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6 NEWSLETTER 14 LETTERS / CALENDAR
30 ADVERTISERS INDEX
GENERAL INTEREST
20 OTC: Federal, state
cooperation vital for
offshore energy development
Steven Poruban
21 OTC: Shell determined
to proceed with
drilling in US Arctic
Matt Zborowski
21 OTC: BPs Dupree outlines
new model for offshore
technology development
Michael T. Slocum
22 OTC: BSEE director says industry
on probation as far as public trust
Paula Dittrick
22 OTC: Deepwater will be
vital to maintaining global
supply, IHSs Fryklund says
Steven Poruban
23 OTC: Brazils 13th bid
round will be concession
model, energy minister says
Michael T. Slocum
23 OTC: Indonesia seeks
paradigm shift in developing
western deepwater assets
Tayvis Dunnahoe
| www.ogj.com May 11, 2015 | Volume 113.5a
16 JOURNALLY SPEAKING 18 EDITORIAL
32 STATISTICS 36 MARKET CONNECTION
24 OTC: Nova Scotia draws deepwater
interest with latest bid round
Tayvis Dunnahoe
26 US, Canada jointly release
crude-by-rail transportation rules
Nick Snow
27 Senate Democrats offer bill to
phase out older rail tank cars
Nick Snow
27 WATCHING GOVERNMENT
Playing by NCACs rules
28 EIA: East Coast refineries got
52% of crude by rail in February
Nick Snow
28 Cost opportunity seen for
LNG projects in western Canada
29 Kizomba Satellites Phase 2
off Angola starts oil production
29 EDITORS PERSPECTIVE
Pope will confirm religious nature of climate activism
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OGJ
Newsletter International News
for oil and gas professionals
GENERAL INTEREST Q U IC K TA K E S
OTC: Petrobras has full government support, Braga says
Petroleo Brasilierio SA (Petrobras) still has full and uncondi-
tional support from the Brazilian government, said Eduardo
Braga, the countrys minister of mining and energy, to an indus-
try luncheon on May 4 at the Offshore Technology Conference
in Houston.
This despite bribery charges that led to the resignation of
six senior executives earlier this year and a $2.1 billion write
down last month (OGJ Online, Apr. 23, 2015). Petrobras faces
challenges, said Braga, but the people of Brazil are still proud of
its most successful company.
The minister was more eager to discuss the potential for for-
eign operators and investors in his county citing the upcoming
13th oil and gas licensing round. The auction, scheduled for
October of this year, will have 269 blocks in 10 different basins
including the Brazil presalt.
OTC: IADC well-control training program launched
An industry-wide collaboration enabled the International As-
sociation of Drilling Contractors to develop a new well-control
training and assessment program that is targeted toward an
individuals actual job, IADA executives told an Offshore Tech-
nology Conference news briefing May 6 in Houston.
The new program, WellSharp, emphasizes training for
every employee having any well-control responsibilities,
whether the employee is based in the field or on the rig, said
Mark Denkowski, IADC executive vice-president, operational
integrity.
Denkowski said the new program seeks to focus on provid-
ing knowledge key to specific individuals to better do their
jobs. Training categories were expanded in the new program
to five levels.
The first level is awareness, which is something that an of-
fice worker might fine useful. The other levels are introductory,
new driller, supervisor, and engineer.
Industry said we need better well-control training. We need
more consistent human behavior, Denkowski said.
WellSharp succeeds IADCs well-control program called
WellCap. Denkowski said the WellSharp program represents
a complete redesign in the way the training program operates.
6 Oil & Gas Journal
May 11, 2015
For up-to-the-minute news,
visit www.ogjonline.com
In the future, WellSharp will be expanded to include cement-
ers and loggers, Denkowski said.
IADC Pres. and Chief Executive Officer Stephen Colville
said the WellSharp program ensures that rig crews know what
they need to do in any circumstance; they have the skills to do
it right every time, all the time.
Colville said early response from operators and regulators
indicates they believe the program to be a step-change in in-
dustry well-control training.
IADC accreditation program, including WellSharp, guide
companies to ensure comprehensiveness in critical training
content and adherence to recognized industry standards.
Hollub named successor as Oxy CEO
Occidental Petroleum Corp. has approved a plan in which Vicki
A. Hollub will succeed Stephen I. Chazen as the companys
chief executive officer following a thorough transition period.
Chazen has served in the position since 2011 (OGJ Online, Oct.
14, 2010).
Vicki A. Hollub also is currently being promoted to senior
executive vice-president from executive vice-president (OGJ
Online, July 11, 2014). She remains president of Oxy Oil & Gas.
Hollub has nearly 35 years of experience in the oil and
gas industry, holding a variety of technical and leadership
roles, both in the US and internationally. In 2013 she was ap-
pointed vice-president of Oxy and executive vice-president,
US operations, Oxy Oil & Gas (OGJ Online, Oct. 11, 2013).
She previously served as executive vice-president, California
operations; and president and general manager, Permian ba-
sin operations.
Deirdre Michie takes helm at Oil & Gas UK
Deirdre Michie assumed the position of chief executive of Oil
& Gas UK on May 1, succeeding Malcolm Webb. She was ap-
pointed by the OGUK board in February (OGJ Online, Feb. 27,
2015).
This is a difficult time for the offshore oil and gas sector,
Michie said. We need to ensure a step up in its performance
to deliver a positive and sustainable future. I look forward to
working with industry, unions, governments, and the regula-
tors in moving this industry forward.
Michie, who worked for Shell for nearly 30 years, will be
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ICE BRENT / NYMEX LIGHT SWEET CRUDE US INDUSTRY SCOREBOARD 5/11
$/bbl
70.00
68.00
66.00
4 wk. 4 wk. avg. Change, YTD YTD avg. Change,
64.00
Latest week 4/24 average year ago1 % average1 year ago1 %
62.00 Product supplied, 1,000 b/d
60.00
Motor gasoline 8,907 8,684 2.6 8,830 8,516 3.7
58.00
Distillate 3,968 3,959 0.2 4,039 3,823 5.7
56.00 Jet fuel 1,589 1,420 11.9 1,526 1,406 8.5
Apr. 29 Apr. 30 May 1 May 4 May 5
Residual 395 224 76.3 216 255 (15.3)
Other products 4,349 4,113 5.7 4,837 4,659 3.8
TOTAL PRODUCT SUPPLIED 19,208 18,400 4.4 19,448 18,659 4.2
WTI CUSHING / BRENT SPOT Supply, 1,000 b/d
$/bbl Crude production 9,382 8,311 12.9 9,311 8,171 14.0
65.00 NGL production2 2,980 2,639 12.9 3,075 2,668 15.3
64.00 Crude imports 7,644 7,716 (0.9) 7,380 7,434 (0.7)
63.00 Product imports 2,221 1,885 17.8 2,070 1,778 16.4
62.00 Other supply2 3 2,329 2,468 (5.6) 2,422 2,231 8.6
61.00
TOTAL SUPPLY 24,556 23,019 6.7 24,258 22,282 8.9
Net product imports (1,476) (1,522) (1,627) (1,829)
60.00
59.00 Refining, 1,000 b/d
58.00
Apr. 29 Apr. 30 May 1 May 4 May 5 Crude runs to stills 15,963 15,761 1.3 15,624 15,355 1.7
Input to crude stills 16,210 16,129 0.5 15,940 15,698 1.5
% utilization 90.8 90.0 89.4 87.6

NYMEX NATURAL GAS / SPOT GAS - HENRY HUB Latest Previous Same week Change,
$/MMbtu Latest week 4/24 week week1 Change year ago1 Change %
2.840 Stocks, 1,000 bbl
2.800 Crude oil 490,912 489,002 1,910 399,357 91,555 22.9
2.760 Motor gasoline 227,451 225,738 1,713 211,572 15,879 7.5
2.720 Distillate 129,270 129,336 (66) 114,449 14,821 12.9
2.680 Jet fuelkerosine 36,833 36,326 507 37,737 (904) (2.4)
2.640 Residual 37,483 38,731 (1,248) 36,723 760 2.1
2.600 Stock cover (days)4 Change, % Change, %
2.560
Apr. 29 Apr. 30 May 1 May 4 May 5
Crude 30.6 30.6 25.4 20.5
Motor gasoline 25.5 25.0 2.0 24.4 4.5
Distillate 32.6 33.0 (1.2) 28.9 12.8
ICE GAS OIL / NYMEX HEATING OIL Propane 68.4 65.1 5.1 31.2 119.2
/gal Futures prices5 5/1 Change Change %
200.00
198.00 Light sweet crude ($/bbl) 58.28 56.54 1.7 102.10 (43.82) (42.9)
196.00
Natural gas, $/MMbtu 2.63 2.56 0.1 4.70 (2.08) (44.1)
194.00 1
Based on revised figures. 2OGJ estimates. 3Includes other liquids, refinery processing gain, and unaccounted for crude oil. 4Stocks
192.00
divided by average daily product supplied for the prior 4 weeks. 5Weekly average of daily closing futures prices.
190.00 Source: Energy Information Administration, Wall Street Journal
188.00
186.00
Apr. 29 Apr. 30 May 1 May 4 May 5
BAKER HUGHES INTERNATIONAL RIG COUNT: TOTAL WORLD / TOTAL ONSHORE / TOTAL OFFSHORE
3,900
3,600
PROPANE - MT. BELVIEU / BUTANE - MT. BELVIEU 3,300
/gal 3,000
2,555
67.00 2,700
66.00 2,400
65.00 2,100 2,195
64.00 1,800
600 362
55.00
300
54.00
0
53.00 Mar. 14 Apr. 14 May 14 Jun. 14 Jul. 14 Aug. 14 Sept. 14 Oct. 14 Nov. 14 Dec. 14 Jan. 15 Feb. 15 Mar. 15
52.00
Apr. 29 Apr. 30 May 1 May 4 May 5 Note: Monthly average count

BAKER HUGHES RIG COUNT: US / CANADA

NYMEX GASOLINE (RBOB)2/ NY SPOT GASOLINE3 2,000 1,854

/gal 1,700
204.00 1,400
202.00 1,100 905
200.00 800
198.00
700
196.00
500
194.00
192.00 300 163
79
190.00 100
Apr. 29 Apr. 30 May 1 May 4 May 51 2/14/14 2/28/14 3/14/14 3/28/14 4/11/14 4/25/14 2/13/15 2/27/15 3/13/15 3/27/15 4/10/15 4/24/15
1Not available 2Reformulated gasoline blendstock for oxygen blending 2/21/14 3/7/14 3/21/14 4/4/14 4/18/14 5/2/14 2/20/15 3/6/15 3/20/15 4/3/15 4/17/15 5/1/15
3Nonoxygenated regular unleaded Note: End of week average count

8 Oil & Gas Journal | May 11, 2015

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based in Aberdeen and will have an office in London.
Webb retires from OGUK May 31, after 40 years in the oil and
gas industry. He joined the UK Offshore Operators Association
as chief executive in 2004 and helped transform UKOOA into
OGUK in 2007 by broadening membership to contractors.
EXPLORATION & DEVELOPMENT Q U IC K TA K E S
Central Tunisia discovery yields 4,300 b/d
The Chouchet El Atrous-1 (Cat-1) well, drilled by Mazarine En-
ergy Tunisia BV in the Zaafrane permit in central Tunisia, has
discovered two net oil-bearing reservoirs with combined 38-m
net pay. Primary objectives of the Cat-1 were to test the Ordovi-
cian El Hamra and El Atchane formations.
Each zone has confirmed 19-m net pay.
On test, the Cat-1 flowed 4,300 bo/d and 395,000 cu m/day
of natural gas. The Cat-1 is the first of a two-well campaign,
the company said. Compagnie Tunisienne de Forage drilled the
Cat-1 well, which reached a total depth of 3,950 m. The DGH-1
well will follow.
The Zaafrane permit spans an area of 5,168 sq km in cen-
tral Tunisia. Mazarine Energy is the operator of the permit,
The Chouchet El
Atrous-1 (Cat-1)
well, drilled by
Mazarine Energy
Tunisia BV in the
Zaafrane permit
in central Tunisia,
has discovered
two net oil-bearing
reservoirs with
combined 38-m
net pay. Photo from
Mazarine.
10
with state-owned Enterprise Tunisienne dActivites Petrolieres
(ETAP) and Medex Petroleum (Tunisia) Ltd. as partners.
Nelsons bill would bar seismic activity off Florida coast
Saying that it puts him at odds with the Obama administra-
tion, US Sen. Bill Nelson (D-Fla.) introduced legislation on Apr.
30 that would prohibit oil and gas seismic activity off Floridas
entire coast.
S. 1171 would ban such activities in the area until the Na-
tional Oceanic and Atmospheric Administration administrator
determined that reasonably foreseeable impacts of such ac-
tivities to individuals and marine life are minimal.
Nelson said he drafted the bill after the US Bureau of Ocean
Energy Management issued a final programmatic environmen-
tal impact statement for proposed geologic and geophysical ac-
tivities along the South and Mid-Atlantic US Outer Continental
Shelf in February.
Drilling off Floridas Atlantic coast would be unwise and
impractical, Nelson said on May 1. It would interfere with
military operations off of Jacksonville, and rocket launch-
es from Kennedy Space Center and Patrick Air Force Base,
not to mention the environmental hazards it would pose.
If youre not going to drill there, then why do the seismic
testing?
A moratorium on federal oil and gas leasing off Floridas Gulf
Coast through 2022 was included in the 2006 Energy Indepen-
dence and Security Act, the senator said. One is not in place for
the states Atlantic coast where communities economically rely
on recreation and tourism, he noted.
Santos, Drillsearch find wet gas in Cooper basin
The Santos Ltd.-led joint venture with Drillsearch Energy Ltd.
has had made it six out of seven with a new discovery of wet
gas in the western flank of the Cooper basin in South Australia.
The joint ventures Emery-1 wildcat in PEL 513 encountered
good gas shows in the Permian-age Patchawarra Formation
from 2641-3174.5 m.
Wireline logs indicate 18.6 m of net pay across several zones
with a gross interval of 533 m. There is also 8 m of net pay in
the underlying Tirrawarra Sandstone with a gross interval of
37 m.
In addition the partners say the well found several zones
with potential for unconventional pay.
Emery-1 has been cased and suspended as a future gas pro-
ducer. It lies 7 km and 10.3 km southeast of Santos producing
gas fields at Moonnanga and Raven, respectively. It is also close
to the Large Gidgealpa oil and gas fields to the northeast.
Drillsearch managing director said the discovery is the com-
panys sixth wet gas discovery with Santos and its eighth this
year overall.
Drillsearch is free-carried by Santos throughout 2014-
15.
Oil & Gas Journal | May 11, 2015
Our strategy?
Drill deep.
OUR KNOWLEDGE OF THE OIL & GAS BUSINESS IS COMPREHENSIVE.
ED
ENR ICH
App reciating
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DRILLING & PRODUCTION Q U IC K TA K E S
BHI: US rig count loses 27 units to 905
The US drilling rig count fell 27 unitsall on landto 905
rigs working during the week ended May 1, according to Bak-
er Hughes Inc. The count has now plunged 1,015 units over
21 weeks since the week ended Dec. 5.
The total of 905 is the lowest since June 19, 2009, and 949
fewer units vs. this week a year ago. The rig counts nadir dur-
ing the 2008-09 downturn was 876 units on June 12, 2009.
During the week, oil rigs fell 24 units to 679, down 848
year-over-year and 930 since a recent peak of 1,609 on Oct. 10.
Gas rigs fell 3 units to 222. Rigs considered unclassified were
unchanged at 4.
Land rigs now total 868, down 918 year-over-year. Rigs en-
gaged in horizontal drilling dropped another 21 units to 699.
Since Nov. 21, 673 horizontal units have gone offline. Rigs
drilling directionally, meanwhile, gained 2 units to 93.
Offshore rigs and rigs drilling in inland waters were un-
changed at respective totals of 34 and 3.
Wintershall submits PDO for Maria field
Wintershall Holding GMBH submitted a plan for development
and operation (PDO) for Maria field in the Norwegian Sea to
the Norwegian Ministry of Petroleum and Energy.
Maria lies 20 km east of Kristin field and 45 km south of
Heidrun field. Recoverable reserves from the field are estimated
at 180 million boe (OGJ Online, Dec. 18, 2014). Production
startup is expected in late 2018, along with an estimated pro-
duction period of 23 years.
Planned development involves two subsea templates on the
sea floor tied back to several host platforms in the area.
Maria will be linked via subsea tieback to the Kristin, Heid-
run, and Asgard B production platforms.
The Maria well stream will go to the Kristin platform for
processing. Supply of water for injection into the reservoir will
come from the Heidrun platform, and lift gas will be provided
from Asgard B via the Tyrihans D field subsea template.
Processed oil will be shipped to Asgard field for storage and
offloading to shuttle tankers. Gas will be exported via pipeline
to the Asgard Transport gas line to Karsto.
Operator Wintershall Norge holds 50% in the field. Part-
ners include Petoro AS 30% and Centrica Resources (Norge)
AS 20%.
PROCESSING Q U IC K TA K E S
ESAI: At-risk refining capacity might hit 2 million b/d
Global refinery closures by yearend 2016 could be more than
the previously announced 1 million b/d of capacity, Energy
Security Analysis Inc. reported. The total capacity at risk of
closure by that time is as high as 2 million b/d, ESAI Refining
Manager Christopher Barber said.
Weaker refining margins in Europe and Asia will put
12
more pressure on marginal operations as changing govern-
ment policies put even more capacity at risk in Asia and Rus-
sia, the Wakefield, Mass., energy and power market research
and strategic advisory firm said in its latest Global Refining
Outlook.
ESAI said refiners in Europe already plan to rationalize
320,000 b/d of capacity by yearend 2016, while petroleum
product manufacturers in former Soviet Union countries intend
to shut another 280,000 b/d. Refiners in Taiwan, Australia, and
Japan plan to cut another 420,000 b/d, the analysis said.
Reports also suggest that Saudi Aramco is planning to close
its 88,000-b/d Jeddah refinery, now that two new joint venture
refineries are operating. Altogether these announced capacity
rationalizations total 1.1 million b/d, ESAI said.
On top of announced cuts, policy changes in Japan, China,
and Russia put as much as an additional 700,000 b/d of capac-
ity at risk of closure by the end of 2016, Barber said.
Another round of rationalization is expected in Japan by
March 2017 under a new directive from the countrys Ministry
of Economy, Trade, and Industry, putting as much as 300,000
b/d at risk of closure before the March 2017 deadline, he said.
A new crude import quota policy for independent refiners in
China will put as much as 240,000 b/d of additional capacity
at risk of closure, Barber said. ESAI also has identified another
160,000 b/d of capacity at risk in Russia, as changing product
export duties mean refiners there are less protected from inter-
national price dynamics, he noted.
Unipetrol takes 100% ownership of Czech refineries
Unipetrol AS, a subsidiary of Polski Koncern Naftowy SA (PKN
Orlen), has completed its purchase of former partner Eni SPAs
interest in Ceska Rafinerska AS (CRC) to become sole owner of
the company, which operates two refineries in Czech Republic
(OGJ Online, Dec. 22, 2014).
Unipetrol acquired Enis nearly 32.5% stake in CRC to be-
come the refining companys sole shareholder in a transaction
that was finalized on Apr. 30, Unipetrol said.
The acquisition price, which was adjusted downward from
an originally announced 30 million euros ($40.8 million) in
July 2014 following a retained earnings payout by CRS prior to
the transactions Apr. 30 closing, amounted to 24 million euros
($26.8 million), according to the company.
In a related transaction, Unipetrol also has agreed to pur-
chase crude oil and refined product inventories from Eni for
about 3.3 billion Czech koruna ($131.5 million).
A final purchase price for this deal, however, will be based
on actual confirmed volumes of inventories and market prices,
which are to be determined at the end of second-quarter 2015,
Unipetrol said.
Unipetrols buyout follows the companys overall strategy for
2013-17, released in June 2013, in which the operator said it
planned to increase capital spending on projects designed to
further integrate the refining and petrochemical segments of its
business in order to guarantee secure feedstock supplies for its
Oil & Gas Journal | May 11, 2015
petrochemical operations (OGJ Online, July 3, 2014).
CRC operates Czech Republics only two running refiner-
iesin Litvinov and Kralupywhich have a combined crude
oil processing capacity of 8.7 million tonnes/year, according to
Unipetrol.
With two crude distillation units, four conversion units, and
a series of additional installations for further improving the
quality of primary distillate products, the refinery in Litvnov
Zaluzi has a total crude processing capacity of 5.4 million tpy,
Unipetrol said.
The Kralupy refinery, which includes a fluid catalytic crack-
ing unit, processes about 3.3 million tpy of crude, according to
Unipetrol.
ETP unit plans fourth fractionator at Mont Belvieu
Lone Star NGL LLC, a unit of Dallas-based Energy Transfer
Partners LP, will build a fourth NGL fractionation plant at Mont
Belvieu, Tex., east of Houston, parent ETP has reported.
Estimated to cost about $450 million, the plant is to be oper-
ating by December 2016. ETP said the 120,000-b/d fractionator
is fully subscribed by multiple long-term contracts and will
be filled with flows through the new 533-mile, 24-in. and 30-
in. Lone Star Express Pipeline.
That pipeline, currently under construction, will move up
to 475,000 b/d, expandable to 705,000 b/d, of NGLs from the
Permians Delaware and Midland basins to Mont Belvieu. Phas-
es I and II of the pipeline, said the announcement, are on sched-
ule for completion in second-quarter 2016 and fourth-quarter
2016, respectively.
In addition, Lone Stars third Mont Belvieu fractionator, cur-
rently under construction, remains on schedule for completion
in January 2016 (OGJ Online, Nov. 6, 2014; Nov. 4, 2013).
TRANSPORTATION Q U IC K TA K E S
Schumer bill would phase out older rail tank cars
US Sen. Charles E. Schumer (D-NY) said he would introduce
legislation requiring US railroads to replace tank cars carrying
crude oil and other hazardous substances more quickly than
new US Department of Transportation rules require. His an-
nouncement came 2 days after US and Canadian railway trans-
portation regulators jointly announced the regulations (OGJ
Online, May 1, 2015).
The regulations are a step in the right direction, but do not
go far enough, Schumer said during a May 4 appearance in
Menands, NY. Specifically, he said DOTs new rules DOT-111
tank cars and their Canadian CPC-1232 tank cars to remain in
service through 2023. His measure would require them to be
gone within 2 years, he noted.
Allowing these outdated oil cars to continue rolling through
our communities for another 8 years is a reckless gamble that
we cant afford to make, Schumer said.
Railroads and refiners have warned that requiring rapid re-
placement or retrofits of the tank cars could strain manufactur-
Oil & Gas Journal | May 11, 2015
ing capacity and potentially disrupt crude shipments by rail.
Schumer dismissed that argument.
For far too long, the rail and oil industries have taken ad-
vantage of the lack of rules by making excuse after excuse to
delay phasing-out the dangerous and outdated tanker cars, he
said. While DOTs announcement has finally forced the indus-
trys hands to update these rules, there is no question that the
new rules dont go far enough.
Schumer said his bill also would require DOT to formulate a
volatility standard for crude shipments, and add speed restric-
tions for crude-bearing trains traveling through populated areas.
He was one of seven US Senate Democrats cosponsoring a
bill introduced on Apr. 30 to regulate crude-by-rail shipments
the day before the US and Canadian transportation regulators
announced their new rules (OGJ Online, May 1, 2015).
Enterprise plans Midland-Sealy crude line
Enterprise Products Partners LP (EPP) has secured long-term
agreements with shippers that it says warrant construction of a
416-mile, 24-in. crude and condensate pipeline between Mid-
land and Sealy, Tex., west of Houston.
The pipeline, with capacity of 540,000 b/d, will connect the
companys Midland terminal with storage at Sealy. An inter-
connect with the 88-mile, 36-in. Rancho II pipeline scheduled
to begin service in July, would link Sealy with the Enterprise
Crude Houston (Echo) terminal (OGJ Online, Nov. 2, 2012).
The Midland-Sealy pipeline will receive oil by truck and
pipeline and deliver it to Sealy in up to four segregated batches.
It will carry West Texas Sour, West Texas Intermediate, and
Light West Texas Intermediate crude as well as condensate.
Golar reaches terms for Equatorial Guinea FLNG
Golar LNG signed a binding heads of terms with Ophir En-
ergy PLC for provision of the Golar floating LNG (FLNG) ves-
sel Gimi. Ophirs Equatorial Guinea Block R upstream partner
GEPetrol approved the terms and will formally ratify them next
week. The agreement will be structured as a 20-year tolling
contract, starting commercial operations first-half 2019.
Gimi is Golars second FLNG vessel following Hilli, which is
scheduled to begin commercial operations off Cameroon first-
half 2017. Golar with its partners Keppel Shipyard and Black
& Veatch committed to the Gimi FLNG conversion last year
(OGJ Online, Jan. 5, 2015). Gimi will use the same configura-
tion of utilities and liquefaction plant as Hilli, with variations
to accommodate production direct from the deepwater Block R
reservoir.
At full production Gimi will have a contracted capacity of
2.2 million tonnes/year of LNG, to be marketed by Ophir and
GEPetrol. Block R has 2.5 tcf of high-purity proved and prob-
able natural gas in an area of benign sea states, Golar said.
The integrated Ophir-GEPetrol-Golar project is expected
to make a first-half 2016 final investment decision, following
completion of its upstream front-end engineering and design
study.
13
2015 EVENT CALENDAR
Denotes new listing or IADC Drilling On- FPSO Vessel Confer- ASME International Baku, web site: www. web site: www.louisi-
a change in previously shore Conference & ence, London, web Conference on Ocean, oilgas-events.com/ anaenergyconference.
published information. Exhibition, Houston, site: www.wplgroup. Offshore & Arctic Findan-Event/Caspian- com 10-12.
web site: www.iadc. com/aci/conferences/ Engineering, St. Johns, OGConference 3-4.
org/event/2015-iadc- eu-mfp6.asp 20-21. Newf., web site: www. USEA Annual En-
drilling-onshore-confer- asmeconferences.org/ SPE European Forma- ergy Efficiency Forum,
ence-exhibition 14. SPE Produced Water omae2015/ May 31- tion Damage Confer- Washington, DC, web
MAY 2015 Handling & Manage- June 5. ence, Budapest, web site: www.eeforum.
BBTC International ment Symposium, site: www.spe.org/ net 11.
Abu Dhabi International Bottom of the Barrel Galveston, Tex., web events/efdc/2015/ 3-5.
Downstream Conference Technology Confer- site: www.spe.org/ JUNE 2015 PIRA Scenario Plan-
& Exhibition, Abu Dhabi, ence, Istanbul, web events/pwhm/2015/ OGIS Toronto, Toronto, ning Conference, Lon-
web site: www.adidown- site: www.europetro. 20-21. Annual Offshore web site: www.ipaa.org/ don, web site: www.
stream.com 10-12. com/en/bbtc_2015 Production Technology meetings-events/event- pira.com 15.
14-15. World Fuel Oil Summit Summit, London, web details/ 4.
International Down- VIII, Athens, web site: site: offshore-summit. EIA Energy Confer-
stream Technology & APPEA Conference & www.worldfueloilsum- com 1-2. Iraq Petroleum ence, Washington, DC,
Strategy Conference, Exhibition, Melbourne, mit.com 21-23. 2015, London, web web site: www.fbcinc.
Istanbul, web site: web site: www.ap- Annual International site: www.cwciraqpe- com/e/eia/ 15-16.
www.europetro.com/ peaconference.com.au Offshore Well Control Operating Conference & troleum.com/ 8-10.
en/idtc_2015 12-13. 17-20. Conference, Houston, Trade Show, Houston, ASME Turbo Expo,
web site: wellcontrolus. web site: www.ilta. Pipeline Technology Montreal, web site:
AFPM National Oc- Future of Global Oil offsnetevents.com/ org/CalendarofEvents/ Conference, Berlin, www.asmeconferenc-
cupational & Process Markets, Boston, web brochure.html 27-28. AOCTS/2015/2015info. web site: www.pipeline- es.org/TE2015/ 15-19.
Safety Conference site: www.esai.com/ htm 1-3. conference.com/ 8-10.
& Exhibition, Austin, boston2015 18-20. SPE Artificial Lift PIRA London Energy
web site: www.afpm. ConferenceLatin EAGE Conference & Annual Floating LNG Conference, London,
org/conferences/ PNEC Conferences, America & Caribbean, Exhibition 2015, Madrid, Conference, Lon- web site: www.pira.com
12-13. Houston, web site: Salvador, web site: web site: www.eage. don, web site: www. 16-17.
www.pnecconferences. www.spe.org/events/ org/ 1-4. icbievents.com/event/
Iraq Future Energy com/index 19-21. laal/2015/ 27-28. flngconference/high- The Oil & Gas
Forum, Amman, web SPE EUROPEC Confer- lights 8-11. Industry Conference,
site: www.theenergy- CCPS Middle East GPA Midcontinent ence, Madrid, web site: Aberdeen, web site:
exchange.co.uk/event/ Process Safety Confer- Annual Meeting, Okla- www.spe.org/events/ SPE London Annual www.oilandgasuk.co.uk
iraq-future-energy-4th- ence 2015, Abu Dhabi, homa City, (918) 493- euro/2015/ 1-4. Conference, London, 17-18.
edition 12-14. web site: www.mepsc. 3872, (918) 493-3875 web site: www.spe.org/
org 19-21. (fax), e-mail: atollette@ World Gas Conference events/lond/2015/ 9-10. IADC World Drilling
International School of gpaglobal.org, web site: & Exhibition, Paris, web Conference & Exhibi-
Hydrocarbon Measure- Turkmenistan Gas Con- www.gpaglobal.org 28. site: www.wgc2015. WRA Global Petro- tion, Rome, web site:
ments, Oklahoma City, gress (TGC), Turkmen- org 1-5. chemicals Conference, www.iadc.org/event/
web site: www.ishm. bashi, web site: www. Routine Maintenance Dusseldorf, web site: world-drilling-2015
info/ 12-14. oilgas-events.com/TGC GCC Planning & SPE Well Integrity www.wraconferences. 17-18.
19-21. Scheduling Confer- Symposium, Galves- com/event/global-
PSIG Annual Meeting, ence, Abu Dhabi, web ton, Tex., web site: petrochemicals-confer- American Association
New Orleans, web site: PNEC Conferences, site: www.routinemain- www.spe.org/events/ ence 9-11. of Petroleum Landman
www.psig.org/home. Houston, web site: tenancegcc.com May wis/2015/ 2-3. Annual Meeting, Nash-
aspx 12-15. www.pipelineweek.com 31-June 3. SPE Canada Heavy ville, web site: www.
19-21. TIA 2015 Network Oil Technical Confer- asmeconferences.org/
Oil & Gas Cyber Se- AAPG Annual Conven- ofthe Future Confer- ence, Calgary, web site: TE2015/ 17-20.
curity North America, AFPM Reliability & tion & Exhibition, ence, Dallas, web site: www.spe.org/events/
Houston, web site: Maintenance Confer- Denver, (918) 584- www.tia2015.org/ 2-4. choc/2015/ 9-11. PIRA Understanding-
www.smi-online.o.uk/2 ence & Exhibition, 2555, (918) 560-2665 Global Oil Markets
015oilgascyberusa49. Austin, web site: www. (fax), web site: www.Asian Oil, Gas & Pet- EnerComs London Conference, London,
asp 13-14. afpm.org/conferences/ aapg.org/meetings May rochemical Engineer- Oil & Gas Conference, web site: www.pira.com
19-22. 31-June 3. ing Exhibition, Kuala London, web site: 18-19.
Uzbekistan Inter- Lumpur, web site: www.enercominc.com/
national Oil & Gas IOA La Jolla 2015 SPE Flow Assurance www.oilandgas-asia. the-london-oil-and- International Confer-
Conference, Tashkent, Energy Conference, La Forum, Newport Beach, com 2-4. gas-conference 10-11. ence on Gas-Liquid
web site: www.oilgas- Jolla, Calif., web site: Calif., web site: www. & Gas-Liquid-Solid
events.com/OGU- www.iamericas.org/ spe.org/events/calen- Caspian International- Louisiana Energy Con- Reactor Engineer-
Conference 13-14. lajolla/ 20-21. dar/ May 31-June 5. Oil & Gas Conference, ference, New Orleans, ing, New York City,

14 Oil & Gas Journal | May 11, 2015

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web site: www.aiche. Equipment & Materi- Moscow International site: www.spe.org/ web site: www.south- Lumpur, www.spe.org/
org/cei/conferences/ als, San Francisco, Oil & Gas Exhibition, events/lahs/2015/ 7-8. texasoilfieldexpo.com events/eorc/2015/ 11-13.
international-confer- web site: www.api. Moscow, web site: 29-30.
ence-on-gas-liquid- org/eventsand- www.mioge.com/ API Offshore Safe Lift- EnerComs Oil & Gas
andgas-liquid-solid-re- training/calendarof- Mioge-Exhibition/ ing Conference & Expo, Conference, Den-
actorengineering/2015 events/2015/e-pstan- About-the-Exhibition. Houston, web site: AUGUST 2015 ver, web site: www.
21-24. dards 22-26. aspx 23-26. www.api.org/events- enercominc.com/the-
andtraining/calendar- SPE Nigeria Annual oil-and-gas-conference
Cyber Security for Oil & API Emergency Brazil Offshore Confer- ofevents/2015/offshore International Confer- 16-20.
Gas Summit, Houston, Response Forum, Fort ence, Rio de Janeiro, 14-15. ence & Exhibition,
web site: www.oiland- Worth, web site: www. web site: brasiloffshore. Lagos, web site: www. NAPE, Houston, web
gascybersecurity.com api.org/events-and- com 23-26. International Bio- spe.org/events/calen- site: napeexpo.com/
22-25. training/calendar-of- technology, Chemical dar/ 4-6. 19-20.
events/2015/ 23-24. Engineering & Life
IADC Critical Issues JULY 2015 Science Conference, CCPS Latin American Rocky Mountain Energy
for Unconventionals World Shale Oil & Hokkaido, web site: Conference on Process Summit, Denver, web
Europe Conference Gas: Latin America Gabon Local Content ibcel.org 20-22. Safety, Rio de Janeiro, site: rmesummit.org/wp
& Exhibition, San Summit, Neuquen, Summit, Libreville, web site: www.aiche. 24-27.
Francisco, web site: Argentina, web site: Gabon, web site: www. SPE/AAPG/SEG org/ccps/conferences/
www.api.org/events- latam.world-shale.com/ gabon-local-content. Unconventional ccps latin-american- IADC Well Control Con-
and-training/calendar- en/ 23-25. com 6-8. Resources Technology conference-on-pro- ference of the Americas
of-events/2015/ep- Conference (URTeC), cess-safety/2015 & Exhibition, Galveston,
standards 22-26. Russian Petroleum & SPE Latin American San Antonio, web site: 10-12. Tex., web site: www.
Gas Congress (RPGC), & Caribbean Health, urtec.org/2015 20-22. iadc.org/event/2015-
API Exploration & Moscow, web site: Safety, Environment & SPE Asia Pacific iadc-well-control-
Production Standards www.oilgas-events. Sustainability Confer- South Texas Oilfield Enhanced Oil Recovery conference-americas-
Conference on Oilfield com/RPGC 23-25. ence, Bogota, web Expo, San Antonio, Conference, Kuala exhibition 25-26.

Oil & Gas Journal | May 11, 2015 15

JOURNALLY SPEAKING
Offshore as archetype
The first annual Offshore Technology Conference
held in Houston drew a surprising 4,500-plus in-
dustry members who heard both optimistic and
pessimistic appraisals of the offshore outlook at the
opening general session.
That was the opening to Oil & Gas Journals
special report published May 26, 1969. Not many
publications can boast being present at the inau-
gural OTC, but OGJ was there and has followed
the innovation, growth, and setbacks of the off-
shore industry every year since.
At that first OTC, OGJ described the scene as
a vast exhibit area in Houstons Albert Thomas
Center jammed with 385 exhibit booths. By
comparison in 2015, OTC Chairman Ed Stokes
TAYVIS DUNNAHOE
said the show now encompasses 2,600 exhibitors
Exploration Editor across 700,000 sq ft (16 acres) in NRG Center.
Roughly speaking, an editor wanting to spend
15 min visiting each exhibitor booth would need
81 days to do so. This is before you add the more
than 1,300 papers submitted for this years tech-
nical sessions, up from 125 papers presented in
1969, according to OGJ.
Themes, past and present
The size and breadth of this years OTC indicate
how the offshore industry has changed, but several
themes presented at the event show that in some
ways it has not changed. Then and now, problems
associated with cost inflation in deeper water, pub-
lic perception, and environmental sustainability
ring true in current market conditions.
In his keynote at the inaugural OTC, Shell Oil
Co. Chief Executive Officer R.C. McCurdy warned
that development of future reserves presented a
tougher problem as the search moved steadily into
deeper water, where extraction costs rise sharply.
Since 2010, deepwater plays have been opened in
10 new basins (OGJ Online, May 5, 2015).
Public approval has remained a constant theme
through the last 50 years. The unfortunate inci-
dent at Santa Barbara, Calif., is still fresh in every-
ones mind, Chairman M.A. Wright of Humble
Oil & Refining Co. told attendees at OTC in 1969,
referring to the oil spill that occurred in January
of that year in the Santa Barbara Channel. We
should not underrate the seriousness of public
16
concern, nor take lightly the powerful currents of
public opinion which are thus generated.
Addressing the 2015 OTC attendees at a panel
discussion on federal and state cooperation, North
Carolina Gov. Pat McCrory said, We often find
ourselves in a reactive mode when discussing en-
ergy vs. the environment. It is important to pro-
vide a picture of the positive outcomes over time,
he said, as opposed to only responding to negative
results.
North Carolina is advocating for access to its
offshore reserves on the Atlantic Margin and will
be acquiring new seismic this fall. One major
roadblock to offshore development is the 50-mile
offshore drilling buffer zone (OGJ Online, May 4,
2015).
Not unlike today, access to offshore areas was
debatable in 1969. At that time, The Marine Sci-
ence Commission proposed that an international
agreement assign coastal nations with resource ju-
risdiction in 200 m of water or 50 miles offshore.
An intermediate zone would encompass water
2,500 m deep or 100 miles offshore with control
maintained by sovereign nations, but with royal-
ties paid out to an international organization.
Northcutt Ely, chairman of the American
branch of the International Law Association, ac-
cused the commission of trading the doughnut
for the hole in its proposal to renegotiate the
Continental Shelf Convention of 1958 (the Ge-
neva Convention) on rights to adjacent submarine
areas.
Today, the US exclusive economic zone is es-
tablished as 200 nautical miles from the coastline.
Although this was not the case until US President
Ronald Reagan enacted Proclamation 5030 on
Mar. 10, 1983, potentially many of the deepwater
projects in the Gulf of Mexico could be in pseu-
dointernational waters under the proposed plan
from 1969.
While the offshore industry is nearly impos-
sible to predict, if the last 50 years are a guide, in-
novation and resource development will continue
to expand. The themes of high costs, limited ac-
cess, and public perception will likely be repeated.
With continued effort and a little luck, OGJ will
be there reporting as this prediction unfolds.
Oil & Gas Journal | May 11, 2015
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EDITORIAL
Compensating safety
Amid a violent contraction of the oil and gas in-
dustry, as companies jettison work and workers
to confine spending to diminished cash flow, one
function must escape the blade. Asserting the pri-
ority of safetypersonal and environmentalis
easy, of course. Company executives do so continu-
ously and mean what they say, most no doubt with
commendable passion. Top-level concern for safety
is essential. Its just not enough.
The priority of safety means safety has to be
the priority, the one and only priority. At every
level and in every operation of every company,
safety has to be more important than anything
elseeven profit. How many chief executives
will say that to a group of shareholders or invest-
ment analysts?
Profit and safety
Profit is supremely important, of course. It reflects
value created by a company for its owners, which is
the reason to be in business. But safety relates to the
work itself, what a company does as part of a group
of companies performing similar activitiesan in-
dustry within a society that accepts or rejects its ac-
tivities based on collective judgments about econom-
ic benefits in balance with risks of harm. Work by a
company and industry depend on those judgments.
When an industry, or a single company within it,
routinely injures its workers, customers, neighbors,
or surroundings, society judges harshly.
Safety performance is a test an industry and all
companies in it must pass continuously as a condi-
tion of being allowed to compete for profit. Safety
precedes profit. That, coupled with the healthy
revulsion most managers and workers feel about
injury to themselves and others, is why it must be
the priority.
When the price of crude oil is low, making prof-
itability elusive in the upstream business, these re-
lationships can become dangerously easy to forget.
Since the Macondo tragedy of 2010, the indus-
try and its regulators have overhauled systems
of safety management (OGJ, May 4, 2015, p. 28).
Those improvements are welcome, important,
and ongoing. They will mitigate many problems,
including the weak-link employee insufficiently
trained or motivated to work safely in all circum-
stances.
18
Another kind of employee needs different at-
tention.
Many companies manage employees above cer-
tain levels of responsibility with incentivesextra
pay dependent on the achievement of company op-
erational or financial objectives. Incentives align
individual behavior with corporate priorities. The
continuing popularity of managerial systems cen-
tered on incentives indicates that they work.
But how many incentive systems give safety the
priority it must have?
A weakness of performance incentives is the
temptation they impose on workers to take injudi-
cious risk to influence evaluation metrics. People
of course differ in their susceptibility to this pres-
sure. The susceptibility can vary circumstantially
within an individual. Some well-incented work-
ers habitually test the boundaries of caution, ever
ready to dismiss warnings with assurances that
all safety standards are unnecessarily strict. Other
workers normally more prudent might, in spells
of personal stress, cut corners opportunistically to
nudge performance-based bonuses.
Safety systems should integrate performance
incentives. More than that, they should dominate
performance incentives. They should ensure not
only that workers have the training and resources
to perform safely in all circumstances but also
that they do. That means no worker ever should
be willing to compromise safety in the interest of
personal gain. The risk of an accident must, at the
personal level across every company, always out-
weigh the reward for starting a well early or push-
ing cost-reduction into the next bonus tier.
Embedding the balance
This balance must be embedded in incentive sys-
tems. How to do this varies from company to com-
pany and falls within the realms of human relations
and compensation specialists. Whats important is
that incentive systems recognize that safety pre-
cedes profit, therefore takes precedence, and thus
represents the managerial priority.
Safety lapses cant be tolerated, primarily be-
cause they hurt people and damage nature and
secondarily because they diminish the legitimacy
of vital work. Preventing lapses must be a priority
that affects peoples pay.
Oil & Gas Journal | May 11, 2015
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 GENERAL INTEREST
OTC: Federal, state cooperation
vital for offshore energy development
Steven Poruban
Managing Editor-News
US coastal states and the federal government will need
to continue having an open and honest dialogue about
the safe and reliable exploration and development of off-
shore oil and gas resources, panelists agreed May 5 in an
opening session at the Offshore Technology Conference
in Houston.
North Carolina Gov. Pat McCrory, who also serves as
chairman of the Outer Continental Shelf Governors Coali-
tion, said his state is not yet taking full advantage of the
development of its energy resources. He said there are four
main issues blocking the way for adequate energy devel-
opment offshore North Carolina and other mid-Atlantic
states, namely: adequate (and updated) seismic
data for North Carolina, South Carolina, and
Virginia; development of a revenue-sharing plan
with the federal government; reduction of the
50-mile offshore drilling buffer zone; and the
scant few lease sales currently being offered for
drilling in offshore federal areas.
Seismic, lease sales needed
Offshore the mid-Atlantic states, seismic data
havent been acquired in decades, McCrory said. Lets find
out what we have in terms of resources, he said.
Regarding seismic data acquisition, another panelist,
Abbey Hopper, newly appointed director of the US Bureau
of Ocean Energy Management, said it wouldnt be appro-
priate, however, to take the template of how the Gulf Coast
works and apply it to other offshore areas.
Another panelist, US Representative Rob Bishop (R-
Utah), who also chairs the House Natural Resources Com-
mittee, agreed that outdated seismic data will not help the
US to develop into an energy powerhouse its destined to
become. Forty-year-old seismic data doesnt help us, he
said.
Bishop also noted that the development of the nations
energy resources will be necessary to forge ahead with a
20
strong foreign policy. For every 11 acres closed, he said,
there is one open for energy development.
McCrory noted that the number of lease sales being of-
fered is problematic to resource development offshore his
state and others. It makes no sense for just one lease sale
off the Atlantic Coast, he said.
Other issues
The No. 1 goal for North Carolina moving ahead with off-
shore energy developmentfollowing seismic data acqui-
sition, which is slated to begin in the fallwould be to
hammer out a revenue-sharing plan with the federal gov-
ernment, McCrory said. We have to have the fed-
eral government agree to revenue sharing with
North Carolina, he said, just like what is done
for states along the Gulf Coast. Funds collected
would be used by the state to improve infrastruc-
ture projects such as highways and dredging.
State and federal governments also will have
to reexamine the Endangered Species Act in the
near future, Bishop said. We need to let states
lead the way on this, he said.
Taking questions from OTC attendees, McCrory noted that
the oil and gas industry has to do a better job overall of com-
municating with the public. Weve got to improve the acu-
men of where energy comes from to energy consumers, he
said. Based on the commercials shown on television, he said,
one would assume that consumers think most energy comes
from renewables like wind and solar. They also assume that
energy is only needed for their residences, he said.
Developing resources, offshore or otherwise, will have
to be accomplished hand-in-hand with an environmental
focus, the panelists agreed.
McCrory said a good course of action for an environ-
mentally balanced development project would be to show a
picture of what things would look like in 25 years, and also
show what things might look like in that same amount of
time without development.
Oil & Gas Journal | May 11, 2015

OTC: Shell determined
to proceed with
drilling in US Arctic
Matt Zborowski
Staff Writer
Despite numerous regulatory hurdles and impassioned re-
sistance from environmentalists, Royal Dutch Shell PLC
maintains that it is on track to drill two wells in the Chuk-
chi Sea during drilling season this summer.
But Ann Pickard, Shells executive vice-president in
the Arctic, remains mindful of ever-present uncertainties,
namely the companys exploration plan currently awaiting
official clearance by the US Bureau of Safety and Environ-
mental Enforcement (OGJ Online, Apr. 1, 2015), as well as
possible legal issues that may emerge given the environmen-
tal sensitivity of the project.
During a May 5 luncheon at this years Offshore Technol-
ogy Conference in Houston, Pickard briefly made note of
another obstacle that emerged this week by way of the city of
Seattle, which ruled that an additional permit will be needed
to house the two drilling rigs Shell is sending up north.
Transocean Ltd.s Polar Pioneer is now moored in the
Port of Angeles following an eventful trip across the Pacific
Ocean during which Greenpeace activists boarded the rig. It
will soon to be joined by the Noble Discoverer. Drilling in
the Chukchi Sea will occur about 80 miles offshore.
Notably during Shells last foray into Arctic drilling in
2012, the Kulluk conical drilling unit was driven aground
by violent weather on Alaskas uninhabited Sitkalidak Island
while under tow to Seattle (OGJ Online, Feb. 13, 2013).
The move by its mayor represents the citys stance in op-
position to oil exploration and production. In a statement
released May 4, Mayor Ed Murray explained, This is an op-
portunity for the port and all of us to make a bold statement
about how oil companies contribute to climate change, oil
spills, and other environmental disastersand reject this
short-term lease.
Now is still right time
Pickard nonetheless believes that now is the right time for
exploration as the company doesnt believe oil prices will
stay this low for long, and theres going to be an insatiable
demand for energy in the coming years spurred by coun-
tries such as China.
She emphasized that the US cant rely solely on the Gulf
of Mexico as an offshore oil source, and that the Arctic is the
future. She pointed out that Shell stopped its 1991 Arctic ex-
ploration effort to focus on the gulf because of low oil prices
and the high cost of technology. She said, Sound familiar?
Oil & Gas Journal | May 11, 2015
A quarter century later technology has dramatically im-
proved efficiency, including advancements in seismic that
lead to fewer wells drilled. Shell last week during its first-
quarter earnings webcast reported plans to drill 3-4 explo-
ration wells as part of its 2-year Arctic program (OGJ Online,
Apr. 30, 2015).
Regarding regulations, Pickard also echoed a common
theme mentioned among representatives of offshore oper-
ators during recent OTCs. US regulations are overly pre-
scriptive and permits arrive too late, she said, adding that
regulations should be performance-based like in Norway.
She said that regulations dictate the length of drilling
season at 3-4 months while leases last 10 yearsrules that
need to be adapted based on operators and their varying ca-
pabilities. She noted that Shell has 8 permits pending at the
moment. In an environment where operations are already
subject to strict, narrow schedules, Shell can ill-afford even
more time it sees as wasted.
OTC: BPs Dupree outlines
new model for offshore
technology development
Michael T. Slocum
Upstream Technology Editor
Operators are changing their approach to offshore technol-
ogy development because of its increasing scale and pace,
said James Dupree, BPs chief operating officer, reservoir de-
velopment technology.
Greater collaboration to collapse timescales, improved
analytics of massive amounts of data, and novel materials
to cope with high pressures and temperatures will highlight
future development, he said at an Offshore Technology Con-
ference industry breakfast on May 4 in Houston.
Dupree looks for new ideas from outside the industry as
well as within. BP has adopted seismic technology from the
military and sensor technology from the Norwegian fishing
industry, to name two sources. In the future, there will be
greater collaboration with Silicon Valley.
Collaboration with academia will be important as well.
Dupree has found, however, that there is a misunderstand-
ing in academia of the technological needs of the oil and gas
industry. Educating those in education should be a priority
in coming years.
Technologies that help store, manage, and analyze data
will be critical to ensuring the right data gets in front of the
right person at the right moment.
As offshore technologies move to the seabed and become
untethered to the surface, remote communication will add
21
GENERAL INTEREST
another layer of information to manage.
BP is experimenting now with Google Glass to help drill-
ers in the field work with large amounts of streaming data.
With more sea-floor facilities and longer tie-backs from
deeper water, new materials to handle high pressure and
temperature will be at the forefront in coming years, said
Dupree. BP has committed to developing systems that oper-
ate autonomously at 20,000 psi.
Breakthroughs in materials will be required to make this
a reality. These breakthroughs are sped up by digital simula-
tions that can determine the stresses a material can absorb
in a given environment or a corrosive event may occur.
Understanding what is happening in the rock pores is im-
portant as well. Computing allows a mere chip of well rock
to be analyzed with results as comprehensive as a core sam-
ple in a lab. Soon the rock chip wont even be necessary, said
Dupree, as permeability will be determined before a single
trip downhole, helping set expectations for a given well.
OTC: BSEE director
says industry on probation
as far as public trust
Paula Dittrick
Special Projects Editor*
Industry must cooperate and collaborate with a number of
international stakeholders to achieve the highest safety stan-
dards offshore, Brian Salerno, director of the Bureau of Safe-
ty and Environmental Enforcement, told an Offshore Tech-
nology Conference breakfast May 6 in Houston.
Key offshore safety concerns include both international
cooperation and a social license to operate, Saler-
no said. Noting that social license is not a com-
monly used US term, Salerno said public trust is
very important.
Five years after Macondo, I would say were all
still on probation, Salerno said of the April 2010
deepwater well blowout that resulted in a massive
oil spill in the Gulf of Mexico. BP PLC operated
the Macondo well.
He noted that some companies are very advanced in their
safety culture, but industry has yet to reach a point when all
companies strive for the highest safety standards.
We have not reached the point where this is the expect-
ed normal, Salerno said. He emphasized the development of
safety standards to get to this level.
Jostein Dahl-Karlsen, a senior policy advisor for the Nor-
wegian Ministry of Petroleum, is the outgoing chairman of
the Gas and Oil Technologies (GOT), which is an initiative
22
started by the International Energy Agency.
GOTs focus is to explore the strategic important of tech-
nology, Dahl-Karlsen said. Worldwide, 8-10 giant fields pro-
vide 80% of the oil and gas available today, he said, add-
ing that technology will be needed to replace those volumes
when those fields stop production.
Its not only the exploration, efforts that are important,
Dahl-Karlsen said, noting that US light, tight oil production
has grown rapidly in recent years, but he expects future pro-
duction growth will swing back toward deepwater reserves
in future decades.
*Paula Dittrick is editor of OGJs Unconventional Oil & Gas
Report.
OTC: Deepwater will be
vital to maintaining global
supply, IHSs Fryklund says
Steven Poruban
Managing Editor-News
A major challenge ahead for the offshore oil and gas indus-
try will be figuring out how to fill the 50 million-b/d gap in
liquids production that will be needed to match rising de-
mand by 2040, IHS Energy Chief Upstream Strategist Bob
Fryklund told attendees May 4 at the Offshore Technology
Conference in Houston.
Industry is yet to find 30 million b/d of that total, and
deepwater plays will serve a major role in bridging this sup-
ply-demand gap.
In the last 5 years, deepwater plays have been opened in
10 new basins resulting in world-class resources
for Brazil, East Africa, the Barents Sea, Canadas
eastern coast, and Angola, Fryklund noted.
The reaction to the current price cycle is not the
same all over the world, Fryklund said. Offshore
players have cut less of their capital spending, he
said, with international operators cutting the least.
The problem with bridging the long-term sup-
ply-demand gap lies in the math, Fryklund said,
noting that between 2005 and 2014 industry only added
10.3 million b/d of liquids production. Operators are spend-
ing more money drilling roughly the same number of wells,
but not added the needed volumes, he said.
Part of the problem, he said, is a natural phenomenon:
where industry is looking for resource basins. Unlike the
super basins found in the past with more than 50 billion bbl
of oil, discoveries today are more like mini basins, with less
than 10 billion bbl. Some examples he gave include Angolas
Oil & Gas Journal | May 11, 2015

presalt play with 6 billion bbl and the Tehiti subbasin in the
Gulf of Mexico with 3 billion bbl.
He said that the majors will likely be the strongest posi-
tioned to lead the future of deepwater exploration and devel-
opment, although, he said, Acreage collectors arent always
the winners.
He said field development times, once seemingly stuck in
the 7-year range for quite a while, are falling to just 3 years,
especially in North America.
Also, companies are pairing up in the services sector, he
said, which will help with the cost side of things. Alliances
are probably cooking up this week perhaps, he speculated.
Given these potential cost savings, many looming ques-
tions remain unanswered, he said, including:
Will activity pick up?
Will deepwater exploration deliver more megaplays?
Will cost and efficiency savings be permanent?
What new models or alliances might help the cost par-
adigm?
What game-changing technology will be developed for
the deep water?
OTC: Brazils 13th bid
round will be concession
model, energy minister says
Michael T. Slocum
Upstream Technology Editor
Brazil will use a concession model rather than a production-
sharing model in the countrys 13th bid round later this
year. The 269 blocks to be auctioned in the fourth quarter
are outside of the presalt area and can be explored by any
operator without a Brazilian partner, said Eduardo Braga,
Brazils minister of mining and energy.
Braga made the announcement May 5 at the Offshore
Technology Conference in Houston. Additional details of the
auction are available from Brazils National Agency of Petro-
leum, Natural Gas, and Biofuels (ANP).
Brazil will continue to use a production-sharing model
in its presalt blocks. Legislation has been proposed in the
Brazilian congress to open the presalt to a concession model.
Braga believes that this would be an unwise move for Brazil.
Much of the revenue collected from presalt production-
sharing goes to a health and education fund, the bill for
which I oversaw as it made its way through congress, said
Braga. This fund provides for the future of Brazilians while
also supporting macroeconomic development in the country.
It would be shortsighted to essentially defund this important
program, and I think the majority in congress agrees.
Oil & Gas Journal | May 11, 2015
GENERAL INTEREST
Presalt blocks by 2017?
While presalt blocks are not up for bid in this round, Braga
believes that some blocks will be in the next roundno lat-
er than 2 years after October bidding. He added, however,
that Petroleo Brasiliero SA (Petrobras) will retain the right
of first refusal in that bidding process. The minister voiced
his governments support for the embattled national oil com-
pany in remarks at OTC on May 4.
We must give Petrobras the opportunity, said Braga.
But if they can or will not take that opportunity, we will
not slow development. We will give foreign operators the
chance.
Proven production
Braga noted that those opportunities in Brazil remain lucra-
tive. He said 36% of all oil discovered in the world in the
last 5 years (22.9 billion bbl) was discovered in Brazil. In the
same period, 63% of all deepwater discoveries (22.2 billion
bbl) have been in Brazilian waters.
Brazil has 2.8 million sq km for potential exploration, of
which much has already been proved, said Braga. Compa-
nies currently operating in the sector have 430 fields under
production. Additionally, there are no restrictions on the ex-
port of oil from Brazil, with over 500,000 b/d exported in
2014 by 17 companies.
Petrobras accounted for only 45% of such exports, with
the remaining 55% coming from other companies operating
in the country.
Braga expects heavy participation in the 2015 auction
and says he has heard as much from operators at OTC. Con-
tinued low oil prices do not seem to putting a damper on
enthusiasm for investment off Brazil.
Large multinational companies dont make long-term
decisions based on temporary price fluctuations, he said.
They are thinking 10-15 years out and have a need to re-
place reserves. We want to engage these companies and cre-
ate an economic environment that convinces them to invest
in Brazil.
OTC: Indonesia seeks
paradigm shift in developing
western deepwater assets
Tayvis Dunnahoe
Exploration Editor
Indonesia is working to change the way it develops its oil
and gas resources, according to Ir. I Gusti Nyoman Wirat-
maja, Indonesias acting director general of oil and gas. Our
vision is to enact a paradigm shift in the way we develop
our energy resources, Wiratmaja said May 4 at an Active
23
GENERAL INTEREST
Arena panel discussion at the Offshore Technology Confer-
ence in Houston.
Historically, the country has used its oil and gas as a pri-
mary commodity, selling it off to raise capital. Our goal
within the next decade is to leverage these resources to pro-
vide real economic growth, Wiratmaja said. In addition to
sustainable development, the minister added that
the country is focused on developing its deepwa-
ter resources in the east, which includes develop-
ing underexplored basins and putting infrastruc-
ture in place.
Only 9% of all Jurassic discoveries from 1998-
2008 were in the eastern portion of Indonesia,
Wiratmaja said. In total, Indonesia has an estimat-
ed 314 working areas for oil and gas exploration
and only 80 of these are producing. In addition, Indonesia
contains at least 22 basins that have seen no exploration.
The goal of the panel was to highlight specific areas that
OTC: Nova Scotia draws deepwater interest with latest bid round
Tayvis Dunnahoe
Exploration Editor
The Canadian province of Nova Scotia reported the addition
of seven new offshore blocks in its deepwater region May 5 at
the Offshore Technology Conference in Houston.
Parcels No. 1-4 are on the western Scotian shelf adjacent
to Shell Canada Ltd.s deepwater acreage acquired in 2012
(OGJ Online, Jan. 30, 2012). Drawing on its seismic work
completed in 2013, Shell plans to drill its first well in this
years third quarter. Suncor Energy Ltd. and ConocoPhillips
are partners on Shells existing licenses.
Parcels No. 5-7 are on the central Scotian shelf north of
BP Canada Energy Group ULCs four existing licenses, also
acquired in 2012. In 2014, BP brought in 10 exploration ves-
Reprints of any OGJ article may be purchased from
Rhonda Brown, Foster Printing Co., 4295 Ohio St.,
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1-866-879-9144 ext. 194
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24
have an abundance of proved and potential reserves, but
come with specific challenges that have lead the regions to
be under explored. For Indonesia, Wiratmaja pointed out
that its energy developments have typically followed the
people. A majority of its producing fields and infrastructure
lies in the west where the population is more concentrated.
Part of our vision is to transform this movement
where people can follow energy developments.
Wiratmaja noted, however, that developing In-
donesias deepwater assets in the East will come
at a cost. The country estimates it will need in-
vestments of as much as $89.7 billion to reach its
goal of full development throughout Indonesia.
Oil production peaked in 2000, and the country
is seeking $57 billion to bring its oil infrastructure
up to speed.
According to Wiratmaja, Indonesia has 7.1%/year energy
demand growth and its deepwater assets are key in meeting
this demand.
sels to Nova Scotia to conduct a major 3D seismic program
that covered much of Nova Scotias offshore region. For BPs
four parcels it picked up Hess Corp. and Woodside Petro-
leum Ltd. as partners in 2014. Its important to note that
both Hess and Woodside came on to BPs project after the oil
price began to decline, said Murray Coolican, Nova Scotia
deputy minister of energy.
Parcels 5, 6, and 7 are on underexplored synrift basins,
with presalt potential. They are located on the landward side
of the deepwater exploration parcels controlled by BP and
its partners.
BP and Shell have committed $1 billion each to their
deepwater operations off Nova Scotia. Coolican told OGJ,
These parcels were industry nominated based in large part
on Nova Scotias Play Fairway Analysis. Initially, we received
inquiries from a number of companies but soon realized
they were examining partnerships with BP and Shell. Ac-
tivity indicates that partnerships may be the best option for
Nova Scotias frontier deepwater area.
In May 2014, Nova Scotia Premier Stephen McNeil an-
nounced the ministry would invest $12 million over 4 years
to provide new geoscience research on the previous work
brought forth in the Play Fairway Analysis, which identified
potential of 8 billion bbl of oil and 120 tcf of natural gas off-
shore Nova Scotia.
The bid round is open for nine parcels total, two of which
are in the shallow-water region near the Sable Island discov-
ery. Nova Scotia is providing its seismic data to interested
bidders at no additional cost. Bidding will remain open until
Oct. 29.
Oil & Gas Journal | May 11, 2015
 AUGUST 18-20, 2015
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GENERAL INTEREST
US, Canada jointly release
crude-by-rail transportation rules
Nick Snow
Washington Editor
The US and Canada simultaneously issued new regulations
governing transportation of crude oil and other hazardous
materials by rail.
Our close collaboration with Canada on new tank car
standards is recognition that the trains moving unprecedent-
ed amounts of crude by rail are not US or Canadian tank
carsthey are part of a North American fleet, and a shared
safety challenge, US Transportation Sec. Anthony Foxx said
at a May 1 presentation at DOT headquarters.
Canadian Minister of Transport Lisa Raitt, who also attend-
ed the ceremony, said it is critical that the requirements apply
equally to tank cars in both countries because they cross the
Canadian-US border daily. That is why the open and trans-
parent process that was followed to jointly develop these regu-
lations included consultations with government and industry
stakeholders on both sides of our border, she said.
DOT said the final US rule, which its Pipeline and Hazard-
ous Materials Safety Administration and Federal Railroad Ad-
ministration jointly developed in coordination with Canada:
Unveils an enhanced tank-car standard and an aggres-
sive, risk-based retrofitting schedule for older tank cars carry-
ing crude oil and ethanol.
Requires a braking standard for certain trains that will
improve safety by potentially reducing an accidents severity,
and the pile-up effect.
Designates operational protocols for trains transporting
large volumes of flammable liquids, such as routing require-
ments, speed restrictions, and information for local govern-
ment agencies.
Provides sampling and testing requirements to improve
classification of energy products placed into transport.
Raitt said the new regulations will require tank-car manu-
facturers in both countries to build a new, safer tank car called
the TC or DOT 117. Its design will include thicker steel shells
and heads to improve puncture resistance and structural
strength; shields to protect the cars head from being punc-
tured; thermal protection and a jacket to better withstand heat
from fire; protective covers over valves and accessories on top
of a tank car; and stronger bottom outlet valves to withstand
derailments and prevent leaks.
Second, these regulations provide new performance-
based standards to build the TC and DOT-117 models and
establish the retrofit schedule for older tank cars, Raitt said.
And finally, the regulations stipulate when Canada and [US]
rail operators must phase out the use of DOT-111 and CPC
1232 tank cars.
26
Both countries top transportation leaders noted that oth-
er departments and agencies in their governments also have
been working on finding ways to improve the transportation
of crude and other hazardous materials by rail.
Initial responses
Petroleum and railroad industry association officials immedi-
ately welcomed the new rules, but expressed concerns.
As we review these rules, the key question is whether
science and data show each change will make a meaningful
improvement to safety, American Petroleum Institute Pres.
Jack N. Gerard said. A thoughtful, comprehensive, and data-
driven safety approach is critical to improving on the 99.997%
safety record of freight rail to reach our goal of zero accidents.
Inclusion of a requirement for electronically controlled
pneumatic (ECP) brakes will add to the artificial constraints
created by a timeline for retrofitting the existing tank car fleet
that does not fully account for limited shop capacity avail-
able to complete the work, Gerard warned. The safety impact
of ECP brakes is marginal at best, he said. It is concerning
that regulators did not select one of several alternative braking
technologies that have much clearer benefits for safety.
The American Fuel & Petrochemical Manufacturers is re-
viewing DOTs tank-car regulations and expects to have fur-
ther comments, AFPM Executive Vice-Pres. Brendan Wil-
liams said.
We intend to work with DOT to implement todays miti-
gation-focused rulemaking to the greatest extent possible, but
caution that this aggressive retrofit schedule is unrealistic and
may be disruptive to transporting crude oil to markets across
the country, Williams said. Now that tank car specifications
have been addressed, AFPM suggests that it is long overdue
for DOT to show similar concern for the root causes of train
derailments: track integrity and human error.
The Association of American Railroads also welcomed
the new tank car rules, but expressed disappointment that
they require either using ECP brakes or a 30-mph speed
limit. DOT couldnt make a safety case for ECP, but forged
ahead anyhow, AAR Pres. Edward R. Hamberger said.
This is an imprudent decision made without supporting
data or analysis. I have a hard time believing the determi-
nation to impose ECP brakes is anything but a rash rush
to judgment.
The new US and Canadian railroad hazardous mate-
rial transportation safety requirements were announced a
day after seven US Senate Democrats introduced a mea-
sure aimed at accelerating phase-outs of older tank cars
and replacing them with newer models (OGJ Online, May
1, 2015).
Oil & Gas Journal | May 11, 2015

Senate Democrats
offer bill to phase out
older rail tank cars
Nick Snow
Washington Editor
Legislation to accelerate the phase-
out of older rail tank cars to reduce
accidental crude oil spills has been
introduced by Finance Committee
Ranking Minority Member Ronald
L. Wyden (D-Ore.) and six other US
Senate Democrats.
The bill, S. 1175, also would im-
pose a fee of $175/shipment on older
tank cars and would make a tax cred-
it available to railroads that upgrade
newer cars to the highest required
safety standard.
Its time for the [US] Department
of Transportation to push faster and
more aggressively to make oil-by-rail
transportation safer, Wyden said on
Apr. 30. This legislation takes a mar-
ket-based approach to get unsafe cars
off the tracks and safer cars on the
tracks more quickly.
The bill also would use the reve-
nue raised by the fee to help commu-
nities and first responders be better
prepared in the event of a rail acci-
dent. It would establish a dedicated
fund for clean-up costs of oil train
accidents, advanced training for first
responders, and grant money for
states and cities to move train tracks
carrying large volumes of hazardous
materials away from highly populat-
ed areas.
It also would require DOT to
implement National Transporta-
tion Safety Board recommendations
to give first responders real-time
rail transportation information, up-
date track maintenance standards,
and study first responder prepared-
ness for rail accidents involving large
amounts of flammable liquids.
The bill was cosponsored by Demo-
crats Sherrod Brown (Ohio), Robert P.
Casey Jr. (Pa.), Dianne Feinstein (Ca-
Oil & Gas Journal | May 11, 2015
WATCHING GOVERNMENT
NICK
SNOW
Washington Editor | Blog at www.ogj.com
Playing by NCACs rules
The Apr. 29 conferences focus was
better than average: Consider economic,
social, and security consequences if
governments were to follow some environ-
mentalists advice, and not produce their
countries energy resources because the
climate consequences would be too dire.
Then the moderator for the first panel
announced the US Association for Energy
Economics National Capital Area Chap-
ters rules for covering the event, and
matters turned difficult. Speakers points
could be paraphrased, but not for attribu-
tion without their permission, he said.
That seemed wholly unacceptable. As
time passed, however, it began to look
possible that NCACs different approach
might offer a fresh way to report the
conference at Johns Hopkins Universitys
School for Advanced International Studies.
Doing so in this column would require
discipline because of its 440-word limit.
It seemed worth a try. Here are the
results:
Energy from fossil fuels provides
undeniable benefits. Standards of living
and national economies can improve with
proper management and reliable deliver-
ies. Developing nations with potential sup-
plies see them as a way to industrialize.
History shows theres also great potential
for corruption and mismanagement.
Technology is helping reduce environ-
mental impacts as it improves fossil fuel
production. It also keeps reducing the
price of solar collectors and lithium iron
batters.
But it cant solve the problem by itself.
The latest United Nations Intergovern-
mental Panel on Climate Change analysis
found under its business-as-usual sce-
nario that carbon accumulations continue
to grow. Droughts and rising sea levels
pose the biggest problems.
Economists will need to calculate the
costs and consequences by asking two
basic questions: What are the current gen-
erations obligations to its descendants?
What are the prices of irreversible climate
and environmental change?
Governments will need to take more
aggressive steps. Policymakers will need
to take the broadest possible view if they
expect to succeed.
More voices than usual
They wont if they simply listen to groups
that talk loudest. More than environmental
organizations and the national business
community matter. Others should be
recognized because they have different
requirements that are equally important.
The US military services, for example,
have a unique bottom line. It emphasizes
response capability. Forces must have
immediate access to fuels so they can re-
spond quickly and effectively to emergen-
cies and enemy actions. They also must
consider possible impacts on naval fleets
in ports as sea levels rise.
Potential biophysical and socioeconom-
ic consequences also matter. Some parts
of the world will feel warming impacts
more than others. Existing stresses could
be amplified. Droughts in countries near
the Equator caused by higher tempera-
tures could offset benefits of longer grow-
ing seasons farther north and south.
No technology is absolutely essential.
Many will need to be deployed.
27
GENERAL INTEREST
lif.), Jeff Merkley (Ore.), Charles E. Schumer (NY), and Mark
R. Warner (D-Va.). It was introduced as DOT prepared to
announce final rules for the safe transportation of crude and
other hazardous materials by rail a day later.
EIA: East Coast refineries got
52% of crude by rail in February
Nick Snow
Washington Editor
US East Coast refineries received more than half of their
crude oil feedstocks by rail during February, the US En-
ergy Information Administration reported.
Although early 2015 capacity utilization within the area
was below normal, the 52% of the plants total monthly
rail receipts marked the first time in EIAs data set that
crude-by-rail deliveries accounted for such a high percent-
age of East Coast refinery supplies, EIA said.
Rail shipments of crude to East Coast refineries within
Petroleum Administration for Defense District 1 (PADD 1)
have displaced waterborne imports from countries other
than Canada, such as Nigeria, EIA noted. Growth of in-
land US production of light, sweet crude since 2010 and in
Canada created opportunities for both nations railroads
to move crude to refineries on the US East, Gulf, and West
coasts as well as plants in Canada, EIA said.
It said much of the crude moved by rail comes from
the Bakken shale in North Dakota and eastern Montana.
Bakken crude supplied by rail to US East Coast refineries,
along with US production supplied by marine vessels from
the Gulf Coast, has reduced demand for foreign crude at
the East Coast plants.
In January 2014, US crude oil accounted for half of all
East Coast refinery crude oil receipts, and crude-by-rail
net receipts to the East Coast surpassed non-Canadian
crude oil imports, EIA said.
Capacity has grown
Area refiners have increased rail shipments by expand-
ing loading and unloading capacities for trains carrying
crude, EIA noted. Some facilities handle individual rail
cars or a small number of rail cars (known as manifest
trains), and others are built for unit trains, which consist
of 80 to 120 rail cars carrying crude oil, it said.
EIA said rail terminals now are better equipped to load
and unload trains. Five years ago, US rail loading capac-
ity for crude oil was almost entirely for manifest trains, but
now more than 30 loading terminals throughout the United
States can accommodate unit trains, it said, adding that 10
East Coast terminals now handle unit train unloading.
As more unit train unloading terminals have been
28
added, some volumes that previously transferred to ves-
sels in Albany before moving on to refineries in New York
Harbor, the Philadelphia area, and Canada now are moved
directly by rail closer to their ultimate destinations, EIA
said.
Its report came 4 days after the US Department of
Transportation and Canadas Transport Ministry jointly
issued new regulations governing transportation of crude
oil and other hazardous materials by rail (OGJ Online,
May 1, 2015).
Cost opportunity seen for LNG
projects in western Canada
Rising construction costs in the US and falling oil prices
give LNG export projects in western Canada a window
of opportunity in competition with otherwise advantaged
projects to the south.
At present, says a report by Wood Mackenzie, US de-
velopments lead the race. About 50 million tonnes/year
of LNG production capacity is under construction in the
US, the report notes. No such construction has begun in
Canada.
Until now, US projects have had a cost advantage. Most
involve retrofitting existing liquefaction plants in Gulf
Coast industrialized areas with large labor pools.
Projects in western Canada involve greenfield construc-
tion in remote areas requiring long-distance pipelines for
access to natural gas. Labor supply for the Canadian proj-
ects is lower than it is on the Gulf Coast.
These higher capital costs have made it difficult for
projects in western Canada to demonstrate the commer-
cial returns necessary for investment to be sanctioned,
WoodMac says.
US costs up
But construction costs are rising in the US as new supplies
of cheap natural gas encourage industrial development.
In addition to nine liquefaction trains on the Gulf Coast,
six world-scale ethane crackers are under construction in
Texas and Louisiana along with methanol, fertilizer, and
other petrochemical plants.
According to WoodMac, capital expenditure on firm
and probable LNG and petrochemical projects in the US
could exceed $130 billion over the next 5-6 years.
Most Gulf Coast construction will proceed despite the
oil-price collapse because projects are in advanced stages.
Although upstream layoffs will moderate wage increases
this year, the consultancy says, tightness in the craft la-
bor market will persist for some time.
Capital costs for new US LNG developments therefore
Oil & Gas Journal | May 11, 2015

wont decline to their levels of before
the gas-related construction boom for
18-24 months, the firm predicts.
Collapse of the oil price has the
potential to lower LNG construction
costs in Canada.
With 16 oil sands project phases
having started production during
2011-14, the construction market in
western Canada was cooling when oil
prices began to fall last year. Wood-
Mac expects oil-sands development
spending to drop to $17.1 billion
(US) this year from $27 billion in
2014. Costs are falling as companies
further defer investments, causing
a sharper reduction in capital spend
and greater slack in the labor market,
including crafts.
Canadian LNG projects also ben-
efit more than their US counterparts
from falling steel prices because of
their greater need for pipeline con-
struction. And they have received
offers of tax concessions from the
Canadian and British Columbian
governments.
Reducing expectations
A diminished cost advantage doesnt
jeopardize US Gulf Coast projects close
to sanction, according to WoodMac.
But with the cost of US LNG con-
struction continuing to increase and
competition between projects grow-
ing, developers will likely need to re-
duce expectations of returns if they
are to remain competitive, it says.
Canadian LNG developers, mean-
while, have the chance to try to be-
come cost-competitive with US proj-
ects targeting Asia.
WoodMac says Petronas of Ma-
laysia will seek cost reductions from
contractors of at least 15% from 2014
tenders to sanction the Pacific North-
West LNG project, which it and part-
ners propose to build in British Co-
lumbia (OGJ Online, Mar. 10, 2014).
If contractors dont oblige, Wood-
Mac says, the worry will be that a
rising oil price will push the costs
of western Canadian LNG back up
again.
Oil & Gas Journal | May 11, 2015
GENERAL INTEREST
Kizomba Satellites Pope will confirm
Phase 2 off Angola religious nature of
starts oil production climate activism
Esso Exploration Angola (Block 15)
Ltd., a subsidiary of ExxonMobil
Corp., has started oil production ahead
of schedule at the Kizomba Satellites
Phase 2 project, 150 km offshore An-
gola in 1,350 m of water.
Kizomba Satellites Phase 2 is a Block
15 subsea infrastructure development
of Kakocha, Bavuca, and Mondo South
fields. Mondo South is the first field to
begin production, while the other two
are expected to start up in the coming
months, ExxonMobil says.
The project develops 190 million
bbl of oil with peak production esti-
mated at 70,000 b/d of oil, and is ex-
pected to increase total Block 15 pro-
duction to 350,000 b/d.
ExxonMobil says the project op-
timizes the capabilities of existing
Block 15 facilities to increase current
production levels without requiring
additional floating production, stor-
age, and offloading vessels. Mondo
South is being developed with tie-
backs to the Mondo FPSO, while the
Kakocha and Bavuca are being devel-
oped with tiebacks to the Kizomba B
FPSO.
ExxonMobil was awarded Block 15
in 1994 and has since discovered 5
billion boe, producing more than 1.8
billion bbl of oil. Kizomba Satellites
Phase 1 started production in 2012.
Darryl Willis, partner BP PLCs re-
gional president, Angola, said, We ex-
pect to follow this up later in the year
with the Greater Plutonio phase 3 proj-
ect in neighboring Block 18 operated
by BP.
Esso Angola operates Block 15 with
40% interest. Partners are BP Explora-
tion Angola Ltd. 26.67%, Eni Explora-
tion Angola BV 20%, and Statoil An-
gola Block 15 AS 13.33%. Sonangol EP
is the concessionaire.
THE EDITORS PERSPECTIVE
by Bob Tippee, Editor
Pope Francis will offer useful clarifcation
in an imminent encyclical declaring action
on climate change to be a matter of moral
imperative.
Until now, the issue had seemed to be
primarily a dreadful confusion of politics and
science, with religion merely an undertone
when proponents of energy-use radicalism
condemned anyone who questioned their
agenda.
But the leader of the Roman Catholic
world, citing concern for the poor, intends
soon to assign one side of the political
debate full stature as a religion.
Apparently, Pope Francis accepts the
dire warming predictions of United Nations
computer models.
If those predictions came true, impover-
ished people indeed would suffer. But the
predictions arent coming true. Temperature
observations arent validating the models.
More certain to hurt the poor are the
monstrously elevated costs associated with
replacing enough cheap energy with costlier
alternatives to create even the possibility of
influencing globally averaged temperature.
Especially because of their effects on
poor people, those costs deserve attention
beyond blithe assurances from activists that
they would be minor. European experience
dispels those claims.
Now come reports that the US Environ-
mental Protection Agency granted University
of Michigan researchers $84,000 to study
ways to help religious groups advocate for
climate-change response.
According to an EPA project document,
This research has potential to provide
models of practice that may help faith com-
munities seeking pathways to respond to
climate change, as well as informing policies
and programs intended to promote more
environmentally sustainable behaviors.
Climate activism, soon to receive papal
support, thus is becoming established reli-
gion in the US. The First Amendment of the
Constitution is supposed to preclude that.
If climate change truly represents a mor-
al justification for papal pronouncements,
suspension of US constitutional protections,
and impoverishment by imposed cost, the
issue deserves serious deliberation.
Instead, its riddled with dissent-squelch-
ing nonsense about settled science and
tipping points and with outright fabrica-
tion, such as the often-repeated claim that
97% of scientists think humans cause most
global warming.
Distortion of truth raises moral questions,
too.
(From the subscription area of www.ogj.com,
posted on May 1, 2015; authors e-mail:
bobt@ogjonline.com)
29
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STATISTICS
Additional analysis of market trends is available
IMPORTS OF CRUDE AND PRODUCTS through OGJ Online, Oil & Gas Journals electronic
information source, at http://www.ogj.com.
Districts 1-4 District 5 Total US
4-24 4-17 4-24 4-17 4-24 4-17 *4-25
2015 2015 2015 2015 2015 2015 2014
1,000 b/d
Total motor gasoline ............. 660 725 102 12 762 737 652
Mo. gas. blending comp..... 557 675 102 9 659 684 622
Distillate............................... 133 239 2 16 135 255 173
Residual ..............................
Jet fuel-kerosine ..................
186
152
260
32
68
45
54
45
254
197
314
77
100
15
OGJ CRACK SPREAD
5-1-15* 5-2-14* Change Change,
Propane-propylene .............. 104 60 7 6 111 66 56 $/bbl %
Other ................................... 961 671 111 55 1,071 727 849
SPOT PRICES
Total products ...................... 2,196 1,987 335 188 2,530 2,176 1,845
Product value 79.12 120.78 (41.66) (34.5)
Total crude ........................... 6,407 6,562 1,038 1,202 7,445 7,764 7,482 Brent crude 63.49 108.96 (45.47) (41.7)
Crack spread 15.62 11.82 3.80 32.2
Total imports ........................ 8,603 8,549 1,373 1,390 9,976 9,939 9,327
FUTURES MARKET PRICES
*Revised. One month
Source: US Energy Information Administration Product value 83.77 124.94 (41.18) (33.0)
Data available at PennEnergy Research Center. Light sweet crude 58.28 100.21 (41.93) (41.8)
Crack spread 25.48 24.73 0.75 3.0
Six month
EXPORTS OF CRUDE AND PRODUCTS Product value
Light sweet crude
79.00 116.37 (37.37) (32.1)
61.88 96.04 (34.16) (35.6)
Total US Crack spread 17.13 20.33 (3.21) (15.8)
4-24-15 4-17-15 *4-25-14
1,000 b/d *Average for week ending.
Finished motor gasoline 547 546 399 Source: Oil & Gas Journal
Jet fuel-kerosine 188 165 122 Data available at PennEnergy Research Center.
Distillate 988 1,119 901
Residual 378 377 391
Propane/propylene 470 477 314
Other oils 945 1,073 877
Total products 3,516 3,757 3,004
Total crude 467 503 71
Total exports 3,983 4,260 3,075
NET IMPORTS
Total 5,993 5,681 6,253
Products (986) (1,581) (1,159)
Crude 6,979 7,262 7,412

*Revised.
Source: Oil & Gas Journal
Data available at PennEnergy Research Center.

CRUDE AND PRODUCT STOCKS

Motor gasoline
Blending Jet fuel, Fuel oils Propane-
Crude oil Total comp. kerosine Distillate Residual propylene
District 1,000 bbl
PADD 1 ..................................... 17,624 63,725 58,665 8,852 32,749 8,373 2,686
PADD 2 ..................................... 146,086 53,453 47,341 6,747 33,943 1,230 18,331
PADD 3 ..................................... 243,864 75,971 64,678 11,585 43,742 22,475 41,270
1
PADD 4 ..................................... 24,618 6,615 4,383 697 4,410 232 2,379
PADD 5 ..................................... 58,720 27,687 25,571 8,952 14,426 5,174

Apr. 24, 2015 ........................... 490,912 227,451 200,638 36,833 129,270 37,484 64,666
Apr. 17, 2015 ............................ 489,002 225,739 199,002 36,326 129,336 38,732 62,044
April 25, 20142.......................... 399,357 211,571 182,364 37,737 114,449 36,723 31,537
1
Includes PADD 5. 2Revised.
Source: US Energy Information Administration
Data available at PennEnergy Research Center.

REFINERY REPORTAPR. 24, 2015

REFINERY REFINERY OUTPUT
OPERATIONS Total
Gross Crude oil motor Jet fuel, Fuel oils Propane-
inputs inputs gasoline kerosine Distillate Residual propylene
District 1,000 b/d 1,000 b/d

PADD 1 .............................................. 1,154 1,152 3,079 121 359 54 199

PADD 2 .............................................. 3,649 3,647 2,592 265 1,090 71 324
PADD 3 .............................................. 8,618 8,528 2,132 857 2,641 325 869
1
PADD 4 .............................................. 612 611 327 33 195 15 203
PADD 5 .............................................. 2,307 2,160 1,657 384 552 105
Apr. 25, 2015 ...................................... 16,340 16,098 9,787 1,660 4,837 570 1,595
Apr. 17, 2015 ...................................... 16,308 15,982 9,819 1,592 4,775 481 1,588
April 25, 20142 ................................... 16,312 15,955 10,075 1,535 4,915 429 1,488

17,889 Operable capacity 91.3 utilization rate

1
Includes PADD 5. 2Revised.
Source: US Energy Information Administration
Data available at PennEnergy Research Center.

32 Oil & Gas Journal | May 11, 2015

 STATISTICS
OGJ GASOLINE PRICES BAKER HUGHES RIG COUNT OGJ PRODUCTION REPORT 1 2
5-1-15 5-2-14
Price Pump Pump 5-1-15 5-2-14 1,000 b/d
ex tax price* price
4-29-15 4-29-15 4-30-14 (Crude oil and lease condensate)
Alabama............................................ 4 5 Alabama ................................. 28 26
/gal Alaska ............................................... 10 9 Alaska .................................... 510 544
Arkansas ........................................... 8 11 California ............................... 600 606
(Approx. prices for self-service unleaded gasoline) California .......................................... 14 39 Colorado ................................. 249 206
Atlanta .......................... 197.2 243.1 359.1 Land................................................ 13 38 Florida .................................... 6 6
Baltimore ...................... 202.9 248.7 364.1 Offshore .......................................... 1 1 Illinois .................................... 29 27
Boston ........................... 204.9 249.8 365.1 Colorado ............................................ 37 64 Kansas ................................... 146 136
Buffalo .......................... 194.6 263.5 366.3 Florida ............................................... 1 1 Louisiana ............................... 1,324 1,326
Miami ............................ 202.5 256.9 381.1 Michigan ................................ 20 20
Illinois ............................................... 1 3 Mississippi ............................. 75 64
Newark .......................... 205.8 238.7 355.1 Indiana.............................................. 0 0 Montana ................................. 88 80
New York........................ 208.8 277.7 372.1 Kansas .............................................. 11 31 New Mexico............................. 350 325
Norfolk........................... 198.7 234.4 364.2 Kentucky............................................ 2 3 North Dakota .......................... 1,255 1,010
Philadelphia .................. 211.9 272.1 373.1 Louisiana .......................................... 73 114 Ohio ........................................ 43 41
Pittsburgh ..................... 207.3 267.5 370.1 N. Land ........................................... 27 27 Oklahoma ............................... 351 356
Wash., DC...................... 221.2 263.1 372.2 S. Inland waters .............................. 3 14 Pennsylvania .......................... 19 16
PAD I avg .................. 205.1 256.0 367.5 S. Land............................................ 11 22 Texas ...................................... 3,892 3,298
Utah ....................................... 113 113
Offshore .......................................... 32 51 West Virginia .......................... 20 24
Chicago ......................... 220.6 278.1 410.5 Maryland ........................................... 0 0 Wyoming ................................. 209 196
Cleveland ...................... 198.5 244.9 364.4 Michigan ........................................... 0 0 Other states ........................... 56 52
Des Moines .................... 207.9 248.3 360.5 Mississippi ........................................ 3 13
Detroit ........................... 185.9 246.3 368.5 Montana ............................................ 1 8 Total 9,383 8,472
Indianapolis .................. 179.3 239.5 375.5 Nebraska ........................................... 2 1 1
OGJ estimate. 2Revised. Source: Oil & Gas Journal.
Kansas City ................... 194.2 229.9 360.5 New Mexico........................................ 46 90 Data available at PennEnergy Research Center.
Louisville ....................... 212.3 263.2 375.5 New York............................................ 0 0
Memphis ....................... 191.7 231.5 380.5 North Dakota ..................................... 79 176
Milwaukee ..................... 200.5 251.8 374.5 Ohio................................................... 25 35 US CRUDE PRICES
Minn.-St. Paul ............... 198.7 245.7 370.5 Oklahoma .......................................... 108 195 5-1-15
Oklahoma City ............... 195.9 231.3 343.5 Pennsylvania ..................................... 47 58 $/bbl*
Omaha .......................... 197.4 243.1 355.5 South Dakota..................................... 0 0 Alaska-North Slope 27 ......................................... 46.61
St. Louis ........................ 209.7 245.4 350.5 Texas ................................................. 380 892 Light Louisiana Sweet ........................................... 54.52
Tulsa ............................. 194.7 230.1 341.6 Offshore .......................................... 1 1 California-Midway Sunset 13 .............................. 53.20
Wichita .......................... 190.6 233.0 365.5 Inland waters .................................. 0 0 California Buena Vista Hills 26 ........................... 62.94
PAD II avg ................. 198.5 244.1 366.5 Dist. 1 ............................................. 57 124 Wyoming Sweet ..................................................... 51.90
Dist. 2 ............................................. 43 83 East Texas Sweet ................................................... 52.50
Albuquerque .................. 203.1 240.3 357.3 Dist. 3 ............................................. 19 57 West Texas Sour 34 .............................................. 50.50
Birmingham .................. 194.3 233.6 347.4 Dist. 4 ............................................. 25 36 West Texas Intermediate........................................ 55.50
Dallas-Fort Worth .......... 203.8 242.2 345.4 Oklahoma Sweet.................................................... 55.50
Dist. 5 ............................................. 4 9 Texas Upper Gulf Coast ......................................... 49.25
Houston ......................... 196.2 234.6 345.6 Dist. 6 ............................................. 17 33 Michigan Sour ....................................................... 47.50
Little Rock ..................... 194.3 234.5 345.4 Dist. 7B ........................................... 2 10 Kansas Common ................................................... 54.75
New Orleans .................. 193.4 231.8 349.4 Dist. 7C ........................................... 37 96 North Dakota Sweet ............................................... 48.44
San Antonio ................... 191.8 230.2 350.4 Dist. 8 ............................................. 144 320
PAD III avg ................ 196.7 235.3 348.7 *Current major refners posted prices except N. Slope lags 2
Dist. 8A ........................................... 13 39 months. 40 gravity crude unless differing gravity is shown.
Dist. 9 ............................................. 3 16 Source: Oil & Gas Journal. Data available at PennEnergy
Cheyenne....................... 198.9 241.3 339.2 Dist. 10 ........................................... 15 68
Denver ........................... 206.3 246.7 362.2 Research Center.
Utah .................................................. 7 27
Salt Lake City ................ 223.9 266.8 346.2
PAD IV avg ................ 209.7 251.6 349.2
West Virginia .....................................
Wyoming............................................
21
24
28
49
WORLD CRUDE PRICES
$/bbl
Others HI-1........................................ 1 2 OPEC reference basket Wkly. avg. 5-1-15 61.37
Los Angeles ................... 297.8 366.0 427.1
Phoenix.......................... 220.9 258.3 391.3 Total US ........................................ 905 1,854 Mo. avg., $/bbl
Portland ........................ 240.5 290.0 399.9 Total Canada ................................ 79 163 Feb. -15 Mar. -15
San Diego ...................... 292.8 361.0 406.9 Grand total ................................... 984 2,017
San Francisco................ 294.8 363.0 429.7 OPEC reference basket....................... 54.06 52.46
US oil rigs.......................................... 679 1,527 Arab light-Saudi Arabia ....................... 53.78 52.20
Seattle........................... 243.3 299.2 396.0 US gas rigs........................................ 222 323
PAD V avg ................. 265.0 322.9 408.5 Basrah light-Iraq ................................. 51.82 50.53
Total US offshore ............................... 34 54 Bonny light 37o-Nigeria........................ 58.46 56.75
Weeks avg. .................. 210.2 257.6 368.6 Total US cum. avg. YTD ..................... 1,280 1,796 Es Sider-Libya ...................................... 56.83 54.78
Apr. avg......................... 198.3 245.7 362.0 Girassol-Angola.................................... 58.27 56.86
Mar. avg.. ...................... 196.5 243.8 349.4 Rotary rigs from spudding in to total depth. Iran heavy-Iran..................................... 53.26 51.27
2015 to date ................. 183.6 230.9 Defnitions, see OGJ Sept. 18, 2006, p. 46. Kuwait export-Kuwait ........................... 52.25 50.52
2014 to date ................. 306.4 352.6 Source: Baker Hughes Inc. Marine-Qatar........................................ 55.38 54.27
Data available at PennEnergy Research Center. Merey-Venezuela .................................. 48.41 45.79
*
Includes state and federal motor fuel taxes and state Murban-UAE ......................................... 58.56 57.41
sales tax. Local governments may impose additional taxes. Oriente-Ecuador ................................... 47.00 45.79
Source: Oil & Gas Journal. Saharan blend 44o-Algeria ................... 58.18 56.93
Data available at PennEnergy Research Center. Other crudes
Minas 34o-Indonesia ............................ 55.90 54.11
Fateh 32o-Dubai ................................... 55.85 54.66
Isthmus 33o-Mexico ............................. 52.68 51.41
Brent 38o-UK ........................................ 58.13 55.93
REFINED PRODUCT PRICES IHS PETRODATA RIG COUNT Urals-Russia ........................................
Differentials
57.81 55.07
WTI/Brent ............................................. (7.37) (8.16)
4-24-15 4-24-15 MAY 1, 2015 Brent/Dubai.......................................... 2.28 1.27
/gal /gal Total Marketed Marketed Source: OPEC Monthly Oil Market Report.
supply supply Marketed utilization Data available at PennEnergy Research Center.
Spot market product prices of rigs of rigs contracted rate (%)
No. 2 Distillate US Gulf of
Motor gasoline
(Conventional-regular) Low sulfur diesel fuel Mexico. . . . . . 113 74 58 78.4 US NATURAL GAS STORAGE1
New York Harbor ......... 190.90 New York Harbor ......... 193.20 South
America 78 72 72 100.0 4-24-15 4-17-15 4-24-14 Change,
Gulf Coast .................. 184.40 Gulf Coast .................. 186.40 bcf %
Los Angeles ................ 194.40 Northwest
Europe. . . . . 99 95 90 94.7 Producing region ................ 752 712 423 77.8
Motor gasoline West Consuming region east ...... 597 560 357 67.2
(RBOB-regular) Kerosine jet fuel
Africa. . . . . . 77 69 55 79.7 Consuming region west ...... 361 357 189 91.0
New York Harbor ......... 245.80 Gulf Coast .................. 177.70
Middle Total US ............................. 1,710 1,629 969 76.5
East. . . . . . . 157 151 130 86.1 Change,
No. 2 heating oil Propane Southeast
New York Harbor ......... 180.90 Mont Belvieu .............. 56.90 Feb.-15 Feb.-14 %
Asia. . . . . . . 97 90 66 73.3
Worldwide. . . . 860 780 673 86.3 Total US2 ............................ 1,677 1,200 39.8
1
Working gas. 2At end of period.
Source: EIA Weekly Petroleum Status Report. Source: IHS Petrodata Source: Energy Information Administration
Data available at PennEnergy Research Center. Data available in PennEnergy Research Center Data available at PennEnergy Research Center.

Oil & Gas Journal | May 11, 2015 33

STATISTICS
WORLDWIDE CRUDE OIL AND GAS PRODUCTION
2 month average Change vs.
Feb. Jan. production previous year Feb. Jan. Cum.
2015 2015 2015 2014 Volume % 2015 2015 2015
Crude, 1,000 b/d Gas, bcf
Argentina ............................ 529 533 531 538 (7) (1.4) 92.6 103.2 195.81
Bolivia................................. 49 49 49 53 (4) (7.4) 63.0 63.0 126.00
Brazil .................................. 2,300 2,300 2,300 2,078 223 10.7 82.0 82.0 164.00
Canada ............................... 3,850 3,859 3,854 3,497 357 10.2 490.0 492.3 982.31
Colombia ............................ 980 980 980 1,008 (28) (2.8) 30.0 30.0 60.00
Ecuador1 ............................. 560 560 560 550 10 1.7 1.0 1.0 2.00
Mexico ................................ 2,678 2,602 2,640 2,504 137 5.5 186.9 204.1 391.03
Peru ................................... 63 62 63 67 (5) (6.9) 40.0 38.2 78.23
Trinidad .............................. 84 84 84 78 6 7.4 113.5 127.1 240.59
United States ...................... 9,238 9,214 9,226 8,018 1,209 15.1 2,202.6 2,415.3 4,617.88
Venezuela1 .......................... 2,370 2,400 2,385 2,440 (55) (2.3) 63.0 63.0 126.00
Other Latin America ............ 89 89 89 88 0.4 4.2 4.2 8.48
Western Hemisphere .......... 22,789 22,733 22,761 20,918 1,843 8.8 3,368.9 3,623.5 6,992.33
Austria ................................ 17 17 17 17 3.4 3.7 7.06
Denmark............................. 161 158 160 164 (5) (2.9) 13.4 13.0 26.40
France ................................ 16 15 16 15 3.0 0.1 0.1 0.16
Germany ............................. 47 43 45 49 (4) (7.2) 25.7 28.0 53.71
Italy .................................... 81 97 89 103 (14) (13.6) 17.8 20.7 38.49
Netherlands ........................ 34 36 35 23 12 52.2 329.7 356.8 686.43
Norway ............................... 1,617 1,587 1,602 1,627 (25) (1.5) 356.7 363.7 720.41
Turkey ................................ 50 47 49 46 3 5.4 1.1 1.2 2.33
United Kingdom .................. 810 878 844 883 (39) (4.4) 120.2 111.2 231.43
Other Western Europe ......... 6 6 6 9 (3) (33.3) 1.0 1.0 2.07
Western Europe ................. 2,839 2,885 2,862 2,936 (74) (2.5) 869.1 899.4 1,768.50
Azerbaijan........................... 811 818 815 915 (101) (11.0) 58.4 63.2 121.59
Croatia ................................ 12 12 12 11 1 9.1 5.0 5.0 10.00
Hungary.............................. 12 12 12 12 5.0 5.0 10.00
Kazakhstan ......................... 1,550 1,550 1,550 1,626 (76) (4.7) 130.0 130.0 260.00
Romania ............................. 81 79 80 85 (5) (5.3) 34.0 34.0 68.00
Russia ................................ 10,500 10,500 10,500 10,524 (24) (0.2) 1,910.4 2,160.2 4,070.54
Other FSU........................... 370 370 370 385 (15) (4.0) 520.0 520.0 1,040.00
Other Eastern Europe .......... 59 59 59 58 1 1.7 23.4 23.4 46.82
Eastern Europe and FSU ..... 13,395 13,400 13,398 13,616 (219) (1.6) 2,686.2 2,940.8 5,626.95
Algeria1 ............................... 1,100 1,100 1,100 1,090 10 0.9 230.0 230.0 460.00
Angola1 ............................... 1,790 1,770 1,780 1,630 150 9.2 4.0 4.0 8.00
Cameroon ........................... 82 82 82 78 4 5.1 2.0 2.0 4.00
Congo (former Zaire) ........... 28 28 28 28
Congo (Brazzaville) ............. 290 290 290 290
Egypt .................................. 690 690 690 667 23 3.4 105.0 105.0 210.00
Equatorial Guinea................ 248 248 248 248 0.1 0.1 0.12
Gabon................................. 260 260 260 260 0.3 0.3 0.60
Libya1 ................................. 270 340 305 430 (125) (29.1) 25.0 25.0 50.00
Nigeria1............................... 1,860 1,890 1,875 1,930 (55) (2.8) 70.0 70.0 140.00
Sudan ................................. 258 258 258 262 (4) (1.5)
Tunisia ................................ 50 54 52 59 (7) (11.4) 8.1 8.1 16.10
Other Africa ........................ 285 285 285 289 (4) (1.4) 9.1 9.1 18.20
Africa ................................ 7,211 7,295 7,253 7,261 (8) (0.1) 453.5 453.5 907.02
Bahrain............................... 48 49 49 49 (1) (1.0) 32.0 32.0 64.00
Iran1 ................................... 2,840 2,820 2,830 2,815 15 0.5 465.0 465.0 930.00
Iraq1 ................................... 3,390 3,440 3,415 3,345 70 2.1 28.0 28.0 56.00
Kuwait1 2 ............................. 2,800 2,800 2,800 2,780 20 0.7 43.3 43.3 86.58
Oman ................................. 963 965 964 955 9 1.0 86.0 86.0 172.00
Qatar1 ................................. 670 670 670 710 (40) (5.6) 600.0 600.0 1,200.00
Saudi Arabia1 2 .................... 9,740 9,690 9,715 9,805 (90) (0.9) 250.0 250.0 500.00
Syria ................................... 30 30 30 30 14.0 14.0 28.00
United Arab Emirates1 ......... 2,840 2,840 2,840 2,730 110 4.0 165.0 165.0 330.00
Yemen ................................ 160 160 160 120 40 33.3
Other Middle East ............... 1 1 1 1 (9.8) 26.5 26.5 53.00
Middle East ....................... 23,482 23,465 23,474 23,340 134 0.6 1,709.8 1,709.8 3,419.58
Australia ............................. 311 327 319 364 (45) (12.4) 137.6 160.0 297.56
Brunei ................................ 117 107 112 125 (13) (10.6) 32.5 39.2 71.65
China .................................. 4,237 4,259 4,248 4,183 65 1.5 394.2 436.4 830.59
India ................................... 764 765 765 781 (16) (2.1) 89.5 101.4 190.92
Indonesia ............................ 790 797 794 794 (0) (0.0) 213.0 213.0 426.00
Japan ................................. 11 11 11 14 (3) (23.2) 15.8 16.6 32.31
Malaysia ............................. 665 628 647 503 144 28.6 200.0 199.3 399.31
New Zealand....................... 34 35 34 38 (3) (9.0) 10.8 13.5 24.33
Pakistan.............................. 96 95 95 86 9 10.3 109.7 125.6 235.26
Papua New Guinea ............. 30 30 30 30 0.5 0.5 0.99
Thailand ............................. 233 234 234 229 4 1.8 107.1 123.5 230.57
Vietnam .............................. 300 300 300 318 (18) (5.7) 33.0 33.0 66.00
Other AsiaPacifc ............... 43 39 41 57 (17) (28.9) 112.1 113.0 225.15
AsiaPacifc ...................... 7,630 7,627 7,629 7,523 106 1.4 1,455.7 1,575.0 3,030.64
TOTAL WORLD .................... 77,347 77,404 77,375 75,594 1,781 2.4 10,543.1 11,201.9 21,745.02
OPEC .................................. 30,230 30,320 30,275 30,255 20 0.1 1,944.3 1,944.3 3,888.58
Offshore Europe .................. 2,615 2,650 2,633 2,701 (69) (2.5) 589.2 594.9 1,184.05
1
OPEC member. 2Kuwait and Saudi Arabia production each include half of Neutral Zone. Totals may not add due to rounding.
Source: Oil & Gas Journal. Data available at PennEnergy Research Center.

34 Oil & Gas Journal | May 11, 2015

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