World's largest deepwater drilling rig under construction in China

Cosco Dalian Shipyard has commenced the construction of the first deepwater drilling rig built in China and the world's largest deepwater rig built to date.

The Dalian Pioneer is being built with a hull 290 meters in length and 50 meters in width. It is designed be operated in waters as deep as 10,000 ft and to drill to a maximum depth of more than 30,000 ft. It is to be capable of storing up to a million bbl of crude oil. The vessel, with its extensive deck space and large variable deck load capacity, is designed to accommodate process facilities as well.

Wang Xingru, general manager of Cosco Dalian, said that the construction of the Dalian Pioneer (formerly Dalian Developer) began on August 22 at the company's shipyard in Dalian, in northeastern China's Liaoning Province. He said that the drillship is being built under a contract with Deutsche Verkehrs-Bank (DVB) and that it will cost more than US$500 million before it is completed in 2012.

Vantage Drilling is to manage the construction and marketing of the combination drillship and floating production, storage, and offloading vessel (FPSO).

Chevron makes significant natural gas find in Australia

Chevron Corp. has announced further drilling success in the Carnarvon Basin offshore Western Australia, Australia’s premier hydrocarbon basin.

“In terms of net gas pay, Acme-1 is one of our most significant natural gas discoveries in Australia. As our ninth and largest offshore discovery in Western Australia in the last 12 months, it underscores the quality of our drilling program and our commitment to technical excellence and safe operations.”

The Acme-1 exploration discovery well is located in the WA-205-P permit area offshore Western Australia approximately 93 miles (150 km) from Onslow. Drilled in 2,880 feet (878 m) of water to a depth of 15,469 feet (4,715 m), the well encountered approximately 896 feet (273 m) of net gas pay.

George Kirkland, vice chairman, Chevron, said, “In terms of net gas pay, Acme-1 is one of our most significant natural gas discoveries in Australia. As our ninth and largest offshore discovery in Western Australia in the last 12 months, it underscores the quality of our drilling program and our commitment to technical excellence and safe operations.”

Jim Blackwell, president, Chevron Asia Pacific Exploration and Production, said, “We are realizing the opportunities we have as a leading lease holder in the Carnarvon Basin. We expect this discovery to help underpin potential expansion opportunities at the Wheatstone liquefied natural gas hub. Adding to our Australian portfolio progresses our long-term plans to build a leading natural gas business in Australia and the Asia-Pacific region.”

Chevron’s Australian subsidiary is the operator of WA-205-P and holds a combined 67 percent interest, while Shell Development (Australia) holds the remaining interest.

Two Transocean semis approved for Norwegian drilling

The Norwegian Petroleum Safety Authority (PSA) has given its consent for the employment of the semisubmersibles Polar Pioneer and Transocean Winner on the Norwegian Continental Shelf.

The PSA said today Statoil received permission to carry out exploration drilling on Block 7220/8 with the Polar Pioneer at a drillsite approximately 200 km from land northwest of Ingoya in Finnmark county and some 210 km south-southeast of Bjornoya, with the water depth at the site 373 meters. It said that the plan is for drilling to start at the beginning of September and last for about 36 days. The well will be drilled in accordance with guidelines forming the basis for the report on the consequences of year-round petroleum activities in the Lofoten - Barents Sea area (ULB). The consent is also given under the assumption that Statoil carries out collection and reporting of meteorological and oceanographic data, including reporting potential proximity between the facility, the ice edge, drift ice or icebergs. The regulations contain a legal basis for ordering operators to carry out this duty.

Lundin Norway, a subsidiary of Lundin Petroleum, has received consent to carry out exploration drilling of a well in Block 16/1 in the Norwegian North Sea in production license 338. The 16/1-14 well is to assess the production properties of the formation. The drilling location is approximately 175 km west-southwest off the coast of Karm¿y in Rogaland, where the water depth is 112 meters.

The drilling activity was scheduled to start at the end of last month and has a planned duration of 40 days. Depending on the results, a production test and possible sidetrack drilling will be carried out, and so the overall activities could take up to 65 days.
Lundin is the operator of production license 338 with an ownership interest of 50% in partnership with Wintershall Norge with 30%, and RWE-Dea Norge with 20%.

Artumas Group and partners get more time onshore Mozambique

Artumas Group Inc., the Oslo Stock Exchange quoted upstream and downstream oil and gas company focused on East Africa, has announced that the Instituto Nacional de Petróleo ("INP") of Mozambique approved a six-month extension, without further commitment, to the current exploration period for the onshore Rovuma license. This extends the term of the initial Exploration Period from September 1, 2010 to March 1, 2011. A notice to enter the second Exploration Period will now be due on or about January 30, 2011 and that period will be reduced by a corresponding six-month period from a term of thirty-six months to thirty months. Formal notification of the extension was given to Artumas' partner and the license operator, Anadarko Petroleum Corporation.

"This extension will allow the partners to further evaluate the data from the Mecupa-1 well before proceeding with further drilling commitments", said Artumas' Chairman and Chief Executive Officer, Bob McBean.

The onshore Rovuma exploration license is a 15,000km² concession area onshore northeastern Mozambique abutting the offshore Rovuma Block (Area 1).

The partners in the license are: Anadarko Petroleum Corporation (35.7%, operator); Maurel et Prom S.A. (27.71%); Artumas Group Inc. (11.59%); Empresa Nacional de Hidrocarbonetos de Moçambique (15%); and Cove Energy plc (10%).

The partners drilled the Mecupa-1 well in Q4 2009 and encountered excellent reservoir sands and indications of hydrocarbons, which provides encouragement to the exploration partners. The well was the first to be drilled in the Rovuma basin since 1986. The well is undergoing an extensive technical evaluation by the operator.

Leni to test Hontomin discovery in Spain

Leni announced the drill rig is scheduled to be at Hontomin on or around the August 16, 2010 to spud Hontomin well and commence an extended well test on the Hontomin oil discovery in northern on-shore Spain.

The Hontomin prospect is 1350 meters to 1500 meters subsurface and is a proven Lower Jurassic Lias Calcarenite hydrocarbon formation discovered by Chevron in the 1960s which initially tested at an initial rate of 700 bopd. The structure is formed in a highly faulted thrusted anticline and covers a maximum area of 2.9 sq.km with probabilistic OIIP of 2.40 mmbo Mean, 5.71 mmbo P10, 1.34 mmbo P50 and 0.29 mmbo P90.

The objective of the Hontomin program is to appraise the long term production potential of the Hontomin-2 well. The program is expected to take 4 weeks to drill-out and re-complete prior to monitoring production performance over the coming months. The perforation of the existing hydrocarbon intervals and other potential undepleted zones is currently planned for start Q4 2010.

The information from the well shall also be used to further appraise the larger Lower Jurassic conventional oil prospect below the Ayoluengo producing oilfield as previously announced on May 11, 2010.

All well test production from Hontomin will be transported 38km to the production facilities at the Ayoluengo oilfield for processing and oil sales.

Completion operations underway on Breitling’s Trinity #1 well

Breitling Oil and Gas today announced that the Trinity #1, the first well it its Breitling-Trinity 3 Well Drilling Prospect in Okfuskee County, Oklahoma, is being completed as a possible oil and gas producer after reaching a total vertical depth of 3,753 feet.

From log analysis, the well encountered several potentially productive zones over a gross interval in the Union Valley formation from 2865 to 2905 feet; the Jefferson Sand formation from 2974 to 2981 feet; and the Viola Limestone formation from 3643 to 3660 feet. Testing and completion plans were finalized August 1 and a completion rig and crew moved into location the week of August 2. Natural gas pipeline tie-in is slated for the week of August 16.

Chris Faulkner, CEO of Breitling Oil and Gas, said, "We are excited to hit a good well with three potential producing zones in less than 3800 feet." Faulkner added, "We will test the well and see where the IP lands and decide how many offsets Breitling wants to shoot for on the acreage block."

Breitling ran a density-neutron log, microlog and an induction log and decided to run pipe based in analysis by Breitling's engineers and geologists. Joe Simo, Chief Geologist for Breitling Oil and Gas, said, "With the zones we have and the logs I've reviewed there is a potential daily flow rate of 200 barrels and two to three MMCF of gas."

Operations halted at Sangaw North exploration well

Sterling Energy provided the following update on its activities at the Sangaw North exploration well.

Operations at the Sangaw North #1 exploration well have been halted following a failure of drilling rig equipment. The extent of the repair work is being assessed, however an initial assessment indicates the requirement for replacement parts to be imported and mobilization of specialist engineers to complete the repairs. Sterling estimates that repairs may take up to 21 days to complete.

Following the satisfactory completion of repairs, Sterling will resume the drill stem testing of the prospective zones identified from the well data.

Flowserve Wins Approval for Yanbu' Export Refinery

Flowserve Corporation, a leading provider of flow control products and services for the global infrastructure markets, announced it has received final approval from Saudi Aramco on a master purchase agreement to supply pumps, valves and services for the Yanbu' Export Refinery Project (YERP).

Under the terms of the corporate procurement agreement (CPA) established between Flowserve and Saudi Aramco, Saudi Aramco plans to make significant future purchases of Flowserve pumps, valves and value-added services. Flowserve expects to begin booking orders under the CPA later in 2010.

Flowserve cited its Kingdom of Saudi Arabia manufacturing facility, strong aftermarket support capabilities, broad product portfolio, technology leadership, and long-standing partnership with Saudi Aramco as its key reasons for winning this agreement.

"We are pleased to expand our relationship with Saudi Aramco for the important YERP project, which will help meet expanding global energy demand by increasing refining capacity in the Middle East," said Tom Ferguson, president, Flow Solutions Group. "Flowserve has made significant investments in the Kingdom of Saudi Arabia, including service, repair and manufacturing facilities to support the oil and gas industry, and to help ensure premium service can be provided in-country."

Under construction on the west coast of Saudi Arabia, YERP will be a 400,000 barrel-per-day, full-conversion refinery being built in Yanbu' Industrial City, Saudi Arabia. The refinery is designed to process Arabian heavy crude and will produce high-quality, ultra-low sulfur refined products, including gasoline and diesel fuel. The new refinery is expected to be operational in 2014.

"This agreement reinforces Flowserve's ongoing commitment to delivering valve products and services in Saudi Arabia through our local facilities," said Tom Pajonas, president, Flow Control Division. "This overall Flowserve strategy is supported by the fact that the project will require a majority of the Flowserve control valves to be produced at our new Dammam valve and actuator facility, which we plan to open in the third quarter of 2010. When completed, the facility will be one of several sites Flowserve has in the region."

In addition, Flowserve and its partners operate Quick Response Centers (QRCs) in the Kingdom of Saudi Arabia, which provide service and repair. These operations help support the Saudi Aramco supply chain with access to Flowserve technology and innovative solutions.

CGGVeritas launches largest, most powerful X-BOW vessel in the seismic industry

CGGVeritas has launched the Oceanic Vega seismic vessel at a naming ceremony held at the Ulstein Verft shipyard in Norway. The Oceanic Vega is the first of a new generation of Ulstein SX120 high-end, environmentally friendly vessels and the first of two X-BOW vessels commissioned by CGGVeritas, the Oceanic Sirius being due for launch in the fall of 2011.

The Oceanic Vega is purpose-designed to deploy a maximum of 20 Sercel Sentinel solid streamers with Nautilus 3-in-1 integrated streamer control devices and is ideally suited for the acquisition of large 3D, 4D and high-resolution projects. The vessel offers the high bollard pull required for towing large spreads for increasing acquisition density as well as reducing the acquisition to first data cycle time.

The revolutionary design of the vessel diminishes slamming of the bow which reduces variations in speed, lowers turbulence in the wake zone and significantly decreases noise, ultimately leading to the acquisition of clearer seismic data.

The vessel is ideal for BroadSeis acquisition, the innovative new CGGVeritas broadband marine solution and, as an Ice Class vessel, can work in Arctic waters.

The Oceanic Vega has a range of features that make her the industry-leader in minimizing environmental impact, including engines compatible with low-emission fuel and a ‘green passport’. In recognition of her low environmental impact status, the vessel has been awarded a DNV ‘Clean Design’ class certification.

Leon Chabannes, Senior Vice President, Marine Acquisition, CGGVeritas, said: "The Oceanic Vega is an impressive addition to the CGGVeritas seismic fleet and will continue to advance our ability to provide safer, quieter and better marine acquisition. This new flagship combines unmatched efficiency and revolutionary technology to deliver the highest quality seismic data with the highest green credentials, essential for meeting the challenges of today as well as for many years into the future."

Seadrill Secures Contract Extention Offshore China

Seadrill has been awarded a six months contract extention for the ultra-deepwater semi-submersible drilling rig West Hercules by Husky Oil China Ltd. The estimated value of the contract extention is approximately US$90 million.

The extention secures continued employment for the ultra-deepwater unit offshore China until May 2012. Husky Oil China Ltd. has the right to extend the assignment by another six months on the same terms and conditions.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS says, "We are pleased to add further earning visibility for our ultra-deepwater rig fleet at what we believe is competitive terms and conditions given the current market sentiment. Our strong contract backlog gives us a unique opportunity to focus our efforts on safety and operational excellence ".

Keppel to deliver fourth ENSCO 8500 Series deepwater rig on schedule

Keppel FELS Limited (Keppel FELS) is on track to deliver ENSCO 8503, the fourth of seven ENSCO 8500 Series semisubmersible drilling rigs being built exclusively for Ensco plc.

ENSCO 8503 is scheduled to commence a two-year primary term with Cobalt International Energy, L.P. in the Gulf of Mexico in early 2011.

The rig was named at Keppel FELS today by Lady Sponsor, Mrs Cynthia Bryant, spouse of Mr Joseph H. Bryant, Chairman & CEO of Cobalt International Energy, L.P., in the presence of Guest of Honour, Ms Ho Ching, Executive Director & CEO of Temasek Holdings Pte Ltd.

Ms Ho Ching shared, “The collaboration with Ensco over the last two decades has enabled Keppel FELS to hone its construction and engineering competencies, its human capital development, and safety programmes, burnishing its reputation as a leading rigbuilder.

“Keppel FELS’s execution capabilities and track record have given it a strong edge overseas, and done Singapore proud.”

Mr Daniel W. Rabun, Ensco's Chairman, President & CEO, said, “Given our long-term relationship and confidence in Keppel FELS, Ensco has awarded Keppel FELS contracts for all seven rigs in the ENSCO 8500 Series.

“ENSCO 8500 and ENSCO 8501 are the first two deepwater rigs to be certified by the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) under NTL No. 2010 – NO5 in the U.S. Gulf of Mexico under the new regulatory framework, and we anticipate similar success for ENSCO 8503.”

“Like her preceding sister rigs, ENSCO 8503 and the remaining three rigs being built are reaping progressive productivity gains, due to Keppel FELS’s accumulated experience and collaboration with Ensco.”

Over the course of completing the first four units of the more than US$3 billion ENSCO 8500 Series seven-rig fleet, Keppel FELS has trimmed construction lead time by about 1 million manhours, compared to the first unit.

Mr Tong Chong Heong, CEO of Keppel O&M, said, “Keppel has grown with Ensco over the years and witnessed its rise from a fledging energy company to a premier global offshore drilling contractor with a formidable fleet of premium rigs across the world.

“Through the ENSCO 8500 Series programme, we have sharpened our engineering edge and construction methodology. This has culminated in the exceptional safety record and significant productivity improvements achieved in building ENSCO 8503.

“With the knowledge and insights amassed from the earlier rigs, we remain focused on completing the rest of the ENSCO 8500 Series fleet, on time, within budget and with the highest safety standards.”

When the ENSCO 8500 Series is completed, Keppel-built rigs will make up a third of the leading driller’s premium fleet. Construction of the next three rigs remains on schedule with expected deliveries extending to 2012.

ABB Wins Marine Order Worth $20 Million

ABB, the leading power and automation technology group, has won an order worth $20 million to provide complete power systems, drilling drive and propulsion systems for a new deep water drilling rig to be built by Daewoo Shipbuilding and Marine Engineering (DSME) at its shipyard in South Korea. The end customer is Brazilian ship owner Petroserv, who will operate the drilling rig for Petrobras.

The rig is scheduled to be commissioned by early 2012.

ABB will supply complete electrical systems for the semi-submersible drilling rig, which will be used for oil and gas exploration drilling. The delivery includes power generation and the high and low voltage distribution systems, the drilling drive system, the propulsion drive system, as well as related engineering services.

In addition to supporting the short delivery schedule, ABB�s scope of supply was specifically selected to improve equipment reliability, efficiency and availability, securing a stable supply of power throughout all rig systems.

�ABB�s broad scope of supply, resident marine, oil and gas industry expertise, and proven track record of delivering advanced, reliable solutions for offshore drilling vessels were important factors in winning this order,� said Veli-Matti Reinikkala, head of ABB�s Process Automation division.

This project is ABB�s fourth Semi submersible drilling vessel project for DMSE; ABB delivered the same scope of supply for the Petroserv #1 rig, which also operates for Petrobras in Brazil.

The new contract with Petroserv demonstrates that the global strategy, along with ABB's core concept for simplicity as a driver in design, commissioning and operation phase for marine customers, can succeed as well in new markets, like Brazil, as they have with owners in U.S.A, Europe and Asia.

ABB�s Process Automation division delivers integrated automation solutions for control, plant optimization, and industry-specific application knowledge and services to help process industry customers worldwide meet their critical business needs in the areas of operational profitability, capital productivity, risk management and global responsibility. These industries include oil and gas, power, chemicals and pharmaceuticals, pulp and paper, metals, minerals, cement, marine and turbocharging.

Reliance enters into JV for US shale acreage

Reliance Industries Limited (RIL) announced that its subsidiary, Reliance Marcellus II, LLC, has signed definitive transaction agreements to enter into a Marcellus Shale joint venture with United States based Carrizo Oil & Gas, Inc.

Under the proposed transaction, Reliance will acquire a 60% interest in Marcellus Shale acreage in Central and Northeast Pennsylvania that is currently held in a 50‐ 50 joint venture between Carrizo and ACP II Marcellus LLC, an affiliate of Avista Capital Partners. Pursuant to the transaction, Reliance will acquire 100% of Avista’s interest and 20% of Carrizo’s interests in the joint venture. Upon completion of the transaction, Reliance and Carrizo will own 60% and 40% interests, respectively, in a newly formed joint venture between the companies.

Reliance will pay a total consideration of $392 million, comprising of $340 million of cash and $52 million of drilling carry obligations. The drilling carry obligations will provide for 75% of Carrizo’s share of development costs over an anticipated two year development program.

The joint venture will have approximately 104,400 net acres of undeveloped leasehold in the core area of the Marcellus Shale in Central and Northeast Pennsylvania, of which Reliance’s 60% interest will represent approximately 62,600 net acres. This acreage is expected to support the drilling of approximately 1,000 wells over the next 10 years, with a net resource potential of about 3.4 Tcfe (2.0 Tcfe net to Reliance). The transaction allows for additional growth in the development acreage, at pre‐agreed terms.

Drilling recommences at Bongo prospect

Caza announced that the Bongo, O.B. Ranch #1 Well in Wharton County, Texas, has reached a depth of 12,964 feet, and intermediate casing has been installed, cemented and formation integrity tested. Drilling has recommenced to the target depth of 16,000 feet, which should take approximately fifteen days. Preliminary drilling and log data indicate hydrocarbon bearing sands in a shallower horizon that will require further evaluation.

W. Michael Ford, Chief Executive Officer commented, "We are pleased that drilling on the O.B. Ranch #1 well is progressing as planned and anticipate reaching the target depth within approximately fifteen days."

BP Operations in the Eastern Hemisphere

Many large Oil companies would consider buying BP�s assets if they are put on sale. BP is setting aside some assets as security while it builds up the $20 billion fund agreed upon with the U.S. to compensate for the damage from the Gulf of Mexico oil spill.

BP and its affiliates operate facilities or market products in most of the world�s countries and explore for oil and natural gas on six continents.

In the Middle East, the BP group has offices in Kuwait, Oman, Qatar, Saudi Arabia and the UAE. The head office for BP Middle East exploration and production activities is in Abu Dhabi. Many of BP's Important projects exist in the UAE such as Lower Zakum Development, Sharjah - Sajaa Gas Concession and Abu Dhabi Hydrogen Power Plant with Masdar. BP main business in Saudi Arabia is the supply and trading of petroleum products such as lubricants and aviation fuel to wholesale and retail customers.

In Asia, BP�s exploration and production activities are centered in Russia, Azerbaijan and China. BP also holds a leadership position in Liquefied Natural Gas (LNG) in China through a number of joint ventures.

In Russia, BP has an important joint venture through 50 per cent ownership of TNK-BP through its major producing assets, which are located in West Siberia, the Volga-Urals and East Siberia. BP is the operator of major projects in Azerbaijan such as Azeri-Chirag-Guneshli" and �Shahdeniz�, as well as Baku-Tbilisi-Jeyhan and South Caucasus pipeline projects. These developments converge at the Sangachal Terminal. Also BP recently signed an agreement to explore and develop the Shafag - Asiman structure.

BP Group has a large number of exploration and production activities in North Africa focused on Algeria and Egypt. In Algeria, BP had plans to spend $2 billion over the next five years to develop its operations in Salah and Amenas fields. In Egypt, BP has many fields in the Gulf of Suez and the Western Desert, which are operated through its subsidiary Gulf of Suez Petroleum Company (GUPCO); and operating gas assets in the Nile Delta through the Pharaonic Petroleum Company (PhPC).

BP has well-established operations in Sub-Saharan Africa including Angola, Botswana, Malawi, Mozambique, Namibia, South Africa, Tanzania, Zambia and Zimbabwe. In Angola, the first BP-operated asset is Block 18, which was discovered in 1999-2001, and consists of five distinct fields (Galio, Cromio, Paladio, Plutonio, and Cobalto).

A Comprehensive coverage of BP operations and major assets in the eastern hemisphere can be found as part of the 3D projects online database available at Gulfoilandgas.com. Additional information can be found at the following link: http://www.gulfoilandgas.com/webpro1/Projects/main.asp.

European Gas Limited awarded new exploration permit in France

French Government has formally granted its wholly-owned subsidiary Gazonor S.A. (Gazonor) a new exploration permit 'Sud Midi' (located in the Nord Pas de Calais region).

The 'Sud Midi' permit increases EGL's portfolio and secures its position among the largest CBM and unconventional gas permit holders in Western Europe. EGL has a 100% working interest.

EGL's CEO, Peter Cockcroft, said, "This is an exciting addition to our current exploration and production asset portfolio located in the largest coal basin in France. The Sud Midi permit is ideally located relative to EGL's existing production facilities, thus any exploration success in the Sud Midi permit will be relatively easy to commercialise and bring on stream, selling into well established markets."

This exploration permit is adjacent to EGL's Gazonor Production Concession, and, together with the Valenciennois Exploration Permit, forms a contiguous permit area of 1,352 km2. The permit area covers 929 km² and is located in the Nord Pas de Calais region (North of France). The permit is granted for a five year term until July 23rd 2015 with a total expenditure commitment of €1.9 million.

McMoRan makes discovery at Blueberry Hill

McMoRan announced that the Blueberry Hill #9STK1 well, located on Louisiana State Lease 340 in 10 feet of water, has been drilled to true vertical depth of 23,630 feet (24,385 feet measured depth).

The gamma ray and resistivity information from log-while-drilling tools indicate a possible hydrocarbon bearing zone in a high quality sand measuring 105 feet. Wireline logs will be required to fully evaluate this section. McMoRan will continue to deepen the well.

McMoRan owns a 42.9% working interest and a 29.7% net revenue interest in the Blueberry Hill well. Plains E&P Co. holds a 47.9% working interest.