http://www.nola.com/business/index.ssf/2012/01/shell_oil_president_says_pace.html
Times-Picayune/Nola.com
Shell Oil President says pace of federal permitting is improving
Published: Wednesday, January 25, 2012, 5:33 PM Updated: Wednesday, January 25, 2012, 5:36 PM
By Richard Thompson, The Times-Picayune
Shell Oil president Marvin Odum said Wednesday that he believes the pace of federal permitting for deepwater oil and gas drilling in the U.S. “may have turned a corner” by the end of 2011, in the nearly two years since a temporary moratorium was put in place in the wake of the BP oil spill. Odum, speaking at the annual meeting of the Louisiana Mid-Continent Oil and Gas Association in New Orleans, said Shell now has five floating drilling rigs working in the Gulf of Mexico and will soon add two more.
“We’re working hard to make up for what we lost,” he said. “Shell has always had confidence that we’ll get back to where we need to be.”
A day after President Barack Obama outlined his domestic energy policy in his third State of the Union address — a speech in which he cited projections that developing natural gas could support more than 600,000 jobs by the end of the decade and touted jobs created by federal investments in renewable energy — Odum offered a similarly optimistic outlook for the natural gas industry in Louisiana.
“For the state, we see even more opportunity in technology that turns natural gas into liquid products, like diesel fuel and lubricants,” Odum said, adding that developing such technology would create jobs and give the state an economic boost, but also “fulfill a critical need for domestic, secure supply of transportation fuels for the U.S.”
Odum said Shell has drilled about 350 vertical and horizontal wells in the Haynesville Shale natural gas field the field since 2008, and has reduced its drilling costs by 50 percent and completion costs by 45 percent, which he described as “real tangible costs.”
Last year Shell announced plans to build a 72-office building complex to service its workforce in the area, where it had a working interest in several hundred thousand acres.
The state Department of Natural Resources announced last week that 39 rigs were drilling off Louisiana’s coast, the most since May 2010. That is almost twice the number of rigs that were operating in the area at the start of 2011, but less than the average rig count of about 42 that were working there in the three months prior to the Deepwater Horizon disaster.
Richard Thompson can be reached at rthompson@timespicayune.com or 504.826.3496.
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http://oilprice.com/Energy/Crude-Oil/Oil-Majors-Move-Back-to-the-Gulf-of-Mexico.html
Oil Price
Oil Majors Move Back to the Gulf of Mexico
By Energy Digital | Wed, 25 January 2012 23:42 | 0
Over a year since America’s worst oil spill in the Gulf of Mexico, big oil finally gets back to business… with a vengeance.
For the first time since BP’s Deepwater Horizon explosion, leading to America’s worst oil spill in history, the Gulf of Mexico has officially reopened its doors for business. In December’s lease sale, the enormity of pent up demand since permits were halted over a year ago resulted in over $337 million in bids on 191 different tracts from 20 companies.
Despite fierce opposition from environmental groups, the Obama administration remains true to the most critical energy strategies meant to boost economic recovery, lower fuel and energy prices and decrease oil imports. And considering that the Keystone XL pipeline may very well not happen along with the more recent events in Iran, which threaten to block the world’s most important oil portal, where else would the US get its most crucial energy source?
While environmentalists fear a repeat of history, moving back into the Gulf without the proper safety procedures and technologies in place, the White House sees the sale as a major milestone in the area’s recovery process.
December’s lease sales, “the first since the tragic events of Deepwater Horizon, continues the Obama administration’s commitment to a balanced and comprehensive energy plan,” said Secretary of the Interior Ken Salazar, who attended the sale and provided opening remarks. “Offshore drilling will never be risk free, but over the last 19 months we have moved quickly and aggressively with the most significant oil and gas reforms in U.S. history to make it safer and more environmentally responsible. Today’s sale is another step in ensuring the safe and responsible development of the nation’s offshore energy resources.”
Not according to environmental groups like the Natural Resources Defense Council (NRDC) and oceans advocacy group Oceana, who are pushing forward with a lawsuit over the environmental impacts of the Gulf spill. Ocean Senior Campaign Director Jackie Savitz claims there is no new assessment of how a future spill will affect ecosystems or a baseline for how much they’ve already been damaged.
But according to Interior Secretary Ken Salazar, the new five-year program will make available for development more than three-quarters of undiscovered oil and gas resources estimated on the Outer Continental Shelf (OCS), including frontier areas such as the Arctic. In addition to the Gulf, offshore drilling in Alaska will recommence under the supervision of the Department of Interior and the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE).
“The Best Place in the World to Drill”
Since the administration lifted the moratorium on drilling permits in the region, oil executives are racing to pursue what many are calling the world’s best place to drill, where more deepwater rigs are expected to go into operation this year than were present before the BP spill.
Shell’s deepest rig Perdido, meaning “lost” in Spanish, runs nearly two miles deep-no other well on Earth produces oil in deeper water. That’s good news for the industry, moving quickly to take advantage of the Gulf’s 15 billion barrels of potential oil, according to analysts.
“We are at the point where … depth is not the primary issue anymore,” Marvin Odum, head of Royal Dutch Shell’s drilling unit in the Americas told the Associated Press. “I do not worry that there is something in the Gulf that we cannot develop … if we can find it.”
That’s a frightening mindset, considering the challenges faced in deepwater drilling made clear from the BP disaster and, more recently, last month’s spill from a Chevron deepwater well off the coast of Brazil. While the Gulf remains the most attractive solution for meeting current and future demands, both from oil companies and under the administration, it’s not so clear whether the technologies and environmental regulations are up to par with the speed at which more deepwater operations are about to reoccur.
By. Carin Hall of Energy Digital
Special thanks to Richard Charter