Ivanhoe, SBM Team Up in Alliance for Offshore Heavy Oil Development

Ivanhoe Energy and SBM Offshore announced they have formed a global strategic alliance (Alliance), combining their respective expertise to create Floating, Production, Upgrading, Storage and Offloading vessels (FPUSO).

The two companies have combined their respective technologies and experience to produce a first of its kind design for offshore facilities that will economically produce and upgrade heavy oil from offshore fields with crude oil quality down to 10 degree API gravity, or lower.

"We expect this combination of technologies to become the pre-eminent method for producing and upgrading heavy oil at offshore locations around the world," said Michael Wyllie, SBM's chief technology officer.

Industry experts have estimated that offshore heavy oil resources exceed 500 billion barrels recoverable. Given the global abundance of such oil deposits and depleting conventional oil supplies, this Alliance creates significant potential for the offshore heavy oil sector.

SBM is a publicly traded, world leader in providing offshore Floating, Production, Storage, and Offloading (FPSO) vessels. With a market cap of over $3 billion and over 7,000 employees, SBM currently has around 1 million barrels of throughput per day from a fleet of 16 production systems in operation world-wide.

Ivanhoe Energy's Heavy-to-Light (HTL) process is a partial upgrading technology that drastically reduces the viscosity of stranded heavy oil resources and produces a high quality synthetic crude oil that commands greater value from refineries around the world. In addition to creating operating efficiencies, the technology will greatly improve the economics of heavy oil development. HTL's small footprint and modularization capability makes installation on FPSOs possible.

Moreover, by providing a source of lighter oil on the FPUSO, some of this fluid can be re-circulated back to the subsea wells, providing a robust solution to overcome the flow assurance challenges of subsea heavy oil wells. This important feature can be an enabler for heavy oil field developments, especially those in deep water.

"Ivanhoe Energy and SBM collaborated over the last two years to develop this new concept," said Dr. Michael Silverman, Ivanhoe Energy's chief technology officer. "In 2012, with engineering support from AMEC Engineering, we completed the conceptual design of an offshore FPUSO facility that will upgrade up to 60,000 barrels per day."

The Alliance is exploring a number of potential business models and applications. Given the number of existing and potential FPSOs, this Alliance is another important avenue to commercialize the HTL process in the near term.

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Five things Gov. Hickenlooper did to put oil & gas industry ahead of Colorado’s health and water

Governor Hickenlooper likes to paint himself as an outsider, unfamiliar with the political process. But his recent actions to undermine public health, water safety – and basic common sense – have proven that Gov. Hickenlooper has become the ultimate insider – adept at helping his billion dollar oil and gas industry boosters cheat the rules, while playing the role of concerned official.

While Governor Hickenlooper has said the he’ll increase fines and hold polluters accountable, behind closed doors he’s actually been working hard to kill or weaken legislation aimed at doing just that.

Case in point: Governor Hickenlooper announces both his campaign for Colorado to be the healthiest state and safe drinking water week, then days later he successfully killed legislation to help protect water from toxic oil and gas spills.

Here’s are the FIVE THINGS Gov. Hickenlooper did to put the public health and water of Coloradans at risk and to make it easier for oil and gas companies to pollute.

Issued the weakest water testing rules for oil and gas operations in the nation…with huge carve out for Anadarko and Noble.
In January, Governor Hickenlooper’s oil and gas commission put forth weakest in the nation water testing rules –which included the Anadarko-Noble loophole for two of the biggest oil and gas operators in Colorado and Weld County – and two of the state’s biggest oil and gas polluters.
The Anadarko-Noble loophole makes it easier for billion dollar oil and gas companies to pollute water in an area in Northern Colorado that’s home to more than 25 percent of  Colorado’s oil and gas wells and more than half of the most recent spills reported.
The result is that it’ll be harder to detect water contamination and to figure out which well(s) are the source of contamination in the region that needs these public safety standards the most. In 2012, industry reported 402 spills in state, of which 20 percent resulted in water contamination, and just last month, a huge spill near Parachute creek contaminated nearby soil and water with cancer causing benzene.Lobbied against efforts to hold oil and gas companies responsible when they pollute Colorado communities and water with toxins, waste.
Governor Hickenlooper sent his lobbyists to the Capitol to weaken fines for oil and gas companies who pollute, despite the fact that Colorado has the lowest in the nation fines and a well-documented problem of spills and water contamination.  In 2012, 20 percent of all reported oil and gas spills resulted in water contamination and just six companies were responsible for more than 85 percent of all spills. And the Parachute spill – which has contaminated nearby water and soil with cancer causing benzene is now being investigated by the EPA’s criminal investigations division.Turned down money to increase the number of state oil and gas inspectors.
Governor Hickenlooper’s Department of Natural Resources agency joined up with the oil and gas industry in opposition to additional resources to help making oil and gas drilling safer by turning down money to increase the number of inspectors, from sixteen to twenty-four, for the state’s more than 52,000 wells. That’s despite the state already being short-staffed on inspectors.Successfully blocked reform efforts to make the actions of the Colorado oil and gas commission more transparent.
Governor Hickenlooper, along with the oil and gas industry, opposed legislation that would have made important systemic changes to Colorado’s oil and gas commission – the Natural Resources Department testified against the bill. Oil and gas companies currently serve on the commission, which regulates their activities, a direct conflict of interest.Worked to defeat public health study to see if fracking is making Coloradans sick.
Governor Hickenlooper’s chief of public health and the environment, Dr. Chris Urbina, testified against a health study – supported by local residents and medical professionals – that would help figure out if Coloradans who live near fracking are getting sicker than those who don’t live near fracking.

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BSEE Cites GOM Contractors for Violations

The Bureau of Safety Environmental Enforcement (BSEE) issued over a two-week period six Incidents of Noncompliance (INCs) to four offshore contractors working in the Gulf of Mexico for violations of federal regulations related to oil and gas operations.

ENSCO Drilling, Nabors Offshore Corporation, Alliance Oilfield Services, Island Operators Co. Inc. and ERT GOM Inc. are among the companies that were issued INCs by BSEE from early February to early March. The contractors have 60 days to appeal the INCs, BSEE said in a March 15 statement. The violations will be reviewed for possible civil penalty statements.

ENSCO was issued an INC for operating for at least seven days with a faulty blowout preventer control system and did not cease well operations during this period as required. Nabors was cited after a worker was seriously injured due to personnel's failure to determine whether an electricity source was on or off before an attempt to place a 30-amp plug into a receptacle. The BSEE inspector also found personnel were not wearing proper protective attire.

A civil penalty of up to $40,000 per violation per day can be assessed if the operator fails to correct the violation in the reasonable amount of time specified on the INC, or the violation resulted in a threat of serious harm or damage to human life or the environment, according to BSEE's website.

The INCs issued are part of BSEE's crackdown on contractors operating on the Outer Continental Shelf following the April 2010 Deepwater Horizon incident. BSEE first exercised its authority to issue an INC to a contractor in October 2011 when Transocean and Halliburton received INCs related to Deepwater Horizon.

"While the primary focus of BSEE's enforcement actions will continue to be on lessees and operators, BSEE will, in appropriate circumstances, issue incidents of noncompliance to contractors for serious violations of BSEE regulations," BSEE said Aug. 15, 2012, when it issued its Interim Policy Document on issuing INCs to contractors working on the OCS. "The issuance of an INC to a contractor does not relieve the lessees from liability. In fact, in instances in which INCs are issued to a
contractor, INCs will also be issued to the lessee or operator."

The violations cited in an INC must be corrected within 14 days or a plan of corrective action has to be submitted. In the case of an accident or a one-time event where the conditions of the violation no longer exist, the contractors are being asked to document how the violation took place and what is being done to prevent its reoccurrence.

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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Gazprom Wants Stake in Eni's Mozambique Gas Assets

Italian energy company Eni SpA is willing to talk to OAO Gazprom about a natural gas deal in Mozambique, although there has been no interest expressed by the Russia behemoth, Chief Executive Paolo Scaroni said Wednesday.

When ask to comment on speculation about interest from the Russian company, Mr. Scaroni said: "This is news to us especially considering how much gas Gazprom has of its own."

Mr. Scaroni told reporters on the sidelines of a conference in Ravenna, northern Italy: "In the search for a partner in the Mamba [field] in Mozambique, we will listen to them [Gazprom], talk to them," referring to the excellent relationship between the two companies. Eni is Gazprom's biggest international corporate buyer of its gas.

Gazprom is interested in a stake in Eni's project in Mozambique but hasn't made an offer yet, said Sergei Kuprianov, a spokesman for the Russian company. He added that discussions are ongoing.

Last week, Eni agreed to sell a 20% stake in its 70% holding to China National Petroleum Corp. for $4.21 billion in a giant offshore gas asset in Mozambique.

Eni has said it has found reserves of 75 trillion cubic feet in the Mozambique field. According to Bernstein Research this amount corresponds to four years of total European gas demand. It is Eni's largest gas find.

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

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ALEC’s Most Wanted: Exposing a front group for fossil fuel interests (and other corporations)

The Center for Media and Democracy’s (CMD) Brendan Fischer and Nick Surgey uncovered an internal document from the American Legislative Exchange Council (ALEC) at the controversial organization’s meeting last week in Oklahoma City. The document entitled “OKC anti-ALEC photos” featured the headshots of eight reporters and public interest advocates that have written about ALEC or been critical of ALEC’s activities (as a front group working on behalf of its corporate membership).

CMD’s Surgey attempted to attend the keynote address by Oklahoma Governor Mary Fallin, which was billed as open to the press. After registering for press credentials at the ALEC registration desk, Mr. Surgey ascended the escalator towards the keynote speech, but was confronted by ALEC staff members and then approached by a uniformed Oklahoma City police officer.

Mr. Fischer and Surgey recount the exchange in which Surgey had his credentials revoked and was ejected from the ALEC meeting.  From PR Watch:

“I need those credentials,” the officer said.

“I registered,” Surgey replied.

“No, you didn’t,” said a female ALEC staffer, who was accompanying the officer.

“I did, downstairs,” he said.

“It was… you shouldn’t have been able to.”

The reason Surgey shouldn’t have been allowed to register, according to the ALEC staffer: “Because we know who you are.

Surgey asked the ALEC staffer for her name as she asserted that he had to leave:

Can I ask your name?” Surgey asked the ALEC staffer who challenged his press credentials.

“Erm, why?” she replied.

“Is there any reason you wouldn’t want to tell me your name?”

“Yeah, because I know who you are,” she said.

The staffer — whose organization had developed talking points claiming to support the First Amendment, which protects a free and vibrant press — added: “Because you’re going to write an article about it.”

Less than 10 minutes after registering as press, Surgey had his credentials revoked and was ejected from the ALEC meeting by a police officer. As he was escorted away, the ALEC staffer repeated: “We know exactly who you are.”

As Director of the Checks & Balances Project, I was one of the eight people featured on the “ALEC Most Wanted” document alongside other reporters and public interest advocates who have criticized ALEC’s efforts to influence state legislators on behalf of special interests.  Fischer and Surgey write:

The page featured pictures and names of eight people, four of whom work with CMD, including Surgey, CMD’s general counsel Brendan Fischer and its Executive Director Lisa Graves, as well as CMD contributor Beau Hodai.

It is not known whether the photo array of people who have reported on or criticized ALEC was distributed to ALEC members or shared with Oklahoma City law enforcement.

Other targets on the document included The Nation‘s Lee Fang, who has written articles critical of ALEC, and Sabrina Stevens, an education activist who spoke out in an ALEC task force meeting last November. Also featured were Calvin Sloan of People for the American Way and Gabe Elsner of Checks and Balances Project, both of whom are ALEC detractors.

The name of ALEC Events Director Sarah McManamon was in the top corner, indicating the document was printed from her Google account.

As Fischer and Surgey point out, ALEC claims to support the freedom of the press. But in practice, the organization seems reluctant to provide transparency and access required for a free press to be functional.   Instead, “ALEC assembled a dossier of disfavored reporters and activists,” and “kicked reporters out of its conference who might write unfavorable stories…”

ALEC’s sensitivity to transparency shows that the accountability work by C&BP, CMD, People for the American Way and others is working. A free society can’t work unless there is some check on the concentration of power. Now, more than ever, society needs more of the most powerful check on concentrations of power – public scrutiny. Most recently, C&BP has worked to expose ALEC’s efforts to eliminate clean energy laws in states across the country and bring to light that these attacks are being driven by powerful special interests.

ALEC exemplifies how fossil fuel corporations and other special interests have an oversized influence in our public process. And, C&BP is proud to be part of the effort to expose ALEC, fossil fuel-funded front groups and other fossil fuel interests using their power and resources to attack clean energy policies — even if it lands us on ALEC’s Most Wanted list.

Filed under ALEC Tagged with 1st Amendment, ALEC, ALEC Most Wanted, American Electric Power, American Legislative Exchange Council, Beau Hodai, Big Gas, Big Oil, BP, Brendan Fischer, Calvin Sloan, Center for Media and Democracy, Checks and Balances Project, Chevron, CMD, Duke Energy, Energy, ExxonMobil, Fracking, Freedom of the Press, Front Group, gas, Industry, Koch Brothers, Koch Industries, Lee Fang, Lisa Graves, Most Wanted, natural gas, Nick Surgey, Oklahoma City, People for the American Way, politics, Progress Energy, Sabrina Stevens, Sarah McManamon, Shell, State Legislators, State Legislatures, The Nation

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Atwood Oceanics Adds New Director to Board

Atwood Oceanics, Inc. announced the appointment of Jeffrey A. Miller to its Board of Directors. Mr. Miller currently serves as the Executive Vice President and Chief Operating Officer of Halliburton. Previously, Mr. Miller held a number of positions at Halliburton, including most recently as Senior Vice President of Global Business Development and Marketing, responsible for strategic account management, sales and marketing. He also served as Senior Vice President of Halliburton's Gulf of Mexico Region; Vice President of Halliburton's Baroid business line; Country Vice President for Indonesia; and Country Vice President for Angola. Prior to his service at Halliburton, Mr. Miller began his career with Arthur Andersen LLP. Mr. Miller holds a MBA from Texas A&M University, a BS – Agriculture and Business from McNeese State University and is a licensed Certified Public Accountant.

"Jeff brings valuable operational and business development experience to our company," commented George S. Dotson, chairman of the Board of Directors of Atwood Oceanics, Inc. "Jeff's extensive career with Halliburton includes various international assignments and a successful track record in building businesses, providing our Board with useful perspective and insight."

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BP Hands Mad Dog Subsea Deal to FMC Technologies

FMC Technologies Inc. and BP plc have inked a deal for the manufacture and supply of subsea equipment to for the Mad Dog Phase Two field development in the Gulf of Mexico.

FMC will supply subsea trees, manifolds and jumper equipment.

"Mad Dog Phase 2 is the first project awarded under our global agreement with BP to provide technologies and services for their worldwide subsea development projects," said Tore Halvorsen, FMC Technologies' senior vice president of Subsea Technologies, in a released statement. "We have a long history of supporting BP's global offshore technology requirements, and today's announcement expands our support of their Gulf of Mexico projects."

Discovered in December 1998, Mad Dog is currently being extended through a second phase of development. The project includes developing 33 wet wells, 19 production and 14 injection wells connecting to a Spar floating platform system with infield flow lines and associated subsea infrastructure. The project will then link in to the existing Mardi Gras system.

Mad Dog Phase Two is located near Green Canyon Block 825, 150 miles south of New Orleans in about 5,100 feet of water.

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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