The government has given Thai oil and gas company PTT EP Australasia a one-month deadline to pay for damages caused by its oil spill in the Timor Sea, a minister said Tuesday.

Transportation Minister Freddy Numberi, who also heads the national oil spill response team, said the government had demanded the company pay Rp 22 trillion in damages.

“Since they think this amount is too high, we have allowed them to verify the amount. We have asked them to verify this within one month,” Freddy said.

“We have the minutes from the meeting. There was no rejection. They must pay the compensation, because we have facts and evidence that our waters were polluted and many parties have suffered losses,” Freddy said.

Should the company refuse to yield to the demand, the government will file charges against the company in an international court.

Earlier this week, PTT EP president Anon Sirisaengtaksin said the company had received a letter from Indonesia requesting compensation for damage from the Montara oil spill.

“PTT EP found no verifiable evidence had been presented to support any claim,” the company said in a statement made available to The Jakarta Post on Friday.

Negotiators from Indonesia and the company met in Perth last week to discuss the spill, which Indonesia said had affected more than 70,000 square kilometers of ocean.

The company said it had worked with Australian authorities to monitor the environmental situation and that the oil slick had been limited to the immediate Montara area.

The company said it was researching the spill’s long-term effects, including the spread of oil from Montara into the Timor Sea, and would publish a report once its findings were complete.

PTT EP Australasia is a Bangkok-based oil and gas company operating in Australia and Asia. On Aug. 21, 2009, the company’s production facility, the Montara Well Head Platform, in West Atlas block, in the Timor Sea, exploded, leading to an estimated 400 barrels of oil being spilled every day. The spill entered Indonesian waters on Aug. 30, 2009.

As of Oct. 3, 2009, the oil spill had covered 16,420 square kilometers of Indonesian waters. PTT EP Australasia was only able to stop the spill more than two months later, on Nov. 3, 2009.

Last month, Freddy said Indonesia had asked PTT EP Australasia to pay around US$5 million in a down payment to repair environmental damage caused by the incident.

Two other oil and gas-related incidents occurred in Indonesian water recently. In early August,
South Korea’s Kodeco Energy had to shut down one of its oil and gas production facilities in the Java Sea after it was hit by a container ship. The operator estimated a production loss of 1,600 barrels of oil per day and 15 million standard cubic feet per day (mmscfd) caused by the incident.

Upstream oil and gas regulator BPMigas estimates repairs to the facility will take several weeks.

Last week, BPMigas reported that an explosion had occurred on the floating storage ship Gagasan Perak, which was collecting oil produced at the Sepanjang field in Kangean block. The block is operated by Kangean Energy Indonesia Ltd, a subsidiary of PT Energi Mega Persada (EMP).

EMP said the tanker contained the equivalent of 20,000 barrels of oil when the incident occurred. BPMigas said the operation of three production wells supplying oil to the tankers had been shut down.

Source

Statoil ASA, Norway’s largest oil and natural gas company, agreed to sell a 40 percent stake in the Brazilian offshore Peregrino field to China’s Sinochem Group for $3.07 billion in cash.

The companies also agreed to jointly seek more opportunities in Brazil and elsewhere, Statoil Chief Executive Officer Helge Lund said today. “Both companies see many opportunities for value creation through increased recovery and exploration for additional resources in the decades to come.”

The Norwegian company said last year it was considering cutting its stake in Peregrino to reduce risk and raise funds to develop other projects. Chinese state-owned companies, including PetroChina Co., last year spent a record $32 billion on energy and mining acquisitions to meet rising resources demand in the world’s fastest-growing major economy.

Cnooc Ltd., China’s biggest offshore energy explorer, was also in the bidding process for the stake estimated to cost as much as $3 billion, people with knowledge of the process said on April 15. Sinochem, China’s biggest chemicals trader, last year agreed to buy Emerald Energy Plc to boost revenue from oil and gas operations by tapping wells in Syria and Colombia.

“This transaction will significantly increase Sinochem’s interests in the exploration and production business and consolidate our position as one of the leading global players in the oil and chemicals business,” Han Gensheng, president of Sinochem Corp., said in a statement. The company made its first oil and gas investment in 2003 and operates 12 such projects in the Middle East, Latin American and Asia, according to the statement.

‘Profited Well’

“Statoil has profited well,” said Trond Omdal, an analyst at Arctic Securities with a “buy” rating on the shares. The price works out to about $15.4 a barrel, compared with the $7.2 a barrel Statoil paid when it took full control in 2008, he said.

Statoil’s shares gained 0.9 kroner, or 0.7 percent, to close at 127.3 kroner on the Oslo exchange after earlier falling as much as3.5 percent.

The Stavanger-based company, which has operations in 40 countries, took control of the field in March 2008 after buying the remaining 50 percent from Anadarko Petroleum Corp. The field, 85 kilometers (53 miles) offshore Rio de Janeiro, has an estimated 460 million barrels of recoverable oil, spokeswoman Mari Dotterud said on Oct. 20.

‘Better Than Fair’

“The price looks very strong actually, it’s better than fair,” Oswald Clint, an analyst at Sanford C. Bernstein who has a “market perform” rating on Statoil shares, said by phone from London. “This was signaled for some time.”

Statoil will keep 60 percent ownership and remain the operator of the field, which is set to start production in early 2011. Brazil will continue to form a “key part” of the company’s international strategy, and Statoil will explore further opportunities in the region, it said.

This stake sale will reduce Statoil’s equity production guiding for 2012 by 40,000 barrels of oil equivalent a day to 2.06 million to 2.16 million, the company said. Equity output was 1.962 million barrels of oil equivalent a day in 2009, while booked reserves of oil and gas totaled 5.4 billion barrels.

The transaction is subject to government approvals in Brazil and China.

–With assistance by William Bi in Beijing, Editors: Jonas Bergman, Raj Rajendran

Source

Astronauts just had to get to the moon. They didn’t have to figure out how to extract oil from it.

With the new $3 billion Perdido oil and natural gas platform, in a remote deep-water area of the Gulf of Mexico, Shell and its partners have effectively done both.

After more than a decade of work, they began last month pumping oil at the massive floating facility, which sits in nearly 8,000 feet of water and draws from wells that far below the sea floor, setting several records along the way.

A recent visit to Perdido, roughly 200 miles south of Houston, brings the scope of the achievement into focus.

It also offers a g

limpse of what could be ahead for the oil and gas industry as it presses farther into one of the last remaining U.S. regions where big quantities of crude oil are still being discovered.

“What we’re seeing here is the start of a new frontier in the Gulf of Mexico,” Bill Townsley, Shell’s Perdido venture leader, said as he stood aboard the hulking steel structure, staffed with 150 people, that he has dedicated the last three years of his life to building.

Indeed, Perdido could offer a template for rivals to follow in coming years as they develop fields of their own in an emerging deep-water area known as the Lower Tertiary trend. In recent years, more than a dozen big oil discoveries have been in made Lower Tertiary formations — deposited from 65 million to 35 million to 23 million years ago — in a 300-mile band on the outer edge of the U.S. Gulf between Texas and Louisiana.

Shell’s Perdido — which in Spanish means “lost” — is the first to achieve commercial production there, but Lower Tertiary fields are also being developed by BP, Chevron Corp. and others and are expected to help reverse years of oil and gas output declines in the well-plowed offshore region.

Perdido alone is capable of producing 100,000 barrels of oil and 200 million cubic feet of natural gas per day — enough to meet the energy needs for over 2 million households for a year.

Though not at that level of production yet, getting to this point hasn’t been easy. Shell, with partners Chevron Corp. and BP, has done the equivalent of moving mountains to bring the project online.

To make the project feasible, Shell, the lead operator, and partners devised an elaborate plan for tying in three distinct fields — called Great White, Silver Tip and Tobago — and handling their production through a single platform. Doing it, however, would require drilling at least 35 wells, some as far as seven miles from the platform and all extremely costly.

“When we came at them with 35 wells, people’s heads exploded,” Townsley said.  >more

LONDON (AP) — BP PLC said Wednesday that it had made a “giant” oil discovery in the Gulf of Mexico but had not yet determined the size and commercial potential of the find.

The well, in Keathley Canyon block 102 about 250 miles (400 kms) southeast of Houston, is in 4,132 feet (1,259 meters) of water, the company said.

The Tiber well was drilled to a total depth of 35,055 feet (10,685 meters), making it one of the deepest wells ever drilled by the oil and gas industry, BP said.

BP has a 62 percent interest in Tiber, while Petrobras holds 20 percent and ConocoPhillips has 18 percent.

BP shares were up 1.9 percent at 529.5 pence on the London Stock Exchange.

Latin America’s oil and gas market has remained relatively strong over the past year, despite the impact of ongoing financial problems worldwide. Demand for drillships and semisubmersibles has led to fleet utilization rates of around 100 percent, and Petrobras has busied itself with a number of offshore field development projects.

However, while the discovery of vast reserves in the pre-salt area of Brazil has helped drive activity for state company Petrobras, the company has had its share of problems, as has Venezuelan state oil company PDVSA.

Troubled Waters

Petrobras recently had to contend with a five-day strike by oil workers union Federação Única dos Petroleiros (FUP). FUP began the strike, which affected refineries and exploration and production units, after becoming unhappy with a profit-sharing scheme proposed by Petrobras, along with grievances that the company had not guaranteed protection against layoffs or adequately addressed concerns over safety issues. The workers previously went on strike in June 2008, demanding payment for time spent commuting to oil platforms.

The latest strike ended March 27 after Petrobras agreed to a substantial increase in the base level for its profit sharing, overtime payment for May Day, new meetings on employee safety and an assertion that job and benefit cuts were not planned. Petrobras also agreed not to harshly penalize workers who participated in the strike.

During the strike, Petrobras’ contingency teams took over operation of its platforms, and the company asserted that there was no interruption in oil and gas production.

Due to low oil prices, Venezuelan state oil company PDVSA has had trouble making payments to drilling contractors and oilfield services companies since pushing out foreign operators and nationalizing its oil and gas industry. PDVSA has ordered gradual payment of all outstanding debts dating back to 2008, and started to renegotiate terms and conditions with rig owners and companies providing well services.

In one of the more dramatic moments related to payment problems, PDVSA subsidiary Petrosucre took over operations of Ensco International jackup ENSCO 69 in January. Ensco had suspended drilling operations due to a lack of payment in the region of US$35 million. Petrosucre employees resumed drilling operations under observation by Ensco supervisory rig personnel, claiming that Ensco had violated contract provisions giving it 30 days to resolve such issues. PDVSA and Ensco are now working on resolving payment issues while drilling continues.

PDVSA President Rafael Ramirez said that the company would be “breaking away from structures that provide goods and services through monopolies, in many sectors of the oil industry” and create new companies, organizations and production units that “contribute effectively to the construction of socialism is the beginning of a new stage in the revolutionary process.”

Discoveries
In September 2008, Anadarko Petroleum made a pre-salt discovery at the Wahoo prospect offshore Brazil in the Campos Basin. The 1-APL-1-ESS well is on Block BM-C-30 in around 4,650 feet (1,417.3 m) of water, southeast from Petrobras’ pre-salt discoveries at the Jubarte field. Results at Wahoo indicate 195 feet (59.3 m) of net pay with similar characteristics to the Jubarte 1-ESS-103A well, Brazil’s first producing pre-salt field, which achieved rates of 18,000 b/d of light oil. Anadarko plans to run a multi-zone drill stem test toward the middle of 2009 at Wahoo and anticipates drilling more wells on the block later in 2009.

In late January of this year, Petrobras found  traces of natural gas in Blocks BM-ES-5 and BCAM-40. BM-ES-5 is in the Espirito Santo Basin in around 196.8 feet (60 m) of water. Scorpion Offshore jackup Offshore Defender is drilling on the block. BCAM-40 is in the Camamu-Almada Basin in around 967.8 feet (295 m) of water.

ExxonMobil has notified Brazilian regulatory agency Agencia Nacional de Petroleo, Gas Natural e Biocombustiveis (ANP) of two hydrocarbon discoveries in block BM-S-22, a pre-salt block known as Azulao. The discoveries were made in 7,293 feet (2,223 m) of water using Seadrill drillship West Polaris.

Rig Demand
South America continues to dominate Latin American drilling activity, with the majority of the rigs in the region working offshore Brazil or Venezuela. There are currently 128 rigs of various types in South America, and at least four rigs that are planned or on order will be headed to the region as well.

Of the existing rigs, 91 are under contract. The majority of the rigs with no contract are cold stacked or out of service drill barges and tender barges in Venezuela.

Other rigs are en route to South America. Noble semisubmersible Noble Dave Beard, Transocean semisubmersible Sedco 706 and Seadrill semisubmersible West Eminence will all begin contracts with Petrobras before the end of the year. Ensco International jackup ENSCO 68 is heading to Venezuelan waters to begin a three-well contract with Chevron.

Demand in both regions is expected to grow, with the majority of the growth coming from the semisubmersible market, according to ODS-Petrodata’s World Rig Forecast Short Term Trends report. In South America, an increase in demand to 52 semisubmersibles is predicted, but some requirements are likely to remain unfilled. At present, 40 semisubmersibles are in South America, all in Brazil, and all mainly operated by Brazilian state energy company Petrobras. Aside from Aban Offshore semisubmersible Aban Pearl, which will begin a contract with Venezuela’s PDVSA towards the end of the month, the rest of the arriving semisubmersibles will be working offshore Brazil for Petrobras or OGX Petroleo.

Of the seven rigs in Central America and the Caribbean Sea, all are in Trinidad and Tobago, with three jackups, one semisubmersible and one platform rig working, one platform rig warm stacked and one jackup cold stacked. One of the working rigs, Maersk-managed semisubmersible Kan Tan IV, has been drilling for Canadian Superior, Challenger Energy and BG Group on the Intrepid block, but will soon be leaving the region for Australia.

Field Development
Petrobras has been busy installing new FPSOs and production platforms offshore Brazil, and on Feb. 25 managed to set a new daily oil production record of 2,012,654 barrels with the help of the new facilities.

In the last quarter of 2008, floating platform P-53 became the first production unit installed in the Marlim Leste field in the Campos Basin. The P-53 is capable of producing up to 180,000 barrels of heavy oil, 20 degrees API, and of compressing up to 211.88 MMcf/d. The platform’s oil production is offloaded by shuttle tankers with the assistance of autonomous repumping platform PRA-1 and floating storage and offloading vessel Cidade de Macaé. The P-53 is in waters of 3,543 feet (1,080 m).

In January 2009, semisubmersible platform P-51 began producing from Well MLS-99 in the Marlim Sul field in the Campos Basin. Installed 93 miles (150 km) offshore in 4,117 feet (1,255 m) of water, the platform is capable of producing up to 180,000 b/d of oil. P-51 is capable of compressing 211.8 MMcf of gas and has a water injection capacity of 282,000 b/d. P-51 is 410 feet (125 m) in length, 360.8 feet (110 m) wide, and weighs 48,000 tons.

Petrobras brought FPSO Cidade de Niterói online in February, also in the Marlim Leste field. Chartered to Modec, the FPSO is 75 miles (120 km) off the coast in 4,495 feet (1,370 m) of water. The FPSO is capable of producing 100,000 b/d of light, 28-degree API oil and 123.6 MMcf/d of gas.

Following these projects, Petrobras expects to bring FPSO Cidade de São Mateus and FPSO BW Peace online within the next six months. Chevron’s Frade FPSO should also begin producing from the Campos Basin by mid-2009.

A number of field development projects have been taking place offshore Trinidad & Tobago. A consortium between Fluor Corp. and J. Ray McDermott recently installed the Poinsettia production platform for BG Trinidad and Tobago. Gas is now flowing from the platform.

The platform, located in 530 feet (161 m) of water off the northwest shore of Trinidad, can produce as much as 350 MMcf/d of gas, which is transported via a 20-inch diameter pipeline to the existing BG Trinidad and Tobago Hibiscus platform before final pipeline transmission to shore.

In March, Trinidad Offshore Fabricators Unlimited (TOFCO) delivered the EOG Toucan Deck to EOG Resources. The deck, a conventional deck module with a structure designed to support a drill rig, gas processing system and manned operations, will be part of the EOG Toucan platform in 433 feet (132 m) of water, 43 miles (69 km) east of Trinidad.

Source: Energy Current

As many as 20 of the 100 deepwater oil rigs on order worldwide may be delayed or canceled as loan availability erodes, possibly slowing developments including the biggest petroleum discovery in the Americas in three decades.

About half of the 20 rigs in question are rented for when they’re completed in two to three years — no longer enough to ensure financing for units that can cost $800 million to build, said Brian Uhlmer, an analyst at Pritchard Capital Partners in Houston. The drillers building those rigs are mostly fledgling contractors and may lack enough cash to satisfy lenders amid a global credit crunch, he said.

Norway’s Sevan Marine ASA has lost 70 percent of its value this month amid concern it won’t get financing for two drilling units. Houston-based Atwood Oceanics Inc. said Oct. 16 that it won’t exercise an option to build a deepwater rig at Jurong Shipyard Pte. Ltd. in Singapore. New rigs were being ordered to ease a shortage of deepwater gear needed to exploit offshore prospects like Brazil’s Tupi, announced in November by Petroleo Brasileiro SA, or Petrobras.

“Petrobras would probably be the dominant oil and gas company that gets hit by this,” Uhlmer said.

Jose Sergio Gabrielli, chief executive officer at state- controlled Petrobras, said the Rio de Janeiro-based company may need to help find financing for some of its suppliers. “We are concerned about the supply chain of products for Petrobras,” Gabrielli told reporters at a conference in Houston last week. >more