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Tag Archives: Gulf Oil Spill

New Capex Spending from Big Oil Could Top 2008 Records

Looking to increase production and take advantage of high oil prices, analysts expect significant new capital investments from the ‘Big Oil’ companies in the coming year.

Spending from the world’s top publicly traded oil companies; ExxonMobil, Chevron, ConocoPhillips, Royal Dutch Shell, BP and Total; may reach record levels in 2011, says ING oil and gas analyst Jason Kenney, potentially reaching $128.54bn, a $10bn+ increase from 2010 spending levels.  This amount could top the record $127bn spent by Big Oil in 2008.

Offshore drilling exploration will be a high priority as oil majors seek to broaden their resources and plan for the future.  “In 2014, about 63% of the majors’ new source production is forecast to come from the offshore – shallow water and deepwater,” notes Rebecca Fitz of consulting group PFC Energy.

However, the consequences of the BP oil spill are being felt throughout the industry.  Ramifications from the spill will prompt companies to pay more attention to safety and regulatory compliance procedures during offshore exploration and production.  Associated costs, especially in North America, are predicted to rise as a result.  Read more…

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Posted by on January 28, 2011 in Oil, Traditional Energy

 

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Obama Extends U.S. Offshore Deepwater Drilling Ban

Last week President Obama reversed a decision to expand oil exploration off the U.S. coastline.  Rather, the administration has extended a moratorium which would prohibit deepwater drilling in the Atlantic, Pacific and eastern parts of the Gulf of Mexico.

Interestingly, under President Obama’s plan, drilling could continue in western sections of the Gulf of Mexico, which was drastically impacted in the April 20th BP oil rig explosion.

In total, the Deepwater Horizon rig spill poured 4.9 million barrels of crude oil into the Gulf waters, devastating local tourism and fishing industries and damaging coastline across many Gulf States, the extent of which is still being determined by scientists in the region.  Read more…

 
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Posted by on December 7, 2010 in Traditional Energy

 

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White House Ends Moratorium on Off-Shore Drilling

President Obama has lifted the moratorium on off-shore drilling, originally put in place following the BP disaster in the Gulf of Mexico – which led to the most significant ecological disaster in U.S. history.

Although the moratorium was supposed to last through the end of November, the White House has been under great pressure from the domestic oil and gas industry who have been adversely affected by the ban.

The Interior Department has instituted new safety rules which cover well casing and cementing, blowout prevention, as well as safety certification, emergency response and training for workers, which all new operations must comply with.  Officials have remarked that even with the lifting of the drilling moratorium, it could still take weeks or months for new permits to be issued in the Gulf.  Read more…

 
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Posted by on October 12, 2010 in Oil, Policy

 

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BP Closes in on Gulf Oil Spill 'Permanent Kill'

BP is nearing completion of a relief well to seal once and for all the Deepwater Horizon spill site in the Gulf of Mexico.  Upon completion, BP will begin its “bottom kill” operation to plug the leaking well with mud and cement.  The well has been provisionally sealed with a containment cap since July 15th.

“They are closing in on the last 30-40 feet,” said retired Coast Guard Admiral Thad Allen, the government’s lead point person on the scene.  He expects to intercept the remaining space between the well shaft and the surrounding rock  “sometime before the end of the week,” depending upon the path of a developing tropical storm moving across the Florida peninsula.

Carol Browner, the energy and climate change adviser to President Obama, says approximately three-fourths of the spilled oil has been recovered from the Gulf of Mexico waters. Deliberate burning, skimming and direct recovery accounted for about 25%, while natural evaporation, dispersion and other processes took care of about 50% of the volume.  The remaining oil has either congealed into tarballs, been embedded into sediment, or remains as a sheen on the water’s surface.  “The good news is that the vast majority of the oil appears to be gone,” Browner said during a recent television appearance.

So far, BP has spent $6.1 billion dealing with fallout from the Gulf spill, the worst in United States history.  BP has already paid $319 million in compensation to businesses and individuals that have been affected by the spill, and will likely continue to face high costs as it continues environmental cleanup operations in the afflicted region.

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Posted by on August 9, 2010 in * Global Fund Exchange, Oil

 

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BP Spill – A "Wake-Up Call" for the Offshore Drilling Industry

The Gulf of Mexico spill is a “wake-up call” for the entire offshore drilling industry, says Bob Dudley, the new replacement for embattled BP CEO Tony Hayward.  In the face of harsh public criticism and Congressional scrutiny, Dudley has promised to make safety his number one concern – a change in direction for the company, which has a reputation for risk-taking.

Clean up and other associated costs related to the spill, the largest in U.S. history, may reach as high as $30 billion.  Since the rig explosion in April which broke open the deep-sea well, estimates say over 5 million barrels of oil have spilled into the Gulf of Mexico, endangering marine life and resulting in major closures of fishing waters and tourist beaches along the Gulf coastline.

The U.S. House of Representatives took up debate today on a bill to reform off-shore drilling practices in the wake of the spill.  The Senate, the SEC and the Department of Justice have also launched their own investigations, and private lawsuits against BP have piled up as well.  The combined effect of these developments has knocked nearly 40% of BP’s market value since the explosion.

BP says it could begin its “static kill” drilling operations to seal the leaking well shut once and for all by this weekend, ahead of schedule.  Still, retired Coast Guard Admiral Thad Allen, the government’s main representative in the region, says conclusive clean up of the region will be both costly and time-consuming, requiring many more millions, many more years and much more effort from BP over the long-term.

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Posted by on July 30, 2010 in Oil

 

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BP Containment Test Successful – Gulf Spill Sealed after 85 days

After 85 days, BP has finally succeeded in containing the gushing oil spill in the Gulf of Mexico waters.  After closing valves and vents on the containment cap during a test on Thursday, the well has stayed in place for two full days.

Although this is a very positive sign, both BP and the White House have warned that the containment cap does not represent a permanent fix – there is still much more work to do to seal the well shut for good, and to clean up the hundreds of millions of spilled oil.  “We’re encouraged by this development, but this isn’t over,” said the U.S. government’s lead contact in the region, retired Coast Guard Admiral Thad Allen.

BP will likely release the flow of oil again, siphoning it up to ships on the surface as it continues to drill a relief well to permanently shut the well with mud and cement.  The well is expected to be ready in early August.

Investors welcomed news of the containment caps success, sending BP shares higher in trading today.  However, since the rig explosion in April nearly $65 billion has been knocked off BP’s market value.

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Posted by on July 16, 2010 in Oil, Traditional Energy, Water

 

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Judge Blocks Obama's Offshore Drilling Ban; OPEC Chief Urges Restraint

In the wake of the catastrophic oil spill in the Gulf of Mexico, the Obama administration moved last week to ban all offshore drilling operations in the Gulf region for six months until further investigation into the cause of the BP gusher, which has been spilling oil into the ocean since April.

However, a judge in New Orleans struck down the ruling, calling it “rash and heavy-handed.”  The Obama administration appealed immediately, saying that continued drilling poses a danger to oil workers and to the environment that “the president does not believe we can afford.”

It is a contentious issue that has even brought in Abdalla Salem El Badri, the Secretary General of OPEC.  After meeting with European ministers in Brussels, Mr. El-Badri urged the United States to reconsider its ban on offshore drilling, warning that a six month hiatus would hold back oil supplies.  “We should not really ban it and we should not jump to conclusions,” he told reporters.

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Posted by on June 28, 2010 in Oil, Traditional Energy

 

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