Economic limit of Outer Continental Shelf Gulf of Mexico structure production

The economic limit of an oil and gas asset occurs when income from production is less than the direct cost of operation. Economic limits determine the threshold for profitable operations and are often considered from a conceptual perspective rather than as an object for empirical assessment. The purpose of this paper is to derive empirical estimates of the economic limit of offshore structures in the Outer Continental Shelf Gulf of Mexico. We classify 1962 decommissioned structures between 1986–2009 by structure type, primary production, water depth and year of removal, and compute end-of-life production, adjusted gross revenue, and water cut thresholds according to various levels of categorization. During the last year of production, historic gross revenues averaged $539,000 for oil structures, $955,000 for gas structures, and $1.1 million for dry gas structures. Daily end-of-life production ranged from 50 BOEPD for oil structures to 647 MCFEPD for gas structures and 788 MCFEPD for dry gas structures. The economic limits for oil and gas structures increased to $1 million and $1.7 million over the period 2005–2009.     

墨西哥湾天然气水合物油气系统

从20世纪80年代开始,墨西哥湾的水合物研究经历了水合物发现阶段、浅表层水合物研究阶段和水合物资源勘探阶段等3个阶段,特别是2005年“联合工业计划”的实施,为这一区域的水合物研究提供了大量的地质、地球物理和地球化学等资料,使其成为目前海域水合物研究的前沿区域。本次研究采用水合物油气系统的思路和工作方法,通过资料的调研、总结和对比,详细描述并刻画了水合物稳定条件、气体组分和来源、有利沉积体类型和特征、含气流体运移通道等4个要素。研究结果表明,墨西哥湾陆坡区域温度和压力等条件非常适于水合物的形成,热成因气和生物成因气都可以作为水合物的气体来源,有利的深水沉积体（如水道、天然堤、块体流沉积体等）提供了潜在的储集类型和聚集空间,盐底辟、断层、倾斜的地层及网状裂隙等为含气流体的运移提供了有利的通道。作为一种全面和系统的研究思路和工作方法,水合物油气系统既考虑了水合物形成时的物理化学条件,又注重实际的地质背景,可以作为海域水合物成藏潜力的快速评价方法。然而,要对重点区域进行水合物矿体描述、不均匀性分布控制因素等方面的分析,开展精细的沉积学解剖和流体运移的分析,是研究的重点。因此,将“水合物识别标志”、“有利沉积体展布”和“流体运移通道”三者有机地结合在一起,是今后海域水合物资源勘探、矿体精细描述和科学评价的发展方向。     

Competitiveness of shallow water hydrocarbon development projects in Mexico after 2015 actualization of fiscal reforms: Economic benchmark of new production sharing agreement versus typical U.S. federal lease terms

Development of Mexican hydrocarbon reservoirs by foreign operators has become possible under Mexico's new Hydrocarbon Law, effective as per January 2015. Our study compares the economic returns of shallow water fields in the Gulf of Mexico applying the royalty and taxes due under the fiscal regimes of the U.S. and Mexico. The net present value (NPV) of the base case scenario is US$1.4 billion, assuming standard development and production cost (opex, capex), 10% discount rate accounting for the cost of capital and revenues computed using a reference oil price of $75/bbl. The impact on NPV of oil price volatility is accounted for in a sensitivity analysis. The split of the NPV of shallow water hydrocarbon assets between the two contractual parties, contractor and government, in Mexico and the U.S. is hugely different. Our base case shows that for similar field assets, Mexico's production sharing agreement allocates about $1,150 million to the government and $191 million to the contractor, while under U.S. license conditions the government take is about $700 million and contractor take is $553 million. The current production sharing agreement leaves some marginal shallow water fields in Mexico undeveloped for reasons detailed and quantified in our study.     

墨西哥湾漏油事件因果分析及对我国的启示和建议

本文系统分析了墨西哥湾漏油事件的起因及事态发展过程,指出本次漏油事件对生态环境的影响具有灾难性特点;严重威胁着墨西哥湾地区的能源战略地位;给墨西哥湾地区经济带来沉痛打击并影响墨西哥湾地区居民生活;BP及BP股东的损失惨重;严重影响着美国能源政策的实施并加剧了两党之间的争斗。本文得到的启示是,美国在宣布解禁部分近海油气开发权时未重视严格监管;漏油事件不会影响美英同盟关系;漏油事件虽不会改变美国能源政策总体方向,但有利于加快清洁能源步伐;有利于加快海上油污净化技术的商业化发展步伐。建议我国应切实抓好能源行业生产的配套监管工作;提高深海技术研发和设备制造水平;加强漏油事故后的应急反应和处理技术水平。     

Modeling lost production from destroyed platforms in the 2004–2005 Gulf of Mexico hurricane seasons

Hurricanes Ivan, Katrina, and Rita passed through the Gulf of Mexico during 2004 and 2005 and resulted in the largest number of destroyed and damaged offshore oil and gas structures in the history of Gulf operations. In the final official government assessment, a total of 126 platforms were destroyed and over 183 structures were identified as having extensive damage. Production associated with wells and structures that are not redeveloped are classified as lost. The purpose of this paper is to derive functional relations that describe the likely contribution the collection of destroyed assets would have made to future production in the Gulf of Mexico. We estimate that the total remaining reserves from the set of destroyed structures range in value between $1.3 and $4.5 billion depending on the assumptions employed. We summarize the impact of the storms on the Gulf of Mexico oil and gas infrastructure and discuss the main issues involved in redevelopment decision making. A meta-model analytic framework is applied to perform sensitivity analysis and to explore the interactions of assumptions on model output. A discussion of the limitations of the analysis is presented.     

A longitudinal study of fallow dynamics in the UK Continental Shelf (UKCS)

This paper identifies the causes of and solutions to the problems posed by the fallow assets’ phenomenon in the UK Continental Shelf (UKCS). Using data available in the public domain, including the Fifth Fallow Release, the province's assets were grouped into two broad cross-sections of fallow and non-fallow assets, with further sub-divisions. The dependent variable of interest was the median fallow duration of the assets. Fallow duration was measured in two ways, namely those relating to censored and uncensored data. An empirical panel econometric model was formulated, estimated and simulated to establish the principal causal factors and the effective remedial policy measures. The model estimation results provide evidence that the interactive effects of the key influencing variables are stronger than their individual effects. Thus, the combined effects of reserves and distance from infrastructure have a greater weight on the fallow spell than their individual effects. Several policy simulation runs established that, contrary to some theoretical propositions, (a) stronger rather than weaker government intervention, on occasion, is preferable, and (b) price is not a central determinant of investment timing.     

Enhancing renewable energy in the Arab States of the Gulf: Constraints & efforts

The development of renewable energy in the Arab States of the Gulf has been relatively low in spite of the large geographical potential for the use of these solutions. This market has been stifled by a combination of constraints, such as the absence of relative legal and policy framework, the high initial capital costs and the lack of commercial skills and information. Even though these states have not been interested in these energy solutions for many years, something seems to have changed recently, due to their accession to the Kyoto Protocol. The government, the private sector and the general public have started realizing the inevitability of putting climate change issues on the top of the list of priorities in the process of economic and social development. Apart from this, some renewable energy investments seem to be more available and effective solutions in the region, because of specified conditions and requirements in remote and isolated areas. The aim of this paper is to analyze in a coherent and integrated way the specific constraints hampering the development of renewable energy, to describe the relative efforts that are connected with the stated role of the renewable energy and to propose some useful recommendations for their future development.     

Hydrogen production in Mexico: State of the art,future perspectives,challenges, and opportunities

The use of hydrogen is increasing in many countries due to potential decarbonization and sustainable energy transition projects. Hydrogen is shown to be a versatile transition alternative in different applications, with an increasing trend towards clean alternatives with better performance improving the existing processes. This paper reviews (i) the international panorama of hydrogen production, (ii) the main alternatives for hydrogen production in Mexico, and (iii) the applications of hydrogen in various areas. The challenges and opportunities for the coming years to include and introduce the use of hydrogen in new and existing processes in Mexico are also analyzed. A great variety of alternatives to procedure hydrogen both in Mexico and on the international scenes are analyzed, contemplating different production mechanisms. Many of them are found to require further studies to make them profitable for industrial applications. Some challenges and opportunities are also analyzed, showing the importance of synchronizing the public-private partnership agenda on hydrogen production, and to provide the most favorable conditions for investment attraction and development. This review shows that Mexico has the opportunity to make a decisive incursion into hydrogen production.     

The impact of Hurricanes Gustav and Ike on offshore oil and gas production in the Gulf of Mexico

During August and September 2008, Hurricanes Gustav and Ike passed through the Gulf of Mexico and damaged and destroyed a number of offshore oil and gas structures. In the final official government assessment, a total of 60 platforms were destroyed and 31 structures were identified as having extensive damage. The destroyed platforms were responsible for about 1.6% of the oil and 2.5% of the gas produced daily in the Gulf of Mexico and represented approximately 234 million BOE of reserves valued between $4.6 and $10.9 billion. Although the number of structures destroyed by Hurricanes Gustav and Ike was half the total destruction from the 2004–2005 hurricane seasons, we estimate that the reserves at risk are approximately three times more valuable. Each destroyed structure is unique in its production capacity and damages incurred and are a candidate for redevelopment. We review pre-hurricane production and revenue characteristics for the collection of destroyed structures and estimate production at risk. Gas structures are expected to present better economics and redevelopment potential than oil structures, and we predict that 198 million BOE, or nearly 95% of reserves-in-place, are likely to be redeveloped. Shut-in production statistics are compared against recent hurricane events and general comments on the factors involved in decision making are presented.     

The impact of weather and ocean forecasting on hydrocarbon production and pollution management in the Gulf of Mexico

Over the past 2 years, the vulnerability of offshore production in the Gulf of Mexico (GOM) has been brought to light by extensive damage to oil and gas facilities and pipelines resulting from Hurricanes Ivan, Katrina, and Rita. The occurrences of extreme weather regularly force operators to shut-down production, cease drilling and construction activities, and evacuate personnel. Loop currents and eddies can also impact offshore operations and delay installation and drilling activities and reduce the effectiveness of oil spill response strategies. The purpose of this paper is to describe how weather and ocean forecasting impact production activities and pollution management in the GOM. Physical outcome and decision models in support of production and development activities and oil spill response management are presented, and the expected economic benefits that may result from the implementation of an integrated ocean observation network in the region are summarized. Improved ocean observation systems are expected to reduce the uncertainty of forecasting and to enhance the value of ocean/weather information throughout the Gulf region. The source of benefits and the size of activity from which improved ocean observation benefits may be derived are estimated for energy development and production activities and oil spill response management.     

An integrated systems framework for service vessel forecasting in the Gulf of Mexico

Throughout the world wherever oil and gas is discovered, a support industry will develop and evolve with the needs of industry and government regulation. In the Gulf of Mexico, a large variety of marine vessels transport goods and provide services to exploration, development and production activity, and play an important role in the economic and ecological impacts across communities. The spatial and temporal dynamics of the logistics network is complex and dynamic and closely related to the magnitude, duration, type, and sequence of offshore workflows and activities. The purpose of this paper is to develop a methodological framework to quantify the number of offshore supply vessel and crew boat departures by activity across the Gulf’s coastal regions in support of the oil and gas industry. The logistics network is modeled as a linear time-invariant deterministic system and implemented using an input-output model. We provide a methodological framework to quantify the magnitude and distribution of service vessel trips to forecast port activity. This is the first integrated modeling study on service vessel trips in the Gulf of Mexico and special attention is paid to the analytic framework, model assumptions, and limitations of the analysis. Generic examples illustrate the model implementation.     

Fossil fuels substitution by the solar energy utilization for the hot water production in the heating plant “Cerak” in Belgrade

The main objective of this paper is to evaluate energy and environmental benefits of the large-scale solar heating system connection with district heating system. The assessment of fossil fuels substitution by the solar energy for the hot water production for domestic use, during the summer period, is done. Hot water for district heating and domestic use is produced in heating plant “Cerak” placed in the suburb of Belgrade. The existing production and distribution system are based on fossil fuel energy, mainly on the natural gas. In the first phase of the project plan was to install about 10,000 m² of solar collectors to substitute nearly 25% of natural gas consumption. During the summer period, the saving of natural gas calculated for presented system is approximately 430,000 m³ and in this way 900 t of the CO₂ emissions would be reduced.     

Utilizing the Rock-eval pyrolysis and biomarkers parameters to characterize the organic matters of selected wells in the Central Gulf of Suez,Egypt

Organic matters from the KK 85-1and HH 83-1wells in the Central Gulf of Suez were analyzed by two well-proven organic geochemical methods: Rock-Eval pyrolysis and gas chromatography–mass spectrometry (GC–MS) analyses. These techniques were used to obtain independent parameters of organic matter composition, thermal maturity, and environment of deposition. The study reveals a close concordance between Rock-Eval pyrolysis data and biomarkers parameters such as steranes and triterpanes. Rock-Eval pyrolysis in conjunction with GC–MS analyses shows that the organic matters contain two types of kerogen (Type-II/III and Type III), which lie dominantly prior to the peak stage of the conventional oil window (end of diagensis–beginning of catagensis). The case study shows that these methods are suitable for a proper assessment of the petroleum potential of source rocks and the rapid geochemical characterization of sedimentary organic matter.     

Organic richness,hydrocarbon potentiality,maturity, and timing of petroleum generation of the Cretaceous and Miocene source rocks in the central Gulf of Suez,Egypt

Total organic carbon (TOC) and pyrolysis analysis of the Cretaceous and Miocene source rocks in the central Gulf of Suez were evaluated throughout the 25 rock samples collected from 6 formations, namely Wata, Raha, Nubia “A” (Cretaceous source rocks); and Nukhul, Zeit, and Belayim (Miocene source rocks) from Gharib-252, Gharib-153, Gharib-163, Gharib-164, Gharib-167, and Gharib-165 wells. These data are used to study the probabilities of the source rock in the Cretaceous and Miocene source rocks in the central Gulf of Suez for the hydrocarbon generation through identifying the organic richness, type of organic matters, and thermal maturation of these organic materials. The results revealed that the Cretaceous formations are immature source rocks, ranging from fair to good source rocks and have kerogen of type III and type III/II. Meanwhile, Miocene source rocks, ranging from immature to marginally mature source rocks, are considered to range from good to very good source rocks for potential generation of both oil and gas and are characterized by kerogen of type III/II and type II.     

Risk evaluation for federally listed (roseate tern,piping plover) or candidate (red knot) bird species in offshore waters: A first step for managing the potential impacts of wind facility development on the Atlantic Outer Continental Shelf

With a worldwide increase in attention toward developing a reliance on renewable energy, there is a need to evaluate the effects of these facilities (solar, wind, hydropower) on ecosystems. We conduct a hazard and risk evaluation for three species of birds that are listed, or candidates for listing, as federally threatened or endangered in the US, and that might occur offshore on the Atlantic Outer Continental Shelf (AOCS) where wind power facilities could be developed. Our objectives were to: 1) provide conceptual models for exposure for each species, and 2) examine potential exposure and hazards of roseate tern (Sterna dougallii) and piping plover (Charadrius melodus, both federally endangered in the US) and red knot (Calidris canutus rufa, candidate species) in the AOCS. We used a weight-of-evidence approach to evaluate information from a review of technical literature. We developed conceptual models to examine the relative vulnerability of each species as a function of life stage and cycle (breeding, staging, migratory, wintering). These methods are useful for conducting environmental assessments when empirical data are insufficient for a full risk assessment. We determined that 1) Roseate terns are likely to be exposed to risk during the migratory and breeding season when they occur in the AOCS, as well as while staging. 2) Piping plovers are not likely to be at risk during the breeding season, but may be at risk during spring or fall migrations. Risk to this species is likely to be low from turbines located far from land as this species migrates mainly along the coast. 3) Red knots are potentially exposed to some risk during migration, especially long-distance migrants whose migratory routes take them over the AOCS. More information is required on exact spatio-temporal migration routes, flight altitudes (especially during ascent and descent), and behavioral avoidance of turbines by birds to ascertain their risk.     

The energy crisis and its impact on the stability of the demand for factors of production

This paper addresses the question of the stability of the demand for the factors of production at the aggregate level for United States manufacturing over the period 1947 through 1976. The results are conclusive. The demand for capital and labor have remained virtually constant over the period of investigation while the relative importance of the factors affecting the demand for energy has changed in a statistically significant fashion.     

The impact of Production Tax Credits on the profitable production of electricity from wind in the U.S.

A spatial financial model using wind data derived from assimilated meteorological condition was developed to investigate the profitability and competitiveness of onshore wind power in the contiguous U.S. It considers not only the resulting estimated capacity factors for hypothetical wind farms but also the geographically differentiated costs of local grid connection. The levelized cost of wind-generated electricity for the contiguous U.S. is evaluated assuming subsidy levels from the Production Tax Credit (PTC) varying from 0 to 4 ¢/kWh under three cost scenarios: a reference case, a high cost case, and a low cost case. The analysis indicates that in the reference scenario, current PTC subsidies of 2.1 ¢/kWh are at a critical level in determining the competitiveness of wind-generated electricity compared to conventional power generation in local power market. Results from this study suggest that the potential for profitable wind power with the current PTC subsidy amounts to more than seven times existing demand for electricity in the entire U.S. Understanding the challenges involved in scaling up wind energy requires further study of the external costs associated with improvement of the backbone transmission network and integration into the power grid of the variable electricity generated from wind.     

Hydrogen rich gas production by the autothermal reforming of biodiesel (FAME) for utilization in the solid-oxide fuel cells: A thermodynamic analysis

The thermodynamics of the autothermal reforming (ATR) of biodiesel (FAME) for production of hydrogen is simulated and evaluated using Gibbs free minimization method. Simulations are performed with water-biodiesel molar feed ratios (WBFR) between 3 and 12, and oxygen-biodiesel molar feed ratio (O_XBFR) from 0 to 4.8 at reaction temperature between 300 and 800 °C at 1 atm. Yields of H₂ and CO are calculated as functions of WBFR, O_XBFR and temperature at 1 atm. Hydrogen rich gas can be produced by the ATR of biodiesel for utilization in solid-oxide fuel cells (SOFCs). The best operating conditions for the ATR reformer are WBFR≥9 and O_XBFR = 4.8 at 800 °C by optimization of the operating parameters. Yields of hydrogen and carbon monoxide are 68.80% and 91.66% with 54.14% and 39.2% selectivities respectively at the above conditions. The hydrogen yield from biodiesel is higher than from unmodified oils i.e., transesterification increases hydrogen yield. Increase in saturation of the esters, results in increase in methane selectivity, while an increase in unsaturation results in a decrease in methane selectivity. Increase in degree of both saturation and unsaturation of esters, increases coke selectivity. Similarly an increase in the linoleic content of esters, increases coke selectivity.