Raisama Slashes Salaries of Two Executive Directors to Reduce Costs

Raisama Energy disclosed Wednesday that it has reduced the salaries of two of its executive directors, Jeff Steketee and Jim Durrant, to save on overhead costs.

In a statement released, the company noted that both of the directors will draw $231,030 (AUD 225,000) per annum; their salaries will be increased to $256,700 (AUD 250,000) per annum upon settlement of a dispute with Blade Petroleum. Steketee was earning $325,000 (AUD 333,710) per annum, while Durrant was drawing a yearly salary of $308,040 (AUD 300,000).

Blade started court proceedings against Raisama last year, the former was seeking to terminate a farm-in agreement pertaining to the Cadlao oil project located in the Philippines inked in 2010, according to a statement from Raisama.

The statement also revealed that both of the directors will be required to give six months' notice period for their rolling employment term of one year. Under their previous contracts, the directors had to present 18 months' notice.

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Centrica Mulls North American Shale Investment

UK utility giant Centrica said Wednesday that it is likely to invest further in North America, possibly in shale gas, as it seeks to diversify its production portfolio.

In its results statement for 2012, Centrica confirmed that the UK and Norway will remain an important part of its investment and activity as it looks to maintain an appropriate energy hedge in the future and it highlighted its involvement in the Cygnus and Valemon large-scale gas field development projects currently taking place in the North Sea. But while the firm also expects to make decisions regarding drilling opportunities in both the east Irish Sea and the North Sea in 2013, Centrica noted that the increasingly small and more expensive nature of North Sea projects means it is looking to diversify its production portfolio.

"This is likely to include further investment in North America, possibly in shale gas, and there is also the potential for gas exports later in the decade," the firm said in its results statement.

"We have built a good platform for growth in North America, with strong capabilities in energy sourcing and supply, risk management, energy services and upstream gas and power."

Centrica's North American total proven and probable gas and liquids reserves were 108 million barrels of oil equivalent (boe) at the end of 2012. The firm's total 2P reserves stood at 525 million boe after it added 170 million boe during the year.

Centrica reported that its total gas and liquids production in 2012 amounted to 56.7 million boe – up 18 percent on the 48.2 million barrels it reported for 2011. For the next few years the firm expects to deliver between 75 and 100 million barrels annually.

In a separate statement Wednesday, Centrica Energy Upstream Managing Director Jonathan Roger commented:

"Centrica Energy Upstream has seen another successful year, delivering against our commitment to grow the business through a combination of acquisitions and exploration activity. We have made important steps to secure and develop our cornerstone assets, as well as recruit talented people.

"Following record investment in the oil and gas industry last year, the strongest for more than three decades, Centrica Energy Upstream increased its profits by 20 percent for the third consecutive year. We are now well positioned to optimise and develop our portfolio, both in the North Sea and internationally, and will invest to increase our annual production up to 100 million boe." 

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Statoil Awards Emerson Automation Upgrade for Visund

Statoil has awarded Emerson Process Management, a business of Emerson (EMR), a $33 million contract to upgrade safety and automation systems on the Visund oil platform in the Norwegian North Sea.

Previously selected by Statoil as one of its preferred automation and safety suppliers, Emerson will provide integrated safety and automation systems to help the international energy company boost oil recovery and extend the life of the field while also reducing operating costs and minimizing safety and environmental risks. The Visund project includes a complex but seamless changeover from existing to new automation and safety systems (known as a hot cutover) to allow uninterrupted operation of the floating production, drilling, and living-quarters platform.

Emerson will design, configure, and install the new safety and automation systems, as well as provide ongoing support services to help ensure continued smooth operations. Aker Solutions of Bergen, Norway, will provide project-execution support to Emerson.

To help with space and weight limitations on the platform and to offer more design flexibility during the upgrade, Statoil will take advantage of Emerson's electronic marshaling with CHARMs technology. This technology reduces the complexity of connecting such systems to the hundreds or thousands of measurement and control instruments in typical process operations – a significant advantage because last-minute wiring changes with traditional marshaling can result in high costs and expensive delays.

Statoil will also benefit from Emerson's operator and maintenance interfaces that were designed with human-centered design principles to make it easier for workers to correctly and efficiently assess operational conditions and take appropriate action to ensure production uptime.

Based on Emerson's PlantWeb digital architecture, the integrated solution will include a DeltaV digital automation system to monitor and control platform operations, as well as a DeltaV SIS system to perform emergency shutdown functions and to control fire and gas detection systems. Emerson's AMS Suite predictive maintenance software will be used for instrument commissioning and configuration and to monitor field devices for potential problems that could affect operations.

"Emerson continues to develop its safety and automation business in the North Sea by providing the best technologies and by investing in support services and skilled personnel to help our customers make the most of their operations," said Steve Sonnenberg, president of Emerson Process Management. "We are delighted that Statoil has recognized the value our technologies and experience can bring to the Visund project."

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Simba Energy IDs Significant Seeps in Guinea

Simba Energy Inc. report it has identified three additional and significant seeps during its initial phase of 2013 exploration work on Blocks 1 & 2 in the Republic of Guinea's Bove Basin.

"Further to our site visit last summer that identified and confirmed a number of known seep areas within Block 2, these three additional seep areas (two in Block 1), from Paleozoic rocks, are impressive and clearly the best seeps seen to date. They certainly increase the prospectivity of both the blocks with the presence of higher C hydrocarbons. A number of samples have been sent to the lab for analysis," remarked Director and CTO for Simba James W. Dick.

In view of the results to date, the Company now plans to focus its initial exploration work in the Republic of Guinea on Block 1 and the northern part of block 2.

The Company is planning a geochemical survey to collect 2,000 samples covering 1,000 line kilometers mostly within Block 1 to focus upcoming phases of exploration. Crews will be mobilized within the next month with completion anticipated shortly thereafter.

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Unknown Amount of Oil Spilled After Boat Crash

An unknown amount of oil has been discharged into a lake connected to the Gulf of Mexico after a boat allided with an inactive wellhead, the U.S. Coast Guard announced Wednesday.

The 42-foot crewboat ran into the wellhead about nine miles southwest of Port Sulphur, La., Tuesday evening, and the platform is discharging an "oily water mixture," the Coast Guard said.

The wellhead is owned by Swift Energy Company (SFY), and is no longer producing.

Swift said in a statement that the well was shut-in in January 2008 and hasn't produced since that time. In the last production test before that, the well's output was about 18 barrels of oil, three barrels of water, and 59 MCF of natural gas per day. Now, the well is releasing "primarily water and a small amount of oil," the company said.

The company said a containment boom and skimmers have been deployed around the well to keep the oil from reaching the shore and nearby marsh lands. A flyover was conducted to assess damage Wednesday morning, and the company said it is working with state, federal and local authorities to develop a "definitive plan" to bring the well under control.

Coast Guard teams are in Port Sulphur to secure the well and clean up any leaking oil.

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

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Rialto Interim CEO Appointed Managing Director

Rialto Energy Ltd. announced Mr. Robert Shepherd, who has been Interim CEO since Nov. 26, 2012, has been appointed to the full-time position of managing director, based in London.

Further to the appointment of Mr. Shepherd, Rialto announces that Mr. Bruce Burrows has advised the Company of his intention to retire from Board during the course of March 2013 due to increasing time commitments elsewhere.

Commenting on today's announcements Chairman Mr. Bruce Burrows said:

"The Board is very pleased to welcome Mr. Shepherd to the Company in a full-time capacity. His appointment comes after an extensive international executive search in which we canvassed many excellent candidates. Mr. Shepherd's commitment and enthusiasm in his interim role has led to his appointment and the Board believes he and the rest of the Rialto team are well equipped to continue advancing the Company.

"I would also take this opportunity to advise that I will be retiring from the Board of the Company during March 2013 when it is intended that Mr. Andrew Bartlett will assume the role of Chairman. This decision comes at a time when the Company has gone through a process of rejuvenation and strengthening in terms of Board and Management. I have enjoyed my time with Rialto immensely and will leave the Board knowing the Company is well placed to move forward with its future endeavors."

Newly appointed Managing Director Rob Shepherd commented:

"I am very pleased that the Board has decided to appoint me to the post of Managing Director. Whilst the Company has been through a difficult 2012, Rialto has a great team and excellent assets and I will do all that I can to ensure that both existing and future shareholders can focus on a potentially highly rewarding 2013 and beyond."

Mr. Shepherd's base salary will be $402,509 (GBP 265,000) per annum along with incentive bonuses to be determined by the Board including, subject to shareholder approval, participation in Rialto's Employee Performance Rights Plan.

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Court Testimony: BP Managers Under Cost-Cutting Pressure before Spill

NEW ORLEANS - BP PLC's managers were under pressure to cut costs significantly in the years leading up to the Deepwater Horizon accident, according to testimony at the federal trial here over liability for the 2010 explosion and oil spill.

Kevin Lacy, BP's former head of drilling in the Gulf of Mexico, said in a videotaped deposition that he was told to cut hundreds of millions of dollars in costs in 2008 and 2009.

"I was never given a directive to cut corners or deliver something unsafe," Mr. Lacy said. "But there was tremendous pressure on costs."

The testimony came on the third day of the civil trial that will determine the degree of culpability that BP and other companies have for the accident, which killed 11 workers. They are being sued by the federal government, state, and local businesses that say they were hurt financially by the oil spill, which lasted for three months.

Mr. Lacy's testimony was preceded by excerpts from interviews lawyers for plaintiffs suing BP did with its former chief executive, Tony Hayward, who was asked repeatedly about speeches he had given on cost-cutting at the company. In many cases Mr. Hayward tried to point out a broader context for the statements and speeches.

On Monday, lawyers for the parties traded barbs over who was to blame for the explosion that unleashed the worst offshore oil spill in U.S. history. Tuesday was dominated by testimony from Robert Bea, a University of California Berkeley engineering professor who called the accident "a classic failure of management and leadership in BP" that came after many warnings to the company.

Lamar McKay, the head of BP's exploration and production business, repeatedly rebuffed attempts by a lawyer for the plaintiffs to place the entire blame for the accident on BP. Mr. McKay stressed that decision making and safety were shared responsibilities among all the companies working on the doomed rig.

The trial is scheduled to take up to three months, but could be cut short or temporarily stopped if the parties reach a settlement.

A second trial, scheduled for the fall, will determine how much oil leaked into the Gulf of Mexico.

Together, they will determine the size of fines firms face under the Clean Water Act, which could total as much as $17.6 billion.

BP, which hired Transocean Ltd. and Halliburton Co. to work on drilling its well, has said the fines would likely be under $5 billion.

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

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Petrofac Enters 2013 with 'Record' Backlog

UK oilfield services firm Petrofac reported Wednesday that it has entered 2013 with a "record" backlog of orders in its Offshore Projects & Operations business, and that it continues to see high levels of bidding activity in both operations support contracts and offshore capital projects.

Announcing its final results for 2012, Petrofac also highlighted that it has a strong pipeline of bidding opportunities for onshore engineering and construction projects, particularly in the Middle East, Africa and the Commonwealth of Independent States (the former Soviet Union).

In its Integrated Engineering Services division, Petrofac said that this year it will be focused on delivering important milestones on several projects. The firm said it is making good progress on its transition activities on the Pánuco and Arenque contract areas in Mexico, where it expects to commence field operations during the first half of 2013. On Block PM304 in Malaysia, Petrofac expects to begin production from the West Desaru fault block and the second phase of the Cendor field during 2013.

Petrofac added that it is also seeing strong industry demand for commercially-innovative integrated oilfield services and that it is looking at a number of additional opportunities with both national oil companies and niche explorers.

Oil sector analysts at JP Morgan Cazenove commented that while Petrofac did not announce any new orders in its 2012 financial report, it hoped to see confirmed of the award of three large contracts this month. These include the estimated $500 million EPC-3 package on Sarb in Abu Dhabi, the $1.5 billion EPC-2 package on Upper Zakum in Abu Dhabi and the $1 billion Jurassic gas project in Kuwait.

In its results, Petrofac reported that its revenue for last year increased nine percent to $6.3 billion, while its net profit improved 17 percent to $632 million.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Bridge Saw 22% Increase in Reserves in 2012

Anglo-Norwegian junior explorer Bridge Energy reported Tuesday that it its 2P (proved plus probable) developed reserves increased to 3.26 million barrels of oil equivalent (MMboe) last year from 2.67 MMboe at the end of 2011, representing a reserve replacement ratio of 224 percent.

Bridge said that the net best estimate of contingent resource (2C) more than doubled to 66 MMboe at Dec. 31 2012 from 29 MMboe a year earlier. The firm said that 22 MMboe of its net 2C resources was added as a result of three successful discoveries out of four exploration wells drilled last year.

Bridge confirmed that its current portfolio includes 11 discoveries in the UK and four in Norway, and that it has interests in 12 licenses in the UK sector of the North Sea as well as 16 licenses in the Norwegian sector. These licenses contain 32 main prospects.

The reserves and resource report, prepared by independent consultancy AGR TRACS International, reflected an increase in contingent resources connected to the award of the Vulcan South license in 2012. The increased gas resources (some 12.3 MMboe) enables wider regional development options to be considered for the whole of the Vulcan Satellite area, said Bridge.

Bridge CEO Tom Reynolds commented in a statement:

"The recently completed reserves and resources report underlines the significant steps made by Bridge, through acquisition, development of our existing asset base and exploration success in 2012. The step change in the commercial resource base, coupled with progressing our development portfolio, provides for a very exciting growth phase for Bridge to build upon during 2013."

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