What's happening offshore
Safer tankers, Baldpate development, IPAA initiativesConoco has announced that it will operate a 100% double-hulled (DH) tanker fleet in the U.S. by August 1998, more than two years ahead of its previously announced target date. And two new DH tankers will join its U.S. fleet of four DH tankers in 1999. Following legislation mandating use of only double-hulled tankers in U.S. ports by 2015, the company committed to operating an all-U.S. DH fleet by 2000. The company's experience with such tankers has proven that they can prevent oil spills resulting from soft groundings or collisions. In October 1997, Conoco's DH tanker Guardian was rammed by a third-party barge while entering the Port of Lake Charles, Louisiana. And despite a 400-sq ft gash in the ship's outer skin, the inner hull was undamaged and not a single drop of crude oil cargo was lost. Such protection for the transportation sector is also important for drillers and producers, as the latter usually bear the brunt of public outrage when a spill occurs, even though a minor amount of total annual oil pollution of the world's oceans comes from "upstream" operations. Further, double-hull technology also has been integrated into the construction of new deepwater drillships for Conoco and Reading & Bates. The first of these two drillships, capable of drilling in 10,000-ft water, will begin work in late 1998 in the Gulf of Mexico. Balpdate development. Amerada Hess Corp., operator of the Baldpate field, located in Garden Banks Block 260, 120 mi off Louisiana in 1,650-ft water in the Gulf of Mexico, could see first oil by August. The development's primary feature is the GB 260 compliant tower, the world's first free-standing (non-guyed) offshore tower, and the world's tallest free-standing structure (1,900 ft from the seabed). Last month, Heerema installed the 1,320-ft tower section, which was fabricated at Aker Gulf Marine in Ingleside, Texas. It was installed onto the 351-ft base section which was fabricated by McDermott, and installed by Heerema in April. During the base installation, a piling was dropped, causing some delay. No damage or injuries were reported. The integrated topsides, being assembled at Aker Gulf, will be transported by barge and set on the tower utilizing the Balder vessel's two cranes for a 3,950-t lift. The Ensco 23 platform rig will then be installed. The 104-million bbl reservoir was discovered in 1991; and MMS subsequently approved the Baldpate Unit, comprising GB 215 S/2, 259 and 260. A 9-slot template was installed over the No. 3 well and six additional wells have been drilled. The wells will be completed with the platform's rig and tied back to the topsides. All fluids will be processed on the facility. Oil and gas will be shipped through 16-in. and 12-in. pipelines, respectively, which will hang from the tower in a catenary configuration from the - 400-ft level. The seven wells are expected to produce 50,000 bopd and 150 MMcfd gas. Amerada and Oryx Energy Co. are 50/50 facility owners. Concurrent with the final Baldpate development, the two companies are also developing the Penn State satellite field in GB 216, with two subsea wells, to be tied back with flowlines and controls to the new Baldpate tower. Low prices spur IPAA initiatives. International Editor, Kurt Abraham attended the Independent Petroleum Association of America (IPAA) meeting in Nashville, recently. He reports here on some important legislative developments. The sharp drop in oil prices prompted IPAA to lobby congress for multi-faceted legislation. As described to members during their Spring Meeting, five bills under a "Domestic Oil and Gas Security Enhancement Plan" umbrella have been introduced; see also Charles Matthews' report on page 35 for more details. The goal is to help producers avoid shutting in or permanently capping marginal wells, thereby protecting U.S. energy security. The first of these bills sought by IPAA is Rep. Wes Watkins' (Democrat-Oklahoma) H.R. 3688, the Marginal Well Tax Credit. It mirrors language contained in Sen. Kay Bailey Hutchison's (Republican-Texas) S. 1929, the U.S. Energy Economic Growth Act. Three other bills were introduced on April 2. Two of these are Sen. Frank Murkowski's (Republican-Alaska) S. 1919, the Federal Oil and Gas Preservation Act (stripper well royalty deductions), and S. 1920, the Federal Oil and Gas Lease Management Improvement Act of 1998 (transfers certain BLM authority to states), respectively. The other is Sen. Don Nickles' (Republican-Oklahoma) S. 1930, the Royalty Enhancement Act of 1998 (payment of royalties in kind). Meanwhile, IPAA won the battle of the on-again, off-again Strategic Petroleum Reserve (SPR) sale. The 1998 Emergency Appropriations bill signed by President Clinton on May 1 contains an amendment authored by Sens. Murkowski and Jeff Bingaman (Democrat-New Mexico). It rescinds the $207.5-million sale of SPR crude authorized by Congress last fall. Another rider included by Hutchison and Rep. Bob Livingston (Republican-Louisiana) has delayed implementation of MMS' oil valuation rule. It would have forced producers with arm's-length transactions on federal lands to use a complex netback valuation method. IPAA's congressional foes screamed that the delay in implementing MMS' rule would cost
taxpayers millions of dollars. Democratic Reps. Carolyn Maloney (New York) and George Miller
(California), and Democratic Sens. Barbara Boxer (California) and Dick Durbin (Illinois)
said they would introduce legislation to repeal the delay.
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