The Bureau of Safety and Environmental Enforcement (BSEE), U.S. Coast Guard, and Walter Oil & Gas Corporation (Walter), through the Unified Command, continue to oversee and coordinate response efforts to secure the South Timbalier 220 natural gas Well A-3. Safety of personnel and protection of the environment remain the top priorities.

All available options to safely secure the natural gas well remain under consideration. Work is moving forward on all approaches. Gas detectors and high-capacity water jet fire monitors have been installed on board the Hercules 265 rig; this is for the safety of the rig and the well intervention operations which will be conducted from a near-by barge, Superior Derrick Services' "Performance."

Walter’s application for permit to drill a relief well was approved Saturday by BSEE. The Rowan EXL-3 jack-up rig, contracted by Walter, is on location at South Timbalier 220 and crews are preparing the rig for drilling. The crew is expected to begin drilling the relief well early Thursday. It is anticipated that it will take approximately 35 days to intercept the original well bore. Many factors can affect the expected schedule including weather and the intricate work of locating the target well bore at the end of the drilling process. A relief well is drilled to intercept the target well. Once intercepted, drilling mud followed by cement will be pumped into the well to secure it.

From visual observation, a sheen is no longer present in the area of the well. The Coast Guard continues to maintain a 500-meter safety zone around the site. Firefighting and other marine vessels remain onsite with personnel from Walter, Hercules, and other professional engineering contractors, and relevant federal agencies.

BSEE's investigation into the cause of the loss of well control continues in coordination with the Coast Guard.

Additional updates will be issued as information becomes available. Media inquiries and requests for additional information should be directed to 504-736-2595.

BACKGROUND:

 Walter experienced a loss of control of Well A-3 at approximately 8:45 a.m. July 23 on an unmanned platform at South Timbalier Block 220 while doing completion work on the sidetrack well to prepare the well for production. The operator reported the safe evacuation of 44 personnel from the Hercules 265 jack-up rig. Coast Guard confirmed that the leaking natural gas ignited at 10:45 p.m. CDT July 23. BSEE confirmed July 25 that the well flow subsided after a natural bridging process suppressed the fire.

CNOOC Limited (the "Company", NYSE: CEO, SEHK: 00883) announced today that its parent company, China National Offshore Oil Corporation (CNOOC) has signed production sharing contract (PSC) with Shell China Exploration and Production Company Limited (Shell) for Block 35/10 in Yinggehai Basin in the South China Sea.

Block 35/10 is located in Yinggehai Basin in the South China Sea. It covers a total area of 3,427 square kilometers with water depth of 80-110 meters.

According to the terms of the PSC, Shell will conduct 3D seismic data survey and may drill exploration wells in the block during the exploration period, in which all expenditures incurred will be borne by Shell. CNOOC has the right to participate in up to 51% working interest in any commercial discoveries in the block.

W&T Offshore, Inc. (NYSE: WTI) announced today that it has made a subsalt discovery in a deep shelf exploratory target beneath its Ship Shoal 349 "Mahogany" Field.  The SS 359 A-14 well has exceeded our expectations and is currently producing from the targeted T-Sand (in excess of 17,200' total vertical depth), at an initial flow back rate of 3,030 barrels of oil per day and 5.6 million cubic feet of gas per day, for a total of approximately 4,000 barrels of oil equivalent (Boe) per day (3,310 Boe per day net of royalty to W&T) with a flowing tubing pressure of approximately 9,400 psi surface pressure.  The T-Sand is the deepest sand discovered in this field, as there is additional pay identified in the M-Sand, N-Sand, and O-Sand, all of which represent future reserve additions to the Company.  The well also penetrated a thicker than expected P-sand interval (the main field pay sand) which will also serve as a future recompletion.  In total, the A-14 well logged over 370 feet of net oil pay, with the T-Sand accounting for 108 feet of the total net pay.  Success from the A-14 T-sand will stimulate additional drilling in 2014 to exploit the four newly discovered oil sands that were encountered in the A-14 well.  W&T holds a 100% working interest in the field.

Tracy Krohn, W&T Offshore's Chairman and CEO, stated, "Our exploration team utilized our subsalt imaging technology to identify and deliver this subsalt discovery which is a deep shelf exploration extension to our producing Mahogany Field.  This new oil discovery is part of our organic growth plan and adds substantial value to the Company.  We found a very high quality oil sand in the T-sand reservoir with great flow characteristics.  Another key value driver on this project is our ability to produce this discovery immediately through our existing infrastructure at Mahogany.  We are evaluating additional targets in this highly prolific field based upon our continuing success and look forward to our next exploratory well at Mahogany, the A-15 well, which should begin drilling in in September."    

The platform rig at Mahogany is currently working on a major recompletion in the A-4 well, designed to bring a behind pipe P-Sand interval into production at an expected rate of 1,000 Boe per day, net of royalties to W&T with an anticipated production date of August or September.  Following the A-4 recomplete we expect to spud the A-15 subsalt exploratory well, a multi-horizon target that is anticipated to encounter multiple stacked oil sand targets.  The A-15 well is scheduled to reach total depth near the end of 2013 or early 2014 with a target IP rate of 1,390 Boe per day, net of royalty to W&T.  The unrisked reserve potential associated with the A-15 well is anticipated to be in the range of 1.8 to 6.2 million Boe. 

Just days before European rules on offshore safety for European companies abroad enter into force, and just a few months before additional requirements for companies operating in U.S. waters take effect, the European Commissioner for Energy, Guenther Oettinger, has called for operating and drilling companies to deliver the highest standards including when operating outside of American and European regulated waters.

At the time of his visit to Washington, DC, on July 16, Commissioner Oettinger said that the path to a strong and reliable culture of offshore safety depends upon global companies operating to the highest standards. Offshore accidents around the world continue to involve American and European companies. This places the spotlight on the global companies – who have done much to improve standards since Macondo – to give leadership to safety wherever they operate, and where the U.S. and EU rules do not apply.

"Under separate arrangements coming into force this year in Europe and the U.S., national regulators will exercise additional vigilance over oil and gas companies to ensure they accelerate the advances in technology and human understanding achieved since Macondo, whilst exercising stringent control of risks of major accidents at all times," said Commissioner Oettinger.

"We call upon oil and gas companies and drilling contractors operating in European Union waters to respond to the challenge to their leadership in global safety and environmental protection. We call on them to exert their influence to see a rise in standards both rapidly and permanently, and to ensure the transparency of that achievement. Beginning without delay, we hope to see full and rigorous disclosure of safety data by all companies in the international industry associations' reports."

Commissioner Oettinger concluded: "Our colleagues in the U.S. Department of the Interior have reaffirmed the value of the long-standing cooperation between offshore regulators in Europe and the USA in securing the transparently highest levels of safety in the offshore oil and gas industry. On Thursday, I will meet with the leaders of the offshore industry in Houston, and I look forward to hearing their views on what more is to be done to reassure people everywhere that the safety lessons of Macondo – and indeed the legacy of Piper Alpha - are truly and visibly embedded wherever our companies operate."

Background

Technip was awarded by Chevron North Sea Ltd a substantial⁽¹⁾ engineering, procurement, installation and construction (EPIC) contract for the Alder field. Chevron is developing the Alder field as a subsea tieback to the Britannia Bridge Link Platform (BLP). This field is located in the central North Sea, about 200 kilometers North-East of Aberdeen, Scotland, at a water depth of approximately 150 meters.

The contract will cover a wide scope of work, from engineering to manufacturing and installation:

•    the detailed design and pipelay of a 28-kilometer 16” pipe-in-pipe system,

•    the installation of a 28-kilometer hybrid umbilical⁽²⁾,

•    various subsea works including the installation of a manifold⁽³⁾ structure including HIPPS⁽⁴⁾, subsea isolation valve structure, valves and spoolpiece⁽⁵⁾ components.

Technip’s operating center in Aberdeen will execute the contract, which is scheduled to be completed in the second semester of 2015. Genesis⁽⁶⁾ will complete the detailed design workscope and Technip’s spoolbase in Evanton, Scotland, will fabricate the pipe-in-pipe. DUCO Ltd, Technip’s wholly-owned subsidiary in Newcastle, England, will manufacture the umbilical. Vessels from the Group’s fleet will be used for the offshore campaign, including its newest state-of-the-art pipelay vessel, the Deep Energy.

Bill Morrice, Managing Director of Technip in the United Kingdom, said: “We are delighted to be reigniting our relationship with Chevron with this substantial contract that will allow us to support them in bringing the Alder field onstream. Technip has a proven track record in delivering EPIC contracts of this scale and our unique vertical integration is an added-value advantage for our clients as our capabilities cover the entire value chain for subsea infrastructures. The UK Continental Shelf is still an exciting place to be with many major fields being developed both around traditional developments and in deeper waters West of Shetland, a market Technip is keen to maximize opportunities.”

⁽¹⁾ For Technip, a “substantial” subsea contract is ranging from €100 to €250 million.

⁽²⁾ Umbilical: An assembly of steel tubes and/or thermoplastic hoses which can also include electrical cables or optic fibres used to control subsea structures from a platform or a vessel.

⁽³⁾ Manifold: a piece of pipe with several lateral outlets and/or inlets for connecting one pipe with 3 others.

⁽⁴⁾ HIPPS: High Integrity Pressure Protection System

⁽⁵⁾ Spoolpiece: A short section of pipe for the connection of two subsea structures.

⁽⁶⁾ Genesis is a market-leading engineering company focused on providing engineering and technical services to the global upstream oil and gas industry. It is part of the Technip Group.

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The Bureau of Ocean Energy Management completed its required evaluation to ensure that the public receives fair market value for tracts leased as part of Central Gulf of Mexico Oil and Gas Lease Sale 227, which was held on March 20, 2013.

After extensive economic analysis, BOEM has awarded 307 leases on tracts covering 1,648,831 acres to the successful high bidders who participated in the sale, which made 7,299 unleased blocks covering about 38.6 million acres available offshore Louisiana, Mississippi and Alabama. The accepted high bids are valued at $1,199,052,037.

The terms of Sale 227 continued a range of incentives to encourage diligent development and ensure a fair return to taxpayers — including an increased minimum bid for deepwater tracts, escalating rental rates and tiered durational terms with relatively short base periods followed by additional time under the same lease if the operator drills a well during the initial period.

BOEM increased its minimum bid requirement in deepwater to $100 per acre, up from $37.50 in Central Gulf of Mexico lease sales prior to 2012. Rigorous historical analysis showed that leases that received high bids of less than $100 per acre have experienced virtually no exploration and development activities.

During the sale, 52 companies submitted 407 bids totaling $1,595,397,446 on 320 tracts. A total of $1,214,675,536 was received in high bids. BOEM rejected thirteen high bids, totaling $15,623,499 after determining that the value of those bids was insufficient to provide the public with fair market value for the tracts.

BOEM will reoffer these tracts as part of the next Central Gulf of Mexico sale, which is currently scheduled for March of 2014.   

The highest bid accepted was $81,787,999, submitted by Samson Offshore, LLC and Statoil Gulf of Mexico LLC for Walker Ridge, Block 271. The tract is at depths greater than 5,249 feet (1600 meters) and received two bids.

The sale’s results reflect strong, continuing industry interest in the Gulf of Mexico and President Obama’s commitment to expand oil and natural gas production safely and responsibly -- reducing our dependence on foreign oil and supporting American energy jobs.

As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year the President has been in office, with domestic oil production currently higher than any time in two decades and natural gas production at its highest level ever. Renewable electricity generation from wind, solar, and geothermal sources has doubled and foreign oil imports now account for less than 40 percent of the oil consumed in America – the lowest level since 1988.

For more information on Sale 227 go to www.boem.gov/sale-227/.

Seadrill Limited ("Seadrill") has signed a contract with Chevron China Energy Company for the newbuild ultra-deepwater drillship West Tellus in support of Chevron's affiliated global exploration program. The contract commences in China immediately upon shipyard delivery and thereafter relocates to Liberia. The agreement is for a period of 180 days with revenue potential of approximately US$150 million inclusive of bonus potential and mobilization.

Additionally, Seadrill is currently engaged in advanced discussions with a major oil company for a multi-year contract commencing in direct continuation of the Chevron contract. 

The West Tellus is a 6th generation drillship currently under construction for Seadrill at Samsung Heavy Industries shipyard in Geoje, South Korea, with expected delivery in September 2013. The rig will be outfitted to work in up to 10,000' of water and is capable of water depths up to 12,000' and drilling depths up to 37,000'. 

Per Wullf, CEO and President of Seadrill Management Ltd. says in a comment, "The multi jurisdiction contract for West Tellus demonstrates our willingness and ability to contract opportunistically and strategically when it is justified. The initial contract on West Tellus allows us to expand a long standing relationship with a key customer in the ultra-deepwater segment while also providing Seadrill the opportunity to place the West Tellus in West Africa, ready for a follow on contract."

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Apache Corporation (NYSE, Nasdaq: APA) announces  that its Australian subsidiary has confirmed a natural gas discovery at its operated Bianchi-1 well in Retention Lease WA-49-R, located in the Carnarvon Basin offshore northwest Australia.

Bianchi-1 was drilled to a total depth of 17,717 feet (5,400 meters) subsea, and final information regarding the well is being assessed. The well encountered approximately 367 feet (112 meters) of net natural gas pay in eight reservoir zones between 15,577 and 17,530 feet subsea (4,748 to 5,343 meters).

Bianchi-1 was drilled using the Ocean America semi-submersible deepwater drilling rig, which remains on location completing wireline logging and other information-gathering operations. Bianchi-1 adds to previous Apache exploration success in this part of the Carnarvon Basin following the Zola discovery in 2011. Zola is a natural gas discovery that Apache announced in 2011, located 4 miles (6 kilometers) southwest of the Bianchi discovery. The data from these wells, along with the Apache-operated Olympus gas discovery drilled in an adjacent permit earlier this year, provides critical insights into hydrocarbon distribution in the area.

"Bianchi is an important well for Apache, providing further understanding of the development options with the greater Zola area," said Faron Thibodeaux, Managing Director of Apache in Australia.

Evaluation of these recent discoveries is at an early stage and is being undertaken to assess potential commercial opportunities," Thibodeaux said.

The Bianchi-1 is part of Apache's ongoing exploration program across the Carnarvon Basin of Western Australia. During 2013, Apache plans to invest approximately US$1.9 billion for drilling, recompletion projects, development projects, equipment upgrades, production enhancement projects and seismic acquisitions.

Apache is the operator of Bianchi-1 (30.25% holding). Other parties in the joint venture are Santos (24.75%), OMV Australia (20%), JX Nippon (15%) and Tap Oil (10%). Apache acquired the interest in the field as part of a number of acreage acquisitions completed since 2010 that increased the company's gross acreage in Australia. Currently, Apache has interests in more than 31 000 square kilometers of northwest Australian offshore acreage including exploration permits and production licenses.

Helix Energy Solutions Group, Inc. (NYSE: HLX) announces that it is proceeding with the construction of a second newbuild semisubmersible well intervention vessel, to be named the Q7000. Owen Kratz, Helix’s President and CEO, stated, “Based on strong market demand and our proven success for delivering specialized deepwater well intervention services, we are moving forward with the Q7000, which is consistent with our strategy of expanding our well intervention fleet around the world.”

The Bureau of Safety and Environmental Enforcement (BSEE) and the U.S. Coast Guard are continuing to oversee Walter Oil & Gas Corporation’s response efforts to secure the natural gas well and extinguish the subsequent fire that started after the operator’s loss of well control Tuesday.

Both BSEE and Coast Guard conducted multiple overflights on Wednesday to supplement responsible party flights to maintain aerial surveillance of the scene. The natural gas well continues to fuel the fire on the rig. The derrick and drill floor structure has collapsed over the rig, and a very light sheen that dissipates quickly has been observed in the ocean.

Photo: Hercules 265 Jack-Up Rig 

 A water curtain is being applied by a fire-fighting vessel to the rig. A water curtain’s purpose is not to extinguish the fire, but to provide heat protection to the rig. Coast Guard Cutter Pompano and Cutter Cypress are on location enforcing the safety zone and assessing the changing conditions on the rig.

BSEE expects Walter Oil & Gas to submit a permit application to drill a relief well this evening. The permit, which would include details on the proposed well and the casing and cementing programs, must be approved by BSEE engineers before drilling could commence. BSEE continues to review and approve all operational plans and procedures for the response. BSEE's priority throughout this operation is the safety of the offshore workers and the protection of the environment.

BSEE and the Coast Guard have stood up a Command Center to respond to the event, which is happening 55 miles offshore Louisiana in 154 feet of water. Walter Oil and Gas Corporation experienced a loss of control of Well A-3 at approximately 8:45 a.m. July 23 on an unmanned platform at South Timbalier Block 220 while doing completion work on the sidetrack well to prepare the well for production. The operator reported the safe evacuation of 44 personnel from the Hercules 265 jack-up rig. Coast Guard confirmed that the fire began at 10:45 p.m. CDT July 23.

BSEE's investigation into the cause of the loss of well control is underway in coordination with Coast Guard. A Joint Information Center will be stood up beginning Thursday morning along with the Unified Area Command

 BSEE and the U.S. Coast Guard confirmed this morning, July 25, that the leaking natural gas well 55 miles offshore Louisiana has bridged over and the gas flow stopped. The fire has decreased to a small flame fueled by residual gas at the top of the well. Bridging is a well condition where small pieces of sediment and sand flow into the well path and restrict and ultimately stop the flow.

Both BSEE and Coast Guard have conducted overflights to visually confirm. BSEE and Coast Guard will continue overseeing response efforts until the event has come to a complete and safe resolution which includes securing the well. 

Apache Corporation (NYSE, Nasdaq: APA) announces it has agreed to sell its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings, for cash proceeds of $3.75 billion. In addition, Fieldwood will assume all asset retirement obligations for these properties, which, as of June 30, 2013, Apache estimated at a discounted value of approximately $1.5 billion. Apache will retain 50 percent of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested.

"This transaction is an important step toward rebalancing our portfolio," said G. Steven Farris, chairman and chief executive officer. "At the end of this process, we expect Apache to have the right mix of assets to generate strong returns, drive more predictable production growth, and create shareholder value.

"Apache has had a great run on the Gulf of Mexico Shelf over the last 30 years, and the Shelf region and staff have played a vital role in making Apache the company it is today.  As our company has evolved, however, so have our investment priorities," Farris said. "Since 2010 we have increased our focus in North America on capturing and developing a deep inventory of onshore assets, where we have been generating exceptional production growth at attractive rates of return. The shallower horizons in the Shelf have matured to the point that dependable production growth is more difficult to achieve than from  our onshore liquids plays. We remain excited about the potential associated with the emerging plays under existing salt domes, which is why we retained 50 percent of the deep rights on 406 blocks held by production and 50 percent of all rights in 146 primary term blocks."

Apache previously announced plans to divest $4 billion in assets by year-end 2013 as part of its ongoing portfolio assessment and to focus on more recently acquired properties. The company intends to use proceeds to reduce debt and enhance financial flexibility and to repurchase Apache common shares under a 30-million-share repurchase program authorized by the Board of Directors earlier this year.

Transaction Terms and Closing Conditions

The effective date of the transaction is July 1, 2013. The sale is subject to customary regulatory approvals and closing conditions and is projected to close September 30, 2013. Apache will operate the properties during a transitional period.

Fieldwood has agreed to offer employment to substantially all of Apache's GOM Shelf employees.

Goldman Sachs & Co. acted as financial advisor and Bracewell & Giuliani LLP served as legal advisor to Apache on the transaction.

Apache's Shelf Portfolio

Apache's Shelf portfolio — the largest operated asset base in Gulf waters to 1,000 feet deep — comprises more than 500 blocks with 1.9 million net acres and year-end 2012 estimated proved reserves of 133 million barrels of oil and natural gas liquids and 636 billion cubic feet of natural gas. In the first quarter of 2013, the fields averaged net production of approximately 50,000 barrels of liquid hydrocarbons and 254 million cubic feet of natural gas per day.

"Employees in Apache's Gulf of Mexico Shelf Region are the most experienced, technically knowledgeable, and dedicated group in the industry. This team  is committed to safe and environmentally responsible operations during the transition and in the new ownership structure," Farris said.

Apache's ratio of incidents of noncompliance per inspected component — a key measure of offshore safety performance — has been at or better than industry average for the last five years. In 2012, Apache was one of the first Gulf of Mexico operators to voluntarily submit an audit of its Safety Environmental Management System (SEMS) to the Bureau of Safety and Environmental Enforcement. SEMS focuses on operating procedures, hazard analysis, mechanical integrity and training for all assets and personnel operating in the Gulf of Mexico.

Keppel FELS, a wholly-owned subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), has secured a contract to build a jackup rig worth US$206 million from repeat customer Grupo R, a Mexican drilling company.

Scheduled for delivery in 4Q 2015, the jackup rig will be built to Keppel's proprietary KFELS B Class design. It will be added to the fleet of another four similar rigs that Keppel FELS is building for Grupo R.

With this new contract, Keppel FELS currently has on order nine KFELS B Class jackup rigs from Mexican customers.

Mr Wong Kok Seng, Managing Director (Offshore) of Keppel O&M and Managing Director of Keppel FELS, said, "We are delighted that Grupo R has chosen to build another jackup rig of the KFELS B Class design with us. It is an affirmation of their confidence in our rig designs as well as our project execution capabilities. The KFELS B Class is an industry leading jackup design with a proven track record in the Gulf of Mexico.

"With this order, there will be 65 KFELS B Class rigs in the market by 2015, of which some 13 rigs are for Mexico. We are glad to be able to support Mexico's exploration of its offshore energy reserves and look forward to providing them with on time, on budget and safe deliveries."

Mexico's President, Enrique Pena Nieto, announced in March this year that the country's proven reserves of oil and gas at the start of 2013 has risen to 13.87 billion barrels of crude-oil equivalent. PEMEX, the Mexican national oil company has stated their aim to increase production with plans to add between eight and 12 offshore platforms to its drilling fleet. In its quarterly results in February 2013, the company unveiled investment plans of US$25.3 billion for 2013, of which US$20 billion will be targeted at upstream activities.

Mr. Ramiro Garza Vargas, CEO of Grupo R said, "Mexico is aiming to boost oil production through increased E&P with PEMEX looking for a number of new high specification rigs that can optimize their operations. The addition of this premium jackup rig to the four KFELS B Class jackups we ordered earlier will enable us to meet their requirements and strengthen our position as the leading player in Mexico's drilling industry.

Claxton Engineering Services Ltd, an Acteon company, successfully responded to an urgent call to mend a rig diverter’s connection by providing a 30” dual seal overshot, a 30” casing cutter and personnel to oversee operations and requirements within 48 hours.

During this time period, Claxton modified and dispatched the necessary equipment for its client. Under normal circumstances, this equipment is ordered a month in advance by the drilling contractor during well planning.

The connection to the rig diverter prohibited the rig from operating. Claxton modified the overshot by cutting it to the precise size and welded the connection on top creating a pressure seal.

Additionally, Claxton supplied cold-cutting equipment to ensure the space-out was correct for the overshot. The wellhead fit seamlessly after the drilling and casing operations had been completed which will provide continuous flow.

“As a core value, Claxton strives to be a responsive company within the oil and gas industry,” said Owen Lewis, Claxton project engineer. “We are prepared and willing to assist our clients with any problems that arise, and we are quick and efficient in completing the job.”

A mere 25 hours after the deck for the Gudrun platform left Aibel's shipyard in Haugesund, the deck had been lifted into place on the steel undercarriage in the North Sea.

The platform deck was positioned on the undercarriage at 17:43 on Thursday, July 18, 2013.
(Photo: Kjell-Arve Tysnes/Statoil)

"The operation has been safe and efficient with favorable sea conditions," says Øyvind Haugsdal, transport and installation manager for the Gudrun project. He has been planning this lifting operation for the last three and a half years:

"It was an incredible feeling to watch it all go as planned," he says.

The platform deck was positioned on the undercarriage at 17:43 on Thursday. The lifting operation marks one of the most important milestones in the project.

Gudrun reached its full height of 232.5 meters when the flare tower was lifted into place on Friday morning.

The platform deck and undercarriage will now be connected and the platform will be prepared for production.

On time - under budget

"The most significant milestone in the project is the start of production in the first quarter of next year. We will achieve that too," says Øystein Michelsen, executive vice president for Development & Production Norway in Statoil.

The field development is on track to cost around NOK 2 billion less than the original investment framework of NOK 21 billion. There are several reasons for this:

"We were given good prices when we awarded the contracts in 2010, in a market characterized by the financial crisis," says Margaret Øvrum, executive vice president for Technology, Projects and Drilling in Statoil.

This was a win-win situation. The Gudrun license received favorable pricing and the suppliers received crucial contracts.

"Just as important were the strict change controls during the project and strong commitment across the entire Gudrun organization in order to meet this savings target. All the different disciplines have contributed," Øvrum says.

The decking contract (engineering work, construction and procurement) was awarded to Aibel.

The engineering work was carried out in Norway and Singapore. Two of the deck modules were constructed at Aibel's shipyard in Thailand and one at the shipyard in Haugesund, with supplies from Poland.

The deck was also connected in Haugesund. The helicopter deck came from China and the living quarters were supplied by Apply Leirvik.

The steel undercarriage, which has already been ready at sea for nearly two years, was supplied by Kværner Verdal. Transport and installation were performed by the Italian company Saipem.

With the latest seismic and drilling technologies, the Cardamom development is expected to deliver new production from the deep waters of the Gulf of Mexico to existing infrastructure

Nearly two decades after setting a world water-depth record for drilling and production, Shell’s Auger tension-leg platform is still playing a central and innovative role in the company’s deep water Gulf of Mexico portfolio – currently producing some 55,000 barrels oil equivalent (boe) per day (Shell share ~30,000 boe per day), and acting in the future as the host platform for the Cardamom subsea development. The Cardamom discovery well also set records three years ago, for subsurface length and depth.

More than a half mile down, Shell is connecting Cardamom wells back to Auger - work that will involve retrofitting the platform and a production shut-in at Auger, which should restart in the fourth quarter of 2013. Once online in 2014, Cardamom (100% Shell share) is expected to produce at a peak rate of 50,000 boe per day.

"The Gulf of Mexico remains an important part of Shell’s portfolio and strategy, and it is expected to generate substantial growth over the next several years,” said John Hollowell, Executive Vice President for Deep Water, Shell Upstream Americas. “Cardamom is a great example of using existing infrastructure to increase oil and gas production in a less capital intensive way.”

In its lifetime, the Auger platform has produced more than 300 million boe.

Occidental Petroleum Corporation(NYSE: OXY) announces that its wholly owned subsidiary Occidental Petroleum of Qatar Ltd. (Oxy Qatar) and Qatar Petroleum have agreed on the Phase 5 Field Development Plan (FDP) of the Idd El Shargi North Dome Field (ISND), offshore Qatar. The ISND Phase 5 FDP has been prepared in close cooperation between Oxy Qatar and Qatar Petroleum as part of the continued development of ISND under the Development and Production Sharing Agreement (DPSA) between the Government of the State of Qatar and Oxy Qatar, which was entered into in July 1994. The work has already begun and will continue to sustain oil production levels at about 100,000 barrels/day through the next six years.

The ISND Phase 5 FDP includes specific activities identified from upgraded reservoir simulation models to implement and/or improve water-flooding practices in all oil producing reservoirs. During implementation of the ISND Phase 5 FDP, Qatar Petroleum and Oxy Qatar will strive to improve the ultimate recovery in all existing contract reservoirs by continuing to work closely together to further optimize long-term production and recoverable reserves.

The ISND Phase 5 FDP comprises drilling over 200 additional production, water injection and water source wells, plus the installation of associated facilities required to support the additional wells. Added facilities will include minimum facilities platforms, wellhead jackets, fluid processing equipment and pipeline debottlenecking and water source projects. In addition, pilot studies to support Produced Water Re-Injection and Enhanced Oil Recovery projects will be implemented. The development activities are expected to constitute an aggregate investment exceeding $3 billion.

Oxy Qatar, under separate contractual arrangements, also operates the Idd El Shargi South Dome Field (ISSD) and the Al Rayyan Field in Block 12, and is a partner in Dolphin Energy.