Archive for the ‘OIL DRILLING’ Category


Saturday, May 24th, 2014


billions-of-barrels-worth-of-shale-oil-found-in-southern-england image

About 4.4 billion barrels-worth of shale oil have been found in the ground beneath the south of England, according to a report published Friday by the British Geological Survey (BGS).


The study, commissioned by the Department for Energy and Climate Change and released this morning, says the huge oil reserves lie under the Weald Basin in Kent and parts of Sussex and Surrey.


How much of this is recoverable is not yet known — further drilling and testing of new wells will be needed to establish this, but the discovery is set to spark a new stage in the battle between environmentalists and energy firms over the controversial topic of fracking.


The discovery has already pushed British authorities to start mulling plans to ease rules on accessing shale oil and gas, including drilling without landowners’ permission

The discovery has already pushed British authorities to start mulling plans to ease rules on accessing shale oil and gas, including drilling without landowners’ permission, reports Reuters.


Under the new plans, energy firms will be allowed to dig 300 metres (1,000ft) down for shale gas and deep geothermal operations provided they notify local communities and give them a “voluntary community payment” for access to the land of US$34,000 per well.


Last year, the BGS published a study of the Bowland Shale in northern England, which, it said, contained about 1,300tn cubic feet of gas. Analyst say that even if only a tenth of that were extracted, it would be the equivalent of 40 years’ gas supply for the UK.

weald-basin map image

Henry Sapiecha



Tuesday, November 6th, 2012



Canada’s economy shrank 0.1% in August, the first drop in six months, driven mainly by depressed manufacturing and energy sectors, Statistics Canada said Wednesday.

Hardest hit were mining and oil extraction operators, with the sector shrinking 0.7% Excluding oil and gas extraction, mining fell 2.8%. Metal ore mining declined 4.7% as a result of decreased output at copper, nickel, lead and zinc mines as well as at gold and silver ore mines.

Statistics Canada said scheduled maintenance affected metal ore output in August, while non-metallic mineral production fell 2.6% as a result of decreases in output at potash mines.

Oil and gas extraction declined 0.4%, as a drop in crude petroleum production outweighed an increase in natural gas extraction. Maintenance activities at some oilfields affected crude petroleum output in August, the statistics agency said.

Overall, StatsCan noted shrinking output in 10 out of 18 industrial sectors.

Sourced & published by Henry Sapiecha


Monday, April 16th, 2012


As the world’s appetite for oil and gas continues to increase while access to easily accessible reserves decreases, deep-sea oil and gas wells are being positioned in ever-deeper waters. The dangers and difficulties faced in such operations were highlighted in 2010 with the Deepwater Horizon oil spill. While placing a containment dome over a leak and piping the oil to a surface storage vessel had worked on leaks in shallower water, the attempt to do the same on the Deepwater Horizon’s largest leak failed when the formation of methane hydrate crystals blocked the opening at the top of the dome. Now researchers at MIT have developed surface coatings that can inhibit the buildup of these methane hydrates and keep the gas and oil flowing.

Methane hydrate is a solid cage-like compound – or clathrate – that forms under very high pressure in which a large amount of methane is trapped within a crystal structure of water to form an ice-like solid. Although it was originally thought to only occur in the outer reaches of the solar system, it is now estimated that total amount of methane contained in hydrates in the world’s seafloor is much greater than the total known reserves of all other fossil fuels combined.

Much like the buildup of cholesterol and fatty deposits on the inner walls of arteries inside the body, the buildup of methane hydrates – which can freeze upon contact with cold water in the depths of the ocean – inside a well casing or on the inner walls of pipes that carry oil or gas from the ocean depths can restrict or even block the flow of gas or oil. It was this kind of blocking that caused the failure of the containment dome technique attempt on the Deepwater Horizon leak.

Current techniques to prevent this happening include the heating or insulation of the pipes – which is expensive – or adding methanol into the flow of gas or oil – which can harm the environment if it escapes.

An MIT team led by associate professor of mechanical engineering Kripa Varanasi had been looking for a solution to this problem even before the Deepwater Horizon spill and now say they have found it. Having already studied the use of superhydrophobic surfaces to prevent the buildup of ordinary ice on things such as aircraft wings, the team decided to examine whether similar surfaces could be used to keep pipe walls clear of methane hydrates.

Using a simple “hydrate-phobic” coating, Varanasi and his colleagues were able to reduce the adhesion of hydrates in a pipe to one-quarter the amount compared to untreated surfaces.

“The oil and gas industries currently spend at least $200 million a year just on chemicals” to prevent methane hydrate buildups, Varanasi says. However, the total figure for prevention and lost production due to hydrates would be much, much higher. Using passive coatings on the insides of pipes would be much cheaper than current prevention techniques and allow the use of containment domes to capture flows from leaks in much deeper waters than is currently possible.

Additionally, the team says the test system they devised provides a simple and inexpensive way to search for even more effective inhibitors. They say their findings are also applicable to other adhesive solids, such as solder adhering to a circuit board, or calcite deposits inside plumbing lines. The testing methods developed by the researchers could also be used to evaluate coatings for a variety of commercial and industrial processes.

The team’s findings are detailed in a paper published in the journal Physical Chemistry Chemical Physics.

Source: MIT

Published by Henry Sapiecha


Wednesday, January 18th, 2012

Oil demand has not been this low  since


By Guy Chazan in London

Oil demand is falling for the first time since the 2008-09 global financial crisis as a result of a mild winter, high crude prices and the European economic crisis, according to fresh estimates from the International Energy Agency.

The industrialised nations’ watchdog said oil demand dropped by 300,000 barrels a day in the final quarter of 2011. Such a fall is rare: over the last decade, oil demand has posted drops only in the financial crisis of mid-2008 to mid-2009.

The IEA revised down its outlook for growth in 2012 to 1.1m b/d from 1.3m b/d amid signs of weakness in the world economy.

It also warned of the geopolitical risk posed to oil markets by rising tensions with Iran.

Global oil demand in 2011 was 89.5m b/d, the IEA said.

David Fyfe, head of the IEA’s oil industry and markets division, said the year-on-year fall in demand was largely due to the exceptionally cold winter of 2010-11 compared to this winter’s milder temperatures. But it was still surprising.

“Even in the 2008-9 crisis we only had a couple of quarters of absolute contraction, so it is quite rare,” he said. “We’re flagging that there are clearly downside risks to the global economy and to oil demand.”

The IEA’s latest monthly oil market report comes against the backdrop of a looming showdown between Iran and the west over Tehran’s nuclear ambitions.

Oil prices jumped $4-$5 a barrel at the new year as the European Union prepared to impose a ban on Iranian oil imports and Tehran threatened to close the Strait of Hormuz, a crucial conduit for oil exports from the Gulf.

The agency characterised the oil market as finely balanced between fears of supply disruptions due to the coming Iranian embargo and concerns about an economic slowdown that will weaken demand for oil.

The price of crude has been relatively stable since last spring within a range of $100 to $120 a barrel. But the IEA said the stability was “more apparent than real.”

It said markets were caught between a “rock” – the growing likelihood of a sharp economic slowdown, or even outright recession, in 2012 – and a “hard place” – possible geopolitical turmoil triggered by the west’s face-off with Iran.

“That is scarcely a source of comfort,” the report said.

Oil markets in Europe and Asia, hit badly last year by the loss of Libyan supply, worry that sanctions against Iran will seriously affect the availability of crude.

The leaders of Japan, China and South Korea have been seeking assurances from Middle Eastern producers like Saudi Arabia that they can make up any shortfall.

Europe, which imports about 600,000 b/d of Iranian crude, is also on the hunt for replacement supplies.

These concerns come at a time of tightness in physical oil markets.

Last year, non-Opec supply grew by only 50,000 barrels a day, the third lowest performance in the last decade – largely due to a series of unscheduled disruptions in places like the North Sea, Canada and China. That was compounded by the unrest in Libya, which knocked out its exports.

While members of the Opec cartel, especially Saudi Arabia, increased production to compensate, and the IEA released emergency stocks, this was not enough to make up for the Libyan shortfall.

The IEA said crude stock levels in industrialised countries remain below the five-year average for a fifth consecutive month.

European refiners faced a “difficult task” in finding substitutes for Iranian supply, and some market dislocation was inevitable, the agency warned.

But the gradual phase-in of any EU import ban and the “considerable latitude in implementation” built into the US sanctions “will serve to minimise unwanted market disruptions,” it added.

Sourced & published by Henry Sapiecha


Monday, January 16th, 2012


The East Coast basin is “literally leaking oil and gas” and provides potential for thousands of wells, an oil company with exploration permits in the area says.

New Zealand’s main oil and gas producing region is at Taranaki on the west coast of the North Island but Tag Oil says the East Coast basin on the other side of the North Island has “world class upside potential”.

A presentation by the small Canadian-based company on its website says it has identified widespread oil and gas seeps over a large area.

The presentation says the “East Coast basin is literally leaking oil and gas”.

The Sunday Star Times newspaper reported that the company regarded the East Coast as a “Texas of the south” and wanted to pursue an aggressive program there.

Last September the company said it was undertaking seismic testing in the region, with first exploration drilling planned after that. The region is seen as having potential for so-called shale oil extracted from rock.

The company has a farmout deal with Apache for the region, under which Apache may spend up to $US100 million ($A97 million) to earn up to half of Tag’s present 100 per cent share of exploration prospects.

“This is not where New Zealand’s economic future lies. We need to be investing instead in renewable solutions,” says Moana Mackey, Labour’s Energy representative.

Sourced & published by Henry Sapiecha


Tuesday, December 13th, 2011


Saudi Arabia is by far the world’s largest oil exporter. Thus, when it raises its production, oil prices usually fall. Yet, when Ali Naimi, Saudi oil minister, said last week Riyadh was pumping more than 10m barrels a day, prices barely moved a few cents.

Oil traders were in disbelief at the number. The International Energy Agency estimated that in October the kingdom pumped 9.45m barrels a day and Opec itself put Saudi production at 9.47 b/d in the same month. The level of production that Mr Naimi stated suggested a huge increase, in only a few weeks. Moreover, the 10m b/d is a psychological barrier – a level the kingdom has not reached since the aftermath of the second oil crisis in 1979.

The level of Saudi oil production has triggered a heated debate among oil traders, analysts and government officials.

The discussion is twofold: on the one hand, about the level itself; on the other, about why it has boosted its output at a time when many are betting that oil demand growth is slowing down, not accelerating.

The discussion is critical to understand the direction of oil prices in 2012.

The 10m b/d figure is controversial in the market.

Some oil traders do not believe the number at all. Two of the largest top-five independent oil trading houses have told me that their own numbers suggest a much lower production level. The traders largely dismiss the 10m b/d figure as a bargaining tactic ahead of the Opec meeting on Wednesday.

Yet, other sources suggest that Saudi Arabia has indeed boosted production sharply over the past few weeks, potentially towards the 10m b/d mark.

The Lloyd’s List Intelligence Apex database, which tracks tankers around the world, puts Saudi Arabia’s oil exports at nearly 7.4m b/d. Add local demand of about 2.7m b/d and you get to the 10m b/d. In addition, Lloyd’s List Intelligence estimates suggest that Riyadh boosted month-on-month exports sharply, from 6.7m b/d in October to 7.4m b/d in November. Other tanker trackers have yet to publish their numbers, but the talk in the market is that they also have witnessed a big increase in tankers sailing from Saudi oil export terminals.

So if the numbers are right – a big if for many traders – what do they say about the health of the global oil market?

The International Energy Agency puts global oil demand this quarter at 91.4m b/d, up from 90.9m b/d from the previous quarter due to the onset of the Northern hemisphere winter and the surge in heating demand. The seasonal increase in demand could well explain an output hike.

But I think there is more. China’s oil demand, which only a month ago appeared to be slowing down to a halt, could be accelerating in reality. Chinese refiners processed a record amount of crude oil in November to offset diesel shortages and oil imports surged last month to the second-highest monthly volume on record, hitting 5.52m b/d, just short of an all-time high of 5.67m b/d in September 2010, according to estimates by Thomson Reuters based on official Chinese data.

The bottom line is that Saudi Arabia could very well be telling a lot of naysayers and sceptics in the market that global crude oil demand is a lot healthier than many assume.

Sourced & published by Henry Sapiecha


Tuesday, November 29th, 2011


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Anadarko Petroleum, the US oil and gas independent, has more than doubled the estimated size of its biggest natural gas discovery, located off the coast of Mozambique.

“This could be one of the most important natural gasfields discovered in the last 10 years,’’ Jim Hackett, Anadarko’s chief executive, told the Financial Times.

Mr Hackett said the Barquentine-3 appraisal well encountered more than 662 net feet of natural gas pay. That expanded the estimated recoverable resource range to 15 to 30 plus trillion cubic feet (Tcf) of natural gas, with an estimated 30 to 50 plus Tcf of natural gas in place.

Anadarko has not released how much it plans to invest but the size of the find indicates it could easily surpass $10bn over the life of the field. “There is no question this will be a commercial project,’’ Mr Hackett said.

The well is in the same offshore Mozambique deepwater in which Eni, the Italian oil group, said in late October it had made an extensive gas discovery. Eni estimated the size of its find at 15,000bn-20,000bn cubic feet. The well was then deepened, and Eni put the size at 22,500bn cubic feet.

Anadarko, which has drilled six successful wells in the area, has a working interest of 36.6 per cent in 2.6m-acre field known as Offshore Area 1. It has five junior partners with Mitsui E&P Mozambique holding 20 per cent.

Anadarko said it will be accelerating its drilling programme with two dedicated rigs. “We will be advancing this very aggressively,’’ Mr Hackett said.

The exploration and appraisal will determine the ultimate size of recoverable resources but Mr Hackett said the target was to begin construction in 2013 with a goal to bring the resources to market in 2018.

Anadarko is planning a large liquefied natural gas (LNG) development to support the field. It is being designed to consist of at least two trains – facilities to liquefy the gas – with the flexibility to expand to six.

The announcement follows Anadarko’s agreement last month to pay $4bn to BP to settle claims related to the Macondo oil spill in the Gulf of Mexico, an attempt to draw a line under the disaster. The spill had weighed on the company, which was a junior partner in that well.

While Anadarko had compartmentalised the risk and continued a strong exploration programme that has yielded significant finds in recent years, ranging from west Africa to Brazil to the US, the uncertainty over how much it would be forced to commit to Macondo claims had kept investors from fully valuing its pipeline of development projects.

Sourced & published by Henry Sapiecha


Saturday, June 11th, 2011

Financial Services Online Leads

Capital Drilling wins more contracts in

Ethiopia, Ghana and Mauritania


Capital Drilling, the emerging and developing drilling company, has recently been awarded another three new contracts. They are for BHP Billiton in Ethiopia, and two for Kinrtoss Gold, one in Ghana and the other in Mauritania. Commenting, Jamie Boyton, Executive Chairman, said: “I am very pleased to announce [these] contract wins, which follow closely on the heels of contracts recently awarded in Chile with BHP and the Solomon Islands with Allied Gold. The contracts represent the expansion of existing relationships with blue chip and major mining companies and further strengthens the long term visibility of our revenue profile. Having concluded successfully our first energy contract with Oil Search in Papua New Guinea we are looking forward to working in Ethiopia and continuing to grow the energy division.

The contract with Kinross continues our drive in the significant market of West Africa.”Capital Drilling Energy has been awarded a contract with BHP Billiton, the second contract with the mining major this year, which will initially involve the deployment of one rig to carry out exploration drilling for potash in the Danakil Depression of the Afar National Regional State in northeast Ethiopia. The contract is expected to run until late 2011 and represents the group’s second energy contract. The rig required for the contract is currently in mobilisation and represents an addition to the group’s fleet.Capital Drilling Africa has been awarded a contract with Kinross Gold in Ghana where it recently acquired the Chirano gold mine through the takeover of Redback Mining. Capital Drilling Africa has been contracted to supply two diamond rigs for development drilling, with the contract expected to commence in early Q3 2011 for a minimum 12 month contract. The rigs required will be sourced from the existing fleet.
Survey Federation

Capital Drilling Africa has been awarded a further contract with Kinross Gold in Mauritania which represents an expansion of activity at the Tasiat gold mine, where the group currently has five diamond rigs operating. The new contract is for an additional air core rig to be utilised in exploration drilling, which has been sourced from within the existing fleet.

Capital Drilling, which has a Premium Listing on the Main Market of the London Stock Exchange, provides specialised drilling services to mineral exploration and mining companies in emerging and developing markets, for exploration, development and production stage projects. The Company currently owns and operates a fleet of 78 drilling rigs with established operations in Tanzania, Zambia, Egypt, Mauritania, Mozambique, PNG, Eritrea and Chile. The group’s corporate headquarters is in Singapore and it has its administrative offices for South America in Santiago, Chile.

Home Equity Club: Homeowner Survey

Sourced & Published by Henry Sapiecha


Sunday, May 1st, 2011


OLI GIExxon earned nearly $US11 billion ($A10.15 billion) in the first quarter, a performance likely to land it in the centre of the national debate over high gasoline prices.

The world’s largest publicly traded company on Thursday reported net income of $US10.65 billion ($A9.83 billion), or $US2.14 per share, in the first three months of the year. That compares with $US6.3 billion ($A5.81 billion), or $US1.33 per share a year ago. Revenue increased 26 per cent to $US114 billion ($A105.2 billion).

The results surpassed Wall Street estimates of $US2.04 per share on sales of $US112.6 billion ($A103.91 billion), according to FactSet.

The quarter was Exxon’s best since it earned a record $US14.83 billion ($A13.69 billion) in 2008’s third quarter. It comes at a time when some drivers are paying $US4 or more for gas and President Obama is threatening the oil industry’s multibillion-dollar tax subsidies.

Earnings grew across the company’s business segments. Income from its exploration and production business gained 49 per cent to $US8.7 billion ($A8.03 billion) while the company’s downstream business, which includes refineries, posted a huge 30-fold jump to more than $US1.1 billion ($A1.02 billion).

Anticipating a strong reaction to the results from drivers and politicians, Exxon said on a company blog on Wednesday that it has little control over the price of oil, which has risen to near $US113 per barrel. The company also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.

That may not appease many motorists, however. The national average for a gallon of gas is $US3.89, about $US1.02 more than a year ago. It’s above $US4 in 8 states and the District of Columbia. And on Thursday, the Commerce Department said economic growth slowed sharply in the first quarter, partly because of high gas prices.

On the blog, Ken Cohen, Exxon’s vice president of public and government affairs, said the company was anticipating “the inevitable headlines and sound bites about high gasoline prices and what to do about them” after the earnings were reported.

Exxon’s huge profit followed similar results by other oil companies.

Europe’s largest oil company, Royal Dutch Shell PLC, reported $US8.78 billion ($A8.1 billion) in first-quarter profits, up 60 per cent from a year ago. BP PLC’s quarterly earnings rose 16 per cent to $US7.2 billion ($A6.64 billion). ConocoPhillips said net income grew 43 per cent to $US3 billion ($A2.77 billion) and Occidental Petroleum Corp said earnings climbed 46 per cent to $US1.55 billion ($A1.43 billion).

Exxon Mobil Corp increased earnings even though it produced less oil and natural gas liquids. Benchmark crude prices rose 20 per cent from a year ago.

The company has increasingly focused on producing natural gas. Exxon expects natural gas to displace coal as the second most important fuel source within the next decade, and last year it acquired XTO Energy to become the largest US natural gas producer.

Natural gas production increased 24 per cent in the quarter for Exxon, but prices declined as other companies followed Exxon’s lead and rushed to develop underground shale gas deposits in North America. Natural gas prices fell nearly 16 per cent from a year ago.

AP   Sourced & published by Henry Sapiecha


Sunday, March 27th, 2011

Liquid salt could help clean up tar sands

By Ben Coxworth

15:06 March 23, 2011

A tar sand sample treated with the ionic liquid process(Photo: Penn State University)

A tar sand sample treated with the ionic liquid process
(Photo: Penn State University)

The United States imports approximately one million barrels of oil per day from Canada, which is about twice the amount that it gets from Saudi Arabia. A large percentage of that oil comes from tar sand deposits, in which bitumen (a tar-like form of crude oil) is found combined with sand. The tar sands – also known as oil sands – are hugely controversial, as many people state that the process used for extracting the oil from the sand is too ecologically-unfriendly. A new technique being pioneered at Penn State University, however, could drastically reduce the environmental impact of that process.

The current method of separating sand and bitumen involves adding warm water to the two, then agitating the mixture. Unfortunately, it requires a lot of water, which is diverted from nearby rivers. Once the separation process is complete, the now-polluted water is pumped into open air tailings ponds. From there, it can potentially leach its way back into the water table. There’s also another risk – despite the presence of bird-scaring devices, in 2008 approximately 1,600 ducks died when they landed in one of the ponds.

Instead of warm water, the Penn State method utilizes room temperature ionic liquids (ILs), which consist of salt in a liquid state – a solvent such as toluene may also be added. When the ILs are introduced to a sand/bitumen mixture and stirred, the resulting combination settles into three distinct layers: a bottom layer of oil-free sand, a middle layer of ILs, and a top layer of bitumen. The bitumen can then be removed and refined, the ILs can be reused, and residual ILs in the sand can be removed using a relatively small amount of water (which can also be reused), after which the sand can be returned to the environment.

Not only is much less water used, but because nothing needs to be heated, there are also substantial energy savings.

The researchers state that the ionic liquids could also be used to clean up beaches devastated by oil spills. Sand could be cleaned and redeposited on the spot, supposedly containing even less hydrocarbons than it did before the spill ever occurred.

We’ll be watching this one with interest …

Sourced & published by Henry Sapiecha