET Area is located, Trapoil has committed to securing a drilling rig within six months for a planned appraisal well. Trapoil’s share of the drilling costs is expected to be approximately $8 million.

It is also intended that Trapoil will be the operator of the TET Area, subject to approval from the Department of Energy and Climate Change.

TET has proven gas in the Carboniferous Westphalian and Namurian reservoirs, with gross recoverable gas resources estimated by Trapoil's management to be between 35 and 60 billion cubic feet. Trapoil's management believes that the proposed drilling of a new appraisal well could potentially recover closer to 60 bcf if all of the main porous gas-bearing sands flow at commercial rates. The existing 43/25-3 discovery well drilled by Arco British Limited flow tested from two of the five potential sands at an aggregate rate of 50 million cubic feet of gas per day.

Trapoil CEO Mark Groves Gidney commented in a company statement:

"The farm-in to the TET asset enables the group to secure operatorship, subject to DECC's approval, and therefore exercise greater control over the scheduling of our work program. In addition, this relatively straight forward gas development project, in conjunction with the promising exploration potential in the adjacent acreage, offers the prospect of attractive cash flow for the group in the medium term."

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Plains All American Extends Mississippian Lime Pipeline

Plains All American Pipeline, L.P. announced it is constructing a 55-mile extension of its previously announced Mississippian Lime pipeline to service growing production in the Mississippian Lime resource play of western Oklahoma and southwest Kansas.

The Mississippian Lime pipeline extension, which is expected to be brought into service in the fourth quarter of 2013, will provide up to 75,000 barrels per day of crude oil throughput capacity from Coldwater in Comanche County, Kansas to Byron in Alfalfa County, Okla. From Byron, crude oil will flow on PAA's Mississippian Lime pipeline to its terminal in Cushing, Okla. The pipeline extension is supported by a long-term commitment from an area producer.

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Gulf of Mexico Decommissioning Projects Continue to Rise

Gulf of Mexico Decommissioning Projects Continue to Rise

With approximately 2,996 production platforms (distinguished from drilling rigs) on the U.S. Outer Continental Shelf (OCS), the Bureau of Safety and Environmental Enforcement (BSEE) records indicate that 813 platforms currently fit the criteria of idle iron or are non-producing in this region.

With such a huge number of platforms for the industry to decommission, it is more important than ever to share best practice approaches, new technological breakthroughs and project case studies to ensure that all projects are completed on time and on budget.

Below is the breakdown from BSEE on the non-producing assets within their jurisdiction:

258 are on Expired/Terminated/Relinquished Leases432 have enough material to be considered under Rigs-to-Reefs: Only 156 are in water depths that would allow for 'Reefing-in-place'6 Permit Applications were denied for Rigs-to-Reefs issues 5 for toppled/damaged facilities with not enough material, too close to existing reef sites, etc.)5 of the 6 Denied Applications were resubmitted for complete removal/disposal on shore386 Structures have actually been reefed since 1973 under a state artificial reef plan9 Removal Applications currently pending with Rigs-to-Reefs proposals.

In October 2010, the Idle Iron NTL came into effect creating a huge boost in decommissioning projects in the Gulf of Mexico. This increase in offshore decommissioning is continuing to accelerate with more and more platforms being removed in the region year after year.

In a decommissioning market valued at $30-$40 billion, this spike presents a vast opportunity for service providers in the Gulf of Mexico. On the flip side, heightened regulatory burden, combined with new technical challenges and increased risks will place heavy demands on both operators and contractors.

To address these issues, leading Gulf of Mexico major & independent operators, Apache, BP, Shell, Taylor Energy, Stone Energy, Chevron, Enbridge Energy and more will meet at DecomWorld's 5th Annual Decommissioning & Abandonment Summit, Gulf of Mexico in Houston, March 19-21 2013, to evaluate decommissioning approaches to improve efficiencies and cut costs whilst reducing offshore liabilities.

Alongside them, leading contractors such as Baker Hughes, Express Energy Services and TETRA Technologies to name a few will be presenting best-in-class; cost-effective decommissioning solutions and up-to-date case studies that will ensure operators can meet compliance challenges safely and efficiently.

With industry support from partners including the American Salvage Association and The Society for Underwater Technology, this year's conference and exhibition will cover all of the key challenges surrounding decommissioning for the offshore industry.

The Decommissioning & Abandonment Summit will take place on March 19-21 in Houston, TX. Over 800 senior offshore industry experts will gather to discuss the future of offshore decommissioning activities in the Gulf of Mexico as well as reflecting on the projects that took place in 2012.

This meeting is recognized as a must attend event for decommissioning professionals in an industry valued between $30 - $40 billion. The Summit, in its fifth blockbusting year, is the only forum for serious decommissioning industry professionals in the Gulf of Mexico that offers these networking and information sharing opportunities.

If you're involved in this industry you can't afford to stay away - DecomWorld's Head of Sector, Dean Murphy, commented, "This is the event to attend for those serious about offshore decommissioning. The D&A Summit has grown year on year with more operator companies in attendance than ever before. This reflects the growth of decommissioning in the Gulf of Mexico and the challenges that still lie ahead'. Dean continued to say, 'the decommissioning stage of offshore operations is crucial for operators. They must continue to align themselves with government regulations, harness the latest technology and partner with the real innovators in the market to ensure costs are kept down whilst ensuring continued safety'.

The conference has received strong feedback from past delegates. David Bowman, Petroleum Engineer at Nexen Petroleum commented, "Great forum. Very beneficial to see how others are handling decommissioning abandonment issues."

Tom Cheatum, Sales & Marketing Manager at Versabar commented, "All of the operators had their decommissioning project managers attending the conference; it gave us an opportunity to discuss projects at a higher level. In addition, it provided an opportunity for us to showcase our newest technology."

Register now to secure your place at the principal decommissioning event where strategies will be mapped, game-changing technologies showcased, and key deals brokered.

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