PetroMagdalena resumes production at Cubiro block

TORONTO -- PetroMagdalena Energy Corp. announced that production operations have resumed at its Cubiro Block located in the province of Casanare, with the blockade being lifted on the morning of Saturday May 5, 2012. As previously announced on April 24, 2012, public roads in the province of Casanare were being blocked and this led to a lack of public order in the area, impacting production from PetroMagdalena's Cubiro block.

No employees or contractors of the Company were involved. Discussions between all four levels of government are focusing on delivering a long term solution for the local communities.

Chevron begins operations on next-generation drillship in deepwater GOM

SAN RAMON, Calif. -- Chevron Corporation  announced that the Pacific Santa Ana, a deepwater drillship built to Chevron's specifications, has arrived in the Gulf of Mexico to work for Chevron under a five-year contract with a subsidiary of Pacific Drilling S.A.. Pacific Santa Ana is the first drillship designed with the capacity to perform dual gradient drilling (DGD).
"Pacific Santa Ana will enable us to demonstrate dual gradient drilling, which has the potential to change the way deepwater wells are drilled," said George Kirkland, vice chairman, Chevron Corporation. "This new process builds on our record of technology leadership in deepwater."
"The addition of Pacific Santa Ana as Chevron's fifth drillship in the deepwater Gulf of Mexico demonstrates our long-term commitment to developing America's energy resources," said Gary Luquette, president of Chevron North America Exploration and Production Company. "We are bullish on the Gulf, where robust energy exploration and development is vital to our nation's economy and energy security."
Unlike conventional deepwater drilling, which uses a single drilling fluid weight in the borehole, dual gradient drilling employs two weights of drilling fluid - one above the seabed, another below. This allows drillers to more closely match the pressures presented by nature and effectively eliminates water depth as a consideration in well design. DGD also allows drillers to more quickly detect and appropriately react to downhole pressure changes, which can enhance the safety and efficiency of deepwater drilling operations.
Pacific Santa Ana is equipped with a DGD riser, a mud lift pump handling system, six mud pumps - three for drilling fluid and three for seawater - extensive fluid management system enhancements and more than 72,000 feet of DGD-related cables. After additional equipment is installed and tested, Pacific Santa Ana will be used for exploratory and development drilling in the deepwater Gulf of Mexico.

Arsenal Energy Inc. completes drilling bakken, North Dakota wells

At Stanley North Dakota, Arsenal Energy, as operator, has completed drilling both the Anthony Robert and Wade Morris 2-mile horizontal Bakken wells. Each well encountered good shows while drilling. Arsenal has an approximate 84% working interest in each well. It is anticipated that both wells will be completed with multistage fracturing and placed on production by the end of June.
At Princess in Eastern Alberta, Arsenal has received approval from the Alberta Energy Board for waterflood of the Mannville Q pool. Water injection conversion and pipeline operations have begun. Arsenal anticipates that water injection will begin by the end of June and that waterflood response should become apparent within six months after that. Reservoir modeling indicates an incremental 470,000 bbl of reserves should be recoverable from the Q pool under waterflood. Arsenal has two additional Mannville pools of similar size at Princess that are in the application stage of the waterflood permitting process.

BG Group achieves first production from Bolivian gas field

BG Group announced Wednesday what it described as another key project delivery milestone for 2012 with the first phase of development at the Margarita gas field in Bolivia now on-stream.

"Margarita Phase I, delivered safely and to plan, will give BG Group additional net production of some 17,000 barrels of oil equivalent per day (boepd), taking total net production from Margarita to over 25,000 boepd," said BG Group Chief Executive Sir Frank Chapman.

"Already this year we have delivered new production from projects in Egypt, Norway and Thailand and, together with the successful start-up of Margarita Phase 1, these developments keep us on track with our programme to deliver average 6 percent to 8 percent per annum production growth through to 2020."

Margarita Phase I is expected to reach capacity in the second quarter of 2012. The project involved the construction of a new 48-mile (77-kilometer) network of gas gathering and export pipelines, four wells and gas processing facilities.

A second phase of development at the Margarita gas field was sanctioned in July 2011. Margarita Phase II, comprising the installation of a new processing train, flowlines and at least three additional development wells, will at capacity increase BG Group net production from the Margarita field to around 42,000 boepd by the end of 2014.

BG Group has a 37.5-percent interest in the Caipipendi block, which contains the Margarita gas field. (Repsol Bolivia 37.5 percent, operator, and PAE E&P Bolivia Limited 25 percent.)

Total CEO: Elgin top-kill job starting in a few days

PARIS -- Operations will start in a few days to "kill" a leaking natural gas well that forced Total SA to abandon and power down its North Sea Elgin platform, Total's Chairman and Chief Executive Christophe de Margerie said Thursday.
The group is also simultaneously drilling two relief wells in case the top kill job doesn't work, he said.
Total has lost around $2.5 million a day from loss of revenue and the costs to address the leak since March 25, when the leak was detected.
The two sorts of operations are "under control," de Margerie also said.

Brazilian Regulator: Chevron needs to show it can prevent spill before drilling again

HOUSTON -- Chevron Corp. won't be allowed to resume drilling in its Frade field offshore Brazil until it finds the cause of two recent oil spills in the area and shows the Brazilian government it can prevent another oil spill from happening, the head of Brazil's oil regulatory agency said Monday.
Chevron "has not identified yet the real cause of the problem," Magda Chambriard, president of Brazil's national oil regulator, ANP, told reporters on the sidelines of the Offshore Technology Conference in Houston. "The report we have [from Chevron] says that it is due to natural causes and natural causes can happen again."
Chevron's spill was smaller than the massive April 2010 Deepwater Horizon leak in the Gulf of Mexico, but that doesn't mean it wasn't a large spill or a major problem for Brazil, Chambriard said.
"It was a real disaster," she said. The incident resulted in the spill of 3,600 barrels of oil, she added.
The Brazilian government is in talks with Chevron and is conducting an investigation into the causes of the spill and it is "confident it can reach an agreement with Chevron," Chambriard said.
To prove that Brazil is not being especially tough on Chevron because it is an international company, ANP plans "to be even harder" with Brazil's state-run energy giant Petroleo Brasileiro SA, which is Chevron's partner in the field.
Chevron shut down operations at the Frade field in March to better study the geology of the area, which has come under scrutiny because of a series of oil seeps from the seabed.
Chevron is lead operator of Frade, which holds estimated recoverable reserves of between 200 million and 300 million barrels of oil equivalent, with a 51.7% stake.
Petrobras holds 30%, while the Frade Japao Petroleo Ltda. consortium has the remaining 18.3% share.

Canada's Pacific Rubiales to start producing oil in Peru

BOGOTA -- Canada-based Pacific Rubiales Energy Corp., the top private oil producer in Colombia, on Friday announced a $335 million deal with BPZ Resources that will allow it to start producing for the first time in neighboring Peru.
In a statement, Rubiales said it will acquire a 49% stake in Houston-based BPZ's offshore Z-1 Block in Peru. The block has two producing fields that averaged 3,800 barrels of oil per day last quarter, and has total proved oil reserves of about 34.7 million barrels.
BPZ has been seeking a partner for its Z-1 Block.
Rubiales said it will pay $150 million in cash and a commitment to pay $185 million for BPZ's share of capital and exploratory expenditures in Block Z-1.
"The acquisition complements our existing exploration acreage in Peru, and it provides us with first production in the country," said Rubiales Chief Executive Ronald Pantin.