46 Fields: Iran's Caspian Sea Blowout

Despite its reputation as an oil development headache, Iran has recently reported the discovery of 46 oil fields within the Caspian Sea:

Iran's Oil Minister Gholam Hossein Nozari said that his country located 46 oil fields in the Caspian Sea, the satellite Press TV reported on Thursday.

"Eight of the fields (out of 46) are presently ready for exploitation," Nozari was quoted as saying.

On Thursday, Iran launched its domestically-built semi-submersible drilling rig in the Caspian Sea for the exploration of oil and gas reserves.

President Mahmoud Ahmadinejad participated in the inaugural ceremony of the semi-submersible rig called Iran-Alborz, the largest in the Middle East, according to another report by Press TV.

Reportedly, the semi-floating rig weighs 14,000 tons and will facilitate oil exploration in the southern part of the Caspian Sea. It can operate at water depths up to 1,030 meters and can drill down to 6,000 meters under the seabed.

After winning the international tender offered by the National Iranian Oil Company for the construction of the Iran-Alborz platform in 2002, the (Iranian) Sadra Group, with a 95 percent of share, kicked off the project in a joint venture with the Swedish company GVA, which held another 5 percent of share, Press TV said.

Iran also plans to build a new oil pipeline linking the northern port of Neka in the Caspian Sea to the southern port of Jask in the Sea of Oman, Press TV quoted Nozari as saying.

According to the report, Iran's Deputy Oil Minister Noureddin Shahnazizadeh had said earlier that initial studies for the 2-billion-U.S.-dollar pipeline had been concluded and that the ministry would move to sign a contract soon.

Earlier in the year, Iran reported whopper-sized mega-finds, and years prior, made headlines with the discovery of the Ferdows and Mound/Zageh Fields.

- Brewskie

Technology Worth its Weight in (Pre)Salt

A Bloomberg article on chewing up salt:

New technology may help companies exploring for oil in the so-called pre-salt area offshore Brazil, home to the largest crude find in the Americas in three decades, Sanford C. Bernstein & Co said.

Most seismic imaging bounces off salt because of its different properties, “meaning that geophysicists are effectively working blind below salt,” Neil McMahon, a London- based analyst at Bernstein, said in a report today. “Oil companies and seismic acquisition companies have started to develop a host of techniques to improve the situation.”

[...]

A lot of the challenges of finding and developing oil in the pre-salt, especially in Brazil, can be put down to rock characteristics, and not just the deepwater environment,” McMahon said. Developments including Petroleum Geo-Services ASA’s GeoStreamer technology may help, the analyst said. That company later this year plans to publish the results of a GeoStreamer survey carried out offshore Brazil, according to McMahon.

“We continue to believe that the exploration in the pre- salt in Brazil is not over,” McMahon said. “The complexity of the geology is becoming a key issue and more wells will be required to complete the pre-salt picture.”

- Brewskie

Gulf of Mexico Forecasts Record Oil Production

Gulf of Mexico Oil production is believed to be heading for greater heights, hitting 1.9 mbpd in a few years, up from 1.2 of last year:

Gulf of Mexico oil production is forecast to increase substantially over the next few years, possibly reaching 1.9 MMb/d in 2013 which would be a record high, according to Richie Baud, MMS deputy regional supervisor for the Office of Production and Development. This is MMS’ best-case scenario, which factors in industry-announced discoveries and undiscovered resources.

Recent startups at BP-operated Thunder Horse (capacity: 280 Mb/d oil; 200 MMcf/d gas), BHP-operated Shenzi (capacity: 100 Mb/d oil; 50 MMcf/d gas), Chevron-operated Tahiti (capacity: 125 Mb/d oil; 70 MMcf/d gas), and volumes of oil and gas production coming back online from hurricane shut-ins, are reversing the GoM oil production trend upward, albeit temporarily, beginning this year. MMS says 75% of the increase in oil production and 72% of the increase in gas production will
result from hurricane shut-ins coming back online.

Well, gas might down in a couple of years (but who cares - we've got a centuries worth of gas here onshore)...

Meanwhile, based on existing shallow water and deepwater operator commitments,
GoM natural gas production is forecast to increase slightly this year over last year, to about 7 bcf/d, according to MMS. However, in 2010, gas output is forecast to begin declining again, even with the addition of resources from industry announced discoveries.

Nevermind; onto the good news...

In 2008, operators announced 15 new deepwater discoveries, almost double
the number reported in 2007. Seven new deepwater projects (Bass Lite, Neptune, Blind Faith, Mississippi Canyon block 161, Raton, Thunder Horse, and
Valley Forge) began production last year, bringing the total to 141. This is up from 130 at the end of 2007. Meanwhile, 73% of the tracts receiving bids in the three GoM lease sales held in 2008 are in deepwater.

Say, haven't peakers been loquaciously warning about declining oil discoveries? With Brazil, Angola, Iran, Saudi Arabia, the Arctic and the Gulf of Mexico, it looks like there's plenty of oil left to be found...

Much of the new development in the GoM is in ultra deepwater (water depths greater than 5,000 ft [1,524 m]), and often targeting high temperature and high pressure prospects beneath salt canopies with layers of tar, which complicates drilling and production. This requires rigs equipped with the latest technology, and production systems suited for harsh weather, in areas with minimal existing infrastructure.

“The deepwater frontier has entered a new phase,” says Mike Prendergast, MMS chief of staff, GoM region. He points to the increasing use of hub facilities as a trend
in deepwater development. “Hub facilities will serve a bigger role as drilling moves to deeper waters, and this will require further development of MODU technology as many of the hubs lack drilling capacity,” he says.

Chevron recently announced it has initiated front-end engineering and design of a new deepwater hub to develop the Jack and St. Malo discoveries. The floating
production platform will be a semisubmersible designed facility with an initial nameplate capacity between 120,000 and 150,000 b/d of oil, 37.5 MMcf/d of gas, and provision for a future 200,000 b/d of water injection. It will be moored in 7,000 ft (2,134 m) of water. Mustang won the contract for topsides FEED, with completion expected in 2Q 2010.

[...]

Many of the newbuild MODUs scheduled for delivery to the GoM will be equipped with DP systems, and capable of drilling in up to 12,000 ft (3,658 m) of water to 40,000 ft (12,192 m) TD. In 2007, MMS reported a record number of
rigs (15) drilling in ultra deepwater. Although this record has not
been surpassed, MMS expects increased drilling in this water depth, with 15 newbuild MODUs scheduled for delivery to the GoM in 2009-2011. MMS expects two
new drillships and six new semisubmersibles in this year, five new drillships
and one semisubmersible in 2010, and one new semisubmersible in 2011. Also, four
semisubmersible rigs are being upgraded to drill in ultra deepwater, with delivery to the GoM expected in this year and in 2010.

- Brewskie

Saudi Gaining Jerry Falwell Appetite for Offshore Crude

The oil kingdom evidently is getting a little "Petrobras envy:" it's got big plans to ramp up offshore production by 20%, and its been signing up platforms (link)...

In fact, the NOC holds the world's largest offshore field, Safaniya, with an estimated 20 billion barrels of oil and daily production of 1 MMbopd. Other major producing offshore fields for Saudi Aramco include Zuluf, which has a daily production capacity of 500,000 bopd, and Marjan, which produces 270,000 bopd.

In a five-year plan starting in 2009, Saudi Aramco is increasing drilling exploration and investment in the oil sector, which includes increasing drilling by a third. A priority has been placed on offshore areas, and the company is presently investing in an effort to increase production capacity by 20%. That includes both development to achieve first production and re-development of producing fields. Major upstream projects include works on offshore fields Berri, Zuluf and Safaniyah. Also under development, Manifa is expected to hold between 10 and 20 billion barrels of oil and is scheduled to come on-stream by the third quarter of 2011.

Saudi Aramco has not always been very active offshore or focused on its offshore resources. At the start of the decade, the NOC only had one rig working in the waters offshore Saudi Arabia, and it was a rig that the company owned. That number increased over the next year to four rigs by the close of 2001. Following that pattern of increased offshore activity, the number of rigs Saudi Aramco contracted from 2002 through mid-2005, continued to increase with nine rigs contracted in June 2005.

By the close of 2005, Saudi Aramco had 16 rigs contracted, and that number continued to increase. By mid-2007, the company had 23 rigs contracted for work.
Through 2008 and into the start of 2009, the number of rigs increased further, with Saudi Aramco's contracted rig count peaking at 29 rigs in January of this year.

[...]

Looking forward, the total number of jackups contracted by Saudi Aramco slips to 19 by the close of 2009. In 2010, the average number of rigs the company has contracted is 17, and 2011 starts with 15 rigs contracted so far.

Although the company has not signed new contracts as of late, the length of Saudi Aramco contracts is significantly longer than the typical jackup rig contract. In fact, the worldwide average contract length for all currently ongoing jackup contracts is 857 days. In contrast, the contracts Saudi Aramco has signed since 2008 are an average of 1,115 days long, which is 258 days, or 30%, longer than the current worldwide average length.

Taking into account that jackup contracts are shorter in the Gulf of Mexico than other areas of the world, the worldwide average jackup contract length is 917 days if you disregard the GOM jackup contracts. Nonetheless, Saudi Aramco contracts remain 198 days, or 22%, longer.Furthermore, the number of contracts signed in the last year has dwindled, but that may be part of a strategic pattern, rather than a lessening in activity. The only contract signed by Saudi Aramco in the last twelve months was an extension of the already contracted Arch Rowan. This is in contrast to the number of contracts signed in 2008, which were six. Prior to 2008, Saudi Aramco had signed just one new offshore rig contract in 2007, but had signed six new contracts in 2006.

If this pattern of a busy year followed by a slow year continues, the company may be ready to sign a number of new contracts at the start of 2010. Given that the company has openly expressed its plans to increase production and focus on its offshore fields, as mentioned above, it seems likely that Saudi Aramco will be launching rig tenders and signing a significant number of new contracts or extending existing contracts in the relatively near future.

Since the King of Peak started screaming like the King of Pop, back in 2003, about Saudi's upcoming oil collapse, I wonder how such oil prospects reflects on his sanity? Hey, according to him, we're still in big trouble in respect to natural gas. Too bad the difficulty of labeling someone legally insane becomes apparently more difficult with each million made...

- Brewskie

Oh-Oh... Petrobras the Tax-Evader

Hey, Petrobras. Ya gotta pay da man, otherwise he comes and takes your bling-bling.

Brazil’s national oil company, Petrobras, has come under scrutiny in an investigation that threatens to complicate government efforts to wring more revenue from the deepwater oil fields that are expected to transform the country into a global energy power.

The Senate voted last week to investigate whether Petrobras had avoided tax payments and awarded illegal contracts, among other issues. The vote was sealed by senators who oppose President Luiz Inácio Lula da Silva’s Workers Party, setting up an inquiry that is likely to drag on for months.

The investigation could prove an embarrassment for Mr. da Silva’s government, which is seeking to overhaul oil legislation to extract a much higher percentage of revenues from the deepwater oil fields, which are expected to hold five billion to eight billion barrels of oil and natural gas.

[...]

The big question now is whether the government has enough time to complete the oil reform law before Lula is out of office” at the end of 2010, said Marcos Tavares, director of Gas Energy, an energy consulting firm based in Porto Alegre, Brazil.

Mr. da Silva, who has said he wants to use additional oil revenues to set up funds for social programs like health and education, called the congressional inquiry “irresponsible” and “unpatriotic,” especially at a time when the country was coping with the global economic crisis.

The chief executive of Petrobras, José Sergio Gabrielli, said the investigation was
politically motivated, arguing Tuesday that it “won’t jeopardize Petrobras or its investments.” He added that “unfortunately, the negative headlines do affect the image of the company.”

The investigation focuses on contract bidding and tax payments. The company already fired two employees and punished three others for their involvement in irregularities in the bidding for oil platform renovations, said Lucio Mena Pimentel, a Petrobras spokesman.

The company came under increasing public scrutiny over a decision to withhold up to $2 billion in federal tax payments stemming from a supposed overpayment of taxes in 2008. Mr. Pimentel said Petrobras was allowed to do that because of legislation that protects companies from major exchange-rate fluctuations, though some analysts have questioned the company’s interpretation of the law.

Brewskie comment: Will tax-evasion put oil production into jeopardy? Not likely. There's too much riding on this. The oil majors have too much at stake in this; Petrobras has a $10 billion loan from China.

- Brewskie

Offshore Oil Rigs in Short Supply

Finding offshore oil isn't a problem, but finding offshore oil rigs seems to be...

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, may be hurt by a rig shortage as it begins development of the Tupi field, the largest discovery in the Americas since 1976, according to Jefferies & Co. Inc.

The company expects to almost double the numbers of rigs operating in deepwater offshore Brazil to 68 by 2012, from 38 today, according to Jefferies analyst Jud Bailey.

It’s “questionable” whether six of these rigs can even be built because the contractors are “small marginal´´ players, Bailey said April 24 in an interview from Houston. Others rigs may be delivered as much as a year late, he said.

[...]

A drop in oil prices has made it difficult for small rig builders to complete orders as margins narrow, Bailey said. Brazil’s government has also required Petrobras to hire local builders, who are not necessarily capable of building the rigs or don’t have the money to do it, he said. Petrobras would have to step in and “backstop” some of these companies financially to allow them to produce the equipment in time, he said.

“The down side for Petrobras is that the world capital crunch will make it hard for many companies to finance new ships and drill rigs,” Peter Ping Ho, an oil and gas analyst with Planner Corretora De Valores in Sao Paulo, said April 24.

Rio de Janeiro-based Petrobras, whose Tupi field is the largest discovery since Mexico’s Cantarell, is tapping overseas partners to help fund a $174.4 billion five-year investment plan. Chief Financial Officer Almir Barbassa was last week touring Asia to persuade equipment manufacturers and shipbuilders to expand their operations in Brazil.

“The Brazilian government is pushing them to build the rigs in Brazil,” Bailey said. “If they do that there will definitely be delays.”

- 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

Not Bad for an Ametuer in Brazil's Waters

Spanish oil company hits 550 million barrel find; euro slacker!

Shares in Spanish oil company Repsol YPF SA (REP) outperformed the Madrid market early Tuesday after the announcement of commercial viability and the existence of 550 million barrels of oil equivalent, or BOE, in oil and gas reserves at Brazil's Piracuca field.

Repsol rose 2.4% to EUR14.21 at 0748 GMT, while the IBEX-35 index rose
1.5%. Repsol (REP) holds 37% in the BM-S-7 block off the coast of Sao Paulo that contains Piracuca. Brazil's government-controlled energy giant Petroleo Brasileiro SA (PBR), which holds a 63% operating stake, had made the announcement Monday night.

Recoverable reserves at the field pale when compared to other recent Brazilian discoveries such as Tupi in the Santos Basin, which is estimated to hold up to 8 billion barrels of oil equivalent. But Piracuca is nevertheless a valuable mid-sized find, BPI analyst Pablo Pena-Rich said. "It's quite positive for Repsol, especially as the find is above the salt layer, which makes production cheaper," he said.

The find could add an upside of 4.5% to Repsol shares, Pena-Rich said. BPI has a EUR16.55 target and a hold recommendation for Repsol.

Piracuca lies at a water depth of only 200 meters, compared to about 2,000 meters for most sub-salt layer deposits, which also lie several thousand meters deeper below the sea bottom.

[...]

Piracuca lies about 200 kilometers off the city of Santos in Sao Paulo state.

- 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

New Brazil Find by Exxon Mobil May Hold 8 Billion Barrels

Man! I wish I knew of some ETF that betted against the idea the world was running out of oil - Brazil is the place to bet on. Exxon Mobil's latest find may hold 8 billion barrels. From Bloomberg:

Exxon Mobil Cor.’s oil discovery off the coast of Brazil may hold enough crude to rival the nearby Tupi prospect as the Western Hemisphere’s largest find in three decades.

Exxon Mobil’s Azulao-1 well tapped a reservoir that could contain 8 billion barrels of recoverable oil, said Luiz Lemos, a partner at TozziniFreire Advogados, a Brazilian law firm that represents foreign energy companies with projects in the South American nation.

[...]

Exxon Mobil, which pumps more crude than every member of OPEC except Saudi Arabia and Iran, in January announced the discovery of petroleum in the Azulao-1 well in an offshore region designated BM-S-22. The company operates the project
on behalf of partners Petroleo Brasileiro, known as Petrobras, and Hess Corp.

[...]

Jon Pepper, a spokesman for New York-based Hess, referred inquiries to the field’s operator, Exxon Mobil. Rio de Janeiro- based Petroleo Brasileiro’s investor relations department didn’t respond to an e-mailed message seeking comment. Exxon and Hess each own 40 percent stakes in the field and Petrobras owns the other 20 percent.

[...]

At current energy prices, 8 billion barrels of oil is worth about $380 billion, which exceeds the economic output of Taiwan, South Africa and Ireland.

Tillerson, entering his fourth year as the head of the world’s largest oil company, expects to boost production by 2 percent this year to the equivalent of 4 million barrels of crude a day.

Searching for Oil

Exxon Mobil is spending $79 million a day this year to search for oil fields, construct platforms and renovate refineries. The company had $45.2 billion in profit last year, the highest in U.S. corporate history.

Quit finding oil, boys. Some of us have work to finish:)

- 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

Chevron Announces Jack Sequel

Yup, ladies, peak oil is in full swing. Chevron recently announced another offshore discovery -Buckskin, which may rival the Jack Oil field (500 mb) discovered in 2006 - in the same lower tertiary formation its older sibling was discovered.

Excerpts are:

The Buckskin find is 190 miles (306 kilometers) southeast of Houston in waters 6,920 feet deep, the San Ramon, California- based company said today in a
statement. Chevron and its partners discovered a 300-foot column of oil-soaked
rocks in a 24 million- to 65 million-year-old formation known as the lower
Tertiary.

The find appears to be similar to the Jack discovery, which is 44 miles to the east and part of the same geological trend, Chevron said. Jack,which Chevron expects to cost at least $3 billion to develop, was the first indication that engineers and geologists had figured out how to tap a previously unreachable formation that may hold as much as 15 billion barrels of crude.

So far this year, Petrobras struck another field (possi. 10bb), Anadarko hit a gulf discovery, Israel hit a whopper gas find, Buckskin popped up; and on top of this, the world has an oil glut, and a possible tsunami gas glut heading for the U.S. Run for the hills.

- Brewskie

Anadarko's Deepwater Gulf Discovery

This isn't a Petrobras strike, but it's worth mentioning. Texas-based Anadarko recently announced a deepwater oil discovery in the Gulf of Mexico, named "Heidelberg," located under 5,000 feet of water and total drilled depth of 28,500 feet.

Excerpts from the press release read:

"The Heidelberg discovery further validates our geologic understanding of the subsalt Miocene trend. The well encountered the same-age sands and reservoir characteristics similar to the previously announced Caesar/Tonga discoveries," said Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration. "Since 2005, we have drilled seven successful exploration wells in this Middle-Miocene trend, each targeting resources of more than 100 million barrels."

Once drilling operations are complete at Heidelberg, Anadarko plans to drill the Vito prospect in Mississippi Canyon block 984, which Anadarko operates with a 20-percent working interest. Vito is a 30,500-foot test, targeting Miocene objectives in 4,000 feet of water and is on trend with other recently announced industry discoveries at Kodiak and Freedom.

According to the press release, "As of year-end 2007, Anadarko had 2.4 billion barrels of oil equivalent of proved reserves, making it one of the world's largest independent oil and natural gas exploration and production companies."

- Brewskie

Petrobras Thumbs Nose at Global Economic Crisis With $174.4 Billion Investment Over 5 years

Petrobras, Brazil's state-run oil company, displayed barrel chested courage recently with its announcement that it will invest $174.4 Billion over five years - an increase of 50% (link). At a time when multi-nationals are gutting investments - Conoco Phillips will slash investments to $12.5 Billion vs. last year, where as Chevron is expected to cut its investments by 10% - Petrobras is displaying courageous bravado in the face of cheap oil with strident determination to take advantage of Brazil's vaunted offshore oil fields.

Some excerpts from the article:

Petrobras said late Friday that it will invest $174.4 billion in 2009-2013, including a whopping $28.6 billion in 2009. Chief Executive Jose Sergio Gabrielli called the company's investment plans "robust and important." Petrobras' previous strategic plan called for $112 billion in investments from 2008 to 2012. Petrobras invested about $23 billion in 2008.

Petrobras joined Mexico's Petroleos Mexicanos, or Pemex, as one of the few oil majors willing to up the ante on investments as a slowdown in global economic growth has sapped demand for crude. Pemex said that it will boost investments in 2009 to $19.4 billion, up from $18 billion in 2008.

- Brewskie