Category Archives: Industry News

Gulf Answers to Efficiency Versus the Downturn

April 20th 2010, 50 miles off the Louisiana coast the future of deep water drilling was called into serious question when the Deepwater Horizon exploded killing 11 workers. The environmental effects of 100 million gallons of oil spewing into the Gulf of Mexico after safety features failed has been felt in the area ever since.

Deepwater Horizon offshore drilling unit on fire 2010

map of the gulf of mexico
Thanks to Uwe Dedering. The Deepwater Horizon was drilling in the Gulf of Mexico. It was sited at the Macondo Prospect when the accident happened. It sank 36 hours later in 5000 feet of water.

People died and many more of the 126 crew were injured, the significance of which was almost forgotten in the scramble to decide who was to blame and who should pay to clear up the sea.

It presented the world with the reality that as exploration was pushing into deeper and deeper water so increased the challenge to ensure safety. This of course is in addition to the inherent technical problems of ultra deep, mile plus drilling.

Compounding the issue is the downturn in the market. Safety measures are never cheap after all. With fields near shore becoming crowded every effort in the area to drive down cost is welcome.

According to the article below there might be light coming from the gloom of the near future. Technology is the cornerstone of the oil and gas industry and from adversity come some of the best solutions.

diagram of new drilling system
SwageHammer integrated liner-hanger system claims to increase wellbore integrity one of a range of  projects aimed at reducing overall production costs in deep water.

If the profit is falling the ideal answer is to operate for less.  Have a look at a few US suggestions for improving deep water efficiency.

Offshore mag article


Kuwait Considers Privatising Oil Companies

Undersecretary Khalifa Hamada announced to the press that the Kuwaiti government were considering privatising oil service operations and currently a study is being carried out to decide what can and cannot be offered.

Kuwait is the home of the massive Burgan field which has an estimated production life of another 30 years. Though the amount of oil still under the sand of the country is a little vague there is small doubt that investment at the right price would yield a comfortable profit.

Hamada stressed that production facilities were not part of the deal and so there will be no loosening of the grip held by the Kuwait Oil Company.

Kuwait, which is the 10th largest producer of oil also possesses considerable gas production capacity, however, the drop in oil prices has given rise to concerns about the budget deficit. It is believed that the selling of operations not central to oil production will create revenue to offset a disappointing year.

It is quite possible that a recent similar move by Saudi Arabia has prompted this latest announcement from Kuwait.




Barrel Price Catches Out the Market

Speculating on oil is a rich man’s horserace but one that so many think they can predict more easily than today.

The price per barrel spiked at almost 5% higher by close despite expected reports by the US that would indicate a further downward trend in prices.

Brent closed in New York at $48.75 a rise of $2.22. The markets had been looking at a long fall towards $40 but speculation is that demand in the US will increase next year and official figures back that up.

Not an end, not maybe the beginning of the end but reason for a touch of optimism nevertheless.

Source: Reuters

Brexit Might Present More Oil and Gas Opportunity Not Less

An interesting take on the future of the industry post Brexit makes for pleasant alternative reading. Below Rigzone editor, Jon Mainwaring, takes his own pre Brexit concerns and looks at the possibilities of turning the frown upside down.

There would be no offshore oil and gas without people in the past being told something can’t be done and then proving the critics wrong. When it comes to Brexit I don’t believe that anything short of time will tell. Meanwhile there does seem to be a shift from the well founded dread of the UK leaving the EU to a spirit of the industry coming through with the determination to make the best of it.

The relaxing of many reels of red tape and the possibility of easier access to skilled overseas labour is explored in this article in Rigzone.

Click here

Early Warning of Vital Skill Loss in Oil and Gas

A people who have no regard for their history are doomed to repeat the mistakes of the past. I grant you I am paraphrasing here but it is ever true. There is an early warning of skill loss following the downturn in oil prices and it is something we should take notice of.

Looking across the UK in a fruitless search for the industrial might of past dusty decades is depressing. Recent threats to the steel industry follow the final last rattles of coal production. Like a discount retailer’s favourite cry, ‘Once it is gone it is gone,’ the mine floods and the furnace goes offline.

Possibly the most undervalued resource left to decay, however, is the skill of the men and women who once knew how it all worked. Is it possible that the oil and gas industry might lose some of it’s people power never to be replaced?

a jigsaw puzzle missing piece.
It only takes a key missing piece to mess up a vision of the future

As far as the short term goes, no. In the long term though the cut backs in investment and dire clouds that hang over skilled workers are driving much need expertise away from offshore production.

In addition, a depressive outlook puts people off the idea of entering the industry in the first place. It would only take a few more years of this before those retiring outnumber those coming in. Traditional efficiency when it comes to training relies on experience being passed on, get an imbalance and it can take sustained effort to reverse a dramatic decline in skill.

The article below goes into the details more fully. I have to say looking at other industries we once took as solid and immune to the test of time, we should take notice of threatened skill shortages sooner rather than later.

Article:The Oil and Gas People 

Zion Oil and Gas Extension

It isn’t often that an oil and gas outfit places inspiration from the Bible on its website . Then again Zion Oil and Gas does what it says on the tin, it has a commitment to producing oil to make Israel independent regarding its energy needs. It is no great surprise, but still a little out of the mainstream because this is an American company.

They got the licences to explore and now have another year to make good on all the effort.

All the prep, geological and geophysical work, might now have paid off.  They claim there are many challenges to drilling in Israel that are not presented elsewhere. Mainly the country has not fully embraced the concept and is understandably cautious as to who does what and where inside their borders.

Meditereanian Map Showing Leviathan Gas Field
The current Leviathan Gas Field is in Red. Tamar Gas Field is to the North East of it.

One to watch for the future. The company talks freely about offshore exploration as well and if there is sufficient found then the investment would certainly follow to develop both oil and gas production. Let us be honest the Leviathan gas field and the reserves estimated in oil there is plenty of reason for hope of a big find. Of course there are many challenges  not least of which is the extreme depth that the resources are located.

Source Reuters: Click here

Zion Oil and Gas: Click here

More Militant Action Blights Niger Delta Oil

The conflict in the Niger Delta continues with groups not acknowledging the supposed truce. Reuters are reporting a pipeline has been attacked in Lasukugbene, Bayelsa state.

map of nigeria and the niger delta on a diagram of Africa
A volatile region that has lost oil production due to internal strife between the government and ethnic groups.

No-one has claimed responsibility for the action so far however the usual suspects, the Niger Delta Avengers, have the most recent history of such action. Some substance can be attributed to this as their spokespeople have said they cannot recall the truce that was arranged in late June.

Operators Nigerian Agip Oil Company, a subsidiary of the Italian Eni corporation have made no comment. Oil production is now down to a 30 year low in the region because of the ongoing dispute between oil companies, Nigerian government and the ethnic people of the Delta.

Source: Reuters. Click here


Tambar Field Extended by Six Years

Early reports that the Tambar field is being given another 6 years of life. Located in the southern Norwegian area it is one of three fields making up the UGT area. First discovered in 1983 the Ula field along with the Gyda field make up the rest of the area.

Tambar came online in 2001 and has a large confirmed oil supply which is processed in Teeside, UK. Operators are Dong Norge and BP. Source: Energy Voice. Click herema showing Southern Norwegian Tambar Field. South west