Category Archives: offshore oil

Platts: BP has record 11 deepwater rigs running in Gulf of Mexico: BP America CEO

http://www.platts.com/latest-news/oil/houston/bp-has-record-11-deepwater-rigs-running-in-gulf-21576914

Houston (Platts)–5May2014/414 pm EDT/2014 GMT

Four years after the Macondo oil spill, BP has 11 operated rigs running in the US Gulf of Mexico, the most the company has ever had there at one time, BP America’s CEO said Monday.

BP will spend $10 billion over the next five years in the deepwater US Gulf, which amounts to about 10% of its worldwide exploration and production budget and makes the company the largest investor in that arena, said John Minge, who is also BP America’s chairman and CEO.

“Our business is back; it’s strong and it’s gaining momentum,” Minge said. “It wasn’t long ago when the common belief was that the region was played out, that deepwater wasn’t going to work and it was better to head off to other places. But we had [employees] who said there’s more there, and convinced the leadership to invest further.”

Minge was enthusiastic over energy reforms in Mexico that could lead to new opportunities for the company in that country, particularly in the upstream deepwater.

Mexico’s so-called “secondary legislation” on energy reform– the fine print and terms — was sent to the Mexican Congress last week for approval later this year. The first bid round is expected in mid-2015.

“We’re excited about developments in Mexico, particularly offshore,” he said at the opening of the Offshore Technology Conference in Houston. “We think the resource base will be similar to what we’re exploring on the US side of the border.”

Not only is BP the largest investor in the deepwater Gulf of Mexico, it also is the largest leaseholder there, with about 620 blocks, Minge said. The company has explored in waters of 1,200 feet deep or greater since the mid-1980s.

On April 20, 2010, the BP-operated Macondo deepwater well offshore Louisiana blew out, causing the US’ largest offshore oil spill. As a result, deepwater exploration came to a virtual standstill for about nine months while the federal government formulated and implemented stricter offshore regulation.

Moreover, in late 2012, the US Environmental Protection Agency imposed a Macondo-related ban on the award of federal contracts to BP, including US Gulf leases. As a result, BP sat out three subsequent federal lease sales, although it reached a settlement with the EPA just days before the most recent sale in March. As a result, the company participated in that sale where it was apparent high bidder on 24 of 31 blocks.

BP ‘READY TO GO’ IN MEXICO

BP has four major production hubs in the US Gulf: Thunder Horse, Atlantis, Mad Dog and Na Kika. It has also made three ultra-deep Paleogene discoveries in recent years, sited largely in the Keathley Canyon area of the US Gulf: Kaskida, Tiber and last December, Gila. The Paleogene is sited in the remote southwest US Gulf in waters that can be more than a mile and a half deep and at total depths more than six miles below the seabed.

Among BP’s 11 deepwater rigs are three Thunder Horse alone, according to federal offshore records. The company is also drilling a wildcat at Keathley Canyon block 57 in 4,065 feet of water. Government records show BP procured the lease in 2003 for a nominal $500,000; it now has a 62% stake, while Brazil’s Petrobras has 20% and ConocoPhillips has 18%.

Owing to what Minge called pioneering technologies BP has developed to allow better deepwater reservoir imaging, data collection and recoveries, the company expects operating cash flow from the US Gulf “to grow to 2020 and beyond,” he said.

BP also has a minority stake in the Shell-operated Perdido Hub, which produces some of the deepest and most remote offshore discoveries in the world. The hub, offshore Texas, is just a handful of miles from Mexican waters, where the ultra-deep Perdido Fold Belt reservoir also spans that country’s offshore. Mexican state oil and gas company Pemex has drilled some wells there and global oil companies may be able to bid on blocks in the area as early as next year. They will also be able to joint-venture with Pemex on the company’s tracts there.

Minge said he believes Mexico “will absolutely compete for capital” within BP.

“We’re ready to go if [Mexico is] ready to have us,” he said.

–Starr Spencer, starr.spencer@platts.com –Edited by Richard Rubin, richard.rubin@platts.com

Special thanks to Richard Charter

Reuters: Bird reproduction collapsed after oil spill Study of shag colonies on Spanish coast shows lingering effect of 2002 Prestige disaster

by Matt Kaplan

30 April 2014

volunteer workers
Jose Manuel Ribeiro/REUTERS
Volunteer workers drag fuel oil spilled by the Prestige tanker at Muxia beach, in northwestern Spain, in December 2002.

Oil spills kill a lot of wildlife quickly, but their long-term effects are hard to establish because to compare the situation before and after a disaster, a study would need to have been already up and running before the disaster occurred. Fortunately, this was precisely the case for a Spanish team of researchers.

Back in 1994, marine biologist Álvaro Barros and his colleagues at Spain’s University of Vigo started looking at the reproductive activity of 18 colonies of a diving bird known as the European shag (Phalacrocorax aristotelis). Then, on 13 November 2002, the hull of the Prestige oil tanker broke in half off the north-western coast of Spain, releasing 63,000 tonnes of oil. The oil heavily coated regions near seven of the colonies, and mostly missed the other 11, creating ‘oiled’ and ‘unoiled’ populations for the researchers to compare.

The team now reports in Biology Letters1 that reproductive success was 45% lower in oiled populations compared with unoiled colonies, whereas it had been much the same before the spill. The researchers measured reproductive success by counting how many fully grown young emerged from each nest. This number averaged 1.6 for both oiled and control colonies before the spill. Afterwards, while the control colonies maintained the 1.6 figure, the number for the birds in the oiled colonies dropped to 1.0.

“We just don’t have much information on long-term oil-spill effects. That this team was able to compare colonies like this over so many years makes the findings very valuable,” explains ecologist David Grémillet at the CNRS Centre for Functional and Evolutionary Ecology in Montpellier, France.

Barros and his team did not investigate why reproductive success was so much lower in the oiled colonies, but speculate from their knowledge of other studies that it resulted from wider ecological damage. “It looks like many of the shags’ preferred prey were wiped out, and that a lot of oil pollutants got incorporated into the ecosystem. This would certainly harm their ability to reproduce,” Barros explains.

Nature
doi:10.1038/nature.2014.15130

References

Barros, A., Álvarez, D. & Velando, A. Biol. Lett. http://dx.doi.org/10.1098/rsbl.2013.1041 (2014).

E&E: NAS oil spill report emboldens drilling foes

Margaret Kriz Hobson, E&E reporter
Published: Thursday, April 24, 2014

A new scientific study that concludes the United States lacks the resources and scientific data necessary to adequately respond to an Arctic oil spill is energizing the environmental community’s campaign to ban oil drilling in the ice-laden waters.

The comprehensive National Academy of Sciences report released yesterday found that the federal government needs additional response tools, personnel and infrastructure to address oil spills in America’s Arctic (Greenwire, April 23).

The panel called for expanded, on-the-ground research to improve oil cleanup technologies for use in the Arctic’s extreme weather and environmental conditions.
Researchers also suggested that oil spill responders need “improved port and air access, stronger supply chains, and increased capacity to handle equipment, supplies, and personnel.”

However, the study concludes that oil spill response improvements have been set back by a lack of federal funding to address those deficiencies.

Several environmental groups responded to the scientific report by demanding an end to oil development in the American Arctic, at least until the government finds more effective ways to handle oil spills in the frigid North.

Margaret Williams, managing director of Arctic programs for the World Wildlife Fund, said the Obama administration “should not approve further Arctic oil and gas leasing or specific activities unless and until spill prevention and response technologies are proven effective in this harsh environment.”

Lois Epstein, Arctic program director for the Wilderness Society, said the report “documents the reasons why we cannot clean up — and are unlikely to ever effectively recover — a significant percentage of oil from any major spill into the Arctic Ocean.”

“We need to decide as a country if it makes sense to risk the near-pristine Arctic Ocean environment now that we know there is little that can be done to clean up major oil spills,” Epstein said.

Sierra Club Alaska Program Director Dan Ritzman said the NAS report reinforces the environmental community’s concerns that “we shouldn’t be drilling in the Arctic Ocean.”

But Charles Ebinger, director of the Brookings Institution’s Energy Security Initiative, disagreed, arguing that the report is just the most recent evidence that the federal government should fund more Arctic research and resources.

“Certainly we need to spend a lot more on resources, beef up the Coast Guard’s capabilities, make sure that we have onshore supporting infrastructure in place in the event of an accident of any kind,” he said.

“All of that has to be done. But that’s a question of allocation of resources. That’s not saying the Arctic shouldn’t be drilled in.”

“You’ve got companies moving into Greenland,” Ebinger added. “The Arctic is being developed. It’s a question of whether we’re going to adopt so many restrictions that our Arctic either doesn’t get developed or lags behind.”

Alaska Sen. Mark Begich (D) echoed those concerns. “Arctic development will happen whether we are prepared or not — we’ve already seen significant increases in marine traffic and natural resource exploration by domestic and international interests,” he said.

More studies ahead
The report comes more than a year after Royal Dutch Shell PLC tried — but failed — to become the first company in decades to explore for oil in Alaska’s Beaufort and Chukchi seas. The company’s 2012 season was marked by equipment problems, unpredictable ice floes and an oil rig grounding.

More recently, Shell’s Arctic drilling efforts have been delayed by a January appeals court decision invalidating the environmental assessment that the Interior Department used to support the federal government’s 2008 lease sale (EnergyWire, April 21).

But once those legal issues are sorted out, oil industry representatives assert, federal regulators should allow Arctic oil exploration to move forward as they improve available oil spill response technologies.

American Petroleum Institute senior policy adviser Richard Ranger said the National Academy study should not be a roadblock to future oil exploration in Alaska’s northern waters.

“Shell demonstrated to the satisfaction of the agency that they possess the capability to respond to a foreseeable spill incident at this exploration stage” in the Arctic, Ranger argued.

“If exploration succeeds in identifying resources for development, then there are a lot of tasks ahead before those resources could be brought online,” he noted. “There would be additional studies needed, additional preparedness and project design to go forward into the next phase of project development.”

Takepart.com: 6 Horrible Oil Spills Since Deepwater Horizon That You Probably Didn’t Hear About

By Kristine Wong | Takepart.com 17 hours ago Takepart.com

On April 20, 2010, the giant Deepwater Horizon oil rig, owned by Transocean Inc. and operated by BP, exploded some 50 miles off the Louisiana coast, killing 11 crew members before sinking into the Gulf of Mexico two days later. The rig’s underwater well, called Macondo, was 5,000 feet below sea level. The extreme environment-and, critics contend, lax oversight and governmental regulation-made it hard to stanch the flow of oil into the sea. By the time Macondo was finally capped on July 15, more than 210 million gallons of oil had leaked into the Gulf of Mexico, making it one of the largest environmental disasters in United States history.

Though environmentalists pounced on the accident as an occasion to push for an end to our oil-dependent lifestyles, BP and its big oil brethren have continued to rake in outsize earnings. In 2013, BP, Chevron, ConocoPhillips, Exxon Mobil, and Shell took home $93 billion in profits-that’s $177,000 per minute. The accidents haven’t stopped either.

Here are six of the largest oil spills around the world that have occurred since that fateful day nearly four years ago.

Little Buffalo, Alberta
On April 29, 2011, more than 868,000 gallons of crude oil from Plains Midstream Canada’s Rainbow Pipeline spilled into a forest 20 miles from the Lubicon Cree First Nation community of Little Buffalo, Alberta. Three hectares of beaver ponds and swampland were contaminated. Many residents reported experiencing headaches and nausea from the fumes. Two years after the spill, Plains Midstream was fined for violating Canada’s Environmental Protection and Enhancement Act. The spill was considered to be Alberta’s worst in 35 years.

Kalamazoo River, Michigan
A pipeline transporting diluted bitumen-aka tar sands oil-from Ontario, Canada, to Indiana ruptured into Talmadge Creek, a tributary of the Kalamazoo River, on July 26, 2010. The size of the spill was initially reported to be 877,000 gallons. But in 2012, the EPA said that cleanup crews recovered 1.1 million gallons of oil and 200,000 cubic yards of oil-contaminated sediment and debris. Three years after the spill, an oil sheen remained on the river, according to The New York Times. Enbridge, the Alberta-based energy company that owned the ruptured pipeline, was fined $3.7 million by the U.S. Pipeline and Hazardous Materials Safety Administration for the incident. The cost of the oil spill has been estimated to exceed $1 billion. Enbridge now wants to build a pipeline transporting tar sands oil through a pristine boreal forest in Western Canada.

Bonga Oil Field, Nigeria
On Dec. 21, 2011, Royal Dutch Shell’s Bonga oil field in Nigeria leaked 1.24 million gallons of oil into the Niger Delta. The Guardian reported that satellite watchdog organization Skytruth posted photos indicating that the spill was 43.5 miles long and covered 356 square miles. Nigerian activist organization Environmental Rights Action told the newspaper that it did not believe Shell’s 1.24-million-gallon claim, saying that the “company consistently under reports the amounts.” Ever year Shell and other companies spill the equivalent of the Exxon Valdez tanker capacity into the Niger Delta.

Lac-Mégantic, Quebec
A 72-car freight train operated by the Montreal, Maine and Atlantic Railway derailed July 6, 2013, in the town of Lac-Mégantic, Quebec, killing 47 people and spilling 1.5 million gallons of oil. Half the city’s downtown area was destroyed by a subsequent blast. The spill leaked into the Chaudière River, a waterway that flows to the St. Lawrence River. It took crews 36 hours to extinguish the fires. The cleanup has involved siphoning oil from the river and removing more than 25,000 cubic meters of toxic soil. The rebuilding effort will cost an estimated $200 million. A criminal investigation by the Quebec police is ongoing. 2013 was the worst year ever for oil spills from trains in North America.

Guarapiche River, Venezuela
On Feb. 4, 2012 a ruptured pipeline operated by Venezuela’s state-owned oil company PDVSA spilled crude oil into the Guarapiche River, near Maturin. While government officials said they could not determine how much was spilled, one lawmaker (from an opposition party to the government) told media that 1.86 million gallons were spilled. Environment Minister Alejandro Hitcher said that the country had deployed 1,500 workers to clean up the spill. A PDVSA executive later told the state-run news agency AVN that “a good percentage” had been cleaned up, Reuters reported.

Yellow Sea, China
After a pipeline heading to a port in Dalian, China, ruptured on July 16, 2010, the Chinese government said that 461,790 gallons had spilled into the Yellow Sea. But two weeks after the spill, Rick Steiner, a former academic conservationist with the University of Alaska, said that after touring the area, he estimated the volume spilled to be between 18.47 and 27.70 million gallons. That figure, he told The Associated Press, was “at least as large as the official estimate of the Exxon Valdez disaster.” Steiner toured the spill area as a consultant for Greenpeace China, The World Post reported. He calculated his estimates based on his understanding that a 27.7-million-gallon oil storage tanker that had been reportedly filled was destroyed during the incident.

Special thanks to Richard Charter

Common Dreams ‘This Is Not Over’: Gulf Life Still Reeling From Toxic BP Spill

http://www.commondreams.org/headline/2014/04/09-6
Published on Wednesday, April 9, 2014
Report on four year anniversary of worst oil disaster in US history details fourteen ailing species
– Jacob Chamberlain, staff writer

See powerpoint slide show at: http://www.slideshare.net/NationalWildlife/deepwater-horizonfouryearslater-nationalwildlifefederation?utm_source=slideshow02&utm_medium=ssemail&utm_campaign=share_slideshow

sea turtle
Photo: Jacqueline Orsulak / National Wildlife Federation

Nearly four years after BP’s Deepwater Horizon oil catastrophe, plants, animals, and fish in the Gulf of Mexico are still reeling from the toxic spill, according to a report released Tuesday by the National Wildlife Federation.

The report, which arrives just ahead of the disaster’s anniversary, examined 14 species of wildlife in the Gulf and found ongoing impacts of the disaster that could last for decades.

“Four years later, wildlife in the Gulf are still feeling the impacts of the spill,” said Doug Inkley, senior scientist for the National Wildlife Federation. “Bottlenose dolphins in oiled areas are still sick and dying and the evidence is stronger than ever that these deaths are connected to the Deepwater Horizon. The science is telling us that this is not over.”

According to the findings, in 2013 dolphins were dying at three times normal rates, with many suffering from “unusual lung damage” and immune system problems.

In addition to the ongoing plight of dolphins in Gulf waters, the researchers found that every year for the past three years roughly five hundred dead sea turtles are found near the spill, “a dramatic increase over normal rates.” These sea turtles only recently recovered from near extinction—a recovery that has now been drastically threatened by the spill.

“The Kemp’s ridley sea turtle has long been the poster child for the possibilities of restoration in the Gulf,” said Pamela Plotkin, associate research professor of oceanography at Texas A&M University and director of Texas Sea Grant. “Once close to extinction, it has rebounded dramatically over the past thirty years. But four years ago, the numbers of Kemp’s ridley appear to have flat-lined. We need to monitor this species carefully, as the next few years will be critical.”

According to the report, sperm whales in the area are showing higher levels of “DNA-damaging metals” than others in other parts of the world—”metals that were present in oil from BP’s well.”

In addition, deep sea coral colonies, which “provide a foundation for a diverse assortment of marine life,” within seven miles from the site of the spill, were still “heavily impacted.”

Other findings, as stated by the group, include:

Oyster reproduction remained low over large areas of the northern Gulf at least through the fall of 2012.
A chemical in oil from the Deepwater Horizon spill has been shown to cause irregular heartbeats in bluefin and yellowfin tuna that can lead to heart attacks, or even death.
Loons that winter on the Louisiana coast have increasing concentrations of toxic oil compounds in their blood.

“Despite what BP would have you believe, the impacts of the disaster are ongoing,” said Sara Gonzalez-Rothi, the National Wildlife Federation’s senior policy specialist for Gulf and coastal restoration. “Last year, nearly five million pounds of oiled material from the disaster were removed from Louisiana’s coast. And that’s just what we’ve seen. An unknown amount of oil remains deep in the Gulf.”

The Gulf oil disaster—which is the worst in U.S. history—”will likely unfold for years or even decades,” NWF writes. “It is essential that careful monitoring of the Gulf ecosystem continue and that mitigation of damages and restoration of degraded and weakened ecosystems begin as soon as possible.”

Despite the ongoing travesty the Environmental Protection Agency announced last month that it removed its ban on BP contracts in the U.S. and new drilling leases, including in the Gulf of Mexico.

Shortly after, the oil giant won bids to start new drilling operations in two dozen separate locations, a total pricetag of $54 million.