Sale Will Make Nearly 38 million Acres Available as Part of the President’s Blueprint for a Secure Energy Future

The Obama administration today announced that the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) will hold the consolidated Central Gulf of Mexico Lease Sale 216/222 in New Orleans on June 20, 2012. The sale will include all available unleased areas in the Central Planning Area offshore Louisiana, Mississippi and Alabama.

President Obama will discuss today’s announcement during remarks in Nevada later today, in which he will highlight his administration’s commitment to promoting safe and responsible domestic oil and gas production as part of a comprehensive energy strategy. This is one of many steps that the Administration is taking, at the President’s direction, to increase responsible domestic production and reduce dependence on foreign oil.

“Expanding offshore oil and gas production is a key component of our comprehensive energy strategy to grow America’s energy economy, and will help us continue to reduce our dependence on foreign oil and create jobs here at home,” said Secretary of the Interior Ken Salazar. “The President has made it clear that developing our domestic oil and gas resources is a significant part of this administration’s efforts to grow our economy and create jobs. This lease sale is part of our commitment to safe and responsible development of the Outer Continental Shelf.”

Lease Sale 216/222 is the last remaining sale scheduled in the 2007 – 2012 Outer Continental Shelf Oil and Natural Gas Leasing Program. As the President discussed in his State of the Union address on Tuesday, DOI is finalizing the next Five-Year Program for 2012-2017, which will make more than 75 percent of undiscovered technically recoverable oil and gas estimated on the OCS available for development. The Proposed 2012-2017 Outer Continental Shelf (OCS) Oil and Gas Leasing Program schedules 12 lease sales in the Gulf of Mexico.

“The Central Gulf of Mexico remains the area with the greatest offshore oil and gas potential in the entire United States outer continental shelf, and this proposed sale is another important step in making this area available for safe and environmentally responsible exploration and development,” said Director Tommy P. Beaudreau. “We are moving forward with this sale based on careful analysis of the best scientific information available and consideration of all of the public comments we have received.”

The proposed lease sale includes approximately 7,250 unleased blocks covering nearly 38 million acres. The blocks are located from three to about 230 miles offshore, in water depths ranging from nine to more than 11,115 feet (three to 3,400 meters) in the Central Gulf of Mexico, a region that BOEM estimates contains close to 31 billion barrels of oil and 134 trillion cubic feet of natural gas that are currently undiscovered and technically recoverable. BOEM estimates that the Central Gulf sale could result in the production of 1 billion barrels of oil and 4 trillion cubic feet of natural gas.

The terms of sale will reflect recent administrative reforms to ensure fair return to taxpayers and encourage diligent development, consistent with policies articulated in the Obama administration’s Blueprint for a Secure Energy Future. These include escalating rental rates to encourage prompt exploration and development of leases, as well as time under the lease if the operator demonstrates a commitment to exploration by drilling a well during the base period. The durational terms of leases are graduated by water depth to account for differences in operating at various water depths.

In addition, BOEM recently increased the minimum bid for deepwater to $100 per acre, up from only $37.50, to ensure that taxpayers receive fair market value for offshore resources and to provide leaseholders with additional impetus to invest in leases that they are more likely to develop. Rigorous analysis of the last 15 years of lease sales in the Gulf of Mexico showed that deepwater leases that received high bids of less than $100 per acre, adjusted for energy prices at time of each sale, experienced virtually no exploration and development drilling.

The terms of sale also reflect a series of conditions to protect the environment. These include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. BOEM completed a supplemental environmental impact statement relating to this sale, which considers the latest available information for the Central Gulf of Mexico Planning Area following the Deepwater Horizon oil spill.

Proposed terms and conditions for the sale, which will be finalized in a Final Notice of Sale published at least 30 days prior to the Sale, are detailed in the Proposed Notice of Sale information package, which will be available at: http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Regional-Leasing/Gulf-of-Mexico-Region/Lease-Sales/216-222/Central-Planning-Area-Lease-Sale-216-222-Information.aspx. Copies can also be requested from the Gulf of Mexico Region’s Public Information Office at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Notice of Availability of the Proposed Notice of Sale will be available for inspection today in the Federal Register at: http://www.archives.gov/federal-register/public-inspection/index.html.

McDermott International, Inc. (NYSE:MDR) (“McDermott”) announces that its Australian subsidiary has received and signed a letter of award for the Ichthys Gas-condensate Field Development subsea umbilical, riser, flowline (“SURF”) project by INPEX. The contract value is in the order of magnitude of US$2 billion and is the largest subsea contract McDermott has been awarded to date.

McDermott's specialty subsea vessel North Ocean 102 will undertake the installation of subsea hardware, moorings, risers, umbilicals and flowlines for Ichthys SURF project. 

This project includes engineering, procurement, construction, installation (“EPCI”) and pre-commissioning of production flowline systems, a MEG injection system, plus start-up condensate transfer and fuel gas transfer flowline systems, control systems as well as other associated SURF elements in water depths up to 275 meters. McDermott will also install mooring systems for the Floating Production, Storage and Offtake vessel and Central Processing Facility as well as installation engineering for future flowlines, risers and umbilicals.

McDermott has already begun engineering and procurement work and is expected to start fabrication of more than 16,000 tonnes of subsea equipment, including a subsea Riser Support Structure and installation aids, at its Batam Island, Indonesia fabrication facility beginning in 2013. The complex offshore installation campaign will see McDermott undertake the installation of subsea hardware, moorings, risers, umbilicals and flowlines utilizing its specialty subsea vessels Emerald Sea and North Ocean 102. McDermott is working with Heerema Marine Contractors (“Heerema”) for transportation and installation of a portion of the offshore scope, utilizing the heavy lift, J-Lay and Reel-Lay capability of Heerema’s new-build vessel Aegir.

Stephen M. Johnson, Chairman of the Board, President and Chief Executive Officer, McDermott said, “McDermott has a long track record working on EPCI projects offshore Australia. This major SURF award firmly endorses McDermott’s core EPCI competencies and our competitive subsea construction vessels, combined with Heerema’s installation strength and the team’s alignment with INPEX. This is a large scale and complex development, and we are firmly behind promoting the success of this LNG project.”

The Ichthys LNG Project is a Joint Venture between INPEX (76%, the Operator) and Total (24%). Gas from the Ichthys Field, in the Browse Basin approximately 200 kilometers offshore Western Australia, will undergo preliminary processing offshore to remove water and extract condensate. The gas will then be exported to onshore processing facilities in Darwin via an 889-kilometer subsea pipeline. The Ichthys LNG Project is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak. 

This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company's ability to control. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements. More information about the risks and uncertainties relating to the company’s forward-looking statements is found in the company’s SEC filings.

GL Noble Denton and the Economist Intelligence Unit launch second annual report on oil and gas industry trends

Nearly 200 oil and gas industry board-level directors, influencers and policymakers surveyed

Oil and gas industry leaders have forecast improved performance and higher levels of capital expenditure this year, despite concerns over global economic instability, according to a new report on the future of the sector.

Increased investment across the industry will focus on exploration activity, with North America emerging as the area with the greatest opportunities in 2012.

Big Spenders: The outlook for the oil and gas industry in 2012, is the Economist Intelligence Unit’s second annual industry barometer, commissioned by GL Noble Denton, an independent technical advisor to the industry with considerable insight into many of the issues faced by those operating in the oil and gas sector.

Eighty-two percent of the 185 board-level directors and industry policy makers surveyed for the report are either highly or somewhat confident about the business outlook for their company, compared with 76 percent last year. Just 8 percent of those polled described themselves as pessimistic over performance in 2012.

Findings from the research also show that nearly two-thirds (63 percent) of executives plan to invest either somewhat or substantially more over the next year, in contrast to 49 percent in 2011. Forty-one percent of industry professionals expect to see increased investment in exploration activities over the next year, with only 4.3 percent anticipating a decline.

There remains a caveat, however; if global economic conditions deteriorate, oil and gas companies will have to scale back their spending commitments where they can do so without creating damage to their wider portfolios, according to the report.

Other key findings from the research, as reported by the Economist Intelligence Unit, include:

Rising operating costs emerge as the top barrier to growth

More than 50 percent of respondents say that they expect there to be an increase in wages over the next 12 months. Fifty-four percent of respondents also expect the cost of contractors to increase, compared to only 11 percent anticipating a decline.

Risk remains a key challenge. 

An overwhelming majority of respondents – 82 percent - either strongly or somewhat agree that regulatory issues have become more important in the post-Macondo period. Increasing regulation is regarded by more than 30 percent of respondents as the main challenge for their company over the next 12 months.

Skills shortages are becoming more acute. 

According to the Economist Intelligence Unit’s research, this issue comes out of the survey as one of the major obstacles to growth over the next 12 months. Last year, skills issues came fifth on the list of barriers and were only identified as a top three issue by 25 percent of respondents. This year, the issue has risen to second on the list, and has been identified as a key barrier by 34 percent of respondents.

Unconventional gas: A global game changer?

The advent of projects like the Marcellus, Barnett, Haynesville and Fayetteville shales have created a supply glut that has affected global prices. Yet there is widespread doubt as to whether the shale gas revolution can be exported outside North America.

Scope for optimism for refiners:

After a dismal few years, the downstream sector is showing some signs of life, at least in the US. Refining profitability has improved where   robust margins have resulted from a revival of consumption of refined products. But Asia and Europe remain in the doldrums.

“The second annual Economist Intelligence Unit oil and gas industry barometer sends a clear message: Companies are preparing to spend big in 2012, despite a slower growth in demand for oil and gas during the second half of last year, and concerns over the future of the global economy,” said Pekka Paasivaara, member of the GL Executive Board.

“But this doesn’t mean that our clients are sanguine about their prospects for the year ahead. Findings from the report highlight a wealth of barriers to success, from rising operating costs to the worry of an impending shortage of skilled professionals and an uncertain regulatory environment in the post-Macondo era.

“While capital expenditure looks set to take off, industry leaders will need to invest selectively this year, keeping operating risks low during a period of prolonged uncertainty. Their success will be defined by an ability to develop innovative approaches to operating more safely, efficiently and sustainably than ever.”

Download the full report at:  www.gl-nobledenton.com 

Norway’s Ministry of Petroleum and Energy on January 20^th, gave the green light to the plan for development and operation (PDO) of Skuld, a fast-track development tied in to the Norne field in the Norwegian Sea.

Skuld template onboard the Skandi Acergy vessel. (Photo: Aker Solutions)

Skuld is Statoil’s fifth approved fast-track PDO, and the largest fast-track development so far. All of these fields are scheduled to come on stream by year-end 2012/early 2013.

In combination, the approved fast-tracks are expected to produce almost 90.000 barrels of oil equivalent per day in 2014, Skuld accounting for more than half of this.

First oil from the field is scheduled for December 2012, well over one year after PDO submission.

Skuld is the future

Skuld will be important to the future of the Norne field. Field life has already been extended from 2016 to 2021. Skuld phase-in will be essential to utilising idle capacity on the Norne production and storage vessel (PSV), and maintaining a high production.

The phase-in of new fields will help utilise idle capacity on the PSV. This will further extend field life, boosting new exploration activities and further development in the Norne area. Plans for further life extension until 2030 are in the pipeline for the Norne field.

Recoverable reserves in Skuld are estimated at 90 million barrels of oil equivalent, primarily oil. Total investments are estimated at NOK 9.8 billion. The project organisation is located mainly in Harstad and Oslo.

Licensees in production license 128: Statoil (operator) (64 percent), Petoro (24.5 percent) and Eni (11.5 percent).

Development concept: Three standard subsea templates with six production wells and three water injectors. Tied in to the Norne PSV through a 14-inch production flow line and an umbilical.

Officials from the Lebanese Ministry of Energy and Water have signed a contract extension with Spectrum for the licensing of the highly successful “LEB-02” and “EMED-00” Multi-Client seismic datasets offshore Lebanon. The signing ceremony was attended by leading figures in the Ministry including the Honourable Minister Gebran Bassil. The ceremony was also covered by local press organisations with both television and newspaper representatives present. 

Spectrum’s comprehensive suite of East Mediterranean products is comprised of four seismic surveys totalling 22,645 km of high quality 2D data including 5,526 km over Lebanese waters. With the recent discovery of the deepwater multi TCF gas fields in the south Levantine Basin, hydrocarbon exploration in the region has increased significantly. Spectrum’s unique dataset covers the entire highly prospective Levantine Basin, considered to contain the most exciting exploration plays in the Mediterranean. The Spectrum dataset provides vital structural insight of the basin and includes a detailed grid over Lebanese acreage, enabling companies to efficiently review hydrocarbon prospectivity ahead of the first Lebanese bid round.

Following the signing ceremony, which extends the existing arrangement by a further 5 years, Spectrum announced that it will be reprocessing the LEB-02 seismic survey in time for the forthcoming Lebanese bid round expected during the first half of 2012. This complements the enhancement of the EMED-00 survey which was completed in 2011.

Spectrum’s EVP of Multi-Client, David Rowlands signed the agreement and commented “This is a very significant deal for Spectrum. We consider our East Mediterranean Multi-Client data to be one of the most valuable assets in our global library. With the anticipated first Lebanese bid round later this year I believe that Spectrum offer the highest quality seismic data to assist oil companies in their exploration of this highly promising region.”

Reprocessing of the LEB-02 survey is due to commence in early 2012 with the final products scheduled to be available for purchase on a Multi-Client basis in Q1.

DeepOcean Group Holding AS, (“DeepOcean Group” or “the Company”) an integrated provider of subsea engineering and trenching services, announces that DeepOcean AS (“DeepOcean”), a subsidiary of DeepOcean Group, has been awarded a long-term frame agreement for offshore survey services for Statoil.

The four-year frame agreement, plus two one-year options, includes services covering light construction, ROV surveys with hull mounted Multi Beam Echosounder (MBE) and ROV surveys without MBE.

As part of this contract, Statoil has also awarded DeepOcean the first call-off for light construction services work on the Norwegian continental shelf. This call-off has a firm duration of six months with six one-month options included. The project will commence March 1 and it will be executed from the survey and light construction support vessel Volstad Surveyor. The project will be lead by an onshore project team in DeepOcean’s Haugesund office.

“This contract has been a key target for DeepOcean and we are pleased that Statoil has once again placed such confidence in our company and the quality of the work our organisation delivers,” says Mads Bardsen, the President of DeepOcean. “With this latest contract, we currently have four vessels working for Statoil through 2012,” he says.

Technip Oceania (TPO), a Technip Group operating centre in Perth, Australia, has been awarded a contract, worth approximately AUD110 million (€90 million), by Daewoo Shipbuilding and Marine Engineering (DSME) for the detailed design of Chevron’s Wheatstone offshore gas processing platform, located 200 kilometers off Western Australia’s coast.  

The upstream (offshore) portion of the project is comprised of the development of gas fields in the WA-17-R and WA-253-P petroleum titles located on the Northwest Shelf offshore Western Australia at water depths of 70 to 200 meters. Subsea gas-gathering systems will transport production to the processing platform where the gas and condensate will be treated. It will then be exported to the onshore gas plant located at Ashburton North, 12 kilometers west of Onslow, on the Pilbara coast of mainland Western Australia.

This award follows on from TPO's successful completion of the front-end engineering design of the project, a contract awarded by Chevron in 2009. The contract represents a breakthrough for TPO, who are leading the work and performing over 40% locally in Australia. Frans Roozendaal, TPO’s Managing Director, says “the Wheatstone Platform is one of the largest offshore platforms ever built, and I am proud that we have been able to deliver the design for DSME from our Australian operation. We have had to expand locally to perform the work, with over 200 people in Perth working on the project.”

DSME’s Project Manager, KH Lee says “it has been good to be able to use Technip’s Australian office to lead this work. The continuation from FEED, the knowledge of Australian requirements, and the proximity to Chevron gives us a great advantage.”

Technip’s operating centers in Perth, Australia and Kuala Lumpur, Malaysia will execute the contract, which is scheduled to be completed in the second half of 2012.

Hyperdynamics Corporation (NYSE: HDY)  has announced the Sabu-1 exploration well offshore Republic of Guinea was drilled to a total subsea depth of 2,224 meters, putting the well near the top of Cretaceous age sediments, and that the next string of 13-3/8 inch casing was successfully set.  Following retesting of the blowout preventer, the well was drilled to a depth of 2,304 meters. Drilling equipment problems were encountered, and drilling has been suspended while repairs are made.  The delay is estimated to be approximately one week.

Hyperdynamics expects to test prospective upper Cretaceous sandstone reservoirs while it drills the Sabu-1 well to a total subsea depth of about 3,600 meters.

Hyperdynamics also announced that the CGGVeritas Ocean Endeavor has completed acquisition of the 4,000-square-kilometer 3D seismic program in the deeper water portion of its concession offshore Guinea. Processing of the 3D data set is in progress, with the first preliminary time section results expected in March 2012.

Hyperdynamics operates the Guinea concession with a 77 percent participating interest, with the remaining 23 percent held by Aberdeen-based Dana Petroleum, a wholly owned subsidiary of the Korean National Oil Company. The well is operated through AGR, a well management company.

Boatracs Inc., a leader in providing integrated satellite communications and software solutions to the maritime industry, announced today that Moran Holdings, Inc., a leading maritime services company, has signed a multi-year extension to its satellite communications services contract.  As part of the renewal Moran added Boatracs BTConnect, the new web-based messaging and mapping software platform launched by Boatracs in December 2011.

“Boatracs has been a core part of our communications infrastructure for almost 15 years,” said Joe Baviello, Director of Information Systems at Moran.  “The extension of our agreement and adoption of BTConnect strengthens our relationship with Boatracs and ensures our shore operations stay in constant contact with our fleet.  As a BTConnect beta program participant, we were very pleased with the performance of the new product.  The Boatracs team was responsive to our feedback and Version 1.0 BTConnect is an outstanding tool for dispatch and fleet management.”

Moran began working with Boatracs in 1997, installing the Qualcomm OmniTRACS mobile communication terminal on tugs to provide satellite communications and positioning for vessels that were working beyond cellular range.  As part of the solution, Boatracs provided integrated software with a shore-side interface that provided mapping and two-way messaging in standardized forms as well as free-form text messaging.  Over the years, Boatracs has continued to provide a reliable, easy to use and cost effective solution to Moran’s captains and operations team.

“We are honored that Moran has extended its contract,” stated Irwin Rodrigues, President and CEO of Boatracs.  “This renewal demonstrates the emphasis Boatracs puts on long-term customer relationships and staying in tune with current industry requirements.  Our suite of products reflects a commitment to providing simple and effective solutions for the complex issues maritime operators face today.  Now, with BTConnect, we are responding to the mobile demands of our customers and delivering an enhanced interface that is web-based and can be accessed from any mobile device.”

Leading international oilfield services company Expro has recently secured a multi-million pound contract win with global oil and gas company Maersk Oil.

The contract involves providing surface well testing, clean-up services and large bore subsea safety systems for Maersk Oil UK’s contracted mobile offshore drilling unit(s) in the UK North Sea.

Running for the duration of three years with a possible two year extension, the contract has a value of £3.2 million.

UK business development manager Tim Horsfall said: “Over the past few years, our team has built up a strong relationship with Maersk Oil and this contract award further cements this. More importantly it allows us to continue supporting Maersk Oil UK’s North Sea operations.”  

Expro’s engineering expertise and flexibility to meet the specific needs of its customers allows it to offer integrated solutions to well flow challenges, at every stage of the well lifecycle.

ConocoPhillips [NYSE:COP] announced  on Wednesday that they and the China National Offshore Oil Corp. (CNOOC) have reached an agreement with China's Ministry of Agriculture to resolve issues related to the June 2011 incidents at the Peng Lai 19-3 field in Bohai Bay. Under this agreement, RMB 1 billion (approximately $160 million) will be paid as compensation to settle public and private claims of potentially affected fishermen in relevant Bohai Bay communities. The agreement fulfills the objectives of the compensation fund announced in September 2011 by ConocoPhillips.

ConocoPhillips will also designate a portion, RMB 100 million (approximately $16 million), of the company’s previously announced environmental fund to be used to improve fishery resources. ConocoPhillips is committed to delivering on environmental stewardship as a responsible corporate citizen in China and around the world.

Kongsberg Maritime has been awarded a significant offshore automation contract with Daewoo Shipbuilding & Marine Engineering (DSME). The contract covers the delivery of Kongsberg Maritime’s proven Dynamic Positioning, thruster control, bridge navigation, vessel automation, safety, riser management and environmental monitoring systems to two semi-submersible drilling rigs (Cat-D).

The two new build high specification semi-submersibles are designed for mid-water harsh environment in the Norwegian North Sea and have been orderd by Songa Offshore SE subsidiary, Songa Rig AS, following a Letter of Award (LOA) from Statoil, announced in July 2011.

"This is what we call a 'Full Picture' solution from Kongsberg Maritime. Our strategy is to take on more responsibility in the value chain by offering a full range of Integrated Automated  Marine Systems. This contract was won as a direct  result of this approach. Close collaboration with the customer and a commitment to understanding the extreme contexts in which our technology is applied are important driving forces behind this award," says Geir Håøy, President, Kongsberg Maritime.

Kongsberg Maritime will commence deliveries, including engineering services, to the DSME yard in Korea early 2012, with all key Kongsberg Maritime deliveries scheduled for completion by December 2012. Startup,  commissioning and trials are scheduled to be completed in Q1 and Q3 2014. The contract also comes with an option for Kongsberg Maritime to deliver products and services for two more semi-submersible drilling rigs.

"The competition is strong and we are very pleased to have secured this contract. It is a clear demonstration of our capabilities in this field. I am also very pleased with the hard work performed by our international offshore team," concludes Tor Erik Sørensen, Executive Vice President, Kongsberg Maritime.

Leni Gas & Oil plc  announces the imminent arrival of the Ocean Columbia jack-up rig at the Eugene Island Field in the US Gulf of Mexico.

As previously announced in December 2011 the Company has approved additional drilling at the Eugene Island-184 leases operated by Marlin Energy LLC ("Marlin") where LGO holds a 7.25% working interest. 

Marlin has informed LGO that the rig is now being released by the previous operator and it is expected to be mobilized to the Eugene Island platform shortly.  The rig move is weather dependent; however, the operator anticipates commencing drilling operations next week.

The first planned operation is the A-2ST01 well, a sidetrack of the existing A-2 well, which targets reserves in the Tex X2 sandstones.  A total of 16 days have been budgeted for the drilling and evaluation.  Further drilling and recompletions work at EI-184 is expected to follow the A-2ST01 well.                  

Veripos, world leaders for supply of high-precision GNSS positioning support to the offshore oil and gas industry, has been awarded an extension to its contract with BP under which it will continue to provide precision positioning for the energy company’s turret monitoring system aboard its floating production storage and offloading unit in the West Shetland Basin, BP Schiehallion.

With the extended contract, Veripos remains responsible for supplying the vessel with its dual-beam Standard positioning service to ensure metre-level accuracies, with seamless correction data being delivered by two independent satellite broadcasts.

Meanwhile, identical Standard services will also continue to be provided by Veripos under a separate contract awarded by Aberdeen-based Vector Offshore for positioning of four regional support vessels on long-term charter to BP, Caledonian Vigilance, Caledonian Victory, Caledonian Vanguard and Caledonian Vision.