DOI: 38 Million Acres in Gulf of Mexico Up for Grabs

To follow through with President Obama's all-of-the-above energy strategy to expand domestic energy production, the U.S. Department of the Interior announced that the upcoming Central Gulf of Mexico Lease Sale 227 will offer 38.6 million acres offshore Louisiana, Mississippi and Alabama for oil and gas exploration and development.

The Interior stated that this lease sale could lead to the production of nearly one billion barrels of oil and almost 4 trillion cubic feet of natural gas.

"The Obama Administration is fully committed to developing our domestic energy resources to create jobs, foster economic opportunities, and reduce America's dependence on foreign oil," said Secretary of the Interior Ken Salazar in a released statement. "Exploration and development of the Gulf of Mexico's vital energy resources will continue to help power our nation and drive our economy."

The lease sale will be held at the Mercedes-Benz Superdome in New Orleans March 20 and includes all un-leased areas in the Central Gulf of Mexico Planning Area. The Administration created a new outer Continental Shelf Oil and Gas Leasing Program for 2012-2017, and this lease sale marks the second sale under the administration and the first of five central Gulf of Mexico lease sales that will be held under the new program.

"We are seeing a very positive trend for the offshore industry in the Gulf of Mexico, and we look forward to Central Gulf sale 227," said National Ocean Industries Association (NOIA) President Randall Luthi. "It should provide a more accurate barometer of industry's interest in the region than the last Central Gulf sale, which was delayed for over a year and saw pent-up industry interest on display."

BOEM estimates the lease sale, which includes 7,299 blocks in water depths of more than 11,115 feet, could result in the production of 0.46 billion to 0.89 billion barrels of oil, and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.

"Lease sales such as this are a good reminder that offshore oil and natural gas are a vital part of an 'all of the above' energy strategy," added Luthi.

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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Kruez Confirms Deal with Chinese Yard for Subsea Vessel

Singapore-based Kruez Subsea Marine revealed Thursday that it has entered into a conditional agreement with a Chinese shipbuilder for a multipurpose subsea dive support and construction vessel worth $114 million.

Kruez Holdings disclosed in October last year that it expects to take delivery the vessel, 30 months from the contract's effective date.

The vessel, Kruez noted, will be equipped with a 140-tonne subsea crane, a 13,993-square-foot deck space, a pair of remote operated vehicles capable of operating at water depths of 9,483 feet and be able to accommodate 130 people.

"The proposed acquisition is undertaken as part of the company’s business strategy to expand its range of subsea services through the acquisition of new operating assets, thereby enhancing its subsea capabilities in shallow, deep and ultra-deep offshore oil and gas operations in the world," Kruez said in its earlier statement.

A spokesperson representing Kruez confirmed with Rigzone Thursday the details released in October remains unchanged.

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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DOI: 38 Million Acres in Gulf of Mexico Up for Grabs

To follow through with President Obama's all-of-the-above energy strategy to expand domestic energy production, the U.S. Department of the Interior announced that the upcoming Central Gulf of Mexico Lease Sale 227 will offer 38.6 million acres offshore Louisiana, Mississippi and Alabama for oil and gas exploration and development.

The Interior stated that this lease sale could lead to the production of nearly one billion barrels of oil and almost 4 trillion cubic feet of natural gas.

"The Obama Administration is fully committed to developing our domestic energy resources to create jobs, foster economic opportunities, and reduce America's dependence on foreign oil," said Secretary of the Interior Ken Salazar in a released statement. "Exploration and development of the Gulf of Mexico's vital energy resources will continue to help power our nation and drive our economy."

The lease sale will be held at the Mercedes-Benz Superdome in New Orleans March 20 and includes all un-leased areas in the Central Gulf of Mexico Planning Area. The Administration created a new outer Continental Shelf Oil and Gas Leasing Program for 2012-2017, and this lease sale marks the second sale under the administration and the first of five central Gulf of Mexico lease sales that will be held under the new program.

"We are seeing a very positive trend for the offshore industry in the Gulf of Mexico, and we look forward to Central Gulf sale 227," said National Ocean Industries Association (NOIA) President Randall Luthi. "It should provide a more accurate barometer of industry's interest in the region than the last Central Gulf sale, which was delayed for over a year and saw pent-up industry interest on display."

BOEM estimates the lease sale, which includes 7,299 blocks in water depths of more than 11,115 feet, could result in the production of 0.46 billion to 0.89 billion barrels of oil, and 1.9 trillion cubic feet to 3.9 trillion cubic feet of natural gas.

"Lease sales such as this are a good reminder that offshore oil and natural gas are a vital part of an 'all of the above' energy strategy," added Luthi.

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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Urals Plans Three Wells in Russia in 2013

Russia-focused Urals Energy announced Thursday that it plans to drill up to three new wells during 2013 at its Arcticneft and Petrosakh operations, after the firm resolved legacy issues to do with loans owed to Petraco Oil Company.

Urals said that the only sum that remains outstanding to Petraco relates to interest owed and total approximately $3 million. It added that the interest payment is expected to be made before the end of this year.

Urals has released the security pledge that Petraco has held over the company's Petrosakh asset and it said it is in discussions about Petraco releasing its security pledge over Arcticneft.

Urals reported that current production at Petrosakh is 1,440 barrels of oil per day (bopd). The company is currently developing a drilling program for Petrosakh and plans to drill up to two new wells there in 2013. Petrosakh is estimated to have 2P reserves standing at 16 million barrels.

The firm also said that production at its Arcticneft asset is now stable and stands at 712 bopd. In 2013, Urals plans to drill one well at Arcticneft – which is estimated to have 2P reserves of 43.6 million barrels.

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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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Forum to Spotlight Oil, Gas Recruiting Solutions in Latin America

There's a human capital crisis across Latin America's oil and gas sector.

Many areas in the region are experiencing incredible growth in oil and gas exploration, and a growing number of large discoveries need skilled employees for development. This growth has also fed an increase in competition for talent to fulfill project deadlines.

As a result, human resources directors in Latin America are under enormous pressure to quickly build capability and recruit from Generation Y in the region. To help facilitate dynamic solutions, human resource (HR) specialists interested in meeting these challenges will come together at Hanson Wade's upcoming Latin American Human Capital Forum 2013 in Rio de Janeiro, Brazil. Hanson Wade specializes in business conferences that gather forward-thinking groups to focus on key industry sectors, including oil and gas, life sciences, shipping and finance.

The inaugural Latin American Human Capital event will run from February 25-28 at the five-star Sheraton Barra Hotel. The four-day program will feature traditional presentations, interactive workshops, working lunches and one-on-one meetings for human resources leaders and capability professionals. Both groups will have ample opportunities to interact with training solutions providers and share strategy ideas. Approximately 25 speakers will lead these opportunities for an expected 125 attendees.

Some of the expert speakers represent leading oil and gas companies active in Latin America include Petrobras, Statoil, Weatherford International Ltd., Chevron Corp. and Shell.

"It's critical that this event take place, as it's the first one to focus on oil and gas 'Y talent' in Latin America," said Hanson Wade Event Director Nicola Freeman. "The oil and gas industry is currently led by the baby boomers, and ways to operate and attract and retain talent from generation Y need to be developed."

According to the most recent Schlumberger HR benchmark, two-thirds of companies in the oil and gas business have been forced to delay projects due to inadequate staffing, Freeman added.

"This conference is all about how to successfully implement a human capital strategy from the top down. It will show HR specialists how to actually win the human resources war."

The agenda is designed to help attendees learn how to bring a HR strategy into the 21st century; capitalize on the talent in an existing workforce; plug the skills gap by building internal capability and career progression; qualify and certify staff quickly and cost-effectively, and more.

"We wanted to do the Latin American oil and gas event because our other programs in the region revealed that one of the main challenges that kept resurfacing was the difficulty in recruiting, training and retaining oil and gas talent," Freeman said.

During the forum, attendees will learn how the region's most proactive national oil companies (NOC), integrated oil companies (IOC) and supplier community are developing practical solutions to these exact challenges. They will also get exposure to ideas about building an effective HR strategy to enhance recruitment success, accelerating capability development, and fast-tracking the leaders of the future.

To review the latest event program or registration information, visit the Latin American Human Capital Forum 2013 event website.

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Senecio Tight Gas Feasibility Study Underway

AWE disclosed Thursday that it has started on a development feasibility study for the commercialization of the onshore Senecio tight gas accumulation. The Senecio discovery is located in the north Perth Basin, Western Australia.

Analysis of pressure tests conducted in November 2012 and other data captured since the fracture stimulation has confirmed permeability of between 0.03 millidarcy (mD) to 0.06 mD, which is within the pre-fracture estimated range.

"This analysis, together with the successful flow test in September 2012 that reported a stabilized gas rate of 1.35 million standard cubic feet of gas per day, with a 16-foot (five-meter) perforation interval, demonstrates potentially commercial reservoir flow capacity," AWE said in a statement. AWE's project partner is Origin Energy. Both of the companies have an equal stake in the partnership.

AWE has previously booked a 2C contingent resource for its 50 percent equity share of Senecio of 4.4 million barrels of oil equivalent (mmboe). Previously interpreted 2D seismic data indicated a potential estimated recoverable volume of at least double the quantity currently booked. An outcome of the feasibility study will be an updated definitive resource estimate which will be based on latest interpretation of the well data, the new 3D seismic data, and planned reservoir modeling studies.

AWE's Managing Director Bruce Clement, said that the Senecio tight gas commercialization program is gaining momentum and that positive subsurface data has given the company considerable confidence that commercial gas production can be achieved from the Senecio discovery.

"The results of the pressure test, the flow test, and the Irwin 3D seismic program indicate that a horizontal, multi-stage, hydraulically fracture stimulated well at Senecio could be economically viable," Clement noted in a statement.

"The Perth Basin is potentially a very important source of energy for the Western Australian market and we believe that the timely completion of a development feasibility study will help define a valuable gas resource," Clement added.

AWE plans to consider the use of nearby existing plant processing infrastructure to minimize the project's environmental footprint and development costs. Evaluation of the Dongara and Xyris gas plants and associated infrastructure will form part of the study.
Detailed work on project planning, budget and product marketing may start as soon as 2Q 2013.

Clement said: "The unconventional gas program in the Perth Basin has been very successful to date, significantly increasing our understanding of the geological and commercial potential of the tight gas and shale gas opportunities in the Basin.

Our exploration team is looking at 30 years of accumulated data for the Perth Basin, compiled through conventional oil and gas exploration activities, to identify additional tight gas intersections with development potential."

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