Showing posts sorted by relevance for query OIL. Sort by date Show all posts
Showing posts sorted by relevance for query OIL. Sort by date Show all posts

Monday, May 23, 2022

Crude oil is selling for over $100 per barrel, but 200 years ago it was a plentiful resource used in medicine and cosmetics. Here are 15 surprising facts about the history of oil and gas.

Dominick Reuter

Sun, May 22, 2022

Woodford oil well with whiskey barrels in 1861
The first century of the oil industry was a wild and unregulated time, with fortunes made and lost almost overnight.Library of Congress
  • For the past century, crude oil has been the lifeblood of the global economy.

  • Before that, the oil industry was marked by wild swings in the usefulness and market value of the resource.

  • Here are 15 surprising facts about the history of oil, according to Daniel Yergin's 1991 book "The Prize."

Commonly called "rock oil," crude oil was found in many places around the world seeping out of the ground or floating on the surface of ponds or streams.

A natural oil seep
A natural oil seep.USGS

Source: Yergin, p. 19

Indigenous peoples in North America and Asia commonly used "rock oil" for both medicinal and cosmetic purposes, including treating headaches, toothaches, upset stomachs, and even straightening eyelashes.

The oldest oil well in the US
Library of Congress

Source: Yergin, p. 19

People would typically collect the oil using rags or blankets to soak it up and wring it out into a container.

An oil tank in Pennsylvania
An oil tank in Pennsylvania.Library of Congress

Source: Yergin, p. 19

One 19th century banker, when asked for funding for the novel idea of drilling for oil, famously scoffed at the idea: "Oil coming out of the ground, pumping oil out of the earth as you pump water? Nonsense! You're crazy."

Pumping oil in western Pennsylvania
Pumping oil in western Pennsylvania.Library of Congress

Source: Yergin, p. 26

Soon, pumped oil was worth half as much as the whiskey barrels that were repurposed to hold it. To this day, the 42-gallon whiskey barrel remains the unit of measure for the industry, even when no actual barrels are used.

Woodford oil well with whiskey barrels in 1861
Woodford oil well with whiskey barrels in 1861.Library of Congress

Source: Yergin, p. 28

Drillers set off the first-ever gusher in April 1861, sending 3,000 barrels per day up into the air before an explosion and fire killed 19 people and burned for three days.

An oil rig in Titusville, Pennsylvania
An oil rig in Titusville, Pennsylvania.Library of Congress

Source: Yergin, p. 30

When the Civil War disrupted the supply of camphene illuminating oil from the South, a market for kerosene derived from Pennsylvania oil emerged. The Union also began exporting crude oil to Europe's growing market.

Pennsylvania oil rigs
Pennsylvania oil rigs.Library of Congress

Source: Yergin, p. 30

After the war, the rush to produce outpaced demand so much that a price crash in the 1870s made oil cheaper than drinking water for households in the oil regions.

Oil refinery in Erie, Pennsylvania
Oil refining in Erie, Pennsylvania.Library of Congress

Source: Yergin, p. 42

Kerosene was the dominant petroleum product prior to 1905, while gasoline was a small byproduct that was often poured off into rivers. Gasoline sold for as low as 2 cents a gallon in 1892.

Interior of a Pennsylvania oil exchange
The interior of the Pennsylvania Oil Exchange.Library of Congress

Source: Yergin, p. 14

That began to change in 1905 with the invention of the automobile, which led gasoline sales to overtake kerosene sales by 1911.

Ford Model T assembly line
Ford Model T assembly line.Library of Congress

Source: Yergin, p. 95

In the early years of the automobile, gasoline was sold at hardware stores and general stores by shopkeepers who kept it in unbranded cans under the counter or outside behind the store. Some entrepreneurs even attempted to deliver via gasoline wagons, which had a tendency to explode.

General Store
General store.Library of Congress

Source: Yergin, p. 209

World War I ushered in the modern oil era, when combustion engines demonstrated their reliability and superior versatility over coal- and horse-powered modes of transportation.

A German car towing a plane in WWI
A German car towing a plane in WWI.Library of Congress

Source: Yergin, ch. 9

By 1920, the concept of a service station had taken root, with roughly 12,000 drive-in gas stations in 1921, rocketing up to more than 140,000 in 1929.

1920's gas station
1920s gas station.Library of Congress

Source: Yergin, p. 209

By 1929, once-dominant kerosene was basically negligible, due to the heightened demand for gasoline and fuel oil, which represented 85% of oil consumption.

Hartford Oil and Gas Co. workers
Hartford Oil and Gas Co. workers.Library of Congress

The 1920s also forged the bond that would tether politics and oil prices for the next century. One Wisconsin Senator railed against corporate price manipulation, warning that if it were to continue "the people of this country must be prepared, before long, to pay at least $1 a gallon for gasoline."

Oil rigs in Oklahoma
Oil rigs in Oklahoma.Library of Congress

Source: Yergin, p. 211

Read the original article on Business Insider

Monday, October 04, 2021


UPDATED
Ship's anchor among possible causes of California oil spill

HUNTINGTON BEACH, Calif. (AP) — Officials are looking into whether a ship's anchor may have struck an oil pipeline on the ocean floor, causing a major leak of crude into waters off Southern California.



The head of the company that operates the pipeline said Monday that divers have examined more than 8,000 feet (2,438 meters) of pipe and are focusing on “one area of significant interest.”

Amplify Energy CEO Martyn Willsher said during a news conference that a ship's anchor striking the pipeline is “one of the distinct possibilities” for the cause of the leak.

U.S. Coast Guard officials said that cargo ships entering the twin ports of Los Angeles and Long Beach routinely pass through the area.

“We’re looking into if it could have been an anchor from a ship, but that’s in the assessment phase right now,” said Coast Guard Lieutenant Commander Jeannie Shaye of Coast Guard.

The leak reported Saturday has fouled the sands of famed Huntington Beach and other coastal communities. The spill could keep beaches closed for weeks or months.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

___

HUNTINGTON BEACH, Calif. (AP) — The company that operates the pipeline suspected in one of California's largest oil spills has been cited 72 times for safety and environmental violations that were severe enough that drilling had to be curtailed or stopped to fix the problem, regulatory records show.

In all, Beta Operating Co. has been cited 125 times since 1980, according to a database from the Bureau of Safety and Environmental Enforcement, the federal agency that regulates the offshore oil and gas industry. The online database provides only the total number of violations, not the details for each incident.

The company was fined a total of $85,000 for three incidents. Two were from 2014, when a worker who was not wearing proper protective equipment was shocked with 98,000 volts of electricity, and a separate incident when crude oil was released through a boom where a safety device had been improperly bypassed.

Beta, which is a subsidiary of Houston-based Amplify Energy, is under scrutiny after a suspected leak in an underwater pipeline sent 126,000 gallons (572,807 liters) of heavy crude into the ocean waters, fouling the sands of famed Huntington Beach and other coastal communities. The spill could keep beaches closed for weeks or longer.

Environmentalists had feared the oil might devastate birds and marine life in the area. But Michael Ziccardi, a veterinarian and director of the Oiled Wildlife Care Network, said only four oily birds had been found so far. One suffered chronic injuries and had to be euthanized, he said.

“It’s much better than we had feared,” he said at a news conference Monday.

Ziccardi said he’s “cautiously optimistic,” but it’s too soon to know the extent of the spill’s effect on wildlife. In other offshore oil spills, the largest number of oiled birds have been collected two to five days after the incident, he said.

Amplify operates three oil platforms about 9 miles (14.5 kilometers) off the coast of California, all installed between 1980 and 1984. The company also operates a 16-inch pipeline that carries oil from a processing platform to an onshore storage facility in Long Beach. The company has said the oil appears to be coming from a rupture in that pipeline about 4 miles (6.44 kilometers) from the platform.

Before the spill, Amplify had high hopes for the Beta oil field and was pouring millions of dollars into upgrades and new “side track” projects that would tap into oil by drilling laterally.

“We have the opportunity to keep going for as long as we want,” Amplify CEO Martyn Willsher said in an August conference call with investors. He added there was capacity “up to 20,000 barrels a day.”

Investors shared Willsher’s optimism, sending the company's stock up more than sevenfold since the beginning of the year to $5.75 at the close of trading on Friday. The stock plunged more than 40% in morning trading Monday.

The company filed for bankruptcy in 2017 and emerged a few months later. It had been using cash generated by the Beta field and others in Oklahoma and Texas to pay down $235 million in debt.

Some residents, business owners and environmentalists questioned whether authorities reacted quickly enough to contain the spill. People who live and work in the area said they noticed an oil sheen and a heavy petroleum smell Friday evening.

Booms were deployed on the ocean surface Sunday to try to contain the oil while divers sought to determine where and why the leak occurred. On land, there was a race to find animals harmed by the oil and to keep the spill from harming any more sensitive marshland.

But it was not until Saturday afternoon that the Coast Guard said an oil slick had been spotted and a unified command established to respond. And it took until Saturday night for the company to shut down the pipeline.

Rick Torgerson, owner of Blue Star Yacht Charter, said on Friday evening “people were emailing, and the neighbors were asking, ‘Do you smell that?’” By Saturday morning, boats were returning to the marina with their hulls covered in oil, he said.

Garry Brown, president of the environmental group Orange County Coastkeeper, decried a lack of initial coordination among the Coast Guard and local officials in dealing with the spreading oil slick.

“By the time it comes to the beach, it’s done tremendous damage. Our frustration is, it could have been averted if there was a quick response,” said Brown, who lives in Huntington Beach.

Some of the oil washed up on the shores of Orange County. The city and state beaches at Huntington Beach were closed, and late Sunday the city of Laguna Beach, just to the south, said its beaches also were closed.

Huntington Beach Mayor Kim Carr said the beaches of the community nicknamed “Surf City” could remain closed for weeks or even months. The oil created a miles-wide sheen in the ocean and washed ashore in sticky black globules.

“In a year that has been filled with incredibly challenging issues, this oil spill constitutes one of the most devastating situations that our community has dealt with in decades,” Carr said. “We are doing everything in our power to protect the health and safety of our residents, our visitors and our natural habitats.”

Amplify CEO Martyn Willsher said the pipeline and the company's three platforms were shut down Saturday night. The 17.5-mile (28.16-kilometer) pipeline that is 80 to 100 feet (24 to 30 meters) below the surface was suctioned out so no more oil would spill while the location of the leak was being investigated.

Crews led by the Coast Guard-deployed skimmers laid some 3,700 feet (1,128 meters) of floating barriers known as booms to try to stop more oil from seeping into areas including Talbert Marsh, a 25-acre (10-hectare) wetland officials said.

The oil will likely continue to wash up on the shore for several days and could affect Newport Beach and other nearby communities, officials said.

The spill comes three decades after a massive oil leak hit the same stretch of Orange County coast. On Feb. 7, 1990, the oil tanker American Trader ran over its anchor off Huntington Beach, spilling nearly 417,000 gallons (1.6 million liters) of crude. Fish and about 3,400 birds were killed.

In 2015, a ruptured pipeline north of Santa Barbara sent 143,000 gallons (541,313 liters) of crude oil gushing onto Refugio State Beach.

The area affected by the latest spill is home to threatened and endangered species, including a plump shorebird called the snowy plover, the California least tern and humpback whales.

___

Associated Press writers Michael Biesecker in Washington, D.C., Bernard Condon in New York, Felicia Fonseca in Phoenix and Julie Walker in New York contributed to this report.

Amy Taxin And Christopher Weber, The Associated Press



Company suspected in oil spill had dozens of violations

By AMY TAXIN and CHRISTOPHER WEBER

HUNTINGTON BEACH, Calif. (AP) — The company whose pipeline is suspected in one of the largest oil spills in recent California history has been cited 72 times for safety and environmental violations that were severe enough that drilling had to be curtailed or stopped to fix the problem, regulatory records show.

In all, Beta Operating Co. has been cited 125 times since 1980, according to a database from the Bureau of Safety and Environmental Enforcement, the federal agency that regulates the offshore oil and gas industry. The online database provides only the total number of violations, not the details for each incident.

The company was fined a total of $85,000 for three incidents. Two were from 2014, when a worker who was not wearing proper protective equipment was shocked with 98,000 volts of electricity, and a separate incident when crude oil was released through a boom where a safety device had been improperly bypassed.

Beta, which is a subsidiary of Houston-based Amplify Energy, is under scrutiny after a suspected leak in an underwater pipeline sent 126,000 gallons (572,807 liters) of heavy crude into the ocean waters, fouling the sands of famed Huntington Beach and other coastal communities. The spill could keep beaches closed for weeks or longer.

An aerial photo shows the closed beach after oil washed up on Huntington Beach, Calif., on Monday, Oct. 4, 2021. A major oil spill off the coast of Southern California fouled popular beaches and killed wildlife while crews scrambled Sunday, to contain the crude before it spread further into protected wetlands. (AP Photo/Ringo H.W. Chiu)


Environmentalists had feared the oil might devastate birds and marine life in the area. But Michael Ziccardi, a veterinarian and director of the Oiled Wildlife Care Network, said only three oily birds had been found so far.

“At this point we’re cautiously optimistic related to the number of animals that may be affected,” he said Monday at a news conference.

Amplify operates three oil platforms about 9 miles (14.5 kilometers) off the coast of California, all installed between 1980 and 1984. The company also operates a 16-inch pipeline that carries oil from a processing platform to an onshore storage facility in Long Beach. The company has said the oil appears to be coming from a rupture in that pipeline about 4 miles (6.44 kilometers) from the platform.

Before the spill, Amplify had high hopes for the Beta oil field and was pouring millions of dollars into upgrades and new “side track” projects that would tap into oil by drilling laterally.

“We have the opportunity to keep going for as long as we want,” Amplify CEO Martyn Willsher said in an August conference call with investors. He added there was capacity “up to 20,000 barrels a day.”


MORE ON CALIFORNIA OIL SPILL
– Oil spill laps at "heartbeat" of California beach community


Investors shared Willsher’s optimism, sending the company’s stock up more than sevenfold since the beginning of the year to $5.75 at the close of trading on Friday. The stock plunged more than 40% in morning trading Monday.

The company filed for bankruptcy in 2017 and emerged a few months later. It had been using cash generated by the Beta field and others in Oklahoma and Texas to pay down $235 million in debt.

Some residents, business owners and environmentalists questioned whether authorities reacted quickly enough to contain the spill. People who live and work in the area said they noticed an oil sheen and a heavy petroleum smell Friday evening.

Booms were deployed on the ocean surface Sunday to try to contain the oil while divers sought to determine where and why the leak occurred. On land, there was a race to find animals harmed by the oil and to keep the spill from harming any more sensitive marshland.

But it was not until Saturday afternoon that the Coast Guard said an oil slick had been spotted and a unified command established to respond. And it took until Saturday night for the company to shut down the pipeline.

Rick Torgerson, owner of Blue Star Yacht Charter, said on Friday evening “people were emailing, and the neighbors were asking, ‘Do you smell that?’” By Saturday morning, boats were returning to the marina with their hulls covered in oil, he said.



Garry Brown, president of the environmental group Orange County Coastkeeper, decried a lack of initial coordination among the Coast Guard and local officials in dealing with the spreading oil slick.

“By the time it comes to the beach, it’s done tremendous damage. Our frustration is, it could have been averted if there was a quick response,” said Brown, who lives in Huntington Beach.


Some of the oil washed up on the shores of Orange County. The city and state beaches at Huntington Beach were closed, and late Sunday the city of Laguna Beach, just to the south, said its beaches also were closed.

Huntington Beach Mayor Kim Carr said the beaches of the community nicknamed “Surf City” could remain closed for weeks or even months. The oil created a miles-wide sheen in the ocean and washed ashore in sticky black globules.

“In a year that has been filled with incredibly challenging issues, this oil spill constitutes one of the most devastating situations that our community has dealt with in decades,” Carr said. “We are doing everything in our power to protect the health and safety of our residents, our visitors and our natural habitats.”

Amplify CEO Martyn Willsher said the pipeline and the company’s three platforms were shut down Saturday night. The 17.5-mile (28.16-kilometer) pipeline that is 80 to 100 feet (24 to 30 meters) below the surface was suctioned out so no more oil would spill while the location of the leak was being investigated.

      SEAGULLS EAT POISIONED FISH

Crews led by the Coast Guard-deployed skimmers laid some 3,700 feet (1,128 meters) of floating barriers known as booms to try to stop more oil from seeping into areas including Talbert Marsh, a 25-acre (10-hectare) wetland officials said.

The oil will likely continue to wash up on the shore for several days and could affect Newport Beach and other nearby communities, officials said.

The spill comes three decades after a massive oil leak hit the same stretch of Orange County coast. On Feb. 7, 1990, the oil tanker American Trader ran over its anchor off Huntington Beach, spilling nearly 417,000 gallons (1.6 million liters) of crude. Fish and about 3,400 birds were killed.

In 2015, a ruptured pipeline north of Santa Barbara sent 143,000 gallons (541,313 liters) of crude oil gushing onto Refugio State Beach.

The area affected by the latest spill is home to threatened and endangered species, including a plump shorebird called the snowy plover, the California least tern and humpback whales.

___

Associated Press writers Michael Biesecker in Washington, D.C., Bernard Condon in New York, Felicia Fonseca in Phoenix and Julie Walker in New York contributed to this report.


California spill came 52 years after historic oil disaster

By CHRISTINA LARSON

In this Feb. 7, 1969, file photo, workers collect oil-soaked straw from the beach at Santa Barbara, Calif., following a leak from an off-shore well that covered area beaches. The oil spill more than a generation ago helped give rise to the modern environmental movement itself. (AP Photo/File)

The weekend oil leak along the Southern California coast happened not far from the site of the catastrophe more than a generation ago that helped give rise to the modern environmental movement itself: the 1969 Santa Barbara spill.

That still ranks in the top tier of human-caused disasters in the United States and is the nation’s third-largest oil spill, behind only the 2010 Deepwater Horizon and 1989 Exxon Valdez calamities.

During a 10-day period in early 1969, between about 3.5 million and 4.2 million gallons of crude spilled into the Santa Barbara Channel after a blowout six miles offshore on a Union Oil drilling platform. The disaster area was about 115 miles from the site of the 126,000-gallon spill over the weekend that fouled Huntington Beach, a celebrated surfing spot.


The Union Oil rig had been controversial since its inception, but local California communities hadn’t been given any voice in decisions about drilling in federal waters. And corners were cut during the construction process: Regulations called for protective steel casing to extend at least 300 feet below the ocean floor, but the company obtained a waiver allowing it to install only 239 feet of casing.

In the aftermath of the spill, thousands of oil-coated birds perished and photos of the carnage on beaches were widely circulated in newspapers and magazines.

President Richard Nixon visited the site in March 1969 and told reporters, “It is sad that it was necessary that Santa Barbara should be the example that had to bring it to the attention of the American people.”

That example — of communities left out of crucial decisions and corners cut to save time or money for large companies — garnered national attention and caused outrage. It added momentum to the movement to organize the first Earth Day the next year.


Wisconsin Sen. Gaylord Nelson, an early environmentalist, visited the Santa Barbara oil spill site and later said it inspired him to organize “a nationwide teach-in on the environment.”

The oil spill was not the only U.S. environmental crisis in the 1960s. The links between rampant overuse of the pesticide DDT and damaged ecosystems — including the dwindling population of bald eagles — were the subject of Rachel Carson’s seminal 1962 book, “ Silent Spring.”

A raft of far-reaching federal environmental legislation was enacted in the early 1970s, including the establishment of the Environmental Protection Agency (1970) and the passage of the Clean Air Act (1970) and Clean Water Act (1972).

 


In this Feb. 6, 1969, file photo, state forestry conservation crews gather up oil-soaked straw on a beach in Santa Barbara, Calif. The oil spill more than a generation ago helped give rise to the modern environmental movement itself. (AP Photo/Wally Fong, File)


Response time questioned in Southern California oil spill
By AMY TAXIN and CHRISTOPHER WEBER

1 of 44
Cleanup contractors unload collected oil in plastic bags trying to stop further oil crude incursion into the Wetlands Talbert Marsh in Huntington Beach, Calif., Sunday, Oct. 3, 2021. One of the largest oil spills in recent Southern California history fouled popular beaches and killed wildlife while crews scrambled Sunday to contain the crude before it spread further into protected wetlands. (AP Photo/Ringo H.W. Chiu)

HUNTINGTON BEACH, Calif. (AP) — Some residents, business owners and environmentalists questioned whether authorities reacted quickly enough to contain one of the largest oil spills in recent California history, caused by a suspected leak in an underwater pipeline that fouled the sands of famed Huntington Beach and could keep the beaches there closed for weeks or longer.

Booms were deployed on the ocean surface Sunday to try to contain the oil while divers sought to determine where and why the leak occurred. On land, there was a race to find animals harmed by the oil and to keep the spill from harming any more sensitive marshland.

People who live and work in the area said they noticed an oil sheen and a heavy petroleum smell Friday evening.

But it wasn’t until Saturday afternoon that the Coast Guard said an oil slick had been spotted and a unified command established to respond. And it took until Saturday night for the company that operates the pipeline believed responsible for the leak to shut down operations.

Rick Torgerson, owner of Blue Star Yacht Charter said on Friday evening “people were emailing, and the neighbors were asking, ‘do you smell that?’” By Saturday morning boats were returning to the marina with their hulls covered in oil, he said.




Garry Brown, president of the environmental group Orange County Coastkeeper, decried a lack of initial coordination among the Coast Guard and local officials in dealing with the spreading oil slick.

“By the time it comes to the beach, it’s done tremendous damage. Our frustration is, it could have been averted if there was a quick response,” said Brown, who lives in Huntington Beach.

An estimated 126,000 gallons (572,807 liters) of heavy crude leaked into the water and some washed up on the shores of Orange County. The city and state beaches at Huntington Beach were closed, and late Sunday the city of Laguna Beach, just to the south, said its beaches also were shuttered.

MORE ON CALIFORNIA OIL SPILL
– Oil spill laps at "heartbeat" of California beach community


Huntington Beach Mayor Kim Carr said the beaches of the community nicknamed “Surf City” could remain closed for weeks or even months. The oil created a miles-wide sheen in the ocean and washed ashore in sticky black globules.

“In a year that has been filled with incredibly challenging issues this oil spill constitutes one of the most devastating situations that our community has dealt with in decades,” Carr said. “We are doing everything in our power to protect the health and safety of our residents, our visitors and our natural habitats.”

Some birds and fish were caught in the muck and died, Orange County Supervisor Katrina Foley said. But by early afternoon Saturday the U.S. Coast Guard said so far there was just one ruddy duck that was covered in oil and receiving veterinary care. “Other reports of oiled wildlife are being investigated,” the Coast Guard said in a statement.

The leaking pipeline connects to an oil production platform named Elly, which in turn is connected by a walkway to a drilling platform named Ellen. Those two platforms and another nearby platform are in federal waters and owned by Amplify Energy Corp.

Elly began operating in 1980 in an area called the Beta Field. Oil pulled from beneath the ocean and processed by Elly is taken by the pipeline to Long Beach.

Amplify CEO Martyn Willsher said the pipeline and three platforms were shutdown Saturday night. The 17.5-mile (28.16-kilometer) pipeline that is 80 to 100 feet (24 to 30 meters) below the surface was suctioned out so no more oil would spill while the location of the leak was being investigated.

Crews led by the Coast Guard-deployed skimmers laid some 3,700 feet (1,128 meters) of floating barriers known as booms to try to stop more oil from seeping into areas including Talbert Marsh, a 25-acre (10-hectare) wetland officials said.

A petroleum stench permeated the air throughout the area. “You get the taste in the mouth just from the vapors in the air,” Foley said.

The oil will likely continue to wash up on the shore for several days and affect Newport Beach and other nearby communities, officials said.




The closure included all of Huntington Beach, from the city’s north edge about 6 miles (9.6 kilometers) south to the Santa Ana River jetty. The shutdown came amid summerlike weather that would have brought big crowds to the wide strand for volleyball, swimming and surfing. Yellow caution tape was strung between lifeguard towers to keep people away.


Officials canceled the final day of the annual Pacific Air Show that typically draws tens of thousands of spectators to the city of about 200,000 residents south of Los Angeles. The show featured flyovers by the U.S. Navy Blue Angels and the U.S. Air Force Thunderbirds.

Huntington Beach resident David Rapchun said he’s worried about the impact of the spill on the beaches where he grew up as well as the local economy.

“For the amount of oil these things produce I don’t think it’s worth the risk,” Rapchun said. He questioned whether drilling for oil was a wise idea along some of Southern California’s most scenic beaches, noting the loss of the final day of the air show could deal a blow to the local economy.

“We need oil, but there’s always a question: Do we need it there?” he said.

The spill comes three decades after a massive oil leak hit the same stretch of Orange County coast. On Feb. 7, 1990, the oil tanker American Trader ran over its anchor off Huntington Beach, spilling nearly 417,000 gallons (1.6 million liters) of crude. Fish and about 3,400 birds were killed.

In 2015, a ruptured pipeline north of Santa Barbara sent 143,000 gallons (541,313 liters) of crude oil gushing onto Refugio State Beach.


The area affected by the latest spill is home to threatened and endangered species, including a plump shorebird called the snowy plover, the California least tern and humpback whales.

“The coastal areas off of Southern California are just really rich for wildlife, a key biodiversity hot spot,” said Miyoko Sakashita, director of the Center for Biological Diversity’s oceans program.

The effects of an oil spill are wide-ranging, environmentalists said. Birds that get oil on their feathers can’t fly, can’t clean themselves and can’t monitor their own temperatures, Sakashita said. Whales, dolphins and other sea creatures can have trouble breathing or die after swimming through oil or breathing in toxic fumes, she said.

“The oil spill just shows how dirty and dangerous oil drilling is and oil that gets into the water. It’s impossible to clean it up so it ends up washing up on our beaches and people come into contact with it and wildlife comes in contact with it,” she said. “It has long-lasting effects on the breeding and reproduction of animals. It’s really sad to see this broad swatch oiled.”


___

Associated Press reporters Felicia Fonseca in Phoenix and Julie Walker in New York contributed.



126,000-gallon oil spill leaves dead wildlife on Southern California coast


More than 126,000 gallons of oil have spilled off the coast of Huntington Beach, Calif., creating "toxicity" in the area and leaving dead wildlife washed up on the beach. 
Photo by Orange County Supervisor Katrina Foley/Twitter


Oct. 3 (UPI) -- A major oil spill has dumped about 126,000 gallons of post-production crude off the coast of Southern California, officials said Sunday as cleanup crews raced to prevent further environmental degradation.

Authorities said during a press conference that the pipeline breach occurred about 5 miles off the coast of Huntington Beach in Orange County on Saturday.



Local and federal agencies have been deployed to the Southern California coast to initiate cleanup operations.
Photo courtesy of City of Huntington Beach/Facebook


Orange County Supervisor Katrina Foley told reporters that oil has already infiltrated many of its wetlands, including the Talbert Wetlands, and they are doing "everything they can" to prevent further contamination.

In a statement late Sunday, Foley said the presence of oil in Hunting Beach has become "slightly more acute" as they have seen an increasing amount wash ashore.

"There has been a significant amount of ecological impact, including loss of birds and fish, which have been reported as washing up on shore," Foley said.

A total of 3,150 gallons of oily water has been removed, she said, adding that nine boats and three shoreline assessment teams have been dispatched for oil spill recovery operations along with 3,700 feet of boom deployed.

A health advisory has also been issued encouraging residents who may have come into contact with contaminated materials to seek medical attention.



Officials have urged residents to stay away from the beaches and those who may have come into contact with contaminated materials to seek medical attention. 
Photo courtesy of City of Huntington Beach/Twitter

"Even when an oil sheen may not be visible, dispersed and dissolved oil contaminates may exist in the water," Orange County Health Officer Dr. Clayton Chau said in a statement.

The City of Huntington Beach said in a statement that the spill measures approximately 5.8 nautical miles stretching from the Huntington Beach Pier to Newport Beach, forcing a closure of the ocean from the Pier to the Santa Ana River jetty.

"The spill has significantly affected Huntington Beach, with substantial ecological impacts occurring at the beach and at the Huntington Beach Wetlands," the city said. "In response, Huntington Beach Fire and Marine Safety personnel have been deployed throughout the day to implement environmental containment efforts."

On Sunday night, the city said via Facebook that federal, state and regional agencies have deployed cleanup crews and skimming boats to remove oil from the environment.

The U.S. Coast Guard said an oil sheen off the coast was first reported at 9:10 a.m. on Saturday morning.

The pipeline is owned by Houston-based oil and gas company Amplify Energy, President and CEO Martyn Willsher said during the news conference.

"We are fully committed to being out here until this incident is fully concluded," Willsher said.



Some 3,700 feet of boom have been deployed to prevent oil from further impacting wetlands. Photo courtesy of City of Huntington Beach/Twitter


As of early Sunday morning, city officials said the leak had not yet been stopped but preliminary patching to repair the oil spill site has been completed as the U.S. Coast Guard will continue to respond to the incident.

The city also urged individuals to avoid the beach due to the "toxicity created by the spill" and city leadership canceled the Pacific Airshow, which was scheduled for Sunday to facilitate clean-up efforts.

Earlier Sunday, Foley tweeted that oil had washed up onto the beachfront along with dead birds and fish.




Huntington Beach Mayor Kim Carr said Coast Guard information indicates the spill may have been the result of an oil release from an offshore oil production off the coast.

Republican Rep. Michelle Steel sent a letter Sunday to President Joe Biden urging him to authorize a major disaster declaration for her Orange County community.

"Your approval of this request is imperative for a swift recovery and the support of assistance efforts for all Californians," she wrote. "Dead fish and birds are already being reported on beaches and shorelines."

The oil spill forced the city of Huntington Beach to cancel the Pacific Airshow scheduled for Sunday.

No exact cause for the spill has been determined and the Coast Guard is conducting an investigation.

The National Transportation Safety Board tweeted two investigators have been dispatched to investigate.

Northern California Environmentalists Respond to Massive Huntington Beach Oil Spill


KQED News Staff and Wires
Oct 3

Oil is washed up on Huntington State Beach after a 126,000-gallon oil spill from an offshore oil platform on October 3, 2021 in Huntington Beach, California. The spill forced the closure of the popular Great Pacific Airshow with authorities urging people to avoid beaches in the vicinity. (Mario Tama/Getty Images)


One of the largest oil spills in recent Southern California history fouled popular beaches that could end up closed for months as crews scrambled Sunday to contain the crude before it spread further into protected wetlands.

Divers are trying to determine where and why the leak occurred, but the flow of oil was stopped late Saturday from the pipeline that runs under the ocean off Huntington Beach, according to the head of the company that operates the line.

At least 126,000 gallons of crude spilled into the waters off Orange County starting late Friday or early Saturday when boaters began reporting a sheen in the water, officials said.

Some in the wider Bay Area, like the UC Davis Oiled Wildlife Care Network, are already responding. They sent field teams down to Huntington Beach to help wildlife that have been coated in the crude oil. They are also assessing how many volunteers they need to send for support.

"All of our teams have 'go bags' where items are packed and ready to go," said Eunah Preston, a spokesperson for the UC Davis-based wildlife network. "There's no hesitation, really."

While the amount of crude that's spilled has raised the eyebrows of experts, Amplify Energy CEO Martyn Willsher said that'll be the last of it.

“I don’t expect it to be more. That’s the capacity of the entire pipeline,” Willsher said. He said the pipeline was suctioned out and dozens of nearby oil platforms operated by Amplify were shut down
.
Cleanup workers attempt to contain oil which seeped into Talbert Marsh, which is home to around 90 bird species, after a 126,000-gallon oil spill from an offshore oil platform on October 3, 2021 in Huntington Beach, California. The spill forced the closure of the popular Great Pacific Airshow with authorities urging people to avoid beaches in the vicinity. (Mario Tama/Getty Images)

It was one of the largest oil spills in recent Southern California history, shoring up black oil on the strand in Huntington Beach, the town known as Surf City USA. Crews scrambled to contain the crude before it spread further into protected wetlands.

Huntington Beach Mayor Kim Carr said the city's famous beaches could remain closed for weeks or even months.

“In a year that has been filled with incredibly challenging issues this oil spill constitutes one of the most devastating situations that our community has dealt with in decades,” Carr said.

The oil created a miles-wide sheen in the ocean and washed ashore in sticky, black globules.
"I believe we are seeing a much better oil spill response due to the time we took after the Cosco Busan spill to really understand what went wrong."Sejal Choksi-Chugh, executive director of San Francisco Baykeeper

Some birds and fish were caught in the muck and killed, said Orange County Supervisor Katrina Foley. But the U.S. Coast Guard said there was a report of just one duck that was covered in oil and receiving veterinary care. “Other reports of oiled wildlife are being investigated,” the Coast Guard said in a statement.

Coordination between various branches of government that deal with oil spills have improved over the past decade, according to Sejal Choksi-Chugh, executive director of San Francisco Baykeeper, an environmental advocacy group.

Oil spill-oriented-reforms sprung from the sluggish response to San Francisco's Cosco Busan spill of 2007, when the Cosco Busan container ship struck the San Francisco-Oakland Bay Bridge, ripping a hole in the boat's hull.
A 90 foot gash is visible on the side of the freighter ship Cosco Busan as it sits anchored in the San Francisco Bay November 13, 2007 in San Francisco, California
(Justin Sullivan/Getty Images)

More than 53,000 gallons of oil spilled into San Francisco Bay and sat there — for hours — with little initial effort to contain it.

Choksi-Chugh was in a boat herself with an SF Baykeeper crew, measuring the distance of the spill. Their crew ended up urging the government to revise its estimation of the spill's size to be larger than it was initially reported.

At first, reports said Cosco Busan spilled 400 gallons, but "we found out about eight hours later it was a 53,000-gallon oil spill," Choksi-Chugh said.

The lackadaisical response in San Francisco's waters led to an overhaul of state oil-spill responses, though some of the changes didn't go as far as advocates had hoped, according to SF Baykeeper.

In the aftermath, oil-spill response plans were developed for the Bay Area and other localities, and communication was streamlined between some agencies. Activists also called for increased investment in quickly training and onboarding volunteers to help clean beaches and save wildlife.

"I believe we are seeing a much better oil spill response due to the time we took after the Cosco Busan spill to really understand what went wrong," Choksi-Chugh said. "When you come up with two hundred different ways that oil spill response went wrong back in 2007, you better believe there's going to be improvements."

Oil booms lay on the beach at Crissy Field November 12, 2007 in San Francisco, California. (Justin Sullivan/Getty Images)

Much of that cleanup was underway nearly immediately in Huntingon Beach over the weekend.

Crews led by the Coast Guard deployed skimmers and some 3,700 feet of floating barriers known as booms to try to stop further incursion into areas including Talbert Marsh, a 25-acre wetland in Huntington Beach, officials said.

A petroleum stench permeated the air throughout the area.

“You get the taste in the mouth just from the vapors in the air,” Supervisor Foley said.

The oil will likely continue to approach the Orange County coast, including Newport Beach to the south, over the next few days, officials said.

The oil slick originated from a pipeline connected to an offshore oil platform known as Elly, Foley said on Twitter. Elly is connected by walkway to another platform, Ellen, located just over 8.5 miles off Long Beach, according to the federal Bureau of Safety and Environmental Enforcement.

U.S. Rep. Jared Huffman, D-San Rafael, said people in Northern California should be concerned about Southern California spills because "we are all one coast." Wildlife experts have noted that migratory animals people spot even from the Bay Area, like whales, often swim up from Southern California.

"I'm horrified, of course," Huffman said.

Cosco Busan was somewhat different because the oil came from a ship, versus a pipeline, but "whether it's a ship, whether it's a pipeline, whether it's inland, or coastal, the bottom line is these accidents happen all the time," and that the United States' dependence on oil is "no way to power an economy, and we don't have to do it anymore." He said this should be "a wake-up call" for a transition to clean and safer energy.

Cleanup workers (R) attempt to contain oil which seeped into Talbert Marsh, which is home to around 90 bird species, after a 126,000-gallon oil spill from an offshore oil platform on October 3, 2021 in Huntington Beach, California. The spill forced the closure of the popular Great Pacific Airshow with authorities urging people to avoid beaches in the vicinity. (Mario Tama/Getty Images)

The Huntington Beach spill comes three decades after a massive oil leak hit the same stretch of Orange County coast. On Feb. 7, 1990, the oil tanker American Trader ran over its anchor off Huntington Beach, spilling nearly 417,000 gallons of crude. Fish and about 3,400 birds were killed.

In 2015, a ruptured pipeline north of Santa Barbara sent 143,000 gallons of crude oil gushing onto Refugio State Beach.

At a news conference Saturday night, Orange County officials expressed concern about the environmental impacts of the spill and hoped crews could stop the oil before it flowed into sensitive wetlands.

“We’ve been working with our federal, state and county partners to mitigate the impact that could be a potential ecological disaster,” Huntington Beach Mayor Kim Carr said.

The area is home to threatened and endangered species — including a plump shorebird called the snowy plover, the California least tern and humpback whales — a fishing industry and migratory birds on the Pacific Flyway.

“The coastal areas off of Southern California are just really rich for wildlife, a key biodiversity hot spot,” said Miyoko Sakashita, director of the Center for Biological Diversity’s oceans program.

The effects of an oil spill are wide-ranging, environmentalists said. Birds that get oil on their feathers can’t fly, can’t clean themselves and can’t monitor their own temperatures, Sakashita said. Whales, dolphins and other sea creatures can have trouble breathing or die after swimming through oil or breathing in toxic fumes, she said.

A bird spreads its wings as it stands in the water at the Berkeley Marina November 27, 2007 in Berkeley, California. Almost three weeks after the freighter ship Cosco Busan struck the San Francisco Bay Bridge and spilled58,000 gallons of bunker fuel into the bay, nearly 2,150 birds have died and more continue to be found with oil-soaked feathers. Biologists are estimating that more than 20,000 birds may have died as a result of the spill but have not been found yet. (Justin Sullivan/Getty Images)

Sakashita keenly remembers the Cosco Busan oil spill near the Bay Bridge, and then havoc it wreaked from beaches and shallow pools to the deepest reaches of San Francisco Bay. She was among the staff that advocated for improving oversight of oil in California after that Bay Area spill.

This new spill down in southern California is "about twice that size" of the Cosco Busan spill, Sakashita noted.

"A lot of us remember going out and seeing the oil washing up on the shores and just feeling so helpless about what can be done to clean up a spill like that in the Bay, and that same thing is really devastating off of Huntington Beach right now," she said. "It's definitely a horrific reminder that oil and gas and all of the fossil fuels that are being so heavily used right now are just dirty and dangerous, and we need to shift off of that."

KQED's Joe Fitzgerald Rodriguez and Annelise Finney in the Bay Area contributed to this report, as did Associated Press reporters Amy Taxin, Christopher Weber, Felicia Fonseca, and Julie Walker.

Tuesday, August 01, 2023

Brazil And Guyana Are Fueling Latin America's Oil Resurgence

By Matthew Smith - Jul 27, 2023

Brazil, with 14.9 billion barrels of proven reserves, is aiming to boost oil output to 5.4 million barrels per day by 2029, potentially becoming the world's fourth-largest oil producer.

Guyana, following a series of discoveries by Exxon since 2015, is becoming an increasingly important player in the global oil sector, currently producing around 400,000 barrels per day.

Latin America's oil sector, led by Brazil and Guyana, is projected to expand significantly over the next decade.


The near collapse of Venezuela’s once colossal oil industry under the weight of endemic corruption‚ and strict U.S. sanctions, along with Mexico’s sputtering mature oil fields, saw Latin America’s economically crucial hydrocarbon sector fall into decline. By 2020, Venezuela’s oil output had crashed to an all-time annual low of 569,000 barrels per day, while Mexico’s sputtering aging oilfields pumped less than 1.7 million barrels daily. Then a series of world-class offshore discoveries in Brazil’s territorial waters captured the attention of energy supermajors and put Latin America back on the world hydrocarbon map. That was followed by Exxon’s world-class offshore discoveries in Guyana, which put the tiny South American on track to become a leading global petroleum producer and exporter. These events see Latin America poised once again to become a global hydrocarbon powerhouse once again.

Brazil’s national oil company Petrobras made the first offshore deepwater pre-salt oil discovery in the Santos Basin in 2006, with the first oil being pumped a mere two years later. Those vast pre-salt reservoirs continue to deliver major world-class discoveries which have endowed Brazil, according to data from the regulator, the National Agency of Petroleum, Natural Gas and Biofuels, with 14.9 billion barrels of proven or 1P reserves. This now sees Brazil holding the second largest oil reserves in Latin America after Venezuela and ranked 16th globally. Those impressive oil reserves, along with ongoing discoveries, are sustaining Brazil’s epic offshore petroleum boom. There are clear indications Brazil’s hydrocarbon reserves and production will continue to expand.

The Ministry of Mines and Energy is targeting significant production growth. The ministry is doing this by implementing strategies to develop existing basins and lift output to 5.4 million barrels per day by 2029. If that ambitious target is achieved, it will make Brazil the world’s fourth-largest oil producer. For May 2023, Brazil pumped an average of 3.2 million barrels per day, which was an impressive 11% greater than the equivalent period a year earlier. Total hydrocarbon output was 4.1 million barrels of oil equivalent per day for May 2023, a notable 9% higher year over year. While Brazil’s hydrocarbon production is growing at a steady clip, there is still a significant way to go before the country is lifting more than 5 million barrels per day with 80% flowing from the pre-salt layer.

It will take a considerable investment in developing Brazil’s offshore hydrocarbon basins to lift production to the targeted volume. Petrobras, as part of its 2023 to 2027 strategic plan, has allocated $64 billion to developing exploration and production assets, with 67% of that amount to be invested in pre-salt operations. By 2027, Petrobras envisages lifting 2.5 million barrels of oil per day and another 600,000 barrels of natural gas, seeing the company pump 3.1 million barrels of oil equivalent per day, with 78% being sourced from pre-salt fields.

Brazil’s booming oil production is an important economic driver for Brazil. By 2012 Petrobras had become a key government policy tool seeing it emerge as the world’s most indebted oil company with the administration of President Dilma Rousseff looting its coffers to fund social programs and other policy initiatives. After a massive corruption scandal involving Petrobras and construction firm Odebrecht rippled through Brazil, eventually claiming Rousseff’s scalp, Petrobras was set on a more independent pro-business footing by her successor Michel Temer with that approach continued by his successor Jair Bolsonaro. There are fears that the return of Luiz Inácio Lula da Silva, known as Lula, to the presidency, will lead to further heavy-handed government intervention.

It isn’t only Brazil which has brought the spotlight back on Latin America’s oil industry. Neighboring Guyana is following in the footsteps of Latin America’s largest oil producer after global energy supermajor Exxon discovered oil in the former British colony’s territorial waters in 2015. Since that discovery in the Stabroek Block, Guyana has emerged as what is being called the world’s hottest offshore frontier oil play. More than 35 discoveries have endowed the impoverished country of around 800,000 people with over 11 billion barrels of oil. The Exxon led consortium’s accelerated development of the Stabroek Block, with it taking four years to go from the first discovery to first oil, sees Guyana pumping around 400,000 barrels per day.

Georgetown plans to auction 14 blocks during 2023, although for the third time, it has been delayed until mid-August 2023 so the government can finalize changes to the regulatory framework. Those reforms include introducing a new Production Sharing Agreement (PSA), which will increase the royalty from 2% to 10%, reduce the cost recovery limit from 75% to 65% and introduce a 10% corporate tax. While those terms are less advantageous than those secured by Exxon for the Stabroek Block, they are still competitive compared to other countries in the region.

Guyana’s first-ever oil auction is intended to reduce the country’s dependence on Exxon. It will do this by attracting other petroleum explorers and producers to the South American country’s territorial waters. Given the considerable petroleum potential believed to exist in Guyana’s shallow water and deepwater blocks, further oil discoveries are only a matter of time. Analysts estimate Guyana will be lifting 1.2 million barrels per day by the end of 2027, making the former British colony become a leading global oil exporter. This is delivering a mega economic boom for Guyana, which will have the fastest growing economy during 2023, with gross domestic product forecast by the IMF to expand by 37.2%.

There are signs that Latin America's hydrocarbon sector will expand substantially over the next decade despite heightened geopolitical risk, the clean energy transition and looming peak oil demand. Venezuela’s oil output is growing because of assistance from Iran while U.S. sanctions are being loosened with supermajor Chevron permitted to lift oil in the crisis-riven country. Argentina is undergoing an onshore unconventional hydrocarbon boom as the Vaca Muerta shale body is developed. While those will boost hydrocarbon production in Latin America and the Caribbean, it is Brazil and Guyana which are driving the massive explosion in oil production expected in the region. Those two countries alone will add up to 3 million barrels per day to Latin America and the Caribbean’s oil output, but that will occur at a time when petroleum prices are under pressure from falling global demand due to the clean energy transition. That makes it a race against time for oil producers in the region to exploit their hydrocarbon wealth.

The Oil Eldorado: Guyana's Stabroek Block Surpasses Analyst Expectations


By Matthew Smith - Jul 26, 2023

Oil estimates for the Guyana Suriname Basin, particularly Guyana's Stabroek Block, are being revised upwards, with Exxon's 35 discoveries believed to contain over 11 billion barrels of oil.

Various oil discoveries in both Guyana and Suriname indicate the presence of up to 32 billion barrels of oil resources in the basin, a number that is likely to grow as exploration and development operations escalate.

The surge in oil resources is attracting foreign energy companies and investment, fueling what is projected to become South America's largest oil boom and promising significant economic benefits for Guyana and Suriname.


Tiny South American country Guyana, which has a population of less than one million, recently emerged as the world’s hottest offshore frontier drilling location. After Exxon’s slew of world-class oil discoveries in the offshore Stabroek Block, the first occurring in 2015, big oil was captivated by the petroleum potential held by the Guyana Suriname Basin. This saw foreign energy companies, including Malaysia’s Petronas, France’s TotalEnergies and U.S.-based Chevron in recent years acquire interests in a range of blocks in offshore Guyana and Suriname. Both impoverished former colonies possess the petroleum potential to become major oil producers and exporters, with Guyana well ahead of Suriname when it comes to developing its considerable oil resources. There are clear signs that the Guyana Suriname Basin contains significantly more petroleum than originally estimated.

It is becoming increasingly evident that the U.S. Geological Survey (USGS) grossly underestimated the volume of oil contained in the Guyana Suriname Basin. In a May 2001 assessment of undiscovered conventional oil and gas resources in South America, the USGS determined the Guyana Suriname Basin contained 2.8 billion to 32.6 billion barrels of oil with mean resources of 15.2 billion barrels. At the time, due to the lack of drilling success in the basin, the assessment appeared accurate. Nonetheless, those conservative numbers are now being challenged by Exxon’s 35 discoveries in the Stabroek Block alone, where the supermajor believes it has discovered more than 11 billion barrels of oil.

There has been a slew of other discoveries in Guyana’s territorial waters. The most recent occurred at CGX Energy’s Wei-1 wildcat well in the northern tip of the Corentyne Block, which is contiguous with the Stabroek Block, where 210 feet of hydrocarbon-bearing sands in the Santonian interval was identified. Analysts believe the success of the Wei-1 exploration well, along with CGX’s earlier discovery at the Kawa-1 exploration well roughly nine miles to the southeast of the Wei well, is particularly important for the oil boom occurring in the Guyana Suriname Basin. This indicates the prolific petroleum fairway contained in the Stabroek Block runs through the north of the Corentyne Block and into neighboring Block 58 in offshore Suriname, where TotalEnergies and partner Apache have made five discoveries.

Frontera Energy, CGX’s 68% partner in the Corentyne Block and majority owner, had an independent resource evaluation for its Guyana Blocks conducted during 2021. This evaluation determined the Corentyne Block contains 1.7 billion to 10.7 billion barrels of oil resources with nearly one billion barrels of mean risk oil resources. In a late 2022 report, industry consultancy S&P Global Commodity Insights determined that more than 15 billion barrels of oil have been discovered in Guyana’s territorial waters since Exxon’s first Liza discovery in 2015. That number alone indicates that the USGS substantially underestimated the volume of petroleum contained in the Guyana Suriname Basin.

This becomes more apparent when it is considered that Block 58 offshore Suriname, where 50% partners TotalEnergies and Apache have made five commercial discoveries, is thought to contain up to 6.5 billion barrels of oil resources. Already flow testing at the Sapakara and Krabdagu discoveries in the block has identified there are over 800 million barrels of oil resources in place, with more to be discovered. Based on the numbers for the Stabroek as well as Corentyne Blocks in Guyana’s territorial waters and Block 58 in offshore Suriname, there are easily up to 32 billion barrels, or even more, of oil resources contained in the Guyana Suriname Basin.

That number will only grow as the tempo of exploration and development operations in the basin gain pace. There have been other discoveries in the Guyana Suriname Basin that have yet to be evaluated and determined whether they are exploitable. These include Exxon, along with partner Malaysia’s national oil company Petronas finding oil with the Slonea-1 exploration well in offshore Suriname Block 52 and Apache’s Baja-1 discovery in Block 53. Since 2015, there have also been a series of non-commercial discoveries in Guyana, which despite being deemed unexploitable for assorted reasons, including being water-bearing, further underscore the considerable oil potential contained in the Guyana Suriname Basin.

While TotalEnergies delayed the multi-billion-dollar final investment decision for Block 58, expected in 2022, because of conflicting drilling results and seismic data as well as a high oil-to-gas ratio, Paramaribo is pushing to attract other energy companies. This saw Surname’s government launch a series of oil auctions for the shallow water underexplored Demerara acreage, the latest of which closed at the end of May 2023 with several companies making qualified bids for three of the six blocks offered. In a series of earlier auctions, supermajor Chevron acquired interests in shallow water Block 5 and 7 as well as deepwater Block 42, where the operator Shell, in 2022, drilled the Zanderij-1 wildcat well where a non-commercial oil discovery was made.

Guyana is also focused on attracting further investment in its burgeoning offshore oil boom. Georgetown announced the first-ever petroleum auction in late-2022, which has since been delayed 3 times, now until mid-August 2023, as the government seeks to implement new contractual terms for the country’s production-sharing agreements. That auction sees a total of 14 blocks on offer, comprised of 11 deepwater and three shallow-water blocks, with a view to reducing dependence on the Exxon-led consortium lifting 400,000 barrels per day in the Stabroek Block. According to Reuters, Shell, Brazil’s national oil company Petrobras and Chevron were weighing whether to make bids earlier this year.

At the start of July 2023, it was announced that Guyana’s Environmental Protection Agency had approved Exxon’s ambitious drilling campaign in the Stabroek Block, where it plans to drill 35 exploration and appraisal wells. With the prolific petroleum trend in the Stabroek Block yet to be fully explored and the large volume of discoveries already made that have yet to be appraised, there are significant odds of further oil discoveries being made as that campaign progresses. Other companies such as CGX, Repsol and Shell are pushing ahead with their own drilling campaigns in offshore Guyana.

As foreign energy companies and capital pour into Guyana and Suriname, advancing further exploration and development activity, there is every indication that further world-class oil discoveries will be made. That will significantly boost the volume of exploitable oil resources in the basin to levels well above those estimated by the USGS, with the government organization claiming the geological body contains 15.2 billion barrels of mean undiscovered oil resources. Indeed, there is an estimated 16 billion barrels of exploitable oil resources discovered to date in the Guyana Suriname Basin, with various estimates indicating that it contains at least 27 billion barrels of oil resources. This considerable petroleum potential will fuel what is South America’s largest oil boom and deliver a tremendous economic windfall for Guyana and Suriname.

By Matthew Smith for Oilprice.com



Offshore Oil Stocks Flying As Investors Bet On A Deep Water Boom


By Alex Kimani - Jul 26, 2023

Offshore drilling companies have seen their share prices jump this year as a result of renewed appetite for offshore drilling and exploration.

One notable trend in the ongoing offshore boom is a large increase in deepwater and ultra-deepwater drilling.

Ultra-deepwater production is set to continue growing at breakneck speed to account for half of all deepwater production by 2030.


Stocks of offshore oil and gas drillers and producers have gone on a tear after recent contracts broke records, reversing their seven-year downturn that reached its nadir during the Covid-19 pandemic. Rising global petroleum demand, coupled with increasing deepwater exploration and drilling, has been keeping offshore contractors really busy.

Leading with impressive gains is deepwater drilling specialist, Transocean Ltd. (NYSE:RIG), whose stock has gained 99.1% in the year-to-date. RIG stock jumped nearly 10% over the past week after the company reported a three-year, $518 million contract to deploy one of its drillships in the Gulf of Mexico, the latest in a series of large transactions announced in recent months. The company has revealed that its aggregate incremental backlog associated with the latest contracts totals ~$1.2, bringing its total backlog to $9.2B. Meanwhile, rig rates have shot up to $480,000 a day, a 50%Y/Y increase and about triple the downturn’s lows.

Deepwater Boom


One notable trend in the ongoing offshore boom is a large increase in deepwater and ultra-deepwater drilling. Recently, the China National Petroleum Corporation (CNPC), the government-owned parent company of PetroChina, and Cnooc (OTCPK: CEOHF), kicked off ultra-deepwater exploratory drilling for oil and gas as the country looks to wean itself of foreign oil. According to Chinese news agency Xinhua Global Service, CNPC will drill a test borehole of up to 11,000 meters (36,089 feet), the country’s deepest ever, which will help it better understand the Earth’s internal structure better, as well as to test underground drilling techniques.Related: Oil Prices Drop As Market Awaits Fed’s Interest Rate Decision

CNPC’s borehole depth is not far from Qatar’s world record of 12,289 meters (40,318 feet) for a petroleum well depth that was drilled in the Al Shaheen Oil Field in 2008 or Russia’s Kola Superdeep well that reached a depth of 12,262 meters (40,230 feet).

In the oil and gas exploration and production (E&P) industry, deepwater is defined as water depth greater than 1,000 feet while ultra-deepwater is defined as depths greater than 5,000 feet.

But China is not the only country willing to drill to ridiculous depths in the pursuit of energy security.

Deepwater oil and gas production is set to increase by 60% by 2030, to contribute 8% of overall upstream production, according to a new report from Wood Mackenzie, as cited by Rig Zone.

Ultra-deepwater production is set to continue growing at breakneck speed to account for half of all deepwater production by 2030.

Deepwater production remains the fastest-growing upstream oil and gas segment with production expected to hit 10.4 million boe/d in 2022 from just 300,000 barrels of oil equivalent per day (boe/d) in 1990. Wood Mackenzie has predicted that by the end of the decade, that figure will pass 17 million boe/d.

Norway's Aker BP (NYSE:BP) (OTCQX:AKRBF) is the latest oil major to make an ultra-deepwater discovery. At a total depth of 8,168 m, Aker BP says the well is the longest exploration well drilled in offshore Norway. The much bigger-than-expected oil discovery was made in the Yggdrasil area of the North Sea.

Preliminary estimates indicate a gross recoverable volume of 40 million-90 million barrels of oil equivalent (boe), much higher than the company’s earlier projection of between 18 million and 45 million boe. The discovery will significantly enhance the company’s resource base for the Yggdrasil development, which previously was estimated at 650M gross boe.The oil discovery is located within production licenses 873 and 442: In license 873, with Equinor ASA (NYSE:EQNR) and PGNiG Upstream Norway as partners. The plan for development and operations (PDO) for this project was submitted to Norwegian authorities in December 2022, with production scheduled to start in 2027.

Two years ago, U.S. oil and gas major Exxon Mobil (NYSE: XOM) made a big deepwater oil and gas find. Exxon announced that it had made two more discoveries at the Sailfin-1 and Yarrow-1 wells in the Stabroek block offshore Guyana, bringing discoveries on the block to more than 30 since 2015. Exxon revealed that the Sailfin-1 well was drilled in 4,616 feet of water and encountered 312 feet of hydrocarbon-bearing sandstone, while the Yarrow-1 well was drilled in 3,560 feet of water and encountered 75 feet of hydrocarbon-bearing sandstone.

Exxon did not disclose how much crude oil or gas it estimates the new discoveries to contain, but hiked a previous output forecast for the third quarter from older discoveries in the region.

The supermajor has boosted development and production offshore Guyana at a pace that "far exceeds the industry average”. Exxon’s two sanctioned offshore Guyana projects, Liza Phase 1 and Liza Phase 2, are now producing above design capacity and have already achieved an average of nearly 360K bbl/day of oil. The supermajor expects total production from Guyana to cross a million barrels per day by the end of this decade.

Exxon said a third project, Payara, is expected to launch by year-end 2023 while a fourth project, Yellowtail, could kick off operations in 2025.

Exxon is the operator of the Stabroek block where it holds a 45% interest while partners Hess Corp. (NYSE: HES) and Cnooc hold a 30% and 25% interest, respectively. Exxon’s oil and gas production are well below record levels, averaging 3.7M boe/day, nearly 9% below 4.1M boe/day set in 2016.

By Alex Kimani for Oilprice.com