Chesapeake of Oklahoma City said its full-year 2010 produc-tion of 2.8 bcfd of gas equivalent marked a 14% increase over its 2009 production.. DRILLING & PRODUCTION Q U IC K TA K E SBP,
Trang 25 NEWSLETTER 10 LETTERS / CALENDAR 12 JOURNALLY SPEAKING 14 EDITORIAL 26 EQUIPMENT
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GENERAL INTEREST
Outlooks in four states
in San Bruno line blast probe
Is Iraq going nuclear?
of safety culture, regulation
Bob Tippee
The report by a presidential commission
studying last year’s Macondo well disaster in
the Gulf of Mexico calls for overhaul both of
the oil and gas industry’s safety culture and of
to tighten in next 2 years
Nick Snow
program, excessive reform
Nick Snow
The video below, courtesy of Range Resources Corp., Fort Worth, features a virtual
fi eld tour of the company’s Midcontinent division.
Trang 4PennWell, Houston offi ce
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Trang 6International News
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Jan 17, 2011
GENERAL INTEREST Q U IC K TA K E S
Marathon Oil to spin off refining, pipeline assets
Marathon Oil Corp will spin off its downstream business,
forming an independent refiner to be named Marathon
Petro-leum Corp based in Findlay, Ohio The parent company,
Mara-thon Oil, will remain in Houston
Gary R Heminger, now Marathon Oil downstream
execu-tive vice-president, will be president and chief execuexecu-tive officer
of Marathon Petroleum Clarence P Cazalot Jr remains
Mara-thon Oil president and chief executive officer MaraMara-thon Oil
expects the transaction to be effective June 30
Refinery locations and capacities to be operated by the
spun-off company are Garyville, La., 464,000 b/d; Catlettsburg, Ky.,
212,000 b/d; Robinson, Ill., 206,000 b/d; Detroit, 106,000 b/d;
Canton, Ohio, 78,000 b/d; and Texas City, Tex., 76,000 b/d
Crude capacity of the Detroit refinery is being expanded by
15,000 b/d in a project that will increase heavy-oil processing
capacity by about 80,000 b/d
Marathon Petroleum also will operate wholesale and retail
operations, including the Speedway retail chain, and Marathon
Pipe Line LLC Through the pipeline subsidiary, the new
com-pany will own, operate, lease, or have ownership interests in
about 9,700 miles of oil and product pipelines
Marathon Oil’s core exploration and production areas are
the US, Equatorial Guinea, Libya, and the North Sea Other
ar-eas in which the company is active include Angola, Indonesia,
the Iraqi Kurdistan region, and Poland
The upstream company also holds a 20% interest in the
Athabasca Oil Sands Project, a joint venture with Shell (60%)
and Chevron (20%) that includes the Muskeg River and
Jack-pine mines, the Scotford upgraders, and more than 215,000
acres of potentially mineable land
Marathon Oil also has an integrated gas unit that includes a
60% interest in a 3.7-million-tonne/year LNG plant and 45% in
a methanol company in Equatorial Guinea
Before the spinoff, Marathon Petroleum plans to borrow
$2.5-3 billion to establish a cash balance of at least $750
mil-lion It will use cash above that level repay intercompany debt
with Marathon Oil Remaining proceeds will be distributed to
Marathon Oil before the spinoff date
JP Morgan and Morgan Stanley will provide a $2.5 billion,
364-day bridge facility The firms also will provide Marathon Petroleum a $2 billion, 4-year revolving credit facility
Before the spinoff, Marathon Oil will reduce its long-term debt by about $2.5 billion through cash on hand and proceeds
of the debt repayment from Marathon Petroleum It will tinue servicing the remaining $5 billion in long-term debt after the spinoff
con-Cheaspeake Energy to cut spending, sell assets
Chesapeake Energy Corp announced plans to reduce its term debt by 25% by substantially reducing leasehold spending and by reducing its 2-year production growth rate to 25% from its previously planned growth rate of 30-40% for 2011-12
long-Aubrey K McClendon, Chesapeake’s chief executive officer, said the latest plan is a shift from Cheaspeake’s “aggressive asset accumulation of the past few years.” The growth plan reduction will be achieved “through asset monetizations,” a news release said.Chesapeake said its 2011-12 strategic plan update will not involve issuing any common or preferred stock to achieve its debt reduction objective Chesapeake reported net debt of $11.4 billion as of Sept 30, 2010
The company did not specify which assets it might sell Chesapeake of Oklahoma City said its full-year 2010 produc-tion of 2.8 bcfd of gas equivalent marked a 14% increase over its 2009 production
US starts 2011 with 1,700 rigs drilling
US drilling activity increased slightly during the first week of
2011, up by 6 rotary rigs to 1,700 working, compared with 1,220 at work a year ago, Baker Hughes Inc reported The US rig count exceeded 1,700 units drilling in 4 of the last 5 weeks
of 2010, finishing the year with 1,694 working the final week
Land operations accounted for the bulk of the latest gain, up
by 5 units to 1,661 working Offshore drilling increased by 1 rig to 25, all in the Gulf of Mexico Inland waters activity was unchanged with 14 rigs drilling
Of the US rigs working, 914 were drilling for natural gas,
5 fewer than the previous week The number drilling for oil increased by 12 to 777 There were 9 rotary rigs unclassified Horizontal drilling increased by 19 to 966 Directional drilling dropped 1 to 211
Among the major producing states, Oklahoma and Colorado
Trang 7Jan 5 Jan 6 Jan 7 Jan 10 Jan 11
Jan 5 Jan 6 Jan 7 Jan 10 Jan 11
Jan 5 Jan 6 Jan 7 Jan 10 Jan 11
Jan 5 Jan 6 Jan 7 Jan 10 Jan 11
Jan 5 Jan 6 Jan 7 Jan 10 Jan 11
Jan 5 Jan 6 Jan 7 Jan 10 Jan 11
WTI CUSHING / BRENT SPOT
NYMEX NATURAL GAS / SPOT GAS - HENRY HUB
IPE GAS OIL / NYMEX HEATING OIL
NYMEX GASOLINE (RBOB)1/ NY SPOT GASOLINE2
IPE BRENT NYMEX LIGHT SWEET CRUDE
PROPANE - MT BELVIEU / BUTANE - MT BELVIEU
1 Reformulated gasoline blendstock for oxygen blending
2 Nonoxygenated regular unleaded
Jan 10 Feb 10 Dec 09 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sept 10 Oct 10 Nov 10 Dec 10
1,000 800
1,400 1,600 1,800
1,200
400 200 0
BAKER HUGHES INTERNATIONAL RIG COUNT: TOTAL WORLD / TOTAL ONSHORE / TOTAL OFFSHORE 3,900
3,600 3,300 3,000 2,700 2,400 2,100 1,800 1,500 300 0
3,226 2,898 328
Note: End of week average count
BAKER HUGHES RIG COUNT: US / CANADA
Note: Monthly average count
422
12/11/09 11/20/09 12/4/09 12/18/09 1/1/10 10/23/09 11/6/09
12/25/09
1,700
12/24/10 1/7/11 10/29/10
11/13/09 11/27/09 11/12/10 11/26/10 12/10/10
11/19/10 12/3/10 12/17/10 12/31/10 10/22/10 11/5/10
342 1,220
1/8/10 10/30/09
Product supplied, 1,000 b/d
Light sweet crude ($/bbl) 89.53 90.97 –1.44 79.07 10.46 13.2 Natural gas, $/MMbtu 4.53 4.27 0.26 5.77 –1.24 –21.5
1 Based on revised figures 2 OGJ estimates 3 Includes other liquids, refinery processing gain, and unaccounted for crude oil 4 Stocks divided by average daily product supplied for the prior 4 weeks 5 Weekly average of daily closing futures prices.
Source: Energy Information Administration, Wall Street Journal
Trang 8had the biggest increases in their rig counts, up 4 each to 164
and 64, respectively Texas and Wyoming gained 2 rigs each
with respective counts of 733 and 47 North Dakota increased
by 1 to 151 Pennsylvania, New Mexico, California, and
Ar-kansas were unchanged at 103, 69, 38, and 37, respectively
West Virginia and Alaska were down 1 rig each to 20 and 5
Louisiana reported the biggest loss, down 8 rigs with 168 still
drilling
EXPLORATION & DEVELOPMENT Q U IC K TA K E S
Shell Todd plans comprehensive review of Maui field
Shell Todd Oil Services Ltd plans a major review of the Maui
gas field region in the Taranaki basin off New Zealand
The JV contracted drillship Noble Discoverer to drill an
exploration well, Ruru-1, on the edge of the field in February
to March It also engaged Electromagnetic Geoservices ASA of
Norway to conduct an electromagnetic survey (New Zealand’s
first) across the Maui field itself
The Ruru prospect, previously known as Hohonu, was
de-lineated in recent years and is believed to have potential to add
large reserves—1 tcf was mentioned unofficially—to the Maui
development Depending on the result of the wildcat well, it
may be developed as a separate project or as an adjunct to the
existing Maui system
Ruru is a fault trap prospect on the southeast boundary of
the Maui production lease and crosses into adjoining permit PEP
381203, also operated by Shell Todd and in which Australian
company OMV has an interest The Eocene-age Kapuni
forma-tion reservoir target is the same as the producing horizon at Maui
The multimillion dollar electromagnetic survey is being run
by the Boa Galatea vessel and is expected to take a month to
complete It will begin with laying a grid of receivers on the
seabed across production lease PEP 381012 before transmitting
electromagnetic waves during the survey
Maui field, discovered in 1969, had initial gas reserves of 3
tcf and once supplied 90% of New Zealand’s demand that
ex-ceeded 200 petajoules/year The field now supplies only about
30% of the current annual market of 150-170 petajoules
However the new exploration initiative indicates Shell Todd
thinks more reserves can be found to prolong the field’s life
and lead to renewing the production lease before it expires in
June 2015
Tweneboa appraisal well confirms potential
The Tweneboa-3 appraisal well on the Deepwater Tano block off
Ghana encountered gas-condensate and confirmed the Greater
Tweneboa area’s resource base potential
The group led by Tullow Oil PLC plans to evaluate
develop-ment options for Tweneboa and Enyenra, formerly Owo, fields
Tweneboa-3 well was drilled with two deviated boreholes
The first leg was drilled to calibrate the potential of an area that
had a weak seismic response This leg encountered 29 ft of
gas-condensate pay, in line with expected results
The well was then sidetracked 1,808 ft west to test an area of strong seismic response This leg encountered a gross vertical reservoir interval of 214 ft and penetrated 112 ft of net gas-condensate pay in high-quality stacked reservoir sandstones in two zones
Tweneboa-3 well is 7.5 miles southeast of the Tweneboa-1 discovery well The Deepwater Millennium dynamically posi-tioned drillship drilled Tweneboa-3 to a total depth of 12,816
ft in 5,253 ft of water The well will be suspended for potential future use in field development
The drillship will remain on the block to drill the top-hole section of the Tweneboa-4 appraisal well and suspend it Then the drillship will drill the Enyenra-2A well, which will appraise the Owo-1 discovery well
Deepwater Tano block interests are Tullow Oil 49.95%, Anadarko Petroleum Corp and Kosmos Energy Inc 18% each, Sabre Oil & Gas Holdings Ltd 4.05%, and Ghana National Pe-troleum Corp has a 10% carried interest
Multizone gas find gauged off Mauritania
A group led by Korea National Oil Corp subsidiary Dana leum has tested gas from one of four separate gas columns in an exploratory well in the Atlantic off Mauritania
Petro-Cormoran-1 is in Block 7 about 2 km south of the late 2003 Pelican-1 gas discovery (see map, OGJ, Oct 23, 2006, p 38)
Cormoran-1’s main purpose was to test the Cormoran pect, which adjoins but lies at a greater depth than Pelican A secondary objective was the Petronia prospect beneath Cormo-ran A further objective was to provide appraisal data on the Pelican gas discovery
pros-Cormoran-1 went to 4,695 m below sea level in 1,630 m
of water It encountered generally thin but good quality bearing sands in the Upper Pelican Group at 3,376-3,420 m true vertical depth subsea (TVD ss) and in the Lower Pelican Group at 3,691-3,711 m TVD ss
gas-The well also encountered good quality gas-bearing sands
in the Cormoran prospect in the gross interval from 4,351 m
to 4,471 m TVD ss and at the top of the Petronia prospect in the gross interval from 4,660 m to 4,695 m TVD ss Drilling stopped at 4,695 m due to elevated pore pressures, and the well was still in gas-bearing reservoir at total depth
The well stabilized at 22-24 MMscfd of gas on a 32∕64-in choke on a drillstem test of the Lower Pelican Group at 3,679-3,712 m TVD ss The flow rate was constrained by the need to avoid sand production Substantially higher flow rates could have been achieved if not for this operational constraint, Dana Petroleum said The company plugged and abandoned the well
so that it can be reentered
Participating interests in Block 7 are Dana Petroleum (E&P) Ltd 36%, GDF Suez Exploration Mauritania BV 27.85%, Tullow Petroleum (Mauritania) Pty Ltd 16.2%, PC Mauritania Pty Ltd 15%, and Roc Oil (Mauritania) Co 4.95%
Trang 9DRILLING & PRODUCTION Q U IC K TA K E S
BP, CNPC increase production from Iraq’s Rumaila field
Output at Iraq’s giant Rumaila oil field has increased by more
than 10% above the 1.066 million b/d target established in
December 2009, when BP PLC and China National Petroleum
Corp (CNPC) signed a technical service contract to expand
production
“This production increase is an important step for Iraq and
demonstrates the success of the contracts awarded,” said Iraq’s
oil minister Abdul Kareem Luaibi, referring to the contract
awarded to the two firms, along with Iraq’s State Oil Marketing
Co (SOMO)
Management of the field’s development has been carried
out by the Rumaila Operating Organization (ROO), which was
originally staffed by 4,000 employees from Iraq’s state-owned
South Oil Co along with 100 technical experts and managers
from BP and CNPC
BP said that the pace of activity on Rumaila has built
steadily over the past year, with 20 new rigs now mobilized
in the field Altogether over the past year, BP said 41 wells
have been drilled, 103 workovers completed, and 122 km of
flowlines laid Employment has more than doubled to 10,000
workers
On signing the TSC in 2009, BP and CNPC said they
planned to invest $15 billion in cash over the 20 year lifetime of
the contract with the intention of increasing plateau production
to 2.85 million b/d during 2005-10
“Once production has been raised by 10% from its current
level of about 1 million b/d, costs will start to be recovered, and
fees of $2/bbl earned on the incremental oil production,” BP
said at the time
“Increasing production at Rumaila, the world’s fourth
larg-est oilfield, has been a massive undertaking,” said BP Chief
Ex-ecutive Bob Dudley this week, adding that “We look forward to
working with our partners to make Rumaila the world’s second
largest oil field.”
In April 2010, BP let contracts worth about $500 million to
three firms for drilling Schlumberger, in partnership with Iraqi
Drilling Co., received a contract for three rigs; Daqing Drilling
a contract for three rigs; and Weatherford a contract for one rig
(OGJ Online, Apr 5, 2010)
The Rumaila consortium is comprised of BP, 38%, CNPC
37%, and SOMO, 25%
Petrobras approves more FPSOs for Santos basin
Petroleo Brasileiro SA (Petrobras) approved the installation of
two floating production, storage, and offloading vessels for
in-stallation on Guara Norte and Cernambi presalt Santos basin
oil fields off Brazil
Cernambi previously was known as the Iracema area
The company said the FPSOs are part of the first production
development phase of Guara Norte (Block BMS-09) and
Cer-nambi (Block BMS-11) and will enable early production from
these areas to start in 2014 compared with the previously posed start of after 2014
pro-Each of the vessels will be designed to handle 150,000 bo/d and 8 million cu m/day of gas The company expects to have the units converted and the modules built and integrated in Brazil with a target local content index above 65%
Petrobras is the operator for both blocks and has a 45% terest in BMS-9 and a 65% interest in BMS-11
in-BG Group 30% and Repsol Brasil SA 25% are its partneres
in BMS-9 Its partners in BMS-11 are BG Group 25% and Galp Energia 10%
PROCESSING Q U IC K TA K E S
Albemarle, Petrobras to build HPC plant in Brazil
Albemarle Corp., Baton Rouge, and Brazil’s Petroleo Brazileiro
SA (Petrobras) have signed a memorandum of understanding
to construct a world-scale hydroprocessing catalyst (HPC) duction plant in Santa Cruz, Brazil
pro-The new facility, to be constructed on the site of the two firms’ existing joint venture Fabrica Carioca de Catalisadores
SA (FCC SA), will complement existing production of fluid catalytic cracking (FCC) catalysts
The two firms said the new plant will be constructed ahead
of “significant demand growth for hydroprocessing catalysts”
as Brazil begins to implement more stringent specifications for ultralow-sulfur diesel and Petrobras begins to introduce new hydrotreaters to existing and new refineries
Albemarle said it will provide FCC SA with its leading nology for the manufacture of HPC, enabling the production of STARS catalysts, which have enabled the broad implementa-tion of the most stringent sulfur specifications in fuels in North America, western Europe, and Japan
tech-“The plant will be ideally placed to serve growing needs for HPC in South America,” the two firms said
Petrobras and Albemarle said they also are enhancing their partnership by engaging into a joint technical cooperation aimed
at the further development of advanced hydroprocessing lysts
cata-In 2008, UOP LLC signed a technology cooperation ment with Petrobras and Albemarle Corp to demonstrate and further commercialize its catalytic crude upgrading (CCU) pro-cess technology (OGJ Newsletter, Oct 13, 2008)
agree-Last October, Albemarle said it completed the R&D tory facilities and begun construction on its Yeosu, South Korea manufacturing facility, which will begin intermediate commer-cial operations in mid-2011, with the commercial facility being fully operational in 2012
labora-Albemarle said the new site will produce finished catalysts, activators like methylaluminoxane (MAO) and metallocene components, as well as “High Purity Metal Organics for the HBLED market.”
Trang 10Dominion secures plant site for Marcellus gas
Dominion, Richmond, Va., has reached agreement with PPG
Industries on an option for Dominion to buy land at PPG’s
Na-trium, W.Va., site for construction of a 300 MMcfd natural gas
processing plant
Dominion Transmission, Dominion’s natural gas pipeline
and storage subsidiary, plans to process gas and separate NGLs
at the 56-acre site as part of its previously announced Marcellus
404 Project (OGJ, June 7, 2010, p 52) Engineering design and
project planning for the plant are under way, said the Dominion
announcement; financial terms were not disclosed
The plant will also have fractionation capacity for up to
38,000 b/d of NGLs
Natrium, on the Ohio River in Marshall County about 9
miles north of New Martinsville, W.Va., is close to
Domin-ion’s TL-404 pipeline, an existing transmission line in Ohio
and West Virginia that Dominion plans to convert into wet-gas
service Natrium is also close to rail, pipeline, and barging for
marketing NGLs
Canada’s Montney shale to get gas plant
AltaGas, Calgary, has let a contract to IMV Projects, a Wood
Group company also based in Calgary, for the engineering,
pro-curement, and construction management for the $235 million
(Can.) Gordondale sour gas processing plant and associated gas
gathering
The 120-MMcfd plant will lie about 100 km northwest of
Grande Prairie in the Gordondale area of the Montney shale
gas play It will include deep-cut liquids extraction to recover
NGL before the gas enters the sales gas pipeline and will be on
stream by fourth-quarter 2012, following regulatory approval
IMV Projects has been involved with development of the
project since its inception, performing the original scoping
study and the front-end engineering design, said the company’s
announcement
IMV Projects also designed the expansion of AltaGas Ante
Creek processing plant, currently under construction, that
in-cludes a new amine train, refrigeration, and gathering
Flint Hills to buy ethanol plants in Iowa
Flint Hills Resources LP plans to buy two ethanol plants in
Iowa from Hawkeye Renewables LLC, which last year
restruc-tured its finances under bankruptcy protection
Flint Hills will buy a 100-million-gal/year plant in Iowa
Falls and a 115-million-gal/year plant in Fairbank
The company, part of Koch Industries Inc., has more than
800,000 of distillation capacity in refineries in Texas, Alaska,
and Minnesota
The refiner already owns ethanol plants with capacities of
110 million gal/year each in Menlo and Shell Rock, Iowa
In Iowa, it operates a fuel terminal and asphalt plants at
Al-gona, Davenport, and Dubuque It also distributes fuels in the
state
Flint Hills didn’t disclose the purchase price
TRANSPORTATION Q U IC K TA K E S
Alyeska restarts TAPS while readying bypass
Alyeska Pipeline restarted the Trans Alaska Pipeline Jan 11 following a 4-day shut down The company’s operations con-trol center began the start-up sequence of opening valves and bringing pumps on line at 7 p.m local time (OGJ Online, Jan
10, 2011)
Alyeska shut down the pipeline at 8:50 a.m on Jan 8 after crews discovered a leak into containment in the basement of a booster pump building at Pump Station 1
The restart is part of a multistep plan to restore pipeline operations The pipeline will run at reduced rates for several days while a 157-ft bypass segment is staged for installation Once staged, Alyeska will shut TAPS down again while crews complete the bypass project
The restart will help increase temperatures in tanks and the pipeline, Alyeska explained, reducing the potential for wax in the oil to accumulate or for water in the oil to freeze It also al-lows flowing oil to move a cleaning pig from its current location between Mileposts 419 and 420 to Pump Station 8
The pig could affect the pump station equipment if left in the pipeline too long in cold temperatures With the pipeline operating again, crews can trap the pig between two valves in the mainline and route crude oil around through bypass pip-ing, Alyeska said
Alyeska said the restart solves three problems: It avoids a more complex cold restart process, it avoids additional prob-lems that would occur if the pig were in the line when the pipe-line begins to get too cold, and it allows North Slope producers
to increase production, which will help mitigate freeze cerns on the North Slope
con-Harvest to build Eagle Ford crude oil pipeline
Harvest Pipeline Co has started to construct a 25-mile crude oil pipeline from near Cotulla in LaSalle County, Tex., to an interconnect near Fowlerton, Tex., with its existing 140-mile Pearsall pipeline
The lateral represents the next phase of Harvest’s ing expansion of its Arrowhead Pipeline in an effort to increase shipments of Eagle Ford crude to refining and terminal facili-ties in Corpus Christi
continu-Harvest expects the Cotulla line to enter service in the third quarter The Cotulla line will be supported with volume com-mitments from large producers in LaSalle and Dimmit coun-ties, according to Harvest
Harvest operates pipeline systems running through the gle Ford trend from Maverick County to San Patricio County, Tex
Ea-Harvest also operates oil and gas gathering and mainline systems across south Texas and Louisiana
Koch Pipeline Co LP received shareholder approval to build
a 120,000-b/d Eagle Ford pipeline to Corpus Christi in ber 2010 (OGJ Online, Dec 17, 2010)
Trang 11org/meetings/index.php
3-4.
NACE Northern Area Western Conference, Regina, Sask., (281) 228-6200, (281) 228-6300 (fax), e-mail:
firstservice@nace.org, website: www.events.
617, website: ictechnologyconference.
www.arct-org/ 7-9.
ARC World Industry Forum, Orlando, (781) 471-1000, e-mail: info@
arcweb.com, website:
www.arcweb.com/
rum-2011/Pages/default.
Events/ARC-Orlando-Fo-aspx 7-10.
International Gas Analysis Symposium & Exhibition, Rotterdam, +31 (0) 15
info@clarion.org, website:
www.clarion.org 14-17.
Unconventional Oil &
Gas Europe, Prague, 1 (888) 299-8016, 1 (888) 299-8057 (fax), e-mail:
registration@pennwell.
com, website: www.
europe.com/index.html
unconventionaloilandgas-15-16.
Russia Offshore Annual Conference & Exhibition, Moscow, +44 207 067
4799 (fax), website:
www.ipaa.org 16.
NAPE Expo, Houston, (972) 993-9090, (972) 993-9191 (fax), e-mail:
info@napeexpo.com, website: www.napeexpo.
com 16-18.
EPNanoNet Forum on Advanced Materials for E&P, Houston, +44 (0)
bettyk@ou.edu, website: www.engr.outreach.
the Middle East Annual
Meeting, Abu Dhabi, +44
IADC South Central
Asia Drilling Technology
Conference & Exhibition,
Mumbai, (713)
292-1945, (713) 292-1946
(fax), e-mail: info@iadc.
org, website: www.iadc.
World Future Energy
Summit, Abu Dhabi,
microsoft.crgevents.com/
GEF2011/microsoft_gef
18.
Chem/Petrochem and Refinery Asset Management and Integrity Conference, New Orleans, (312) 540-
wtgevents.com, website:
www.gtsevent.com
19-20.
ME TECH 2011, Dubai, +44 20 7357 8394, +44
20 7357 8395 (fax), e-mail: conferences@
API Inspection Summit
& Expo, Galveston, Tex., (202) 682 8000, (202) 682-8222 (fax), website:
www.api.org 24-27.
API Exploration and duction Winter Standards Meeting, Fort Worth, Tex., (202) 682-8000, (202) 682-8222 (fax), website: www.api.org
Pro-24-28.
Shale Gas Symposium, Calgary, Alta., (877) 927-
7936, (877) 927-1563 (fax), website: www.
z.nathan@theenergyex- exchange.co.uk/3/13/
http://www.theenergy-articles/214.php 25-27.
Oil Sands Water Management Initiative Conference, Calgary, (866) 921-7782, 1 (800) 714-1359 (fax), e-mail:
ness-conferences.com, website: www.worldoils.
louise@american-busi-com 26-27.
API/AGA Joint Committee
on Oil and Gas Pipeline Welding Practices, Fort Worth, Tex., (202) 682
8000, (202) 682-8222 (fax), website: www.api.
ness-conferences.com, website: www.worldoils.
louise@american-busi-com Jan 30-Feb 1.
Annual Gas Arabia Summit, Abu Dhabi, +44
207 067 18 00, e-mail:
change.co.uk, website:
com Jan 31-Feb 1.
SPE Middle East ventional Gas Conference and Exhibition, Muscat, +971 4 390 3540, +971
1945, (713) 292-1946 (fax), e-mail: info@iadc.
org, website: www.iadc.
org/conferences 1-2.
Topsides Conference &
Exhibition, Galveston, (918) 831-9160, (918) 831-9161 (fax), e-mail:
wendyl@pennwell.com, website: www.topsidesev-
ent.com/index.html 1-3.
Global LNG Forum, celona, +421 257 272
Bar-112, +421 255 644 490, e-mail; beata.kyblova@
jacobfleming.com, site: www.jacobfleming.
web-com 2-3.
East African Petroleum Conference & Exhibi- tion (EAPCE), Kampala, +256 414 320714, +256
414 320437 (fax), e-mail: eapce11@
petroleum.go.ug website:
rica.com/en/eventdetail.
www.petroleumaf-php?Eventld=522 2-4.
Trang 12SPE European
Confer-ence on Health Safety
and Environment in Oil
and Gas Exploration,
Shale Gas Asia
Confer-ence, New Delhi, 1 (800)
AOG Australasian Oil &
Gas Exhibition &
Con-petcokes@jacobs.com, website: www.petcokes.
c.pallen@theenergyex-www c.pallen@theenergyex- exchange.co.uk/3/13/
www.theenergy-articles/157.php Feb
27-Mar 1.
MARCH 2011NPRA Security Confer- ence & Exhibition, Houston, (202) 457-
0480, (202) 457-0486 (fax), e-mail: info@npra.
org, website: www.npra.
org 1-2.
Annual Arctic Gas Symposium, Calgary, Alta., (877) 927-7936, (877) 927-1563 (fax), website: www.arcticgas- symposium.com/index.
APPEX/AAPG Property &
Prospect Expo, London, +44 (0) 207 434 13
99, e-mail: Europe@
aapg.org website: www.
europetro.com 1-3.
Turkmenistan Asia Oil &
Gas Summit, Singapore, +44 (0) 20 7328 8899, +44 (0) 20 7624 9030 (fax), e-mail: info@
summittradeevents.com, website: www.summit- tradeevents.com/Hold-
ingA2011.php 3-4.
Libya International Petro
& Energy Fair, Tripoli,
00971 4 2988144,
00971 4 2987886 (fax), e-mail: nafees@orange- fairs.com, website: www.
orangefairs.com 7-10.
API Spring Committee
on Petroleum ment Standards Meeting, Dallas, (202) 682 8000, (202) 682-8222 (fax), website: www.api.gor
Measure-7-10.
CERA Week, Houston, (713) 840-8282, (713) 599-9111 (fax), e-mail:
info@cera.com, website:
www.cera.com 7-11.
Renewable Energy World Conference & Expo North America, Tampa, (918) 831-9160, (918) 831-9161 (fax), e-mail:
Confer-9513, +44 (0)207 430
9513 (fax), e-mail:
change.co.uk, website:
e.huiban@theenergyex-www.wraconferences.
com/2/4/articles/205.
php 8-11.
DEA(e) Technical Oil &
Gas Conference on Well Control, Bad Bentheim, +44 (0) 1483 598000, e-mail: dawn.dukes@
Confer-www.events.nace.org/
conferences/c2011/in-dex.asp 13-17.
AIChE Spring Meeting
& Global Congress on
Process Safety, Chicago, (800) 242-4363, (203) 775-5177 (fax), website:
ences/springmeeting/
www.aiche.org/confer-index.aspx 13-17.
Offshore West Africa Conference & Exhibition, Accra, Ghana, (918) 831-
9160, (918) 831-9161 (fax), e-mail: registra- tion@pennwell.com, website: www.offshore-
westafrica.com 15-17.
World Heavy Oil gress, Edmonton, Alta., (888) 799-2545, (403) 245-8649 (fax), website:
Con-
www.worldheavyoilcon-gress.com 15-17.
TUROGE Turkish International Oil & Gas Conference & Showcase, Ankara, +44 (0) 20 7596
5000, +44 (0) 20 7596
5111 (fax), e-mail: quiry@ite-exhibition.com, website: www.turoge.
en-com 16-17.
NPRA Annual Meeting, San Antonio, (202) 457-
0480, (202) 457-0486 (fax), e-mail: info@npra.
org, website: www.npra.
org 20-22.
MEOS/SPE’s Middle East Oil & Gas Conference &
Exhibition, Manama, +44 (0)20 7840 2139, +44 (0)20 7840 2119 (fax), e- mail: meos@oesallworld.
com, website: www.
meos2011.com 20-23.
GPA Europe at GasTech Conference & Exhibition, Amsterdam, +44 (0)
1737 855000, +44 (0)
1737 855482 (fax), mail: info@gastech.co.uk, e-mail: www.gastech.
e-co.uk 21-24.
GASTECH International Conference & Exhibition, Amsterdam, +44 (0)
1737 855000, +44 (0)
1737 855482 (fax), mail: info@gastech.co.uk, e-mail: www.gastech.
e-co.uk 21-24.
IADC Drilling HSE Asia Pacific Conference &
Exhibition, Singapore, (713) 292-1945, (713) 292-1946 (fax), e-mail:
Mediter-219418, e-mail: ence@omc.it, website:
confer-www.omc.it/2011 23-25.
SPE Production and Operations Sympo- sium, Oklahoma City, (800) 456-9393, (972) 952-9435 (fax), e-mail:
spedal@spe.org, website:
www.spe.org 27-29.
NPRA International rochemical Conference, San Antonio, (202) 457-
Pet-0480, (202) 457-0486 (fax), e-mail: info@npra.
org, website: www.npra.
org 27-29.
Howard Weil Annual Energy Conference, New Orleans, (504) 582-
ACS National Meeting
& Exposition, Anaheim, Calif., (202) 872-4600, e-mail: help@acs.org, website: www.acs.org
27-31.
Purvin & Gertz tional LPG Seminar, The Woodlands-Houston, (713) 331-4000, (713) 236-8490 (fax), e-mail:
117, (405) 525-3592 (fax), e-mail: amy.
207 596 5135, +44 207
596 5106 (fax), e-mail:
tions.com, website: www.
ilyas.idigov@ite-exhibi-giogie.com/2011/ 29-30.
Offshore Asia Conference
& Exhibition, Singapore, (918) 831-9160, (918) 831-9161 (fax), e-mail:
www.seg.org 30-31.
Trang 13JOURNALLY SPEAKING
ALAN PETZET
Chief Editor-Exploration
Encana: ‘We own the Piceance’
When listing the public companies that want to be associated with liquids resource plays as opposed
to gas plays, don’t include Encana Corp
The Calgary firm has refocused its operations
on North America and is a large participant in several resource plays in Canada and the US The Piceance basin Williams Fork tight sand and the North Louisiana Haynesville shale are two of the company’s large US ventures
In the Piceance basin, Encana owns 869,000 net acres bounded roughly by Rangely, Grand Junction, Rifle, and Meeker, Colo More than 70%
of the lands are undeveloped
Jeff Wojahn, executive vice-president of cana and president of its USA Division, told an investment conference Jan 5, “We own the basin.”
En-In the 2010 third quarter, Encana at about 3.2 bcfd of companywide gas production was be-hind only ExxonMobil Corp at 4.2 bcfd in North American gas output
Piceance position
At its current pace, Encana has a 35-year inventory
of drilling locations in the Williams Fork formation alone
The company has built its Piceance net tion to 440 MMcfd of gas in 2010 from 325 MMcfd
produc-in 2005, produc-increasproduc-ing flow every year except 2009, when pipeline capacity was insufficient to take all
of its gas Output grew at a compound rate of more than 30%/year from 2002 to 2008
“Our capacity-reduced production from 2009 came back on line better than expected, and many
of the Piceance wells that we’ve recently pleted are performing well above expectations,”
com-Wojahn said
Using what the company calls a “gas factory”
approach, Encana has drilled as many as 52 wells from a single pad in the Piceance basin
“I am proud to say that in just a few short years, the Piceance gas factory has progressed from the conceptual stage to full implementation… Since
2005, Encana has reduced its drilling cycle times by
as much as 65% in some areas of the Piceance basin.”
Encana is expanding the use of its Piceance gas factory approach throughout the company’s op-erations to gain efficiencies Those include sharply
reducing truck trips in the field, fewer pad-to-pad rig moves, shorter drilling and completion cycle time, and optimizing frac efficiency and produc-tion via gas lift
Without giving details, Wojahn said Encana is diversifying its supplier base and is engaging in-dustry players to develop fit for purpose comple-tion equipment
“Though our 2010 program focused on drilling for land retention, we’re nowhere near optimizing our surface or drilling operations,” Wojahn said
“This year we have one gas factory pilot plant that will see eight wells drilled from a single pad This will be the first step in a long-term exercise of continued optimization and cost reduction.”
The company sees overall field savings of as much as 20% when it fully implements the gas factory method in the Haynesville, Wojahn said
Joint venture capital
Encana has attracted more than $4 billion in third party capital to its projects in the last 3 years, Wojahn said
The company targets total joint venture ment of $1-2 billion/year, and current expected
invest-2011 partner spending on Encana’s behalf is about
$500 million A joint venture with China National Petroleum Co could contribute further
Such capital infusion enables Encana to drill wells that would otherwise remain dormant in its inventory for far too long, Wojahn said
In 2010, Encana had more than $900 lion in third party joint venture commitments in place It was involved in more than 30 deals in Canada and had more than 30 partners in the
mil-US The deals involved gross well commitments
of more than 760 wells in Canada and 1,784 wells in the US
Trang 14OWNED & PRODUCED BY: ORGANIZED BY: OFFICIAL MEDIA PARTNERS:
Trang 15The spill report—1
First, the shortcomings
The report to US President Barack Obama by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling has draw-backs As a foundation for further regulatory re-sponse to the Macondo disaster last April, how-ever, it’s important to oil and gas producers It also contains solid ideas for real and obviously neces-sary improvement in offshore safety and regula-tion
The drawbacks will be dispensed with here The solid ideas will receive attention in later weeks
Length and agenda
At nearly 400 pages, the report is unnecessarily long In too many places, historical excursions few will read obscure important messages about the fu-ture Normally, excessive length would be merely annoying In this case, it seems to betray political agendas
For example, the report traces in dreary length the history of the old Minerals Management Ser-vice Created in 1982 by then-Interior Sec James Watt, whose desire to open the whole federal off-shore for oil and gas leasing became a celebrity cause of environmentalism, MMS in its last years had become, even before the Macondo tragedy, a whipping post for the political left
About MMS, only two points need to be made:
1 that combining royalty collection with lease management might have tilted regulation toward revenue generation at the expense of operation-
al safety and therefore might bear on Macondo lapses, and 2 that a post-Macondo reorganiza-tion makes the issue old news These points are easily lost in the spill commission’s retelling of the whole MMS story, which a thousand or so words into the narrative begins to feel like politi-cal scab-picking
Political leanings also seem to be at work in the report’s contention that “systemic failures by indus-try management” beyond BP and its contractors were at play at Macondo The judgment is valid
to the extent that operators routinely provided surances about their abilities to respond to a major deepwater spill that Macondo repudiated
as-Behind those assurances lay a determination, now discredited, not to let such a spill occur But a
catastrophic spill occurred in one deepwater well That fact requires urgent attention and strong re-sponse But no catastrophic spill has occurred from more than 2,500 other deepwater wells drilled since 2006 in the Gulf of Mexico That fact needs
to be part of the response framework The report’s extrapolations skew this essential perspective
From its thusly distorted stance on pre-Macondo regulation and industry practice, the commission leaps to suggestions for impossibly aggressive regu-lation It recommends creation of a new agency in the Department of Interior and new involvement in offshore decision-making by existing agencies out-side the department
Yet the problem isn’t that there hasn’t been enough bureaucracy focused on offshore regula-tion The problem, as the commission report duly notes, is that offshore activity bypassed oversight capability in its volume and technical complexity Oversight needs to improve, to be sure But com-plicating the administrative structures dedicated to oversight will only dissipate resources and hamper activity
The problem at Macondo wasn’t that an cient number of NEPA reviews had been conduct-ed; it was that broad-area assessments contained the standard assurances about response capability that proved unfounded More reviews would have generated more unfounded assurances without preventing the accident
insuffi-The goals now should be to prevent recurrence
of anything like the Macondo accident and to velop spill preparedness hitherto lacking without slowing development of oil and gas resources The report suggests changes able to help the industry and government achieve those goals
de-One such change will be discussed here next week
Trang 16A d v a n c i n g R e s e r v o i r P e r f o r m a n c e
to an Eagle Ford operator’s drilling plan
An Eagle Ford operator was losing valuable time waiting for frac-water tanks to fill to required volumes, forcing a substantial reduction in the drilling plan The operator considered drilling five new frac-water supply wells, at a cost of USD 1.25 million, to solve this problem
Baker Hughes had a better idea We installed a high-volume Centrilift electric submersible pumping (ESP) system and tripled the frac-water supply well production rate Downtime between completions dropped from 50 to 17 days A second Centrilift ESP on another water-supply well quadrupled its production rate and cut completion wait times to less than 12 days The operator regained its original drilling plan and scheduled to add 36 more wells per year
To learn how we can help you produce more profits from your shale operations, contact your Baker Hughes representative or visit us online You’ll find that partnering with us to maximize the value of your Eagle Ford assets is a very good idea