GULF OF MEXICO Bruce Beaubouef • Houston
New rig tracking service
sees modest decline in GoM activity
Gaffney, Cline & Associates (GCA) has launched a new weekly
commentary and tracking service that reviews US onshore and Gulf
of Mexico (GoM) rig activity. Based on the Baker Hughes rig count,
it will highlight the reported week-on-week changes, and compare
these to the evolving fall seen in 2009 during the financial crisis.
Figures released on Jan. 9, 2015, confirmed a fall of 60 in the onshore
rig count, the largest weekly drop since early 2009. The count has now
declined by 180 from a year high of 1,876 in November 2014 to 1,696.
The commentary follows two articles published by the company
in the final quarter of 2014. The first reviewed the economics of the
US shale oil development at a time when prices were testing $80/
bbl ( http://gaffney-cline-focus.com/oil-price-and-the-us-unconven-tional-boom); the second focused on the economics of both unconventional activity and GoM activity as oil prices approached $60/bbl
( http://gaffney-cline-focus.com/pain-likely-in-2015-but-deep-water-
gom-should-be-better-placed-than-uncon). The latter article noted
US unconventional activity was likely to be the harder hit sector if
prices continued to weaken into 2015.
GCA executive director and senior strategic advisor Bob George
commented: “The drop is significant, and although it is not unusual
to see drops at this time of year, it is now chasing down the 50% drop
in oil price that has taken place since mid-2014. If it follows the trend
seen in 2008-2009 following the financial crisis, the drop is likely to
be very sharp indeed.”
In contrast with the onshore rig count, GCA noted that the offshore
GoM rig count is only showing a modest drop. Total rigs drilling have
dropped from a high of 63 in August 2014 to 53 as of press time. How-
ever, rigs focused on oil drilling having dropped by only 2 to 42, and
have actually showed a small increase since the start of the year.
Senior geoscientist and analyst Neil Abdalla added: “Price hedg-
ing for many companies has allowed them to continue selling their
produced oil at prices far above current WTI trading ranges, often
in the $80-90 per barrel range. However these price hedges will run
out heading into 2Q 2015, putting further pressure on activity.”
“With oil prices having declined further in the opening days of the
New Year, and now dipping below $50/bbl on both sides of the Atlan-
tic, we are instituting a weekly watch on both US onshore and Gulf of
Mexico rig activity levels to assess how activity evolves,” said Abdalla.
Chevron makes another
Lower Tertiary deepwater discovery
Chevron Corp. says it has made a significant oil discovery at the
Anchor prospect in the deepwater US Gulf of Mexico. Anchor is Chevron’s second discovery in the deepwater
Gulf in less than a year.
“The Anchor discovery, along with the
previously announced Guadalupe discovery, are significant finds for us in the deep-water Gulf of Mexico,” said Jay Johnson,
senior vice president, Upstream, Chevron
Corp.
The Green Canyon block 807 Well No.
2 encountered oil pay in multiple Lower
Tertiary Wilcox Sands. The well, which
was spudded in August 2014, is located
approximately 140 mi (225 km) off the
coast of Louisiana in 5,183 ft ( 1,580 m) of
water and was drilled to a depth of 33,749 ft ( 10,287 m). Appraisal
drilling will begin this year.
“Chevron’s leading position in the Gulf, where we are expecting further growth in the near-term from recent project startups at
Jack/St. Malo and Tubular Bells, is further underpinned by this discovery,” said Jeff Shellebarger, president, Chevron North America
Exploration and Production Co. “We currently have five deepwater
drillships operating in the Gulf, two of which are focused on exploration activities.”
Chevron subsidiary Chevron U.S.A. Inc. is the operator, with a
55% working interest in the Anchor prospect. Anchor co-owners are
Cobalt International Energy, Inc. (20%), Samson Offshore Anchor,
LLC ( 12.5%); and Venari Resources LLC ( 12.5%).
Enbridge to build Stampede lateral
Enbridge Inc. has announced that it will build, own, and operate a
crude oil pipeline in the GoM to connect the planned Stampede development, operated by Hess Corp., to an existing third-party pipeline system.
The lateral pipeline is expected to cost approximately $0.13 billion and
be operational in 2018. The Stampede development was previously sanctioned by Hess and its project co-owners in October 2014.
Approximately 16 mi in length and 18-in. in diameter, the Stampede lateral will originate in Green Canyon block 468, located approximately 220 mi southwest of New Orleans. Water depth at the
location of the planned pipeline is approximately 3,500 ft ( 1,067 m).
“The Stampede lateral is consistent with Enbridge’s low-risk business model and furthers our objective to capture new deepwater
Gulf of Mexico crude oil plays,” said Greg Harper, president, Gas
Pipelines & Processing, Enbridge Inc. “This project is an attractive
investment opportunity for Enbridge and we are pleased to be working with Hess and the other producers on this development.”
BSEE solicits oil spill
response research projects
The Bureau of Safety and Environmental Enforcement (BSEE)
issued a solicitation for proposals for oil spill response research
projects, and will invest up to $6 million to support these projects
in 2015.
BSEE called for white papers focusing specifically on the following topic areas for proposed research covering oil spill response operations on the US outer contintenal shelf.
Topics should be limited to the following:
• Innovative methods to remove surface oil under arctic conditions
• Decanting recovered oil at sea
• Quantifying in-situ burn efficiency
• Innovative new uses of chemical
herders to enhance oil spill mitiga-
tion efforts
• Develop an innovative dispersant
spray drift model
• Determine the effect of various
deep-ocean conditions on dispersant
effectiveness
• Evaluate dispersant effectiveness of
subsea applications in ocean brine
pools.
The announcement, which came on Jan.
14, 2015, said that the deadline for submitting white papers was Feb. 9, 2015. So the
deadline will have ostensibly passed by the
time this issue hits mailboxes. However,
more information can be found by searching for BSEE solicitation E15PS00027 on
www.fbo.gov. •
Chevron’s Anchor well was drilled by Pacific
Drilling’s Pacific Santa Ana drillship
(Courtesy Pacific Drilling)
