Zerrs Gold I Hear Off Zat West Coast

The specifics aren't clear, but Ireland made its first oil discovery off of its west coast in thirty years:

OIL has been found off the west coast for the first time in over 30 years, a discovery which could spark a new rush of exploration drilling.

The discovery was made by a small UK company Serica Energy, which was drilling for gas.The find was made 100km off the west coast, it emerged yesterday.

Shares in the small exploration company Serica Energy soared by 18pc on the London Stock Market after news of the discovery broke.

Serica chief Paul Ellis said that while it was too early to say how much oil had been found, the company now intended to carry out new site surveys to choose a location for a follow-up well next year.

The drilling, which cost the company around $50m (€36m), was paid for under an agreement with Serica's new partner, the German company RWE. In return
for paying the cost of the well the German's secured a 50pc stake in the find,
with Serica holding the balance.

[...]

The discovery is likely to re-awaken interest in oil exploration off the west coast, including in these areas which are not currently under licence.

"This is the first oil discovery west of Ireland for nearly 30 years," Mr Ellis said, adding that its 600 sq km licence area contains several prospects which will now be evaluated as potential drilling targets.

- Brewskie

Senate Panel Approves Expanded Offshore Drilling

The Senate's Energy and Natural Resources Committee approved expanded offshore oil and gas drilling in the Gulf of Mexico:

The Senate Energy and Natural Resources Committee voted 13- 10 today in favor of an amendment to expand drilling, as part of its debate over pending energy legislation.

Former President George W. Bush removed a presidential moratorium on offshore drilling last year, and Congress let a ban expire after oil prices reached a record $147.27 a barrel. The amendment, proposed today by Senator Byron Dorgan, alters a remaining ban on drilling from 2006 legislation that protected portions of the gulf.

“That portion of the eastern gulf that is not open, with a buffer zone of 45 miles, should be available for drilling for oil and natural gas,” said Dorgan, a North Dakota Democrat. The drilling area includes the Destin Dome, an area off the coast of Pensacola, Florida, which may hold 2.6 trillion cubic feet of natural gas, according to the Energy Department.

The drilling provision is one of several amendments that have been considered during the weeks the committee has spent debating energy legislation that would, among other things, require a portion of electricity to come from renewable resources and set new energy efficiency standards.

- Brewskie

Offshore Drilling Rigs for Petrobras: No Problem?

Last month I posted this piece about a potential drilling rig shortage for Petrobras; this new piece suggests there could be a supply glut. Okay, I'm confused.

Petrobras will drive the demand for deep-water rigs but the brazilian giant should be in no hurry to commit to newbuilding contracts given the excess floater supply through mid-2012, according to ODS-Petrodata’s Gavin Strachan.

Strachan estimated that about 20% of the floaters under construction have not been contracted. The excess supply will allow Petrobras the option to either charter or purchase rigs to meet its drilling requirements, he said.

Petrobras has unveiled plans to commission the construction of 28 floaters for long-term charters to be deployed in the gigantic oilfields off Brazil from 2013 to 2017. These rigs are expected to have a rated water depth of about 7200 feet.

Given most units under construction are built to drill in 10,000 feet of water, Strachan said Petrobras is more likely to consider the purchase options if there are any "distressed newbuilds" in the market.

According to market data collected by ODS-Petrodata, recent day rate for a seven-year floater charter from a local contractor exposed to the Brazilian market only is about $350,000.

- Brewskie

Florida House Goes Petrobras

(Note: some may disagree with this and that's fine. The purpose of the post is mearly to report the news.)

The Florida House gave approval Tuesday to a bill that may allow offshore drillers to drill off of Florida's coastal areas - right within sight of Florida's Gulf of Mexico beaches.

A surprise indeed. Dean Cannon, R- Winter Park, slated to be House leader next year and the man who introduced the legislation, calls for:

lifting the state's decades-old ban on rigs and giving the governor and Cabinet authority over proposals for drilling between 3 to 10 miles from shore.

And Rigzone adds more...

Industry boosters and legislators praised the concept in a meeting of the House Policy Council, calling it potentially lucrative for an economically depressed state and a needed step toward energy independence.

Environmentalists were outraged at the prospect of drilling so close to Florida's popular and environmentally sensitive coast and at Cannon's unexpected attempt to undo the state's drilling law during the chaotic last days of a session focused on a budget crisis.

"This bill represents pure insanity," said Frank Jackalone, staff director for Sierra Club in Florida.

The session is set to close next week, leaving little time for debate among House members and for the Senate to craft a companion bill. Though not backing off from fighting the proposal, environmentalists predicted Gov. Charlie Crist would veto the legislation.

Federal rules restrict drilling to 125 miles off Florida's coast, south of Pensacola.

- Brewskie

Petrobras Wants You in the Rig Army

"Captain Exxon" may be gearing up to plunder the Gulf of Mexico, but she's a small fishing fleet compared to the "drilling armada" Petrobras is forging. Look at the chart above: the sea monkeys deep below must be popping their eye balls out like bubbles, terrified of the monstrous, mechanical leviathans above; they must be freezing in the deep of petrified fear, watching long mechanical straws seep oil from its safe bastion. What's next? Hydrocarbons from Saturn's moon, Titan? Lol - hopefully, we'll have moved our collective common sense far beyond goo by then, and up to more enlightened forms of energy; for we deserve peak's retribution if we don't (of course peak will never occur if morons keep forecasting it:)).

Below is an excerpt of Brazil's master plan for crude dominance. Be in awe, or live in fear:

Accomplishing this rise partly through increased exploration, appraisal and development drilling, Petrobras has a massive amount of deepwater and
ultra-deepwater rigs contracted and working for the company now through 2013.

Starting from April 2009 and looking forward through 2013, Petrobras has contracted no less than 34 semisubs and drillships. In fact, the yearly averages of floaters contracted by Petrobras range from 39 rigs in 2009 to 47 rigs in 2010, 48 rigs in 2011, 53 rigs in 2012, and 52 rigs in 2013. The future rig counts portray the biggest increases in number of rigs between 2009 and 2010 with a 20% rise in average rigs contracted, followed by an increase of 11% in average rigs contracted between 2011 and 2012. Petrobras has the most floaters under contract in July and August of 2012, with 58 deepwater and ultra-deepwater rigs.

This commitment to drilling in the next five years is in stark contrast to super-majors BP, Chevron, ExxonMobil and Shell. While Petrobras is beefing up its rig count over the coming years, each of these companies has contracted substantially fewer floaters.

Over the same time period, BP contracted the most deepwater and ultra-deepwater rigs in 2009, with an average of 11 floaters contracted to work for the British company for the remainder of 2009. The number of rigs contracted by BP drops dramatically through the next five years, with a low of five rigs contracted for the majority of 2013. Furthermore, Chevron has more rigs working for the remainder of 2009, but that number drops, as well. Although the remainder of 2009 averages 11 rigs, Chevron drops to a low of four rigs in 2014. ExxonMobil is similar with an average of 5 rigs contracted for the remainder of 2009 and those contracts dropping off to a low of one rig in 2013. Shell starts off the strongest of the bunch with an average of 15 floaters through the remainder of 2009, but its numbers also dwindle to a low of two rigs by the end of 2013.

Additionally, Petrobras has contracted the most newbuild rigs of any operator. Out of the 88 deepwater and ultra-deepwater floaters that are currently being built or are slated to be built, 59 have contracts executed on them -- and Petrobras holds the contracts on 29* of those newbuilds, representing nearly 50%.

You won't have to sacfice your first-born to get Brazilian oil...

Solidifying the company's practiced theory of rising to the top through investments during economic downturns, the CEO of Petrobras, Jose Sergio Gabrielli confirmed that the company believes drilling in its sub-salt basins is a low risk.

Speaking at a Brazilian congressional public hearing on March 25, 2009, Gabrielli claimed that sub-salt exploration and production was commercially viable for Petrobras even with crude prices ranging between $40 and $50 a barrel. "We've found oil in 16 of the 16 wells we've drilled," Gabrielli simply stated.

You guys are role-models.

- Brewskie

Exxon to Boost Gulf of Mexico Exploration

America's biggest buccaneer is gearing up its motley crew to plunder the Gulf of Mexico:

The Irving, Texas, oil giant said in a financial and operating review released Monday that in 2008 it obtained 142 leases to explore for oil and gas in the offshore Gulf - up from five tracts a year before and seven in 2006. This level of interest is a sign that the area, once considered a wild frontier, has reached maturity in the eyes of the largest oil company in the U.S.

"There's more oil to be found than they thought before," said Jason Gammel, a New York-based analyst with Macquarie.

Exxon has lagged behind rivals Royal Dutch Shell PLC (RDSA), BP PLC (BP) and Chevron Corp. (CVX) in extracting oil and gas from the Gulf of Mexico's rich deep water subsoil, although the company has accumulated significant offshore acreage and invested in major projects such as the BP-operated Thunder Horse platform, the second-largest oilfield in the U.S.

Now Exxon seems eager to catch up - or at least willing to gear up for a major wave of exploration. The firm is being especially aggressive in the western part of the Gulf, where it was the top bidder at a lease sale last August, winning 128 tracts. Exxon was also among the top 10 bidders at a Central U.S. Gulf of Mexico lease sale held in New Orleans earlier this month, with 15 high bids.

[...]

Macquarie's Gammel said that the cost of operating in the deepwater Gulf has come down because a decade of aggressive investment by other oil firms has created a critical mass of infrastructure.

In addition, the risk of not finding enough oil and gas to make a big investment profitable has decreased in the wake of recent, rich hydrocarbon discoveries in the lower Tertiary area of the Gulf. These new conditions have created an environment that famously disciplined Exxon is comfortable with. "This is a very return-driven company," Gammel said.

[...]

Exxon highlighted in its report that it added 2.2 billion oil-equivalent barrels to its resource base due to significant contributions from drilling programs in the U.S. Gulf of Mexico, western Canada, the onshore U.S. and West Africa.

- Brewskie

A Prelude: Could Angola Become the Next Brazil?

A fair warning: first, exploration of Angola's subsalt regions is still a little ways down the road - three or four years away - and oil has yet to be struck. Still, there's striking similarities between Brazil and Angola's subsalt regions - something that has drawn the attention of Petrobras. Read below or click here for the article...

Geological similarities between Angola's and Brazil's subsalt areas suggest that future exploratory drilling on Angola's continental shelf may one day find oil reserves similar to Brazil's recent large discoveries, a Sonangol scientist said Wednesday.

Sonangol, Angola's state oil firm, has started preliminary studies into Angola's subsalt region over the last several months. The company is now preparing for seismic and other geological studies -- expected to cost hundreds of million of dollars -- to assess the size of reserves in the country's subsalt region, said Luman Sebastiao, a geoscientist for Angola state oil firm Sonangol's exploration unit.

[...]

The Angolan and the Brazilian continental shelves have various similarities as they have been joined for a certain geological period," Sebastiao said.

Brazilian state-run oil firm Petroleo Brasileiro SA in the past two years has announced several massive oil finds in the subsalt area off Brazil's coast that together contain dozens of billions of barrels in reserves.

Oil found in the area is usually at water depths of around 2,000 meters, and several thousand meters further below layers of sand, rocks and salt -- making exploration and production challenging and expensive.

[...]

The subsalt is Angola's next exploration front, after deep and ultra-deep exploration, Sebastiao said, adding that unlike in Brazil, Angola's subsalt region is found both onshore and offshore.

Angola's onshore subsalt region lies about 4,000 meters below the ground, while the offshore subsalt region lies even deeper, Sebastiao said.

Brazil's Petrobras has been helping Sonangol in starting to study its subsalt region, and many Sonangol technicians have been trained in the area in Brazil, Sebastiao said.

[...]

Angola's studies into its subsalt area at first are concentrating on the Kwanza onshore and offshore basin, and the Congo basin. At a later stage, Angola will study more southern regions.

Ghawar Guzzler Comment: True, oil has yet to be found in Angola's subsalt region and exploratory drilling is a few years away. It may very well all be for naught - busts are apart of life in the oil and gas industry. But if Angola strikes it rich, you'll be way ahead of the curve of knowing of its development. I'll keep you posted if I learn of any positive developments. Petrobras is banking on Angola, and their track record speaks for itself.

- Brewskie

Cuba's Oil Reserves Increasing

The land of 1950's era Packards is hitting oil delight:

Cuba’s oil reserves in its portion of the Gulf of Mexico “continue increasing,” Agence France- Presse reported, citing Yadira Garcia, the island nation’s minister for basic industries.

The Caribbean country’s future oil reserves are most likely to be found in its area of the gulf, which measures 112,000 square kilometers (43,000 square miles) and is divided into 59 oil blocks, AFP reported, citing Garcia, who spoke at a geological sciences conference in Cuba.

Cuba may have 21 billion barrels of probable oil reserves, including onshore and offshore discoveries, AFP said, citing conference participants

.

Ghawar Guzzler point: While few defend the reprehensible acts of communism, it hasn't stopped the U.S. from developing trade relations with China, or buying oil from other despotic regimes. What's wrong with dumping the trade embargo with Cuba? If we'd rather buy oil from other repressive regimes, then China, India or Russia will be more than happy to help Cuba develop its jackpot.

- Brewskie

Pemex Discovers "Significant" Oil and Gas Discoveries

Mexico's state-owned oil company, Pemex, reported "sigificant" oil and gas discoveries in the Gulf of Mexico. Details are sketchy, but info. is as stated (link):

Mexico's state-owned Petroleos Mexicanos, which has budgeted more than $12.2 billion for oil and gas exploration in 2009-12, has discovered "significant" amounts of natural gas and condensate with its Tsimin-1 wildcat well drilled in the Gulf of Mexico.

The Tsimin-1 well had initial production of 4,400 boe/d, Pemex said.

Meanwhile, the state firm also announced the onset of gas production of the Cali-1 well in its Burgos project, with production starting at 9.1 MMcfd of gas.

Pemex, which drilled the discovery well in August 2008 on Mision block in Burgos, said the development of the field will provide an additional 90-110 MMcfd of gas.

Pemex also listed four light oil discoveries in its fourth-quarter 2008 financial results, with the Xanab-DL1 offshore well being the most productive at 9,200 b/d of oil.

The discoveries coincide with a statement by Pemex Chief Executive Officer Jesus Reyes Heroles stating that the firm likely discovered 30-35% more oil and gas in 2008 than in 2007.

"It was a very good year in general terms and very important with respect to the previous year," Reyes Heroles said. During 2007, 1.053 billion boe were incorporated, he said. He said the firm, before making any more details public, is awaiting final certification of its reserves by independent consulting firms.

Last month, as part of its effort to boost production, Pemex Exploration & Production let a contract to J. Ray McDermott SA, Houston, to transport and install the Ixtal-B and Maloob-C drilling platforms in the Bay of Campeche, Mexico (OGJ Online, Feb. 11, 2009).

- Brewskie

Petrobras' Oil Calvary on the Way

Brazil is tooling up an army for plunder. Petrobras will receive 33 brand new spakin' oil rigs by 2012, with 11 arriving this year. Forty rigs are operated or leased currently.

Excerpts...

The rigs are part of a $104.6 billion exploration and oil output plan through 2013. Under the program, Petrobras hopes to increase production by more than half to 3.66 million barrels a day in 2013 from 2.4 million barrels a day in 2008. Exploration and production will account for more than half the company’s $174.4 billion spending plan in the period.

- Brewskie