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Sumit Dutta Successfully Combining Two North Sea Oil Businesses
At the Growth Summit for Junior Oil and Gas, Tom Reynolds, Commercial Director, Bridge Energy ASA, describes how to successfully combine North Sea oil businesses to create a stronger player in the E&P market.
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Sumit Dutta Plant Reliability and Maintenance
In the continuing difficult economic times, plant reliability is essential to ensure strong oil and gas production levels and prevent unplanned maintenance work.
Plant reliability also has its part to play in ensuring minimal damage to the environment is caused as a result of oil and gas operations. Reliability and safety go hand-in-hand, making sure that major incidents with the potential to affect the workforce and wider community occur as infrequently as possible. Poor plant reliability also causes uncertainty among both investors and customers, ultimately impacting on the bottom line.
Speaking at an industry event in 2009, Sherman J Glass Jnr, president of Exxon Mobil refining and supply company, said: "We know that regardless of economic conditions we must continue to improve the safety and the reliability of operations, increase the efficiency of plants and steadily improve shareholder returns as well as invest in new technologies." In many cases, the technical issues that lead to unplanned maintenance work are both costly and unavoidable. Understanding why these occur and when they are most likely to happen helps boost plant reliability.
High Priority
Sherman J Glass Jnr, president of Exxon Mobil refining and supply company, highlighted that risk assessments played an essential role in ensuring plant reliability. "We have learned that while we operate in the start-up and shutdown mode less than 5 percent of the time, almost...

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Sumit Dutta Queensland Coal Seam Gas Industry Booming
The coal seam gas (CSG) industry in Queensland is booming. Government figures show that record levels of investment were placed in the state's mining and petroleum industries in 2009/2010.
Mines and energy minister Stephen Robertson said that figures from the Australian Bureau of Statistics show AU$917.1 million (£550 million) was invested in exploration during the 12-month period, an increase of 43 percent on 2008/2009 figures.
Robertson said the increased investment highlighted the continuing attraction of Queensland as a destination for exploration.
"This represents 60 percent of total Australian onshore petroleum expenditure and clearly reflects the intense exploration activity in the search for coal seam gas.
"It's also interesting to note Queensland's mineral exploration expenditure was greater than the combined total AU$402 million invested in New South Wales, South Australia, Victoria and Tasmania," he said.
The continued application of the Petroleum Resource Rent Tax has also helped ensure that the Liquefied Natural Gas (LNG) industry in Australia remains competitive with the rest of the world.
Growth for Pipeline Industry
The impact of this boom will also have a knock-on effect on the pipeline industry in Australia.
Cheryl Cartwright, chief executive of the Australian Pipeline Industry Association, said at the industry's annual conference in Darwin that the construction of high-pressure pipelines for the transportation of CSG and LNG will be a huge driver behind growth in the sector.
Cartwright predicted that in the next ten years it is possible AU$10 billion could be spent on the high-pressure pipeline infrastructure, adding that it is essential the development of the CSG industry is not delayed.
"It is important for Australia that this CSG industry growth is not delayed, and our industry is keen to work with governments—state and federal—to ensure progress of such CSG development," she said.
She added that it is "critical" the country invests in the necessary infrastructure so that natural gas can be used to support renewable energy supplies.
The development of natural gas resources in the country is also likely to help contribute to Australia's carbon reduction targets, Cartwright highlighted. The country is aiming to reduce its emissions by 60 percent on 2000 levels by the year 2050.
Environmental Concerns
Despite the possibility that the development of CSG could contribute to a reduction in carbon emissions in Australia, green groups have expressed concerns about the development of such projects.
Drew Hutton, from Friends of the Earth, called for all CSG projects to be halted in Queensland until further environmental assessments are carried out, ABC reported.
"We're saying call a halt to the whole thing, all of the companies, no further infrastructure until they've got the proper assessments made," he said.
Hutton's concerns centre around the effect of CSG on groundwater supplies.
The Queensland government set up an online system for monitoring groundwater supplies in the Surat and Bowen basins, which measures traditional levels of water and salinity in the region.
Stephen Robertson, minister for natural resources, mines and energy, said that it is going to increase monitoring of the CSG industry.
"The department will sample approximately 300 bores in 2011 and 2012 to further monitor the accuracy of information provided by coal seam gas operators," he added.
The Australian Petroleum Production & Exploration Association (APPEA) said that it supports the move by the Queensland government but added that it believes "adverse impacts from CSG activities upon groundwater are very unlikely and manageable."
Belinda Robinson, chief executive of the APPEA, added: "The publishing of this data demonstrates the industry's commitment to respond to landholder concerns and the industry expects the availability of this data will improve the community's acceptance of our operations."
Sumit Dutta How the Sun Will Shine for the Oil Industry : The Emergence of Solar Enhanced Oil Recovery
The oil and gas industry has been injecting steam into oil reservoirs for decades. Steam enhanced oil recovery (EOR) is both an accepted and effective method of increasing production from heavy oil resources and tight formations. While the simple premise of steam injection to increase the reservoir temperature and pressure hasn’t changed significantly over time, the method and source of generating steam has. With the advent of robust cost-effective solar steam equipment, steam generation is set for a further evolution—one that removes industry reliance on volatile fuel costs and replaces it with a free and abundant resource: the sun’s thermal energy.
Heavy oil operators seeking to expand steam generation without the costs of gas or other fuels are already moving into this space. ARCO pioneered solar steam generation with a pilot solar tower in the 1980s. Shell has recently sanctioned a project to produce steam for EOR via a parabolic trough system in Oman, and Chevron is building a California solar tower steam project. Although these systems have proven technical feasibility, the high capital costs of existing trough and tower collectors have limited the deployment of solar EOR.
But now for the first time, with the recently developed solar collector system, for example the one developed by GlassPoint, field engineers can develop resources knowing they have fixed-price steam below market prices for the lifetime of the field. Solar EOR can produce steam at roughly half the cost per barrel of steam produced by burning natural gas.
What this means for the future of steam EOR is nothing short of revolutionary. For heavy oil operations in California, Texas, North Africa, the Middle East and other sunny areas, solar generated steam can now supplement, and in some cases completely displace, steam generated from natural gas (see figure 1)...
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Sumit Dutta What is your FCPA Investigation Protocol? Report by Thomas Fox
What is your FCPA Investigation Protocol?
September 18, 2010 – 11:57 am
Speaking at the IQPC 2010 Internal and Regulatory Investigations in Oil and Gas Conference, Dominic Sheils, Compliance Counsel for John Wood Group PLC, and James W. Noe, Senior Vice President, General Counsel and Compliance Officer for Hercules Offshore, Inc., discussed two different approaches to internal investigation protocols and how these different approaches work for their respective companies. The presentations of Sheils and Noe highlighted the different approaches taken by many companies in the United States and abroad when dealing with the issue of whether to have a written procedure outlining the steps to be taken when a claim which may constitute a bribery or corruption is reported to the company.
Compliance Counsel Dominic Sheils indicated that the John Wood Group has a detailed written procedure for handling any such complaint or allegation of bribery or corruption, regardless of the means through which it is communicated. The mechanism could include the internal company hot-line, anonymous tips, or a report directly from the business unit involved. In the John Wood Group the decision on whether or not to investigate is made by the internal Compliance Department, with possible consultation with the Audit Committee of the Board of Directors. The head of the business unit in which the claim arose is notified that such an allegation has been made and that the Compliance Department will be handling the matter on a go-forward basis.
The John Wood Group uses this detailed written procedure to ensure there is complete transparency on the rights and obligations of all parties once an allegation is made. This allows the Compliance Department to have not only the flexibility but also the responsibility to deal with such matters. The Compliance Department believes that this mandated responsibility gives it the role in which it can best assess and then make a decision on how to manage the matter.
The previous approach is contrasted by that of Hercules Offshore, Inc. General Counsel James Noe stated that Hercules has no written protocol for the handling of investigations of allegations of corruption or bribery. He initially noted that he, as General Counsel, makes the final decision on whether a matter is to be investigated. He believes that it is important for the General Counsel to maintain maximum flexibility to deal with the issues involved around any such allegations.
Mr. Noe stated that each investigation depends on the underlying facts presented. He is concerned that if there is a written protocol mandating the procedure it might impinge on the flexibility of the company to proceed. He used the phrase “Sometimes small streams can become big rivers”, indicating that when a matter is thoroughly investigated flexibility is required. Additionally, at Hercules, there is no set person(s) or personnel who are required to be notified when bribery and corruption allegations are put forward. The scope of the decision on to whom and how to make the notification can be influenced by a myriad of factors including statutorily mandated reporting requirements of US public companies, so no one protocol can respond to every scenario.
Both John Wood Group and Hercules Offshore, Inc. have robust Foreign Corrupt Practices Act (FCPA) compliance and ethics programs. Their respective compliance programs differ on the mechanism by which the decisions on investigation protocols and notification are to be made, after an allegation of bribery and corruption comes forward. However both these company’s have made their approaches work for them.
To see a video of their presentation, click here: http://bit.ly/90PFcS
This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.
© Thomas R. Fox, 2010

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