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Fresh delay for BP’s Thunder Horse
Sheila McNulty, Financial Times
BP was hit by yet another setback on Monday when the company was forced to announce that production at its showcase Thunder Horse oil and gas field will not start until mid-2008, 18 months later than planned. ..
For BP, the delay is the latest in a succession of problems in its US operations, including the explosion at its Texas City refinery last year and the shutdown of its Prudhoe Bay field in Alaska following leaks from a corroded pipe. Analysts had said the start-up of Thunder Horse had been the only good news on the horizon for BP.
On Monday, some were questioning the returns the project will make. The company has touted the field will deliver 1.5bn barrels of oil, making it the biggest find yet in the Gulf of Mexico. ..
BP discovered the Thunder Horse field in July 1999 and set January 2005 as a production target, with about 50 wells. BP has delayed the project several times.
The oil and gas platform, the world’s largest of its type, was found to be listing badly after its evacuation during Hurricane Dennis in July last year.
On September 10, BP took a key manifold – the central structure of the platform – to a shipyard in Houston for hydro-testing, in which water is pumped in at high pressures to ensure the system is intact.
“In this case, it blew apart and didn’t hold pressure,’’ said a BP employee. “Things shot 60ft in the air. It is very clear there is a system-wide problem.’’
The Organisation of the Petroleum Exporting Countries and the International Energy Agency are expected to revise downward their oil supply forecasts because of the delay, which will probably reduce US supply growth to zero in 2007. An Opec official said: “This is amazing. Thunder Horse was absolutely key.”
(20 Sept 2006)
Contributor Alfred Nassim writes:
Nine years from discovery to production for this platform. How long will it be for Jack 2?
Rig shortage to stunt oil output growth for years
Reuters
LONDON – A global shortage of rigs will hamper attempts to raise global oil and gas output for years, oil service company executives and consultants said on Monday.
As producers look to boost crude and gas output to meet soaring demand growth, the global supply of rigs is stretched to the limit and is insufficient to meet industry needs.
…”We have a problem, it’s real and it’s going to be extremely tough to deal with,” Matthew Simmons, Chairman of Houston-based energy investment bank Simmons & Company International, said at the same event.
“We are in a rusty industry. We have the world heading to astonishing growth in oil and gas demand. To meet that demand envisages an awful lot of drilling.”
Simmons said that more than 20 years of recession in the oil services industry from the early 1980s had left rig builders in a poor state to meet surging demand.
Rapid decline rates in some of the world’s mature producing areas meant that even more drilling was needed, Simmons said.
(19 Sept 2006)
Australian oil production decline over 8%
Dave Kimble, ROEOZ list
ABARE Mineral Statistics for the June 2006 quarter have been released.
Oil production rose slightly over the previous quarter but was still a shade below the forecast based on projecting the previous 25 quarters.
Production is now 49.4% of what it was at the peak in March 2000 (see figure). The year ending June 2006 was 8.7% down on the year ending June 2005.
Natural gas production for the year ending June 2006 was up 2%. Coal production (all kinds) was up 0.86%.
Imports of diesel fuel are now 44.9% of our diesel consumption.
(14 Sept 2006)
Contributor Dave Kimble writes: When we are thinking “Energy Security”, diesel looks like the weak link. Disruptions to tanker shipping around Singapore could easily lead to supermarket shelves in Australia’s regions being only half-full, or worse.
