http://www.houstonchronicle.com/business/energy/conferences/article/New-rules-coming-for-retiring-offshore-oil-5458587.php

May 6, 2014 | Updated: May 6, 2014 11:06pm
by Jennifer A. Dlouhy

Tommy Beaudreau says new rules are coming on the decommissioning of old offshore oil infrastructure.

New regulations governing the decommissioning of old offshore oil infrastructure are on the horizon, a top Obama administration official said Tuesday. The Bureau of Ocean Energy Management will begin tackling the issue this summer, said Tommy Beaudreau, the former director of the agency. Although Beaudreau did not give specifics during a presentation at the Offshore Technology Conference, the coming regulations are expected to deal with concerns that existing bonding requirements for oil and gas companies are insufficient in an era of ultradeep exploration far from the coast.

“This will be an open, transparent process on how we meet these challenges around aging infrastructure and decommissioning,” said Beaudreau, who is now chief of staff to Interior Secretary Sally Jewell. The issue is a live one as some of the oldest deep-water wells in the Gulf of Mexico reach the end of their lives and companies look to dismantle the operations. Randall Luthi, the head of the National Ocean Industries Association and a former federal drilling regulator, said any changes should embrace rigs-to-reefs programs designed to allow old structures to have new lives as a habitat for marine life.

Norwegian company plans underwater ‘factories’ by Ryan Holeywell

Statoil wants to build huge underwater “factories” by 2020 that would sit on the seabed as they produce and process natural gas offshore.
The effort would be the culmination of work the Norwegian oil and gas company has pursued since 1986, when it drilled its first subsea wells, said Ola Anders Skauby, Statoil’s vice president of communication, technology, projects and drilling.

Statoil’s 500 undersea wells now account for half of its energy production, and its plan is to put almost every component needed for that work underwater in some locations, in part to insulate personnel and technology from difficult conditions. The company says subsea factories will be vital in parts of the world that are farthest from shore in deep, cold, harsh environments. One key to making them work is development of giant undersea gas compressors to boost production. Statoil is set to deploy a pair of those devices next year off the coast of Norway at a site called Åsgard.

“It’s as large as a soccer stadium – something you put on the seafloor,” Skauby told the Houston Chronicle. Compressors typically are placed on surface facilities. Building and installing the two compressors will cost $2.7 billion, but Statoil projects they will increase production in the Åsgard fields by at least 282 million barrels of oil equivalent. Subsea factories also will include an electrical power source and machinery to separate oil, gas and water. Statoil already operates a commercial separator off the coast of Norway. “We have that technology today,” Skauby said.

Still, subsea is costly and only will take hold where the economics make sense, he said.

__________

The Black Elk Energy platform is submerged at South Timbalier Block 185 in the Gulf of Mexico. OceanGate, a Seattle-based provider of deep-water submersible vessels, has released a new crop of underwater images from the federal Rigs to Reefs program, showing sea creatures swimming among the steel legs of an old Black Elk Energy platform. The manned submersibles typically are contracted for deep-water research and filming of shipwrecks and underwater life. But OceanGate made its first dive to observe an oil facility in the Gulf of Mexico earlier this year.

Special thanks to Richard Charter

http://oilprice.com/Energy/Energy-General/Problems-At-Petrobras-Mount-As-Brazils-Oil-Production-Stagnates.html

By Nick Cunningham | Tue, 06 May 2014 22:06 | 0
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For the past 30 years or so, Brazil has increased its oil production every year. Brazil’s state-owned oil company, Petrobras, has become a world class producer of offshore drilling technology, which puts it in a good position for the future, as oil comes from increasingly difficult places to reach.

In the 1980s, Brazil’s oil production was negligible, but by 2010, it was pumping 2.7 million barrels of liquid fuels per day (bpd). By the mid-2000s, the trend line seemed to be inexorably rising upwards, and with the huge oil discoveries in 2007 in Brazil’s pre-salt basins – oil reserves that are trapped beneath a thick layer of salt – many observers believed Brazil was destined to become an oil superpower.

But then something happened. Since 2010, oil production has flattened out entirely. In 2013, Brazil averaged only 2.7 million bpd of oil production, which is where it was three years ago.

Petrobras’ performance over the last few years deserves some of the blame, and a steady stream of reports point to mismanagement within the company as why. A former executive was arrested in March for money laundering in connection with a gang. The company is conducting an internal investigation because of allegations that top company officials accepted bribes from a Dutch company in exchange for awarding contracts.

Local content rules are also hampering production. With Brazilian oil service companies booked up, there is a shortage of labor, leaving Petrobras and its partners struggling to find enough qualified contractors. Not only has this raised costs, but it has also delayed projects. Most recently, Brazil’s oil regulator ANP recommended a delay of further auctions for offshore blocks until 2015, so that local service companies could absorb all the demand.

Petrobras’ problems were perfectly summed up in an April mishap. According to Reuters, Saipem SpA, an Italian contractor working at a Petrobras-run oil field in the Atlantic Ocean, managed to drop a 2.3 kilometer steel pipe deep into the ocean. Saipem was trying to attach the pipe to a drilling rig, but it sank 1,800 meters (5,900 feet) to the ocean floor. Damaged and lost to sea, the $2 million pipe is not recoverable. That’s only the beginning – the lost pipe could set the project back by more than a month, costing Petrobras tens of millions more.

The incident fits a pattern – several other rigs in nearby oil fields are also behind schedule, including Parque da Baleias off the coast of the state of Espirito Santo, and Papa Terra near Rio de Janeiro.

But the problem is deeper than just bad management. The state-owned oil company is used as a tool to achieve policy goals by the government, such as subsidizing fuel prices for drivers, which has cost the company $37 billion since 2011.

All of these problems have caused Petrobras to claim the mantle of the world’s most indebted and least profitable major oil company. It has amassed $114.3 billion in debt, and according to Moody’s, Petrobras owes $11.50 for every barrel of oil it has yet to produce. Its share price has cratered, losing half of its value since 2010.

The stagnating oil industry is becoming a hotter political issue in Brazil. Whether true or not, it fits the narrative of how corruption at the highest levels is causing the economy to stagnate. And the angry protests in several major cities last year demonstrated voter frustration as Brazil heads into this fall’s presidential election.

Brazil’s political opposition is using Petrobras’ woes in an effort to unseat President Dilma Rousseff. But she continues to back the firm, which is a symbol of nation pride. “No one and nothing will destroy Petrobras,” she told a crowd of oil workers and supporters in April in the state of Pernambuco. “Petrobras is bigger than all of us. Petrobras is as big as Brazil.” Her fate, as well the country’s, hinges on the performance of Brazil’s largest company.

By Nick Cunningham of Oilprice.com Special thanks to Richard Charter