14, 2011 | Volume 109.7International Petroleum News and Technology | www.ogj.com Visit our video library www.ogj.com/index/video.html CLICK TO VIEW VIDEO 22 API: Congress, not EPA, sho
Trang 1CLEAN INNOVATION
© 2011 Halliburton All rights reserved.
How ingredients sourced exclusively from food industry suppliers are helping produce more natural gas
The world asked for cleaner fracturing chemistry and Halliburton
margin of safety to people, animals and the environment Laboratory testing indicates that it also produces higher retained conductivity than conventional fracturing fluids under many conditions The CleanStim recipe is designed for downhole use, not dinner tables But it will help satisfy the world’s appetite for natural gas See if it’s right for you
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Trang 25 NEWSLETTER 10 LETTERS / CALENDAR 12 JOURNALLY SPEAKING 14 EDITORIAL 27 EQUIPMENT
Feb 14, 2011 | Volume 109.7International Petroleum News and Technology | www.ogj.com
Visit our video library www.ogj.com/index/video.html
CLICK TO VIEW VIDEO
22 API: Congress, not EPA, should direct GHG policyPaula Dittrick
22 EIA: Oil demand to rise
offshore rigs, longer
onshore laterals in shale
Paula Dittrick
Oil and natural gas companies are asking
oil service contractors for sophisticated
technology to drill longer horizontal wells in
onshore shale plays and for new offshore rigs
that can fulfill increasingly stringent deepwater
drilling safety standards and regulations
in $7.3 billion deal
Paula Dittrick
Ensco PLC agreed to buy Pride International
Inc for $7.3 billion, marking the biggest
consolidation in the offshore drilling industry
since Transocean Ltd announced plans to
acquire GlobalSantaFe Corp in July 2007
18 Supply, demand trends still drive
oil prices, Senate panel told
Nick Snow
Canadian oil choices
21 GOP energy leaders float draft
bill to halt EPA’s GHG effort
Nick Snow
GENERAL INTEREST
The video below, courtesy of Range Resources Corp., Fort Worth, features a virtual
fi eld tour of the company’s Appalachian division.
Trang 3we are the people
©2011 Baker Hughes Incorporated All Rights Reserved.
Whatever your challenge, count on Baker Hughes to build dependable
solutions tailored to your specific needs
From reliable equipment to disciplined personnel, our ongoing commitment
to best practices, consistent procedures, and repeatable performance gives
you the capability you need to manage your risks and make the most of
your assets
We deliver what’s promised and stand behind our performance To see how Tauseef and the Baker Hughes team integrate reliability throughout our culture, starting with the technology design process, please visit us
at www.bakerhughes.com/tauseef
Trang 4PennWell, Houston offi ce
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Production Editor Guntis Moritis, guntism@ogjonline.com
Pipeline Editor Christopher E Smith, chriss@ogjonline.com
Senior Editor-Economics Marilyn Radler, marilynr@ogjonline.com
Senior Editor Steven Poruban, stevenp@ogjonline.com
Senior Writer Sam Fletcher, samf@ogjonline.com
Senior Staff Writer Paula Dittrick, paulad@ogjonline.com
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Trang 5World GTL Trinidad Limited (In Receivership)
Investment Opportunity Trinidad, West Indies
Offers are invited for the purchase of a Gas to Liquids plant and other assets of World GTL Trinidad Limited (In Receivership) which are located in Pointe-a-Pierre, Trinidad, West Indies
This Gas to Liquids plant is the first commercial gas to liquids facility in the Americas and is designed to produce between 2,050 to 2,400 barrels per day of ultra-low sulphur diesel and naphtha based on the conversion of used methanol
plants to Fischer Tropsch GTL plants The major process units of the plant are a Steam Methane Reformer, an Amine
Unit, a Hydrogen Prism unit, 2 Fixed Bed FT Reactors and a Hydrotreating unit
The Gas To Liquids plant is being constructed by using equipment relocated from Methanol Plants located in the United
States of America and Guatemala supplemented by new equipment to convert the process from methanol synthesis to Fischer Topsch synthesis One of the assets is a gas to liquids technology with proprietary FT catalysts developed through extensive testing in pilot plants
The Gas to Liquids plant is now in the completion phase with significant construction completed
The Receiver is in the process of selling the plant and other related assets on an AS IS WHERE IS basis subject to the
payment by the purchaser of all outstanding rates and taxes and the purchaser obtaining certification from the Trinidad
and Tobago Ministry of Energy
Interested parties can make arrangements for viewing and/or inspecting the plant and other assets and receiving additional
information from the Receiver at the under mentioned address Offers must be communicated in writing to the Receiver
and submitted in a sealed envelope addressed as shown below
The Receiver is under no obligation to accept any of the offers received
All correspondence and inquiries should be directed to :
World GTL Trinidad Limited (In Receivership)
c/o PricewaterhouseCoopers Limited GTL Drive, Petrotrin, Pointe-a-Pierre Trinidad, West Indies
Attention: Mr Varune Mungal Email: varune.mungal@tt.pwc.com
Tel: 1 (868) 658-7980 or 1 (868) 623-1361 ext 162
Fax: 1 (868) 623-6025
Trang 6International News
for oil and gas professionals
For up-to-the-minute news, visit www.ogjonline.com
Feb 14, 2011
Chevron to sell fuels, aviation business in Spain
Chevron Corp agreed to sell its Spanish fuels, finished
lubri-cants, and aviation business to Cia Espanola de Petroleos SA
(CEPSA)
The companies being sold are Chevron Espana SA and
Chevron Estaciones de Servicio The sale is subject to
regula-tory approvals CEPSA plans to buy 62 Texaco-branded service
stations in the Canary Islands and its aviation supply
agree-ments at 11 airports The transaction also includes the Valencia
lubricants blending plant
Chevron will retain its marine lubricants business in Spain
BOEMRE announces EIS for 2012-17 lease sales
The US Bureau of Ocean Energy Management, Regulation, and
Enforcement began environmental reviews for proposed Gulf of
Mexico oil and gas lease sales during 2012-17 by announcing
it would prepare an environmental impact statement (EIS) for
the offerings
The US Department of the Interior agency said it will
pro-pose a single, multi-tiered EIS for all propro-posed sales in the gulf’s
central and western planning areas during the next 5-year
planning period for the US Outer Continental Shelf
It said federal, state, and local government agencies, and
other interested parties can submit comments to help BOEMRE
determine significant issues and alternatives which need to be
analyzed in the EIS The agency also has scheduled public
scop-ing meetscop-ings in Houston on Feb 15, New Orleans on Feb 16,
and Mobile, Ala., on Feb 17 in conjunction with similar
meet-ings for preparation of the overall programmatic EIS for the
en-tire 2012-17 federal OCS oil and gas leasing program
The Pipeline Transportation Task Force’s (PTTF) research into
options for a future national US carbon dioxide pipeline
sys-tem found the current state-based regulatory syssys-tem sufficient
to handle CO2 transportation needs for the foreseeable future
PTTF presented the findings in its final report, “A Policy,
Le-gal, and Regulatory Evaluation of the Feasibility of a National
Pipeline Infrastructure for the Transport and Storage of Carbon
Dioxide.”
The report noted that in response to demand for CO2 for hanced oil recovery and other uses, the private sector had suc-cessfully constructed and is operating about 4,000 miles of CO2pipelines in the US The task force recommended the status quo model of private sector pipeline development and state regula-tion be continued The report explicitly stated that “no federal role is required in order to develop CO2 pipeline projects.”
en-It said, “The assumption that a federal mandate will duce the desired result (capture, transportation, and storage
pro-of nationally produced CO2) may not follow Other state-based regulatory solutions should be carefully considered before pur-suit of an untested federal strategy that could prove harmful to future CO2 pipeline construction.”
The report also urged care be taken to ensure pipelines transporting CO2 for storage-only purposes are not viewed less favorably by the public then pipelines transporting CO2for EOR
The Interstate Oil & Gas Compact Commission and the Southern States Energy Board assembled regulators, policy-makers, and industry representatives to form PTTF The PTTF study focused on identifying various pipeline regulatory and business development models and the opportunities and dif-ficulties associated with each of them
EXPLORATION & DEVELOPMENT Q U IC K TA K E S
Statoil to develop find near Gullfaks South
Statoil plans to develop a gas and condensate discovery in the Norwegian North Sea via tieback to facilities on nearby Gull-faks South field
The 34/10-53 S well confirmed about 300 m of gas pay in the Middle Jurassic Brent Group The Odfjell Drilling Deepsea Atlantic semisubmsersible rig drilled the well to 3,847 m verti-cal depth below sea level in 136 m of water
The well, 2 km west of Gullfaks South in an area called faks Valley, bottomed in the Early Jurassic Statfjord formation, which yielded no hydrocarbons
Rim-Statoil did not formation-test the well It estimated able oil equivalent hydrocarbons at 19-75 million bbl
recover-Statoil said the rig will plug the discovery well and drill a sidetrack, 34/10-53 A, to test a Brent Group prospect called Opal west of Rimfaks Valley
Trang 7Feb 2 Feb 3 Feb 4 Feb 7 Feb 8
Feb 2 Feb 3 Feb 4 Feb 7 Feb 8
Feb 2 Feb 3 Feb 4 Feb 7 Feb 8
Feb 2 Feb 3 Feb 4 Feb 7 Feb 8
Feb 2 Feb 3 Feb 4 Feb 7 Feb 8
Feb 2 Feb 3 Feb 4 Feb 7 Feb 8
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 1,200 400 600 200
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
626
12/11/09 11/20/09 12/4/09 12/18/09 1/1/10 1/15/10 1/29/10
12/25/09
1,739
12/24/10 1/7/11 1/21/11 1/22/10 2/5/10
11/19/10 12/3/10 12/17/10 12/31/10 1/14/11 1/28/11 557
Stock cover (days) 4 Change, % Change, %
Motor gasoline 27.2 26.2 3.8 26.4 3.0 Distillate 44.4 45.3 –2.0 42.3 5.0 Propane 22.8 25.9 –12.0 20.7 10.1
Futures prices5 2/4 Change Change %
Light sweet crude ($/bbl) 90.68 87.27 3.41 74.03 16.65 22.5 Natural gas, $/MMbtu 4.37 4.44 –0.07 5.35 –0.98 –18.3
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 8Oil & Gas Journal | Feb 14, 2011 7
Newfield adds oil area to Arkoma Woodford play
Newfield Exploration Co has begun producing oil from the
Woodford shale on the far west side of its predominately dry
gas play in the Arkoma basin in southeastern Oklahoma
The company, which has drilled six wells in Coal County,
Okla., reported a peak initial rate of 1,400 b/d of oil equivalent,
35% oil Four wells averaged 950 boe/d the first 30 days on
production, 840 boe/d the first 60 days, and 760 boe/d the first
90 days The oil is 41° gravity
Newfield plans to run two to three rigs and drill 12-18 wells
in the oily part of the play in 2011 It has identified 100
poten-tial well locations so far
Practically all of the company’s 172,000 net acres in the
overall play are held by production The leases are in Atoka,
Coal, Hughes, and Pittsburg counties
Realm Energy builds European shale acreage
Realm Energy International Corp., White Rock, BC, is
build-ing a portfolio of shale gas and shale oil acreage in continental
Europe, holding acreage in Poland and Germany and with more
under application in other basins
The company holds 465,000 net acres on two permits in the
Baltic basin in northern Poland and one permit in the Podlasie
basin in southeastern Poland It is completing first-year work
commitments that include a geologic assessment of existing log
and seismic data and designing three seismic programs
It holds 15,888 acres southwest of Hanover in the middle
of Germany’s Lower Saxony basin where a regional geological
study should be finished by the end of February It targets two
prospective organic rich shale units Also, several wells had oil
and gas shows in tight sandstones
The company has applied for more than 2.4 million acres
in two basins in France, of which 1.65 million acres are on
nine exploratory permits in the Paris basin Realm Energy is
in discussions with an undisclosed integrated North American
energy company and leading shale player to join it in
develop-ing the Paris basin shale oil play
Realm Energy and Halliburton Consulting are evaluating
shale gas and oil opportunities in other European basins This
subsurface work has resulted in additional, large-scale shale
ex-ploration opportunities in respect of which Realm Energy has
either submitted or is in the process or submitting new
explora-tion permit applicaexplora-tions
High-pressure Cretaceous gas hit off Cameroon
Bowleven PLC has cemented off the lower portion of the
Sapele-1 exploratory well off Cameroon after encountering a
high-pressure gas reservoir in the Cretaceous
Sapele-1 went to a total depth of 4,733 m on Block MLHP-5
of the Etinde Permit in the Douala basin The company plans to
test the well’s Tertiary discoveries and drill three firm Tertiary
and Cretaceous appraisal wells and one contingent well in 2011
using an additional rig expected to arrive late this month
Bowleven halted drilling due to a “rapid influx of very high
pressure gas” that precluded logging
“Based on an initial analysis of the major step change in pressure encountered and the interpretation of the seismic, it
is considered that the well may have encountered a significant hydrocarbon column in the Cretaceous
“Further analysis of mudlogging and wireline data, gether with gas chromatograph ratio analysis, has confirmed oil shows were encountered within thin sands in the upper part of the Cretaceous Epsilon Complex Further interpreta-tion and calibration of the well and seismic data is required
to-to assess fully the implications for Cretaceous volumetrics,” Bowleven said
Shell drops plans for Beaufort Sea drilling in 2011
Shell Alaska dropped its plans to drill in the Beaufort Sea this year, Shell Alaska Vice-Pres Peter Slaiby said during a Feb 3 news conference in Anchorage The announcement came after
a ruling last month revoked federal clean air permits to allow the drilling
A federal environmental appeals board in January ruled the US Environmental Protection Agency needs to do more extensive analysis of nitrogen dioxide emissions from vessels involved in drilling operations The ruling was based upon ap-peals from Alaska Native and conservation groups
Slaiby said Shell’s decision to delay Beaufort exploratory drilling stemmed from “continuous regulatory delays.” Royal Dutch Shell PLC has worked for 5 years and invested more than
$50 million pursuing air permits to drill in Arctic waters off Alaska, he said
Shell intends to work closely with the EPA to identify an proved process for delivering air permits for 2012, Slaiby said
im-“Shell has dedicated significant time and resources to mencing a world-class, environmentally responsible explora-tion program for Alaska, and the loss of another drilling season
com-is extremely dcom-isappointing,” he said
Previously, Shell Alaska had planned exploratory drilling during 2010 in both the Chukchi and Beaufort seas, but those plans were put on hold following the oil spill in the Gulf of Mexico from the deepwater Macondo well operated by BP PLC.Sen Lisa Murkowski (R-Alas.) issued a statement after Shell’s announcement Murkowski said the government’s deci-sion could “result in all of us paying more for gasoline—not to mention the loss of jobs and revenue that responsible develop-ment brings.”
“We talk a lot about the economy, but rarely do our actions match our rhetoric,” Murkowski said “That’s unfortunate.”
Shell Offshore Inc last year submitted an application to the
US Bureau of Ocean Energy Management, Regulation, and forcement for a permit to drill an exploration well in the Beau-fort Sea in 2011 The application was for the shallow waters of Camden Bay (OGJ Online, Oct 7, 2010)
Trang 9En-8 Oil & Gas Journal | Feb 14, 2011
Eni starts Nikaitchuq oil field off Alaska
Eni SPA has started oil production from Nikaitchuq field off
Alaska’s North Slope The company, with 100% interest,
ex-pects production to peak at 28,000 b/d and last 30 years It
estimates reserves at 220 million bbl
At full development, the field will have 26 producing wells,
21 water injectors, and 5 water source and disposal wells
Twenty-two of the wells will be onshore and the rest offshore,
drilled from an artificial island The field lies in an average 3
m of water Eni has completed the processing facility and 12
onshore wells It plans to drill the remaining wells by 2014
The wells have vertical depths of 4,000 ft and vertical
reach-es up to 20,000 ft The operator says the under-seabed pipeline
bundle connecting the on and offshore facilities is the heaviest
ever installed in the Arctic
The processing facility can treat 40,000 b/d of heavy crude
with sand and as much as 120,000 b/d of water, enabling Eni to
ship sales-quality crude through the Trans-Alaska oil pipeline
with no further processing
Range hikes Marcellus resource, pursues Utica
Range Resources Corp., Fort Worth, said its unproved resource
potential rose to 35-52 tcf of gas equivalent at the end of 2010
compared with 24-32 tcfe a year earlier
The company said its Marcellus shale resource potential rose
to 20-31 tcfe due to higher per-well reserves It also included for
the first time the unproved resource potential for the overlying
Upper Devonian shale in the Appalachian basin That figure is
10-14 tcfe
The remainder is attributable to the Nora area in Virginia
and the Permian and Midcontinent areas where Range holds
more than 560,000 net acres
Range said its first Utica shale well in Pennsylvania averaged
an encouraging 4.4 MMcfd of gas equivalent on a 7-day
produc-tion test No Utica shale resource potential is included in the
yearend estimate, but that issue will become clearer as Range
and others drill more Utica wells in 2011
Fire extinguished at Mont Belvieu complex
Enterprise Products Partners LP, Houston, said Feb 9 that it
found the contract worker missing since a Feb 8 fire at the west
storage network at the company’s Mont Belvieu, Tex., complex
about 35 miles east of Houston (OGJ Online, Feb 8, 2011) The
worker did not survive the fire
Much of the residual product in lines around the storage
net-work burned off, and Enterprise cut off all flow of any product
that was feeding the fire, a spokesman said Feb 9
Cause of the fire will be investigated, the spokesman said,
adding that the company also is evaluating the damages to the
complex
Previously, Enterprise reported that the main facilities at the
Mont Belvieu complex “were not damaged” and “remain
op-erational.” These unaffected systems include “the natural gas liquids fractionators, the propylene fractionators, the butane isomerization units, the octane enhancement facility, north and east facilities, and the import-export terminals on the Houston Ship Channel.”
Aramco taps KBR for Jazan refinery work
Saudi Aramco has let a front-end engineering and design and project management services contract to KBR for a grassroots refinery in the Jazan area of southern Saudi Arabia
KBR reported crude capacity of the refinery, to be built in conjunction with a marine terminal on the Red Sea, at 400,000 b/d Aramco earlier has described capacity as 200,000-400,000 b/d
Aramco says the refinery ultimately will be integrated with
a world-scale power and water facility The terminal will be able to receive very large crude carriers The refinery will have berths to support product exports
The refinery will be able to process Arabian crude oils and
to yield about 75,000 b/d of gasoline, 100,000-160,000 b/d of ultralow-sulfur diesel, and 160,000-220,000 b/d of fuel oil, ac-cording to Aramco
UAE refinery expansion contracts awarded
Engineering and construction contractors for Abu Dhabi Oil Refining Co (Takreer) have awarded contracts for mass-trans-fer equipment to GTC Technology Korea Co Ltd., a unit of Houston-based GTC Technology International LP, as part of an expansion of the 350,000-b/d refinery at Ruwais
The project is to be completed in 2013 No contract amount was announced
The South Korea company will provide mass-transfer ment for the crude distillation unit, saturated gas plant, and residue catalytic cracking unit under the subcontracts awarded
equip-by South Korean engineering and construction companies GS Engineering & Construction Ltd and SK E&C Co Ltd
The scope includes engineering and fabrication of a variety
of mass-transfer equipment including high-performance valve trays, structured packing, grid packing, vapor horns, and FCC feed distributors
The RCCU is, according to the GTC Technology ment earlier this month, the largest single unit of its kind in the world The contract includes a “giant‐sized pre-flash column, crude column, and residue fluidized catalytic cracking main fractionator.” The expansion includes 21 process units, off sites, and utilities, it said
TransCanada begins Keystone oil deliveries to Cushing
TransCanada Corp has begun commercial deliveries of crude oil to Cushing, Okla., on the second phase of its $12 billion Keystone Pipeline system The second phase is a 298-mile ex-tension from Steele City, Neb., to Cushing and increases Key-
Trang 10Oil & Gas Journal | Feb 14, 2011 9
stone’s nominal capacity to 591,000 b/d, of which 530,000 b/d
is contracted
The next phase of expansion for the Keystone Pipeline
sys-tem is the proposed US Gulf Coast Expansion (Keystone XL)
project Keystone XL is a 1,661-mile, 36-in OD oil pipeline
beginning at Hardisty, Alta., and extending southeast through
Saskatchewan, Montana, South Dakota, Nebraska, and
Okla-homa to delivery terminals near Port Arthur, Tex
Keystone XL needs approval by the US Department of State
before construction can begin (OGJ Online, Jan 27, 2011)
TransCanada expects Keystone XL to enter service in
first-quarter 2013, pending approval
TransCanada concluded on open season in January for its
Bakken Marketlink and Cushing Marketlink projects to deliver
US-sourced crude from Baker, Mont., to Cushing and the US
Gulf Coast Bakken Marketlink secured 65,000 b/d of firm,
term contracts Cushing Marketlink will have capacity to move
150,000 b/d from Cushing to the US Gulf Coast Both Bakken
Marketlink and Cushing Marketlink will use pipeline facilities
forming part of TransCanada’s Keystone XL system Combined
the two projects will transport up to 250,000 b/d of US crude
oil production to the Gulf Coast (OGJ Online, Jan 27, 2011)
TransCanada’s Horn River pipeline receives NEB OK
Canada’s National Energy Board approved TransCanada Corp.’s
Horn River natural gas pipeline project The pipeline will
con-nect British Columbia shale gas supplies to TransCanada’s
Al-berta System TransCanada anticipates bringing Horn River
into service second-quarter 2012
The $310 million, 155-km Horn River line consists of a new
36-in OD line and acquisition of an existing 24-in OD line
The project will provide firm service for Alberta System gas
transportation contracts exceeding 630 MMcfd by 2014
TransCanada expects British Columbia shale gas supplies
to climb to more than 5 bcfd by the end of the decade and
the Horn River pipeline is the company’s second major
pipe-line connecting its Alberta System to these supplies The first
extension of the Alberta System into British Columbia was the
Groundbirch pipeline, which came into service in December
2010 Horn River and Groundbirch shippers have committed to
Alberta System contracts reaching 1.9 bcfd by 2014
TransCanada plans to bring its Keystone Phase 2 crude
pipe-line and Guadalajara gas pipepipe-line in Mexico into service during
2011 Keystone Cushing (Phase 2) extends 36-in OD pipe from
Steele City, Neb., to Cushing, Okla TransCanada commenced
commercial operation on the 435,000 b/d Keystone Phase 1,
June 30, 2010 Phase 2 will boost capacity to 591,000 b/d
The Guadalajara Pipeline will move gas from an LNG
ter-minal under construction near Manzanillo on Mexico’s Pacific
Coast to both Guadalajara and the CFE CT Manzanillo power
plant The pipeline’s first segment consists of about 6 km of
24-in OD pipeline capable of transporting 500 MMcfd to the
power plant The second segment will consist of a 30-in OD
pipeline extending roughly 295 km between the Manzanillo
LNG terminal and an interconnection with Pemex Gas y quimica Basica This segment will be bidirectional and capable
Petro-of transporting as much as 320 MMcfd Petro-of gas
Plains All American plans Shafter LPG expansion
Plains All American Pipeline LP reported plans to construct its Shafter Expansion Project, consisting of a 10,000 b/d LPG pipe-line system and related upgrades to its Shafter LPG processing facility near Bakersfield, Calif A 5-year transportation agree-ment with a unit of Occidental Petroleum Corp underpins the project, currently expected to cost about $50 million Oxy also has a general partner ownership stake in Plains All American
The pipeline will link the Shafter facility with Oxy’s Elk Hills gas processing plant and related infrastructure Plains has targeted a third-quarter 2012 in-service date
The Shafter expansion involves building a 15-mile LPG pipeline system as well as enhancing Plains’ storage and rail capabilities at the Shafter facility The facility currently includes roughly 200,000 bbl of NGL storage and a processing facility with 14,000 b/d butane isomerization capacity and 12,000 b/d NGL fractionation capacity Plains expects to spend $30 million
on the Shafter project in 2011 and the balance during 2012
Egyptian gas supplies to Israel to resume Feb 17
East Mediterranean Gas Co (EMG) advised Ampal-American Israel Corp that Egyptian National Gas Co (Egas) expects to
be supplying pipeline gas to EMG and therefore to EMG’s Israeli clients by Feb 17 Ampal owns a 12.5% interest in EMG
Ampal announced Feb 6 that an explosion and fire in a tering station along the 10.3 billion cu m/year Arab Gas Pipe-line from Egypt to Jordan, owned and operated by Egas sub-sidiary GASCO, had interrupted these supplies The affected GASCO station is about 30 km from the EMG line into which
me-it feeds GASCO is repairing a 200-m long segment of me-its line which was damaged by heat from the explosion
Neither EMG’s interconnect site its pipeline were damaged
Venezuela orders crude tankers from Itochu Corp.
Itochu Corp has won an order to supply four Aframax ers to a subsidiary of Venezuela’s Petroleos de Venezuela SA (PDVSA) and has commissioned Sumitomo Heavy Industries
tank-to build the vessels
The ships will have a capacity of 104,300 dwt each and are scheduled for delivery in 2012 The four new vessels are likely
to be added to a group of PDVSA tankers that transport oil duced in Venezuela to its refineries in the US and Europe
pro-Construction of the tankers will cost ¥25 billion with ing to be provided by the Japan Bank for International Coop-eration, which reportedly agreed to provide ¥20 billion
fund-The agreement follows earlier ones in 2009, when Venezuela signed 12 energy-related agreements with Japan At the time, PDVSA signed an MOU with Itochu, Mitsubishi, Itochu, Mitsui, and Marubeni regarding possible cooperation on the Mariscal Sucre LNG project
Trang 1110 Oil & Gas Journal | Feb 14, 2011
2011-2012 EVENT CALENDAR
2011-2012 EVENT CALENDAR
NACE Corrosion ence & Expo, Houston, (800) 797-6223, (281) 228-6329 (fax), website:
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),
e-mail: info@gastech.co.uk, e-mail: www.gastech.
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.
CIPPE China national Petroleum &
Inter-Petrochemical ogy and Equipment Exhibition, Beijing, +86
Technol-10 58236588/6555
+86 10 58236567 (fax), e-mail: cippe@zhenwei- expo.com, website: www cippe.com.cn/cippeen
22-24.
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-
Unconventional Oil &
Gas Europe, Prague, 1
Russia Offshore Annual
Conference & Exhibition,
org.uk 21-23.
Nitrogen+Syngas national Conference &
Inter-Exhibition, Dusseldorf, +44 (0) 20 7903 2438, +44 (0) 20 7903 2432 (fax), e-mail: confer- ences@crugroup.com, website: www.crugroup.
com 21-24.
SUBSEA Tieback Forum & Exhibition, San Antonio, (918) 831-9160, (918) 831-9161 (fax), e-mail: registration@pen- nwell.com, website: www.
subseatiebackforum.
com 22-24.
SPE European ence on Health Safety and Environment in Oil and Gas Exploration, Vienna, +44 (0)1224
Confer-318088, website: www.
spe-uk.org 22-24.
Pipe Line Contractors Association Convention, Maui, (214) 969-2700, e-mail: plca@plca.org, website: www.plca.org
22-26.
Shale Gas Asia ence, New Delhi, 1 (800) 721-3915, 1 (800) 714-
Confer-1359 (fax), e-mail: info@
ferences.com, website:
american-business-con-www.shale-gas-asia.com
23-24
AOG Australasian Oil &
Gas Exhibition & ence, Perth, +61 3 9261
Confer-4500, +61 3 9261 4545 (fax), e-mail: aog@divex- hibition.com.au, website:
Con-petcokes@jacobs.com, website: www.petcokes.
c.pallen@theenergyex-www c.pallen@theenergyex- exchange.co.uk/3/13/
Confer-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@
otmnet.com, website:
www.dea-europe.com
10-11.
Trang 12Oil & Gas Journal | Feb 14, 2011 11
2011-2012 EVENT CALENDAR
Middle East Downstream
Week Annual Meeting,
ACS National Meeting
& Exposition, Anaheim,
Calif., (202) 872-4600,
e-mail: help@acs.org,
website: www.acs.org
27-31.
Purvin & Gertz
Interna-tional LPG Seminar, The
International Oil & Gas
Energy and Infrastructure
Offshore Asia Conference
& Exhibition, Singapore,
www.seg.org 30-31.
APRIL 2011
Middle East Downstream Week Annual Meeting, Abu Dhabi, +44 1242
529 090, +44 1242
529 060 (fax), e-mail:
change.co.uk, website:
gpaglobal.org, website:
www.GPAglobal.org 3-6.
Hannover Messe Pipeline Technology Confer- ence, Hannover, +49
511 90992 22, +49 511
90992 69 (fax), e-mail:
fandrich@eitep.de, website: www.pipeline-
conference.com 4-5.
ShaleCon Conference, Montreal, Q.C., (800) 882-8684, e-mail: info@
Inter-4-8.
SPE/ICoTA ing & Well Intervention Conference & Exhibition,
CoiledTub-The Woodlands, Texas, (800) 456-9393, (972) 952-9435 (fax), e-mail:
spedal@spe.org, website:
www.spe.org 5-6.
SPE/IADC Managed Pressure Drilling & Un- derbalanced Operations Conference, Denver, (800) 456-9393, (972) 952-9435 (fax), e-mail:
spedal@spe.org, website:
www.spe.org 5-6.
OilTech Atyrau Regional Petroleum Technology Conference, Atyrau, +44 (0) 20 7596 5000, +44 (0) 20 7596 5111 (fax), e-mail: enquiry@ite- exhibition.com, website:
www.oiltech-atyrau.com/
home.html 5-6.
Atyrau North Caspian Regional Oil, Gas and Infrastructure Exhibi- tion, Atyrau, +44 (0) 20
AAPG Annual Convention
& Exhibition, Houston, (918) 560-2679, (918) 560-2684 (fax), website:
www.aapg.org 10-13.
APPEA Conference and Exhibition, Perth, +61 (7) 3802 2208, +61 (7)
3802 2209, website:
www.appeaconferences.
com.au 10-13.
GITA’s Geospatial Infrastructure Solutions Conference, Grapevine, Texas, (303) 337-0513, (303) 337-1001 (fax) website: www.gita.org/
events/futconf.asp
10-14.
SAGEEP Information Exchange for New-Sur- face Geophysics Forum, Charleston, (918) 497-
5500, (918) 497-5557 (fax), website: www.seg.
org 10-14.
Gas Turbine Users International Annual Con- ference (GTUI), Dubai, +971 4 8047883, +971
6625, e-mail: lew@marcusevansch.
org 11-13.
Pipe Line Contractors Association of Canada Annual Convention, Maui, (905) 847-9383, (905) 847-7824 (fax), e- mail: placa@pipeline.ca, website: www.pipeline.
org 12-13.
AADE National cal Conference and Exhibition, Houston, (281) 366-8204, e-mail:
Techni-Bonsall.Wilton@pb.com, website: www.aade.org
12-14.
Russia & CIS Bottom of the Barrel Technology Conference & Exhibition, Moscow, +44 (0) 20
com 13-14.
Middle East Petroleum &
Gas Conference (MPGC), Bahrain, 0065 6338
0064, 0065 6338 4090 (fax), website: www.
texasalliance.org, site: www.texasalliance.
web-org/index.php 26-27.
Oil & Gas Siberia, birsk, +7 383 2106290, +7 383 2209747 (fax), e- mail: welcome@sihfair.ru, website: www.petroleum.
Novosi-sibfair.ru/eng/ 27-29.
GPA Mid-continent nual Meeting, Okla City, (918) 493-3872, (918) 493-3875 (fax), website:
(866) 229-2386, (972) 952-9435 (fax), e-mail:
registration@spe.org, website: www.otcnet.
org.2011 2-5.
GPA Permian Basin Annual Meeting, Odessa, (918) 493-3872, (918) 493-3875 (fax), website: www.gasprocessor.com/
calendar.html 3.
World Renewable Energy Congress, Linkoping, e-mail: info@wrec2011.
com, website: www.
wrec2011.com 8-13.
NPRA National Safety Conference & Exhibi- tion, Forth Worth, Texas, (202) 457-0480, (202) 457-0486 (fax), e-mail:
lcowley@ou.edu, website:
www.ishm.info/ 10-12.
IADC Environmental Conference & Exhibition, Trinidad & Tobago, (713) 292-1945, (713) 292-
1946 (fax), e-mail: info@
iadc.org, website: www.
iadc.org/conferences
12-13.
SPWLA Symposium, Colorado Springs, Colo., (713) 947-8727, (713) 947-7181 (fax), e-mail:
www.webmaster@spwla.
org, website:
www.sp-wla.2011.com 14-19.
Trang 13JOURNALLY SPEAKING
Obama stirs memories of Mom
US President Barack Obama is a lot like my mama
Mother, bless her, had a good heart, but if she ever did anything for me and my brothers—advance us money, loan us her car, give us birth—we’d hear about it forever “Look at all I’ve done for you,” she’d sob, “and this is the thanks I get.” Although she loved us, the implication was clearly that my broth-ers and I were not the sons she deserved and likely never would be
So Obama’s Feb 7 speech to the US ber of Commerce generated a déjà vu feeling of a visit with Mom when he essentially told business executives: Look at all the tax breaks the govern-ment has given you, and this is the thanks I get
Cham-You sit there on your fat assets of $2 trillion and won’t build new plants or hire more workers just because the economy is still uncertain
Guess they’re not the business leaders the ident feels he deserves, either Apparently Obama figures if they would just hire workers they don’t need and pay salaries they can’t afford, eventually there will be more demand for the surplus prod-ucts they would turn out That’s the same reason-ing that is pushing auto manufacturers to build fleets of vehicles powered by electricity or natural gas when there is yet no network of retail refueling outlets for them It’s also the reason for govern-ment loans and subsidies that triggered a rash of construction of ethanol distillation plants, many
pres-of which independent refiner Valero Energy Corp
has since bought for pennies on the dollar from the financially strapped original owners Those underfunded projects failed as increased demand pushed the cost of corn to new highs, diminished food supplies, and set the stage for riots in North Africa against despots who had held power for decades Just proves business can be risky even when the government favors one industry over an-other and also can have unforeseen effects
That’s another way Obama is like Mom—she didn’t know a thing about economics either Un-like Obama, however, Mother was founder and
chief executive of her own small business—a ery for preschoolers—and knew what it meant to meet payrolls, invest in equipment, comply with government regulations, and cope with insurance, workman compensation claims, and other issues while maintaining a strict budget so outlays didn’t exceed income
nurs-Does Obama get it?
Obama told chamber members, “I understand the challenges you face I understand that you’re un-der incredible pressure to cut costs and keep your margins up I understand the significance of your obligations to your shareholders I get it.”
But he really doesn’t That was plain in his lier State of the Union address when he said, “I’m asking Congress to eliminate the billions in tax-payer dollars we currently give to oil companies
ear-I don’t know if you’ve noticed, but they’re doing just fine on their own So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”
Maybe a behemoth like ExxonMobil Corp can survive anything but a meteor strike like the one that killed the dinosaurs But there are a lot
of smaller producers and service companies out there it wouldn’t take much to drive under What’s more those oil industry tax breaks and “subsi-dies” Obama sneers at weren’t bestowed out of the goodness of the federal government’s heart There were economic and energy security reasons for those so-called loopholes that were as important
to the government as to the companies
But if Obama wants to turn his back on terday’s energy” and “invest”—which will deepen the deficit just as much as spending—in tomor-row, then where will the energy come from to power the US economy today? That’s something
“yes-he should consider as t“yes-he oil and gas wells sary to hold down energy prices in 2012 when he seeks reelection are not being drilled today due to his ban in the Gulf of Mexico
neces-Mama warned there would be days like that
SAM FLETCHER
Senior Writer
Trang 146th Annual Conference & Exhibition
29 - 31 March 2011
Sands Expo & Convention Center
Marina Bay Sands, Singapore
In the current climate a reliable, industry leading source of
information is needed to show the direction and future
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Trang 15Jan 31 Early last year, Sen Jay Rockefeller (D-W.Va.) proposed a 2-year delay in implementation of the EPA program
The new bills represent progress from the Rockefeller bill, which purportedly was designed
to give Congress time to debate the issue The problem isn’t a rushed Congress The problem is wildly misguided regulation
The lesser of two large problems with EPA’s greenhouse gas initiative is the imposition of cost with no hope for meaningful benefit In testimony prepared for the Feb 9 hearing, Margo Thorn-ing, senior vice-president and chief economist
of the American Council on Capital Formation, said EPA’s program “will slow investment and job growth and have no significant impact on reduc-ing global GHG emission growth.” So why does EPA press ahead? “It makes little economic or en-vironmental sense for EPA to regulate GHGs un-der the Clean Air Act,” Thorning said
The even larger problem is constitutional The proposition of sharply increased energy costs, in-escapable under any effort to lower emissions of the benchmark greenhouse gas, carbon dioxide, needs legislative deliberation People exposed to the cost increases should have a voice in the out-come through representatives they elect To im-pose the costs through regulation would be inap-propriate To try to impose them after Congress failed to enact climate-change legislation last year
is preposterous
Wayward path
EPA, acting under authority of a loopy decision
in 2007 by the Supreme Court, started down this wayward path in part to press Congress into action
on climate change Lawmakers should consider that an institutional affront In the face of last year’s collapse of cap-and-trade legislation in the Senate,
in fact, they should see EPA’s persistence as the tential for a constitutional crisis
po-This is an Executive Branch agency claiming control of a major dimension of the US economy
in contradiction of the will of the people as pressed through Congress Congress must stop
ex-it Congress must set clear and permanent limits
on the maverick agency’s authority and behavior Congress must act soon
Hearings began last week on legislation that would derail the US Environmental Protection Agency’s regulation, under the Clean Air Act, of greenhouse gas emissions They represent a triumph of public discourse and participatory government
Not long ago, any initiative purporting to resist global warming would have had clear sailing The popular view was that greenhouse gases released into the atmosphere by human activity inexorably and unquestionably warmed the planet and that catastrophe would ensue unless people radically changed behavior, especially by slashing their use
of fossil fuel The science was said to be settled
Contrary views were rejected on sight as the
wick-ed fulminations of unholy deniers
How things do change
Alarm waning
Public alarm has waned in response to questions about the scientific basis for predictions of calami-tous warming and to projections about the huge costs of remediation Political support for urgent response has weakened Opinion polls show global warming ranks very low among things about which people worry
The issue has momentum, nevertheless, pushed along by factions for which it long ago be-came a secular religion Those factions include the unyielding environmental groups that President Barack Obama, since taking office, has been loath
to upset The Environmental Protection Agency therefore has plowed forward with its program of regulating greenhouse gases under the Clean Air Act
Last month, EPA began phasing in rules ing permits for large new and expanding green-house-gas emitters Later this year, it will begin regulating emissions from existing large facilities
requir-Now Congress, with its Republican constituency newly fortified, has balked
The House Energy and Commerce Committee held a hearing Feb 9 on legislation that would block EPA implementation of its greenhouse gas regulations and declare that the Clean Air Act was not intended to address climate change Commit-tee Chairman Fred Upton (D-Mich.) authored the bill, which was matched in the Senate by legisla-tion introduced by James Inhofe (R-Okla.) Sen
John Barrasso (R-Wyo.) introduced a similar bill
Reining in EPA
Trang 16tomorrow’s performance
C O N F E R E N C E & & E X H H I B I B I T I I O N
Trang 1716 Oil & Gas Journal | Feb 14, 2011
GENERAL INTEREST
Industry seeks new offshore rigs,
longer onshore laterals in shale
into deepwater drilling practices
Ongoing delays in US offshore drilling permits mean deepwater drilling activity in the gulf is unlikely to pick up significantly until this year’s second half, executives for both contractors and operators repeatedly stated in recent earn-ings conference calls
Barclays Capital analyst James C West said, “Drilling
contractors begin to ize that older assets have become somewhat obsolete
real-or are nearing obsolescence
in a post-Macondo world” because older equipment is
“becoming much less able” to oil and gas compa-nies
desir-For instance, ODS rodata reported last year that 18% of the floater fleet worldwide second-gen-eration semisubmersibles
Pet-vs 20% of the fleet being sixth-generation semisub-mersible The 20% includes newbuilds under construc-tion (Table 1)
West foresees continuing growth in the deepwater worldwide, noting “major oil companies are starting
to express concerns about rig capacity in 2012-13 and beyond.” He expects more than 100 new offshore rigs will be ordered during an ongo-ing rig build cycle that started in late 2010
Subsea demand
West said, “New rig construction is a powerful driver of backlog and earnings for the equipment suppliers, primarily National Oilwell Varco and also for Cameron.” Cameron has reported accelerating demand for subsea equipment
During January, Brazil’s Petroleo Brasileiro SA (Petrobras)
Paula Dittrick
Senior Staff Writer
Oil and natural gas companies are asking oil service
contrac-tors for sophisticated technology to drill longer horizontal
wells in onshore shale plays and for new offshore rigs that
can fulfill increasingly stringent deepwater drilling safety
standards and regulations
“The growing abundance
of shale gas and liquids, the
continued pursuit of oil in
increasingly complex
envi-ronments, and a rapid
es-calation of service intensity
cannot be understood
with-in the constrawith-ints of normal
energy industry cyclicality,”
FBR Capital Markets
ana-lyst Robert MacKenzie said
in a Feb 7 research note
Fourth-quarter 2010
earnings reports “proved
stellar” for most large
ser-vice providers, MacKenzie
said, adding that he expects
this trend will continue
through 2012 based in part
on robust land drilling
ac-tivity in the US focused on
liquids-rich shale plays
An offshore rig
construc-tion cycle also appears to be
gaining momentum,
par-tially because oil companies demand new, high-specification
equipment from drilling contractors given regulatory
uncer-tainties following the 2010 deepwater well blowout and
mas-sive oil spill in the Gulf of Mexico
An April 2010 blowout of the deepwater Macondo well,
operated by BP PLC, resulted in an explosion and fire on
Transocean Ltd.’s Deepwater Horizon semisubmersible,
kill-ing 11 crew members and promptkill-ing numerous inquiries
NUMBER OF WORLD FLOATER FLEET
BY CLASSIFICATION
Table 1
Rig class Number of rigs
Drillship < 2,500 ft 5 Drillship 2,500-5,000 ft 7 Drillship > 5,000 ft* 71 Semisubmersible 2nd gen 55 Semisubmersible 3rd gen 47 Semisubmersible 4th gen 45 Semisubmersible 5th gen 15 Semisubmersible 6th gen* 62
––––
Total fl oaters, Oct 26, 2010* 307
*Includes newbuilds under construction.
Source: Barclays Capital after ODS Petrodata
Shale Year Avg hp Lateral length, ft Stages
Marcellus 2008 6,000 3,000 7
2010 30,000 5,000 15 Bakken 2008 12,000 6,500 5
2010 14,000 8,500 17 Eagle Ford 2008 18,000 N/A 3
2010 36,000 6,000 14
Source: FBR Capital after Halliburton 2011 analyst day presentation