http://www.reuters.com/article/2011/11/15/us-chevron-brazil-idUSTRE7AD1D420111115?type=GCA-GreenBusiness&feedType=RSS&

1:19pm EST
(Reuters) – Chevron Corp. said on Tuesday that oil flow from an appraisal well drilled at its Frade field in Brazil appears to have ceased, the first sign of progress in efforts to contain an oil spill in the region. Monitoring by the company also showed “a significant decrease” in the amount of oil observed leaking from a line of seeps on the ocean floor, the company said in a statement.

Cementing of the well, which is suspected to have been a cause for the oil leak, will be finished in coming days. Oil seeps have created a “sheen” with a volume of 400 barrels to 650 barrels of oil on the ocean in the area, which lies 370 kilometers (230 miles) northeast of Rio de Janeiro.

The statement is the first signal by the company that actions taken to control the spill are yielding results. Government officials began a probe and said that drilling likely increased pressure on the area where the well is located, leading to the leak.

The incident is likely to increase scrutiny of safety in Brazil’s offshore operations as the Latin American country seeks to tap huge, newly found reserves and become a major oil exporter. Analysts said it is too early to know whether the spill will slow Brazil’s plans to develop ultra-deepwater fields in the prolific region known as the subsalt, which is believed to hold more than 50 billion barrels of oil.

The Frade field is located in the Campos Basin, which produces the vast majority of Brazil’s oil, in water depths of 1,200 meters (3,800 feet). The company has said Frade is not part of the subsalt. Last year’s BP spill in the Gulf of Mexico spurred greater vigilance by regulatory authorities over Brazil’s offshore operations, state oil company Petrobras has said. New investments in the subsalt are on hold due to a political dispute over how to distribute royalties among states.

(Reporting by Guillermo Parra-Bernal; editing by Bob Burgdorfer)

Special thanks to Richard Charter

sounds suspicious. DV

http://in.reuters.com/article/2011/11/11/chevron-brazil-idINN1E7A91MQ20111111

Fri Nov 11, 2011 6:15am IST

* Regulator says leak one km from Chevron’s Frade field

* Company says leaking from seep, unrelated to production (Adds Chevron statement)

Nov 10 (Reuters) – An oil leak near Chevron’s Frade field off Brazil’s coast, which had temporarily halted work there, is from a natural seep on the seabed and is unrelated to Frade’s production, Chevron said on Thursday.

Chevron Corp (CVX.N) said it had notified the appropriate agencies and was working with partners to deploy response vessels to control the sheen and minimize any environmental impact.

“An inspection of the Frade facility found that production activities were unrelated to the sheen and production is continuing,” the U.S. oil company said in a statement.

A subsea vehicle deployed by Chevron found the source was a seep, where hydrocarbons naturally escape from underground. Investigations into the sheen’s causes were continuing, Chevron said.

ANP, Brazil’s oil regulator, has begun its own investigation after earlier reporting oil on the ocean surface about a kilometer (0.6 mile) from the Frade field, which began production in 2009 and averaged 50,000 barrels per day of output in 2010.

After flyovers of the area, Chevron estimated the total volume on the surface at about 60 barrels of oil.

Chevron owns 51.7 percent of Frade, while state-run oil company Petrobras (PETR4.SA) has a 30 percent slice and the remainder belongs to the Frade Japao Petroleo consortium.
The field is about 230 miles (370 km) from the northeast coast of Rio de Janeiro state and its output feeds into a floating production, storage and offloading vessel (FPSO), according to details on Chevron’s website.

The company has been drilling to add five more development wells and three injection wells to the project on top of the existing eight development and four injection wells.
The leak is in the Campos Basin, which accounts for the bulk of Brazil’s oil output off the coast of Rio de Janeiro state. Brazil’s output is expected to leap from about 2 million barrels of crude per day now, once vast reserves lying at depths of about 7 kilometers (4.3 miles) below the seabed come on stream.

The ANP tightened regulations for offshore oil production in the wake of the Gulf of Mexico oil spill in 2010 which dumped millions of barrels of crude into the ocean following an explosion on a drilling rig working for BP (BP.L). (Reporting by Brian Ellsworth, Reese Ewing and Sabrina Lorenzi and Peter Murphy, with additional reporting by Braden Reddall in San Francisco; editing by Sofina Mirza-Reid, Phil Berlowitz)
REGULATORY NEWS

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http://www.canadianbusiness.com/article/56593–china-says-probe-finds-conocophillips-oil-spills-caused-by-negligence

By Gillian Wong, The Associated Press | November 11, 2011

BEIJING, China – Chinese authorities said Friday that negligence by a ConocoPhillips subsidiary caused recent oil spills in Bohai Bay that have drawn intense criticism from marine authorities and environmentalists.

The State Oceanic Administration said in a statement on its website that an investigation found there were shortcomings in ConocoPhillips China’s systems and management and that the company failed to take necessary preventive measures after signs of a problem emerged. The oil spills began in June in Penglai 19-3, China’s largest oil field.

These factors led “to a major oceanic oil spill pollution accident occurring due to negligence,” the statement said.

ConocoPhillips China operates the Penglai 19-3 oil field with state-owned partner China National Offshore Oil Corp. Houston-based ConocoPhillips did not immediately respond to an emailed request for comment.

ConocoPhillips had said in September that it would set up two funds to pay compensation and address environmental problems resulting from the spills.

The government has already ordered the company to stop all production pending a full cleanup and review to ensure no more oil seeps into the sea.

The administration said Friday that the oil spill covered 2,400 square miles (6200 sq. kilometres) of water surface. It said that the company violated requirements that had been laid out in an environmental impact assessment report reducing the ability to respond to emergencies, causing oil spill from one side.

It was not immediately clear what measures the government would take, or the response it expected from ConocoPhillips, but the Oceanic Administration has said it plans to pursue legal action over the spills, including losses to regional fisheries.

China’s maritime authorities contend that ConocoPhillips failed to meet an Aug. 31 deadline for permanently staunching and cleaning up the spills. The company says it met the deadline and has contended that any oil still seeping from the wells, which have been sealed, is residual from the earlier spills, which released about 700 barrels of oil and 2,500 barrels of mineral oil-based drilling mud – used as a lubricant for drilling.

Environmental experts say measures to cut back on effluent from factories and mining and to expand sewage treatment have failed to keep pace with the fast expansion of industries and oil drilling in the Bohai Bay, leading to the decimation of seafood and fish stocks and frequent red tides.

Special thanks to Richard Charter

Phil Taylor, E&E reporter
Published: Thursday, November 10, 2011

The Interior Department today spelled out the final terms for its first lease sale in the Gulf of Mexico since the BP PLC Deepwater Horizon oil spill began a year and a half ago. As previously announced, the sale will nearly triple the minimum bids allowed for blocks in water depths of at least 1,300 feet. The move aims to discourage companies from purchasing leases they don’t intend to develop and to ensure taxpayers receive a fair return on public minerals, Interior said.

The Dec. 14 sale in New Orleans will offer every unleased block in the western planning area, including 21 million acres stretching as far as 250 miles from the Texas shore. Interior’s Bureau of Ocean Energy Management estimated the sale could
result in the production of up to 423 million barrels of oil and 2.65 trillion cubic feet of natural gas.

“This sale is an important step toward a secure energy future that includes safe, environmentally-sound development of our domestic energy resources that will continue to reduce our dependence on foreign oil and create jobs here at home,” Interior Secretary Ken Salazar said in a statement. “Since the Deepwater Horizon spill, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability.”

The sale will increase the minimum bid amount for blocks in water depths of 1,312 feet and greater from $37.50 to $100 per acre. The National Ocean Industries Association praised the sale, but said it was unsure what impact the higher minimum bidding rules would have on industry. “It remains to be seen whether the increased costs of minimum bids will have an effect on the bidding,” NOIA President Randall Luthi said in a statement. “Companies could forego bidding on lesser known tracts and thus the federal government will receive nothing, not bonus bids or rental fees, for tracts that might have generated interest in earlier sales.” He added that while Interior has accelerated its approval of certain exploration permits, he was still concerned over how long it has taken to approve exploration plans. “This sale will help gauge industry’s confidence in whether the current permitting process will allow buyers to actually develop the leases they purchase,” he said.

Environmental stipulations will require operators to protect biologically sensitive features, as well as marine mammals and sea
turtles, Interior said.

Special thanks to Richard Charter

Mike Soraghan, E&E reporter
Published: Thursday, November 10, 2011

Federal offshore drilling regulators today formally recommended that drillers should heed the mistakes federal investigators found when investigating the April 2010 Deepwater Horizon explosion.

The newly created Bureau of Safety and Environmental Enforcement (BSEE) today issued a “safety alert” to leaseholders and contractors working in the Gulf of Mexico. The alert summarizes the findings of the investigation by the Coast Guard and the Interior Department and makes recommendations the drillers can incorporate into their work.

“We must ensure that the lessons learned from the investigation of the Deepwater Horizon explosion and oil spill are widely disseminated and used to enhance the safety practices used by offshore oil and gas operators and contractors in their day-to-day activities,” said BSEE Director Michael Bromwich. “Issuing this Safety Alert to all oil and gas leaseholders and contractors is another method for BSEE to ensure that offshore operations are conducted in the most safe and environmentally- responsible manner.”

The explosion led to an oil spill from BP PLC’s Macondo well that lasted for months before it could be capped. Interior’s offshore drilling regulators use safety alerts to inform the offshore drilling industry about the circumstances surrounding an
incident or a near miss, and usually offer recommendations on how to avoid a repeat occurrence. The department’s recommendations cover operational issues such as negative pressure testing procedures, location of equipment on the rig, and the configuration and alignment of blowout preventer stacks.

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Special thanks to Richard Charter