FY 2013 Represents First Budget Request for Independent Bureau

President Obama’s fiscal year 2013 budget request, announced today, includes $164.1 million to fund the recently established Bureau of Ocean Energy Management (BOEM), which oversees the environmentally responsible development of vital conventional and renewable energy resources in Federal waters offshore of the United States.

FY 2013 funding will be critical to advance key priorities, including implementing the Five-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012 – 2017 and conducting the first oil and gas lease sale under the new program in the first quarter of FY 2013.

“Our priorities are advancing the Administration’s commitment to a comprehensive energy strategy that encourages safe and responsible production of domestic oil and gas resources and expanding the development of renewable sources of energy,” said BOEM Director Tommy P. Beaudreau.

The budget proposes a modest increase of $3.3 million, or two percent, above the FY 2012 enacted level. The requested increases reflect careful analysis of the resources needed to develop the bureau’s capacity and to execute its functions carefully, responsibly and efficiently, with limited increases to support renewable energy lease auctions and environmental studies, and funding otherwise level with last year’s request.

“This bureau’s predecessor historically lacked sufficient resources to keep pace with expanding development of offshore oil and gas and renewable energy resources,” Beaudreau added. “We have been pleased over the last fiscal year to see that these critical resources are provided, particularly as they relate to investing in robust science to inform decisions relating to ocean energy policy and management and appropriate environmental safeguards. It is imperative to sustain this level of investment moving into the next fiscal year.”

The FY 2013 request is a continuation of the Obama Administration’s plan to complete the reorganization of the former Minerals Management Service. BOEM’s responsibilities include long-term resource management planning through development of the Five-Year Outer Continental Shelf Oil and Gas Leasing Program and designing offshore oil and gas lease sales in a way that makes these resources available, encourages diligent development, protects communities and the environment, and ensures a fair return to the America taxpayer.

BOEM also oversees the development of clean, renewable energy resources, such as wind power off of America’s coasts. The offshore renewable energy program’s responsibilities include implementing the Secretary’s Smart from the Start initiative to accelerate leasing in wind energy areas off of U.S. coasts.

Additional details on the President’s FY 2013 budget request are available online at http://www.doi.gov/budget/.

Mineral potential of 212.5 billion cubic meters of gas in place encountered.

This new discovery, in addition to the Mamba South discovery from October 2011, further increases the potential of the Mamba complex in the Area 4.
It is estimated that the total volume of gas in place reaches now about 850 billion cubic meters (30 tcf).

Eni announces a new giant natural gas discovery at the Mamba North 1 prospect, in Area 4 Offshore Mozambique, encountering a mineral potential of 212.5 billion cubic meters (7.5 tcf) of gas in place.

This new discovery, in addition to the Mamba South discovery from October 2011, further increases the potential of the Mamba complex in the Area 4. It is estimated that the total volume of gas in place reaches now about 850 billion cubic meters (30 tcf).

The Mamba North 1 discovery, located in water depths of 1,690 meters, reaches a total depth of 5,330 meters and is located approximately 23 Km north of Mamba South 1 discovery and 45 Km off the Capo Delgado coast. The discovery well encountered a total of 186 meters of gas pay in multiple high-quality Oligocene and Paleocene sands.
During the production test, the first performed at offshore Rovuma, the well produced high quality gas with flow rates, constrained by surface facilities, of about 1 million cubic meters a day and minor volumes of condensates. In a final production completion configuration, estimated gas production per well is expected to reach over 4 million cubic meters a day.
During 2012, Eni plans to drill at least other five wells in nearby structures to assess the upside potential of Mamba Compex.

Eni is the operator of Offshore Area 4 with a 70% participating interest. Co-owners in the area are Galp Energia (10%), KOGAS (10%) and ENH (10%, held through the exploration phase).

Multi-million-dollar contract for automation services and technologies will help BP Azerbaijan recover additional oil

The Azerbaijan International Operating Company, operated by BP, has awarded Emerson Process Management, a global business of Emerson (NYSE: EMR), a multi-million-dollar contract to automate a new offshore oil platform in the Azerbaijan sector of the Caspian Sea. The Chirag Oil Project, to be completed in 2013 and operated by BP Azerbaijan, will enable additional oil to be recovered from the Azeri-Chirag-Guneshli field.

“We welcome the opportunity to work with BP Azerbaijan on this important project”

“We welcome the opportunity to work with BP Azerbaijan on this important project,” said Steve Sonnenberg, president, Emerson Process Management. “We look forward to applying our automation technology, our experience managing offshore projects, and our local support capabilities to help make the Chirag Oil Project a success.”

Emerson is the Main Automation Contractor for the project and will deliver a variety of technologies and services. The company’s PlantWeb™ digital plant architecture – including Foundation fieldbus communications, digital automation systems, asset management software, and intelligent field devices – will provide process control and access to management information. Its network of intelligent transmitters and valve positioners will deliver continuous process and equipment health information to identify potential problems before they affect operations.

Emerson also will provide project-management services to ensure the equipment is properly installed and integrated to meet technical, budget, and schedule requirements. Support for the Chirag Oil Project will be provided by Emerson Process Management’s Azerbaijan office in Baku.

Development of the Azeri-Chirag-Guneshli field is managed by the Azerbaijan International Operating Company, a BP-operated consortium of nine oil companies.

Emerson Process Management (www.EmersonProcess.com), an Emerson business, is a leader in helping businesses automate their production, processing, and distribution in the chemical, oil and gas, refining, pulp and paper, power, water and wastewater treatment, metals and mining, food and beverage, life sciences, and other industries. The company combines superior products and technology with industry-specific engineering, consulting, project management, and maintenance services. Its brands include PlantWeb™, Syncade™, DeltaV™, Fisher®, Micro Motion®, Rosemount®, Daniel™, Ovation™, and AMS Suite.

Norway celebrated 40 years as an oil-producing nation in 2011, and could look back on gratifying quantum leaps in safety over these decades. But PSA director general Magne Ognedal notes that some worrying basic issues remain in the Norwegian petroleum sector.

The global community used 2011 to lick its wounds after the Deepwater Horizon disaster the year before – ask critical questions, probe reasons and responsibilities, and discuss the need for a new organization of international safety. That process is far from over, and Mr Ognedal has identified some key issues which stand out at the start of a new year.

“First and foremost, I would ask – yet again – why the Gulf of Mexico disaster continues to be categorized as an environmental discharge?

“It perplexes and astonishes me that an accident with a tragic outcome for many people is usually discussed as a pollution issue – not least in Norway.

“Perhaps it’s appropriate to ask how Norway would have handled a petroleum incident which left 11 dead and many permanently injured? I believe – and hope – that the answer is self evident.

“Let’s remember that safety and concern for people must always be the top priority. And an enterprise management which safeguards personnel is also the best protection for the environment.”

Observations Mr Ognedal has several observations to make in the wake of the Deepwater Horizon disaster and the major incident on the Montara field off Australia during 2009.

“Have the international companies, both those directly involved and others, subsequently been too concerned to centralize their overall management systems and work routines?

“Is it the case now that management is concentrated to a greater extent at company head offices, without operations being tailored to the established rules and principles of the countries in which they operate?”

He says that the PSA has seen a number of worrying signals of this. These include information received over the past year which suggests that genuine employee participation and influence have been reduced in some companies.

“Such codetermination is a regulatory requirement in Norway and an overall expectation in Norwegian society –
expressed most recently in the working life White Paper published last autumn. This must be respected.

“We’ve otherwise seen examples of the requirement to apply best practice for operations in Norway being overridden
by central guidance from company head offices.

“That’s also unacceptable. Every company which operates in Norway undertakes to comply with national requirements and expectations.”

Collaboration At home, disquiet about the “tripartite” collaboration between companies, unions and government in the country’s petroleum sector is another source of concern for Mr Ognedal.

“Some people perceive a negative trend in this area,” he notes.
 
“Such worries must be listened to and taken seriously. It’s very important that cooperation between the three central groupings functions well.”

Pointing out that all sides must contribute to a good climate, he says that a tripartite collaboration demands loyalty to existing petroleum industry fora. These include the Safety Forum, the Regulatory Forum and Working Together for Safety.

“Participants must be expected to use the meetings of these bodies to raise key concerns and questions. Their mandate for taking part is to express views on behalf of the organization they represent.

“In return, we must be able to require that views are debated and listened to by the other sides involved. However, one party can’t always fulfill the expectations of the others, and that must also be respected.

“Nor can the PSA intervene in all circumstances. Certain conditions must be settled between the employers and the employees.”

But Mr Ognedal emphasizes that a fundamental principle of the tripartite collaboration is that decisions taken in its arenas are respected.

“We can’t have issues already settled in a tripartite forum being rehashed in the parties’ own arenas. Over time, such conditions will clearly dilute cooperation.”

Gratifying With Norwegian petroleum production past its 40th anniversary, Mr Ognedal can look back on gratifying progress. He has personally worked in the industry for almost the entire period, and has been at the safety helm – first in the Norwegian Petroleum Directorate (NPD) and then at the PSA – for 32 years.

“The changes have been huge,” he emphasizes. “ Conditions in the 1970s are barely comparable with those which prevail today.

“In the early years, safety was an add-on to other concerns. New facilities were designed, and then assessed for how safe they were.

“That’s fundamentally different from the present position, where safety considerations are incorporated from the moment the first line is penciled in.”

Complex “Before the 1985 reform, regulation of the Norwegian petroleum sector was complex,” Mr Ognedal admits.

“The change established clear lines of responsibility between the various regulators, and between them and the industry.”

People began to think in completely different ways and to develop new regulatory/supervisory methods, he notes. And – not least – the internal control principle was established in Norway.

“I well remember some episodes from my first years as safety director at the NPD. On one occasion, for instance, I asked an oil company management who they felt had overall responsibility for the safety of their operations – themselves or the government.

“At the same time, I requested some thoughts on how the responsible party should discharge that responsibility. I wanted an answer in writing – and got one after two years.”

When he tried the same exercise with a different company, Mr Ognedal recalls with a smile, it took them five years to come up with a response.

“That provides a good illustration of the present maturity and understanding of roles we have in Norway’s petroleum industry. No company management would need time to answer such a simple and basic question today.

“Both the industry and the government have done a fantastic job over these four decades. We’ve created a grown-up sector.”

Mobile “I’d take our follow-up of mobile units as an example of progress over the most recent decade of our 40-year petroleum history,” Mr Ognedal continues.

“We’ve now allocated responsibilities clearly between vessel owners and drilling contractors, and made an  acknowledgement of compliance [AoC] necessary for working on the NCS.

“These moves have brought us some important steps forward. The drilling contractors have accepted their responsibility and helped to improve safety in the Norwegian petroleum industry.”

He points out that Norway’s offshore safety regime is highly respected in the global arena, with training in and information on the national model in demand across much of the world.

“We’ve also experienced great interest from the USA since Deepwater Horizon. This recognises and confirms that we’ve come up with some bright ideas in Norway during our oil history.”

Bergen Group Fosen has signed a contract with Volstad Maritime AS to build a large high-end offshore vessel. The contract has an estimated value of more than NOK 800 million, and the ship is scheduled for delivery in Q3 2013.

The signed contract is subject to final board approval and financing, which is expected to be clarified during Q1 2012.

The contract is for construction of a large and advanced OCV (Offshore Construction Vessel) with a length of 125 meters and a beam of 25 meters. The ship is a ST-259 CD design from Skipteknisk in Ålesund, Norway.  

“The contract with Volstad Maritime AS is a confirmation of Bergen Group’s strong position related to construction of advanced and innovative offshore vessels to a demanding international market.  This is a market we consider to be interesting and attractive for years to come”, says Terje Arnesen in Bergen Group.

Arnar Utseth, CEO of Bergen Group Fosen, is looking forward to start building vessel number seven to be delivered to Volstad Maritime AS.

“We are very pleased that the company wants to continue the well-established partnership with us, and we look forward to building another top modern, advanced and future-oriented vessel to Volstad Maritime.  This contract will also give us a solid extension of the period with high outfitting activity already secured a Fosen throughout 2012, “says Arnar Utseth.

Volstad Maritime AS is a privately owned Norwegian offshore shipping company headquartered in Ålesund, Norway. The company is well established in the international market, with a modern fleet of advanced offshore vessels.

Volstad Maritime AS has since 2005 ordered all their newbuildings, a total of seven vessels, from  Bergen Group Fosen.  Five of there have already been delivered. One vessel is under full production and will be delivered in summer of 2012 .

Bergen Group has during the last four years delivered a total of 16 advanced offshore vessels to different customers both nationally and internationally.   The group’s shipbuilding division will in 2012 deliver another four different vessels with a total contract value of NOK 2.7 billion.

OceanWorks International is pleased to announce the successful delivery of a major system upgrade, Lloyd’s certification renewal and completion of sea trials for the Turkish Navy’s Atmospheric Diving Suit system. After 5 years of operation, the Turkish HARDSUIT™ Atmospheric Diving System (ADS) was returned to OceanWorks International to complete the major Lloyd’s survey and to upgrade the system electronics to the latest configuration.

The HARDSUIT™ Quantum has been upgraded to include new LED lights, a new low-light pan and tilt camera and an updated pilot control system which allows for redundant surface controls. A new electronic panel system inside the suit also improves accessibility for maintenance. The upgrade to the QUANTUM II configuration offers much improved operational, maintenance and training features.

The contract included provision of a temporary replacement ADS system to ensure that the Turkish Navy did not experience any interruption of their rescue and salvage capabilities during this upgrade and refurbishment period. The upgrades and major survey represent a strong commitment by the Turkish Navy to the HARDSUIT™ ADS system as the cornerstone of their submarine rescue capability.

“We are pleased with the results of the Major Survey and believe that the upgrades made to the ADS will further increase the flexibility and efficiency of the Turkish Navy system,” states Rod Stanley, Chief Executive Officer at OceanWorks International.

Successful Sea Trials in Turkey once again proved OceanWorks International's ability to provide cutting edge systems to the military market and demonstrated OceanWorks International's ongoing commitment to meet and exceed customer requirements.

Marathon Oil Norge AS (Marathon) has received consent to use the Transocean Winner mobile drilling facility for drilling of production well 24/6-B-5 on the Alvheim field.

The Alvheim field is developed with the Alvheim FPSO mobile production facility and subsea wells. Well 24/6-B-5 will produce oil from one of the three discoveries comprising the Alvheim field. Water depth in the area is between 120 and 130 metres.

The work will start during February at the earliest, and has an expected duration of 140 days.

Transocean Winner (photo) is a semi-submersible drilling facility of the GVA-4000 design, built in 1983 at Gøtaverken Arendal in Gothenburg in Sweden.

The facility is owned by Transocean Offshore and operated by Transocean Offshore (North Sea) Ltd, with main offices in Stavanger.

Transocean Winner received the PSA’s Acknowledgement of Compliance (AoC) in August 2006.

Crude oil output from the Organization of the Petroleum Exporting Countries (OPEC) rose to 30.87 million barrels per day (b/d) in January from 30.83 million b/d in December. This leaves the organization overproducing its brand new production ceiling by 870,000 b/d, according to a just-released Platts survey of OPEC and oil industry officials and analysts.

A 200,000-b/d increase in Libyan production to 1 million b/d – just 600,000 b/d short of pre-uprising output early last year – more than offset combined reductions totalling 170,000 b/d from Angola, Iran, Nigeria andVenezuela. United Arab Emirates production also saw a small increase of 10,000 b/d to 2.56 million b/d.

"Libyan production is clearly recovering steadily, and it will be interesting to see how the group accommodates these rising volumes, especially when OPEC is already substantially overproducing its 30-million-b/d ceiling and with the Vienna secretariat forecasting that demand for OPEC crude in the first quarter will be well below current production," said John Kingston, Platts global director of news.

The survey estimated output from OPEC kingpin Saudi Arabia at 9.8 million b/d, unchanged from December.

Earlier February 9, OPEC trimmed its forecast of demand for crude from its 12 members for 2012 as a whole to 30.04 million b/d from the 30.15 million projected a month ago.

But for the first three months of this year, OPEC slashed its previous forecast by 290,000 b/d, to 29.55 million b/d from 29.84 million b/d a month ago. This suggests that OPEC may need to rein in production over the next two months.

OPEC ministers in December agreed to set crude output for all 12 members, including Iraq and Libya, at 30 million b/d. But they did not set individual quotas.

For production numbers by country, click here. You may be prompted for a cost-free one-time-only log-in registration.

Platts OPEC and oil experts are available for media interviews; please consult Platts Media Center to schedule an interview. For other oil, energy and related information, visit www.platts.com.

By Allen Brooks, Managing Director, PPHB

Can’t People Find A New Way To Regulate O&G Industry?

On January 18th, Representative Denis Kucinich (D-Ohio), along with five liberal Democrats in the House of Representatives, introduced a bill that displays not only a lack of understanding about the basics of business, but also champions some of the most failed government economic policies of the past 40 years.  

The bill, H.R. 3784, otherwise known as the “Gas Price Spike Act of 2012,” would, as its preamble sets forth: “…amend the Internal Revenue Code of 1986 to impose a windfall profit tax on oil and natural gas (and products thereof) and to allow an income tax credit for purchases of fuel-efficient passenger vehicles, and to allow grants for mass transit.”  For this group of politicians, profits are as dirty as the crude oil they are derived from.  While the preamble sets forth the premise of regulating energy industry profitability, the proposed mechanisms in the bill demonstrate the worst of a social engineering mandate.    

The premise of the bill is the mantra that fossil fuels are bad and the “excess” profits they produce should be confiscated by the government and handed over to the buyers of politically-correct, fuel-efficient vehicles and the operators of mass transit systems.  What’s worse about the policy is that not all fuel-efficient vehicles would benefit, only those assembled in this country by union labor.    

So just what are “excess” profits, or for that matter “reasonable” profits?  To answer those questions, we would have to await the determination by the Reasonable Profits Board, which would be a three-member board appointed by the president for three-year terms.  (Sounds like Rep. Nancy Pelosi and Obamacare.)  Once they figure out what is an acceptable profit for the oil and gas industry, the law would levy an excise tax of 50% of the excess profits between 100% and 102% of that reasonable profit measure.  For excess profits between 102% and 105%, the excise tax would be 75%, and anything above 105% would be taxed at 100%.    

One of the requirements to serve on this board is that you don’t work in the industry.  We would hope, however, that the members would at least understand business and the respective measures of profitability.  That might stand in contrast with many of President Obama’s economic and cabinet appointees.  What should be the test of “reasonable” profits?  Should it be the absolute dollars?  Or maybe it should be the company’s profit margin percentage.  There is also a case to be made that profitability should be measured based on return on equity.  Whichever measure is used, there will be problems in determining what’s reasonable, since reasonableness should be based on the capital needs of the industry.   

Exxon Mobil Corp. (XOM-NYSE) generated a 9.1% profit margin last year, but that was over two percentage points below the margin of Chevron (CVX-NYSE).  More importantly, while those oil company profit margins exceeded those of GM (GM-NYSE) and Ford (F-NYSE) at 6.6% and 5.1%, respectively, Apple (AAPL-NYSE) had a 25.8% margin, Microsoft’s (MSFT-NYSE) was 32.6%, and Google’s (GOOG-NYSE) was 25.7%.  So why should oil companies be punished given their low profit margins?  Just because ExxonMobil earned $41.1 billion last year and Chevron $26.9 billion, admittedly very large numbers, they were nowhere near as profitable as some of our high tech powerhouses.  If you look at return on equity, Apple (45.6%) and Microsoft (41.7%) were way more profitable than ExxonMobil (26.8%) or Chevron (11.4%).    

We know, we’ll devise a new “Buffett rule.”  Berkshire Hathaway (BRK.B-NYSE) for the twelve months ended September 30, 2011, earned $11.6 billion in net income.  The problem is that its profit margin was only 8.2%, only besting the beaten up auto companies.  On a return on equity measure, Berkshire Hathaway only mustered a 7.6% performance, coming in last among all these companies.  No Buffett rule here.  Even GM had a 26.2% performance through September, but then again it had all its debt stripped away by the Obama administration’s restructuring (we won’t use the term bankruptcy).  A recent article in The Wall Street Journal pointed out how GM hopes to report profits of $8 billion for 2011, a nice recovery, but then again the article pointed out that the company is not paying any taxes as a result of its bailout.  (Above figures from Yahoo Finance.)

What gets lost in this populist assault on the oil and gas industry is its size and capital-intensive nature.  Last year, ExxonMobil generated $453 billion in revenues while its major U.S. competitor, Chevron, earned $236 billion.  These numbers compare to Apple’s $127 billion, Microsoft’s $72 billion and Google’s $38 billion.  The two auto companies – GM and Ford – were similar in size to Apple at $149 billion and $134 billion, respectively, but more importantly, they are comparable to Berkshire Hathaway’s $142 billion in revenue.  Because the oil companies are so large, their profit numbers are going to be large even with modest profit margins.  To punish them due to their absolute size would be akin to requiring all National Basketball Association players over 6-feet 10-inches tall to have to wear 10-pound ankle weights during games to counter their height and ability to jump.    

Assuming there are excess profits to tax, where would the funds go?  First, they would go to buyers of fuel-efficient passenger vehicles.  Buyers would get a $3,000 tax credit for a vehicle with a fuel-efficiency rating within 10% of the most fuel-efficient vehicle.  Buy a car with a rating within 5% of the most fuel-efficient and you would get $4,500.  But if you buy a car that gets at least 65 miles per gallon, you get a $6,000 tax credit.  This latter category would  include all the electric vehicles, some hybrids and a select number of very small cars, many of which have been arbitrarily assigned very high mileage ratings.    

The most interesting point in this section of the legislation is the definition of what is a Qualified Passenger Vehicle.  While that classification includes measures such as having been purchased after the effective date of the legislation, being first used by the owner and only for personal and not business use, the car has to be American-made.  Moreover, as subparagraph B of the section states, a qualified car is one “which is assembled in the United States by individuals employed under a collective bargaining agreement.”  Assuming you want this tax credit, your vehicle shopping list will be limited to models from Chrysler, Dodge, Jeep, Ford (F-NYSE) and General Motors (GM-NYSE).  You also could choose from Mazda Motors’s (MZDAF.PK) Mazda 6 and Tribute models and Mitsubishi’s Eclipse.  Otherwise, you’re out of luck.    

Any left over money collected can be given out by the Secretary of Transportation to operators of mass transit systems to help them reduce fares during gas price spikes.  Mass transit means rail and bus systems, but the grants are made on a fiscal year basis and remain in effect until funds are expended.  Nowhere in this bill is there a definition of a gas price spike – so we guess it has already happened.  Without a definition, we wonder what happens if oil and gas prices decline?    The Lima News in Lima, Ohio editorialized that Rep. Kucinich’s bill would do little but guarantee the return of gasoline lines such as the nation experienced in the 1970s.  

Those lines came partly as a result of the shocks to the petroleum system from the quadrupling of crude oil prices following the Arab oil embargo after the Six Day War in 1973, and the Iranian Revolution and capture of American hostages in 1978.  The reactions to these events prompted politicians to become involved in directing how the flow of oil and gasoline moved in this country and controlling product prices to protect consumers.  That meddling in the business produced little more than long lines of cars at gasoline stations and restrictions on the amount one could purchase on a visit.    

The reason for the gasoline lines was that the government relied on population statistics to allocate gasoline volumes.  As these statistics were notoriously late, and especially before the widespread use of computers, gasoline volumes were always allocated based on historical population measures that were out of date.  The only question was just how out of date they were.  The statistics failed to capture the mass population migration from the Rust Belt states to the jobs Mecca of the oil producing states.  

As a result, states like Ohio and Michigan had areas swimming in gasoline and no lines while Dallas, Houston and Tulsa, to name a few oil-centric cities, had horrendous gasoline lines and rationing.  The experiments ofregulating the industry proved that bureaucrats didn’t have the ability to anticipate demand changes and their regulations masked the price signals that appropriate allocate petroleum products.    

A different situation occurred in the 1980s after the Iranian Revolution when President Jimmy Carter signed into law the Crude Oil Windfall Profits Tax Act.  That law imposed a 70% excise tax on the amount of an oil sale price exceeding $12.81 per barrel.  According to the Congressional Research Service, domestic oil output declined by 3%-6% and oil imports rose by 8%-16%.  Due to the recession’s impact on the economy, oil demand fell, bringing oil prices down and causing the tax to generate very little revenue.    

With this bill, Rep. Kucinich and his band of followers have committed the folly of planning to repeat history because they haven’t taken the time to know their history.  As a result, they will prove Albert Einstein’s definition of insanity correct – repeating the same thing over and over and expecting a different result.  We are not sure which is the worse criticism - the claim of insanity or of ignorance?  These politicians clearly don’t understand anything about business, only about politics, and for that Americans will suffer.

Note: Musings from the Oil Patch reflects an eclectic collection of stories and analyses dealing with issues and developments within the energy industry that I feel have potentially significant implications for executives operating and planning for the future.  The newsletter is published every two weeks, but periodically events and travel may alter that schedule. As always, I welcome your comments and observations.   Allen Brooks

Pulse Structural Monitoring is to announce the latest news regarding its DrillASSURE monitoring software at this year's IADC/SPE Drilling Conference in San Diego.

Pulse is updating its flagship drilling riser monitoring software package with a new online 'back-to-base' link function, which will enable live monitoring data to be sent via the internet to selected personnel.

The addition, which will be formally unveiled at the conference on 6-8 March, will allow operators to access information about the operation of their drilling risers remotely, from anywhere in the world.

Managing Director Richard Kluth said: "We developed the back-to-base link in response to feedback from clients requesting greater access to information about the integrity of the drilling riser.

"The system gives engineers based onshore all the data they need to monitor the drilling riser and swiftly take the required actions to ensure on-going operational integrity.

"Data can be consistently monitored and recorded, with the relevant parties automatically notified when operation deviates outside pre-defined limits.

"Built on Pulse's extensive track record of successful drilling riser monitoring campaigns, DrillASSURE helps both the operator and drilling contractor to streamline the campaign whilst maintaining the most rigorous safety standards."

The back-to-base feature is designed to complement the three new software modules Pulse added to its DrillASSURE package in August 2011.

Since their release, these modules have been successfully deployed by drilling teams in Brazil, both UK and Norwegian sectors of the North Sea and are about to see service with an Australia-based drilling contractor.

The modules were developed in conjunction with 2H Offshore and based on experience gained over 13 years in more than 350 drilling campaigns worldwide.

They were introduced to help operators and contractors optimise the usage of their drill joint inventory, identify optimum operating windows and drill within safe parameters by constantly analysing conditions in real time.

The current DrillASSURE offering comprises the following modules:

DrillJOINT: A complete inventory detailing the location, availability, technical specification, previous usage and maintenance history of the owner's drill joints.

Using this software, an operator or contractor can source riser joints and assemble a robust drilling stack on screen prior to drilling, saving time and ensuring optimum safety and efficiency throughout the campaign.

DrillWINDOW offers pre-drilling analysis of static and dynamic operating windows and hang-off envelopes.

The user inputs known environmental data, such as wave height, current velocity and mud density, then the software evaluates these against approved safety margins to calculate the fatigue life of the drill stack.

DrillADVISE calculates parameters such as vessel position, flex joint angles and environmental conditions, then presents easily interpretable data in real time to guide the user on proceeding safely and efficiently.

Feedback is presented in a simple traffic-light format - green shows all parameters are within thresholds, amber indicates caution or corrective action are required, while red is an instruction to disconnect immediately.

Helix Energy Solutions Group, Inc. (NYSE: HLX) announces that it is proceeding with the construction of a newbuild semisubmersible well intervention vessel. Owen Kratz, Helix’s Chairman and CEO, stated, “We are leveraging our market and technological leadership in subsea well intervention along with the proven success of the Q4000 platform to satisfy an increasing market interest for specialized deepwater well intervention services. We have previously indicated that we intend to address this growing market by delivering new capacity and will continue to expand this business segment further.”

Helix has completed the detailed engineering for the new vessel and expects to commence construction in the near future.

Foster Wheeler AG (Nasdaq: FWLT) has announced that Foster Wheeler Upstream, part of its Global Engineering and Construction Group, has been awarded a contract by Discovery Gas Transmission, LLC to provide design, engineering and technical services for a junction platform, facilities and associated pipelines within the Discovery System at South Timbalier 283, in the Gulf of Mexico.

The Foster Wheeler contract value, which was not disclosed, will be included in the company’s fourth-quarter 2011 bookings.

The platform, located in approximately 350 feet of water, will be a four-pile structure with a two-level deck. It will be designed as an unmanned structure with a control system designed to shut down the facility in the event of an upset condition. The new infrastructure will enable the existing Discovery pipeline to operate at a higher pressure, both before and after the connection of the new Keathley Canyon pipeline.

“This project gives us an opportunity to fully showcase our wide range of capabilities and will build on our track record for delivering complex offshore projects in the Gulf of Mexico,” said Clive Vaughan, Chief Executive Officer, Foster Wheeler Upstream.

Williams Partners L.P. (NYSE: WPZ) owns 60 percent of the Discovery system and operates it. 

DCP Midstream Partners, LP (NYSE: DPM) owns 40 percent of the system.DPM) owns 40 percent of the system.

Technip (Paris:TEC) (ISIN:FR0000131708) was awarded a pipeline installation contract by Woodside Energy Limited for the Greater Western Flank Phase 1 Project located 130 kilometers North West of Karratha in Western Australia.

This pipeline will link the Goodwyn GH and Tidepole fields via a subsea tie-back to the existing Goodwyn A (GWA) platform and represents the next major development for the Woodside-operated North West Shelf Project.

The contract scope includes load out, transportation and installation of 16 kilometers of 16” gas flow line from the Tidepole manifold to the GWA platform.

Technip’s operating center in Perth, Australia will execute the contract, with the support from the Singapore office. Offshore installation will be carried out by the Global 1200 or the Global 1201, two flagship vessels that joined Technip’s fleet through the recent acquisition of Global Industries.

Superior Energy Services, Inc. (NYSE: SPN) announces that its Board of Directors has elected Brian Moore as Senior Executive Vice President, and Westy Ballard and Greg Rosenstein as Executive Vice Presidents.

Mr. Moore, 55, will serve as Senior Executive Vice President of North America Services, overseeing the Company's completion and production service lines. From March 2007 until the merger between Complete Production Services, Inc. and Superior, Mr. Moore was President and Chief Operating Officer of Complete, and was with Complete and its predecessor companies since April 2004. He has more than 30 years of management and operations experience in the North American energy industry.

Mr. Ballard, 40, will serve as Executive Vice President of International Services, focusing on developing and building out the Company's core services in international markets. Mr. Ballard has served as Vice President of Corporate Development since joining the Company in June 2007. Prior to joining Superior, Mr. Ballard spent six years working in private equity.

Mr. Rosenstein, 44, will serve as Executive Vice President of Corporate Development with responsibilities for corporate planning/M&A, investor relations and corporate marketing. Rosenstein will continue to be the main point of contact for investor relations matters and continue to serve as the Company's Corporate Secretary.  Mr. Rosenstein most recently served as Vice President of Investor Relations, and has been with the Company since March 2000. He has more than 15 years of experience in the energy industry.

David Dunlap, President and Chief Executive Officer of Superior, stated, "By establishing these executive management level functions, I believe we have a structure in place that will support our long-term strategies and can endure as we grow. Brian, Westy and Greg have been successful in their prior roles and responsibilities, and I look forward to their contributions as we leverage our diverse suite of products and services to enhance our North American market position and continue our international expansion strategy."

Hornbeck Offshore Services, Inc. (NYSE: HOS) (the "Company") announced today that Nicholas L. Swyka has been appointed to its Board of Directors (the "Board"), effective February 14, 2012.  In connection with Mr. Swyka's appointment, the size of the Board was increased from eight to nine members.

Mr. Swyka, 67, has over 30 years of energy related investment banking experience.  From September 1999 until his retirement in June 2011, he served as Vice Chairman of Simmons and Company International ("Simmons"), one of the largest investment banks providing services exclusively to the energy industry.  During this time, Mr. Swyka also served on Simmons' Executive Management, Compensation and Underwriting Committees.  From January 1987 until September 1999, he served as Managing Director and Co-Head of Investment Banking for Simmons.  During that time, he functioned as senior team leader advising the Boards of Directors of both public and private energy companies on a significant number of transactions, including mergers, acquisitions and divestitures, as well as capital market transactions.  Mr. Swyka continues to serve as an Advisory Director pursuant to a consulting agreement with Simmons.  Mr. Swyka also currently serves as an Advisory Director to the University of Texas Marine Science Institute and the National Ocean Industry Association ("NOIA").

Todd Hornbeck, Chairman, President and CEO, commented, "We are very pleased that Mr. Swyka has joined our board.  Nick brings to our Board significant industry experience, critical insights into the issues facing the global oil and gas industry, a proven track record of providing financial advisory services to the growing energy service sector and a personal knowledge of the history and the accomplishments of our Company."

Hornbeck Offshore Services, Inc. is a leading provider of technologically advanced, new generation offshore supply vessels in the U.S. Gulf of Mexico and  Latin America, and is a leading short-haul transporter of petroleum products through its coastwise fleet of ocean-going tugs and tank barges in the northeastern U.S. and the U.S. Gulf of Mexico.  Hornbeck Offshore currently owns a fleet of 80 vessels primarily serving the energy industry.