[Tanada]

Note that more than 1/3 of NGL output in the US is ethane (37 %) (not used at all in refining or blending), another third is propane. Maybe propane should be included, we could throw in Natural Gas as well as that offsets fuel use for heating.

It makes more sense to separate these fuels into gases and liquids, only C5 and C5+ should be included as liquids IMO.

DC

If you are talking about pure liquids and room temperature at sea level pressure than saying C5 and up are liquids makes perfect sense.
However Gasoline and Diesel fuel and even Kerosene are not pure liquids, every one of them is a blend of a half dozen or more types of molecule. Gasoline include Butane C4 in significant quantities, the blend of heavier components and a vapor tight gas cap create enough pressure in the fuel tank for it to remain in solution and behave as a liquid.
If you look at the history of Gasoline engines in the USA the first refineries often left significant quantities of Propane in the Gasoline blend as well, however back in those days fuel tanks were not pressure sealed and the Propane would actually fizz out like soda-pop on hot summer days. This created not only air pollution but also a fire hazard of the tank were in an enclosed building. LPG was invented when a smart man refined the fizzy gasses out of his gasoline and stored them in a pressurized tank, a mixture of Propane and Butane. Today we have the technology to make all vehicle tanks pressurized to the point they could hold Propane, we just have not bothered to do so because oil is still cheap enough that it doesn't matter and we have an alternative use in grilling and for rural heating for people not on the Natural gas network.

[dcoyne78]

The question came the other day after the announcement of the latest DW GOM discovery: how many new fields in the future. I don't know but here is the count for the number of fields that began producing during the last 10 years:

2002 - 13
2003 - 8
2004 - 13
2005 - 7
2006 - 15
2007 - 7
2008 - 5
2009 - 8
2010 - 4
2011 - 3
2012 - 6

Not absolute but looks like the rate is dropping. The question was if we could expect 20 new fields coming to production in the next 12 months. Doesn't look likely. OTOH there are many undrilled leases and currently over 1,800 approved drill permits. But it cuts both ways: while the learning curve goes up there are fewer fields to discover. And, though not perfect, companies try to drill the best looking prospects first. But also know it's not uncommon to permit more wells than one eventually drills. It can take a couple of years to get a permit so you apply for every possibility.

But we should still have a lot of oil developed out there for at least the next 10 -15 years IMHO.

Over the last 5 years the rate seems pretty steady, if that is correct and it remains steady then we might expect about 25 new fields to come on line over the next 5 years, or about 5 each year. Let's assume each field on average produces at a maximum rate of 25 kb/d, that would give us 125 kb/d which would offset the likely 10 % decline rate of fields already in production so that production would remain flat.
If the average decline rate of existing production is 20 % (similar to North Sea average decline rates) and the 5 new fields per year is correct, then these fields would need to be about 50 kb/d to offset declines from existing production.

Note that if we assume that 90 % of the current GOM output is from the 89 fields that came online in the last 10 years (a WAG), then the average output of those 89 fields is about 13 kb/d.

We also need to keep in mind the long lead time needed for these projects, if 10 years is about right then the run up in oil prices from 2005 to 2008 might lead to an increase in fields brought online between 2015 and 2018.

DC

[dcoyne78]

Note that more than 1/3 of NGL output in the US is ethane (37 %) (not used at all in refining or blending), another third is propane. Maybe propane should be included, we could throw in Natural Gas as well as that offsets fuel use for heating.

It makes more sense to separate these fuels into gases and liquids, only C5 and C5+ should be included as liquids IMO.

DC

If you are talking about pure liquids and room temperature at sea level pressure than saying C5 and up are liquids makes perfect sense.
However Gasoline and Diesel fuel and even Kerosene are not pure liquids, every one of them is a blend of a half dozen or more types of molecule. Gasoline include Butane C4 in significant quantities, the blend of heavier components and a vapor tight gas cap create enough pressure in the fuel tank for it to remain in solution and behave as a liquid.
If you look at the history of Gasoline engines in the USA the first refineries often left significant quantities of Propane in the Gasoline blend as well, however back in those days fuel tanks were not pressure sealed and the Propane would actually fizz out like soda-pop on hot summer days. This created not only air pollution but also a fire hazard of the tank were in an enclosed building. LPG was invented when a smart man refined the fizzy gasses out of his gasoline and stored them in a pressurized tank, a mixture of Propane and Butane. Today we have the technology to make all vehicle tanks pressurized to the point they could hold Propane, we just have not bothered to do so because oil is still cheap enough that it doesn't matter and we have an alternative use in grilling and for rural heating for people not on the Natural gas network.

I understand that gasoline contains some butane and is a mix of many different molecules, most of these are liquid at Standard Temp and Pressure (25 C, 1 ATM), propane is no longer contained in liquid fuels, and ethane is not either. We could call Natural gas a liquid as well, as it can be cooled and pressurized to a liquid state, that would increase the liquids fuel supply by a large margin. It would be best to estimate the energy content of the Petroleum supply in Joules or BTU's, or we could use the mass of the various fuels as an approximation, though this would understate the energy content of propane and ethane because in liquid form they have a higher specific energy (energy/ unit mass, J/g) than crude (this is also true for gasoline.)

It seems the best way to measure energy might be in units of energy.

DC

[ROCKMAN]

I still find it funny when some folks pick on President Obama for holding back the oil industry. Here's another fine example of "the man" holding us back:

The BOEM Western Gulf Lease Sale 233 drew 61 bids totaling $144 million Wednesday. The auction offered more than 21 million acres offshore Texas. Twelve companies bid on 53 offshore blocks that contained Lower Tertiary play in both shallow and deep water. The agency offered 3,864 blocks in an area located nine to 250 miles offshore in water depths ranging from 16 to more than 10,975 feet.

This is a continuation of what's been seen in the past where companies are bidding on smaller tracts but focusing on those tracks and spending more money on those acquisitions.
The sale, part of the Interior’s Outer Continental Shelf Oil and Gas Leasing Five-Year Program, could lead to the production of up to 200 million barrels of oil and 938 billion cubic feet of natural gas, reported the organization.

Offered a lousy 21 million acres to lease. I can we do our job such a little chunk of real estate to play with? I feel so oppressed now. LOL.

[ROCKMAN]

Still a lot of life in the DW GOM. This story is about one drilling contractor and one company: a multiyear commitment of $1.1 million PER DAY. And that’s just for the drill rig. The rest of the ops run several hundred thousand $’s per day.

“Offshore drilling contractor Transocean Ltd added nearly $2 billion to a its backlog of work with extensions for two ultra-deepwater rigs in the Gulf of Mexico for Chevron Corp., an executive said on Thursday. The Discoverer Clear Leader, on a four-year contract at $566,000 per day until September 2014, had its lease extended four years at $590,000. The Discoverer Inspiration contract, now at $521,000 a day until March 2015, was extended for five years at $585,000.”

In addition Transocean has an addition $28 billion in backlog work scheduled for the DW GOM.

[wildbourgman]

I can see the Discoverer Inspiration from where I'm at right now.

It looks like people in my portion of the Deep Water drilling industry are gearing up to man future and current rigs. I don't see how we can prudently do this if we are honest with ourselves, because we don't have the experience and capability to man the rigs that are being built at the pace that they're being built.

For example the people that worked the Deepwater Horizon were much more experienced and seasoned veterans than what we will have working some new ultra deep water rigs in the GOM today. It's going to be ok, because we'll be able to meet the governments requirements in order to get a drilling permit and that's all that counts.

[ROCKMAN]

Hey there stranger. I do think about the situation these days even though the MS has ended my offshore rotations. I didn't sleep that sound 5 years ago. My last gig on that Russian piece of crap drill ship caused the first actual nightmare I ever had while sleeping offshore. BTW you catch the thread here about the blow out near Shiner, Texas? I did an update search today. Google "Nabors blowout". Unfortunately for Nabors lots of links to a lot of blowouts.


Sleep tite, amigo.

[ROCKMAN]

OK...start holding your breath: BP is back to developing oil fields in the DW GOM. BTW BP owns more leases in the GOM than any other company. There was some PR spin from the feds a while back about not letting BP operate in our waters in the future. But I suppose it's difficult for the gov't to turn away a sugar daddy with tens of $billions ready to spend for it's benefit.

http://www.rigzone.com/news/oil_gas/a/1 ... e_to_Spill

[wildbourgman]

Hey Rockman I had been reading more than posting for the last few weeks, but for the last few days I've been busy and our internet has been locked up.

I heard about the blow-out n my rig but haven't checked the story. Later!

[ROCKMAN]

Howdy Wildman. Just figured you were busy. I think I posted somewhere around here about a new oil patch recruiting project in Houston. Something like a several weeks intro designed to get folks to turn towards the dark side (i.e. the oil patch).

All I can say is watch your back. LOL. I think they be trying to develop a class below even worm.

[wildbourgman]

Yeah there was an article from the UK about Generation X folk's in the oil patch getting burned out, because of baby boomers retiring and because of the the younger crowd not being ready to take more responsibility.

As you know during the late 1980's and early 1990's there were only a few of us Gen X guys that got hired in the oil patch and few actually stuck around through long enough to get quality experience. The guys that did (like me) have alot of experience, but we are tired of the growing pile of BS especially since Macando.

I'm looking for a way out right now, every move I make is in regard to that. It's time for a change.



I found the article!
http://www.rigzone.com/news/oil_gas/a/1 ... urning_Out

[ROCKMAN]

Wildman - Hope you make it out in time. You know as I do how the body count runs during a boom. At least now I just sit in the logging unit or in my car and watch from afar. They can't drop nuthin on you if you ain't under nuthin. LOL.

[ROCKMAN]

A continuation of the POTUS “all of the above” US energy plan. An interesting side note: all the lease sales in the current 5 year plan as approved in the POTUS are in the GOM except in 2016 going forward after he leaves office. At that time there are 3 scheduled leases for offshore Alaska. The Beaufort Sea lease was originally scheduled for 2015 but was delayed “…to allow more time to analyze and implement our focused leasing strategy in this area.” Also the evaluation of future lease sales off the east coast of the US has begun and is expected to be included in the following 5 year plan beginning in 2017.

From Rig Zone: "The Department of the Interior will offer more than 40 million acres for oil and gas exploration and development in the Gulf of Mexico in consecutive March lease sales. “These lease sales underscore the President’s commitment to create jobs through the safe and responsible exploration and development of the Nation’s domestic energy resources,” said Secretary of the Interior Sally Jewell, in the release. “The five year program reflects this Administration’s determination to facilitate the orderly development." The two lease sales will be held in New Orleans March 19.

The first Lease Sale, 231, includes about 7,507 of unleased blocks, spanning more than 39.6 million acres, situated about 3 to 230 miles offshore Louisiana, Mississippi and Alabama in water depths ranging from 9 to 11,115 feet. Around 1 billion barrels of oil and 4 trillion cubic feet of natural gas could potentially be produced as a result of the proposed sale. Sale 225 is the first sale offering acreage in the Eastern Planning Area since March 2008. More than 134 whole or partial unleased blocks spanning about 465,000 acres in the Eastern Planning Area will be up for grabs. This area, situated about 125 miles offshore in water depths ranging from 2,657 feet to 10,213 feet, is south of eastern Alabama and western Florida.

These auctions will be the fourth and fifth offshore sales under the Obama Administration’s Outer Continental Shelf Oil and Gas Leasing Programs for 2012-2017. Thus far, the first three sales in the five year program offered more than 79 million acres for development and garnered $1.4 billion in high bids. “As a critical component of the nation’s energy portfolio, the Gulf holds vital energy resources that can continue to generate jobs and spur economic opportunities for Gulf producing states as well as further reduce the Nation’s dependence on foreign oil,” said BOEM Director Beaudreau."

[Subjectivist]

A continuation of the POTUS “all of the above” US energy plan. An interesting side note: all the lease sales in the current 5 year plan as approved in the POTUS are in the GOM except in 2016 going forward after he leaves office. At that time there are 3 scheduled leases for offshore Alaska. The Beaufort Sea lease was originally scheduled for 2015 but was delayed “…to allow more time to analyze and implement our focused leasing strategy in this area.” Also the evaluation of future lease sales off the east coast of the US has begun and is expected to be included in the following 5 year plan beginning in 2017.

From Rig Zone: "The Department of the Interior will offer more than 40 million acres for oil and gas exploration and development in the Gulf of Mexico in consecutive March lease sales. “These lease sales underscore the President’s commitment to create jobs through the safe and responsible exploration and development of the Nation’s domestic energy resources,” said Secretary of the Interior Sally Jewell, in the release. “The five year program reflects this Administration’s determination to facilitate the orderly development." The two lease sales will be held in New Orleans March 19.

The first Lease Sale, 231, includes about 7,507 of unleased blocks, spanning more than 39.6 million acres, situated about 3 to 230 miles offshore Louisiana, Mississippi and Alabama in water depths ranging from 9 to 11,115 feet. Around 1 billion barrels of oil and 4 trillion cubic feet of natural gas could potentially be produced as a result of the proposed sale. Sale 225 is the first sale offering acreage in the Eastern Planning Area since March 2008. More than 134 whole or partial unleased blocks spanning about 465,000 acres in the Eastern Planning Area will be up for grabs. This area, situated about 125 miles offshore in water depths ranging from 2,657 feet to 10,213 feet, is south of eastern Alabama and western Florida.

These auctions will be the fourth and fifth offshore sales under the Obama Administration’s Outer Continental Shelf Oil and Gas Leasing Programs for 2012-2017. Thus far, the first three sales in the five year program offered more than 79 million acres for development and garnered $1.4 billion in high bids. “As a critical component of the nation’s energy portfolio, the Gulf holds vital energy resources that can continue to generate jobs and spur economic opportunities for Gulf producing states as well as further reduce the Nation’s dependence on foreign oil,” said BOEM Director Beaudreau."

ROCKMAN you are up on this stuff, how far east in the gulf are these leases? Really what I am wondering about is Florida seems to freak out if anyone drills within 500 miles.

[ROCKMAN]

Sub - While the eastern Gulf sale will be markedly smaller, it marks the first time the Obama administration has approved lease sales as far east as the Florida panhandle under its five-year lease program rolled out in 2012. The leasing area covers waters more than three miles off the coast of eastern Alabama up to an eastern borderline that falls around Pensacola, Fla.

The lease area is at the far western edge of the Eastern Planning Area which runs right up to the FL state waters. The leases are about 125 miles of the FL coastline. Congress issued a 125 mile wide buffer zone from the FL coast which so far has excluded leasing. But FL paid a price: From 2009 article – “Six coastal states, but not Florida, will share nearly half a billion dollars over two years from offshore oil and gas revenue, the Interior Department announced today. Florida’s exclusion is the price it pays for sheltering its coastline from offshore drilling. The money will go to states -- Alabama, Alaska, California, Louisiana, Mississippi, and Texas where drilling is allowed in federal waters near their shores. The money must be used to restore or protect coastal wetlands, habitat or marine life.”

But the sale includes very DW tracks. Have another BP nightmare out there and that 125 mile barrier will seem like nothing depending on which way the wind is blowing. In the meantime almost 20 million bbls of Eagle Ford oil are being shipped yearly along the FL shoreline. Until BP’s screw up almost all the major oil spills have come from tanker accidents. I wonder if folks in FL know what’s passing right by their door steps every day?

[Tanada]

Sub - While the eastern Gulf sale will be markedly smaller, it marks the first time the Obama administration has approved lease sales as far east as the Florida panhandle under its five-year lease program rolled out in 2012. The leasing area covers waters more than three miles off the coast of eastern Alabama up to an eastern borderline that falls around Pensacola, Fla.

The lease area is at the far western edge of the Eastern Planning Area which runs right up to the FL state waters. The leases are about 125 miles of the FL coastline. Congress issued a 125 mile wide buffer zone from the FL coast which so far has excluded leasing. But FL paid a price: From 2009 article – “Six coastal states, but not Florida, will share nearly half a billion dollars over two years from offshore oil and gas revenue, the Interior Department announced today. Florida’s exclusion is the price it pays for sheltering its coastline from offshore drilling. The money will go to states -- Alabama, Alaska, California, Louisiana, Mississippi, and Texas where drilling is allowed in federal waters near their shores. The money must be used to restore or protect coastal wetlands, habitat or marine life.”

But the sale includes very DW tracks. Have another BP nightmare out there and that 125 mile barrier will seem like nothing depending on which way the wind is blowing. In the meantime almost 20 million bbls of Eagle Ford oil are being shipped yearly along the FL shoreline. Until BP’s screw up almost all the major oil spills have come from tanker accidents. I wonder if folks in FL know what’s passing right by their door steps every day?

I'll bet you a dollar to a doughnut they are as clueless about oil freight tankers off the coast as the people in almost every city are about the unit trains of crude tank rail cars rolling through their neighborhoods day and night.

Not picking on Florida here, people are just designed to ignore uncomfortable realities and carry on as if they did not exist.

[ROCKMAN]

Even more obvious when you think about: a great many more folks are exposed to potential explosions from transported hydrocarbons then the rail shipments represent. I’m talking about those trailers hauling gasoline, diesel and all kinds of equally deadly material. I would guess thousands of times as many folks. Just one sad example from last Thanksgiving. And in this case it doesn’t sound like the trucker did anything improper…just wrong place at the wrong time:

The County Sheriff's Office says Highway 17 remains closed this morning after a fiery tanker crash Thursday afternoon. Preliminary reports show that a Ford Truck struck a tanker truck. The truck was occupied by two teenagers and a small child.

On a lighter note years ago some Houston residents were terrified at the prospect of a number of tanker trucks hauling napalm through the city on the highway leading to a recycling plant. The fact that napalm was actually designed to be less volatile and explosive then the tens of thousands of gasoline tankers that crisscross the city yearly did help.

[wildbourgman]

Here your Gulf of Mexico update. We currently have brand new ultra deepwater rigs steaming towards contracts in the Gulf. Many of these are with some of the junior exploration companies that no one can figure where they are getting the cash from.

The major exploration companies throwing are a hissy fit over cost, but the threat of lower expenditures in the Gulf have not yet grown beyond the threat distinction.

Our rigs are still being filled with arrogant short service employees that thinks the oil industry revolves around them. I still see a potential for a downturn in exploration, but I don't know what would be the catalyst this time.

[ROCKMAN]

Wildman - You put 100 million bbls recoverable into your wildcat's Power Points display and less royalty you show revenue of about $8.5 BILLION and then find some greedy enough investors the capex has a good chance of showing up. Finding the 100 million bbls is another matter. LOL

[Subjectivist]

Here your Gulf of Mexico update. We currently have brand new ultra deepwater rigs steaming towards contracts in the Gulf. Many of these are with some of the junior exploration companies that no one can figure where they are getting the cash from.

The major exploration companies throwing are a hissy fit over cost, but the threat of lower expenditures in the Gulf have not yet grown beyond the threat distinction.

Our rigs are still being filled with arrogant short service employees that thinks the oil industry revolves around them. I still see a potential for a downturn in exploration, but I don't know what would be the catalyst this time.

Well if I were paranoid I would suspect big national oil companies of quietly funding these projecs just so they can learn which plays are worth major investment.