And Production Co News

On October 1 two new wholly owned group companies of Mitsubishi Heavy Industries, Ltd. (MHI) succeeding to MHI's ship construction operations in the Nagasaki district will commence business operations. Mitsubishi Heavy Industries Shipbuilding Co., Ltd. will handle ship constructions, while Mitsubishi Heavy Industries Hull Production Co., Ltd. will manufacture hull blocks. By making full use of the diverse resources cultivated at the Nagasaki Shipyard & Machinery Works, the two new companies will pursue enhanced competitive strength by narrowing product lines to areas of core competence and engaging in more compact business operations. Mitsubishi Heavy Industries Shipbuilding will focus on the construction of LNG and LPG gas carriers, a type of vessel in which MHI excels.

Transocean Ltd. announced that it has reached two separate settlement agreements, with the Plaintiffs' Steering Committee (the "PSC") and with BP Exploration & Production Inc. and BP America Production Co. ("BP"). These settlements together resolve substantially all outstanding claims against Transocean arising from the April 20, 2010, Macondo Well incident involving the Deepwater Horizon in the Gulf of Mexico. Under the terms of the agreement with the PSC, which is subject to approval by the U.S. District Court for the Eastern District of Louisiana (the "Court"), Transocean will pay two classes of plaintiffs, represented by the PSC, a total of  approximately $212 million. Transocean will also pay attorneys' fees to be determined by the Court.

Bibby Offshore Singapore (BOS) said it has successfully completed a call out contract with PTT Exploration & Production Co Ltd (PTTEP). The project involved a short notice mobilization, and saw the BOS-operated DP2 ROV Support Vessel, the Bibby Spring perform subsea inspection services to PTTEP’s Bongkot Field assets in the Gulf of Thailand. The work was successfully completed within PTTEP’s restricted timeframe. Darren Morgan, Managing Director of Bibby Offshore Singapore,said, “The team work tirelessly to ensure we deliver on time and within budget.

Technip awarded Murphy Exploration & Production Co. contract for development of Dalmatian Field in Gulf of Mexico. The lump-sum contract is for work at a water depth ranging from 530 to 1,800 meters on a field  jointly owned by Murphy and Ecopetrol America Inc., comprised of the De Soto Canyon Blocks 4, 47, 48 and 91. The project consists of a subsea tie-back to an existing Gulf of Mexico platform. The contract covers: project management, engineering, fabrication and installation of a gas riser, an oil riser, a 38-kilometer flowline and a 34-kilometer pipe-in-pipe flowline with associated PLETs and jumpers; installation of a main subsea control umbilical, infield umbilical, and associated foundation and flying leads, then pre-commissioning.

According to a May 13 report from Bloomberg, a regulatory crackdown on offshore oil drilling after the fatal rig explosion in the Gulf of Mexico will delay development of U.S. deposits with billions of barrels of crude and may spawn industry job cuts. BP Plc, ConocoPhillips, Petroleo Brasileiro SA, Cobalt International Energy Inc. and Plains Exploration & Production Co. are among explorers with projects on hold in the Gulf or coastal California after the April 20 explosion prompted federal and state officials to halt new drilling. An estimated 7,500 jobs on offshore drilling rigs in the Gulf of Mexico may be lost if the ban on new well permits continues through July 1, Lee Hunt, President of the International Association of Drilling Contractors in Houston, told Bloomberg.

The U.S. Department of the Interior’s Minerals Management Service recent central Gulf of Mexico lease sale received 1,428 bids on 723 tracts, attracting $2.9 billion in high bids – the second highest total in U.S. leasing history. Secretary of the Interior Dirk Kempthorne, who officially opened the sale, said the bids made a statement concerning the future of the Gulf of Mexico. “This historic sale emphasizes the Gulf’s strategic value for America’s energy security and the significant economic benefits of environmentally safe oil and gas production for the nation and the Gulf states,” Kempthorne said. The Gulf accounts for about a quarter of domestically produced oil and 15 percent of domestically produced natural gas in the nation.

Fifteen offshore energy companies have been named national finalists for the Department of the Interior’s 2006 Safety Awards for Excellence (SAFE) competition. Sponsored by the Minerals Management Service (MMS), the SAFE awards are presented annually to Outer Continental Shelf (OCS) oil and gas operators and contractors who achieve excellence in safety and pollution prevention. Established in 1983, the SAFE Awards recognize and honor companies making concerted efforts to train and motivate their employees to conduct offshore operations in a safe and environmentally responsible manner. The SAFE Award is presented annually to offshore…

Chevron Corporation said that Raymond I. Wilcox, president of Chevron North America Exploration and Production Co., will retire from the company on March 31, 2006, to become president and chief executive officer of Chevron Phillips Chemical Company LLC, a company owned equally by Chevron and ConocoPhillips. Wilcox will be succeeded by Gary P. Luquette, currently managing director of the European strategic business unit of Chevron International Exploration and Production Co., effective April 1, 2006.

Owner Shell Nigeria Exploration and Production Co. Samsung's latest technological innovation is the successful completion and delivery of an 2,000,000 bbls FPSO, Bonga, built for the Shell Nigeria Exploration and Production Company, SNEPCO in June 2002. The vessel, which is a double hull type floating oil production, storage, and offloading unit (FPSO), will be permanently spread moored in Bonga field located offshore Nigeria in water depth ranging from 1,000 to 1,125 m. The Machinery space will be located underneath the accommodation spaces. The double bottom in way of machinery spaces is used as sludge and oily water drain tanks.

Exxon Mobil Corp. made a major oil and gas discovery in the deepwater off the coast of Nigeria. Located about 100 miles southeast of Lagos, the discovery well, Erha-1, was drilled from December 1998 to February 1999. Exxon Mobil said the appraisal well, Erha-2, stood in 3,860 feet of water and was drilled to a total depth of 12,287 feet. It tested at a flow rate of 2,800 barrels per day. As operator, Exxon will hold a 56.25 percent participating interest and Shell Nigeria Exploration and Production Co., a unit of the Royal Dutch/Shell Group, will a hold 43.75 percent stake. Including the Erha find, Exxon Mobil holds an interest in 44 deepwater blocks in West Africa.

According to the U.S. Department of the Interior's Minerals Management Service (MMS), deepwater drilling (1,000 ft. and deeper) shows the greatest potential of development, and certainly has garnered the attention (as well as the E&P dollars) of offshore oil production industry leaders. By yearend 2003, the MMS estimates as much as 63 percent of the oil production and 29 percent of the daily gas production will come from deepwater reserves. In August of 1998 there were 30 (temporary and permanent) deepwater rigs drilling simultaneously in the Gulf of Mexico's Outer Continental Shelf (OCS), at depths greater than this. The proliferation of deepwater development projects will likely continue to grow…

Noble Drilling said its fourth successful EVA-4000 semisubmersible conversion, Noble Amos Runner, began drilling in the Gulf of Mexicofor its contractors - Kerr-McGee Corp., Marathon Oil and Murphy Exploration and Production Co. The semi, capable of drilling in water depths of 6,600 ft., underwent mooring sea trials before it began its five-year drilling project in the Gulf. Noble Drilling, also announced its second conversion, Noble Paul Wolff, drilled a well for Petroleo Brasiliero S.A. (Petrobas) in 8,017 ft. of water, reportedly setting a new world record. Noble Paul Wolff, capable of drilling in 8,900 ft. of water, is currently under a six-year Petrobas contract.

Although this has been considered an off year in the Gulf of Mexico from rig count and fleet utilization standpoints, it is another record year for major offshore operators expanding their fleets and the shipyards that are building these vessels. Last year, over 50 supply boats were delivered and about an equal number of crew/supply vessels made their way into the fleets of operators. This year looks equally robust as vessels are being ordered in quantities of four, six and even 10. This begs the question as to why offshore vessel operators are order record number of vessels if the business is sluggish? The answer is two fold: Deep water and deep gas. Drilling activity is bound to increase based on these two factors industry leaders believe.