The Leading Edge: If we knew then, what we know now. The 20-year transformation of the oil business as recorded in TLE 1982-2002.
"Twenty years ago, the oil industry was experiencing a price and hiring boom. The price of oil was up, and optimism abounded. College students majoring in geoscience were being actively recruited, and many were able to choose between several job opportunities."
> That was when I decided to go into geophysics. I was a college student in south Louisiana, and times were good in the oil patch. I was sure that by the turn of the century, geophysicists would be worth their weight in gold.
I found this press release on the 3DGeo site --
3DGeo Development Corporation Opens Houston Office.
"... 3DGeo has added 40 central processing units of SGI Origin, and 10 terabytes of disk capacity to the new Houston office. Additionally, 3DGeo will be adding even more computing power to the Houston office with the purchase of a 512 CPU Linux Cluster."
> While I'm at it, I thought this was pretty interesting --
3DGeo Selected to InfoWorld Top 100 Innovative Companies.
Oil and Gas International: Schlumberger introduces Inside Reality.
"Schlumberger has licensed the Inside Reality system for use by oil and gas companies and will be installing it in its own iCenter virtual reality visualization centers worldwide. Inside Reality uses OpenSpirit for data access from industry-standard project databases. Inside Reality is based on technology developed by Norsk Hydro and Christian Michelsen Research AS."
In the last two months I've linked to stories on the Arthur Andersen and the S&P annual surveys of expected industry activity. Here are the very similar, but more comprehensive, results of Salomon Smith Barney's annual survey --
World Oil: 2002 E&P Spending: Annual survey signals spending plateau.
"Overall, the survey indicates that, after two years of robust recovery from the 1999 contraction, 2002 spending will be essentially flat with 2001. In a predictable pattern, North American activity led the rebound in 2000 with a 40% increase, followed by an unexpectedly strong 30% increase in 2001. Gas has been -- and will likely continue to be -- the driving force behind North American spending." ...
"Consistent with the trend toward increased development work, 38% plan for a decreased budget share to be allocated to seismic, vs. 28% who plan an increase. If this turns out to be the case, 2002 would be only the second year in the past ten, in which seismic expenditures were reduced as a budget percentage. Once the fundamentals turn positive again, which is expected in mid-2002, a return to increased seismic expenditures is expected."
Slate: Today's Papers. (Sunday's papers, actually.)
"President Bush, in his weekly radio address, renewed his call for a new energy policy that will `increase our energy independence.' The Senate is expected to open debate on the issue this week. Both the WP and NYT stuff the story, but the LAT fronts it, pitting the issue of production versus that of conservation. The paper also invokes the name `Enron' 11 times in the article, arguing that along with an expected Democratic filibuster, the Enron mess might make passage difficult. The WP, on the other hand, barely touches the Enron issue and cites belief on the Hill that a filibuster can be overcome."
Speaking of Enron, here's a nice little explanation of the holes in Enron's "business model" that lead to the massive losses that lead to the cover-ups that lead to everything else --
Houston Business Journal: The other Enron whistleblower.
"Enron had developed a model forecasting fluctuations in the power market over a decade, while others in the industry sell no more than two or three years forward because no market exists beyond that time frame. And the lack of a market means that there is no real basis for marking prices on such extended deals."
Oil and Gas International: Conoco spuds ultra-deep wildcat on Walker Ridge.
"Conoco has commenced drilling an exploratory well in 6,643 ft water depth on Walker Ridge Block 286 that is extended to the west into Block 285.... At this time, a second drillship is working on Walker Ridge, ... drilling a wildcat for BHP on the Cascade prospect in Block 206, some 28 miles east of the Conoco drillsite."
Oil Online: Study casts doubt on ANWR potential.
"According to the analysis, drilling in the Arctic Refuge fails oil companies' conservative investment criteria. While oil companies typically require projects like the Refuge to provide a 15 percent return on investment at prices as low as $12 to $16.50 a barrel, the U.S. Geological Survey estimates that there is no economically recoverable oil in the Refuge at prices less than $17.05 per barrel, the study pointed out."
> Despite the obvious bias of the report, that's a really good point.
Houston Chronicle: BP project now Thunder Horse. Capitulation on name eases Lakota objection.
"BP announced Wednesday it has changed the name of its massive Gulf of Mexico oil discovery from Crazy Horse to Thunder Horse, after learning that using the name of the legendary Lakota warrior and spiritual leader is offensive to his descendants."
Reuters: Unocal unfazed by gasoline patent hitch.
"California energy company Unocal Corp said on Tuesday it expects its reformulated gasoline patents to survive reexamination by the U.S. Patent and Trademark Office (PTO), despite an `initial rejection' of one of the key blends." ...
"Only 29 percent of all patents that are challenged are upheld without change, while 12 percent are wholly rejected, according to statistics from the PTO."
Oil & Gas Journal: MMS issues final notice for central Gulf of Mexico lease sale.
"The US Minerals Management Service issued a final notice for central Gulf of Mexico Lease Sale 182, scheduled for Mar. 20 in New Orleans."
Oil and Gas International: Seismic inversion center opened in Houston.
"Rock Solid Images and Ødegaard have opened their seismic inversion center in Houston at Rock Solid Images' Houston headquarters. The two companies formed a strategic alliance last year to offer a full range of seismic reservoir characterization data products and software, and these are now available to North American customers through the new center."
WSJ (subscription): Seitel's Barter Tactics Raise Questions Among Investors.
"... Seitel's revenues and earnings have risen during this rugged period, thanks to barter transactions. The company has swapped its surveys with other companies in a bid to build its library of seismic data." ...
"While Seitel officials say they comply with the accounting rules, the fact that barter transactions now amount to nearly 30% of the company's revenue has spooked investors who are increasingly cautious about companies with even a whiff of an accounting issue." ...
"Poe Fratt of A.G. Edwards & Sons last week downgraded his rating of Seitel shares to "hold" from "buy," citing, among other things, "increased scrutiny" of the company's accounting practices, which he believes are proper. He also said the company is highly leveraged. It carries $246 million of debt -- $30 million more than a year ago -- which amounts to 47% of the company's total capital."
> This story is a week old, but I just saw it.
Information Week: Vendors Spur Linux On.
"... Western Geco, the world's largest seismic services company ... is building clusters of Linux-based Dell PC servers to run computer-intensive research algorithms. Western Geco, a unit of Schlumberger Ltd., has eyed Linux for some time, but it's only in the last year that the Sussex, United Kingdom, company felt it was ready for its IT environment, says Kannan Venkataraman, area manager for worldwide computer systems and support. Linux's open-source status, combined with its Unix roots, was a big draw. "A lot of the tools that we used in the Unix environment port to Linux very easily," Venkataraman says."
Oil and Gas International: Kasyanov says continued Russian cuts unlikely.
"Russia will probably remove or alter upward its current exports of oil to world markets, said Mikhail Kasyanov. The Russian Prime Minister was speaking to the World Economic forum in New York City."
This is from last week --
Oil & Gas Journal: Bush proposes global warming, power plant emissions policy.
"The White House said the climate change policy would commit the US to `an aggressive' strategy to cut greenhouse gas (GHG) `intensity' by 18% over the next 10 years. It defined GHG intensity as the ratio of greenhouse gas emissions to economic output." ...
"The Sierra Club called the administration's global warming proposal `a Valentine's Day gift to corporate polluters.'" ...
"The biggest industry winners from the White House announcement were coal-fired generators, according to Wall Street analysts."
Paul Krugman, New York Times: Ersatz Climate Policy.
"... the Bush administration exaggerates the economic costs of environmental regulations. Last spring Dick Cheney implied, disingenuously, that environmental rules had caused a shortage of refining capacity; now George W. Bush tells us, implausibly, that the Kyoto Protocol will destroy millions of jobs. Meanwhile the administration offers the illusion of environmentalism, by announcing policies that sound impressive but are nearly content-free."
Oil & Gas Journal: Industry officials expect oil and gas markets to rebound in last half of 2002.
"`If we are wrong,' [Michael E. Wiley of Baker Hughes] said, `the recovery will be pushed out through another winter to 2003. Any scenarios for recovery sooner than the second half of 2002 are unrealistic.'" ...
"The National Climate Data Center reported last week that the 2001-02 winter so far has been the warmest on record. As a result, it will likely end with more natural gas in storage than the historical averages."
Oil and Gas International: Russian domestic oil glut topic of producer meeting.
"Russia's major oil producers are meeting in Moscow on February 20th to decide whether to continue the export cut or reduce production. Oil is currently selling in Russia at cost and sometimes even lower, causing difficulties for its leading oil companies, but production is increasing rapidly."
Woo-hoo, I managed to get registered at the AIP site for access to Geophysics and The Leading Edge. Good thing, because they will be turning off free access to the web sites next week.
If you're a member of SEG, and you need to register, AIP should have sent you a registration password by now. It will be in a mysterious email message that never actually identifies any affiliation with the SEG.
In addition to your password, you need an equally mysterious membership ID number, which will be "SEG_xxxxxx" where the x's are replaced by numbers. [It doesn't tell you about the "SEG_" bit in either the email or on the web site. If you hadn't read it here, you would be SOL.] Your six digit number should be on your SEG membership card, which I'm sure you keep near at all times. You can also get it by calling 1-800-874-6383 and asking.
If you're a geophysicist, and you aren't a member of SEG, join now!
Oil and Gas International: Ultra-deep Mad Dog development approved.
"The Mad Dog Field is situated in the Atwater Foldbelt, 125 miles from the Louisiana coast. It is a very large structure, with over 4,000 ft of structural closure covering 26,500 acres. It contains estimated reserves in the range of 200-450 million boe gross.... It comprises Green Canyon Blocks 825, 826, 738, 739, 781, 782 ... and 783. BHP Billiton holds a 23.9% working interest in Mad Dog with partners BP (designated operator) 60.5% interest, and Unocal 15.6%."
I stumbled across this old post from October on a University of Colorado at Boulder bulletin board. I thought it deserved a link.
Mark Jones: Re: this is about oil. It's always about oil.
"Caspian and ex-Soviet energy resources are not enough to supply the hole left by the accelerating decline in other reserves. The North Sea, North America, Venezuela, Nigeria and many other basins which were important additions to non-Opec supply in the 1970s and after, are now in terminal decline. There simply is not enough oil and gas in Central Asia to fill the gap. So something will have to give. This is true even before you add into the mix the sensational political instability of Central and South Asia. And the likelihood of political crisis in Saudi Arabia."
Reuters: Cray to Sell Dell Servers in Clusters.
"Dell said that it expects demand for the computing clusters from oil companies doing seismic exploration as well as from academic institutions that are interested in the lower cost associated with a standardized server. The Dell computer servers, which are called PowerEdge servers, are based on microchips from Intel Corp. and start at $75,000 for a cluster that includes eight separate processors."
> I guess I should admit that vector supercomputing really is dead.
Houston Business Journal: Shell to brand new U.S. gas stations.
"Shell Oil Co. said Friday it will spend more than $500 million to rebrand more than 75 percent of the gasoline stations it bought from ChevronTexaco Corp."
Houston Chronicle: Shell to rebrand 13,000 Texaco stations.
"The renaming comes as a result of Shell's and Saudi Refining's $3.86 billion deal to buy ChevronTexaco's stakes in two refining/marketing joint ventures, Equilon and Motiva. Texaco was required to sell off the stakes in the joint ventures thatit held with Shell as a condition of its merger with Chevron. After the deal closes, Shell will sell almost 1 in every 6 gallons of gasoline in the United States, surpassing ExxonMobil Corp. and BP."
Oil & Gas Journal: OPEC and Russia increase oil output despite production cut pact.
"The IEA figures show that world oil supply decreased by just 510,000 b/d in January to 76.3 million b/d while OPEC and non-OPEC producers had agreed to cut output by 2 million b/d. The IEA now predicts that global demand will average 76.4 million b/d in the first quarter of this year, down 200,000 b/d from last month's estimate."
Oil and Gas International: PGS scores $33 Million in new 4C shoots.
"Petroleum Geo-Services' (PGS) has secured new four-component seismic acquisition contracts in Nigeria, the Norwegian North Sea, and the West of Shetlands area of the North Atlantic. The contracts are valued at US$33 million and include the provision of seismic data processing by PGS' Data Processing Division."
Oil and Gas International: Q-Marine vessel launched, will shoot Gulf of Mexico survey.
"According to WesternGeco, Q-Marine technology uses calibrated sensors, sources, and steerable streamers to deliver exceptional image quality and repeatability.... The Western Neptune will deploy 10 eight-km streamers and is the fourth WesternGeco seismic vessel to be equipped with the proprietary Q-Marine system."
Oil & Gas Journal: Royal Dutch/Shell Group moves to gas as oil price cuts hit profits.
"The company, Europe's biggest, also confirmed that it has at least $11 billion available to acquire assets." ...
"Repsol-YPF SA ... could be a takeover target for Shell if, as analysts predict, it shortly begins an acquisition program." ...
"Shell has now cut its forecast for oil and gas production growth as supplies in the UK and US decline. The company now expects growth to average 3%/year up to 2005, from 5% previously."
WSJ (subscription): Threat of Terror Abroad Isn't New For Oil Companies Like Occidental.
"Amid a 38-year-old civil war, Occidental faces a near-constant threat of terrorism. Rebel groups have extorted local workers. Engineers have been murdered. But the main focus of the guerrillas' wrath is the 470-mile oil pipeline that transports oil from the Caño Limón oil field to a port on the Caribbean. Rebels bombed the pipeline a record 170 times last year, up from 99 attacks in 2000."
World Oil: Using gravity gradiometry in seismic interpretation in pre-SDM.
"To define salt bodies vertically and laterally, as well as subsalt structures, Texaco elected to incorporate Full Tensor Gradient (FTG) data in the seismic interpretation. Using FTG analysis allows the base of salt to be determined where it cannot be imaged by seismic alone."
> This is a nice paper if you have a couple of minutes. At least look at the figures.
> I hate to be the one to say it, but I can't help but wonder whether this work violates Conoco's patent on finding the base of salt using gravity.
Oil & Gas Journal: IFP sees geopolitical problems in developing oil beyond 200-mile zone.
"Deep sea proven resources currently are only about 3-4% of world reserves."
Hey, if you typo www.westerngeco.com as www.westerngeo.com, you'll end up at Baker Hughes!
Whatever you do, don't go directly to Schlumberger unless you want telecom or a smart card.
Houston Chronicle: Officials defend science behind lower speed limit. Benefit seems small but cuts add up, they say.
"Nitrogen oxides, called NOX for short, and volatile organic compounds (VOC), are the major components of ground-level ozone pollution, sometimes referred to as smog." ...
"The 55-mph speed limit is part of a two-prong plan to cut vehicle emissions, which the H-GAC estimates produce 24 percent of NOX emissions in the region. The other prong, certain to also elicit howls of complaint from motorists, is a tightened tailpipe testing program scheduled to begin May 1.
"The slower speed limit is projected to account for a NOX reduction of about 12 tons a day, the tailpipe test about 36 tons. Together, they would achieve about 7 percent of the needed reductions, set at 750 to 800 tons a day under the state's air plan."
> So my driving 55 mph will help Houston meet its clean air goals by *less**than**two**percent**?!?!
Oil & Gas Journal: White House budget plan would overhaul federal oil and gas research.
"The administration asked, for the fiscal year beginning Oct. 1, to cut natural gas research from $45.2 million to $22.6 million and oil technology research from $56 million to $35.4 million."
Oil and Gas International: New geophysical front-end services operations.
"Drilling Services Inc (DSI), a newly formed subsidiary of Mitcham Industries is now providing front-end services for geophysical contractors.... Front-end services typically include permitting, surveying, shothole drilling, and other activities that are performed prior to recording seismic data."
Houston Chronicle: Motorists get set to downshift. First 55-mph signs to be posted today.
"For most drivers, the big adjustment in behavior -- if not attitude -- will come March 4-8 when the changeout moves to local freeways."
> What I want to know is, does this include the toll roads?
Oil & Gas Journal: Industry expectations high for US oil and gas research funding.
"President George W. Bush's budget last year ... proposed dramatic research cuts on oil, gas, and renewable fuels in favor of clean coal technologies. Research for oil and gas was slated to fall by 50% from $112 million in 2001 to $51.5 million in fiscal 2002.... Congress, as the White House likely anticipated, later restored oil and gas funding close to 2001 levels under the Interior Appropriations bill."
I stuck direct links to O&G and OANJ at the top of my blog so I wouldn't feel guilty about pointing (or not pointing!) to everything in the table of contents of these two mags almost every day. In particular, Oil and Gas International seems to have at least a half dozen interesting international exploration stories daily.
