Embed Size (px)
DESCRIPTION
OGJ • Move carefully on crude exports, refine rurges House subcommittee • API report unveils economic gains from US crude exports • Scott links South Atlantic OCS bill, jobs growth plan • Mathanex methanol plant completes move to Louisiana • Moody's: Global refining, marketing industry to see earnings rise this year • AFPM: Shale boom sparks need for petchem workers • EIA: Ethanol spot prices rise on rail congestion, cold weather • USCG: 'Chain of errors' led to Shell drilling unit running aground • WATCHING GOVERNMENT: Greenland in transition • Anadarko settles legacy claims against Kerr-McGee for $5.15 billion
Citation preview
Copyright © 2013 Merichem Company
To win a race you need not only speed, but a timely start. Merichem Company has a proven track record
of providing hydrocarbon treating solutions that meet the stringent timelines of our customers. Get your
treating project off to a timely start by choosing Merichem Company as your technology licensor.
Midstream Solutions
Proven Results
Think Fast...Think Merichem
Midstream Solutions with Industry-Leading Speed to Market
Merichem Companyís portfolio of midstream treating technologies
includes our patented FIBER FILM
Æ Contactor that offers a variety of
caustic, amine and acid treating processes. Merichem also offers
solutions for gas treating, including our patented LO-CAT
Æ wet scrubbing,
liquid redox system that converts H2S to innocuous, elemental sulfur. In
addition to our large portfolio of licensed treating technologies,
Merichem offers industry leading spent caustic management services that
utilize Beneficial Reuse options to create a non-waste solution for your
spent caustics. For fast, effective treating solutions, choose Merichem.
www.merichem.com | 5455 Old Spanish Trail | Houston, Texas 77023 | 713.428.5000
Æ
Merich_OGJ_140324 1 3/17/14 3:25 PM
International Petroleum News and Technology | www.ogj.com
EDITORIAL
NEWSLETTER
STATISTICS
EDITOR’S PERSPECTIVE
GENERAL INTEREST
JOURNALLY SPEAKING
WATCHING GOVERNMENT
DIGITAL WEEKLY E D I T I O N
APR. 14, 2014 | USD 10
LKLY
D I T I O N
140414ogj_1 1 4/10/14 11:29 AM
Email: [email protected]
© 2
013
Nat
iona
l Oilw
ell V
arco
All
righ
ts r
eser
ved
D39
2005
058-
MK
T-00
8 R
ev 0
1
www.nov.com/ogj/ArtificialLift
NOV Mono PC Pumps deliver the optimum long term solution
We are empowering producers around the world to
increase oil and gas production at the lowest capital and
operating costs. Operators everywhere are benefiting from
technologically advanced solutions that deliver efficiency,
reliability and low life cycle cost. These solutions have
proven to be successful in applications ranging from heavy
crude extraction to coal bed methane (CBM).
PC Pump Solutions include:
� Wellhead Drives
� Stuffing Boxes
� Automation Controllers and Monitoring
� Downhole Pumps and Accessories
� Patented Tools and Technologies
� Pump Optimization Design Software
No matter where . . .
With thousands of installations,
producers depend on NOV Mono in
more than 200 felds around the globe.
� Albania
� Argentina
� Australia
� Botswana
� Canada
� Chad
� Colombia
� Egypt
� India
� Indonesia
� Kazakhstan
� Mexico
� New Zealand
� Oman
� Panama
� Suriname
� Trinidad
� United Kingdom
� United States
� Venezuela
140414ogj_2 2 4/10/14 11:29 AM
7 NEWSLETTER 12 LETTERS / CALENDAR 14 JOURNALLY SPEAKING 16 EDITORIAL
30 ADVERTISERS’ INDEX 31 STATISTICS 34 MARKET CONNECTION
Apr. 14, 2014 | Volume 112.4aInternational Petroleum News and Technology | www.ogj.com
GENERAL INTEREST
US $10
COVERCurrent crude oil output from Statoil’s Oseberg feld
center (shown) averages about 144,000 b/d.
Production from all Oseberg installations (A, B, C,
and D platforms) fows via the OFC and the Oseberg
transport system to the onshore Sture terminal near
Bergen in western Norway. Photo from Statoil by Ole
Jørgen Bratland.
18 Move carefully on crude exports, refiner urges House subcommittee
Nick Snow
Tight oil formations have helped the US increase its crude production dramatically, an independent refiner conceded.
19 API report unveils economic gains from US crude exports
20 Scott links South Atlantic OCS bill, jobs growth plan
Nick Snow
22 Mathanex methanol plant completes move to Louisiana
22 Moody’s: Global refining, marketing industry to see earnings rise this year
23 EIA: Ethanol spot prices rise on rail congestion, cold weather
24 USCG: ‘Chain of errors’ led to Shell drilling unit running aground
Michael T. Slocum
26 WATCHING GOVERNMENT Greenland in transition
28 Anadarko settles legacy claims against Kerr-McGee for $5.15 billion
Nick Snow
29 EDITOR’S PERSPECTIVE Exchange in Senate committee
displays energy misconception
140414ogj_3 3 4/10/14 11:30 AM
OF THE
FUTUREWAVE
NEXT GENERATION LINE PIPE. FlexSteel is the clear
pipeline choice for salt water applications with cyclic
operating pressures. Its innovative steel-reinforced
spoolable design delivers solid performance and
extreme corrosion resistance, without having to be
de-rated over time. Choose FlexSteel because pipeline
failure is never an option.
Learn more at flexsteelpipe.com.
Corrosion
Resistant
Shield
Corrosion
Resistant
Liner
Steel
Reinforcements
2"–8", up to 3,000 psi
140414ogj_4 4 4/10/14 11:30 AM
OGJ®
Copyright 2014 by PennWell Corporation (Registered in U.S. Patent & Trademark Offce). All rights reserved. Oil & Gas Journal or any part thereof may not be reproduced, stored in a retrieval system, or transcribed in any form or by any means, electronic or mechanical, including photocopying and recording, without the prior written permission of the Editor. Permission, however, is granted for employees of corporations licensed under the Annual Authorization Service offered by the Copyright Clearance Center Inc. (CCC), 222 Rosewood Drive, Danvers, Mass. 01923, or by calling CCC’s Customer Relations Department at 978-750-8400 prior to copying. Requests for bulk orders should be addressed to the Editor. Oil & Gas Journal
(ISSN 1944-9151) is published 12x per year - monthly the frst Monday of each month in print and other Mondays in digital form by PennWell Corporation, 1421 S. Sheridan Rd., Tulsa, Okla., Box 1260, 74101. Periodicals postage paid at Tulsa, Okla., and at additional mailing offces. Oil & Gas Journal and OGJ are registered trademarks of PennWell Corporation. POSTMASTER: send address changes, letters about subscription service, or subscription orders to P.O. Box 3497, Northbrook, IL 60065, or telephone (800) 633-1656. Change of address notices should be sent promptly with old as well as new address and with ZIP code or postal zone. Allow 30 days for change of address. Oil & Gas Journal is available for electronic retrieval on Oil & Gas Journal Online (www.ogj.com) or the NEXIS® Service, Box 933, Dayton, Ohio 45401, (937) 865-6800. SUBSCRIPTION RATES in the US: 1 yr. $89; Latin America and Canada: 1 yr. $94; Russia and republics of the former USSR, 1 yr. 2,200 rubles; all other countries: 1 yr. $129, 1 yr. premium digital $59 worldwide. These rates apply only to individuals holding responsible positions in the petroleum industry. Single copies are $10 each except for 100th Anniversary issue which is $20. Publisher reserves the right to refuse non-qualifed subscriptions. Oil & Gas Journal is available on the Internet at http://www.ogj.com. (Vol. 112, No. 4a) Printed in the US. GST No. 126813153. Publications Mail Agreement Number 602914. Return Undeliverable Canadian Addresses to: P.O. Box 1632, Windsor, ON N9A 7C9.
ADVERTISING SALES
US SalesMike Moss, (713) 963-6221, [email protected]. Mark Gates, (713) 963-6237, [email protected]. Stan Terry, (713) 963-6208, [email protected]. Marlene Breedlove, (713) 963-6293, [email protected]. Roy Markum, (713) 963-6220, [email protected].
Australia / New ZealandMike Twiss, Miklin Business Services, Unit 15, 3 Benjamin Way, Rockingham, Western Australia 6168;Tel +61 8 9529 4466, Fax +61 8 9529 4488Email: [email protected] Brazil / South AmericaJim Klingele, (713) 963-6214, [email protected] 1455 West Loop South, Suite 400, Houston, TX 77027
CanadaStan Terry, (713) 963-6208, [email protected]
France / Belgium / Spain / Portugal /Southern Switzerland / MonacoDaniel Bernard, 8 allee des Herons, 78400 Chatou, France; Tel: 33(0)1.3071.1119, Fax: 33(0)1.3071.1119; E-mail: [email protected]
Germany / Austria / Northern Switzerland /Eastern Europe / Russia / Former Soviet UnionSicking Industrial Marketing, Kurt-Schumacher-Str. 16, 59872, Freienohl, Germany. Tel: 49(0)2903.3385.70, Fax: 49(0)2903.3385.82; E-mail: [email protected]; www.sicking.de <http://www.sicking.de> Andreas Sicking
IndiaRajan Sharma, Interads Limited, 2, Padmini Enclave, Hauz Khas, New Delhi-110 016, India; Tel: +91.11. 6283018/19, Fax: +91.11.6228 928; E-mail: [email protected]
ItalyFerruccio Silvera, Viale Monza, 24 20127 MILANO Italy; Tel:+02.28.46 716; E-mail: [email protected]
Japane.x.press sales division, ICS Convention Design Inc. 6F, Chiyoda Bldg., 1-5-18 Sarugakucho, Chiyoda-ku, Tokyo 101-8449, Japan, Tel: +81.3.3219.3641, Fax: 81.3.3219.3628; Kimie Takemura, Email: [email protected]; Masaki Mori, E-mail: [email protected]
Singapore / Australia / Asia-PacificMichael Yee, 19 Tanglin Road #05-20, Tanglin Shopping Center, Singapore 247909, Republic of Singapore; Tel: 65 9616.8080, Fax: 65.6734.0655; E-mail: [email protected]
United Kingdom / Scandinavia / Denmark /The NetherlandsGraham Hoyle, Regional Agent for UK, Netherlands, Scandinavia, Finland & Middle East, 10 Springfield Close, Cross, Axbridge, Somerset BS26 2FE Phone: +44 1934 733871 Mobile: +44 7927 889916 [email protected] or [email protected]
West AfricaDele Olaoye, Flat 8, 3rd Floor, Oluwatobi House, 71 Allen Ave., Ikeja Lagos, Nigeria; Tel: +234 805 687 2630; Tel: +234 802 223 2864; E-mail: [email protected]
OGJ ReprintsRhonda Brown, Foster Printing Co., Reprint Marketing Manager; 866.879.9144 ext 194, Fax: 219.561.2023;4295 Ohio Street, Michigan City, IN 46360;[email protected]. www.fosterprinting.com
PennWell1455 West Loop South, Houston, TX 77027www.ogj.com
PennWell, Houston offce1455 West Loop South, Suite 400,
Houston, TX 77027Telephone 713.621.9720/Fax 713.963.6285/
Web site www.ogjonline.comEditor Bob Tippee, [email protected] Technology Editor Warren R. True,
[email protected] Technology Editor Christopher E. Smith,
[email protected] Editor Tayvis Dunnahoe,
[email protected] Technology Editor Michael T. Slocum,
[email protected] Technology Editor Robert Brelsford,
[email protected] Editor Steven Poruban,
[email protected] Editor-Economics Conglin Xu,
[email protected] Writer Matt Zborowski,
[email protected] Editor/News Writer Leena Koottungal,
[email protected] Projects Rachael Seeley,
[email protected] Correspondent Alan Petzet,
[email protected] Correspondent Paula Dittrick,
Editorial Advisory BoardPat Dennler Motiva Enterprises LLC, Port Arthur, Tex.Doug Elliot Bechtel Hydrocarbon Technology
Solutions/IPSI (Advisor), HoustonAndy Flower Independent Consultant,
Caterham, UKMichelle Michot Foss Bureau of Economic Geology’s
Center for Energy Economics, The University of Texas (Houston)
Michael Lynch Strategic Energy & Economic Research Inc., Amherst, Mass.
Tom Miesner Pipeline Knowledge & Development, Houston
Ralph Neumann Badger Midstream Energy LPKent F. Perry RPSEA, HoustonIgnacio Quintero Chevron Pipe Line Co., HoustonBill Schlesing KBC Advanced Technologies Inc.,
HoustonJohn A. Sheffeld John M. Campbell & Co.,
Lechlade, UKAndrew J. Slaughter IHS Energy, HoustonJohn Thorogood Drilling Global Consultant LLP,
Insch, ScotlandSteven Tobias Hess Corp., HoustonShree Vikas Conoco Phillips Co., HoustonColin Woodward Woodward International Ltd.,
Durham, UK
Houston AdministrationPublisher Jim Klingele, [email protected]/Group Publishing Director
Paul Westervelt, [email protected]/Custom Publishing Roy Markum,
PennWell, Tulsa offce1421 S. Sheridan Rd., Tulsa, OK 74112 PO Box 1260, Tulsa, OK 74101 Telephone 918.835.3161 / Fax 918.832.9290Senior Art Director Michelle Gourd,
[email protected] Graphic Designer Lena Banuet,
[email protected] Editor Laura Bell, [email protected] Illustrators Mike Reeder, Kay WayneEditorial Assistant Donna Barnett,
[email protected] Director Charlie ColeProduction Manager Shirley Gamboa
Ad Services Manager Dillon Waters
WashingtonTel 703.533.1552Washington Editor Nick Snow, [email protected]
OGJ NewsPlease submit press releases via e-mail to:
Subscriber ServiceP.O. Box 2002, Tulsa OK 74101Tel 1.800.633.1656 / 918.831.9423 / Fax 918.831.9482E-mail [email protected] Circulation Manager Tommie Grigg,
PennWell Corporate Headquarters1421 S. Sheridan Rd., Tulsa, OK 74112
P.C. Lauinger, 1900-1988Chairman Frank T. LauingerPresident/Chief Executive Offcer Robert F. Biolchini
Member Audit Bureau of Circulations & American Business Media
140414ogj_5 5 4/10/14 11:30 AM
Register for this Webcast now at:
www.OGJ.com/bpwebcasts.html
What You Will Learn:
In this webcast, the last of BP’s Refning and Marketing (R&M)
webcast series, viewers will get insight into Judy Indorf’s career
as a Technical Manager at BP, as well as shed light on BP’s global
portfolio and share her experiences working on and delivering some
of BP’s most critical projects.
Judy will provide an overview of BP’s major downstream assets,
across different refneries, products and locations, whilst explaining
how BP’s downstream approach differs and why.
Guest Speaker:
Judy IndorfTechnical Manager, Toledo Refnery, BP
Wednesday April 16, 2014 9:00 am CT 2:00 pm GMT
2 Ways to Register for the Webcast:
1. Register at http://www.ogj.com/bpwebcasts.html
2. Register by scanning the QR code
A Focus on our Global PortfolioWorking and Delivering Major Projects and Career Insights
Who Should Attend:
• Process & Maintenance Engineers
• Operation Superintendents
• Mechanical & Chemical Engineers
• Strategy & Planning
• Corrosion & Reliability Engineers
• Project Managers
• Engineering Undergraduates
• Turn Around Managers
• Inspection Engineer
• Metallurgists
• Health & Safety Managers
WEBCASTR E G I S T E R N O W
140414ogj_6 6 4/10/14 1:14 PM
NewsletterOGJ®
International News for oil and gas professionals
For up-to-the-minute news, visit www.ogjonline.com
Oil & Gas Journal 7
Apr. 14, 2014
GENERAL INTEREST QUICK TA K ES
US House subcommittee forwards LNG-export billA US House Energy and Commerce Committee subcommit-
tee voted to forward a bill aimed at facilitating approvals of US
LNG exports to the full committee. The Energy and Power Sub-
committee’s action by 15 to 11 votes was along party lines, with
Republicans favoring the move and Democrats opposing it.
The subcommittee also approved an amendment to HR 6
by Rep. Bobby L. Rush (D-Ill.), the subcommittee’s ranking
minority member, which would require applicants seeking US
Department of Energy certification that their exports are in the
US national interest to publicly disclose specific destinations of
their proposed LNG sales.
The votes came hours before the Ways and Means Commit-
tee’s Trade Subcommittee was scheduled to hold a hearing on
the trade implications of removing barriers to LNG exports and
other US energy policy questions.
American Petroleum Institute Pres. Jack N. Gerard ap-
plauded the subcommittee’s action. “Today’s vote is just the lat-
est signal that momentum for action on natural gas exports is
stronger than ever,” he said, adding, “In the last few weeks, new
proposals have won bipartisan support in both the House and
Senate, and we are optimistic that members will come together
on efforts to harness the full economic and strategic power of
America’s energy exports.”
Gazprom urges Ukraine to settle accumulated debtOAO Gazprom says Ukraine needs to settle more than $2.2 bil-
lion in accumulated debt for Russian gas supplies (OGJ Online,
Mar. 5, 2014). The total includes overdue payments for March
supplies. Andrey Kobolev, chief executive officer of Naftogaz
of Ukraine, met Apr. 3 at Gazprom headquarters with Alexey
Miller, chairman of Gazprom’s management committee.
Miller also met Apr. 3 with Russia’s Prime Minister Dmitry
Medvedev. According to a transcript on Gazprom’s web site, the
natural gas price for Ukraine in April was set at $485 per 1,000
cu m. The Russian government has abolished the “zero customs
duty” for Ukraine.
Miller said Ukraine received 1.956 million cu m of gas in
March “and so far no payments have come for these supplies.”
The situation, he said, “is not improving, but only getting
worse.” Medvedev said, “I think our Ukrainian partners should
raise the necessary funds to settle the debts and pay off the
current bills.”
Laclede to acquire Alagasco for $1.6 billionLaclede Group Inc., St. Louis, has entered into an agreement
with Energen Corp. to acquire subsidiary Alabama Gas Corp.
(Alagasco) for $1.6 billion, with an effective purchase price of
$1.34 billion.
Alagasco is the largest natural gas utility in Alabama, serv-
ing more than 422,000 customers. The transaction is expected
to close this year, increasing Laclede’s customer base to 1.55
million from 1.13 million.
Laclede said that it made the acquisition in accordance with
its regulated growth strategy, including its desire to expand
outside of Missouri.
Talisman aims to divest Timor Sea assetsTalisman Energy Inc., Calgary, has placed its Timor Sea pro-
duction interests up for sale in a move to exit the Kitan and
Laminaria-Corallina oil fields as soon as a buyer is found. It has
a 25% interest in Kitan oil field, a 40.1% interest in Laminaria,
and a 33.33% hold on Corallina.
Kitan, operated by Eni SPA, lies on the northwest edge of
the Timor Gap Joint Petroleum Development Authority shared
between Australia and East Timor. It has been on stream since
2011 and has produced at rates as high as 40,000 b/d.
Oil is processed through the Bluewater Glas Dowr FPSO.
Appraisal work earlier this year saw two successful wells drilled
by the Stena Clyde semisubmersible rig at Kitan South and Ki-
tan-6. It is thought the field still contains 20 million bbl of oil.
Laminaria-Corallina oil fields, operated by Woodside Pe-
troleum Ltd., also are in the northwestern Timor Sea, but in
Australian waters.
The fields have been on stream since 1999 and have pro-
duced about 200 million bbl of oil since then. However the
fields are in decline and recent production rates had fallen to
3,400 b/d.
Production is through the Northern Endeavour FPSO.
Talisman is conducting a planned divestment of select capi-
tal-intensive assets around the world.
140414ogj_7 7 4/10/14 1:27 PM
Apr. 7 Apr. 8Apr. 4Apr. 3Apr. 2
WTI CUSHING / BRENT SPOT
$/bbl
107.00
106.00
105.00
104.00
102.00
101.00
100.00
99.00
$/bbl
107.00
106.00
105.00
104.00
102.00
101.00
100.00
99.00
NYMEX NATURAL GAS / SPOT GAS - HENRY HUB
ICE GAS OIL / NYMEX HEATING OIL
NYMEX GASOLINE (RBOB)2/ NY SPOT GASOLINE3
ICE BRENT / NYMEX LIGHT SWEET CRUDE
PROPANE - MT. BELVIEU / BUTANE - MT. BELVIEU
¢/gal
296.00
293.00
290.00
287.00
284.00
281.00
278.00
275.00
¢/gal
127.00
126.00
125.00
124.00
108.00
107.00
106.00
105.00
¢/gal
300.00
295.00
290.00
285.00
280.00
275.00
270.00
265.00
4.550
4.500
4.475
4.450
4.425
4.400
4.375
4.350
1Not available 2Reformulated gasoline blendstock for oxygen blending3Nonoxygenated regular unleaded
$/MMbtu
Apr. 7 Apr. 8Apr. 4Apr. 3Apr. 2
Apr. 71 Apr. 81Apr. 41Apr. 31Apr. 21
Apr. 7 Apr. 8Apr. 4Apr. 3Apr. 2
Apr. 7 Apr. 8Apr. 4Apr. 3Apr. 2
Apr. 7 Apr. 81Apr. 4Apr. 3Apr. 2
Apr. 13 May. 13 Jun. 13 Dec. 13 Feb. 14Jan. 14Feb. 13 Mar. 13 Sept. 13 Nov. 13Oct. 13Jul. 13 Aug. 13
1,400
2,000
1,800
2,200
1,600
300
500
700
100
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
600
300
0
3,736
3,362
374
Note: End of week average countNote: End of week average count
BAKER HUGHES RIG COUNT: US / CANADA
Note: Monthly average count
235
1,818
2/21/142/21/143/8/133/8/13 3/22/133/22/13 4/5/134/5/131/25/131/25/13
2/15/132/15/13 3/1/133/1/131/18/131/18/13 2/1/132/1/13 2/14/143/15/13 3/29/13 2/28/14 3/14/14 3/28/141/17/14 1/31/14
2/22/132/8/13 3/7/14 3/21/14 4/4/141/24/14 2/7/14
206
1,738
8 Oil & Gas Journal | Apr. 14, 2014
US INDUSTRY SCOREBOARD — 4/14
Motor gasoline 8,794 8,468 3.8 8,462 8,430 0.4 Distillate 3,782 3,758 0.6 3,778 3,671 2.9 Jet fuel 1,449 1,365 6.2 1,401 1,348 3.9 Residual 252 424 (40.6) 265 315 (15.9)Other products 4,290 4,535 (5.4) 4,837 4,708 2.7 TOTAL PRODUCT SUPPLIED 18,567 18,550 0.1 18,743 18,472 1.5
Supply, 1,000 b/d
Crude production 8,195 7,153 14.6 8,125 7,081 14.7 NGL production2 2,615 2,414 8.3 2,677 2,471 8.3 Crude imports 7,267 7,735 (6.1) 7,343 7,755 (5.3)Product imports 1,804 1,795 0.5 1,743 1,908 (8.6)Other supply2 3 2,299 1,920 19.7 2,153 1,935 11.3 TOTAL SUPPLY 22,180 21,017 5.5 22,041 21,150 4.2 Net product imports (1,893) (1,152) — (1,929) (1,121) —
Refining, 1,000 b/d
Crude runs to stills 15,086 15,193 (0.7) 15,292 15,007 1.9 Input to crude stills 15,378 14,961 2.8 15,590 15,340 1.6 % utilization 86.3 84.0 — 87.5 88.1 —
4 wk. 4 wk. avg. Change, YTD YTD avg. Change,Latest week 3/28 average year ago1 % average1 year ago1 %
Product supplied, 1,000 b/d
Latest Previous Same week Change,Latest week 3/28 week week1 Change year ago1 Change %Stocks, 1,000 bbl
Crude oil 380,092 382,471 (2,379) 388,624 (8,532) (2.2)Motor gasoline 215,624 217,198 (1,574) 220,664 (5,040) (2.3)Distillate 112,955 112,401 554 112,986 (31) (0.0)Jet fuel–kerosine 35,620 36,547 (927) 39,442 (3,822) (9.7)Residual 36,486 37,290 (804) 35,817 669 1.9
Stock cover (days)4 Change, % Change, %
Crude 25.2 25.4 (0.8) 26.6 (5.3)Motor gasoline 24.5 24.9 (1.6) 26.1 (6.1)Distillate 29.9 30.2 (1.0) 30.1 (0.7)Propane 22.7 21.0 8.1 27.1 (16.2)
Futures prices5 34/4 Change Change %
Light sweet crude ($/bbl) 100.47 100.40 0.1 96.24 4.23 4.4 Natural gas, $/MMbtu 4.38 4.43 (0.1) 3.98 0.40 10.1
1Based on revised figures. 2OGJ estimates. 3Includes other liquids, refinery processing gain, and unaccounted for crude oil. 4Stocks divided by average daily product supplied for the prior 4 weeks. 5Weekly average of daily closing futures prices.Source: Energy Information Administration, Wall Street Journal
140414ogj_8 8 4/10/14 1:27 PM
Oil & Gas Journal | Apr. 14, 2014 9
EXPLORATION & DEVELOPMENT QUICK TA K ES
GeoPark makes oil discovery in ColombiaGeoPark Ltd. reported the successful drilling and testing of the
Aruco 1 exploration well on the Llanos Block 34 in the central
Llanos basin in Colombia.
A test conducted with an electrical submersible pump in the
Guadalupe formation, at a total depth of 10,075 ft, resulted in
a gross production rate of 1,154 b/d of 16.8° gravity oil. The
well flowed with 4.8% water cut through a 42/64-in. choke and
wellhead pressure of 193 psi. The company said further pro-
duction history will be required to determine stabilized flow
rates and the extent of the reservoir.
The Aruco discovery is GeoPark’s sixth oil discovery on
Llanos Block 34. Since acquiring the block in 2012 with no
production or reserves, the company has increased production
on the block to more than 15,000 b/d gross and more than
6,700 b/d net (OGJ Online, July 11, 2012; Mar. 27, 2013; June
17, 2013).
“We have an ambitious risk-balanced work plan for 2014
with 50-60 new wells, with the objective of continuing to build
an attractive and enduring upstream business in the high-
potential Latin American hydrocarbon market,” said James F.
Park, GeoPark chief executive officer.
GeoPark, operator of Llanos Block 34, holds 45% working
interest.
Large seismic survey starts offshore NorwayCGG has begun shooting the largest broadband multiclient
seismic survey it has conducted in Northwest Europe and what
it calls the largest multiclient 3D survey ever shot by any com-
pany offshore Norway.
The 19,000-sq km survey will cover more than 80 produc-
tion licenses in the North Sea between the Horda platform in
the southeast to the Sogn graben in the north. The area covers
all of Quadrant 35 and parts of Quadrants 31, 32, and 36, in-
cluding the Troll, Brage, Fram, and Gjoa licenses.
Responding to increased exploratory interest due to recent
discoveries in the Horda area, the survey aims to provide a
large, uniform dataset with increased seismic resolution, CGG
said.
Data acquisition by the Viking Vanquish seismic vessel, to
be joined later by a second vessel, will continue into 2015.
OMV, Murphy acquire blocks offshore NamibiaOMV AG and Murphy Luderitz Oil Co. Ltd. have acquired 65%
interest in Blocks 2613A and 2613B offshore Namibia from Bra-
zil’s Cowan Petroleum.
Murphy will operate the joint venture with 40% interest,
OMV will hold 25%, Cowan will retain 20%, and the remaining
15% will be held by Namibian national oil company Namcor.
The joint venture partners will conduct an extensive 3D
seismic program starting in the second quarter.
“Offshore Namibia offers great exploration potential as it
is largely unexplored, yet has all the elements of an effective
hydrocarbon system. The transaction is fully in line with our
growth strategy and our focus on the North Sea region, Black
Sea, and opportunities like these in Sub-Saharan Africa,” said
Jaap Huijskes, OMV executive board member responsible for
exploration and production.
OMV acquired interests in Madagascar and Gabon in 2013
(OGJ Online, Aug. 30, 2013; Dec. 18, 2013).
DRILLING & PRODUCTION QUICK TA K ES
Shell starts crude oil exports from Majnoon fieldRoyal Dutch Shell PLC has exported its first shipment of crude
from Iraq’s Majnoon field after surpassing its initial commer-
cial production target. The field, operated in conjunction with
South Oil Co., Malaysia’s Petronas, and Missan Oil Co., is pro-
ducing 210,000 b/d, said Shell.
The milestone comes just 8 months after Majnoon produc-
tion was restarted by the partners following major overhauls,
including clearing war munitions, upgrading safety standards,
and building a greenfield central processing plant that will al-
low increased capacity. Shell said it drilled 18 wells in that time.
“The lifting of Shell’s first oil shipment from Majnoon has
great significance to us and our partners in the [Iraqi] govern-
ment as it is a testimony to our shared progress and signals the
start of Majoon’s long-term journey toward generating further
revenue for Iraq’s economy, and as an investment in Iraq’s fu-
ture,” said Shell Iraq Vice-Pres. and Chairman Hans Nijkamp.
In 2010, Iraq’s Ministry of Oil signed a 20-year contract with
Shell and its partners for the development of Majnoon field, one
of the largest oil fields in the world. (OGJ Online, Jan. 18, 2010).
Shell owns a 45% stake, Petronas 30%, and Missan 25%.
The consortium targets a production plateau of 1.8 million
b/d of oil from its Majnoon operations.
Statoil starts production from Gudrun fieldStatoil ASA and partners have started oil and natural gas pro-
duction from Gudrun field in the Norwegian North Sea (OGJ
Online, Sept. 28, 2011).
Gudrun is the first new Statoil-operated platform to come on
stream on the Norwegian continental shelf since 2005. “This is
a red-letter day for the company,” said Arne Sigve Nylund, an
executive vice-president.
Gudrun field lies in PL025 about 55 km north of the Sleipner
installations. The platform will produce from seven production
wells. Statoil expects to recover 184 million boe.
Statoil has 51%. GDF Suez E&P Norge has 25% and OMV
Norge AS 24%.
Gudrun has a process facility for partial stabilization of oil
and gas, which are transported to the Sleipner A platform. The
oil is routed to Karsto, while the gas goes to European markets
through gas pipelines tied in to Sleipner.
Some 112 km of pipeline have been laid, along with a 55-km
power cable on the seabed between Gudrun and Sleipner.
140414ogj_9 9 4/10/14 1:27 PM
10 Oil & Gas Journal | Apr. 14, 2014
The reservoir is at a depth of 4,200-4,700 m and originates
from the Jurassic. Gudrun was discovered in 1975. Statoil said
the “high temperature-high pressure field” required new drill-
ing technology, which was “one of the reasons why these re-
serves were left in the bank for such a long time.”
Statoil farms out interest in block off AngolaStatoil ASA has agreed to farm out a 15% interest in Block 39 of
the Kwanza presalt basin offshore Angola to WRG Angola Block
39 Ltd. (WRG). The deal is subject to approval by Sonangol EP,
the Angolan minister of petroleum, and the license partners,
according to the company.
Statoil operates Block 39 and retains a 40% interest after the
farmout. The remaining interest is held by Sonangol (30%) and
Total SA (15%) in addition to the interest held by WRG.
“This is part of Statoil’s active portfolio management,” said
Gareth Burns, senior vice-president for exploration strategy
and business development.
According to Statoil, the Angolan continental shelf is the
largest contributor to its oil production outside Norway. An-
gola yielded about 200,000 boe/d in equity production in 2013,
about 28% of the company’s total international oil and gas pro-
duction.
Statoil says it will start drilling in its Kwanza-operated port-
folio during this year’s second quarter, with Dilolo-1 becoming
the first high-impact prospect drilled on Block 39. After Dilolo,
Statoil will operate its second commitment well on Block 38.
WRG acquired 15% interest in the Statoil-operated Block 38
from Sonangol. Following the acquisition, Statoil still holds a
55% interest with the remaining 30% held by Sonangol.
WRG is a 50-50 joint venture of White Rose Energy Ven-
tures and Genel Energy PLC.
PROCESSING QUICK TA K ES
CNPC, Shell strengthen global cooperationChina National Petroleum Corp. (CNPC) and Royal Dutch
Shell PLC have reached an agreement to deepen their strategic
partnership by increasing cooperation in the development of
both companies’ global projects.
The agreement—China Petroleum & Shell Global Coopera-
tion Agreement—was signed by the two companies Apr. 8 in
Beijing, according to CNPC.
Under the deal, CNPC and Shell have agreed, on a global
scale, to strengthen long-term mutually beneficial cooperation
in the development of unconventional resources, deep water,
LNG, and other upstream and downstream businesses, accord-
ing to CNPC.
Shell and CNPC previously signed a Global Alliance Agree-
ment to jointly pursue opportunities internationally and in
China. The two parties also signed an agreement to establish a
well manufacturing joint venture (50% CNPC and 50% Shell)
(OGJ Online, Mar. 20, 2012).
Chevron launches Gulf Coast petchem projectChevron Phillips Chemical Co. LP has broken ground on its
US Gulf Coast petrochemicals project at the company’s existing
Cedar Bayou plant in Baytown, Tex.
A groundbreaking ceremony held on Apr. 2 marked the start
of construction for the project, which was sparked by increased
shale resource development, the company said.
First announced in March 2011 (OGJ Online, Mar. 29, 2011),
the Texas Gulf coast project will include a 1.5-million tonne/year
ethane cracker to be built at the Cedar Bayou plant in Baytown,
and two 500,000-tpy polyethylene plants to be constructed in
Old Ocean, Tex. (OGJ Online, Nov. 20, 2013; May 2, 2012).
The engineering, procurement, and construction phase of
the ethane cracker project will be executed through a joint ven-
ture of JGC (USA) Inc. and Fluor Enterprises Inc., while Gulf
Coast Partners—a partnership of Technip USA Inc. and Zachry
Industrial Inc.—will execute EPC for the two polyethylene
plants, Chevron Phillips Chemical said.
Chevron Phillips Chemical will host a groundbreaking for
the polyethylene units on June 17.
The estimated completion date for the project is in 2017, ac-
cording to the company.
Contracts inked for Egyptian petchem complexCarbon Holdings Ltd. (CHL) of Egypt has let contracts for en-
gineering, procurement, construction, and commissioning
(EPCC) activities related to the development of its Tahrir petro-
chemical complex planned at Ain Sokhna, Egypt (OGJ Online,
Oct. 19, 2010).
The contracts, awarded to a consortium consisting of Maire
Tecnimont SPA, Milan, and Netherlands-based Archirodon
Group NV, were signed during an Apr. 6 ceremony in Cairo,
Maire Tecnimont said.
The EPCC contracts, awarded on a direct-negotiation basis,
are valued at $1.7-1.95 billion, 50% of which will go to Maire
Tecnimont, the company said.
Maire Tecnimont’s scope of work will consist in EP activities
for a utilities island, seawater desalination system, wastewater
treatment, power plant, and auxiliary packages and systems, as
well as in the commissioning of all related services.
Archirodon’s scope of work under the contract will cover
EPC supply of sea works, tanks, jetty works, and pipelines, in-
cluding construction activities for all associated structures, ac-
cording to Maire Tecnimont.
Financial close the project is scheduled to take place by
yearend, Maire Tecnimont said.
CHL previously awarded contracts for work on the Tahrir
petrochemical complex to Foster Wheeler USA Corp. and Uni-
vation Technologies for project management consultancy and
polyethylene process technology, respectively (OGJ Online,
Oct. 19, 2010).
Most recently, in November 2013, CHL let a $500 million
contract to GE to provide technology and equity support to
the greenfield naphtha cracker and olefins complex at Tahrir,
140414ogj_10 10 4/10/14 1:27 PM
Oil & Gas Journal | Apr. 14, 2014 11
including aero-derivatives gas turbines, steam turbines, gen-
erators, water filtration and desalination equipment, turbo ma-
chinery compressors, and industrial solutions services, GE said
in a Nov. 18, 2013, release.
Once completed, the Tahrir complex, which will be at the
entry of the Suez Channel, will have a combined ethylene and
propylene production capacity of 1.36 million tonnes/year,
making it the world’s largest naphtha liquid cracker, says GE.
Set to generate annual revenue of $6 billion, the Tahrir proj-
ect additionally will strengthen Egypt’s overall annual exports
by over 25%, said Basil El-Baz, chairman and chief executive
officer of Carbon Holdings, in November 2013.
Azure Midstream starts up Haynesville gas plantAzure Midstream Energy LLC, Houston, has started up its
10-MMcfd Fairway gas processing plant in San Augustine
County, Tex. An Azure Midstream spokesperson told OGJ that
the plant consists of two 5 MMcfd freon refrigeration plants.
Azure said the plant came into service on Mar. 17 and will
recover NGLs from gas produced from the James Lime forma-
tion. It will return residue gas into Azure’s East Texas Gathering
System (OGJ Online, Nov. 18, 2013) for delivery into intercon-
nections with Gulf South’s 42-in. pipeline, CenterPoint Energy
Gas Transmission’s 42-in. line near Carthage, Gulf South’s 30-
in. pipeline at Milam, and Azure’s interconnection with Natural
Gas Pipeline Co. of America in Nacogdoches County, Tex.
NGLs recovered at the Fairway plant will move by truck to
fractionation in East Texas, South Louisiana, or Mont Belvieu.
The James Lime formation in the Haynesville shale in East
Texas has rich associated gas that requires processing to re-
move the heavy end of the produced gas stream. The announce-
ment said that olume growth for the central portion of Azure’s
gathering system, where many of the company’s customers are
drilling, has resulted in the need for additional gathering.
Azure Midstream operates more than 1,300 miles of pipe-
lines, 16,000 hp of compression, 2.4 bcf of gas treating, and
natural gas throughput of more than 1.1 bcfd.
TRANSPORTATION QUICK TA K ES
Aussie LNG projects reach respective milestonesTwo of Australia’s largest LNG projects reached significant
milestones.
The first hull block of the Inpex Group’s Ichthys LNG proj-
ect’s central processing facility (CPF) has been laid down at the
Samsung Heavy Industry Geoje Shipyard in South Korea.
The CPF, which will be the world’s largest semisubmersible
platform when completed in 2015, will gather gas from the Ich-
thys field in the Browse basin offshore Western Australia. Ex-
tracted condensate will be sent to a nearby floating storage and
offloading vessel while the processed gas will be piped 890 km
to the Darwin LNG processing plant.
The CPF will have topside dimensions of 150 m by 110 m.
Ichthys will produce 8.4 million tonnes/year of LNG from
2016. It will also produce and sell 100,000 b/d of condensate
and 1.6 million tpy of LPG at its peak.
Separately, onshore Queensland, the final three prefabri-
cated modules for the Santos Ltd.-operated Gladstone LNG
(GLNG) project have arrived on site at Curtis Island.
The Train 1 facility comprises 82 modules and it has taken 2
years to construct and transport these components to the LNG
plant. The final three modules are all cryogenic modules weigh-
ing a total of 2,777 tonnes.
The GLNG project will produce 7.8 million tpy of LNG with
first production scheduled for 2015.
Deals advance plans for FSRU off Puerto RicoExcelerate Energy, Houston, and the Puerto Rico Electric Power
Authority have executed agreements for the procurement, con-
struction, and operation of the Aguirre Offshore GasPort LNG
terminal off the southern coast of the country, the firm said.
The agreements include the provision of one of Excelerate’s
floating storage and regasification units (FSRU) specifically de-
signed to provide closed-loop regasification, together with the
design, construction, and operation of an offshore terminal for
berthing the FSRU and the reception and transfer of LNG from
carriers of various sizes.
The terminal, off Puerto Rico’s southern coast near the town
of Salinas, would provide fuel to the Aguirre central complex
and underpin the conversion of power generation from import-
ed oil to natural gas.
The Central Aguirre Power Complex will convert 900 Mw
of existing power generation to be dual-fueled, capable of using
No. 2 diesel or natural gas or both as primary fuel (OGJ Online,
Apr. 19, 2013).
The project is in the approval process in the US Federal
Energy Regulatory Commission, and Excelerate expects it to
receive its draft environmental impact statement next month.
Pending FERC approval, Excelerate said, construction could
begin in this year’s fourth quarter.
South Africa okays Oiltanking crude terminalThe government of South Africa has granted Oiltanking MOGS
Saldanha RF Pty. Ltd. (OTMS), a joint venture of OTGC Hold-
ings Pty. Ltd. and MOGS Pty. Ltd., environmental authorization
for a 13.2-million bbl commercial crude oil blending and stor-
age terminal, comprising twelve in-ground concrete tanks, at
Saldanha Bay. Eight specialist studies occurred over 2 years as
part of the environmental impact assessment.
OTMS also conducted a marine oil pollution control study
to ensure any and all environmental risks are adequately un-
derstood and addressed. This study was not required as part of
environmental approval.
The 12 tanks have a layer underneath them that will collect
oil in the event of a leak and relay it to an underground collec-
tion point for redirection to a nonleaking tank. OTMS says this
layer will be continuously monitored.
140414ogj_11 11 4/10/14 1:27 PM
12 Oil & Gas Journal | Apr. 14, 2014
2014-2015 EVENT CALENDAR
Symposium, Houston,
website: www.spe.org/
events/calendar/ 19-21.
Flame–Europe’s Lead-
ing Natural Gas & LNG
Conference, Amster-
dam website: http://
www.icbi-flame.com/
FKN2382OGJW 19-22.
API Spring Refin-
ing and Equipment
Standards Meeting,
Orlando, website: www.
api.org/events-and-
training/calendar-of-
events/2014/spring-
refining 19-23.
API Spring Operating
Practices Symposium,
Orlando, website:
http://www.api.org/
events-and-training/cal-
endar-of-events/2014/
springops 20.
TGC Turkmenistan
Gas Congress, Avaza,
Turkmenbashi, web-
site: http://www.turk-
menistangascongress.
com/conference-
delegate-booking-form
20-21.
Advanced Contract
Risk Management for
Oil & Gas Summit,
Houston, website:
http://www.contrac-
triskmanagement.us/
20-21.
DUG Permian Basin
Conference, Fort
Worth, Texas, website:
http://www.dugperm-
ian.com/?gclid=CN30i
PKenL0CFRQV7AodTm
4A4A 20-22.
International Confer-
ence on Petroleum
Data, Integration &
Data Management,
Houston, website:
http://www.pnecconfer-
ences.com/index.html
20-22.
afpm.org, website:
www.afpm.org/Confer-
ences 14-15.
GPA Europe Techni-
cal Meeting, Leiden,
website: https://www.
gpaeurope.com/event-
details.aspx?event=32
14-16.
IADC Drilling Onshore
Conference & Exhibi-
tion, Houston, website:
http://www.iadc.org/
event/drilling_on-
shore_2014/ 15.
World Fuel Oil
Summit VII, Athens,
website: http://www.
worldfueloilsummit.
com/ 15-17.
IOGCC Midyear Issues
Summit, Biloxi, Miss.,
website: www.iogcc.
state.ok.us/events
18-20.
MEPIPES Oil and Gas
Pipelines in the Middle
East Conference, Abu
Dhabi, website: www.
theenergyexchange.
co.uk/event/oil-and-
gas-pipelines-middle-
east-2014. 18-21.
SPE High CO2 and H
2S
Gas Fields Develop-
ment Completions and
Productions Operations
Forum, Bali, website:
http://www.spe.org/
events/14fsap/ 18-23.
SPE Hydrocarbon Eco-
nomics and Evaluation
Conference, Hous-
ton, website: http://
www.spe.org/events/
hees/2014/ 19-20.
World XTL Summit,
London, website: http://
www.cwcxtl.com/
19-21.
SPE Hydrocarbon Eco-
nomics and Evaluation
BBTC International
Bottom of the Barrel
Technology Confer-
ence, Lisbon, website:
http://www.europetro.
com/en/bbtc_2014
8-9.
SPE International Con-
ference and Exhibition
on Oilfield Corrosion,
Aberdeen, website:
www: www.spe.org/
events 12-13.
Deloitte Energy Confer-
ence, National Harbor,
Md., website: https://
www.deloitte.com/view/
en_US/us/Events-De
loitte/9de451a76d3
64410VgnVCM3000
003456f70aRCRD.
htm?oper=REG 13-14.
Eastern Oil & Gas Con-
ference & Trade Show,
Pittsburgh, website:
http://www.pioga.org/
event/2014-eastern-oil-
gas-conference-and-
trade-show/ 13-14.
International School of
Hydrocarbon Measure-
ments, Oklahoma City,
website: http://www.
ishm.info/ 13-15.
Uzbekistan Inter-
national Oil & Gas
Conference, Tash-
kent, website: http://
www.oguzbekistan.
com/2013/about-con-
ference.html 13-15.
SPE International
Conference and Exhibi-
tion on Oilfield Scale,
Aberdeen, website:
www: www.spe.org/
events 14-15.
AFPM National Oc-
cupational & Process
Safety Conference and
Exhibition, San Anto-
nio, (202) 457-0480,
(202) 457-0486 (fax),
e-mail: meetings@
Small-Mid Scale LNG
Summit, Amsterdam,
website: http://www.
smallmidlng.com/
29-30.
Smart Grids Summit,
Malaga, website: http://
thesmartgridssummit.
com 29-30.
MAY 2014
API International Oil
Spill Conference, Sa-
vannah, website: www.
api.org/events-and-
training/calendar-of-
events/2014/iosc2014
5-8.
OTC Offshore Technol-
ogy Conference, Hous-
ton, website: www.
otcnet.org 5-8.
Annual East Texas
Energy Symposium,
Kilgore, Texas, website:
www.easttexasoilmu-
seum.com 6.
International Down-
stream Technology &
Strategy Conference,
Lisbon, website: http://
www.europetro.com/
en/idtc_2014 6-7.
PSIG Annual Meeting,
Baltimore, website:
http://www.psig.org/
6-9.
Morocco Oil & Gas
Summit, Marrakesh,
website: http://moroc-
cosummit.com 7-8.
Four Corners Oil & Gas
Conference, Farming-
ton, N.M., website:
http://www.fourcorner-
soilandgas.com/regis-
tration.html 7-8.
GPA MidContinent An-
nual Meeting, Midwest
City, Okla., website:
www.gpaglobal.org 8.
Russia & CIS Bottom of
the Barrel Technology
Conference & Exhibi-
tion, Moscow, website:
http://www.europetro.
com/en/rusbbtc_2014
22-23.
Texas Alliance Expo
and Annual Meeting,
Wichita Falls, website:
http://texasalliance.
org/event/alliance-
expo-annual-meeting/
22-23.
Annual Utica & Mar-
cellus Infrastructure
Development Summit,
Pittsburgh, website:
http://infocastinc.com/
events/utica/?gclid=CP
jrzPWnnL0CFUVp7Aod-
wGsAzA 22-24.
CIS Oil&Gas Summit,
Baku, www.theenergy-
exchange.co.uk/event/
cis-oil-gas-summit
22-24.
USEA Annual Mem-
bership Meeting &
Public Policy Forum,
Washing, DC, website:
http://www.usea.org/
event/2014-usea-
annual-membership-
meeting-public-policy-
forum 23.
OpEx Operational
Excellence in Oil &
Gas & Petrochemicals
Conference, Moscow,
website: http://www.
europetro.com/en/ruso-
pex2014 24-25.
AIPN Spring Confer-
ence, New York City,
website: http://aipn.org/
Events/SC2014.aspx
27-29.
M2M for Oil and Gas
Conference, London,
website: www.smi-
online.co.uk/energy/
uk/conference/m2m-
security 28-29.
Denotes new listing or
a change in previously
published information.
APRIL 2014
SPE Improved Sym-
posium Oil Recovery,
Tulsa, website: www.
spe.org/events 12-16.
Annual Middle East
Petroleum & Gas
Conference, Dubai,
website: http://ow.ly/
sEnqi 13-15.
Petchem Arabia Confer-
ence, Sofitel, website:
www.wraconferences.
com/event/petchem-
arabia-2014 13-16.
MEDW Middle East
Downstream Week,
Sofitel, website: www.
wraconferences.com/
event/middle-east-
downstream-week
13-16.
GPA Annual Conven-
tion, Dallas, (918) 493-
3872, (918) 493-3875
(fax), e-mail: pmirkin@
gpaglobal.org, website:
www.gpaglobal.org
13-16.
SPE Oilfield Water
Management Confer-
ence and Exhibition,
Kuwait City, website:
www.spe.org/events/
wmce/2014/ 14-16.
SPE Western North
American and Rocky
Mountain Joint Confer-
ence, Denver, website:
www.spe.org/events/
calendar/ 17-18.
SPE-SAS Annual
Technical Symposium
& Exhibition, Al Kobar,
website: http://spesas.
org/atse/ 21-24.
140414ogj_12 12 4/10/14 11:30 AM
Oil & Gas Journal | Apr. 14, 2014 13
2014-2015 EVENT CALENDAR
AFPM Annual Meeting,
San Antonio, (202)
457-0480, (202)
457-0486 (fax), e-mail:
meetings@afpm.
org, website: www.
afpm.org/Conferences
20-23.
AFPM Reliability &
Maintenance Confer-
ence and Exhibition,
San Antonio, (202)
457-0480, (202)
457-0486 (fax), e-mail:
meetings@afpm.
org, website: www.
afpm.org/Conferences
20-23.
International LNG
in B.C. Conference,
Vancouver, website:
http://engage.gov.
bc.ca/lnginbc/lng-
conference/ 21-23.
SPE Latin American
and Caribbean Petro-
leum Engineering Con-
ference, Maracaibo,
website: www.spe.org/
events 21-23.
GPA Permian Basin
Annual Meeting,
Odessa, website: www.
gpaglobal.org. 22.
New Libya Oil & Gas
Summit, London, web-
site: http://libyaoilgas.
com 29-30.
JUNE 2014
SPE Exploitation of
Tight Carbonates
Forum, San Diego, web-
site: http://www.spe.
org/events/14fus2/ 1-6.
Annual Mining Ameri-
cas Summit, Denver,
website: http://www.
miningamericas.com/
2-3.
Annual International
Operating Confer-
ence & Trade Show,
Houston, website:
http://www.ilta.org/
CalendarofEvents/
AOCTS/2014/2014info.
htm 2-4.
Annual Unconventional
Gas & Oil Conference,
London, website: http://
www.oilandgasuncon-
ventional.com/ 2-5.
International Caspian
Oil & Gas Exhibition
& Conference, Baku,
website: http://www.
caspianoil-gas.com/
3-6.
PIRA Canadian Energy
Conference, Calgary,
Alta, website: www.
pira.com 4.
Annual Ireland Oil &
Gas Summit, Dublin,
website: http://ireland-
summit.com 4-5.
GTL North America
Conference, Hous-
ton, website: www.
gtlnorthamerica.com
4-5.
Tulsa Oilfield Expo,
Tulsa, website: http://
www.tulsaoilfieldexpo.
com 4-5.
SPE London Annual
Conference, London,
website: http://www.
spe.org/events/
lond/2014/ 4-5.
Latin American Leader-
ship Forum, Cartagena,
website: http://www.
cg-la.com/forums 4-6.
IPAA OGIS Toronto
Meeting, Toronto,
Ont., website: http://
www.ipaa.org/
meetings-events/event-
details/?mid=308 5.
SPEE Annual Meet-
ing, Stowe, Vermont,
website: https://secure.
spee.org/ 7-10.
PIRA Scenario Plan-
ning Conference,
Houston, website:
www.pira.com 9.
Annual Global Procure-
ment and Supply Chain
Management for the
Oil and Gas Industry
Conference, Houston,
website: http://www.
ifmr-events.com/
marcusevans-confer-
ences-event-details.
asp?EventID=21085
9-11.
SPE Energy Resources
Conference, Port of
Spain, website: www.
spe.org/events/calen-
dar/ 9-11.
Enercom’s London Oil
& Gas Conference,
London, website: http://
www.enercominc.com/
the-london-oil-and-
gas-conference/ 10-11.
PIRA Understanding
Global Oil Markets
Conference, Houston,
website: www.pira.com.
10-11.
SPE African Health,
Safety, Security, and
Environment and Social
Responsibility Confer-
ence and Exhibition,
Nairobi, website: http://
www.spe.org/events/
hsea/2014/ 10-12.
SPE Heavy Oil
Conference-Canada in
Conjunction with GPS,
Calgary Alta., website:
www.spe.org/events/
calendar/ 10-12.
SPE Exploration and
Development in Un-
conventional Reservoir
Symposium, Neuquen,
website: www.spe.org/
events/calendar/ 10-12.
Global Petroleum Show,
Calgary, AB, website:
http://www.digitalrefining.
com/55,events,Global_
Petroleum_Show.html
10-12.
Tight & Shale Gas
Summit, Edinburgh,
website: http://www.
wplgroup.com/aci/
conferences/eu-eug3.
asp 11-12.
USEA Annual En-
ergy Efficiency Forum,
Washington, DC,
website: http://www.
eeforum.net 12.
World Petroleum
Congress, Moscow,
website: www.21wpc.
com 15-19.
Annual Lebanon Oil &
Gas Summit, Beirut,
website: http://irn-inter-
national.com 16-17.
Pipe Tech World Sum-
mit, Rome, website:
http://www.pipetech-
summit.com/ 16-18.
EAGE Conference &
Exhibition, Amsterdam,
website: http://www.
eage.org/events/index.
php?eventid=1000&Op
endivs=s3 16-19.
API Exploration and
Production Standards
Conference on Oilfield
Equipment and Materi-
als, Chicago, website:
www.api.org/events-
and-training/calendar-
of-events/2014/e-p-
standards 16-20.
EuALF SPE Aberdeen
European Artificial Lift
Forum, Aberdeen, web-
site: http://www.spe-
uk.org/default.aspx.
LocID-0a4008003.
Lang-EN.emID-965.
rss-cal.EventID-13676.
htm 17-18.
PIRA London Energy
Conference, London,
website: www.pira.com
17-18.
IADC World Drilling
Conference & Exhibi-
tion, Vienna, website:
http://www.iadc.org/
event/iadc-world-
drilling-2014-confer-
ence-exhibition-2/
18-19.
Africa Energy
Forum, Istanbul,
website: http://
africa-energy-forum.
com/ 18-20.
IPAA Midyear Meeting,
Colorado Springs,
website: www.ipaa.
org/meetings-events/
upcoming-meetings/
18-20.
PIRA Scenario Plan-
ning Conference,
London, website: www.
pira.com 19-20.
PIRA Understanding
Global Oil Markets Con-
ference, London, www.
pira.com 19-20.
Iran Oil & Gas Summit,
Abu Dubai, website:
www.iransummit.com
23-25.
Annual Energy Exposi-
tion & Symposium,
Billings, Mont., website:
http://energyexposition.
com/ 25-26.
API Tanker Conference,
Austin, website: http://
www.api.org/events-
and-training/calendar-
of-events/2014/tanker
25-26.
AAPL American’s
Landman Annual
Meeting, Montreal,
Que., website: http://
www.landman.org/
25-28.
JULY 2014
South Texas Oilfield Expo,
San Antonio, website:
http://www.southtexasoil-
fieldexpo.com/?gclid=CO
r78Mypi70CFY3m7Aode-
wEAvA 9-10.
E&P Information &
Data Management Asia
Pacific Conference,
Singapore, website:
www.smi-online.
co.uk/energy/asia/
conference/ep-
information-data-and-
knowledge-manage-
ment-asia-pacific 9-10.
SPE Well Construc-
tion Efficiency: NPT,
Reliability and Process
Improvement Forum,
Santa Fe, website:
http://www.spe.org/
events/14fus4/ 13-18.
North American Cus-
tody Transfer Measure-
ment Conference,
Denver, website: http://
www.ceesi.com/Train-
ing/CustodyTransfer-
MeasurementConfer-
ence.aspx 15-17.
SPE Low Carbon
Intensity Process
for Low-Mobility Oil
Recovery Forum, New-
port Beach, website:
http://www.spe.org/
events/14fus3/ July
27-Aug. 1.
AUGUST 2014
SPE Nigeria Annual In-
ternational Conference
& Exhibition, Lagos,
website: www.spe.org/
events/calendar 5-7.
EnerCom’s Oil & Gas
Conference, Denver,
website: http://www.en-
ercominc.com/the-oil-
and-gas-conference/
17-21.
140414ogj_13 13 4/10/14 11:30 AM
JOURNALLY SPEAKING
14 Oil & Gas Journal | Apr . 14, 2014
TAYVIS DUNNAHOEExploration Editor
Old basins, new ideasThe accepted paradigms in today’s exploration in-dustry seem obvious yet in their origins were often difficult to understand. Historically, new geologic concepts have experienced relatively slow accep-tance due to perceived high risks, unfavorable price environments, and a lack of enabling technologies.
Once proven, the resulting paradigm shift often leads to a growth in opportunity. New opportunity types introduce new questions that need answers.
“Many of the questions before us today are very similar, if not the same, to the questions we have been trying to answer for decades,” said Carlos A. Dengo, director of the Berg-Hughes Center for Petroleum and Sedimentary Systems at Texas A&M University. “Time will show us again that what we accept today to be our paradigms will be proven wrong,” he said.
Speaking at AAPG’s Annual Convention in Houston on Apr. 7, Dengo said, “Exploration suc-cess is driven by the competitive advantage of seeing first what others have not.” New resource opportunity growth resulted from applying new concepts and new innovative technologies. “But certainly we’ve also seen some paradigm shifts that can be attributed to accidental discoveries,” he said.
The discovery of the East Texas oil field in 1930 highlighted the importance of stratigraphic traps. The field has produced 7 billion bbl of oil. “At the time, many companies discounted this [strati-graphic traps] as an exploration concept. They did so because those who were exploring the area were caught in the paradigm that the only types of traps you could find were salt dome related anti-clines,” Dengo said.
Shifting continents, ideas“Plate tectonics when combined with new appre-ciation for the potential of continental carbonate reservoirs could further change the opportunity space, and this is best illustrated with the presalt examples offshore Brazil and Angola,” Dengo said.
The accepted paradigm states that as continents break up and form rifts and eventually passive mar-gin basins, the demarcation of the continental and ocean boundary is very sharp. “We had convinced ourselves that we knew where the ocean and conti-nental boundaries lie all around the world,” Dengo said. “The consequence of this paradigm, of course, is that it limited exploration plays to those areas un-derlain predominantly by continental crust.”
Recent observations based on modern geophys-
ical data, deep offshore exploration, and onshore analogs are challenging the classical concepts for the evolution of rift basins. Recent discoveries of how rift basins are formed are changing the ac-cepted paradigms about the controls and process-es that thin out continental lithosphere under rift basins. This new understanding has shown that ocean and continental boundaries are not equiva-lent everywhere around the globe. “With these new concepts, it is clear that the opportunities lie further outboard than what we previously thought with our existing paradigms,” he said.
Dengo pointed out that this new concept may be a reasonable interpretation that explains the initial rift history underlying the Tupi and other presalt discoveries offshore Brazil. Since 2007, deepwater, presalt discoveries in Brazil’s Santos basin have revolutionized offshore exploration. The following year, the complementary margin offshore Angola also led to deepwater discoveries. Brazil and Angola share a common rift history, ac-cording to Dengo. The total resource base for An-gola’s Kwanza basin is not well understood, but some analysts have estimated at least 30 billion bbl of oil in place, if not more.
New understandingRift history is initially characterized by isolated basin formation followed by the widespread deposition of salt and evaporites. “What was not fully appreciated until the Tupi discovery was the stratigraphy of the presalt section,” Dengo said. Most are now recognized as con-tinental carbonates. The paradigm for years has been that most of the world’s producing reservoirs involved marine carbonates—about 60%. For decades, Dengo said, all research was directed at understanding marine carbonate reservoir characterization, facies distribution, and physical properties. Recent discoveries off Brazil have again changed the industry’s paradigm. “We are now going back to asking the same questions we have all along,” he said. Meanwhile, he added, “There are still questions we need to keep answering if we are to continue identifying new opportunities, which should abound if we continue to shift our paradigms.”
With the example of hyperextended margins and the possibility of new reservoir types, the in-dustry is revisiting many of the passive margins around the world and this could open up addi-tional resource opportunities. The 21st century is as good a time as any to keep an open mind.
140414ogj_14 14 4/10/14 11:30 AM
OWNED & OPERATED BY: PRESENTED BY: SUPPORTED BY:
OCTOBER 14–16, 2014ABERDEEN EXHIBITION AND CONFERENCE CENTRE / ABERDEEN, SCOTLAND
WWW.DEEPOFFSHORETECHNOLOGY.COM
SAVE THE DATE!
140414ogj_15 15 4/10/14 11:30 AM
EDITORIAL
16 Oil & Gas Journal | Apr . 14, 2014
Knives, guns, and gasIn a famous scene in the 1987 movie The Un-touchables, tough cop Jimmy Malone (played by Sean Connery) colorfully illustrates the resolve needed to bring gangster Al Capone (Robert De Niro) to justice. “You want to get Capone?” Malone asks Federal Agent Eliot Ness (Kevin Costner). “Here’s how you get him: He pulls a knife; you pull a gun. He sends one of yours to the hospital; you send one of his to the morgue. That’s the Chi-cago way, and that’s how you get Capone.” In the making of energy policy, supporters of oil and gas development seem reluctant to acknowledge they confront the Chicago way. They carry knives into a gunfight.
The militant argument for expedited LNG-export approval is an especially dull blade that betrays misunderstanding of the conflict. Indeed, the government has been too slow to permit plant construction and exports to countries not party to US free-trade agreements. But arguing for faster action as a way to weaken Russia is opportunistic, unsound, and mistargeted.
Without question, Russia’s takeover of Crimea and apparent designs on other parts of Ukraine warrant concern. While effective responses are available, quickened permitting of LNG exports isn’t one of them. US liquefaction plants won’t start work in time to dissuade Russian expansion-ism and probably won’t export enough LNG to materially threaten Russian gas sales.
More troublesome for Russia than the prospect of LNG from the US are the rapid development of unconventional gas resources in the US and the chance that similar development might occur else-where. The competitiveness of Russian gas already suffers from the diversion of LNG once destined for the US to other markets and from increasing US exports of coal. To the extent other countries, especially in Europe, achieve similar success pro-ducing gas from shale, pressure on Russia will in-crease.
What’s most important is resource develop-ment, which should occur regardless of Russian behavior. But that’s the real fight. It’s a strategic struggle that can’t be won by slicing arguments into tactical pieces.
Gunning for gasSuddenly, natural gas no longer represents the “clean” hydrocarbon bridge to a future dominated by renewable energy. Policy discussions and politi-cal commentary treat it increasingly as an environ-mental threat because methane is a greenhouse gas. Later this year, the Bureau of Land Management will propose regulations to curb gas-flaring on fed-eral land. The Environmental Protection Agency soon will begin studying methane emissions from oil and gas equipment in a project sure to generate new, costly controls.
Why is EPA mounting this effort when its own data show methane emissions dropped 3% from all sources during 2005-12 and 14% from natu-ral gas systems, even though gas production has increased? The answer has to be that environ-mental pressure groups, deeply persuasive at EPA throughout the Barack Obama presidency, have drawn their guns on natural gas. As reported here earlier, 16 such groups wrote Obama a letter on Mar. 18 protesting LNG exports and urging the president to commit to “keeping most of our na-tion’s fossil fuel reserves in the ground (OGJ, Mar. 31, 2014, p. 16).” They want to do more than block exports of natural gas; they want to kill gas devel-opment.
Influencing policyOn that goal, the pressure groups will fail. Curtail-ing production would be doubly costly, foreclosing wealth generation from resource development while denying energy consumers ready supply of afford-able fuel. Those costs would become politically in-tolerable long before the goal could be achieved. But gas producers, processors, and transporters should find no comfort in futility of the ultimate aim. In an administration loath to disappoint activists, the antiproduction agenda influences policy until costs become tangible to consumers. Why else is the in-ternational section of the Keystone XL pipeline not already under construction?
The energy fight is not about pipelines or liq-uefaction plants. It’s about resource development, opponents of which don’t carry knives. Support-ers of oil and gas production must understand the nature of the struggle.
140414ogj_16 16 4/10/14 11:30 AM
MANAGING WEST AFRICAíS MAJOR PROJECTS
Europe & Middle East
Jane Bailey
T: +44 (0) 1992 656 651
M: +44 7983 388 367
Africa
Dele Olaoye
T: +234 802 223 2864
The Americas
Desiree Reyes
T: +1 713 963 6283
South East Asia
Mike Twiss
T: +61 437 700 093 or +65 9018 5179
Presented by:Owned & Produced by: Supporting Publication: Follow Offshore Events on:
The 19th Annual
20-22 January 2015
The Landmark Events Centre l Lagos l Nigeria
Are you interested in speaking at the 19th Annual Offshore West Africa
Conference and Exhibition?
We are pleased to announce that the Advisory Committee of Offshore West Africa is now accepting
abstracts for the Offshore West Africa 2015 Conference. We invite you to submit an abstract and
share your knowledge, experience and solutions with industry colleagues from around the world.
To have your presentation considered, please submit your 150 - 400 word abstract on one or more
of the technical focus areas listed by 13 May 2014.
Sponsorship and Exhibiting OpportunitiesMake the most of your attendance at the event. Sponsorship and exhibiting opportunities offer a
��������������������������������������������� ���������������
Contact your local representative today for details on how Offshore West Africa 2015 can help you
showcase your products and services through a host of available exhibiting and sponsorship options.
CALL FOR ABSTRACTS
For further information please visit: www.offshorewestafrica.com
DEADLINE 13 MAY 2014
Delivering the premier technical
forum on West African
offshore exploration and production.
140414ogj_17 17 4/10/14 11:30 AM
18 Oil & Gas Journal | Apr. 14, 2014
GENERAL INTEREST
Tight oil formations have helped the US increase its crude production dramatically, an independent refiner conceded. But the nation should proceed cautiously as it considers au-thorizing more crude oil exports, he told a US House For-eign Affairs Committee subcommittee.
“For decades, this country has worked to become energy secure or even energy independent, and now just recently, the expansion of production from both traditional and non-traditional sources has allowed the country to make great progress toward that goal,” said Michael Jennings, chief ex-ecutive officer of Houston-based HollyFrontier Corp., on Apr. 2.
Higher US crude production also has reduced refined product costs for consumers, and has mitigated price vol-atility or prices that historically resulted from geopolitical events, he continued in testimony to the Terrorism, Nonpro-liferation, and Trade Subcommittee.
“Given the great progress made in the last several years and the continued uncertainty in the global marketplace, HollyFrontier does not believe that lifting the historic ban on crude oil exports is in the best interest of our citizens or our national security,” Jennings said.
But other witnesses argued that increased US crude ex-ports would provide more benefits than problems for the country. “Today, America is producing nearly 50% more oil than we did in 2008,” said Erik Milito, the American Petro-leum Institute’s upstream and industry operations director.
“By 2015, the International Energy Agency predicts the US will surpass Saudi Arabia and Russia to be the world’s top crude oil producer,” he said.
Current exportsUS crude exports now are limited to production from state waters in Alaska’s Cook Inlet, Alaskan North Slope crude, certain US-produced crude destined for Canada, shipments to US crude territories, and California crude sold to Pacific Rim countries, according to the US Energy Information Ad-ministration.
Canada currently is the only US crude export custom-er, with purchases climbing from 2.1 million bbl in August
2013 to 7.6 million bbl in January, its latest figures indicate.Jennings noted that while EIA projects US crude produc-
tion will rise to 8.5 million b/d this year from 7.5 million b/d in 2013, it would still only be half the nation’s 17 million b/d of refining capacity. Those who support lifting the ban on US crude exports argue that such a move would reflect a move toward a freer market in total global supply, he said.
But national oil companies control about 85% of the world’s crude and 58% of its production, Jennings contin-ued. “In addition to these figures, and equally important to global prices, oil exports by the Organization of Petroleum Exporting Countries constitute approximately 60% of the total petroleum traded internationally,” he said.
“Though American production has increased dramati-cally, it has not yet matured to the point at which it could significantly impact the price of crude in the global market,” the refining executive said, adding, “Lifting the crude ex-port ban without dramatically revising other impediments to free trade, which include the Renewable Fuels Standard, the Jones Act, and fiat-style exclusions on import-oriented infrastructure, will come at the detriment of the American consumer and American jobs.”
Milito said API released a study by ICF International and EnSys Energy late last month that concluded that addi-tional exports could help increase supplies, put downward pressure on the prices at the pump, and bring more jobs to America (see story, p. 19).
“Harnessing these benefits, however, will require law-makers and regulators to reexamine policies that were en-acted long before the US transitioned from a period of energy scarcity to one of energy abundance,” he added.
Stranded crude impacts“In the long run, any oversupply of unrefined crude may create a disincentive to produce more energy here at home,” Milito said. “But if oil can flow to the global market, this study shows that then you begin to see higher global sup-plies, more production, and consumer-level benefits—as well as more American jobs.”
Free trade also increases efficiency, he asserted. Noting
Nick Snow
Washington Editor
Move carefully on crude exports,refiner urges House subcommittee
140414ogj_18 18 4/10/14 11:30 AM
Oil & Gas Journal | Apr. 14, 2014 19
the US increasingly produces light, sweet crude, he said it might make sense to import a surplus of it from one region and import cheaper, heavy oil in another instead of shipping the more expensive higher grade cross-country.
“This is especially true in the absence of sufficient infra-structure to efficiently transport crude to the refineries that could use it,” said Milito. “But export restrictions effective-ly insulate consumers from the positive benefits of efficient markets.”
US Sen. Lisa Murkowski (R-Alas.), who also testified, agreed that lifting the US crude oil export ban would boost US production and improve global markets. “I believe the [US Department of Commerce] retains the authority to mod-ernize its regulations and update its 30-year-old definition of ‘crude oil’ in such a way as to facilitate exports of conden-sate,” she told the subcommittee.
The department has taken such steps in the past, said Murkowski, who is the Energy and Natural Resources Com-mittee’s ranking minority member. “During the era of price and allocation controls, California started to shut in produc-tion for a variety of competitive and regulatory reasons,” she said. “Commerce authorized a temporary export program of residual fuel oil to protect this production. When an over-supply of butane—a glut—was created in the Gulf Coast, additional exports were also authorized by Commerce.”
US President Barack Obama also retains authority to ap-prove limited crude exports, which predecessors from both parties have used in the past, Murkowski added. Congress gave the president that authority to address crude exports in the national interest, she said. “At the end of the day, I am fully prepared to introduce legislation if necessary—but because legislation takes time we may not need to spend, I remain hopeful that we may have a willing partner in the administration,” Murkowski said.
‘Far more complex’US crude exports are part of a broader North American ener-gy picture that needs to be considered, two other witnesses suggested.
“Managing America’s newfound oil abundance will re-quire careful choices,” said Deborah Gordon, a senior associ-ate at Carnegie Endowment for International Peace’s Energy & Climate Program. “The situation is far more complex than those who favor or oppose the export ban suggest. Given the US can already export an unlimited amount of petroleum products, a question should be how much crude oil exports should be allowed,” Gordon said.
Kenneth B. Medlock III, senior director at the Center for Energy Studies at Rice University’s James A. Baker III Insti-tute for Public Policy, meanwhile, noted, “If you pinch or constrain one market, the arbitrage opportunity will move downstream. That’s exactly what we’ve seen. We have a products market that’s internationally fungible.”
Medlock said, “Beyond what might happen to gasoline
prices, we’d be moving more light sweet crude onto global markets and putting downward pressure on prices. It’s dif-ficult to predict what would happen because it’s impossible to tell what OPEC and other players would do in response.”
It’s also a domestic infrastructure issue, Medlock indi-cated. “Currently, we move more Bakken crude by rail than pipeline,” he said. If you actually had the pipeline infrastruc-ture, the crude price would be $20 higher.” Philadelphia area refineries are configured to process Bakken and Eagle Ford crude, but would be at risk if exports were allowed, he said.
Refiners also are adjusting some plants’ configurations. “BP is building the first splitter unit in Houston that can handle both light and heavy crudes,” Gordon said.
“Inside every heavy oil refinery is the capability to refine light crude,” added HollyFrontier’s Jennings. “There’s a lot of investment being made in things such as condensate split-ters. We have one in Cheyenne which originally processed heavy Canadian crude exclusively, but now runs 50% Bak-ken Light and 50% heavy.”
API report unveils economic gains from US crude exportsA recent study details significant US jobs gains, reduced consumer fuel costs, and robust economic growth associ-ated with future crude oil exports, according to Kyle Isa-kower, vice-president for regulatory and economic policy for the American Petroleum Institute. The new study, by ICF International and EnSys Energy, was released Mar. 31 dur-ing an API conference call.
“Consumers are among the first to benefit from free trade, and crude oil is no exception,” Isakower said, adding, “Gaso-line costs are tied to a global market, and this study shows that additional exports could help increase supplies, put downward pressure on the prices at the pump, and bring more jobs to America. Access to foreign customers could drive significant investment in US production, helping to strengthen our energy security. Now that the US is poised to become the world’s largest oil producer, the economic case for exports is clear.”
Analysis from the API-commissioned study suggests that if current restrictions on crude exports were lifted:• US weighted average petroleum products prices could
decline as much as 3.8¢/gal in 2017, dropping as much as 2.3¢/gal, on average, during 2015-35. These price decreases for gasoline, heating oil, and diesel fuel are projected to save American consumers as much as $5.8 billion/year, on aver-age, during 2015-35.• The US economy could gain as many as 300,000 ad-
140414ogj_19 19 4/10/14 11:30 AM
GENERAL INTEREST
20 Oil & Gas Journal | Apr. 14, 2014
$22.3 billion in 2020 assuming all else equal, through increased international trade of crude oil.• US gross domestic product could
increase by as much as $38.1 billion in 2020, led by increases in hydrocar-
ditional jobs in 2020. Consumer prod-ucts and services and hydrocarbon production sectors would see the larg-est gains.• US exports will expand and
could narrow the US trade deficit by
bon production and greater consumer spending due to lower retail process for gasoline and other petroleum prod-ucts.• As much as an additional $70 bil-
lion is projected to be invested in US exploration, development, and pro-duction between 2015 and 2020.• US federal, state, and local gov-
ernment revenues could rise by as much as $13.5 billion in 2020.• US oil production is expected
to rise faster and could increase by as much as 500,000 b/d in 2020.• US refiners could process, on av-
erage, an additional 100,000 b/d due to more efficient distribution of heavy and light crudes over the 2015 to 2035 period.“This is a new era for American en-
ergy, but our energy trade policies are stuck in the 1970s,” said Isakower. “The US and China are the only major oil producers in the world that don’t export a significant amount of crude. It’s time unlock the benefits of trade for US consumers and further strengthen our position as a global energy super-power.”
Scott links South Atlantic OCS bill, jobs growth plan
Nick Snow
Washington Editor
US Sen. Tim Scott (R-SC) introduced legislation that would reverse US Pres-ident Barack Obama’s administration’s exclusion of four South Atlantic coast-al states from active offshore oil and gas resource development planning. It is the third part of Scott’s broader leg-islative Opportunity Agenda to create jobs and increase educational oppor-tunities, he said on Apr. 2.“The Southern Energy Access Jobs
Act will allow our nation’s energy sec-
EconoLator®
Make Smarter use of Your Energy...
Through Storing & Applying Pressure!
Our designs have a proven track record of more than 50 years with the most comprehensive offering of accumulators, and related accessories in the industry.
• Custom engineered Piston
& Bladder Accumulators
• Optimize system performance
• Reduce energy cost
• Increase efficiency
• Provide smooth,
more reliable operation
• Special material, porting,
and options available
From 10 cubic inches to 200 gallons, 100 PSI to 20,000 PSI…with Tobul, the pressure is always on!
61 Innovation Drive l Bamberg SC 29003 USA l 803.245.2400
tobul.com
VISIT BOOTH 80816
VISIT BOOTH
1455
140414ogj_20 20 4/10/14 11:30 AM
Oil & Gas Journal | Apr. 14, 2014 21
“ I need safety and performance that work in my world.”
Choose the global specialists in alarm and shutdown instrumentation for upstream oil and gas.
UE’s products are specifi cally designed for your high-pressure world. Our rugged TX200 explosion-proof pressure
transmitter for safety and monitoring applications features built-in temperature compensation for minimal drift,
reducing nuisance trips and helping prevent catastrophic failures. Our compact, durable 12 Series hazardous
location safety switch boasts a unique dual seal between process and electrical systems, adding safety and
cutting costs. If safety, performance, worldwide approvals,
and unbeatable delivery work for you, call UE today!
ueonline.com LEADERS IN SAFETY, ALARM & SHUTDOWN
See us at the 2014Offshore Technology
Conference,booth #8555
tor to innovate and grow while meeting several important needs, including creating more opportunities for science, technology, engineering, and math (STEM) education, in-creasing job opportunities for our nation’s veterans, and helping ease the burden of energy for families,” said Scott, who is a member of the Energy and Natural Resources Com-mittee.
Scott’s bill would create a single South Atlantic offshore energy planning area comprised of Virginia, North Carolina, South Carolina, and Georgia. It would give those states more control of federal offshore energy planning by prohibiting permanently visible drilling infrastructure within 20 miles of the shoreline, Scott said.
He said it also would create a public-private partnership of industry and higher education institutions, including Historically Black Colleges and Universities, to enhance and broaden the study of geological and geophysical sciences, encourage new STEM studies of offshore energy resources, and educate the next generation of America’s offshore energy scientists.
Scott’s bill also would establish a veteran’s workforce training program, using Atlantic offshore energy production revenue to fund employment training supporting US oil and gas production. It also would give each of the four states
37.5% of federal revenue from energy production directly off its coast, and dedicate another 10% to federal deficit reduc-tion.
Less import reliance“By unleashing the potential of America’s vast energy re-sources in the Atlantic, we can continue the long overdue process of reducing our national dependency on fuel pro-duced in some of our world’s most dangerous areas,” Scott said.
“Additionally, by enacting the SEA Jobs Act, we can po-tentially create more than 280,000 jobs and add $24 billion to the economy,” he continued. “In South Carolina alone, this legislation could create more than 35,000 new jobs.”
National Ocean Industries Association Pres. Randall B. Luthi applauded the bill’s intent. “Currently, 85% of our off-shore area is closed to oil and gas exploration,” he said on Apr. 3.
“We should continue down the path of weaning America off of oil and gas imports with new access to the outer con-tinental shelf,” Luthi maintained, adding, “Sen. Scott’s push to cut the through the administration’s red tape by opening the ‘South Atlantic’ to oil and gas production is a giant leap in the right direction.”
140414ogj_21 21 4/10/14 11:30 AM
GENERAL INTEREST
22 Oil & Gas Journal | Apr. 14, 2014
The global refining and marketing (R&M) industry will con-tinue to see pockets of earnings growth over the next year, but flat conditions overall, with product demand expected to increase modestly this year by 1.2 million b/d, accord-ing to a recent report from Moody’s. That demand increase will be roughly in line with net global capacity additions, Moody’s said.
The outlook reflects Moody’s expectations for the fun-damental business conditions in the industry over the next 12-18 months, during which time it expects the R&M sec-tor’s earnings before interest, taxes, depreciation, and amor-tization (EBITDA) to remain volatile but to rise by about 8% through mid to late-2015.
North American companies, particularly Gulf Coast re-finers, have the most favorable positions, Moody’s said, but capacity additions in China and elsewhere in the world will water down earnings growth for the overall sector.
North American refiners will retain their advantage over competitors elsewhere, with cheaper feedstock and natural gas prices, and lower costs for renewable identification num-ber contributing to 10% or higher EBITDA growth through mid to late-2015.
Shifting crude discount advantages to the Gulf Coast from the Midcontinent, plus strong export opportunities to Latin America and Europe, give an edge to refiners with big Gulf Coast operations, including Phillips 66, Marathon Pe-troleum Corp., and Valero Energy Corp., Moody’s said.
These three refiners also will continue expanding their logistics and midstream operations. Companies in the Mid-continent, such as HollyFrontier Corp. and CVR Refining, lack this export advantage. Refiners with a big presence in
Mathanex methanol plant completes move to Louisiana
Heavy-lift contractor Mammoet has completed the heavy lift-
ing, transportation, and reassembly preparation of a Meth-
anex Corp. methanol plant, relocating it 5,450 miles from
southern Chile to a 225-acre site in Geismar, La. (OGJ On-
line, Feb. 7. 2012). The Geismar I plant is targeted to be oper-
ational by yearend. The project, in which Mammoet worked
with Jacobs Engineering, involved the lifting and moving al-
most 400 heavy components and modules totaling 12,145
tonnes and setting them up for reassembly. Mammoet man-
aged subcontractors, secured the necessary permits, and
maintained full oversight over the transport operation for
the project’s duration. Methanex previously reported plans
to relocate two of its methanol plants from Chile to Geismar,
California, including Valero Corp. and Tesoro Corp., face a crucial year in 2015, when environmental rules become stricter (OGJ Online, Sept. 19, 2013).
China will be the biggest source of new refining capacity worldwide in 2014-15, and significant Middle East capacity additions will likely go into service in 2015 but are less pre-dictable. Moody’s expects 2% EBITDA growth this year for the Asian R&M sector overall.
In China, the world’s largest source of demand growth for refined products, capacity additions of more than 1.2 million b/d through 2015 will outpace demand growth for refined products. Moody’s anticipates about 1 million b/d of addi-tional capacity for the Middle East, but notes that accurately projecting projects in certain countries can be difficult, since a national oil company’s plans are not always visible.
India’s demand for refined products will increase at a far-slower pace of 1% through mid to late-2015, due to declin-ing gross domestic product growth and government price increases on both gasoline and middle distillates.
Latin American growth for refined products will remain strong through mid to late-2015, with few capacity addi-tions, but the region’s reliance on costly refined product im-ports will hold back EBITDA growth to no more than 2%. Most of the region’s big projects for boosting refining capac-ity have either been delayed or called off. Moody’s doesn’t expect Mexico’s Petroleos Mexicanos (Pemex) or Brazil’s Petroleo Brasileiro SA (Petrobras) to pursue additional new refineries, but Colombia’s Ecopetrol SA’s modest capacity ex-pansions will come onstream in 2015.
Growth for European refining operations will stay rough-ly flat through mid to late-2015. Economic improvements
Moody’s: Global refining, marketing industry to see earnings rise this year
a move that provides capital savings and a reduced project
timeframe. Photo from Mammoet.
140414ogj_22 22 4/10/14 11:30 AM
Oil & Gas Journal | Apr. 14, 2014 23
GENERAL INTEREST
EIA: Ethanol spot prices rise on rail congestion, cold weather
Spot prices for ethanol have increased steadily since early Feb-ruary, driven by logistical problems and harsh weather condi-tions, according to the US Energy Information Administration.
By late March, New York Harbor (NYH) spot ethanol prices exceeded prices for reformulated gasoline blendstock for oxygen blending (RBOB) by more than $1/gal. Ethanol spot prices in Chicago and Gulf Coast markets also rose above NYH RBOB prices.
The premium of NYH over Chicago spot ethanol prices also widened to $1/gal in early March from 25¢/gal in Janu-ary, reflecting logistical constraints in the Midwest ethanol production centers, mainly involving railroads on which 70% of ethanol is shipped.
“Railcar dwell time, the time that loaded railcars spend in a terminal awaiting movement at Burlington Northern Santa Fe Corp.’s Galesburg, Ill., terminal, which handles many ethanol cars from Iowa, nearly doubled in early 2014 to reach a peak of 60 hr in February and remain above year-
in Germany, France, and elsewhere in the Euro-zone will modestly lift the region’s demand for refined products, but Europe will need meaningful capacity rationalization to pre-vent margin erosion in 2015 and beyond.
Europe’s older, less-efficient, lower-complexity refineries, which rely on high-cost feedstocks, cannot compete easily with the new, high-complexity facilities of the Middle East. A number of integrated oil companies intend to reduce their European footprints, but political sensitivities in Europe can also stall or prevent widespread capacity curtailments (OGJ, Dec. 2, 2013, p. 34).
Rather than shut down capacity, operators such as Mur-phy Oil Corp. often try to sell off unwanted capacity, even as they continue to generate losses. Italy’s Eni SPA plans to cut its refining capacity by 22% by 2017, thereby reducing its total capacity by one-third since 2012.
Moody’s notes that it would change its outlook to negative if net refining capacity additions worldwide begin to outpace growth in demand for refined products, particularly with China’s growth slowing through 2015 alongside further ca-pacity additions in China and the Middle East. Conversely, Moody’s would change its outlook to positive if worldwide demand overwhelmed capacity additions, and if the US and Chinese economies began surging simultaneously.
The success of your energy operations depends on getting the right vehicles—on
time, on budget, and on your terms. At Merchants, we have a wide selection of
vehicles, and offer fl exible fi nancing options for both leases and project fl eets.
You can count on us to to keep your fl eet running smoothly.1-866-6LEASES merchantsfl eetmanagement.com
TO KEEP ALL THIS GOING, YOUR
FLEET CAN’T BE AT A STANDSTILL.
140414ogj_23 23 4/10/14 11:30 AM
24 Oil & Gas Journal | Apr. 14, 2014
GENERAL INTEREST
ago levels,” EIA said. The agency also noted that the average speed of manifest trains (trains running multiple products), which are often used to deliver ethanol to gasoline blending terminals that are not equipped to handle unit trains, also slowed by 23% over the past 12 months.
During mid-February to mid-March, ethanol stocks were drawn down nationwide by nearly 2 million bbl, partially recovering to 15.9 million bbl on Mar. 28 but still more than 4 million bbl below typical March levels, which averaged more than 20 million bbl from 2011 through 2013. East Coast inventories were especially hard hit, and on Mar. 14 reached 4.5 million bbl, the lowest level since EIA began re-cording data in June 2010.
However, ethanol futures prices suggest that the recent price increase is anticipated by the market to be short-lived as rail system congestion improves and ethanol producers respond to the strong incentive that higher ethanol prices provide.
USCG: ‘Chain of errors’ led to Shell drilling unit running aground
Michael T. Slocum
Upstream Technology Editor
A US Coast Guard (USCG) investigation has found that a “chain of errors” led to the Royal Dutch Shell PLC conical drilling unit, the Kulluk, running aground on Sitkalidak Is-land, Alas., in December 2012 (OGJ Online, Jan. 2, 2013). The primary cause was attempting a winter voyage in the Arctic with ineffective risk assessment and management, ac-cording to USCG’s report, which was released Apr. 2.
The Kulluk broke free while being towed in heavy seas by Edison Chouest Offshore’s vessel, the Aiviq. There was no oil spill associated with the incident. The drilling unit was later salvaged and towed to an Asian dry dock for inspection and repairs. (OGJ Online, Feb. 13, 2013).
Complex series of eventsUSCG’s investigation report describes a “complex series of events” that included inclement weather, seas of 20 ft, an inadequate tow plan, the Kulluk’s conical hull (see figure, OGJ, Oct. 1, 2007, p. 40), faulty tow shackles, engine failure, and human error.
“The most significant factor was the decision to attempt the voyage during the winter in the unique and challenging environment of Alaska,” said USCG Rear Adm. T.P. Ostebo. “Shell and Edison Chouest Offshore’s ineffective risk man-agement and application of towing measures for the voyage also contributed to the grounding.”
DONOT CLOSEthis magazine until you’ve seen it all!Published every month in print and online, check out the OGJ Market Connection for the latest in product and service offerings!
• EMPLOYMENT OPPORTUNITIESWant to start a career in the oilfield Use Market Connection
to find available jobs to get your foot in the door.
• EQUIPMENTLooking to purchase equipment This section connects buyers and sellers with generators, tanks, gauging systems, refning
equipment, etc. You can fnd just about anything here.
• PRODUCTSView the latest and greatest new products and services and
expand your knowledge of what’s available in the marketplace!
• REAL ESTATE / LEASESBe the first to find out about land leases up for bid and potential partnerships. The movers and shakers are looking for a partner like you, so fnd out about the latest opportunities with Market Connection!
THINK YOU’VE SEEN IT ALL?Turn to the back of this issue to be hired,
acquired, buy or sell in the Market Connection.
Also be sure to visit us online for weekly updates
www.ogj.com/market-connection
140414ogj_24 24 4/10/14 11:30 AM
Oil & Gas Journal | Apr. 14, 2014 25
GENERAL INTEREST
9th Pipeline TechnologyConference12-14 May 2014, Estrel, Berlin, Germany
More Information: www.pipeline-conference.com
Euro Institute for Information
and Technology Transfer
Europe’s Leading Conference and
Exhibition on New Pipeline Technologies
During the USCG’s 9-day investigative hearing in 2013, Shell’s Alaska operations manager testified that the Kulluk was moved due to “financial considerations,” contradicting previous claims that fair weather had prompted the move. If Shell had not moved the drilling unit, it would have been liable for $6 million in taxes.
USCG recommendations
The USCG offered nine recommendations to mitigate the possibility of a similar incident. Most of these are aimed at towing vessels, and include stricter standards and certifica-tion policies, better training, and the inclusion of the Safety Management System on all vessels.
For Shell, or any company intending to operate in the Arctic, the report offers recommendations, as well. It calls for the inclusion of tow plans in any policies that address marine operations, and the establishment of additional cri-teria for operations in areas of historical heavy weather.
Specifically, the report tasks Shell with reconsidering its criteria for tow routing, assessing the suitability of its tow vessels, creating contingency plans including harbors of safe
The Shell Kukkuk conical drilling platform. Photo from OGJ archives.
140414ogj_25 25 4/10/14 11:30 AM
26 Oil & Gas Journal | Apr. 14, 2014
WATCHING GOVERNMENT
NICK SNOWWashington Editor | Blog at www.ogj.com
Greenland expects its oil, gas, and
minerals to be crucial as it continues
its gradual transition to independence,
its first US representative said on Apr.
3. “We have begun developing our oil
and gas,” noted Inuuteq Holm Olsen,
who began a 5-year assignment at
the Danish Embassy in Washington 2
months ago.
The US Geological Survey esti-
mates there are billions of barrels of
oil equivalent offshore Greenland,
although there have been no commer-
cial finds, Olsen said during a presen-
tation at GWU’s Institute for European,
Russian & Eurasian Studies.
“Since 2002, 25 exploratory wells
have been drilled off Greenland, most-
ly off the West Coast,” Olsen said.
“The four latest licenses which were
awarded to consortiums in December
were in waters to the east, however.”
The country began to take control
of its domestic affairs soon after it re-
ceived home rule in 1979. A 2009 act
redefined its relationship to Denmark,
and one of Greenland’s first steps was
to take over the rights and responsi-
bilities for its oil, gas, and minerals,
Olsen said.
“It’s critical for Greenland to
develop its oil, gas, and minerals to
become economically self-sufficient,”
he said. “It’s also very much a frontier
area—and very environmentally chal-
lenging. We can enter into internation-
al agreements that are geographically
limited to Greenland and don’t involve
Denmark.”
ExxonMobil Corp., Royal Dutch
Shell PLC, Chevron Corp., BP PLC,
and other multinationals have been
partners in consortiums buying
offshore licenses there. “Countries
like China and South Korea are taking
much more active roles in countries
like Greenland,” Olsen said. “They’re
new actors who were not present 5-10
years ago.”
Relations with USGreenland could be considered a
microcosm for the Arctic in terms of
challenges as well as opportunities,
Olsen noted. He said the US has been
a relatively inactive Arctic Council
member until recently when Sec. of
State John F. Kerry appointed its first
special Arctic representative a year
before the US is scheduled to become
its chairman. Olsen said the two coun-
tries have had a close relationship
since World War II, and several US
scientists are doing research there.
“We’re studying the movement of
ice and the problems it can create
for oil and gas operations,” he said.
“We also want to avoid environmen-
tal disasters. Our aim is to have a
performance-based regulatory regime
with the highest standards possible.
It’s an evolving process, with con-
stantly changing best practices and
standards.”
Greenland is looking closely at
Norway’s oil and gas system as a
model, particularly its investment
fund, but also intends not to ignore
social issues stemming from develop-
ment, Olsen said. “The last thing we
want to do is become a spectator,” he
emphasized.
Greenland in transition
refuge, and employing towing equip-ment that is sized and configured for anticipated environmental conditions. An “acceptable” third-party will en-sure Shell meets these criteria.
Mixed reactionsReactions to the report in Washington, DC, were mixed. Sen. Lisa Murkowski (R-Alas.) commended the USCG’s inves-tigation and its recommendations to im-prove the safety of maritime activities as exploration in the Arctic moves forward.
“I believe that we can safely develop our energy resources in the Arctic, but it requires that we adhere to world-class safety standards,” she said.
However, Sen. Ed Markey (D-Mass.), a member of the Senate Commerce and Environment Committee, believes Shell’s disregard for safety should serve as a warning, particularly if it was moti-vated for financial reasons.
“This kind of behavior should raise major red flags for any future Arctic drilling plans,” he said.
Cindy Shogan, Alaskan Wilderness League executive director, claims the report demonstrates that no company is ready to drill in the harsh, unpre-dictable conditions of Alaska. Her or-ganization has called for US President Barack Obama to place a moratorium on Arctic Ocean drilling.
Shell’s Arctic ‘pause’In February 2013, Shell announced it would “pause” its exploration drilling activity for the remainder of the year in Alaska’s Beaufort and Chukchi seas to prepare equipment and make plans for how and when to resume activity in the Arctic (OGJ Online, Feb. 27, 2013).
A request sent to Shell for comment on the USCG report or its future plans in Alaska went unanswered.
In a statement issued last year, Shell’s Marvin Odum, director, upstream Americas, noted that the company re-mained committed to building an Arc-tic exploration program and continued to believe that a measured and respon-sible pace, especially in the exploration phase, fits best in the Arctic.
140414ogj_26 26 4/10/14 11:30 AM
CONFERENCE & EXHIBITION
26 - 28 JANUARY 2015
QATAR NATIONAL
CONVENTION CENTRE
DOHA, QATAR
OPTIMIZING PERFORMANCE
Offshore Middle East is the premier event dedicated to the offshore exploration and production industries in the Gulf region.
Are you interested in speaking at the 5th Annual Offshore Middle East Conference and Exhibition?
We are pleased to announce that the Advisory Committee of Offshore Middle East is now accepting abstracts for the 2015 conference. Over 1600 attendees from 48 countries attended the event in 2013 providing excellent networking opportunities and a forum for sharing ideas and experiences.
We invite you to submit an abstract and share your knowledge, experience and ideas with technical and strategic decision-makers and strategists by 1 May 2014.
Sponsorship and Exhibiting Opportunities
Make the most of your attendance at the event. Sponsorship and exhibiting opportunities offer a great way to enhance the profle and awareness of your company.
Contact your local representative today for details on how Offshore Middle East 2015 can help you showcase your products and services through a host of available exhibiting and sponsorship options.
For more information visit: www.offshoremiddleeast.com
Supporting Publications:
Owned and produced by:
Presented by:
Held under the Patronage of H.E. Dr Mohd Bin Saleh Al-Sada, Minister of Energy & Industry, State of Qatar
Organised by: Hosted by:
CALL FOR ABSTRACTSDeadline 1 May 2014
140414ogj_27 27 4/10/14 11:30 AM
GENERAL INTEREST
28 Oil & Gas Journal | Apr. 14, 2014
has agreed to pay, $4.4 billion, will be used for environmen-tal cleanups and to settle environmental claims. It is the larg-est environmental enforcement recovery in DOJ history, the federal department said. “This settlement agreement with the Litigation Trust and the US government eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmen-tal liabilities and tort claims,” Anadarko Chief Executive Of-ficer Al Walker separately said.
Evasive move
In his Dec. 12, 2013, opinion, Judge Allan J. Gropper of US Bankruptcy Court for New York’s Southern District agreed with the government and litigation trust’s charges that Kerr-McGee transferred out and spun off its oil and gas assets in 2005 to a newly formed entity with the same name to evade creditors and environmental liabilities.
Although it had been founded in 1929 as an oil and gas exploration and production operation, Kerr-McGee diversi-fied into refining and marketing, uranium mining and pro-cessing, wood treatment, and manufacturing and use of chemicals including creosote and ammonium perchlorate. By the early 2000s, the Oklahoma City-based independent
Anadarko settles legacy claims against Kerr-McGee for $5.15 billionNick Snow
Washington Editor
Anadarko Petroleum Corp. and subsidiaries it acquired when it bought Kerr-McGee Corp. in 2006 agreed to pay $5.15 billion to settle fraudulent conveyance allegations brought by the US government and co-plaintiff Anadarko Litigation Trust in the bankruptcy of Tronox Inc.
A federal bankruptcy court found in December 2013 that Kerr-McGee conveyed its oil and gas assets to a new entity with the same name and renamed the remaining holdings Tronox in an attempt to evade debts, including its environ-mental liability to clean up contaminated sites around the country, US Department of Justice and Environmental Pro-tection Agency officials jointly announced on Apr. 3.
They reported that of the settlement amount Anadarko
Expand Your Knowledge
in Other Industry Areas
Order Today!Visit our website for complete listings!
www.PennWellBooks.com / 1-800-752-9764 (toll free)
Our nontechnical series is tailored for energy industry professionals, especially those who lack technical training in an area, providing a basic understanding of the industry in a simple, easy-to-understand language.
Whether you need quick information for a new assignment or just want to expand your knowledge in other areas of the industry, we have your nontechnical needs covered. Best of all, our books and videos f t easily into your budget!
Many topics to choose from, including:
Vi itVisit
w P W llwww.PennWell
MaMaMaManyny t t t t topopicicicicics s tototo c chohohoososose e frfromom, ininclclclcludududinininining:g:ududud g:niie fromhhhoosany to
• Basic petroleum• Drilling• Financial management• Geology & exploration• Natural gas• Petrochemicals• Petroleum production
• Petroleum ref ning• Pipelines• Well logging
140414ogj_28 28 4/10/14 11:30 AM
GENERAL INTEREST THE EDITOR’S PERSPECTIVE
(From the Subscribers Only area of www.ogj.com)
Oil & Gas Journal | Apr . 14, 2014 29
up the contaminated sites. The 2011 agreement specifies percentages of the funding that will be made available to each site. DOJ said as a result of these agreements, some of the key recoveries for environmental claims and for site cleanups will include:• $1.1 billion to a trust to clean up
24 contaminated sites, including the Kerr-McGee Superfund Site in Colum-bus, Miss.• $1.1 billion to a trust to clean up
a former chemical manufacturing site in Nevada that has led to contamina-tion of Lake Mead.• $985 million to EPA for clean-up
of 50 abandoned uranium mines in and around the Navajo Nation, where radioactive waste remains from Kerr-McGee mining operations. The Navajo tribe also will receive more than $43 million to address radioactive waste left at the former Kerr-McGee uranium mill in Shiprock, NM.• $224 million to EPA for clean-up
of thorium contamination at the Wels-bach Superfund Site in Gloucester, NJ.• $217 million to the federal Su-
perfund in repayment of costs previ-ously incurred by EPA’s clean-up of the Federal Creosote Superfund Site in Manville, NJ.Anadarko said in exchange for the
payment, the litigation trust and Kerr-McGee have agreed to mutually release claims against each other, and the US government and Kerr-McGee have provided mutual covenants not to sue. The US government also will provide contribution protection from third-party claims seeking reimbursement from Kerr-McGee at more than 4,000 sites covered by the covenants.The claims asserted in the Tronox
adversary proceeding will be dis-missed with prejudice after the settle-ment payment is made. It expects the process to be completed before the end of this year’s third quarter, and be-lieves its significant cash position and available $5 billion credit facility pro-vide flexibility in funding the settle-ment payment.
had discontinued all but its chemi-cal and E&P operations but still was responsible for environmental, tort, workers’ compensation, and retiree and employee benefit liabilities related to the other businesses.
In 2001, Kerr-McGee began an in-ternal reorganization, Project Focus, to separate its oil and gas business from its chemical business and legacy li-abilities, according to Cropper. When it was unable to sell the chemical op-erations, the firm decided to move it into a new entity, Tronox, which also assumed the legacy liabilities, in 2005. It was spun off a year later from Kerr-McGee, which Anadarko bought for $18 billion soon after.
Burdened by environmental and other legacy liabilities, Tronox sought Chapter 11 bankruptcy protection in New York’s Southern District in Janu-ary 2009 and sued the defendants. It emerged from bankruptcy on Feb. 14, 2011, when the court confirmed its re-organization plan that included a set-tlement with various environmental regulators for $270 million and 88% of any net proceeds from the fraudulent conveyance litigation.At the same time, Tronox estab-
lished a litigation trust to pursue the action after its emergence from bank-ruptcy and to distribute any recoveries from the litigation to the trust’s envi-ronmental and tort beneficiaries. The US government intervened in the case under the Federal Debt Collection Pro-cedures Act to recover response costs for environmental cleanups at numer-ous sites around the country.
Settlement’s terms
Under the Apr. 3 settlement, Anadar-ko and the subsidiaries will pay the settlement amount to the trust. It said that under a 2011 agreement be-tween the US government; certain state, local, and tribal governments; and the bankruptcy estate, the trust will distribute 88% of the litigation’s net proceeds to the US, certain state governments, the Navajo Nation, and environmental trusts created to clean
Exchange in Senate committee displays energy misconceptionby Bob Tippee, Editor
Misconception common in US government decision-making about energy received full exposure Apr. 3 in the Senate Finance Committee.
During work on a bill to extend expiring tax measures, Pat Toomey (R-Pa.) offered an amendment to remove incentives for alternative energy.
“I don’t think we should force taxpay-ers to subsidize inefficient, uncompetitive forms of energy,” Toomey said, according to The Hill news service. “We are simply picking winners and losers.”
Debbie Stabenow (D-Mich.) countered, “I would argue that Congress has picked a win-ner in the oil industry, and they have won.”
Charles Grassley (R-Iowa) added, “The 100-year-old oil and gas industry contin-ues to benefit from tax preferences that benefit only their industry.”
Stabenow’s statement implies oil and gas dominate energy use because Congress willed them to do so. This kind of thinking leads to the popular but eco-nomically deadly assumption that energy is chiefly a matter of political choice.
In fact, oil and gas, along with coal, dominate energy use because they possess overwhelming advantages of form related to energy density. Congress didn’t convey those advantages. Nature did.
Grassley’s elaboration about how Congress supposedly favored oil and gas is as incorrect as Stabenow’s implication. Yes, the industry uses tax mechanisms unavailable to most other industries. Those mechanisms address resource depletion, dry holes, spending oriented to intangible goods and services, and other economic complications most other industries don’t encounter. They mainly accommodate the tax regime to industry idiosyncrasies. They don’t promote oil and gas in energy markets the way the generous tax credits supported by Stabenow and Grassley do wind energy and biofuels.
The Finance Committee rejected Toomey’s amendment and passed the full measure to the Senate. Members of the House have hinted they won’t support a tax-extender bill full of credits for renewable energy.
Whatever the outcome of that con-flict, energy decisions would improve if decision-makers acknowledged limits on the influence of politics in energy choices. Eventually, even politicians must yield to physical and economic laws.
ONLINE APR. 4, 2014 | [email protected]
140414ogj_29 29 4/10/14 11:30 AM
30 Oil & Gas Journal | Apr. 14, 2014
NOWAVAILABLE!
Find the answers to your subseapipeline questions in one book!
Industry veterans Andrew Palmer and Roger
King, two of the world’s most respected
authorities in subsea pipeline engineering,
have updated their defi nitive reference book.
The second edition of Subsea Pipeline
Engineering:
• Covers the entire spectrum of subjects about pipelines
that are laid underwater—pre-design, design, construction,
installation, inspection, maintenance, and repair.
• Devotes attention to the important specialized subjects
of hydraulics, strength, stability, fracture, upheaval, lateral
buckling and decommissioning.
• Contains valuable information from the authors’ respected
short course on subsea pipeline engineering.
• Offers an in-depth examination of marine pipeline
construction.
• Instructs on effective techniques for laying pipeline
at great depths.
645 Pages/Hardcover/2008
ISBN 978-1-59370-133-8
$179.00 US
Order your copy today! www.PennWellBooks.com
REPRINTS ARE IDEAL FOR:
■ New Product Announcements
■ Sales Aid For Your Field Force
■ PR Materials & Media Kits
■ Direct Mail Enclosures
■ Customer & Prospect Presentations
■ Trade Shows/Promotional Events
■ Conferences & Speaking Engagements
■ Recruitment & Training Packages
CUSTOM
REPRINTS
For additional information, please contact Rhonda Brown at Foster Printing
Service, the official reprint provider for Oil & Gas Journal.
Call Rhonda at 866.879.9144
ext. 194 or pennwellreprints@
fosterprinting.com
includes
companion
CD-ROM!
••
incl des
companion
CD-ROM!353 Pages/Hardcover/2007
ISBN13 : 978-1-59370-070-6
$129.00 US
O R D E R Y O U R C O P Y T O D A Y !
• W W W . P E N N W E L L B O O K S . C O M •
An Indispensable Workon Riser Behavior
Charles Sparks, one of the foremost
authorities on riser mechanics, has written the
defi nitive work on riser behavior. This book
is a must-own for anyone who deals with
riser technology, from university students to
engineers with extensive experience.
FEATURES and BENEFITS:
• Straightforward explanations of the principal
parameters that infl uence riser behavior.
• Clear procedures for analyzing highly
complicated problems.
• Means of making rapid “ballpark” analyses before
and after running sophisticated FE riser programs.
EITPE 25 http://www.eitep.de/de/
Flexsteel Pipeline Technologies 4 www.flexsteelpipe.com
Market Connection 24 http://www.ogj.com/market-connection.html
Merchants Fleet Management 23 merchantsfleetmanagement.com
Merichem Company Digital Edition Cover www.merichem.com
National Oilwell Varco 2 www.nov.com
Pennwell Corporation 6, 15, 17, 27 www.webaddress.com
PennWell Books 28, 30 www.pennwellbooks.com
Reprints 30 [email protected]
Tobul Accumulator Inc 20 www.tobul.com
United Electric Controls 21 www.ueonline.com
COMPANY NAME PAGE
ADVERTISERS INDEX
This index is provided as a service. The publisher does not assume any liability for errors or omission.
140414ogj_30 30 4/10/14 1:43 PM
STATISTICS
Oil & Gas Journal | Apr. 14, 2014 31
Additional analysis of market trends is available through OGJ Online, Oil & Gas Journal’s electronic information source, at http://www.ogj.com.
OGJ CRACK SPREAD 4–4–14* 4–5–13* Change Change, ———–—$/bbl ——–—— %
SPOT PRICES Product value 116.22 118.56 (2.35) (2.0) Brent crude 105.51 107.18 (1.67) (1.6) Crack spread 10.71 11.38 (0.67) (5.9)
FUTURES MARKET PRICESOne month Product value 121.75 125.19 (3.44) (2.7) Light sweet crude 100.47 94.93 5.54 5.8 Crack spread 21.28 30.26 (8.98) (29.7)Six month Product value 115.60 119.29 (3.69) (3.1) Light sweet crude 96.16 95.00 1.16 1.2 Crack spread 19.44 24.29 (4.85) (20.0)
*Average for week ending. Source: Oil & Gas JournalData available at PennEnergy Research Center.
IHS PURVIN & GERTZ LNG NETBACK MATRIX—APR. 4, 2014 –––––––––––––––––––––––––––– Liquefaction plant ––––––––––––––––––––––––––––––––Receiving Algeria Malaysia Nigeria Austr. NW Shelf Qatar Trinidadterminal –––––––––––––––––––––––––––––––– $/MMbtu ––––––––––––––––––––––––––––––––––––
Barcelona 11.70 9.27 10.68 9.15 10.02 10.58 Everett 4.84 0.85 2.71 0.93 1.47 6.93 Isle of Grain 6.97 4.51 6.19 4.41 5.19 6.23 Lake Charles 1.86 (0.27) 1.58 (0.05) 0.22 2.56 Sodegaura 11.09 14.08 11.20 13.58 12.48 10.11 Zeebrugge 10.06 7.44 9.20 7.31 8.19 9.29
Defnitions, see OGJ Apr. 9, 2007, p. 57.Source: IHS Purvin & GertzData available at PennEnergy Research Center.
CRUDE AND PRODUCT STOCKS —–– Motor gasoline —–– Blending Jet fuel, ————— Fuel oils ————— Propane- Crude oil Total comp. kerosine Distillate Residual propyleneDistrict ———————————————————————————— 1,000 bbl —————————————————————————
PADD 1 ..................................... 10,576 55,119 48,451 7,832 30,561 9,484 1,719PADD 2 ..................................... 96,810 47,350 37,588 6,347 27,421 1,637 7,913PADD 3 ..................................... 198,975 76,807 64,753 11,167 37,555 20,711 15,979
PADD 4 ..................................... 21,881 6,599 4,030 689 3,890 179 1957PADD 5 ..................................... 51,849 29,750 26,630 9,585 13,527 4,476 —
Mar. 28, 2014 .......................... 380,091 215,625 181,452 35,620 112,954 36,487 26,568Mar. 21, 2014 ........................... 382,471 217,198 182,132 36,546 112,400 37,290 25,657Mar. 29, 20132 .......................... 388,625 220,664 169,071 39,442 112,986 35,816 39,738
1Includes PADD 5. 2Revised. Source: US Energy Information AdministrationData available at PennEnergy Research Center.
REFINERY REPORT—MAR. 28, 2014
REFINERY –––––––––––––––––––––––––––– REFINERY OUTPUT ––––––––––––––––––––––––––– –––––– OPERATIONS –––––– Total Gross Crude oil motor Jet fuel, ––––––– Fuel oils –––––––– Propane- inputs inputs gasoline kerosine Distillate Residual propyleneDistrict ––––––– 1,000 b/d –––––––– –––––––––––––––––––––––––––––––– 1,000 b/d –––––––––––––––––––––––––––––––
PADD 1 .............................................. 958 952 2,865 67 325 62 122PADD 2 .............................................. 3,333 3,327 2,519 216 961 46 270PADD 3 .............................................. 8,158 8,054 2,155 766 2,683 204 867PADD 4 .............................................. 523 520 352 24 177 13 1153PADD 5 .............................................. 2,650 2,462 1,635 415 642 133 —
Mar. 28, 2014 ..................................... 15,622 15,315 9,526 1,488 4,788 458 1,412Mar. 21, 2014 ..................................... 15,323 15,092 9,340 1,451 4,734 439 1,395Mar. 29, 2013 ..................................... 15,273 15,007 8,671 1,566 4,324 604 1,311
17,818 Operable capacity 87.7 utilization rate
1Includes PADD 5. 2Revised.Source: US Energy Information AdministrationData available at PennEnergy Research Center.
IMPORTS OF CRUDE AND PRODUCTS
— Districts 1-4 — — District 5 — ———— Total US ———— 3-28 3-21 3-28 3-21 3-28 3-21 3-29* 2014 2014 2014 2014 2014 2014 2013 ––––––––––––––––––––––––— 1,000 b/d ––––––––––––––––––––––––—
Total motor gasoline ............. 523 628 10 0 533 628 595 Mo. gas. blending comp. ..... 454 606 8 0 462 606 527 Distillate ............................... 222 226 18 2 240 228 83 Residual .............................. 183 91 19 19 202 110 173 Jet fuel-kerosine .................. 106 96 1 0 107 96 0 Propane-propylene .............. 85 107 (13) (49) 72 58 89 Other ................................... 2 77 51 84 53 161 385
Total products ...................... 1,575 1,831 94 56 1,669 1,887 1,852
Total crude ........................... 5,687 6,476 1,144 1,141 6,831 7,617 7,929
Total imports ........................ 7,262 8,307 1,238 1,197 8,500 9,504 9,781
*Revised. Source: US Energy Information AdministrationData available at PennEnergy Research Center.
140414ogj_31 31 4/10/14 11:30 AM
STATISTICS
32 Oil & Gas Journal | Apr. 14, 2014
OGJ GASOLINE PRICES Price Pump Pump ex tax price* price 4-2-14 4-2-14 4-3-13 ————— ¢/gal —————
(Approx. prices for self-service unleaded gasoline)Atlanta .......................... 301.1 348.0 371.0Baltimore ...................... 307.0 352.4 361.0Boston ........................... 307.9 352.8 352.7Buffalo .......................... 287.1 355.0 377.6Miami ............................ 315.1 369.5 372.7Newark .......................... 310.5 343.4 332.7New York........................ 293.2 361.2 389.4Norfolk........................... 318.0 353.7 347.7Philadelphia .................. 301.8 362.0 384.3Pittsburgh ..................... 298.2 358.4 366.7Wash., DC ...................... 317.8 359.7 368.6 PAD I avg .................. 305.2 356.0 365.8
Chicago ......................... 343.2 400.7 415.1Cleveland ...................... 308.5 354.9 344.4Des Moines .................... 309.9 350.3 354.4Detroit ........................... 301.0 358.5 371.0Indianapolis .................. 308.2 365.3 361.0Kansas City ................... 314.5 350.2 334.4Louisville ....................... 316.2 365.4 360.7Memphis ....................... 330.5 370.3 347.1Milwaukee ..................... 312.9 364.2 362.7Minn.-St. Paul ............... 313.3 360.3 365.0Oklahoma City ............... 298.0 333.4 336.1Omaha .......................... 299.6 345.3 341.0St. Louis ........................ 304.6 340.3 339.0Tulsa ............................. 296.0 331.4 334.3Wichita .......................... 312.0 355.4 352.3 PAD II avg ................. 311.2 356.4 354.6
Albuquerque .................. 299.9 337.2 337.7Birmingham .................. 291.8 331.2 350.4Dallas-Fort Worth .......... 292.4 330.8 359.3Houston ......................... 296.2 334.6 352.6Little Rock ..................... 287.0 327.2 351.0New Orleans .................. 295.8 334.2 357.0San Antonio ................... 297.8 336.2 349.0 PAD III avg ................ 294.4 333.1 351.0
Cheyenne....................... 293.3 335.7 339.4Denver ........................... 318.0 358.4 358.9Salt Lake City ................ 299.8 342.7 348.4 PAD IV avg ................ 303.7 345.6 348.9
Los Angeles ................... 335.9 406.7 429.2Phoenix.......................... 330.5 367.9 364.2Portland ........................ 323.0 372.5 367.2San Diego ...................... 307.9 378.8 424.2San Francisco................ 335.4 406.3 422.2Seattle........................... 316.5 372.4 384.2 PAD V avg ................. 324.9 384.1 398.6
Week’s avg. .................. 308.3 355.6 362.8Mar. avg.. ...................... 302.1 349.4 370.7Feb. avg. ....................... 286.1 333.4 361.52014 to date ................. 290.8 338.0 —2013 to date ................. 306.0 352.2 —
*Includes state and federal motor fuel taxes and state sales tax. Local governments may impose additional taxes.Source: Oil & Gas Journal.Data available at PennEnergy Research Center.
US CRUDE PRICES4-4-14
$/bbl*
Alaska-North Slope 27° ......................................... 97.76 Light Louisiana Sweet ........................................... 96.51 California-Midway Sunset 13° .............................. 99.20 California Buena Vista Hills 26° ........................... 106.48 Wyoming Sweet ..................................................... 92.64 East Texas Sweet ................................................... 96.00 West Texas Sour 34° .............................................. 92.75 West Texas Intermediate ........................................ 97.75 Oklahoma Sweet.................................................... 97.75 Texas Upper Gulf Coast ......................................... 91.50 Michigan Sour ....................................................... 89.75 Kansas Common ................................................... 96.50 North Dakota Sweet ............................................... 87.94
*Current major refner’s posted prices except N. Slope lags 2 months. 40° gravity crude unless differing gravity is shown. Source: Oil & Gas Journal. Data available at PennEnergy Research Center.
REFINED PRODUCT PRICES 3-28-14 3-28-14 ¢/gal ¢/gal Spot market product prices
Motor gasoline (Conventional-regular) New York Harbor ......... 270.10 Gulf Coast .................. 273.60
Motor gasoline (RBOB-regular) New York Harbor ......... 292.70
No. 2 heating oil New York Harbor ......... 292.10
No. 2 DistillateLow sulfur diesel fuel New York Harbor ......... 295.60 Gulf Coast .................. 292.10 Los Angeles ................ 293.20
Kerosine jet fuel Gulf Coast .................. 287.80
Propane Mont Belvieu .............. 106.50
Source: EIA Weekly Petroleum Status Report.Data available at PennEnergy Research Center.
BAKER HUGHES RIG COUNT 4-4-14 4-5-13
Alabama............................................ 4 6Alaska ............................................... 11 9Arkansas ........................................... 12 15California .......................................... 38 39 Land................................................ 37 37 Offshore .......................................... 1 2Colorado ............................................ 62 59Florida ............................................... 1 1Illinois ............................................... 3 1Indiana.............................................. 0 2Kansas .............................................. 27 25Kentucky............................................ 3 2Louisiana .......................................... 99 106 N. Land ........................................... 25 23 S. Inland waters .............................. 17 25 S. Land............................................ 15 13 Offshore .......................................... 42 45Maryland ........................................... 0 0Michigan ........................................... 0 1Mississippi ........................................ 14 10Montana ............................................ 7 10Nebraska ........................................... 2 2New Mexico........................................ 90 81New York............................................ 0 0North Dakota ..................................... 178 174Ohio................................................... 38 30Oklahoma .......................................... 193 179Pennsylvania ..................................... 54 63South Dakota..................................... 0 2Texas ................................................. 877 825 Offshore .......................................... 3 1 Inland waters .................................. 0 0 Dist. 1 ............................................. 130 135 Dist. 2 ............................................. 80 81 Dist. 3 ............................................. 54 43 Dist. 4 ............................................. 39 35 Dist. 5 ............................................. 8 15 Dist. 6 ............................................. 36 26 Dist. 7B ........................................... 8 14 Dist. 7C ........................................... 86 78 Dist. 8 ............................................. 314 269 Dist. 8A ........................................... 35 42 Dist. 9 ............................................. 18 22 Dist. 10 ........................................... 66 64Utah .................................................. 27 28West Virginia ..................................... 26 20Wyoming............................................ 49 44Others—ID-1; NV-2 .......................... 3 4
Total US ........................................ 1,818 1,738 Total Canada ................................ 235 206
Grand total ................................... 2,053 1,944US oil rigs.......................................... 1,498 1,357US gas rigs........................................ 316 375Total US offshore ............................... 47 48Total US cum. avg. YTD ..................... 1,782 1,756
Rotary rigs from spudding in to total depth.Defnitions, see OGJ Sept. 18, 2006, p. 46.Source: Baker Hughes Inc.
Data available at PennEnergy Research Center.
US NATURAL GAS STORAGE1 3-28–14 3-21–14 3-28–13 Change, –——––—— bcf —––——– %
Producing region ................ 352 376 701 (49.8)Consuming region east ...... 310 356 669 (53.7)Consuming region west ...... 160 164 331 (51.7)
Total US ............................. 822 896 1,701 (51.7) Change, Jan.-14 Jan.-13 %
Total US2 ............................ 1,926 2,702 (28.7)
1Working gas. 2At end of period.Source: Energy Information Administration Data available at PennEnergy Research Center.
OGJ PRODUCTION REPORT 14-4-14 24-5-13
–—— 1,000 b/d —–—
(Crude oil and lease condensate)Alabama ................................. 26 28 Alaska .................................... 535 531 California ............................... 598 592 Colorado ................................. 186 163 Florida .................................... 6 6 Illinois .................................... 24 26 Kansas ................................... 130 132 Louisiana ............................... 1,204 1,212 Michigan ................................ 21 21 Mississippi ............................. 63 66 Montana ................................. 77 80 New Mexico ............................. 289 255 North Dakota .......................... 989 786 Oklahoma ............................... 341 296 Texas ...................................... 3,340 2,682 Utah ....................................... 105 90 Wyoming ................................. 179 173 All others ................................ 79 86
Total .................................. 8,192 7,2251OGJ estimate. 2Revised. Source: Oil & Gas Journal.Data available at PennEnergy Research Center.
WORLD CRUDE PRICES $/bbl OPEC reference basket Wkly. avg. 4-4-14 102.75 –– Mo. avg., $/bbl –– Jan.-14 Feb.-14
OPEC reference basket....................... 104.71 105.38Arab light-Saudi Arabia ....................... 105.74 106.30Basrah light-Iraq ................................. 102.70 103.38Bonny light 37o-Nigeria ........................ 110.26 110.77Es Sider-Libya ...................................... 107.86 108.47Girassol-Angola.................................... 107.96 109.54Iran heavy-Iran..................................... 104.89 104.96Kuwait export-Kuwait ........................... 103.79 104.17Marine-Qatar........................................ 103.95 104.91Merey-Venezuela .................................. 93.72 94.00Murban-UAE ......................................... 107.66 108.69Oriente-Ecuador ................................... 93.44 97.44Saharan blend 44o-Algeria ................... 109.96 110.52Other crudesMinas 34o-Indonesia ............................ 110.60 108.46Fateh 32o-Dubai ................................... 104.01 105.04Isthmus 33o-Mexico ............................. 96.35 100.47Tia Juana light 31o-Venezuela .............. 108.26 108.87Brent 38o-UK ........................................ 106.40 107.43Urals-Russia ........................................ 102.74 108.06DifferentialsWTI/Brent ............................................. (13.36) (8.09)Brent/Dubai.......................................... 4.25 3.83
Source: OPEC Monthly Oil Market Report.Data available at PennEnergy Research Center.
IHS PETRODATA RIG COUNT APR. 4, 2014
Total supply of rigs
Marketed supply of rigs
Marketed contracted
Marketed utilization rate (%)
US Gulf of Mexico. . . . . . 112 86 80 93.0South America 83 81 81 100.0Northwest
Europe. . . . . 93 91 91 100.0West Africa. . . . . . 80 76 68 89.5Middle East. . . . . . . 146 142 130 91.6Southeast Asia. . . . . . . 101 93 82 88.2Worldwide. . . . 836 780 737 94.5
Source: IHS PetrodataData available in PennEnergy Research Center
140414ogj_32 32 4/10/14 11:30 AM
STATISTICS
Oil & Gas Journal | Apr. 14, 2014 33
WORLDWIDE CRUDE OIL AND GAS PRODUCTION 1 month average Change vs. Jan. Dec. –––– production ––– –––– previous year ––– Jan. Dec. Cum. 2014 2013 2014 2013 Volume % 2014 2013 2014 ––––––––––––––––––– Crude, 1,000 b/d –––––––––––––––––––––––– –––––––––– Gas, bcf ––––––––––––––
Argentina ............................ 539 545 539 534 5 0.9 101.6 100.0 101.61 Bolivia ................................. 48 48 48 45 3 7.7 63.0 63.0 63.00 Brazil .................................. 2,120 2,200 2,120 2,140 (20) (0.9) 68.4 67.1 68.44 Canada ............................... 3,600 2,700 3,600 3,329 271 8.2 395.0 420.0 395.00 Colombia ............................ 1,010 1,010 1,010 1,010 0 0.0 30.0 30.0 30.00 Ecuador1 ............................. 530 530 530 507 23 4.5 1.0 1.0 1.00 Mexico ................................ 2,506 2,517 2,506 2,562 (56) (2.2) 200.3 193.6 200.26 Peru ................................... 170 170 170 165 5 3.0 36.7 37.0 36.67 Trinidad .............................. 75 80 75 83 (8) (9.6) 124.2 130.2 124.19 United States ...................... 7,939 7,864 7,939 7,047 892 12.7 2,215.5 2,206.0 2,215.50 Venezuela1 .......................... 2,460 2,440 2,460 2,500 (40) (1.6) 60.0 60.0 60.00 Other Latin America ............ 89 88 89 88 1 1.2 4.0 4.0 4.01
Western Hemisphere .......... 21,085 20,192 21,085 20,009 1,076 5.4 3,303.7 3,315.9 3,303.69
Austria ................................ 17 16 17 14 3 20.8 4.0 3.8 4.00 Denmark ............................. 161 160 161 187 (26) (14.0) 15.9 14.5 15.93 France ................................ 15 16 15 16 (1) (4.0) 0.1 1.5 0.06 Germany ............................. 50 50 50 53 (3) (5.3) 28.0 28.0 28.00 Italy .................................... 100 110 100 95 5 5.3 24.0 24.0 24.00 Netherlands ........................ 21 23 21 23 (2) (8.7) 120.0 120.0 120.00 Norway ............................... 1,633 1,611 1,633 1,545 88 5.7 349.6 360.2 349.61 Turkey ................................ 45 47 45 45 — — 1.5 1.5 1.50 United Kingdom .................. 845 948 845 938 (93) (9.9) 115.0 110.5 114.97 Other Western Europe ......... 9 9 9 10 (1) (10.0) 2.3 2.3 2.29
Western Europe ................. 2,896 2,990 2,896 2,925 (29) (1.0) 660.4 666.3 660.36
Azerbaijan ........................... 844 844 844 921 (77) (8.3) 95.3 88.3 95.35 Croatia ................................ 11 12 11 11 — — 4.5 4.5 4.50 Hungary .............................. 12 12 12 13 (1) (9.3) 6.0 6.0 6.00 Kazakhstan ......................... 1,642 1,665 1,642 1,696 (55) (3.2) 130.7 134.2 130.66 Romania ............................. 81 82 81 82 (1) (1.2) 20.0 20.0 20.00 Russia ................................ 10,506 10,553 10,506 10,366 141 1.4 2,327.2 2,313.1 2,327.19 Other FSU ........................... 375 366 375 399 (23) (5.9) 568.6 488.0 568.56 Other Eastern Europe .......... 53 53 53 50 3 5.1 20.9 20.9 20.92
Eastern Europe and FSU ..... 13,524 13,587 13,524 13,538 (14) (0.1) 3,173.2 3,075.0 3,173.18
Algeria1 ............................... 1,080 1,150 1,080 1,160 (80) (6.9) 230.0 230.0 230.00 Angola1 ............................... 1,650 1,640 1,650 1,770 (120) (6.8) 4.0 4.0 4.00 Cameroon ........................... 61 61 61 61 — — 2.0 2.0 2.00 Congo (former Zaire) ........... 28 28 28 28 — — — — —Congo (Brazzaville) ............. 290 290 290 290 — — — — —Egypt .................................. 680 730 680 730 (50) (6.8) 105.0 105.0 105.00 Equatorial Guinea ................ 255 255 255 255 — — 0.1 0.1 0.06 Gabon ................................. 260 250 260 260 — — 0.3 0.3 0.30 Libya1 ................................. 500 230 500 1,380 (880) (63.8) 25.0 25.0 25.00 Nigeria1 ............................... 1,920 1,920 1,920 2,000 (80) (4.0) 70.0 70.0 70.00 Sudan ................................. 470 470 470 470 — — — — —Tunisia ................................ 58 58 58 67 (9) (13.6) 9.0 9.0 9.00 Other Africa ........................ 315 315 315 315 — — 9.1 9.1 9.10
Africa ................................ 7,567 7,397 7,567 8,786 (1,219) (13.9) 463.6 463.6 463.56
Bahrain ............................... 49 43 49 42 7 16.7 32.0 32.0 32.00 Iran1 ................................... 2,780 2,750 2,780 2,650 130 4.9 465.0 465.0 465.00 Iraq1 ................................... 3,090 3,130 3,090 2,970 120 4.0 28.0 28.0 28.00 Kuwait1 2 ............................. 2,780 2,810 2,780 2,820 (40) (1.4) 40.0 40.0 40.00 Oman ................................. 959 945 959 940 19 2.0 94.0 94.0 94.00 Qatar1 ................................. 720 730 720 740 (20) (2.7) 350.0 350.0 350.00 Saudi Arabia1 2 .................... 9,760 9,820 9,760 9,250 510 5.5 250.0 250.0 250.00 Syria ................................... 30 30 30 130 (100) (76.9) 14.0 14.0 14.00 United Arab Emirates1 ......... 2,720 2,760 2,720 2,600 120 4.6 165.0 165.0 165.00 Yemen ................................ 130 120 130 160 (30) (18.8) — — —Other Middle East ............... 1 1 1 1 1 89.1 22.1 27.5 22.13
Middle East ....................... 23,019 23,139 23,019 22,302 717 3.2 1,460.1 1,465.5 1,460.13
Australia ............................. 319 338 319 348 (29) (8.3) 154.9 151.3 154.89 Brunei ................................ 109 109 109 150 (41) (27.2) 36.5 36.5 36.50 China .................................. 4,152 4,226 4,152 4,210 (58) (1.4) 402.2 385.3 402.23 India ................................... 783 782 783 760 23 3.0 108.5 106.0 108.51 Indonesia ............................ 787 823 787 823 (36) (4.3) 202.0 202.0 202.00 Japan ................................. 12 11 12 15 (3) (20.0) 10.8 9.0 10.84 Malaysia ............................. 500 501 500 541 (41) (7.6) 203.6 191.0 203.59 New Zealand ....................... 40 33 40 38 2 4.0 13.7 13.2 13.67 Pakistan .............................. 87 84 87 77 9 12.2 127.9 131.9 127.91 Papua New Guinea ............. 30 31 30 30 — — 0.5 0.5 0.50 Thailand ............................. 225 230 225 251 (25) (10.1) 118.7 124.4 118.70 Vietnam .............................. 330 330 330 330 — — 32.0 32.0 32.00 Other Asia–Pacifc ............... 28 51 28 38 (10) (26.1) 111.5 108.6 111.46
Asia–Pacifc ...................... 7,402 7,549 7,402 7,611 (209) (2.8) 1,522.8 1,491.6 1,522.79
TOTAL WORLD .................... 75,493 74,855 75,493 75,172 321 0.4 10,583.7 10,477.8 10,583.71
OPEC .................................. 29,990 29,910 29,990 30,347 (357) (1.2) 1,688.0 1,688.0 1,688.00 Offshore Europe .................. 2,665 2,747 2,665 2,697 (32) (1.2) 516.4 521.1 516.43
1OPEC member. 2Kuwait and Saudi Arabia production each include half of Neutral Zone. Totals may not add due to rounding.
Source: Oil & Gas Journal. Data available at PennEnergy Research Center.
140414ogj_33 33 4/10/14 11:30 AM
MARKET CONNECTIONW H E R E T H E I N D U S T R Y G O E S T O C L A S S I F Y
The Oil & Gas Journal has a circulation of over 100,000 readers and has been the world’s most widely read petroleum publication for over 100 years
34 Oil & Gas Journal | Apr. 14, 2014
The Proco Series 230 Online Catalog is now powered by TraceParts.
Visit http://www.tracepartsonline.net/ws/proco for more details.
The Expansion Joint and
Check Valve People
The Proco Series 230 Online
Proco Products, Inc. is a global leader in the design and supply of
piping/ducting system joints and rubber check valves. We offer
the most complete line of rubber and molded PTFE expansion
��������������������������������������� ���������� ������
low torque sealing gaskets to the piping industry.
Proco Products, Inc. also offers ProFlexô rubber check valves
manufactured completely of rubber with top quality fungicide and
barnacle resistant rubber.
www.procoproducts.com
Wireless, remote daily tank
monitoring and gauging system
for crude oil and waste water.
855-842-8265 (TANK)/ 1-618-345-6891/ www.tanksentinel.com
�� ����� ��� ��������������
����������� ���
�������� �� ������NO����������
�� �������� �������� !����������! ���
�� ���� ���� � ����������������������
��� ������ ��#��
�� ��������������
�� �!��� �������������!� "�� ������
ONLY $795!STARTING AT
������������������� �������
���� ���� �� ����
�������� �������� ��������
PRODUCTS
CONTACT:
Toll-Free: 1/866-617-0764
LB 40-60 EXPElectric Steam Generators for
Cleaning/Degassing
Operations Prior
to“Hot Work”
Reach nearly 100,000 paid subscribers.
Contact Grace at [email protected]
713-963-6291
Brady, TexasBrownwood, Texas
Early, Texas
www.loadcraft.com(800)803-0183
Drill Like You Mean It.
WORKOVER & DRILLING RIGSDRAWWORKS PARTS&SERVICE
MOBILE SAND SILOSFRAC UNITS HEAVY HAUL TRAILERS
M A N U F A C T U R I N G
VISIT US
IN OUR
HOSPITALITY
SUITE AT THE
140414ogj_34 34 4/10/14 11:30 AM
SEE RESULTS—Ask me how!
GRACE JORDAN
713-963-6291 [email protected]
Twitter: @ogjmarket
• Employment? HIRE
• Services Offered? ACQUIRE
• Equipment/Products/Land? SELL
MARKET CONNECTIONW H E R E T H E I N D U S T R Y G O E S T O C L A S S I F Y
The Oil & Gas Journal has a circulation of over 100,000 readers and has been the world’s most widely read petroleum publication for over 100 years
Oil & Gas Journal | Apr. 14, 2014 35
25 MMCFD x 1100 PSIG PROPAK
REFRIGERATION PLANT
28 TPD SELECTOX SULFUR
RECOVERY UNIT
1100 BPD LPG CONTACTOR x 7.5 GPM
CAUSTIC REGEN
NGL/LPG PLANTS:10 - 600 MMCFD
AMINE PLANTS:60 - 3300 GPM
SULFUR PLANTS:10 - 180 TPD
FRACTIONATION:1000 ñ 25,000 BPD
HELIUM RECOVERY: 75 & 80 MMCFD
NITROGEN REJECTION: 25 ñ 100 MMCFD
MANY OTHER REFINING/GAS
PROCESSING UNITS
We offer engineered surplus
equipment solutions.
Bexar Energy Holdings, Inc.
Phone 210 342-7106/ Fax 210 223-0018
www.bexarenergy.com
Email: [email protected]
SURPLUS GAS PROCESSING/
REFINING EQUIPMENT
100 MCF ñ 20 MMCF
JT PLANTS: 1 MMCF ñ 20 MMCF
AMINE PLANTS: 0.5 GPM ñ 6 GPM
��� ���������������
PRODUCT STORAGE TANKS:
12,000 ñ 30,000 GALLON
REFRIGERATION
PLANTS
318-425-2533, 318-458-1874
[email protected] * www.gas--corp.com
30s, 60s & 90k
Gallon Tanks
Available
1,000 GPM Amine Plant @ 1250 PSI
Quantity 2—21,000 Gallon 250 PSI
Quantity 3—7,000 Gallon 1000 PSI SS
We WANT your storage tanks 12k to 90k gallon ≥250 PSI
Gas Corporation of America
FEATURED EQUIPMENT:
800-762-6015������������ ���
�������������� ��������
Contact: [email protected] / 281-559-2995
BTX Reformer-22kBPD, UDEX, Cyclohexane
DHT-16kBPD,SWS-309gpm, SRU-30LTPD
FCC-49kBPD w/30,000HP Power Rec Turbine
ALKY-9kBPD, MTBE-10kBPD, Ethylene
��� �����������������������������������
���������
���������
�����
����������
�
FCC EquipmentLarge Inventory: New--Unused
Contact Bryan Watt918-744-5588
Refurbished or new… PennEnergy connects
true buyers to true sellers.
Major features include
» Heat rate: 10,430 Btu/Wh
» Output: 85,100 kWh ISO rated
» Fuel system: Dual liquid fuel; crude
and distillate
» Convertible to natural gas
» Price includes auxiliaries
GE 7EA
combustion
turbine generator
packagesThree unused 60-Hz units
available for immediate delivery
POWER GENERATION EQUIPMENT
AVAIL ABLE FOR IMMEDIATE SALE EQUIPMENTwww.pennenergyequ ipment . com
Major features include
» Heat rate: 10,430 Btu/Wh
» Output: 85,100 kWh ISO rated
» Fuel system: Dual liquid fuel; crude
and distillate
» Convertible to natural gas
» Price includes auxiliaries
GE 7EA
combustion
turbine generator
packagesThree unused 60-Hz units
available for immediate delivery
Randy Hall [email protected] +1 713-499-6330 Chris Davis [email protected] +1 817-263-3271
Contact For info or pricing
e
e
p
p
Exclusively for sale in partnership with
POWER GENERATION EQUIPMENT
AVAIL ABLE FOR IMMEDIATE SALE EQUIPMENTwww.pennenergyequ ipment . com
FOR SALEGAS TURBINE GENERATORS
DIESELS – TURBINES – BOILERS24/7 EMERGENCY SERVICE • IMMEDIATE DELIVERYwww.wabashpower.com • [email protected]
POWER
EQUIPMENT CO.wabash 1-800-704-2002
3750KW / 4688KVA4400KW / 5500KVA
Solar T60SDual Fuel, SoloNox
(1) 40MW GECFR-6B GAS 50/60 Hz
(1) 22MW GEFR-5P, Oil/Gas
EQUIPMENT
Your Ad Here
Reach nearly 100,000
petroleum professionals!
and
Contact: [email protected]
140414ogj_35 35 4/10/14 11:30 AM
MARKET CONNECTIONW H E R E T H E I N D U S T R Y G O E S T O C L A S S I F Y
The Oil & Gas Journal has a circulation of over 100,000 readers and has been the world’s most widely read petroleum publication for over 100 years
36 Oil & Gas Journal | Apr. 14, 2014
EMPLOYMENTTRAINING
Optimizing Careers for Oil and Gas Leaders
Through Professional Short Courses
at Colorado School of Mines
• Using Dynamic DCF and Real
Options to Value and Manage Mining
and Petroleum Projects
May 7-9
• Economic Evaluation and Investment
Decision Methods
May 12-16, July 21-25, Sept. 22-26,
Oct. 20-22, Nov. 10-14
• Crude Oil Valuation and Pricing
May 14-16, Nov. 5-7
• Introduction to Petroleum
Refning
June 4-6, Oct. 1-3
• Natural Gas Hydrates
June 25-27
Upcoming Continuing Education
Courses in 2014:
www.csmspace.com
303-279-5563 / [email protected]
Register Today!
T h e N e W S R e S e R V e F O R N O R T h A M e R I C A N S h A L e P L A Y S VOLUME 1 NUMBER 1
Beyond US border, Mexico primes shale pot
Oil production from 14 of the most active counties in the South Texas eagle Ford shale reached 28 MMbbl in the last year. Gas production doubled from the previous year to 271 bcf, and for the
same period, condensate tripled to 21 MMbbl, according to a March report from the eagle Ford Task Force, which was established by the Texas Railroad Commission. By 2015, the eagle Ford shale will become the largest stand-alone energy project in the world as
measured by capital expenditures, the report indicates.
Meanwhile, across the border from South Texas, Mexico is gearing up to initiate its own shale boom.
“The eagle Ford doesn’t stop at the border,” said edgar Rangel-German, commissioner with Mexico’s National hydrocarbons Commission (CNh). The US energy Information Admin-istration (eIA) reported in 2011 that Mexico has the second-largest shale gas potential in Latin America and the fourth-largest in the world. The country contains 61 tcf of natural gas reserves but the eIA report places Mexico’s shale gas potential at 680 tcf.
Mexico state oil cbeen analyzing tthe eIA along witof resources, beithe world was a nbelieve the eIA’s nmated,” Rangel-G
Mexico’s CNhnew laws in the cThe commission isanctioning resertioning e&P projmation concerniand overseeing oThe country is in iunconventional
Tayvis Dunnahoe, Editor
EAGLE FORD
SHALE GAS BASINS OF EASTERN MEXICO
TexasEl BurroUplift
Sabinas Basin
Coahuila
Platform
Burgos
Percutor
Nomada
MontañezHabano
Emergente
Arbolero-1
Eagle Ford
Gas
Play
Eagle Fo rd O
il Pl
ay
Peyotes-Pic
achos A
rches
U S
The Journal of Energy
from Innovation
www.uogreport.com
The New:
BUSINESS OPPORTUNIT IES
Oat Mountain So. California
640-2000 acres available.
650,000,000 Barrel Potential
Contact George 805-432-4701 or
5,614 wells, $3,000Contact: lhronek@
thomasldavisgeologist.com
well listing on:
www.thomasldavisgeologist.com
San Joaquin Basin Logs
All from Kern County, California
2,342 wells (mostly wildcats)
.LAS format, $15,000
Formation Tops
The Bureau of Indian Affairs, Pawnee
Agency, Pawnee, OK, is offering the sale
of Restricted Indian Land for Oil & Gas
Mining Leases, located in Noble, Pawnee,
Kay Counties & part of Payne Co., north
of the Cimarron River on Tuesday, May
20, 2014. Persons or frms interested in
bidding or those desiring additional infor-
mation should contact the Trust Manage-
ment Services Offce at 918-762-2585.
O I L & G AS M I N I N G L E AS E S
The Department of Interior, Bureau of Indian
Affairs, Concho Agency will be conducting an
at 9 a.m. on May 15, 2014
at Redlands Community College in El Reno,
Oklahoma. Indian lands in Blaine, Canadian,
Buster, Dewey, Kingfsher, Roger Mills and
Washlite counties in Oklahoma will be
available for lease.
To obtain the complete text of the sale
notice or further information,
please call (405)-262-7481.
Oil and Gas Lease Sale
BUSINESS OPPORTUNIT IES
In response to program growth and
campus strategic initiatives, the
Geological Sciences and Engineering
Department at Missouri S&T seeks
applicants for a tenure track faculty
opening in Petroleum Engineering
with appointment at the assistant or
associate professor level. Candidates
must have an earned PhD in petroleum
engineering, petroleum geosciences,
or a closely related area appropriate
to support research and teaching in
reservoir characterization, geostatistics,
petrophysics, and/or formation evalua-
tion. Industrial experience in analyz-
ing and evaluating the many indices
used to characterize unconventional
resources is strongly preferred.
For full position description includ-
ing application procedures visit:
http://hraadi.mst.edu/hr/employ-
ment/faculty/ (reference number
R00059882). For additional informa-
tion (but not to submit applications)
contact Dr. Runar Nygaard, 153 McNutt
Hall, Rolla, MO 65409; nygaardr@mst.
edu; (573) 341-4759. Review of appli-
cations will begin
May 10, 2014, and
applications will
be accepted and
reviewed until the
position is flled.
Assistant/Associate Professor
of Petroleum Engineering
in Reservoir Characterization
Missouri University of Science and
Technology/Geological Sciences and
Engineering Department
Reach nearly 100,000 paid subscribers.
Contact Grace at [email protected]
713-963-6291EMPLOYMENT OPPORTUNITIES
continued on page 37
140414ogj_36 36 4/10/14 11:31 AM
SEE RESULTS—Ask me how!
GRACE JORDAN
713-963-6291 [email protected]
Twitter: @ogjmarket
• Employment? HIRE
• Services Offered? ACQUIRE
• Equipment/Products/Land? SELL
MARKET CONNECTIONW H E R E T H E I N D U S T R Y G O E S T O C L A S S I F Y
The Oil & Gas Journal has a circulation of over 100,000 readers and has been the world’s most widely read petroleum publication for over 100 years
Oil & Gas Journal | Apr. 14, 2014 37
EMPLOYMENT
Cameron International Corporation in
Houston, TX seeks Sr. Technical Analyst.
Qualifed applicants will possess a Bachelor’s
degree in Finance or Accounting and 2 years
of experience managing fnancial analysis func-
tions. To apply, submit resumes to Deborah A.
Russell at [email protected]. Resume
must include job code 789.
Maersk Drilling USA Inc. is looking for
motivated and highly qualifed people to
join our team. We have needs to fll the fol-
lowing offshore vacancies for our rig operations
in the U.S. Gulf of Mexico:
• AssistantDriller
• AssistantMarineSectionLeader
• AssistantSubseaEngineer
• AuxillaryDriller
• CampBoss
• CateringHand
• DrillingSectionLeader
• ElectricalSupervisor
• ElectronicTechnician
• HydraulicMechanic
• LeadCraneOperator
• MainDriller
• MaintenanceEngineer
• MarineSectionLeader
• Materials&LogisticsCoordinator
• NightToolpusher
• OffshoreInstallationManager
• SafetyOffcer
• SeniorDPO
• SubseaEngineer
• SubseaSupervisor
• TechnicalSectionLeader
• Tourpusher
Applicants should mail resumes to Maersk
Drilling USA Inc., Attn. Recruitment Manager,
2500CityWestBlvd.,Suite1850,Houston,TX
77042-3052 or fax resume at 713-972-3303.
Reference JobCodeMDHOU003014onre-
sume and indicate the applicable position(s).
For further info, refer to www.maerskdrilling.
com.
Maersk Drilling USA Inc. is an Equal Opportu-
nity Employer.
Your Source for Energy News, Research, and Insight.
Make PennEnergy a part of your day and know what is happening in the world of energy. PennEnergy.com
PennEnergy.com was created by PennWell to serve as the broadest and most complete source of energy-related news, research, and insight.
Including content from all PennWell energy-related brands, PennEnergy.com delivers news, fi nancial data, research materials, books, equipment, and service information all in one easy-to-navigate website.
We’re In Great Company…
part of your day and know P E
A FEW OF OUR PENNWELL FRIENDS:
UTIL ITYPRODUCTSconference & exposition
®
All your industry needs
met in one place.
For the latest in employment opportunities visit Market
Connection online:
www.ogj.com/market-connection.html
Contact Grace at [email protected]
713-963-6291
140414ogj_37 37 4/10/14 11:31 AM
