South Sudan to Restart Oil Production Soon

KAMPALA, Uganda - South Sudan hopes to restart oil production "within a few days" after more than a year of closure, following a border security deal with former civil war foe Sudan, a company executive told Dow Jones Newswires Wednesday.

A Sudanese government delegation is expected in Juba, South Sudan's capital on Thursday, to prepare for the finalization of the paperwork required for the resumption of crude pumping, from the South's oil fields, through pipelines and ports that straddle the north, Paul Adong Deng, managing director of state oil company, Nile Petroleum Corp. said.

The resumption of crude production and shipments is critical for both economies, which have been struggling under the burden of a host of economic hardships.

"Once the paperwork is finalized, oil production will start immediately, the facilities are ready," Mr. Deng said, adding that production would start with a few oil fields, before gradually being extended to the country's entire oil blocks, in Upper Nile and Unity states.

The country is expected to initially start pumping around 30,000-40,000 barrels a day of crude as early as next week, before reaching a pre-independence capacity of around 350,000 barrels a day within two months, Mr. Deng added. Analysts expect the country's crude to reach global oil markets by next month.

Preparations to resume oil production have been ongoing for some time, back in early March a top official at South Sudan's national oil company also said oil exports were expected to reach the international market by May after South Sudan and Sudan signed an agreement signaling their commitment to resuming crude-oil shipments from the South through Sudanese pipelines.

Sudanese President Omar al Bashir is expected to visit Juba later this week for the first time in nearly two years, to endorse the oil deal, according to the Sudanese presidency.

Earlier this month, Sudan and South Sudan agreed to pull their troops from contested oil-rich regions along their 1,120-mile poorly marked border, to create a 12-mile demilitarized zone, a condition for the resumption of crude shipments. South Sudan separated from Sudan in July 2011 after two decades of war, retaining around 75% of the oil fields.

Last week, global economic trader, Trafigura announced that it had signed fuel supply deal with South Sudan for the supply of Dar Blend crude oil through Port Sudan.

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Record Dolphin, Sea Turtle Deaths Since Gulf Spill

Apr 2, 2013 02:27 PM ET // by Jennifer Viegas . Discovery News

The Deepwater Horizon oil spill happened in the Gulf of Mexico nearly three years ago, but the estimated 4.9 million barrels of oil that it released are still killing dolphins, sea turtles and other marine life in record numbers, according to new research.

The report, “Restoring a Degraded Gulf of Mexico: Wildlife and Wetlands Three Years into the Gulf Oil Disaster,” found that dolphins were among the hardest hit animals. As of just earlier this year, infant dolphins were dying six times faster than they did before the spill. Scientists aren’t even yet sure of the extent of the massive spill, given that it was impossible to fully clean up the chemical-laden, carcinogenic oil.

Photos: Devastating Oil Spill Disasters

“Three years after the initial explosion, the impacts of the disaster continue to unfold,” Doug Inkley, senior scientist for the National Wildlife Federation and lead author of the report, said in a press release. “Dolphins are still dying in high numbers in the areas affected by oil. These ongoing deaths — particularly in an apex predator like the dolphin — are a strong indication that there is something amiss with the Gulf ecosystem.”

An infographic summarizes some of the findings.

The NWF also highlighted these findings:

* Dolphin deaths in the area affected by oil have remained above average every month since just before the spill began. (The infant dolphin data was gathered in January and February of 2013.)

* NOAA called the dolphin die-off “unprecedented” — a year ago. While NOAA is keeping many elements of its dolphin research confidential pending the conclusion of the ongoing trial, the agency has ruled out the most common causes of previous dolphin die-offs.

* More than 1,700 sea turtles were found stranded between May 2010 and November 2012 — the last date for which information is available. For comparison, on average about 240 sea turtles are stranded annually.

* A coral colony seven miles from the wellhead was badly damaged by oil. A recent laboratory study found that the mixture of oil and dispersant affected the ability of some coral species to build new parts of a reef.  Read the full article

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Has Canada’s government been muzzling its scientists?

By Pallab Ghosh Science correspondent, BBC News. 2 April 2013

Canada's Information Commission is to investigate claims that the government is "muzzling" its scientists.

The move is in response to a complaint filed by academics and a campaign group.

BBC News reported last year instances of the government blocking requests by journalists to interview scientists.

Some scientists alleged that the muzzling could help suppress environmental concerns about government policies.

The former president of the Canadian Science Writers' Association, Veronique Morin, says that the commissioner's office will now have to find out if the federal government has in effect been operating a policy of censorship.

"Vital stories pertaining to the environment, natural resources, food safety, fisheries and oceans are not coming out in Canada because, for several years now, the government has imposed rules which prevents its scientists from speaking freely about their publicly funded research," she said.  Read the full article

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Total Gets NPD Nod for North Sea Appraisal

The Norwegian Petroleum Directorate has granted Total E&P Norge AS a drilling permit for well 7225/3-2, cf. Section 8 of the Resource Management Regulations.

Wellbore 7225/3-2 will be drilled from the drilling facility Leiv Eiriksson (UDW semisub) at position 72 57' 05.17" north and 25 58' 23.34" east.

The drilling program for well 7225/3-2 relates to drilling of an appraisal well in production license 535. Total E&P Norge AS is the operator with an ownership interest of 40 percent. The other licensees are North Energy ASA with 20 percent, Det norske oljeselskap ASA with 20 percent, Valiant Petroleum Norge AS with 13 percent and Rocksource Exploration Norway AS with 7 percent.

The production license consists of blocks 7225/3 and 7226/1, and was awarded in the 20th licensing round in 2009.

Wildcat well 7225/3-2 is the second exploration well in production license 535.

The permit is contingent upon the operator securing all other permits and consents required by other authorities prior to starting drilling activities.

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Shah Gas Field: Defying the Environment

The development of the first sour gas field in the United Arab Emirates, the Shah Gas Field in Abu Dhabi, reached more than 75 percent by the end of 2012, the company said.

The $10 billion project is being developed by Alhosn Gas, a joint venture between Abu Dhabi National Oil Company (ADNOC) and Occidental Petroleum Corporation (Oxy), where Oxy holds a 40 percent participating interest in a 30-year contract. ADNOC holds the remaining 60 percent interest.

Located about 130 miles (210 kilometers) south west of Abu Dhabi, the Shah gas field covers an area of 5.8 square miles (15 square kilometers), and is expected to start up in 2014.

The Shah Gas project is the biggest of its kind in the world. Although this sour gas field was discovered in the mid-1960s, its remoteness and the complexity of gas extraction made development virtually impossible. Only in recent years has technology advanced to an extent that makes processing such sour gas feasible.

"The project will involve construction of several gas gathering systems, new gas and liquid pipelines, and processing trains. The development is expected to produce significant amounts of condensate and natural gas liquids (NGL)," said Saif Al Ghafli, chief executive of Al Hosn Gas.

In 2012, the company also constructed special plants and pipeline network, and completed almost 20 percent of the special wells of the field, which total 20 wells. In addition, the company has taken over full operatorship of the drilling program from Abu Dhabi Company for Onshore Oil Operations (ADCO) in April 2012, and finalized contracting of required services and materials for the drilling program.

The company has also obtained two rental drilling rigs that started the drilling operations in July 2012, in addition to ADCO's assistance in lending a rig and drilling the first four wells in 2011 and 2012.

The Shah Gas Development (SGD) project consists of four major elements: The gas gathering system; The Shah processing plant; product pipelines and the Shah sulfur station. The field's high H2S content - 23 percent in the well fluid – means that in addition to key HSE design and implementation considerations, it will pose certain unique challenges due to the sheer scope of work to be done. The SGD project will also have a total of four trains – the largest in the world - for the massive Sulphur Recovery Units (SRU) that would process the 1 billion cubic feet per day of sour gas. The SRUs will have a capacity of 2,500 tons per day (TD).

The four main products expected to be produced from the billion scf/day of feed gas at SGD which lies about 112 miles (180 kilometers) southwest of Abu Dhabi, are sales gas (500 million scf/day); NGL (4,400 TD); sulfur (9,200 TD) and about 33,000 barrels of condensate per day.

The development of the Shah gas project is very challenging. The main design technical challenges result from the gas and reservoir characteristics of the Shah Field. The gas is extremely sour, as 23 percent of its content is hydrogen sulfide, and 10 percent is carbon dioxide. The underground temperature and pressure are equally daunting. The temperature is about 150 degrees Celsius and the pressure is as high as 5,500 pounds per square inch.

In addition, the production of sour gas and its conversion to the usable sweet product poses technical and financial challenges, because hydrogen sulfide is toxic and highly corrosive to certain metals. Raw sour gas is generally treated at the well-head stage, to remove the sulfur impurities.

Despite of all these challenges, the soaring local energy consumption has pushed Abu Dhabi to tap the development of the Shah field, and currently mauling of developing other sour fields like Bab and Hail fields.

In August 2008, ADNOC selected ConocoPhillips as a partner for the development of the project, followed in July 2009 by a joint-venture and field-entry agreement. Under the deal, ConocoPhillips was going to have a 40 percent stake in the joint-venture development, with ADNOC to hold the remainder.

But in April 2010, ConocoPhillips decided to pull out from the project without given details about the move. In January 2011, ADNOC selected Oxy as a partner to develop the field.

The remoteness of the location offers up its own set of unique challenges as far as logistics is concerned. Originally, the concept was to transport sulfur in liquid form all the way from Shah via hot water jacket pipelines down to Ruwais for granulation and export. It would take 360 trucks to transport the 22,000 tons of sulfur per day produced from the field.

But, as the UAE decided to create a national rail system, the opportunity arose for the project to take advantage of that and utilize that railway to transport sulfur from Shah to Ruwais. Therefore, they actually have shorter sulfur pipelines – only about 6.8 miles (11 kilometers) long – that will take the sulfur from the Shah plant to the nearby sulfur station where the sulfur is granulated, loaded on railcars and sent down to Ruwais for export.

To use the railway, ADNOC signed a contract with Etihad Railway to build the first phase of its railway network - the 165-mile (266-kilometer) Shah-Habshan-Ruwais section. The rail line will be built to transport granulated sulfur for export from ADNOC's oil and gas fields, including Shah, in the three points. The Habshan-Ruwais link is scheduled for completion by the end of 2013, and the Shah gas field-Ruwais link by the end of 2014, according to the agreement.

In early January 2013, Etihad Railway announced that the first shipment of wagons, to be used in Stage One of the rail project linking Shah and Habshan to Ruwais in the Western Region arrived at Abu Dhabi's Mina Zayed port. The wagons' top-hatch covers for loading maintain the purity of the sulfur at 99.9 percent.

Furthermore, train transport allows for a capacity of up to 22,000 tons of sulfur per day.

The development of the Shah gas will also allow the UAE to increase its production capacity of sulfur to 22,000 TD by 2015.

"By 2015 the field is expected to produce around 9,200 TD of sulfur," said Tareq Sahoo, supervisor of operations at ADCO. "Once the Shah project starts, we expect sulfur production in the UAE to reach 22,000 TD which will be the largest production in the world, surpassing Canada," he said.

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US Court Rules Against BP on Oil Spill Settlement Payments Dispute

A federal judge denied BP PLC's plea to halt payments from a settlement fund set up to reimburse businesses and individuals for losses from the 2010 Deepwater Horizon accident.

During a hearing in New Orleans Friday morning, U.S. District Judge Carl Barbier rejected BP's arguments that the fund administrator, Patrick Juneau, was misinterpreting how claims should be assessed and payments calculated, according to lawyers who attended the hearing. BP claims the fund has made millions of dollars in payments for "fictitious" claims.

Lawyers representing the claimants argued the claims formulas were approved by BP. "The court's ruling speaks for itself," said Steve Herman, one of the lead lawyers representing thousands of businesses and individuals.

BP said in a statement that it has already appealed an earlier decision on the fund's payments to the U.S. Court of Appeals for the Fifth Circuit.

BP said it still believes that Mr. Juneau's interpretation of payment formulas is wrong, resulting in "unjustified windfall payments to numerous business claimants for non-existent, artificially calculated losses."

The ruling wasn't a surprise given Judge Barbier's previous rejection of BP's arguments, said Tom Claps, an analyst and legal expert with Susquehanna Capital, who has closely followed the case. It will be very difficult for the oil giant to score a victory at the appeals court because the settlement was "extensively negotiated, drafted and approved by BP and its legal team," Mr. Claps said.

The hearing took place during a break in the ongoing civil trial aimed at determining the degree of culpability that BP and other companies have for the accident. Judge Barbier has heard six weeks of testimony from employees of BP, drilling rig owner Transocean Ltd., cement contractor Halliburton Co. and expert witnesses.

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Shell, Gazprom to Sign Arctic Agreement

MOSCOW - Royal Dutch Shell PLC will sign a framework agreement Monday to partner Russia's OAO Gazprom Neft on projects on Russia's Arctic shelf, a person familiar with the matter said Friday, becoming the latest international major to seek access to potentially vast but hard-to-recover resources in the region. 

The deal will be signed Monday during a visit to the Netherlands by Russian President Vladimir Putin, the person said, without giving further details. 

Shell is already a partner of Gazprom Neft's parent company, OAO Gazprom, on the Pacific Sakhalin-2 project, and is also working with Gazprom Neft on developing oil resources onshore. 

Gazprom and OAO Rosneft, which are both state-controlled, are the only firms allowed to lead projects on Russia's Arctic shelf. Rosneft is partnering with Exxon Mobil Corp., Italy's Eni SpA and Norway's Statoil ASA. 

Shell's attempts to explore the U.S. Arctic have been marred by problems. 

A spokeswoman for Shell didn't immediately respond to a request for comment.

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Singapore's Temasek Sets Up LNG Investment Firm Pavilion Energy

SINGAPORE - Singaporean state-investment firm Temasek Holdings Pte. Ltd. has set up an investment unit focused on liquefied natural gas, to increase its exposure to the energy sector.

Pavilion Energy Pte. Ltd. will invest globally across the LNG value chain, such as in LNG trading and exploration, as well as storage, processing and shipping, the unit said in a statement Friday.

"As [Asia's] economies continue to transform and urbanise, the demand for clean energy, especially liquefied natural gas, is expected to increase," Pavilion said.

The unit will operate in North America, Europe, Asia, Africa and Australia, and may make joint investments with its parent. It has been incorporated with 1 billion Singapore dollars (US$806 million) in initial capital and should be operational by September.

Pavilion named as chief executive Seah Moon Ming, Temasek's senior managing director for special projects. Mohd. Hassan Marican--former president and CEO of Malaysia's Petroliam Nasional Bhd., or Petronas--will chair the board of directors.

Singapore is developing its LNG infrastructure to become a natural gas trading hub.

The Southeast Asian city-state is building its first LNG import and storage terminal, which will begin commercial operations in the second quarter. The terminal will also reduce Singapore's reliance on imports from Indonesia and Malaysia.

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Foster Wheeler Wins Technical Consultancy Contract in Egypt

Foster Wheeler AG (FWLT) announced that subsidiaries of its Global Engineering and Construction Group have been awarded contracts by Apache Khalda Corporation LDC (Apache Khalda) for the provision of technical consultancy services to oversee the engineering, procurement and construction (EPC) phase of the Qasr Compression Project in Egypt. The Qasr Compression Project will provide additional compression to the existing facilities at the Qasr gas condensate field, in the Western Desert, approximately 326 miles (525 kilometers) west of Cairo.

The Foster Wheeler contract value was not disclosed and will be included in the first-quarter 2013 bookings.

Foster Wheeler will assist Apache Khalda in the management and administration of the EPC phase of the project as part of a joint project management team. The EPC phase is expected to be completed in the first- quarter 2015.

The company also provided project management consultancy services to Apache Khalda during the front-end engineering design phase.

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Maersk Invests in New Danish Platform

Maersk Oil said Friday that it and its partners in the Danish Underground Consortium would invest $800 million in a new unmanned platform in the Danish North Sea. 

The investment in the development, known as Tyra Southeast, is expected to add reserves and resources of 50 million barrels of oil equivalent over the next 30 years to Danish production, comprising of 20 million barrels of oil and 170 billion standard cubic feet of gas. 

Mark Wallace, managing director for Maersk Oil Danish Business Unit, said: "The Danish North Sea still contains significant oil and gas resources. However, the remaining oil and gas is becoming progressively more difficult to extract, requiring efficient development, new technology and continued large investments." 

First oil from the new development is expected in early 2015 and after installing the platform, Maersk Oil plans to drill 12 wells during 2015-2017. 

Maersk Oil is a unit of Danish conglomerate A.P. Moller-Maersk A/S and is operator of the DUC joint venture. 

DUC is a partnership between A.P. Moller-Maersk A/S holding a 31.2% stake, Royal Dutch Shell PLC holding 36.8%, Nordsofonden holding 20% and Chevron Corp. holding 12.0%.

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