Oil & Gas Journal, April 14, 2014 by Oil & Gas Journal

Midstream Solutions Proven Results Æ

Midstream Solutions with Industry-Leading Speed to Market To win a race you need not only speed, but a timely start. Merichem Company has a proven track record of providing hydrocarbon treating solutions that meet the stringent timelines of our customers. Get your treating project off to a timely start by choosing Merichem Company as your technology licensor.

Merichem Companyís portfolio of midstream treating technologies includes our patented FIBER FILM Æ Contactor that offers a variety of caustic, amine and acid treating processes. Merichem also offers solutions for gas treating, including our patented LO-CAT Æ wet scrubbing, liquid redox system that converts H2S to innocuous, elemental sulfur. In addition to our large portfolio of licensed treating technologies, Merichem offers industry leading spent caustic management services that utilize Beneficial Reuse options to create a non-waste solution for your spent caustics. For fast, effective treating solutions, choose Merichem.

Think Fast...Think Merichem

APR. 14, 2014 | USD 10

DIGITALL KLY WEEKLY E D I T I O N

International Petroleum News and Technology | www.ogj.com

EDITORIAL NEWSLETTER STATISTICS

EDITOR’S PERSPECTIVE GENERAL INTEREST JOURNALLY SPEAKING WATCHING GOVERNMENT

No matter where . . .

NOV Mono PC Pumps deliver the optimum long term solution We are empowering producers around the world to increase oil and gas production at the lowest capital and operating costs. Operators everywhere are beneﬁting from technologically advanced solutions that deliver efﬁciency, reliability and low life cycle cost. These solutions have proven to be successful in applications ranging from heavy crude extraction to coal bed methane (CBM).

PC Pump Solutions include: 𰁴𰁴𰁴𰁴𰁴𰁴

Wellhead Drives Stufﬁng Boxes Automation Controllers and Monitoring Downhole Pumps and Accessories Patented Tools and Technologies Pump Optimization Design Software

www.nov.com/ogj/ArtificialLift

Email: NOV-Mono-ALS@nov.com

With thousands of installations, producers depend on NOV Mono in more than 200 felds around the globe. 𰁴𰁴𰁴𰁴𰁴𰁴𰁴𰁴𰁴𰁴

Albania Argentina Australia Botswana Canada Chad Colombia Egypt India Indonesia

𰁴𰁴𰁴𰁴𰁴𰁴𰁴𰁴𰁴𰁴

Kazakhstan Mexico New Zealand Oman Panama Suriname Trinidad United Kingdom United States Venezuela

US $10

International Petroleum News and Technology

7 NEWSLETTER

www.ogj.com

12 LETTERS / CALENDAR

30 ADVERTISERS’ INDEX

Apr. 14, 2014

14 JOURNALLY SPEAKING

31 STATISTICS

Volume 112.4a

16 EDITORIAL

34 MARKET CONNECTION

GENERAL INTEREST 18 Move carefully on crude exports, refiner urges House subcommittee Nick Snow

Tight oil formations have helped the US increase its crude production dramatically, an independent refiner conceded.

19 API report unveils economic gains from US crude exports

26 WATCHING GOVERNMENT Greenland in transition

28 Anadarko settles legacy claims against Kerr-McGee for $5.15 billion Nick Snow

29 EDITOR’S PERSPECTIVE Exchange in Senate committee displays energy misconception

20 Scott links South Atlantic OCS bill, jobs growth plan Nick Snow

22 Mathanex methanol plant completes move to Louisiana 22 Moody’s: Global refining, marketing industry to see earnings rise this year 23 EIA: Ethanol spot prices rise on rail congestion, cold weather 24 USCG: ‘Chain of errors’ led to Shell drilling unit running aground Michael T. Slocum

COVER Current crude oil output from Statoil’s Oseberg feld center (shown) averages about 144,000 b/d. Production from all Oseberg installations (A, B, C, and D platforms) fows via the OFC and the Oseberg transport system to the onshore Sture terminal near Bergen in western Norway. Photo from Statoil by Ole Jørgen Bratland.

WAVE OF THE FUTURE

Corrosion Resistant Shield

Corrosion Resistant Liner

NEXT GENERATION LINE PIPE. FlexSteel is the clear pipeline choice for salt water applications with cyclic operating pressures. Its innovative steel-reinforced spoolable design delivers solid performance and extreme corrosion resistance, without having to be

Steel Reinforcements

2"â&#x20AC;&#x201C; 8", up to 3,000 psi

de-rated over time. Choose FlexSteel because pipeline failure is never an option. Learn more at ďŹ&#x201A;exsteelpipe.com.

OGJ

ADVERTISING SALES

US Sales Mike Moss, (713) 963-6221, mikem@pennwell. com. Mark Gates, (713) 963-6237, markg@pennwell. com. Stan Terry, (713) 963-6208, stant@pennwell. com. Marlene Breedlove, (713) 963-6293, marleneb@ pennwell.com. Roy Markum, (713) 963-6220, roym@ pennwell.com.

Australia / New Zealand Mike Twiss, Miklin Business Services, Unit 15, 3 Benjamin Way, Rockingham, Western Australia 6168; Tel +61 8 9529 4466, Fax +61 8 9529 4488 Email: miklinbusiness@bigpond.com

Brazil / South America Jim Klingele, (713) 963-6214, jimk@PennWell.com 1455 West Loop South, Suite 400, Houston, TX 77027

Canada Stan Terry, (713) 963-6208, stant@pennwell.com

France / Belgium / Spain / Portugal / Southern Switzerland / Monaco Daniel Bernard, 8 allee des Herons, 78400 Chatou, France; Tel: 33(0)1.3071.1119, Fax: 33(0)1.3071.1119; E-mail: danielb@pennwell.com

Germany / Austria / Northern Switzerland / Eastern Europe / Russia / Former Soviet Union Sicking Industrial Marketing, Kurt-Schumacher-Str. 16, 59872, Freienohl, Germany. Tel: 49(0)2903.3385.70, Fax: 49(0)2903.3385.82; E-mail: wilhelms@pennwell. com; www.sicking.de <http://www.sicking.de> Andreas Sicking

India Rajan Sharma, Interads Limited, 2, Padmini Enclave, Hauz Khas, New Delhi-110 016, India; Tel: +91.11. 6283018/19, Fax: +91.11.6228 928; E-mail: rajan@interadsindia.com

Italy Ferruccio Silvera, Viale Monza, 24 20127 MILANO Italy; Tel:+02.28.46 716; E-mail: info@silvera.it

Japan e.x.press sales division, ICS Convention Design Inc. 6F, Chiyoda Bldg., 1-5-18 Sarugakucho, Chiyoda-ku, Tokyo 101-8449, Japan, Tel: +81.3.3219.3641, Fax: 81.3.3219.3628; Kimie Takemura, Email: takemurakimie@ics-inc.co.jp; Masaki Mori, E-mail: masaki.mori@ ics-inc.co.jp

Singapore / Australia / Asia-Pacific Michael Yee, 19 Tanglin Road #05-20, Tanglin Shopping Center, Singapore 247909, Republic of Singapore; Tel: 65 9616.8080, Fax: 65.6734.0655; E-mail: yfyee@singnet. com.sg

United Kingdom / Scandinavia / Denmark / The Netherlands Graham Hoyle, Regional Agent for UK, Netherlands, Scandinavia, Finland & Middle East, 10 Springfield Close, Cross, Axbridge, Somerset BS26 2FE Phone: +44 1934 733871 Mobile: +44 7927 889916 grahamh@pennwell.com or ghms@btinternet.com

West Africa Dele Olaoye, Flat 8, 3rd Floor, Oluwatobi House, 71 Allen Ave., Ikeja Lagos, Nigeria; Tel: +234 805 687 2630; Tel: +234 802 223 2864; E-mail: q-she@inbox.com

OGJ Reprints Rhonda Brown, Foster Printing Co., Reprint Marketing Manager; 866.879.9144 ext 194, Fax: 219.561.2023; 4295 Ohio Street, Michigan City, IN 46360; rhondab@fosterprinting.com. www.fosterprinting.com

PennWell 1455 West Loop South, Houston, TX 77027 www.ogj.com

PennWell, Houston offce

PennWell, Tulsa offce

1455 West Loop South, Suite 400, Houston, TX 77027 Telephone 713.621.9720/Fax 713.963.6285/ Web site www.ogjonline.com Editor Bob Tippee, bobt@ogjonline.com Chief Technology Editor Warren R. True, warrent@ogjonline.com Senior Technology Editor Christopher E. Smith, chriss@ogjonline.com Exploration Editor Tayvis Dunnahoe, tayvisd@ogjonline.com Upstream Technology Editor Michael T. Slocum, michaels@ogjonline.com Downstream Technology Editor Robert Brelsford, rbrelsford@ogjonline.com Senior Editor Steven Poruban, stevenp@ogjonline.com Senior Editor-Economics Conglin Xu, conglinx@ogjonline.com Staff Writer Matt Zborowski, matthewz@ogjonline.com Survey Editor/News Writer Leena Koottungal, lkoottungal@ogjonline.com Special Projects Rachael Seeley, rachaels@ogjonline.com Special Correspondent Alan Petzet, alanp@ogjonline.com Special Correspondent Paula Dittrick, paulad@ogjonline.com

1421 S. Sheridan Rd., Tulsa, OK 74112 PO Box 1260, Tulsa, OK 74101 Telephone 918.835.3161 / Fax 918.832.9290 Senior Art Director Michelle Gourd, michelleg@pennwell.com Editorial Graphic Designer Lena Banuet, lenab@pennwell.com Statistics Editor Laura Bell, laurab@ogjonline.com Senior Illustrators Mike Reeder, Kay Wayne Editorial Assistant Donna Barnett, donnab@ogjonline.com Production Director Charlie Cole Production Manager Shirley Gamboa Ad Services Manager Dillon Waters

Editorial Advisory Board Pat Dennler Motiva Enterprises LLC, Port Arthur, Tex. Doug Elliot Bechtel Hydrocarbon Technology Solutions/IPSI (Advisor), Houston Andy Flower Independent Consultant, Caterham, UK Michelle Michot Foss Bureau of Economic Geology’s Center for Energy Economics, The University of Texas (Houston) Michael Lynch Strategic Energy & Economic Research Inc., Amherst, Mass. Tom Miesner Pipeline Knowledge & Development, Houston Ralph Neumann Badger Midstream Energy LP Kent F. Perry RPSEA, Houston Ignacio Quintero Chevron Pipe Line Co., Houston Bill Schlesing KBC Advanced Technologies Inc., Houston John A. Sheffeld John M. Campbell & Co., Lechlade, UK Andrew J. Slaughter IHS Energy, Houston John Thorogood Drilling Global Consultant LLP, Insch, Scotland Steven Tobias Hess Corp., Houston Shree Vikas Conoco Phillips Co., Houston Colin Woodward Woodward International Ltd., Durham, UK

Washington Tel 703.533.1552 Washington Editor Nick Snow, nicks@pennwell.com

OGJ News Please submit press releases via e-mail to: news@ogjonline.com

Subscriber Service P.O. Box 2002, Tulsa OK 74101 Tel 1.800.633.1656 / 918.831.9423 / Fax 918.831.9482 E-mail ogjsub@pennwell.com Circulation Manager Tommie Grigg, tommieg@pennwell.com

PennWell Corporate Headquarters 1421 S. Sheridan Rd., Tulsa, OK 74112

P.C. Lauinger, 1900-1988 Chairman Frank T. Lauinger President/Chief Executive Offcer Robert F. Biolchini

Houston Administration

Publisher Jim Klingele, jimk@pennwell.com Vice-President/Group Publishing Director Paul Westervelt, pwestervelt@pennwell.com Vice-President/Custom Publishing Roy Markum, roym@pennwell.com

Member Audit Bureau of Circulations & American Business Media

Copyright 2014 by PennWell Corporation (Registered in U.S. Patent & Trademark Offce). All rights reserved. Oil & Gas Journal or any part thereof may not be reproduced, stored in a retrieval system, or transcribed in any form or by any means, electronic or mechanical, including photocopying and recording, without the prior written permission of the Editor. Permission, however, is granted for employees of corporations licensed under the Annual Authorization Service offered by the Copyright Clearance Center Inc. (CCC), 222 Rosewood Drive, Danvers, Mass. 01923, or by calling CCC’s Customer Relations Department at 978-750-8400 prior to copying. Requests for bulk orders should be addressed to the Editor. Oil & Gas Journal (ISSN 1944-9151) is published 12x per year - monthly the frst Monday of each month in print and other Mondays in digital form by PennWell Corporation, 1421 S. Sheridan Rd., Tulsa, Okla., Box 1260, 74101. Periodicals postage paid at Tulsa, Okla., and at additional mailing offces. Oil & Gas Journal and OGJ are registered trademarks of PennWell Corporation. POSTMASTER: send address changes, letters about subscription service, or subscription orders to P.O. Box 3497, Northbrook, IL 60065, or telephone (800) 633-1656. Change of address notices should be sent promptly with old as well as new address and with ZIP code or postal zone. Allow 30 days for change of address. Oil & Gas Journal is available for electronic retrieval on Oil & Gas Journal Online (www.ogj.com) or the NEXIS® Service, Box 933, Dayton, Ohio 45401, (937) 865-6800. SUBSCRIPTION RATES in the US: 1 yr. $89; Latin America and Canada: 1 yr. $94; Russia and republics of the former USSR, 1 yr. 2,200 rubles; all other countries: 1 yr. $129, 1 yr. premium digital $59 worldwide. These rates apply only to individuals holding responsible positions in the petroleum industry. Single copies are $10 each except for 100th Anniversary issue which is $20. Publisher reserves the right to refuse non-qualifed subscriptions. Oil & Gas Journal is available on the Internet at http://www.ogj.com. (Vol. 112, No. 4a) Printed in the US. GST No. 126813153. Publications Mail Agreement Number 602914. Return Undeliverable Canadian Addresses to: P.O. Box 1632, Windsor, ON N9A 7C9.

WEBCAST R E G I ST E R N OW

A Focus on our Global Portfolio Working and Delivering Major Projects and Career Insights Wednesday April 16, 2014

9:00 am CT

2:00 pm GMT

What You Will Learn: In this webcast, the last of BP’s Refning and Marketing (R&M) webcast series, viewers will get insight into Judy Indorf’s career as a Technical Manager at BP, as well as shed light on BP’s global portfolio and share her experiences working on and delivering some of BP’s most critical projects. Judy will provide an overview of BP’s major downstream assets, across different refneries, products and locations, whilst explaining how BP’s downstream approach differs and why.

Who Should Attend: • • • • • •

Process & Maintenance Engineers Operation Superintendents Mechanical & Chemical Engineers Strategy & Planning Corrosion & Reliability Engineers Project Managers

• • • • •

Engineering Undergraduates Turn Around Managers Inspection Engineer Metallurgists Health & Safety Managers

Guest Speaker: Judy Indorf Technical Manager, Toledo Refnery, BP

2 Ways to Register for the Webcast: 1. Register at http://www.ogj.com/bpwebcasts.html 2. Register by scanning the QR code

OGJ Newsletter

Apr. 14, 2014

International News for oil and gas professionals

GENERAL INTEREST Q U IC K TA K E S US House subcommittee forwards LNG-export bill A US House Energy and Commerce Committee subcommittee voted to forward a bill aimed at facilitating approvals of US LNG exports to the full committee. The Energy and Power Subcommittee’s action by 15 to 11 votes was along party lines, with Republicans favoring the move and Democrats opposing it. The subcommittee also approved an amendment to HR 6 by Rep. Bobby L. Rush (D-Ill.), the subcommittee’s ranking minority member, which would require applicants seeking US Department of Energy certification that their exports are in the US national interest to publicly disclose specific destinations of their proposed LNG sales. The votes came hours before the Ways and Means Committee’s Trade Subcommittee was scheduled to hold a hearing on the trade implications of removing barriers to LNG exports and other US energy policy questions. American Petroleum Institute Pres. Jack N. Gerard applauded the subcommittee’s action. “Today’s vote is just the latest signal that momentum for action on natural gas exports is stronger than ever,” he said, adding, “In the last few weeks, new proposals have won bipartisan support in both the House and Senate, and we are optimistic that members will come together on efforts to harness the full economic and strategic power of America’s energy exports.”

Gazprom urges Ukraine to settle accumulated debt OAO Gazprom says Ukraine needs to settle more than $2.2 billion in accumulated debt for Russian gas supplies (OGJ Online, Mar. 5, 2014). The total includes overdue payments for March supplies. Andrey Kobolev, chief executive officer of Naftogaz of Ukraine, met Apr. 3 at Gazprom headquarters with Alexey Miller, chairman of Gazprom’s management committee. Miller also met Apr. 3 with Russia’s Prime Minister Dmitry Medvedev. According to a transcript on Gazprom’s web site, the natural gas price for Ukraine in April was set at $485 per 1,000 cu m. The Russian government has abolished the “zero customs duty” for Ukraine. Miller said Ukraine received 1.956 million cu m of gas in March “and so far no payments have come for these supplies.” The situation, he said, “is not improving, but only getting

Oil & Gas Journal

For up-to-the-minute news, visit www.ogjonline.com

worse.” Medvedev said, “I think our Ukrainian partners should raise the necessary funds to settle the debts and pay off the current bills.”

Laclede to acquire Alagasco for $1.6 billion Laclede Group Inc., St. Louis, has entered into an agreement with Energen Corp. to acquire subsidiary Alabama Gas Corp. (Alagasco) for $1.6 billion, with an effective purchase price of $1.34 billion. Alagasco is the largest natural gas utility in Alabama, serving more than 422,000 customers. The transaction is expected to close this year, increasing Laclede’s customer base to 1.55 million from 1.13 million. Laclede said that it made the acquisition in accordance with its regulated growth strategy, including its desire to expand outside of Missouri.

Talisman aims to divest Timor Sea assets Talisman Energy Inc., Calgary, has placed its Timor Sea production interests up for sale in a move to exit the Kitan and Laminaria-Corallina oil fields as soon as a buyer is found. It has a 25% interest in Kitan oil field, a 40.1% interest in Laminaria, and a 33.33% hold on Corallina. Kitan, operated by Eni SPA, lies on the northwest edge of the Timor Gap Joint Petroleum Development Authority shared between Australia and East Timor. It has been on stream since 2011 and has produced at rates as high as 40,000 b/d. Oil is processed through the Bluewater Glas Dowr FPSO. Appraisal work earlier this year saw two successful wells drilled by the Stena Clyde semisubmersible rig at Kitan South and Kitan-6. It is thought the field still contains 20 million bbl of oil. Laminaria-Corallina oil fields, operated by Woodside Petroleum Ltd., also are in the northwestern Timor Sea, but in Australian waters. The fields have been on stream since 1999 and have produced about 200 million bbl of oil since then. However the fields are in decline and recent production rates had fallen to 3,400 b/d. Production is through the Northern Endeavour FPSO. Talisman is conducting a planned divestment of select capital-intensive assets around the world.

ICE BRENT / NYMEX LIGHT SWEET CRUDE $/bbl 107.00 106.00 105.00 104.00 102.00 101.00 100.00 99.00

US INDUSTRY SCOREBOARD — 4/14 4 wk. average

Latest week 3/28

Apr. 2

Apr. 3

Apr. 4

Apr. 7

Motor gasoline Distillate Jet fuel Residual Other products

Apr. 8

TOTAL PRODUCT SUPPLIED

Crude production NGL production2 Crude imports Product imports Other supply2 3 TOTAL SUPPLY Net product imports

YTD avg. year ago1

Change, %

8,794 3,782 1,449 252 4,290 18,567

8,468 3,758 1,365 424 4,535 18,550

3.8 0.6 6.2 (40.6) (5.4) 0.1

8,462 3,778 1,401 265 4,837 18,743

8,430 3,671 1,348 315 4,708 18,472

0.4 2.9 3.9 (15.9) 2.7 1.5

8,195 2,615 7,267 1,804 2,299 22,180 (1,893)

7,153 2,414 7,735 1,795 1,920 21,017 (1,152)

14.6 8.3 (6.1) 0.5 19.7 5.5 —

8,125 2,677 7,343 1,743 2,153 22,041 (1,929)

7,081 2,471 7,755 1,908 1,935 21,150 (1,121)

14.7 8.3 (5.3) (8.6) 11.3 4.2 —

15,086 15,378 86.3

15,193 14,961 84.0

(0.7) 2.8 —

15,292 15,590 87.5

15,007 15,340 88.1

1.9 1.6 —

Refining, 1,000 b/d Apr. 2

Apr. 3

Apr. 4

Apr. 7

Apr. 8

Crude runs to stills Input to crude stills % utilization

Latest week 3/28

Latest week

Previous week1

380,092 215,624 112,955 35,620 36,486

382,471 217,198 112,401 36,547 37,290

Same week year ago1 Change

Change

Change, %

Stocks, 1,000 bbl Crude oil Motor gasoline Distillate Jet fuel–kerosine Residual Stock cover (days)4 Apr.

Apr.

(2,379) (1,574) 554 (927) (804)

388,624 220,664 112,986 39,442 35,817

Change, %

(8,532) (5,040) (31) (3,822) 669

(2.2) (2.3) (0.0) (9.7) 1.9

Change, %

Crude Motor gasoline Distillate Propane Futures prices5 34/4

ICE GAS OIL / NYMEX HEATING OIL ¢/gal 296.00 293.00 290.00 287.00 284.00 281.00 278.00 275.00

YTD average1

Supply, 1,000 b/d

NYMEX NATURAL GAS / SPOT GAS - HENRY HUB $/MMbtu 4.550 4.500 4.475 4.450 4.425 4.400 4.375 4.350

Change, %

Product supplied, 1,000 b/d

WTI CUSHING / BRENT SPOT $/bbl 107.00 106.00 105.00 104.00 102.00 101.00 100.00 99.00

4 wk. avg. year ago1

25.2 24.5 29.9 22.7

25.4 24.9 30.2 21.0

(0.8) (1.6) (1.0) 8.1

26.6 26.1 30.1 27.1

(5.3) (6.1) (0.7) (16.2)

Change

Light sweet crude ($/bbl) Natural gas, $/MMbtu

100.47 4.38

100.40 4.43

Change

0.1 (0.1)

96.24 3.98

4.23 0.40

4.4 10.1

Based on revised figures. 2OGJ estimates. 3Includes other liquids, refinery processing gain, and unaccounted for crude oil. 4Stocks divided by average daily product supplied for the prior 4 weeks. 5Weekly average of daily closing futures prices. Source: Energy Information Administration, Wall Street Journal

Apr. 2

Apr. 3

Apr. 4

Apr. 7

Apr. 8

BAKER HUGHES INTERNATIONAL RIG COUNT: TOTAL WORLD / TOTAL ONSHORE / TOTAL OFFSHORE

PROPANE - MT. BELVIEU / BUTANE - MT. BELVIEU ¢/gal 127.00 126.00 125.00 124.00 108.00 107.00 106.00 105.00

Apr. 2

Apr. 3

Apr. 4

Apr. 7

Apr. 8

3,900 3,600 3,300 3,000 2,700 2,400 2,100 1,800 600 300 0

3,736

3,362

374

Feb. 13

Mar. 13

Apr. 13

May. 13

Jun. 13

Jul. 13

Aug. 13 Sept. 13

Oct. 13

Nov. 13

Dec. 13

Jan. 14

Feb. 14

Note: Monthly average count

NYMEX GASOLINE (RBOB)2/ NY SPOT GASOLINE3 ¢/gal 300.00 295.00 290.00 285.00 280.00 275.00 270.00 265.00 1Not

BAKER HUGHES RIG COUNT: US / CANADA 2,200 2,000

1,818

1,738

1,800 1,600 1,400 700 500 300 Apr. 2

Apr. 3

Apr. 4

Apr. 7

Apr. 8 1

available 2Reformulated gasoline blendstock for oxygen blending regular unleaded

3Nonoxygenated

100

235

206

1/18/13

2/1/13

1/25/13

2/15/13

2/8/13

3/1/13

2/22/13

3/15/13

3/8/13

3/29/13

3/22/13

1/17/14

4/5/13

1/31/14

1/24/14

2/14/14

2/7/14

2/28/14

2/21/14

3/14/14

3/7/14

3/28/14

3/21/14

4/4/14

Note: End of week average count

Oil & Gas Journal | Apr. 14, 2014

EXPLORATION & DEVELOPMENT Q U IC K TA K E S GeoPark makes oil discovery in Colombia GeoPark Ltd. reported the successful drilling and testing of the Aruco 1 exploration well on the Llanos Block 34 in the central Llanos basin in Colombia. A test conducted with an electrical submersible pump in the Guadalupe formation, at a total depth of 10,075 ft, resulted in a gross production rate of 1,154 b/d of 16.8° gravity oil. The well flowed with 4.8% water cut through a 42/64-in. choke and wellhead pressure of 193 psi. The company said further production history will be required to determine stabilized flow rates and the extent of the reservoir. The Aruco discovery is GeoPark’s sixth oil discovery on Llanos Block 34. Since acquiring the block in 2012 with no production or reserves, the company has increased production on the block to more than 15,000 b/d gross and more than 6,700 b/d net (OGJ Online, July 11, 2012; Mar. 27, 2013; June 17, 2013). “We have an ambitious risk-balanced work plan for 2014 with 50-60 new wells, with the objective of continuing to build an attractive and enduring upstream business in the highpotential Latin American hydrocarbon market,” said James F. Park, GeoPark chief executive officer. GeoPark, operator of Llanos Block 34, holds 45% working interest.

Large seismic survey starts offshore Norway CGG has begun shooting the largest broadband multiclient seismic survey it has conducted in Northwest Europe and what it calls the largest multiclient 3D survey ever shot by any company offshore Norway. The 19,000-sq km survey will cover more than 80 production licenses in the North Sea between the Horda platform in the southeast to the Sogn graben in the north. The area covers all of Quadrant 35 and parts of Quadrants 31, 32, and 36, including the Troll, Brage, Fram, and Gjoa licenses. Responding to increased exploratory interest due to recent discoveries in the Horda area, the survey aims to provide a large, uniform dataset with increased seismic resolution, CGG said. Data acquisition by the Viking Vanquish seismic vessel, to be joined later by a second vessel, will continue into 2015.

OMV, Murphy acquire blocks offshore Namibia OMV AG and Murphy Luderitz Oil Co. Ltd. have acquired 65% interest in Blocks 2613A and 2613B offshore Namibia from Brazil’s Cowan Petroleum. Murphy will operate the joint venture with 40% interest, OMV will hold 25%, Cowan will retain 20%, and the remaining 15% will be held by Namibian national oil company Namcor. The joint venture partners will conduct an extensive 3D seismic program starting in the second quarter. “Offshore Namibia offers great exploration potential as it

Oil & Gas Journal | Apr. 14, 2014

is largely unexplored, yet has all the elements of an effective hydrocarbon system. The transaction is fully in line with our growth strategy and our focus on the North Sea region, Black Sea, and opportunities like these in Sub-Saharan Africa,” said Jaap Huijskes, OMV executive board member responsible for exploration and production. OMV acquired interests in Madagascar and Gabon in 2013 (OGJ Online, Aug. 30, 2013; Dec. 18, 2013).

DRILLING & PRODUCTION Q U IC K TA K E S Shell starts crude oil exports from Majnoon field Royal Dutch Shell PLC has exported its first shipment of crude from Iraq’s Majnoon field after surpassing its initial commercial production target. The field, operated in conjunction with South Oil Co., Malaysia’s Petronas, and Missan Oil Co., is producing 210,000 b/d, said Shell. The milestone comes just 8 months after Majnoon production was restarted by the partners following major overhauls, including clearing war munitions, upgrading safety standards, and building a greenfield central processing plant that will allow increased capacity. Shell said it drilled 18 wells in that time. “The lifting of Shell’s first oil shipment from Majnoon has great significance to us and our partners in the [Iraqi] government as it is a testimony to our shared progress and signals the start of Majoon’s long-term journey toward generating further revenue for Iraq’s economy, and as an investment in Iraq’s future,” said Shell Iraq Vice-Pres. and Chairman Hans Nijkamp. In 2010, Iraq’s Ministry of Oil signed a 20-year contract with Shell and its partners for the development of Majnoon field, one of the largest oil fields in the world. (OGJ Online, Jan. 18, 2010). Shell owns a 45% stake, Petronas 30%, and Missan 25%. The consortium targets a production plateau of 1.8 million b/d of oil from its Majnoon operations.

Statoil starts production from Gudrun field Statoil ASA and partners have started oil and natural gas production from Gudrun field in the Norwegian North Sea (OGJ Online, Sept. 28, 2011). Gudrun is the first new Statoil-operated platform to come on stream on the Norwegian continental shelf since 2005. “This is a red-letter day for the company,” said Arne Sigve Nylund, an executive vice-president. Gudrun field lies in PL025 about 55 km north of the Sleipner installations. The platform will produce from seven production wells. Statoil expects to recover 184 million boe. Statoil has 51%. GDF Suez E&P Norge has 25% and OMV Norge AS 24%. Gudrun has a process facility for partial stabilization of oil and gas, which are transported to the Sleipner A platform. The oil is routed to Karsto, while the gas goes to European markets through gas pipelines tied in to Sleipner. Some 112 km of pipeline have been laid, along with a 55-km power cable on the seabed between Gudrun and Sleipner.

The reservoir is at a depth of 4,200-4,700 m and originates from the Jurassic. Gudrun was discovered in 1975. Statoil said the “high temperature-high pressure field” required new drilling technology, which was “one of the reasons why these reserves were left in the bank for such a long time.”

Statoil farms out interest in block off Angola Statoil ASA has agreed to farm out a 15% interest in Block 39 of the Kwanza presalt basin offshore Angola to WRG Angola Block 39 Ltd. (WRG). The deal is subject to approval by Sonangol EP, the Angolan minister of petroleum, and the license partners, according to the company. Statoil operates Block 39 and retains a 40% interest after the farmout. The remaining interest is held by Sonangol (30%) and Total SA (15%) in addition to the interest held by WRG. “This is part of Statoil’s active portfolio management,” said Gareth Burns, senior vice-president for exploration strategy and business development. According to Statoil, the Angolan continental shelf is the largest contributor to its oil production outside Norway. Angola yielded about 200,000 boe/d in equity production in 2013, about 28% of the company’s total international oil and gas production. Statoil says it will start drilling in its Kwanza-operated portfolio during this year’s second quarter, with Dilolo-1 becoming the first high-impact prospect drilled on Block 39. After Dilolo, Statoil will operate its second commitment well on Block 38. WRG acquired 15% interest in the Statoil-operated Block 38 from Sonangol. Following the acquisition, Statoil still holds a 55% interest with the remaining 30% held by Sonangol. WRG is a 50-50 joint venture of White Rose Energy Ventures and Genel Energy PLC.

PROCESSING Q U IC K TA K E S CNPC, Shell strengthen global cooperation China National Petroleum Corp. (CNPC) and Royal Dutch Shell PLC have reached an agreement to deepen their strategic partnership by increasing cooperation in the development of both companies’ global projects. The agreement—China Petroleum & Shell Global Cooperation Agreement—was signed by the two companies Apr. 8 in Beijing, according to CNPC. Under the deal, CNPC and Shell have agreed, on a global scale, to strengthen long-term mutually beneficial cooperation in the development of unconventional resources, deep water, LNG, and other upstream and downstream businesses, according to CNPC. Shell and CNPC previously signed a Global Alliance Agreement to jointly pursue opportunities internationally and in China. The two parties also signed an agreement to establish a well manufacturing joint venture (50% CNPC and 50% Shell) (OGJ Online, Mar. 20, 2012).

Chevron launches Gulf Coast petchem project Chevron Phillips Chemical Co. LP has broken ground on its US Gulf Coast petrochemicals project at the company’s existing Cedar Bayou plant in Baytown, Tex. A groundbreaking ceremony held on Apr. 2 marked the start of construction for the project, which was sparked by increased shale resource development, the company said. First announced in March 2011 (OGJ Online, Mar. 29, 2011), the Texas Gulf coast project will include a 1.5-million tonne/year ethane cracker to be built at the Cedar Bayou plant in Baytown, and two 500,000-tpy polyethylene plants to be constructed in Old Ocean, Tex. (OGJ Online, Nov. 20, 2013; May 2, 2012). The engineering, procurement, and construction phase of the ethane cracker project will be executed through a joint venture of JGC (USA) Inc. and Fluor Enterprises Inc., while Gulf Coast Partners—a partnership of Technip USA Inc. and Zachry Industrial Inc.—will execute EPC for the two polyethylene plants, Chevron Phillips Chemical said. Chevron Phillips Chemical will host a groundbreaking for the polyethylene units on June 17. The estimated completion date for the project is in 2017, according to the company.

Contracts inked for Egyptian petchem complex Carbon Holdings Ltd. (CHL) of Egypt has let contracts for engineering, procurement, construction, and commissioning (EPCC) activities related to the development of its Tahrir petrochemical complex planned at Ain Sokhna, Egypt (OGJ Online, Oct. 19, 2010). The contracts, awarded to a consortium consisting of Maire Tecnimont SPA, Milan, and Netherlands-based Archirodon Group NV, were signed during an Apr. 6 ceremony in Cairo, Maire Tecnimont said. The EPCC contracts, awarded on a direct-negotiation basis, are valued at $1.7-1.95 billion, 50% of which will go to Maire Tecnimont, the company said. Maire Tecnimont’s scope of work will consist in EP activities for a utilities island, seawater desalination system, wastewater treatment, power plant, and auxiliary packages and systems, as well as in the commissioning of all related services. Archirodon’s scope of work under the contract will cover EPC supply of sea works, tanks, jetty works, and pipelines, including construction activities for all associated structures, according to Maire Tecnimont. Financial close the project is scheduled to take place by yearend, Maire Tecnimont said. CHL previously awarded contracts for work on the Tahrir petrochemical complex to Foster Wheeler USA Corp. and Univation Technologies for project management consultancy and polyethylene process technology, respectively (OGJ Online, Oct. 19, 2010). Most recently, in November 2013, CHL let a $500 million contract to GE to provide technology and equity support to the greenfield naphtha cracker and olefins complex at Tahrir,

Oil & Gas Journal | Apr. 14, 2014

including aero-derivatives gas turbines, steam turbines, generators, water filtration and desalination equipment, turbo machinery compressors, and industrial solutions services, GE said in a Nov. 18, 2013, release. Once completed, the Tahrir complex, which will be at the entry of the Suez Channel, will have a combined ethylene and propylene production capacity of 1.36 million tonnes/year, making it the world’s largest naphtha liquid cracker, says GE. Set to generate annual revenue of $6 billion, the Tahrir project additionally will strengthen Egypt’s overall annual exports by over 25%, said Basil El-Baz, chairman and chief executive officer of Carbon Holdings, in November 2013.

2016. It will also produce and sell 100,000 b/d of condensate and 1.6 million tpy of LPG at its peak. Separately, onshore Queensland, the final three prefabricated modules for the Santos Ltd.-operated Gladstone LNG (GLNG) project have arrived on site at Curtis Island. The Train 1 facility comprises 82 modules and it has taken 2 years to construct and transport these components to the LNG plant. The final three modules are all cryogenic modules weighing a total of 2,777 tonnes. The GLNG project will produce 7.8 million tpy of LNG with first production scheduled for 2015.

Deals advance plans for FSRU off Puerto Rico Azure Midstream starts up Haynesville gas plant Azure Midstream Energy LLC, Houston, has started up its 10-MMcfd Fairway gas processing plant in San Augustine County, Tex. An Azure Midstream spokesperson told OGJ that the plant consists of two 5 MMcfd freon refrigeration plants. Azure said the plant came into service on Mar. 17 and will recover NGLs from gas produced from the James Lime formation. It will return residue gas into Azure’s East Texas Gathering System (OGJ Online, Nov. 18, 2013) for delivery into interconnections with Gulf South’s 42-in. pipeline, CenterPoint Energy Gas Transmission’s 42-in. line near Carthage, Gulf South’s 30in. pipeline at Milam, and Azure’s interconnection with Natural Gas Pipeline Co. of America in Nacogdoches County, Tex. NGLs recovered at the Fairway plant will move by truck to fractionation in East Texas, South Louisiana, or Mont Belvieu. The James Lime formation in the Haynesville shale in East Texas has rich associated gas that requires processing to remove the heavy end of the produced gas stream. The announcement said that olume growth for the central portion of Azure’s gathering system, where many of the company’s customers are drilling, has resulted in the need for additional gathering. Azure Midstream operates more than 1,300 miles of pipelines, 16,000 hp of compression, 2.4 bcf of gas treating, and natural gas throughput of more than 1.1 bcfd.

Excelerate Energy, Houston, and the Puerto Rico Electric Power Authority have executed agreements for the procurement, construction, and operation of the Aguirre Offshore GasPort LNG terminal off the southern coast of the country, the firm said. The agreements include the provision of one of Excelerate’s floating storage and regasification units (FSRU) specifically designed to provide closed-loop regasification, together with the design, construction, and operation of an offshore terminal for berthing the FSRU and the reception and transfer of LNG from carriers of various sizes. The terminal, off Puerto Rico’s southern coast near the town of Salinas, would provide fuel to the Aguirre central complex and underpin the conversion of power generation from imported oil to natural gas. The Central Aguirre Power Complex will convert 900 Mw of existing power generation to be dual-fueled, capable of using No. 2 diesel or natural gas or both as primary fuel (OGJ Online, Apr. 19, 2013). The project is in the approval process in the US Federal Energy Regulatory Commission, and Excelerate expects it to receive its draft environmental impact statement next month. Pending FERC approval, Excelerate said, construction could begin in this year’s fourth quarter.

South Africa okays Oiltanking crude terminal TRANSPORTATION Q U IC K TA K E S Aussie LNG projects reach respective milestones Two of Australia’s largest LNG projects reached significant milestones. The first hull block of the Inpex Group’s Ichthys LNG project’s central processing facility (CPF) has been laid down at the Samsung Heavy Industry Geoje Shipyard in South Korea. The CPF, which will be the world’s largest semisubmersible platform when completed in 2015, will gather gas from the Ichthys field in the Browse basin offshore Western Australia. Extracted condensate will be sent to a nearby floating storage and offloading vessel while the processed gas will be piped 890 km to the Darwin LNG processing plant. The CPF will have topside dimensions of 150 m by 110 m. Ichthys will produce 8.4 million tonnes/year of LNG from

Oil & Gas Journal | Apr. 14, 2014

The government of South Africa has granted Oiltanking MOGS Saldanha RF Pty. Ltd. (OTMS), a joint venture of OTGC Holdings Pty. Ltd. and MOGS Pty. Ltd., environmental authorization for a 13.2-million bbl commercial crude oil blending and storage terminal, comprising twelve in-ground concrete tanks, at Saldanha Bay. Eight specialist studies occurred over 2 years as part of the environmental impact assessment. OTMS also conducted a marine oil pollution control study to ensure any and all environmental risks are adequately understood and addressed. This study was not required as part of environmental approval. The 12 tanks have a layer underneath them that will collect oil in the event of a leak and relay it to an underground collection point for redirection to a nonleaking tank. OTMS says this layer will be continuously monitored.

2014-2015 EVENT CALENDAR Denotes new listing or Russia & CIS Bottom of the Barrel Technology a change in previously Conference & Exhibipublished information. tion, Moscow, website: http://www.europetro. com/en/rusbbtc_2014 22-23. APRIL 2014 Texas Alliance Expo and Annual Meeting, SPE Improved SymWichita Falls, website: posium Oil Recovery, http://texasalliance. Tulsa, website: www. spe.org/events 12-16. org/event/allianceexpo-annual-meeting/ 22-23. Annual Middle East Petroleum & Gas Annual Utica & MarConference, Dubai, cellus Infrastructure website: http://ow.ly/ Development Summit, sEnqi 13-15. Pittsburgh, website: Petchem Arabia Confer- http://infocastinc.com/ ence, Sofitel, website: events/utica/?gclid=CP www.wraconferences. jrzPWnnL0CFUVp7AodwGsAzA 22-24. com/event/petchemarabia-2014 13-16. CIS Oil&Gas Summit, Baku, www.theenergyMEDW Middle East exchange.co.uk/event/ Downstream Week, Sofitel, website: www. cis-oil-gas-summit wraconferences.com/ 22-24. event/middle-eastUSEA Annual Memdownstream-week bership Meeting & 13-16. Public Policy Forum, Washing, DC, website: GPA Annual Convention, Dallas, (918) 493- http://www.usea.org/ 3872, (918) 493-3875 event/2014-usea(fax), e-mail: pmirkin@ annual-membershipgpaglobal.org, website: meeting-public-policyforum 23. www.gpaglobal.org 13-16. OpEx Operational Excellence in Oil & SPE Oilfield Water Gas & Petrochemicals Management ConferConference, Moscow, ence and Exhibition, website: http://www. Kuwait City, website: europetro.com/en/rusowww.spe.org/events/ pex2014 24-25. wmce/2014/ 14-16.

Small-Mid Scale LNG Summit, Amsterdam, website: http://www. smallmidlng.com/ 29-30. Smart Grids Summit, Malaga, website: http:// thesmartgridssummit. com 29-30.

MAY 2014 API International Oil Spill Conference, Savannah, website: www. api.org/events-andtraining/calendar-ofevents/2014/iosc2014 5-8. OTC Offshore Technology Conference, Houston, website: www. otcnet.org 5-8. Annual East Texas Energy Symposium, Kilgore, Texas, website: www.easttexasoilmuseum.com 6. International Downstream Technology & Strategy Conference, Lisbon, website: http:// www.europetro.com/ en/idtc_2014 6-7.

BBTC International Bottom of the Barrel Technology Conference, Lisbon, website: http://www.europetro. com/en/bbtc_2014 8-9.

afpm.org, website: Symposium, Houston, www.afpm.org/Confer- website: www.spe.org/ ences 14-15. events/calendar/ 19-21.

GPA Europe Technical Meeting, Leiden, website: https://www. gpaeurope.com/eventSPE International Con- details.aspx?event=32 ference and Exhibition 14-16. on Oilfield Corrosion, Aberdeen, website: IADC Drilling Onshore www: www.spe.org/ Conference & Exhibievents 12-13. tion, Houston, website: http://www.iadc.org/ Deloitte Energy Confer- event/drilling_onence, National Harbor, shore_2014/ 15. Md., website: https:// www.deloitte.com/view/ World Fuel Oil en_US/us/Events-De Summit VII, Athens, loitte/9de451a76d3 website: http://www. 64410VgnVCM3000 worldfueloilsummit. 003456f70aRCRD. com/ 15-17. htm?oper=REG 13-14. IOGCC Midyear Issues Eastern Oil & Gas Con- Summit, Biloxi, Miss., ference & Trade Show, website: www.iogcc. Pittsburgh, website: state.ok.us/events http://www.pioga.org/ 18-20. event/2014-eastern-oilgas-conference-andMEPIPES Oil and Gas trade-show/ 13-14. Pipelines in the Middle East Conference, Abu International School of Dhabi, website: www. Hydrocarbon Measure- theenergyexchange. ments, Oklahoma City, co.uk/event/oil-andwebsite: http://www. gas-pipelines-middleishm.info/ 13-15. east-2014. 18-21.

Flame–Europe’s Leading Natural Gas & LNG Conference, Amsterdam website: http:// www.icbi-flame.com/ FKN2382OGJW 19-22. API Spring Refining and Equipment Standards Meeting, Orlando, website: www. api.org/events-andtraining/calendar-ofevents/2014/springrefining 19-23. API Spring Operating Practices Symposium, Orlando, website: http://www.api.org/ events-and-training/calendar-of-events/2014/ springops 20. TGC Turkmenistan Gas Congress, Avaza, Turkmenbashi, website: http://www.turkmenistangascongress. com/conferencedelegate-booking-form 20-21.

Advanced Contract Risk Management for Uzbekistan InterSPE High CO2 and H2S Oil & Gas Summit, Houston, website: Gas Fields DevelopPSIG Annual Meeting, national Oil & Gas Conference, Tashment Completions and http://www.contracBaltimore, website: kent, website: http:// Productions Operations triskmanagement.us/ http://www.psig.org/ www.oguzbekistan. 20-21. Forum, Bali, website: 6-9. com/2013/about-con- http://www.spe.org/ ference.html 13-15. events/14fsap/ 18-23. DUG Permian Basin Morocco Oil & Gas Conference, Fort Summit, Marrakesh, SPE Hydrocarbon Eco- Worth, Texas, website: website: http://moroc- SPE International Conference and Exhibi- nomics and Evaluation http://www.dugpermcosummit.com 7-8. AIPN Spring Confertion on Oilfield Scale, Conference, Housian.com/?gclid=CN30i SPE Western North ence, New York City, PKenL0CFRQV7AodTm ton, website: http:// Four Corners Oil & Gas Aberdeen, website: American and Rocky 4A4A 20-22. www.spe.org/events/ Mountain Joint Confer- website: http://aipn.org/ Conference, Farming- www: www.spe.org/ events 14-15. hees/2014/ 19-20. ton, N.M., website: ence, Denver, website: Events/SC2014.aspx 27-29. International Conferhttp://www.fourcornerwww.spe.org/events/ ence on Petroleum World XTL Summit, soilandgas.com/regis- AFPM National Occalendar/ 17-18. M2M for Oil and Gas cupational & Process London, website: http:// Data, Integration & tration.html 7-8. Conference, London, Safety Conference and www.cwcxtl.com/ Data Management, SPE-SAS Annual Houston, website: 19-21. GPA MidContinent An- Exhibition, San AntoTechnical Symposium website: www.smihttp://www.pnecconfernual Meeting, Midwest nio, (202) 457-0480, & Exhibition, Al Kobar, online.co.uk/energy/ (202) 457-0486 (fax), SPE Hydrocarbon Eco- ences.com/index.html website: http://spesas. uk/conference/m2m- City, Okla., website: security 28-29. nomics and Evaluation 20-22. www.gpaglobal.org 8. e-mail: meetings@ org/atse/ 21-24.

Oil & Gas Journal | Apr. 14, 2014

2014-2015 EVENT CALENDAR AFPM Annual Meeting, San Antonio, (202) 457-0480, (202) 457-0486 (fax), e-mail: meetings@afpm. org, website: www. afpm.org/Conferences 20-23.

ence & Trade Show, Houston, website: http://www.ilta.org/ CalendarofEvents/ AOCTS/2014/2014info. htm 2-4.

website: https://secure. Global Petroleum Show, spee.org/ 7-10. Calgary, AB, website: http://www.digitalrefining. com/55,events,Global_ PIRA Scenario PlanPetroleum_Show.html ning Conference, 10-12. Houston, website: www.pira.com 9. Annual Unconventional Tight & Shale Gas Gas & Oil Conference, Annual Global Procure- Summit, Edinburgh, AFPM Reliability & London, website: http:// ment and Supply Chain website: http://www. Maintenance Conferwww.oilandgasuncon- Management for the wplgroup.com/aci/ ence and Exhibition, ventional.com/ 2-5. conferences/eu-eug3. Oil and Gas Industry San Antonio, (202) Conference, Houston, asp 11-12. 457-0480, (202) International Caspian website: http://www. 457-0486 (fax), e-mail: Oil & Gas Exhibition ifmr-events.com/ USEA Annual Enmeetings@afpm. & Conference, Baku, marcusevans-conferergy Efficiency Forum, org, website: www. website: http://www. ences-event-details. Washington, DC, afpm.org/Conferences caspianoil-gas.com/ asp?EventID=21085 website: http://www. 20-23. 3-6. 9-11. eeforum.net 12.

PIRA London Energy JULY 2014 Conference, London, website: www.pira.com South Texas Oilfield Expo, 17-18. San Antonio, website: http://www.southtexasoilIADC World Drilling fieldexpo.com/?gclid=CO Conference & Exhibi- r78Mypi70CFY3m7Aodetion, Vienna, website: wEAvA 9-10. http://www.iadc.org/ event/iadc-worldE&P Information & drilling-2014-confer- Data Management Asia ence-exhibition-2/ Pacific Conference, 18-19. Singapore, website: www.smi-online. Africa Energy co.uk/energy/asia/ Forum, Istanbul, conference/epwebsite: http:// information-data-andafrica-energy-forum. knowledge-managecom/ 18-20. ment-asia-pacific 9-10.

International LNG in B.C. Conference, Vancouver, website: http://engage.gov. bc.ca/lnginbc/lngconference/ 21-23.

PIRA Canadian Energy Conference, Calgary, Alta, website: www. pira.com 4.

IPAA Midyear Meeting, Colorado Springs, website: www.ipaa. org/meetings-events/ upcoming-meetings/ 18-20.

SPE Latin American and Caribbean Petroleum Engineering Conference, Maracaibo, website: www.spe.org/ events 21-23. GPA Permian Basin Annual Meeting, Odessa, website: www. gpaglobal.org. 22. New Libya Oil & Gas Summit, London, website: http://libyaoilgas. com 29-30.

JUNE 2014 SPE Exploitation of Tight Carbonates Forum, San Diego, website: http://www.spe. org/events/14fus2/ 1-6. Annual Mining Americas Summit, Denver, website: http://www. miningamericas.com/ 2-3. Annual International Operating Confer-

SPE Energy Resources Conference, Port of Spain, website: www. spe.org/events/calendar/ 9-11.

Annual Ireland Oil & Gas Summit, Dublin, Enercom’s London Oil website: http://ireland- & Gas Conference, summit.com 4-5. London, website: http:// www.enercominc.com/ the-london-oil-andGTL North America gas-conference/ 10-11. Conference, Houston, website: www. gtlnorthamerica.com PIRA Understanding 4-5. Global Oil Markets Conference, Houston, website: www.pira.com. Tulsa Oilfield Expo, Tulsa, website: http:// 10-11. www.tulsaoilfieldexpo. com 4-5. SPE African Health, Safety, Security, and Environment and Social SPE London Annual Responsibility ConferConference, London, ence and Exhibition, website: http://www. Nairobi, website: http:// spe.org/events/ www.spe.org/events/ lond/2014/ 4-5. hsea/2014/ 10-12. Latin American Leadership Forum, Cartagena, SPE Heavy Oil Conference-Canada in website: http://www. cg-la.com/forums 4-6. Conjunction with GPS, Calgary Alta., website: www.spe.org/events/ IPAA OGIS Toronto calendar/ 10-12. Meeting, Toronto, Ont., website: http:// SPE Exploration and www.ipaa.org/ meetings-events/event- Development in Unconventional Reservoir details/?mid=308 5. Symposium, Neuquen, website: www.spe.org/ SPEE Annual Meetevents/calendar/ 10-12. ing, Stowe, Vermont,

Oil & Gas Journal | Apr. 14, 2014

World Petroleum Congress, Moscow, website: www.21wpc. com 15-19.

Annual Lebanon Oil & Gas Summit, Beirut, website: http://irn-inter- PIRA Scenario Plannational.com 16-17. ning Conference, London, website: www. Pipe Tech World Sum- pira.com 19-20. mit, Rome, website: http://www.pipetechPIRA Understanding summit.com/ 16-18. Global Oil Markets Conference, London, www. pira.com 19-20. EAGE Conference & Exhibition, Amsterdam, website: http://www. Iran Oil & Gas Summit, eage.org/events/index. Abu Dubai, website: php?eventid=1000&Op www.iransummit.com endivs=s3 16-19. 23-25.

SPE Well Construction Efficiency: NPT, Reliability and Process Improvement Forum, Santa Fe, website: http://www.spe.org/ events/14fus4/ 13-18. North American Custody Transfer Measurement Conference, Denver, website: http:// www.ceesi.com/Training/CustodyTransferMeasurementConference.aspx 15-17.

SPE Low Carbon Intensity Process for Low-Mobility Oil Recovery Forum, Newport Beach, website: API Exploration and Annual Energy Exposi- http://www.spe.org/ events/14fus3/ July Production Standards tion & Symposium, Conference on Oilfield Billings, Mont., website: 27-Aug. 1. Equipment and Materi- http://energyexposition. als, Chicago, website: com/ 25-26. AUGUST 2014 www.api.org/eventsand-training/calendar- API Tanker Conference, of-events/2014/e-pAustin, website: http:// SPE Nigeria Annual Instandards 16-20. ternational Conference www.api.org/eventsand-training/calendar- & Exhibition, Lagos, EuALF SPE Aberdeen of-events/2014/tanker website: www.spe.org/ events/calendar 5-7. European Artificial Lift 25-26. Forum, Aberdeen, website: http://www.speEnerCom’s Oil & Gas AAPL American’s uk.org/default.aspx. Conference, Denver, Landman Annual LocID-0a4008003. website: http://www.enMeeting, Montreal, Lang-EN.emID-965. Que., website: http:// ercominc.com/the-oilrss-cal.EventID-13676. www.landman.org/ and-gas-conference/ htm 17-18. 17-21. 25-28.

JOURNALLY SPEAKING

Old basins, new ideas

TAYVIS DUNNAHOE Exploration Editor

The accepted paradigms in today’s exploration industry seem obvious yet in their origins were often difficult to understand. Historically, new geologic concepts have experienced relatively slow acceptance due to perceived high risks, unfavorable price environments, and a lack of enabling technologies. Once proven, the resulting paradigm shift often leads to a growth in opportunity. New opportunity types introduce new questions that need answers. “Many of the questions before us today are very similar, if not the same, to the questions we have been trying to answer for decades,” said Carlos A. Dengo, director of the Berg-Hughes Center for Petroleum and Sedimentary Systems at Texas A&M University. “Time will show us again that what we accept today to be our paradigms will be proven wrong,” he said. Speaking at AAPG’s Annual Convention in Houston on Apr. 7, Dengo said, “Exploration success is driven by the competitive advantage of seeing first what others have not.” New resource opportunity growth resulted from applying new concepts and new innovative technologies. “But certainly we’ve also seen some paradigm shifts that can be attributed to accidental discoveries,” he said. The discovery of the East Texas oil field in 1930 highlighted the importance of stratigraphic traps. The field has produced 7 billion bbl of oil. “At the time, many companies discounted this [stratigraphic traps] as an exploration concept. They did so because those who were exploring the area were caught in the paradigm that the only types of traps you could find were salt dome related anticlines,” Dengo said.

Shifting continents, ideas “Plate tectonics when combined with new appreciation for the potential of continental carbonate reservoirs could further change the opportunity space, and this is best illustrated with the presalt examples offshore Brazil and Angola,” Dengo said. The accepted paradigm states that as continents break up and form rifts and eventually passive margin basins, the demarcation of the continental and ocean boundary is very sharp. “We had convinced ourselves that we knew where the ocean and continental boundaries lie all around the world,” Dengo said. “The consequence of this paradigm, of course, is that it limited exploration plays to those areas underlain predominantly by continental crust.” Recent observations based on modern geophys-

ical data, deep offshore exploration, and onshore analogs are challenging the classical concepts for the evolution of rift basins. Recent discoveries of how rift basins are formed are changing the accepted paradigms about the controls and processes that thin out continental lithosphere under rift basins. This new understanding has shown that ocean and continental boundaries are not equivalent everywhere around the globe. “With these new concepts, it is clear that the opportunities lie further outboard than what we previously thought with our existing paradigms,” he said. Dengo pointed out that this new concept may be a reasonable interpretation that explains the initial rift history underlying the Tupi and other presalt discoveries offshore Brazil. Since 2007, deepwater, presalt discoveries in Brazil’s Santos basin have revolutionized offshore exploration. The following year, the complementary margin offshore Angola also led to deepwater discoveries. Brazil and Angola share a common rift history, according to Dengo. The total resource base for Angola’s Kwanza basin is not well understood, but some analysts have estimated at least 30 billion bbl of oil in place, if not more.

New understanding Rift history is initially characterized by isolated basin formation followed by the widespread deposition of salt and evaporites. “What was not fully appreciated until the Tupi discovery was the stratigraphy of the presalt section,” Dengo said. Most are now recognized as continental carbonates. The paradigm for years has been that most of the world’s producing reservoirs involved marine carbonates—about 60%. For decades, Dengo said, all research was directed at understanding marine carbonate reservoir characterization, facies distribution, and physical properties. Recent discoveries off Brazil have again changed the industry’s paradigm. “We are now going back to asking the same questions we have all along,” he said. Meanwhile, he added, “There are still questions we need to keep answering if we are to continue identifying new opportunities, which should abound if we continue to shift our paradigms.” With the example of hyperextended margins and the possibility of new reservoir types, the industry is revisiting many of the passive margins around the world and this could open up additional resource opportunities. The 21st century is as good a time as any to keep an open mind.

Oil & Gas Journal | Apr . 14, 2014

SAVE THE DATE! OCTOBER 14–16, 2014

ABERDEEN EXHIBITION AND CONFERENCE CENTRE / ABERDEEN, SCOTLAND WWW.DEEPOFFSHORETECHNOLOGY.COM

OWNED & OPERATED BY:

PRESENTED BY:

SUPPORTED BY:

EDITORIAL

Knives, guns, and gas In a famous scene in the 1987 movie The Untouchables, tough cop Jimmy Malone (played by Sean Connery) colorfully illustrates the resolve needed to bring gangster Al Capone (Robert De Niro) to justice. “You want to get Capone?” Malone asks Federal Agent Eliot Ness (Kevin Costner). “Here’s how you get him: He pulls a knife; you pull a gun. He sends one of yours to the hospital; you send one of his to the morgue. That’s the Chicago way, and that’s how you get Capone.” In the making of energy policy, supporters of oil and gas development seem reluctant to acknowledge they confront the Chicago way. They carry knives into a gunfight. The militant argument for expedited LNGexport approval is an especially dull blade that betrays misunderstanding of the conflict. Indeed, the government has been too slow to permit plant construction and exports to countries not party to US free-trade agreements. But arguing for faster action as a way to weaken Russia is opportunistic, unsound, and mistargeted. Without question, Russia’s takeover of Crimea and apparent designs on other parts of Ukraine warrant concern. While effective responses are available, quickened permitting of LNG exports isn’t one of them. US liquefaction plants won’t start work in time to dissuade Russian expansionism and probably won’t export enough LNG to materially threaten Russian gas sales. More troublesome for Russia than the prospect of LNG from the US are the rapid development of unconventional gas resources in the US and the chance that similar development might occur elsewhere. The competitiveness of Russian gas already suffers from the diversion of LNG once destined for the US to other markets and from increasing US exports of coal. To the extent other countries, especially in Europe, achieve similar success producing gas from shale, pressure on Russia will increase. What’s most important is resource development, which should occur regardless of Russian behavior. But that’s the real fight. It’s a strategic struggle that can’t be won by slicing arguments into tactical pieces.

Gunning for gas Suddenly, natural gas no longer represents the “clean” hydrocarbon bridge to a future dominated by renewable energy. Policy discussions and political commentary treat it increasingly as an environmental threat because methane is a greenhouse gas. Later this year, the Bureau of Land Management will propose regulations to curb gas-flaring on federal land. The Environmental Protection Agency soon will begin studying methane emissions from oil and gas equipment in a project sure to generate new, costly controls. Why is EPA mounting this effort when its own data show methane emissions dropped 3% from all sources during 2005-12 and 14% from natural gas systems, even though gas production has increased? The answer has to be that environmental pressure groups, deeply persuasive at EPA throughout the Barack Obama presidency, have drawn their guns on natural gas. As reported here earlier, 16 such groups wrote Obama a letter on Mar. 18 protesting LNG exports and urging the president to commit to “keeping most of our nation’s fossil fuel reserves in the ground (OGJ, Mar. 31, 2014, p. 16).” They want to do more than block exports of natural gas; they want to kill gas development.

Influencing policy On that goal, the pressure groups will fail. Curtailing production would be doubly costly, foreclosing wealth generation from resource development while denying energy consumers ready supply of affordable fuel. Those costs would become politically intolerable long before the goal could be achieved. But gas producers, processors, and transporters should find no comfort in futility of the ultimate aim. In an administration loath to disappoint activists, the antiproduction agenda influences policy until costs become tangible to consumers. Why else is the international section of the Keystone XL pipeline not already under construction? The energy fight is not about pipelines or liquefaction plants. It’s about resource development, opponents of which don’t carry knives. Supporters of oil and gas production must understand the nature of the struggle.

Oil & Gas Journal | Apr . 14, 2014

The 19th Annual

20-22 January 2015 The Landmark Events Centre l Lagos l Nigeria

MANAGING WEST AFRICAĂS MAJOR PROJECTS

Delivering the premier technical forum on West African offshore exploration and production.

CALL FOR ABSTRACTS DEADLINE 13 MAY 2014

Are you interested in speaking at the 19th Annual Offshore West Africa Conference and Exhibition? We are pleased to announce that the Advisory Committee of Offshore West Africa is now accepting abstracts for the Offshore West Africa 2015 Conference. We invite you to submit an abstract and share your knowledge, experience and solutions with industry colleagues from around the world. To have your presentation considered, please submit your 150 - 400 word abstract on one or more of the technical focus areas listed by 13 May 2014.

Sponsorship and Exhibiting Opportunities Make the most of your attendance at the event. Sponsorship and exhibiting opportunities offer a

Contact your local representative today for details on how Offshore West Africa 2015 can help you showcase your products and services through a host of available exhibiting and sponsorship options.

For further information please visit: www.offshorewestafrica.com

Owned & Produced by:

Presented by:

Supporting Publication:

Follow Offshore Events on:

Europe & Middle East Jane Bailey T: +44 (0) 1992 656 651 M: +44 7983 388 367 E: janeb@pennwell.com Africa Dele Olaoye T: +234 802 223 2864 E: q-she@inbox.com The Americas Desiree Reyes T: +1 713 963 6283 E: desireer@pennwell.com South East Asia Mike Twiss T: +61 437 700 093 or +65 9018 5179 E: miket@pennwell.com

GENERAL INTEREST

Move carefully on crude exports, refiner urges House subcommittee Nick Snow Washington Editor

Tight oil formations have helped the US increase its crude production dramatically, an independent refiner conceded. But the nation should proceed cautiously as it considers authorizing more crude oil exports, he told a US House Foreign Affairs Committee subcommittee. “For decades, this country has worked to become energy secure or even energy independent, and now just recently, the expansion of production from both traditional and nontraditional sources has allowed the country to make great progress toward that goal,” said Michael Jennings, chief executive officer of Houston-based HollyFrontier Corp., on Apr. 2. Higher US crude production also has reduced refined product costs for consumers, and has mitigated price volatility or prices that historically resulted from geopolitical events, he continued in testimony to the Terrorism, Nonproliferation, and Trade Subcommittee. “Given the great progress made in the last several years and the continued uncertainty in the global marketplace, HollyFrontier does not believe that lifting the historic ban on crude oil exports is in the best interest of our citizens or our national security,” Jennings said. But other witnesses argued that increased US crude exports would provide more benefits than problems for the country. “Today, America is producing nearly 50% more oil than we did in 2008,” said Erik Milito, the American Petroleum Institute’s upstream and industry operations director. “By 2015, the International Energy Agency predicts the US will surpass Saudi Arabia and Russia to be the world’s top crude oil producer,” he said.

2013 to 7.6 million bbl in January, its latest figures indicate. Jennings noted that while EIA projects US crude production will rise to 8.5 million b/d this year from 7.5 million b/d in 2013, it would still only be half the nation’s 17 million b/d of refining capacity. Those who support lifting the ban on US crude exports argue that such a move would reflect a move toward a freer market in total global supply, he said. But national oil companies control about 85% of the world’s crude and 58% of its production, Jennings continued. “In addition to these figures, and equally important to global prices, oil exports by the Organization of Petroleum Exporting Countries constitute approximately 60% of the total petroleum traded internationally,” he said. “Though American production has increased dramatically, it has not yet matured to the point at which it could significantly impact the price of crude in the global market,” the refining executive said, adding, “Lifting the crude export ban without dramatically revising other impediments to free trade, which include the Renewable Fuels Standard, the Jones Act, and fiat-style exclusions on import-oriented infrastructure, will come at the detriment of the American consumer and American jobs.” Milito said API released a study by ICF International and EnSys Energy late last month that concluded that additional exports could help increase supplies, put downward pressure on the prices at the pump, and bring more jobs to America (see story, p. 19). “Harnessing these benefits, however, will require lawmakers and regulators to reexamine policies that were enacted long before the US transitioned from a period of energy scarcity to one of energy abundance,” he added.

Current exports US crude exports now are limited to production from state waters in Alaska’s Cook Inlet, Alaskan North Slope crude, certain US-produced crude destined for Canada, shipments to US crude territories, and California crude sold to Pacific Rim countries, according to the US Energy Information Administration. Canada currently is the only US crude export customer, with purchases climbing from 2.1 million bbl in August

Stranded crude impacts “In the long run, any oversupply of unrefined crude may create a disincentive to produce more energy here at home,” Milito said. “But if oil can flow to the global market, this study shows that then you begin to see higher global supplies, more production, and consumer-level benefits—as well as more American jobs.” Free trade also increases efficiency, he asserted. Noting

Oil & Gas Journal | Apr. 14, 2014

the US increasingly produces light, sweet crude, he said it might make sense to import a surplus of it from one region and import cheaper, heavy oil in another instead of shipping the more expensive higher grade cross-country. “This is especially true in the absence of sufficient infrastructure to efficiently transport crude to the refineries that could use it,” said Milito. “But export restrictions effectively insulate consumers from the positive benefits of efficient markets.” US Sen. Lisa Murkowski (R-Alas.), who also testified, agreed that lifting the US crude oil export ban would boost US production and improve global markets. “I believe the [US Department of Commerce] retains the authority to modernize its regulations and update its 30-year-old definition of ‘crude oil’ in such a way as to facilitate exports of condensate,” she told the subcommittee. The department has taken such steps in the past, said Murkowski, who is the Energy and Natural Resources Committee’s ranking minority member. “During the era of price and allocation controls, California started to shut in production for a variety of competitive and regulatory reasons,” she said. “Commerce authorized a temporary export program of residual fuel oil to protect this production. When an oversupply of butane—a glut—was created in the Gulf Coast, additional exports were also authorized by Commerce.” US President Barack Obama also retains authority to approve limited crude exports, which predecessors from both parties have used in the past, Murkowski added. Congress gave the president that authority to address crude exports in the national interest, she said. “At the end of the day, I am fully prepared to introduce legislation if necessary—but because legislation takes time we may not need to spend, I remain hopeful that we may have a willing partner in the administration,” Murkowski said.

‘Far more complex’ US crude exports are part of a broader North American energy picture that needs to be considered, two other witnesses suggested. “Managing America’s newfound oil abundance will require careful choices,” said Deborah Gordon, a senior associate at Carnegie Endowment for International Peace’s Energy & Climate Program. “The situation is far more complex than those who favor or oppose the export ban suggest. Given the US can already export an unlimited amount of petroleum products, a question should be how much crude oil exports should be allowed,” Gordon said. Kenneth B. Medlock III, senior director at the Center for Energy Studies at Rice University’s James A. Baker III Institute for Public Policy, meanwhile, noted, “If you pinch or constrain one market, the arbitrage opportunity will move downstream. That’s exactly what we’ve seen. We have a products market that’s internationally fungible.” Medlock said, “Beyond what might happen to gasoline

Oil & Gas Journal | Apr. 14, 2014

prices, we’d be moving more light sweet crude onto global markets and putting downward pressure on prices. It’s difficult to predict what would happen because it’s impossible to tell what OPEC and other players would do in response.” It’s also a domestic infrastructure issue, Medlock indicated. “Currently, we move more Bakken crude by rail than pipeline,” he said. If you actually had the pipeline infrastructure, the crude price would be $20 higher.” Philadelphia area refineries are configured to process Bakken and Eagle Ford crude, but would be at risk if exports were allowed, he said. Refiners also are adjusting some plants’ configurations. “BP is building the first splitter unit in Houston that can handle both light and heavy crudes,” Gordon said. “Inside every heavy oil refinery is the capability to refine light crude,” added HollyFrontier’s Jennings. “There’s a lot of investment being made in things such as condensate splitters. We have one in Cheyenne which originally processed heavy Canadian crude exclusively, but now runs 50% Bakken Light and 50% heavy.”

API report unveils economic gains from US crude exports A recent study details significant US jobs gains, reduced consumer fuel costs, and robust economic growth associated with future crude oil exports, according to Kyle Isakower, vice-president for regulatory and economic policy for the American Petroleum Institute. The new study, by ICF International and EnSys Energy, was released Mar. 31 during an API conference call. “Consumers are among the first to benefit from free trade, and crude oil is no exception,” Isakower said, adding, “Gasoline costs are tied to a global market, and this study shows that additional exports could help increase supplies, put downward pressure on the prices at the pump, and bring more jobs to America. Access to foreign customers could drive significant investment in US production, helping to strengthen our energy security. Now that the US is poised to become the world’s largest oil producer, the economic case for exports is clear.” Analysis from the API-commissioned study suggests that if current restrictions on crude exports were lifted: • US weighted average petroleum products prices could decline as much as 3.8¢/gal in 2017, dropping as much as 2.3¢/gal, on average, during 2015-35. These price decreases for gasoline, heating oil, and diesel fuel are projected to save American consumers as much as $5.8 billion/year, on average, during 2015-35. • The US economy could gain as many as 300,000 ad-

GENERAL INTEREST ditional jobs in 2020. Consumer products and services and hydrocarbon production sectors would see the largest gains. • US exports will expand and could narrow the US trade deficit by

$22.3 billion in 2020 assuming all else equal, through increased international trade of crude oil. • US gross domestic product could increase by as much as $38.1 billion in 2020, led by increases in hydrocar-

Make Smarter use of Your Energy...

VISIT BOOTH 80816

Through Storing & Applying Pressure!

VISIT BOOTH 1455

Our designs have a proven track record of more than 50 years with the most comprehensive offering of accumulators, and related accessories in the industry.

• Custom engineered Piston & Bladder Accumulators • Optimize system performance • Reduce energy cost • Increase efﬁciency • Provide smooth, more reliable operation • Special material, porting, and options available

Scott links South Atlantic OCS bill, jobs growth plan Nick Snow Washington Editor

From 10 cubic inches to 200 gallons, 100 PSI to 20,000 PSI …with Tobul, the pressure is always on!

EconoLator

tobul.com 61 Innovation Drive l Bamberg SC 29003 USA l 803.245.2400

bon production and greater consumer spending due to lower retail process for gasoline and other petroleum products. • As much as an additional $70 billion is projected to be invested in US exploration, development, and production between 2015 and 2020. • US federal, state, and local government revenues could rise by as much as $13.5 billion in 2020. • US oil production is expected to rise faster and could increase by as much as 500,000 b/d in 2020. • US refiners could process, on average, an additional 100,000 b/d due to more efficient distribution of heavy and light crudes over the 2015 to 2035 period. “This is a new era for American energy, but our energy trade policies are stuck in the 1970s,” said Isakower. “The US and China are the only major oil producers in the world that don’t export a significant amount of crude. It’s time unlock the benefits of trade for US consumers and further strengthen our position as a global energy superpower.”

US Sen. Tim Scott (R-SC) introduced legislation that would reverse US President Barack Obama’s administration’s exclusion of four South Atlantic coastal states from active offshore oil and gas resource development planning. It is the third part of Scott’s broader legislative Opportunity Agenda to create jobs and increase educational opportunities, he said on Apr. 2. “The Southern Energy Access Jobs Act will allow our nation’s energy sec-

Oil & Gas Journal | Apr. 14, 2014

“I need safety and performance that work in my world.” See us at the 2014 Offshore Technology Conference, booth #8555

Choose the global specialists in alarm and shutdown instrumentation for upstream oil and gas. UE’s products are speciﬁcally designed for your high-pressure world. Our rugged TX200 explosion-proof pressure transmitter for safety and monitoring applications features built-in temperature compensation for minimal drift, reducing nuisance trips and helping prevent catastrophic failures. Our compact, durable 12 Series hazardous

location safety switch boasts a unique dual seal between process and electrical systems, adding safety and cutting costs. If safety, performance, worldwide approvals, and unbeatable delivery work for you, call UE today!

ueonline.com

tor to innovate and grow while meeting several important needs, including creating more opportunities for science, technology, engineering, and math (STEM) education, increasing job opportunities for our nation’s veterans, and helping ease the burden of energy for families,” said Scott, who is a member of the Energy and Natural Resources Committee. Scott’s bill would create a single South Atlantic offshore energy planning area comprised of Virginia, North Carolina, South Carolina, and Georgia. It would give those states more control of federal offshore energy planning by prohibiting permanently visible drilling infrastructure within 20 miles of the shoreline, Scott said. He said it also would create a public-private partnership of industry and higher education institutions, including Historically Black Colleges and Universities, to enhance and broaden the study of geological and geophysical sciences, encourage new STEM studies of offshore energy resources, and educate the next generation of America’s offshore energy scientists. Scott’s bill also would establish a veteran’s workforce training program, using Atlantic offshore energy production revenue to fund employment training supporting US oil and gas production. It also would give each of the four states

Oil & Gas Journal | Apr. 14, 2014

LEADERS IN SAFETY, ALARM & SHUTDOWN

37.5% of federal revenue from energy production directly off its coast, and dedicate another 10% to federal deficit reduction.

Less import reliance “By unleashing the potential of America’s vast energy resources in the Atlantic, we can continue the long overdue process of reducing our national dependency on fuel produced in some of our world’s most dangerous areas,” Scott said. “Additionally, by enacting the SEA Jobs Act, we can potentially create more than 280,000 jobs and add $24 billion to the economy,” he continued. “In South Carolina alone, this legislation could create more than 35,000 new jobs.” National Ocean Industries Association Pres. Randall B. Luthi applauded the bill’s intent. “Currently, 85% of our offshore area is closed to oil and gas exploration,” he said on Apr. 3. “We should continue down the path of weaning America off of oil and gas imports with new access to the outer continental shelf,” Luthi maintained, adding, “Sen. Scott’s push to cut the through the administration’s red tape by opening the ‘South Atlantic’ to oil and gas production is a giant leap in the right direction.”

GENERAL INTEREST

Mathanex methanol plant completes move to Louisiana Heavy-lift contractor Mammoet has completed the heavy lifting, transportation, and reassembly preparation of a Methanex Corp. methanol plant, relocating it 5,450 miles from southern Chile to a 225-acre site in Geismar, La. (OGJ Online, Feb. 7. 2012). The Geismar I plant is targeted to be operational by yearend. The project, in which Mammoet worked with Jacobs Engineering, involved the lifting and moving almost 400 heavy components and modules totaling 12,145 tonnes and setting them up for reassembly. Mammoet managed subcontractors, secured the necessary permits, and maintained full oversight over the transport operation for the project’s duration. Methanex previously reported plans to relocate two of its methanol plants from Chile to Geismar,

a move that provides capital savings and a reduced project timeframe. Photo from Mammoet.

Moody’s: Global refining, marketing industry to see earnings rise this year The global refining and marketing (R&M) industry will continue to see pockets of earnings growth over the next year, but flat conditions overall, with product demand expected to increase modestly this year by 1.2 million b/d, according to a recent report from Moody’s. That demand increase will be roughly in line with net global capacity additions, Moody’s said. The outlook reflects Moody’s expectations for the fundamental business conditions in the industry over the next 12-18 months, during which time it expects the R&M sector’s earnings before interest, taxes, depreciation, and amortization (EBITDA) to remain volatile but to rise by about 8% through mid to late-2015. North American companies, particularly Gulf Coast refiners, have the most favorable positions, Moody’s said, but capacity additions in China and elsewhere in the world will water down earnings growth for the overall sector. North American refiners will retain their advantage over competitors elsewhere, with cheaper feedstock and natural gas prices, and lower costs for renewable identification number contributing to 10% or higher EBITDA growth through mid to late-2015. Shifting crude discount advantages to the Gulf Coast from the Midcontinent, plus strong export opportunities to Latin America and Europe, give an edge to refiners with big Gulf Coast operations, including Phillips 66, Marathon Petroleum Corp., and Valero Energy Corp., Moody’s said. These three refiners also will continue expanding their logistics and midstream operations. Companies in the Midcontinent, such as HollyFrontier Corp. and CVR Refining, lack this export advantage. Refiners with a big presence in

California, including Valero Corp. and Tesoro Corp., face a crucial year in 2015, when environmental rules become stricter (OGJ Online, Sept. 19, 2013). China will be the biggest source of new refining capacity worldwide in 2014-15, and significant Middle East capacity additions will likely go into service in 2015 but are less predictable. Moody’s expects 2% EBITDA growth this year for the Asian R&M sector overall. In China, the world’s largest source of demand growth for refined products, capacity additions of more than 1.2 million b/d through 2015 will outpace demand growth for refined products. Moody’s anticipates about 1 million b/d of additional capacity for the Middle East, but notes that accurately projecting projects in certain countries can be difficult, since a national oil company’s plans are not always visible. India’s demand for refined products will increase at a farslower pace of 1% through mid to late-2015, due to declining gross domestic product growth and government price increases on both gasoline and middle distillates. Latin American growth for refined products will remain strong through mid to late-2015, with few capacity additions, but the region’s reliance on costly refined product imports will hold back EBITDA growth to no more than 2%. Most of the region’s big projects for boosting refining capacity have either been delayed or called off. Moody’s doesn’t expect Mexico’s Petroleos Mexicanos (Pemex) or Brazil’s Petroleo Brasileiro SA (Petrobras) to pursue additional new refineries, but Colombia’s Ecopetrol SA’s modest capacity expansions will come onstream in 2015. Growth for European refining operations will stay roughly flat through mid to late-2015. Economic improvements

Oil & Gas Journal | Apr. 14, 2014

TO KEEP ALL THIS GOING, YOUR FLEET CAN’T BE AT A STANDSTILL.

The success of your energy operations depends on getting the right vehicles—on time, on budget, and on your terms. At Merchants, we have a wide selection of vehicles, and offer flexible financing options for both leases and project fleets. You can count on us to to keep your fleet running smoothly.

in Germany, France, and elsewhere in the Euro-zone will modestly lift the region’s demand for refined products, but Europe will need meaningful capacity rationalization to prevent margin erosion in 2015 and beyond. Europe’s older, less-efficient, lower-complexity refineries, which rely on high-cost feedstocks, cannot compete easily with the new, high-complexity facilities of the Middle East. A number of integrated oil companies intend to reduce their European footprints, but political sensitivities in Europe can also stall or prevent widespread capacity curtailments (OGJ, Dec. 2, 2013, p. 34). Rather than shut down capacity, operators such as Murphy Oil Corp. often try to sell off unwanted capacity, even as they continue to generate losses. Italy’s Eni SPA plans to cut its refining capacity by 22% by 2017, thereby reducing its total capacity by one-third since 2012. Moody’s notes that it would change its outlook to negative if net refining capacity additions worldwide begin to outpace growth in demand for refined products, particularly with China’s growth slowing through 2015 alongside further capacity additions in China and the Middle East. Conversely, Moody’s would change its outlook to positive if worldwide demand overwhelmed capacity additions, and if the US and Chinese economies began surging simultaneously.

Oil & Gas Journal | Apr. 14, 2014

GENERAL INTEREST

1-866-6LEASES merchantsﬂeetmanagement.com

EIA: Ethanol spot prices rise on rail congestion, cold weather Spot prices for ethanol have increased steadily since early February, driven by logistical problems and harsh weather conditions, according to the US Energy Information Administration. By late March, New York Harbor (NYH) spot ethanol prices exceeded prices for reformulated gasoline blendstock for oxygen blending (RBOB) by more than $1/gal. Ethanol spot prices in Chicago and Gulf Coast markets also rose above NYH RBOB prices. The premium of NYH over Chicago spot ethanol prices also widened to $1/gal in early March from 25¢/gal in January, reflecting logistical constraints in the Midwest ethanol production centers, mainly involving railroads on which 70% of ethanol is shipped. “Railcar dwell time, the time that loaded railcars spend in a terminal awaiting movement at Burlington Northern Santa Fe Corp.’s Galesburg, Ill., terminal, which handles many ethanol cars from Iowa, nearly doubled in early 2014 to reach a peak of 60 hr in February and remain above year-

GENERAL INTEREST

DO NOT CLOSE

this magazine until you’ve seen it all! Published every month in print and online, check out the OGJ Market Connection for the latest in product and service offerings! • EMPLOYMENT OPPORTUNITIES

Want to start a career in the oilfield Use Market Connection to find available jobs to get your foot in the door.

• EQUIPMENT

Looking to purchase equipment This section connects buyers and sellers with generators, tanks, gauging systems, refning equipment, etc. You can fnd just about anything here.

• PRODUCTS

View the latest and greatest new products and services and expand your knowledge of what’s available in the marketplace!

• REAL ESTATE / LEASES

Be the first to find out about land leases up for bid and potential partnerships. The movers and shakers are looking for a partner like you, so fnd out about the latest opportunities with Market Connection!

THINK YOU’VE SEEN IT ALL? Turn to the back of this issue to be hired, acquired, buy or sell in the Market Connection. Also be sure to visit us online for weekly updates www.ogj.com/market-connection

ago levels,” EIA said. The agency also noted that the average speed of manifest trains (trains running multiple products), which are often used to deliver ethanol to gasoline blending terminals that are not equipped to handle unit trains, also slowed by 23% over the past 12 months. During mid-February to mid-March, ethanol stocks were drawn down nationwide by nearly 2 million bbl, partially recovering to 15.9 million bbl on Mar. 28 but still more than 4 million bbl below typical March levels, which averaged more than 20 million bbl from 2011 through 2013. East Coast inventories were especially hard hit, and on Mar. 14 reached 4.5 million bbl, the lowest level since EIA began recording data in June 2010. However, ethanol futures prices suggest that the recent price increase is anticipated by the market to be short-lived as rail system congestion improves and ethanol producers respond to the strong incentive that higher ethanol prices provide.

USCG: ‘Chain of errors’ led to Shell drilling unit running aground Michael T. Slocum Upstream Technology Editor

A US Coast Guard (USCG) investigation has found that a “chain of errors” led to the Royal Dutch Shell PLC conical drilling unit, the Kulluk, running aground on Sitkalidak Island, Alas., in December 2012 (OGJ Online, Jan. 2, 2013). The primary cause was attempting a winter voyage in the Arctic with ineffective risk assessment and management, according to USCG’s report, which was released Apr. 2. The Kulluk broke free while being towed in heavy seas by Edison Chouest Offshore’s vessel, the Aiviq. There was no oil spill associated with the incident. The drilling unit was later salvaged and towed to an Asian dry dock for inspection and repairs. (OGJ Online, Feb. 13, 2013).

Complex series of events USCG’s investigation report describes a “complex series of events” that included inclement weather, seas of 20 ft, an inadequate tow plan, the Kulluk’s conical hull (see figure, OGJ, Oct. 1, 2007, p. 40), faulty tow shackles, engine failure, and human error. “The most significant factor was the decision to attempt the voyage during the winter in the unique and challenging environment of Alaska,” said USCG Rear Adm. T.P. Ostebo. “Shell and Edison Chouest Offshore’s ineffective risk management and application of towing measures for the voyage also contributed to the grounding.”

Oil & Gas Journal | Apr. 14, 2014

GENERAL INTEREST During the USCG’s 9-day investigative hearing in 2013, Shell’s Alaska operations manager testified that the Kulluk was moved due to “financial considerations,” contradicting previous claims that fair weather had prompted the move. If Shell had not moved the drilling unit, it would have been liable for $6 million in taxes.

The Shell Kukkuk conical drilling platform. Photo from OGJ archives.

USCG recommendations The USCG offered nine recommendations to mitigate the possibility of a similar incident. Most of these are aimed at towing vessels, and include stricter standards and certification policies, better training, and the inclusion of the Safety Management System on all vessels. For Shell, or any company intending to operate in the Arctic, the report offers recommendations, as well. It calls for the inclusion of tow plans in any policies that address marine operations, and the establishment of additional criteria for operations in areas of historical heavy weather. Specifically, the report tasks Shell with reconsidering its criteria for tow routing, assessing the suitability of its tow vessels, creating contingency plans including harbors of safe

9th Pipeline Technology Conference 12-14 May 2014, Estrel, Berlin, Germany

Ex Eu hib ro iti pe’s on on Lea Ne din w gC Pi on pe fe lin re e T nc ec e a hn nd olo gie s

More Information: www.pipeline-conference.com

Euro Institute for Information and Technology Transfer

Oil & Gas Journal | Apr. 14, 2014

WATCHING GOVERNMENT NICK

refuge, and employing towing equipment that is sized and configured for anticipated environmental conditions. An “acceptable” third-party will ensure Shell meets these criteria.

Washington Editor | Blog at www.ogj.com

Mixed reactions

SNOW

Greenland in transition Greenland expects its oil, gas, and minerals to be crucial as it continues its gradual transition to independence, its first US representative said on Apr. 3. “We have begun developing our oil and gas,” noted Inuuteq Holm Olsen, who began a 5-year assignment at the Danish Embassy in Washington 2 months ago. The US Geological Survey estimates there are billions of barrels of oil equivalent offshore Greenland, although there have been no commercial finds, Olsen said during a presentation at GWU’s Institute for European, Russian & Eurasian Studies. “Since 2002, 25 exploratory wells have been drilled off Greenland, mostly off the West Coast,” Olsen said. “The four latest licenses which were awarded to consortiums in December were in waters to the east, however.” The country began to take control of its domestic affairs soon after it received home rule in 1979. A 2009 act redefined its relationship to Denmark, and one of Greenland’s first steps was to take over the rights and responsibilities for its oil, gas, and minerals, Olsen said. “It’s critical for Greenland to develop its oil, gas, and minerals to become economically self-sufficient,” he said. “It’s also very much a frontier area—and very environmentally challenging. We can enter into international agreements that are geographically limited to Greenland and don’t involve Denmark.” ExxonMobil Corp., Royal Dutch Shell PLC, Chevron Corp., BP PLC,

and other multinationals have been partners in consortiums buying offshore licenses there. “Countries like China and South Korea are taking much more active roles in countries like Greenland,” Olsen said. “They’re new actors who were not present 5-10 years ago.”

Relations with US Greenland could be considered a microcosm for the Arctic in terms of challenges as well as opportunities, Olsen noted. He said the US has been a relatively inactive Arctic Council member until recently when Sec. of State John F. Kerry appointed its first special Arctic representative a year before the US is scheduled to become its chairman. Olsen said the two countries have had a close relationship since World War II, and several US scientists are doing research there. “We’re studying the movement of ice and the problems it can create for oil and gas operations,” he said. “We also want to avoid environmental disasters. Our aim is to have a performance-based regulatory regime with the highest standards possible. It’s an evolving process, with constantly changing best practices and standards.” Greenland is looking closely at Norway’s oil and gas system as a model, particularly its investment fund, but also intends not to ignore social issues stemming from development, Olsen said. “The last thing we want to do is become a spectator,” he emphasized.

Reactions to the report in Washington, DC, were mixed. Sen. Lisa Murkowski (R-Alas.) commended the USCG’s investigation and its recommendations to improve the safety of maritime activities as exploration in the Arctic moves forward. “I believe that we can safely develop our energy resources in the Arctic, but it requires that we adhere to worldclass safety standards,” she said. However, Sen. Ed Markey (D-Mass.), a member of the Senate Commerce and Environment Committee, believes Shell’s disregard for safety should serve as a warning, particularly if it was motivated for financial reasons. “This kind of behavior should raise major red flags for any future Arctic drilling plans,” he said. Cindy Shogan, Alaskan Wilderness League executive director, claims the report demonstrates that no company is ready to drill in the harsh, unpredictable conditions of Alaska. Her organization has called for US President Barack Obama to place a moratorium on Arctic Ocean drilling.

Shell’s Arctic ‘pause’ In February 2013, Shell announced it would “pause” its exploration drilling activity for the remainder of the year in Alaska’s Beaufort and Chukchi seas to prepare equipment and make plans for how and when to resume activity in the Arctic (OGJ Online, Feb. 27, 2013). A request sent to Shell for comment on the USCG report or its future plans in Alaska went unanswered. In a statement issued last year, Shell’s Marvin Odum, director, upstream Americas, noted that the company remained committed to building an Arctic exploration program and continued to believe that a measured and responsible pace, especially in the exploration phase, fits best in the Arctic.

Oil & Gas Journal | Apr. 14, 2014

CONFERENCE & EXHIBITION 26 - 28 JANUARY 2015 QATAR NATIONAL CONVENTION CENTRE DOHA, QATAR Held under the Patronage of H.E. Dr Mohd Bin Saleh Al-Sada, Minister of Energy & Industry, State of Qatar Organised by:

Hosted by:

OPTIMIZING PERFORMANCE CALL FOR ABSTRACTS Deadline 1 May 2014 Offshore Middle East is the premier event dedicated to the offshore exploration and production industries in the Gulf region. Are you interested in speaking at the 5th Annual Offshore Middle East Conference and Exhibition? Owned and produced by:

Presented by:

Supporting Publications:

We are pleased to announce that the Advisory Committee of Offshore Middle East is now accepting abstracts for the 2015 conference. Over 1600 attendees from 48 countries attended the event in 2013 providing excellent networking opportunities and a forum for sharing ideas and experiences. We invite you to submit an abstract and share your knowledge, experience and ideas with technical and strategic decision-makers and strategists by 1 May 2014.

Sponsorship and Exhibiting Opportunities Make the most of your attendance at the event. Sponsorship and exhibiting opportunities offer a great way to enhance the profle and awareness of your company. Contact your local representative today for details on how Offshore Middle East 2015 can help you showcase your products and services through a host of available exhibiting and sponsorship options.

For more information visit: www.offshoremiddleeast.com

GENERAL INTEREST

Anadarko settles legacy claims against KerrMcGee for $5.15 billion Nick Snow Washington Editor

Anadarko Petroleum Corp. and subsidiaries it acquired when it bought Kerr-McGee Corp. in 2006 agreed to pay $5.15 billion to settle fraudulent conveyance allegations brought by the US government and co-plaintiff Anadarko Litigation Trust in the bankruptcy of Tronox Inc. A federal bankruptcy court found in December 2013 that Kerr-McGee conveyed its oil and gas assets to a new entity with the same name and renamed the remaining holdings Tronox in an attempt to evade debts, including its environmental liability to clean up contaminated sites around the country, US Department of Justice and Environmental Protection Agency officials jointly announced on Apr. 3. They reported that of the settlement amount Anadarko

has agreed to pay, $4.4 billion, will be used for environmental cleanups and to settle environmental claims. It is the largest environmental enforcement recovery in DOJ history, the federal department said. “This settlement agreement with the Litigation Trust and the US government eliminates the uncertainty this dispute has created, and the proceeds will fund the remediation and cleanup of the legacy environmental liabilities and tort claims,” Anadarko Chief Executive Officer Al Walker separately said.

Evasive move In his Dec. 12, 2013, opinion, Judge Allan J. Gropper of US Bankruptcy Court for New York’s Southern District agreed with the government and litigation trust’s charges that KerrMcGee transferred out and spun off its oil and gas assets in 2005 to a newly formed entity with the same name to evade creditors and environmental liabilities. Although it had been founded in 1929 as an oil and gas exploration and production operation, Kerr-McGee diversified into refining and marketing, uranium mining and processing, wood treatment, and manufacturing and use of chemicals including creosote and ammonium perchlorate. By the early 2000s, the Oklahoma City-based independent

Expand Your Knowledge in Other Industry Areas

Our nontechnical series is tailored for energy industry professionals, especially those who lack technical training in an area, providing a basic understanding of the industry in a simple, easy-to-understand language. Whether you need quick information for a new assignment or just want to expand your knowledge in other areas of the industry, we have your nontechnical needs covered. Best of all, our books and videos ft easily into your budget! Many Ma any ny ttop topics opic icss to c ic cho choose hoos ho h oos ose os e from fr from, om, iin incl including: clud cl udin ud ing: in ng: • Basic petroleum • Drilling • Financial management • Geology & exploration • Natural gas • Petrochemicals • Petroleum production

• Petroleum refning • Pipelines • Well logging

Order Today! Vi it our website for complete listings! Visit www.PennWellBooks.com w www.PennWell P W ll / 1-800-752-9764 (toll free)

Oil & Gas Journal | Apr. 14, 2014

GENERAL INTEREST had discontinued all but its chemical and E&P operations but still was responsible for environmental, tort, workers’ compensation, and retiree and employee benefit liabilities related to the other businesses. In 2001, Kerr-McGee began an internal reorganization, Project Focus, to separate its oil and gas business from its chemical business and legacy liabilities, according to Cropper. When it was unable to sell the chemical operations, the firm decided to move it into a new entity, Tronox, which also assumed the legacy liabilities, in 2005. It was spun off a year later from KerrMcGee, which Anadarko bought for $18 billion soon after. Burdened by environmental and other legacy liabilities, Tronox sought Chapter 11 bankruptcy protection in New York’s Southern District in January 2009 and sued the defendants. It emerged from bankruptcy on Feb. 14, 2011, when the court confirmed its reorganization plan that included a settlement with various environmental regulators for $270 million and 88% of any net proceeds from the fraudulent conveyance litigation. At the same time, Tronox established a litigation trust to pursue the action after its emergence from bankruptcy and to distribute any recoveries from the litigation to the trust’s environmental and tort beneficiaries. The US government intervened in the case under the Federal Debt Collection Procedures Act to recover response costs for environmental cleanups at numerous sites around the country.

Settlement’s terms

Under the Apr. 3 settlement, Anadarko and the subsidiaries will pay the settlement amount to the trust. It said that under a 2011 agreement between the US government; certain state, local, and tribal governments; and the bankruptcy estate, the trust will distribute 88% of the litigation’s net proceeds to the US, certain state governments, the Navajo Nation, and environmental trusts created to clean

Oil & Gas Journal | Apr . 14, 2014

up the contaminated sites. The 2011 agreement specifies percentages of the funding that will be made available to each site. DOJ said as a result of these agreements, some of the key recoveries for environmental claims and for site cleanups will include: • $1.1 billion to a trust to clean up 24 contaminated sites, including the Kerr-McGee Superfund Site in Columbus, Miss. • $1.1 billion to a trust to clean up a former chemical manufacturing site in Nevada that has led to contamination of Lake Mead. • $985 million to EPA for clean-up of 50 abandoned uranium mines in and around the Navajo Nation, where radioactive waste remains from KerrMcGee mining operations. The Navajo tribe also will receive more than $43 million to address radioactive waste left at the former Kerr-McGee uranium mill in Shiprock, NM. • $224 million to EPA for clean-up of thorium contamination at the Welsbach Superfund Site in Gloucester, NJ. • $217 million to the federal Superfund in repayment of costs previously incurred by EPA’s clean-up of the Federal Creosote Superfund Site in Manville, NJ. Anadarko said in exchange for the payment, the litigation trust and KerrMcGee have agreed to mutually release claims against each other, and the US government and Kerr-McGee have provided mutual covenants not to sue. The US government also will provide contribution protection from thirdparty claims seeking reimbursement from Kerr-McGee at more than 4,000 sites covered by the covenants. The claims asserted in the Tronox adversary proceeding will be dismissed with prejudice after the settlement payment is made. It expects the process to be completed before the end of this year’s third quarter, and believes its significant cash position and available $5 billion credit facility provide flexibility in funding the settlement payment.

THE EDITOR’S PERSPECTIVE (From the Subscribers Only area of www.ogj.com)

Exchange in Senate committee displays energy misconception by Bob Tippee, Editor Misconception common in US government decision-making about energy received full exposure Apr. 3 in the Senate Finance Committee. During work on a bill to extend expiring tax measures, Pat Toomey (R-Pa.) offered an amendment to remove incentives for alternative energy. “I don’t think we should force taxpayers to subsidize inefficient, uncompetitive forms of energy,” Toomey said, according to The Hill news service. “We are simply picking winners and losers.” Debbie Stabenow (D-Mich.) countered, “I would argue that Congress has picked a winner in the oil industry, and they have won.” Charles Grassley (R-Iowa) added, “The 100-year-old oil and gas industry continues to benefit from tax preferences that benefit only their industry.” Stabenow’s statement implies oil and gas dominate energy use because Congress willed them to do so. This kind of thinking leads to the popular but economically deadly assumption that energy is chiefly a matter of political choice. In fact, oil and gas, along with coal, dominate energy use because they possess overwhelming advantages of form related to energy density. Congress didn’t convey those advantages. Nature did. Grassley’s elaboration about how Congress supposedly favored oil and gas is as incorrect as Stabenow’s implication. Yes, the industry uses tax mechanisms unavailable to most other industries. Those mechanisms address resource depletion, dry holes, spending oriented to intangible goods and services, and other economic complications most other industries don’t encounter. They mainly accommodate the tax regime to industry idiosyncrasies. They don’t promote oil and gas in energy markets the way the generous tax credits supported by Stabenow and Grassley do wind energy and biofuels. The Finance Committee rejected Toomey’s amendment and passed the full measure to the Senate. Members of the House have hinted they won’t support a tax-extender bill full of credits for renewable energy. Whatever the outcome of that conflict, energy decisions would improve if decision-makers acknowledged limits on the influence of politics in energy choices. Eventually, even politicians must yield to physical and economic laws. ONLINE APR. 4, 2014 | bobt@ogjonline.com 29

CUSTOM REPRINTS

An Indispensable Work on Riser Behavior

• des inclu ion pan com

353 Pages/Hardcover/2007 ISBN13 : 978-1-59370-070-6 $129.00 US

M! D-R O

Charles Sparks, one of the foremost authorities on riser mechanics, has written the deﬁnitive work on riser behavior. This book is a must-own for anyone who deals with riser technology, from university students to engineers with extensive experience. FEATURES and BENEFITS: Straightforward explanations of the principal parameters that inﬂuence riser behavior. • Clear procedures for analyzing highly complicated problems. • Means of making rapid “ballpark” analyses before and after running sophisticated FE riser programs.

REPRINTS ARE IDEAL FOR: ■ New Product Announcements ■ Sales Aid For Your Field Force ■ PR Materials & Media Kits ■ Direct Mail Enclosures ■ Customer & Prospect Presentations ■ Trade Shows/Promotional Events ■ Conferences & Speaking Engagements ■ Recruitment & Training Packages

•

ORDER YOUR COPY TODAY! • WWW.PENNWELLBOOKS.COM •

For additional information, please contact Rhonda Brown at Foster Printing Service, the official reprint provider for Oil & Gas Journal.

Call Rhonda at 866.879.9144 ext. 194 or pennwellreprints@ fosterprinting.com

ADVERTISERS INDEX

Find the answers to your subsea pipeline questions in one book!

COMPANY NAME

PAGE

EITPE

http://www.eitep.de/de/

Flexsteel Pipeline Technologies

www.flexsteelpipe.com

Market Connection

Industry veterans Andrew Palmer and Roger King, two of the world’s most respected authorities in subsea pipeline engineering, have updated their deﬁnitive reference book.

NOW BLE!

AVAILA

645 Pages/Hardcover/2008 ISBN 978-1-59370-133-8 $179.00 US

Order your copy today! 30

Merchants Fleet Management

Merichem Company Digital Edition Cover www.merichem.com

• Covers the entire spectrum of subjects about pipelines that are laid underwater—pre-design, design, construction, installation, inspection, maintenance, and repair.

www.nov.com

National Oilwell Varco Pennwell Corporation

2 6, 15, 17, 27

www.webaddress.com

PennWell Books

28, 30

www.pennwellbooks.com

• Contains valuable information from the authors’ respected short course on subsea pipeline engineering.

Reprints

• Offers an in-depth examination of marine pipeline construction.

Tobul Accumulator Inc

• Instructs on effective techniques for laying pipeline at great depths.

United Electric Controls

www.PennWellBooks.com

merchantsfleetmanagement.com

The second edition of Subsea Pipeline Engineering:

• Devotes attention to the important specialized subjects of hydraulics, strength, stability, fracture, upheaval, lateral buckling and decommissioning.

http://www.ogj.com/market-connection.html

pennwellreprints@fosterprinting.com

www.tobul.com

www.ueonline.com This index is provided as a service. The publisher does not assume any liability for errors or omission.

Oil & Gas Journal | Apr. 14, 2014

STATISTICS IMPORTS OF CRUDE AND PRODUCTS — Districts 1-4 — — District 5 — ———— Total US ———— 3-28 3-21 3-28 3-21 3-28 3-21 3-29* 2014 2014 2014 2014 2014 2014 2013 ––––––––––––––––––––––––— 1,000 b/d ––––––––––––––––––––––––— Total motor gasoline ............. Mo. gas. blending comp. ..... Distillate............................... Residual .............................. Jet fuel-kerosine .................. Propane-propylene .............. Other ...................................

523 454 222 183 106 85 2

628 606 226 91 96 107 77

10 8 18 19 1 (13) 51

0 0 2 19 0 (49) 84

533 462 240 202 107 72 53

628 606 228 110 96 58 161

595 527 83 173 0 89 385

Total products ......................

1,575

1,831

1,669

1,887

1,852

Total crude ...........................

5,687

6,476

1,144

1,141

6,831

7,617

7,929

Total imports ........................

7,262

8,307

1,238

1,197

8,500

9,504

9,781

*Revised. Source: US Energy Information Administration Data available at PennEnergy Research Center.

IHS PURVIN & GERTZ LNG NETBACK MATRIX—APR. 4, 2014 Receiving terminal

–––––––––––––––––––––––––––– Liquefaction plant –––––––––––––––––––––––––––––––– Algeria Malaysia Nigeria Austr. NW Shelf Qatar Trinidad –––––––––––––––––––––––––––––––– $/MMbtu ––––––––––––––––––––––––––––––––––––

Barcelona Everett Isle of Grain Lake Charles Sodegaura Zeebrugge

11.70 4.84 6.97 1.86 11.09 10.06

9.27 0.85 4.51 (0.27) 14.08 7.44

10.68 2.71 6.19 1.58 11.20 9.20

9.15 0.93 4.41 (0.05) 13.58 7.31

10.02 1.47 5.19 0.22 12.48 8.19

10.58 6.93 6.23 2.56 10.11 9.29

Additional analysis of market trends is available through OGJ Online, Oil & Gas Journal’s electronic information source, at http://www.ogj.com.

OGJ CRACK SPREAD 4–4–14* 4–5–13* Change Change, ———–—$/bbl ——–—— %

SPOT PRICES Product value Brent crude Crack spread

116.22 118.56 105.51 107.18 10.71 11.38

FUTURES MARKET PRICES One month Product value 121.75 125.19 Light sweet crude 100.47 94.93 Crack spread 21.28 30.26 Six month Product value 115.60 119.29 Light sweet crude 96.16 95.00 Crack spread 19.44 24.29

(2.35) (1.67) (0.67)

(2.0) (1.6) (5.9)

(3.44)

(2.7)

5.54 5.8 (8.98) (29.7) (3.69)

(3.1)

1.16 1.2 (4.85) (20.0)

*Average for week ending. Source: Oil & Gas Journal Data available at PennEnergy Research Center.

Defnitions, see OGJ Apr. 9, 2007, p. 57. Source: IHS Purvin & Gertz Data available at PennEnergy Research Center.

CRUDE AND PRODUCT STOCKS —–– Motor gasoline —–– Blending Jet fuel, ————— Fuel oils ————— PropaneCrude oil Total comp. kerosine Distillate Residual propylene ———————————————————————————— 1,000 bbl —————————————————————————

District PADD 1 ..................................... PADD 2 ..................................... PADD 3 ..................................... PADD 4 ..................................... PADD 5 .....................................

10,576 96,810 198,975 21,881 51,849

55,119 47,350 76,807 6,599 29,750

48,451 37,588 64,753 4,030 26,630

7,832 6,347 11,167 689 9,585

30,561 27,421 37,555 3,890 13,527

9,484 1,637 20,711 179 4,476

1,719 7,913 15,979 1 957 —

Mar. 28, 2014 .......................... Mar. 21, 2014 ........................... Mar. 29, 20132 ..........................

380,091 382,471 388,625

215,625 217,198 220,664

181,452 182,132 169,071

35,620 36,546 39,442

112,954 112,400 112,986

36,487 37,290 35,816

26,568 25,657 39,738

1 Includes PADD 5. 2Revised. Source: US Energy Information Administration Data available at PennEnergy Research Center.

REFINERY REPORT—MAR. 28, 2014 REFINERY –––––– OPERATIONS –––––– Gross Crude oil inputs inputs ––––––– 1,000 b/d ––––––––

District

–––––––––––––––––––––––––––– REFINERY OUTPUT ––––––––––––––––––––––––––– Total motor Jet fuel, ––––––– Fuel oils –––––––– Propanegasoline kerosine Distillate Residual propylene –––––––––––––––––––––––––––––––– 1,000 b/d –––––––––––––––––––––––––––––––

PADD 1 .............................................. PADD 2 .............................................. PADD 3 .............................................. PADD 4 .............................................. PADD 5 ..............................................

958 3,333 8,158 523 2,650

952 3,327 8,054 520 2,462

2,865 2,519 2,155 352 1,635

67 216 766 24 415

325 961 2,683 177 642

62 46 204 13 133

122 270 867 1 153 —

Mar. 28, 2014 ..................................... Mar. 21, 2014 ..................................... Mar. 29, 2013 .....................................

15,622 15,323 15,273

15,315 15,092 15,007

9,526 9,340 8,671

1,488 1,451 1,566

4,788 4,734 4,324

458 439 604

1,412 1,395 1,311

17,818 Operable capacity 1

87.7 utilization rate

Includes PADD 5. Revised. Source: US Energy Information Administration Data available at PennEnergy Research Center.

Oil & Gas Journal | Apr. 14, 2014

STATISTICS OGJ GASOLINE PRICES

OGJ PRODUCTION REPORT

BAKER HUGHES RIG COUNT

Price Pump Pump ex tax price* price 4-2-14 4-2-14 4-3-13 ————— ¢/gal ————— (Approx. prices for self-service unleaded gasoline) Atlanta .......................... 301.1 348.0 Baltimore ...................... 307.0 352.4 Boston ........................... 307.9 352.8 Buffalo .......................... 287.1 355.0 Miami ............................ 315.1 369.5 Newark .......................... 310.5 343.4 New York........................ 293.2 361.2 Norfolk........................... 318.0 353.7 Philadelphia .................. 301.8 362.0 Pittsburgh ..................... 298.2 358.4 Wash., DC...................... 317.8 359.7 PAD I avg .................. 305.2 356.0

371.0 361.0 352.7 377.6 372.7 332.7 389.4 347.7 384.3 366.7 368.6 365.8

Chicago ......................... Cleveland ...................... Des Moines .................... Detroit ........................... Indianapolis .................. Kansas City ................... Louisville ....................... Memphis ....................... Milwaukee ..................... Minn.-St. Paul ............... Oklahoma City ............... Omaha .......................... St. Louis ........................ Tulsa ............................. Wichita .......................... PAD II avg .................

343.2 308.5 309.9 301.0 308.2 314.5 316.2 330.5 312.9 313.3 298.0 299.6 304.6 296.0 312.0 311.2

400.7 354.9 350.3 358.5 365.3 350.2 365.4 370.3 364.2 360.3 333.4 345.3 340.3 331.4 355.4 356.4

415.1 344.4 354.4 371.0 361.0 334.4 360.7 347.1 362.7 365.0 336.1 341.0 339.0 334.3 352.3 354.6

Albuquerque .................. Birmingham .................. Dallas-Fort Worth .......... Houston ......................... Little Rock ..................... New Orleans .................. San Antonio ................... PAD III avg ................

299.9 291.8 292.4 296.2 287.0 295.8 297.8 294.4

337.2 331.2 330.8 334.6 327.2 334.2 336.2 333.1

337.7 350.4 359.3 352.6 351.0 357.0 349.0 351.0

Cheyenne....................... Denver ........................... Salt Lake City ................ PAD IV avg ................

293.3 318.0 299.8 303.7

335.7 358.4 342.7 345.6

339.4 358.9 348.4 348.9

Los Angeles ................... Phoenix.......................... Portland ........................ San Diego ...................... San Francisco................ Seattle........................... PAD V avg ................. Week’s avg. .................. Mar. avg.. ...................... Feb. avg. ....................... 2014 to date ................. 2013 to date .................

335.9 330.5 323.0 307.9 335.4 316.5 324.9 308.3 302.1 286.1 290.8 306.0

406.7 367.9 372.5 378.8 406.3 372.4 384.1 355.6 349.4 333.4 338.0 352.2

429.2 364.2 367.2 424.2 422.2 384.2 398.6 362.8 370.7 361.5 — —

4-4-14

4-5-13

Alabama............................................ Alaska ............................................... Arkansas ........................................... California .......................................... Land................................................ Offshore .......................................... Colorado ............................................ Florida ............................................... Illinois ............................................... Indiana.............................................. Kansas .............................................. Kentucky............................................ Louisiana .......................................... N. Land ........................................... S. Inland waters .............................. S. Land............................................ Offshore .......................................... Maryland ........................................... Michigan ........................................... Mississippi ........................................ Montana ............................................ Nebraska ........................................... New Mexico........................................ New York............................................ North Dakota ..................................... Ohio................................................... Oklahoma .......................................... Pennsylvania ..................................... South Dakota..................................... Texas ................................................. Offshore .......................................... Inland waters .................................. Dist. 1 ............................................. Dist. 2 ............................................. Dist. 3 ............................................. Dist. 4 ............................................. Dist. 5 ............................................. Dist. 6 ............................................. Dist. 7B ........................................... Dist. 7C ........................................... Dist. 8 ............................................. Dist. 8A ........................................... Dist. 9 ............................................. Dist. 10 ........................................... Utah .................................................. West Virginia ..................................... Wyoming............................................ Others—ID-1; NV-2 ..........................

4 11 12 38 37 1 62 1 3 0 27 3 99 25 17 15 42 0 0 14 7 2 90 0 178 38 193 54 0 877 3 0 130 80 54 39 8 36 8 86 314 35 18 66 27 26 49 3

6 9 15 39 37 2 59 1 1 2 25 2 106 23 25 13 45 0 1 10 10 2 81 0 174 30 179 63 2 825 1 0 135 81 43 35 15 26 14 78 269 42 22 64 28 20 44 4

Total US ........................................ Total Canada ................................

1,818 235

1,738 206

Grand total ................................... US oil rigs.......................................... US gas rigs........................................ Total US offshore ............................... Total US cum. avg. YTD .....................

2,053 1,498 316 47 1,782

1,944 1,357 375 48 1,756

1 2 4-4-14 4-5-13 –—— 1,000 b/d —–—

(Crude oil and lease condensate) Alabama ................................. 26 Alaska .................................... 535 California ............................... 598 Colorado ................................. 186 Florida .................................... 6 Illinois .................................... 24 Kansas ................................... 130 Louisiana ............................... 1,204 Michigan ................................ 21 Mississippi ............................. 63 Montana ................................. 77 New Mexico............................. 289 North Dakota .......................... 989 Oklahoma ............................... 341 Texas ...................................... 3,340 Utah ....................................... 105 Wyoming ................................. 179 All others ................................ 79 Total .................................. 8,192 1 OGJ estimate. 2Revised. Source: Oil & Gas Journal. Data available at PennEnergy Research Center.

US CRUDE PRICES Alaska-North Slope 27° ......................................... Light Louisiana Sweet ........................................... California-Midway Sunset 13° .............................. California Buena Vista Hills 26° ........................... Wyoming Sweet ..................................................... East Texas Sweet ................................................... West Texas Sour 34° .............................................. West Texas Intermediate........................................ Oklahoma Sweet.................................................... Texas Upper Gulf Coast ......................................... Michigan Sour ....................................................... Kansas Common ................................................... North Dakota Sweet ...............................................

Research Center.

WORLD CRUDE PRICES OPEC reference basket

Rotary rigs from spudding in to total depth. Defnitions, see OGJ Sept. 18, 2006, p. 46. Source: Baker Hughes Inc. Data available at PennEnergy Research Center.

IHS PETRODATA RIG COUNT 3-28-14 ¢/gal

Spot market product prices No. 2 Distillate Motor gasoline Low sulfur diesel fuel (Conventional-regular) New York Harbor ......... 270.10 New York Harbor ......... Gulf Coast .................. 273.60 Gulf Coast .................. Los Angeles ................ Motor gasoline Kerosine jet fuel (RBOB-regular) New York Harbor ......... 292.70 Gulf Coast ..................

295.60 292.10 293.20 287.80

Propane No. 2 heating oil New York Harbor ......... 292.10 Mont Belvieu .............. 106.50

APR. 4, 2014 Total supply of rigs US Gulf of Mexico. . . . . . South America Northwest Europe. . . . . West Africa. . . . . . Middle East. . . . . . . Southeast Asia. . . . . . . Worldwide. . . .

Wkly. avg.

$/bbl 4-4-14 102.75 –– Mo. avg., $/bbl –– Jan.-14 Feb.-14

OPEC reference basket....................... Arab light-Saudi Arabia ....................... Basrah light-Iraq ................................. Bonny light 37o-Nigeria........................ Es Sider-Libya ...................................... Girassol-Angola.................................... Iran heavy-Iran..................................... Kuwait export-Kuwait ........................... Marine-Qatar........................................ Merey-Venezuela .................................. Murban-UAE ......................................... Oriente-Ecuador ................................... Saharan blend 44o-Algeria ................... Other crudes Minas 34o-Indonesia ............................ Fateh 32o-Dubai ................................... Isthmus 33o-Mexico ............................. Tia Juana light 31o-Venezuela .............. Brent 38o-UK ........................................ Urals-Russia ........................................ Differentials WTI/Brent ............................................. Brent/Dubai..........................................

Includes state and federal motor fuel taxes and state sales tax. Local governments may impose additional taxes. Source: Oil & Gas Journal. Data available at PennEnergy Research Center.

3-28-14 ¢/gal

4-4-14 $/bbl* 97.76 96.51 99.20 106.48 92.64 96.00 92.75 97.75 97.75 91.50 89.75 96.50 87.94

*Current major refner’s posted prices except N. Slope lags 2 months. 40° gravity crude unless differing gravity is shown. Source: Oil & Gas Journal. Data available at PennEnergy

REFINED PRODUCT PRICES

28 531 592 163 6 26 132 1,212 21 66 80 255 786 296 2,682 90 173 86 7,225

104.71 105.74 102.70 110.26 107.86 107.96 104.89 103.79 103.95 93.72 107.66 93.44 109.96

105.38 106.30 103.38 110.77 108.47 109.54 104.96 104.17 104.91 94.00 108.69 97.44 110.52

110.60 104.01 96.35 108.26 106.40 102.74

108.46 105.04 100.47 108.87 107.43 108.06

(13.36) 4.25

(8.09) 3.83

Source: OPEC Monthly Oil Market Report. Data available at PennEnergy Research Center.

Marketed Marketed supply Marketed utilization of rigs contracted rate (%)

US NATURAL GAS STORAGE1

112

93.0

100.0

89.5

146

142

130

91.6

Producing region ................ Consuming region east ...... Consuming region west ...... Total US .............................

101 836

93 780

82 737

88.2 94.5

Total US2 ............................

3-28–13

Change,

–——––—— bcf —––——– 352 376 701 310 356 669 160 164 331 822 896 1,701 Change, Jan.-14 Jan.-13 %

3-28–14

% (49.8) (53.7) (51.7) (51.7)

1,926

3-21–14

2,702

(28.7)

Source: EIA Weekly Petroleum Status Report. Data available at PennEnergy Research Center.

Source: IHS Petrodata Data available in PennEnergy Research Center

Working gas. 2At end of period. Source: Energy Information Administration Data available at PennEnergy Research Center.

Oil & Gas Journal | Apr. 14, 2014

STATISTICS WORLDWIDE CRUDE OIL AND GAS PRODUCTION 1 month average Change vs. Jan. Dec. –––– production ––– –––– previous year ––– 2014 2013 2014 2013 Volume % ––––––––––––––––––– Crude, 1,000 b/d –––––––––––––––––––––––– Argentina ............................ Bolivia................................. Brazil .................................. Canada ............................... Colombia ............................ Ecuador1 ............................. Mexico ................................ Peru ................................... Trinidad .............................. United States ...................... Venezuela1 .......................... Other Latin America ............

539 48 2,120 3,600 1,010 530 2,506 170 75 7,939 2,460 89

545 48 2,200 2,700 1,010 530 2,517 170 80 7,864 2,440 88

539 48 2,120 3,600 1,010 530 2,506 170 75 7,939 2,460 89

534 45 2,140 3,329 1,010 507 2,562 165 83 7,047 2,500 88

5 3 (20) 271 0 23 (56) 5 (8) 892 (40) 1

Jan. Dec. Cum. 2014 2013 2014 –––––––––– Gas, bcf ––––––––––––––

0.9 7.7 (0.9) 8.2 0.0 4.5 (2.2) 3.0 (9.6) 12.7 (1.6) 1.2

101.6 63.0 68.4 395.0 30.0 1.0 200.3 36.7 124.2 2,215.5 60.0 4.0

100.0 63.0 67.1 420.0 30.0 1.0 193.6 37.0 130.2 2,206.0 60.0 4.0

101.61 63.00 68.44 395.00 30.00 1.00 200.26 36.67 124.19 2,215.50 60.00 4.01

Western Hemisphere ..........

21,085

20,192

21,085

20,009

1,076

5.4

3,303.7

3,315.9

3,303.69

Austria ................................ Denmark............................. France ................................ Germany ............................. Italy .................................... Netherlands ........................ Norway ............................... Turkey ................................ United Kingdom .................. Other Western Europe .........

17 161 15 50 100 21 1,633 45 845 9

16 160 16 50 110 23 1,611 47 948 9

17 161 15 50 100 21 1,633 45 845 9

14 187 16 53 95 23 1,545 45 938 10

3 (26) (1) (3) 5 (2) 88 — (93) (1)

20.8 (14.0) (4.0) (5.3) 5.3 (8.7) 5.7 — (9.9) (10.0)

4.0 15.9 0.1 28.0 24.0 120.0 349.6 1.5 115.0 2.3

3.8 14.5 1.5 28.0 24.0 120.0 360.2 1.5 110.5 2.3

4.00 15.93 0.06 28.00 24.00 120.00 349.61 1.50 114.97 2.29

Western Europe .................

2,896

2,990

2,896

2,925

(29)

(1.0)

660.4

666.3

660.36

Azerbaijan........................... Croatia ................................ Hungary.............................. Kazakhstan ......................... Romania ............................. Russia ................................ Other FSU........................... Other Eastern Europe ..........

844 11 12 1,642 81 10,506 375 53

844 12 12 1,665 82 10,553 366 53

844 11 12 1,642 81 10,506 375 53

921 11 13 1,696 82 10,366 399 50

(77) — (1) (55) (1) 141 (23) 3

(8.3) — (9.3) (3.2) (1.2) 1.4 (5.9) 5.1

95.3 4.5 6.0 130.7 20.0 2,327.2 568.6 20.9

88.3 4.5 6.0 134.2 20.0 2,313.1 488.0 20.9

95.35 4.50 6.00 130.66 20.00 2,327.19 568.56 20.92

Eastern Europe and FSU .....

13,524

13,587

13,524

13,538

(14)

(0.1)

3,173.2

3,075.0

3,173.18

Algeria1 ............................... Angola1 ............................... Cameroon ........................... Congo (former Zaire) ........... Congo (Brazzaville) ............. Egypt .................................. Equatorial Guinea................ Gabon................................. Libya1 ................................. Nigeria1............................... Sudan ................................. Tunisia ................................ Other Africa ........................

1,080 1,650 61 28 290 680 255 260 500 1,920 470 58 315

1,150 1,640 61 28 290 730 255 250 230 1,920 470 58 315

1,080 1,650 61 28 290 680 255 260 500 1,920 470 58 315

1,160 1,770 61 28 290 730 255 260 1,380 2,000 470 67 315

(80) (120) — — — (50) — — (880) (80) — (9) —

(6.9) (6.8) — — — (6.8) — — (63.8) (4.0) — (13.6) —

230.0 4.0 2.0 — — 105.0 0.1 0.3 25.0 70.0 — 9.0 9.1

230.00 4.00 2.00 — — 105.00 0.06 0.30 25.00 70.00 — 9.00 9.10

Africa ................................

7,567

7,397

7,567

8,786

(1,219)

(13.9)

463.6

463.56

Bahrain............................... Iran1 ................................... Iraq1 ................................... Kuwait1 2 ............................. Oman ................................. Qatar1 ................................. Saudi Arabia1 2 .................... Syria ................................... United Arab Emirates1 ......... Yemen ................................ Other Middle East ...............

49 2,780 3,090 2,780 959 720 9,760 30 2,720 130 1

43 2,750 3,130 2,810 945 730 9,820 30 2,760 120 1

49 2,780 3,090 2,780 959 720 9,760 30 2,720 130 1

42 2,650 2,970 2,820 940 740 9,250 130 2,600 160 1

7 130 120 (40) 19 (20) 510 (100) 120 (30) 1

16.7 4.9 4.0 (1.4) 2.0 (2.7) 5.5 (76.9) 4.6 (18.8) 89.1

32.0 465.0 28.0 40.0 94.0 350.0 250.0 14.0 165.0 — 22.1

32.0 465.0 28.0 40.0 94.0 350.0 250.0 14.0 165.0 — 27.5

32.00 465.00 28.00 40.00 94.00 350.00 250.00 14.00 165.00 — 22.13

Middle East .......................

23,019

23,139

23,019

22,302

717

3.2

1,460.1

1,465.5

1,460.13

Australia ............................. Brunei ................................ China .................................. India ................................... Indonesia ............................ Japan ................................. Malaysia ............................. New Zealand....................... Pakistan.............................. Papua New Guinea ............. Thailand ............................. Vietnam .............................. Other Asia–Pacifc ...............

319 109 4,152 783 787 12 500 40 87 30 225 330 28

338 109 4,226 782 823 11 501 33 84 31 230 330 51

319 109 4,152 783 787 12 500 40 87 30 225 330 28

348 150 4,210 760 823 15 541 38 77 30 251 330 38

(29) (41) (58) 23 (36) (3) (41) 2 9 — (25) — (10)

(8.3) (27.2) (1.4) 3.0 (4.3) (20.0) (7.6) 4.0 12.2 — (10.1) — (26.1)

154.9 36.5 402.2 108.5 202.0 10.8 203.6 13.7 127.9 0.5 118.7 32.0 111.5

151.3 36.5 385.3 106.0 202.0 9.0 191.0 13.2 131.9 0.5 124.4 32.0 108.6

154.89 36.50 402.23 108.51 202.00 10.84 203.59 13.67 127.91 0.50 118.70 32.00 111.46

Asia–Pacifc ......................

7,402

7,549

7,402

7,611

(209)

(2.8)

1,522.8

1,491.6

1,522.79

TOTAL WORLD ....................

75,493

74,855

75,493

75,172

321

0.4

10,583.7

10,477.8

10,583.71

OPEC .................................. Offshore Europe ..................

29,990 2,665

29,910 2,747

29,990 2,665

30,347 2,697

(357) (32)

(1.2) (1.2)

1,688.0 516.4

1,688.0 521.1

1,688.00 516.43

OPEC member. 2Kuwait and Saudi Arabia production each include half of Neutral Zone. Totals may not add due to rounding. Source: Oil & Gas Journal. Data available at PennEnergy Research Center.

Oil & Gas Journal | Apr. 14, 2014

MARKET CONNECTION WHERE THE INDUSTRY GOES TO CLASSIFY

The Oil & Gas Journal has a circulation of over 100,000 readers and has been the worldâ&#x20AC;&#x2122;s most widely read petroleum publication for over 100 years PR OD UCT S

STARTING AT

Wireless, remote daily tank monitoring and gauging system for crude oil and waste water.

ONLY $795!

NO ! !

# !

! "

855-842-8265 (TANK)/ 1-618-345-6891/ www.tanksentinel.com

LB 40-60 EXP Electric Steam Generators for Cleaning/Degassing Operations Prior toâ&#x20AC;&#x153;Hot Workâ&#x20AC;? CONTACT: sales@electrosteam.com Toll-Free: 1/866-617-0764

The Expansion Joint and Check Valve People Proco Products, Inc. is a global leader in the design and supply of piping/ducting system joints and rubber check valves. We offer the most complete line of rubber and molded PTFE expansion low torque sealing gaskets to the piping industry. Proco Products, Inc. also offers ProFlexĂ´ rubber check valves manufactured completely of rubber with top quality fungicide and barnacle resistant rubber.

www.procoproducts.com

Reach nearly 100,000 paid subscribers. Contact Grace at gracej@pennwell.com 713-963-6291

The Proco Series 230 Online Catalog is now powered by TraceParts. Visit http://www.tracepartsonline.net/ws/proco for more details.

VISIT US IN OUR HOSPITALITY SUITE AT THE

M A N U F A C T U R I N G

WORKOVER & DRILLING RIGS DRAWWORKS PARTS&SERVICE FRAC UNITS HEAVY HAUL TRAILERS MOBILE SAND SILOS

(800)803-0183

www.loadcraft.com

Drill Like You Mean It. 34

Brady, Texas Brownwood, Texas Early, Texas

Oil & Gas Journal | Apr. 14, 2014

MARKET CONNECTION

â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

WHERE THE INDUSTRY GOES TO CLASSIFY

Employment? HIRE Services Offered? ACQUIRE Equipment/Products/Land? SELL

SEE RESULTSâ&#x20AC;&#x201D;Ask me how!

GRACE JORDAN 713-963-6291 GraceJ@PennWell.com Twitter: @ogjmarket

The Oil & Gas Journal has a circulation of over 100,000 readers and has been the worldâ&#x20AC;&#x2122;s most widely read petroleum publication for over 100 years E QU IPME NT

Gas Corporation of America

800-762-6015 gascorp@wf.net * www.gas--corp.com

BTX Reformer-22kBPD, UDEX, Cyclohexane DHT-16kBPD,SWS-309gpm, SRU-30LTPD FCC-49kBPD w/30,000HP Power Rec Turbine ALKY-9kBPD, MTBE-10kBPD, Ethylene

30s, 60s & 90k Gallon Tanks Available

Contact: carlvalentino@comcast.net 832-723-7545 / 281-559-2995

FEATURED EQUIPMENT: 1,000 GPM Amine Plant @ 1250 PSI Quantity 2â&#x20AC;&#x201D;21,000 Gallon 250 PSI Quantity 3â&#x20AC;&#x201D;7,000 Gallon 1000 PSI SS We WANT your storage tanks 12k to 90k gallon â&#x2030;Ľ250 PSI

REFRIGERATION PLANTS

100 MCF Ăą 20 MMCF JT PLANTS: 1 MMCF Ăą 20 MMCF AMINE PLANTS: 0.5 GPM Ăą 6 GPM PRODUCT STORAGE TANKS: 12,000 Ăą 30,000 GALLON

FCC Equipment Large Inventory: New--Unused Contact Bryan Watt 918-744-5588 bwatt@wattequipment.com

318-425-2533, 318-458-1874 regardres@aol.com

P O W E R G E N E R AT I O N E Q U I P M E N T AVA L E NFEORRATI M DQ I AT SE AN LE P O WI LEA RBG I OM NEE U IE PM T AVA I L A B L E F O R I M M E D I AT E S A L E

EQUIPME N T EQUIPME w w w. p e n n e n e N r g yTe q u i p m e n t . c o m w w w. p e n n e n e r g y e q u i p m e n t . c o m

Refurbished or newâ&#x20AC;Ś

FOR SALE

GAS TURBINE GENERATORS

(1) 40MW GEC FR-6B GAS 50/60 Hz

3750KW / 4688KVA 4400KW / 5500KVA Solar T60S Dual Fuel, SoloNox

(1) 22MW GE FR-5P, Oil/Gas

DIESELS â&#x20AC;&#x201C; TURBINES â&#x20AC;&#x201C; BOILERS 24/7 EMERGENCY SERVICE â&#x20AC;˘ IMMEDIATE DELIVERY www.wabashpower.com â&#x20AC;˘ info@wabashpower.com

wabash

POWER

EQUIPMENT CO.

1-800-704-2002

SURPLUS GAS PROCESSING/ REFINING EQUIPMENT 25 MMCFD x 1100 PSIG PROPAK REFRIGERATION PLANT 28 TPD SELECTOX SULFUR RECOVERY UNIT 1100 BPD LPG CONTACTOR x 7.5 GPM CAUSTIC REGEN NGL/LPG PLANTS:10 - 600 MMCFD AMINE PLANTS:60 - 3300 GPM SULFUR PLANTS:10 - 180 TPD FRACTIONATION:1000 Ăą 25,000 BPD HELIUM RECOVERY: 75 & 80 MMCFD NITROGEN REJECTION: 25 Ăą 100 MMCFD MANY OTHER REFINING/GAS PROCESSING UNITS We offer engineered surplus equipment solutions. Bexar Energy Holdings, Inc. Phone 210 342-7106/ Fax 210 223-0018 www.bexarenergy.com Email: info@bexarenergy.com

PennEnergy connects

true buyers to true sellers.

GE 7EA

GE 7EA combustion combustion turbine generator packagesgenerator turbine Three unused 60-Hz units packages available for immediate delivery Three unused 60-Hz units Major features include available for immediate delivery Âť Heat rate: 10,430 Btu/Wh

Âť Output: 85,100 kWh ISO rated Major features include Âť Fuel system: Dual liquid fuel; crude

rate: 10,430 Btu/Wh Âť Heat and distillate

Convertible85,100 to naturalkWh gas ISO rated ÂťÂť Output:

Âť Price includes auxiliaries

Âť Fuel system: Dual liquid fuel; crude and distillate Exclusively for sale

in partnership with

Âť Convertible to natural gas

Contact

For info or pricing

Oil & Gas Journal | Apr. 14, 2014

Randy Hall Chris Davis

p +1 713-499-6330 Âť Price includes auxiliaries

e rhall@pennenergy.com e cdavis@thomassenamcot.com

p +1 817-263-3271

Your Ad Here and

Reach nearly 100,000 petroleum professionals! Contact: GraceJ@PennWell.com 35

MARKET CONNECTION WHERE THE INDUSTRY GOES TO CLASSIFY

The Oil & Gas Journal has a circulation of over 100,000 readers and has been the world’s most widely read petroleum publication for over 100 years TR A I NI N G

U SIN ES SOPP OPP ORUTU IE S B UBSI N E SS ORT NINIT TI ES

E MPL OY ME NT

Optimizing Careers for Oil and Gas Leaders

The Department of Interior, Bureau of Indian Affairs, Concho Agency will be conducting an

Through Professional Short Courses at Colorado School of Mines

Oil and Gas Lease Sale

Missouri University of Science and Technology/Geological Sciences and Engineering Department

Upcoming Continuing Education Courses in 2014: • Using Dynamic DCF and Real Options to Value and Manage Mining and Petroleum Projects May 7-9 • Economic Evaluation and Investment Decision Methods May 12-16, July 21-25, Sept. 22-26, Oct. 20-22, Nov. 10-14 • Crude Oil Valuation and Pricing May 14-16, Nov. 5-7 • Introduction to Petroleum Refning June 4-6, Oct. 1-3 • Natural Gas Hydrates June 25-27

at 9 a.m. on May 15, 2014 at Redlands Community College in El Reno, Oklahoma. Indian lands in Blaine, Canadian, Buster, Dewey, Kingfsher, Roger Mills and Washlite counties in Oklahoma will be available for lease. To obtain the complete text of the sale notice or further information, please call (405)-262-7481.

650,000,000 Barrel Potential Oat Mountain So. California 640-2000 acres available. Contact George 805-432-4701 or george@gtwaterproducts.com

San Joaquin Basin Logs All from Kern County, California 2,342 wells (mostly wildcats) .LAS format, $15,000

Formation Tops 5,614 wells, $3,000 Contact: lhronek@ thomasldavisgeologist.com well listing on: www.thomasldavisgeologist.com

The New:

OIL & GAS MINING LEASES

The Journal of Energy from Innovation www.uogreport.com

T h e

N e W S

R e S e R V e

F O R

N O R T h

A M e R I C A N

S h A L e

P L AY S

VOLUME 1 NUMBER 1

Beyond US border, Mexico primes shale pot Tayvis Dunnahoe, Editor

Oil production from 14 of the most active counties in the South Texas eagle Ford shale reached 28 MMbbl in the last year. Gas production doubled from the previous year to 271 bcf, and for the

same period, condensate tripled to 21 MMbbl, according to a March report from the eagle Ford Task Force, which was established by the Texas Railroad Commission. By 2015, the eagle Ford shale will become the largest standalone energy project in the world as

SHALE GAS BASINS OF EASTERN MEXICO Nomada

El Burro Uplift

y la lP y Oi la rd sP Eagl e Fo Ga or d le F Ea g

Montañez

Habano Emergente Percutor

te s yo Pe

Coahuila Platform

es Arch os ach -Pic

Sabinas Basin

Arbolero-1

U S Burgos

Texas

measured by capital expenditures, the report indicates. Meanwhile, across the border from South Texas, Mexico is gearing up to initiate its own shale boom. “The eagle Ford doesn’t stop at the border,” said edgar Rangel-German, commissioner with Mexico’s National hydrocarbons Commission (CNh). The US energy Information Administration (eIA) reported in 2011 that Mexico has the second-largest shale gas potential in Latin America and the fourth-largest in the world. The country contains 61 tcf of natural gas reserves but the eIA report places Mexico’s shale gas potential at 680 tcf. EAGLE FORD

Mexico state oil c been analyzing t the eIA along wit of resources, bei the world was a n believe the eIA’s n mated,” Rangel-G Mexico’s CNh new laws in the c The commission i sanctioning reser tioning e&P proj mation concerni and overseeing o The country is in i unconventional

The Bureau of Indian Affairs, Pawnee Agency, Pawnee, OK, is offering the sale of Restricted Indian Land for Oil & Gas Mining Leases, located in Noble, Pawnee, Kay Counties & part of Payne Co., north of the Cimarron River on Tuesday, May 20, 2014. Persons or frms interested in bidding or those desiring additional information should contact the Trust Management Services Offce at 918-762-2585.

EMPLOYMENT OPPORTUNITIES

Assistant/Associate Professor of Petroleum Engineering in Reservoir Characterization In response to program growth and campus strategic initiatives, the Geological Sciences and Engineering Department at Missouri S&T seeks applicants for a tenure track faculty opening in Petroleum Engineering with appointment at the assistant or associate professor level. Candidates must have an earned PhD in petroleum engineering, petroleum geosciences, or a closely related area appropriate to support research and teaching in reservoir characterization, geostatistics, petrophysics, and/or formation evaluation. Industrial experience in analyzing and evaluating the many indices used to characterize unconventional resources is strongly preferred. For full position description including application procedures visit: http://hraadi.mst.edu/hr/employment/faculty/ (reference number R00059882). For additional information (but not to submit applications) contact Dr. Runar Nygaard, 153 McNutt Hall, Rolla, MO 65409; nygaardr@mst. edu; (573) 341-4759. Review of applications will begin May 10, 2014, and applications will be accepted and reviewed until the position is flled.

Reach nearly 100,000 paid subscribers. Contact Grace at gracej@pennwell.com 713-963-6291

continued on page 37

Oil & Gas Journal | Apr. 14, 2014

MARKET CONNECTION WHERE THE INDUSTRY GOES TO CLASSIFY

• • •

Employment? HIRE Services Offered? ACQUIRE Equipment/Products/Land? SELL

SEE RESULTS—Ask me how!

GRACE JORDAN 713-963-6291 GraceJ@PennWell.com Twitter: @ogjmarket

The Oil & Gas Journal has a circulation of over 100,000 readers and has been the world’s most widely read petroleum publication for over 100 years E M P LOY M EN T Maersk Drilling USA Inc. is looking for motivated and highly qualifed people to join our team. We have needs to fll the following offshore vacancies for our rig operations in the U.S. Gulf of Mexico: • Assistant Driller • Assistant Marine Section Leader • Assistant Subsea Engineer • Auxillary Driller • Camp Boss • Catering Hand • Drilling Section Leader • Electrical Supervisor • Electronic Technician • Hydraulic Mechanic • Lead Crane Operator • Main Driller • Maintenance Engineer • Marine Section Leader • Materials & Logistics Coordinator • Night Toolpusher • Offshore Installation Manager • Safety Offcer • Senior DPO • Subsea Engineer • Subsea Supervisor • Technical Section Leader • Tourpusher Applicants should mail resumes to Maersk Drilling USA Inc., Attn. Recruitment Manager, 2500 CityWest Blvd., Suite 1850, Houston, TX 77042-3052 or fax resume at 713-972-3303. Reference Job Code MD HOU 003014 on resume and indicate the applicable position(s). For further info, refer to www.maerskdrilling. com.

Your Source for Energy News, Research, and Insight.

We’re In Great Company… PennEnergy.com was created by PennWell to serve as the broadest and most complete source of energy-related news, research, and insight. Including content from all PennWell energyrelated brands, PennEnergy.com delivers news, ﬁnancial data, research materials, books, equipment, and service information all in one easy-tonavigate website.

A FEW OF OUR PENNWELL FRIENDS: ®

UTILITY

PRODUCTS conference & exposition

Make PennEnergy a part of your day and know what is happening in the world of energy.

Maersk Drilling USA Inc. is an Equal Opportunity Employer.

All your industry needs met in one place.

P E PennEnergy.com

For the latest in employment opportunities visit Market Connection online: www.ogj.com/market-connection.html

Cameron International Corporation in Houston, TX seeks Sr. Technical Analyst. Qualifed applicants will possess a Bachelor’s degree in Finance or Accounting and 2 years of experience managing fnancial analysis functions. To apply, submit resumes to Deborah A. Russell at debbie.russell@c-a-m.com. Resume must include job code 789.

Oil & Gas Journal | Apr. 14, 2014

Contact Grace at gracej@pennwell.com 713-963-6291