Four wastewater wells tied to Oklahoma quake surge, study says

Four wastewater wells used in oil and natural gas drilling may be responsible for triggering 20% of all earthquakes in the central and eastern U.S. from 2008 to 2013, according to a study published in the journal Science.

The wells are used to dispose of high volumes of wastewater released from underground rocks when they are fractured using modern oil-drilling techniques. The four wells are likely responsible for a dramatic rise in earthquakes near Oklahoma City since 2009, according to the research.

Oklahoma has had more earthquakes than California so far this year, making it the most seismically active state in the continental U.S. and raising suspicions that drilling activity is influencing a surge in temblors there. The state had 238 earthquakes with a magnitude 3.0 or greater through June, more than double the number in California, which has historically ranked second in earthquakes behind Alaska.

Scientists studied wastewater-injection volumes, geologic information and data from earthquake sensors to show that fluids pumped into the wells increased underground pressures and spread them. The area of elevated underground pressure grew in a way that overlapped with a “migrating front” of earthquakes centered near Oklahoma City.

The data showed that water pumped into wastewater wells can increase and affect underground pressures as far away as 35 km (22 miles), potentially triggering earthquakes at faults that would have previously been considered too distant.

Researchers from Cornell University, University of Colorado, Columbia University, and the U.S. Geological Survey collaborated on the study.

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Aubrey McClendon acquires stake in Oklahoma shale pipeline

Aubrey McClendon, the U.S. shale wildcatter who’s raised $10 billion in capital since getting fired from Chesapeake Energy Corp. last year, acquired a stake in an Oklahoma pipeline project.

An affiliate of McClendon’s American Energy Partners LP contributed natural gas lines in exchange for a minority interest in Tall Oak Midstream LLC’s planned 250-mi pipeline and processing network, Oklahoma City-based Tall Oak said in a Business Wire statement today, June 25.

McClendon’s company also dedicated drilling prospects spread throughout six Oklahoma counties to the new network, according to the statement. Casey Nikoloric, a Tall Oak spokeswoman with the public-relations firm Ten 10 Group, said the size of the acreage commitment wasn’t disclosed.

American Energy, also based in Oklahoma City, has an option to increase its stake to as much as 50%. McClendon announced plans on June 18 to expand his growing shale empire into the pipeline business, with backing from buyout firm The Energy & Minerals Group.

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MedcoEnergi buys oil and gas blocks in Tunisia

Medco Tunisia Petroleum, has entered into an agreement, effective 1 January 2014, to acquire 100% of the shares of Storm Ventures International from Storm Ventures International “Seller” for a base purchase price of $ 114.03 million, excluding an amount payable forworking capital (which is subject to a customary post-closing adjustment). The Seller is a subsidiary of Chinook Energy, which is listed on the Toronto Stock Exchange. SVI (together with its subsidiaries) is one of the leading active exploration and production companies in Tunisia, with a participating interest in eight working areas.

SVI’s interest in Tunisia comprises four exploration areas, two development areas and two production areas with concession periods of either 30 or 50 years. Out of these eight areas, five are located onshore and three are offshore. All of SVI’s blocks are located in prolific hydrocarbon areas. Five onshore blocks (Adam, Sud Remada,Bir Ben Tartar, Jenein and Borj El Khadra) are located in the Ghadames Basin, while the remaining three offshore blocks (Cosmos, Hammamet and Yasmin) are located in the Pelagian Basin off the northeast coast of Tunisia.
The completion of this acquisition is conditional upon, amongst other things, approval from the Government of Tunisia and the consent of certain existing partners in the blocks. Upon completion of the acquisition, MedcoEnergi anticipates adding 2P reserves and oil-and-gas production (net working interest before royalties, taxes and Government take) by 12.3 MMboe and 2,800 Boepd, respectively.

Production is envisaged to increase to approximately 16,000 Boepd from in fill well drilling of the existing producing block (Bir Ben Tartar) and the development of the Cosmos and Yasmin blocks (scheduled for completion in 2018) is expected to add a further 12.6 MMboe of 2P reserves.

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Keystone foes urge top Nebraska court to void pipeline path

Nebraska landowners opposed to the proposed $5.4 billion Keystone XL pipeline urged the state’s highest court to uphold a judge’s ruling invalidating the route mapped by Governor Dave Heineman and TransCanada Corp.

The property owners urged the state Supreme Court to uphold a February ruling effectively blocking the pipeline. Judge Stephanie Stacy in Lincoln declared TransCanada a common carrier like a railroad. As such, a 2012 law giving the governor control over the path violated a part of the state constitution vesting power in the Public Service Commission.

TransCanada “offers pipeline structures for transportation services, like taxis offer rides to passengers for a fee, and truckers offer cartage for dollars per mile,” the landowners said in a June 20 legal brief. “The currently-proposed pipeline is a structure that will transport crude oil for hire.”

TransCanada, based in Calgary, seeks to build a 1,179-mile (1,897-km) conduit capable of carrying 830,000 bopd from Hardisty, Alberta, to Steele City, Nebraska, where it would connect to an existing network.

Supporters say Keystone will create jobs and promote energy independence. Opponents say petroleum derived from Alberta’s oil sands will contribute to global warming.

The decision on whether to approve Keystone will fall to President Barack Obama, who may wait until the Nebraska court rules. The judges have yet to schedule arguments, and a decision may not come until after Congress’s midterm elections.

Energy East

TransCanada has said it will seek Canadian government permission to construct a different, longer, pipeline giving it a conduit to the Atlantic Ocean. That proposed 2,700-mile pipeline, called Energy East, would carry 1.1 MMbopd across six provinces to a refinery and export terminal at Saint John, New Brunswick.

Heineman, a Republican who’s leaving office on Dec. 31, and state Attorney General Jon Bruning, who sought to succeed him, argued in April that the three landowners who sued haven’t shown they’ve been injured by the plan and lack standing to sue.

Bruning last month lost the Republican Party’s gubernatorial primary to former Ameritrade Holding Corp. Vice Chairman Pete Ricketts.

David Domina, the landowners’ lawyer and a Democrat seeking a U.S. Senate seat, said his clients have been harmed.

“There is no competitor, different regulator or differently affected landowner to bring this suit,” he said in a phone interview. “The state belongs to the citizens, and they are its saving watchfulness.”

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Gulf Keystone rises most in month on Kurdistan output estimate

Gulf Keystone Petroleum Ltd., an oil producer in Iraq’s Kurdistan region, gained the most in almost a month after saying production from its key asset was proceeding as planned.

The company advanced as much as 6.3%, the most since May 15, to 85 pence in London trading and was at 82.75 pence at 11:41 a.m. local time.

Gulf Keystone expects production from Shaikan to rise to 40,000 bopd by the end of the year, Hamilton, Bermuda-based Gulf Keystone said in a statement. The shares had lost 14% this week through yesterday, June 12, amid concern violent unrest in Iraq could spread toward Kurdistan.

The company’s operations “are progressing in line with our previous guidance, whilst we remain alert to the current security situation in Iraq, which has recently escalated outside the Kurdistan region,” Todd Kozel, CEO, said in the statement.

Eight cargoes have so far been sold into the international market, it said.

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Fugro strengthens Africa presence with Geofor buy

Fugro has completed the acquisition of the Geofor Group based in Libreville (Gabon), Douala (Cameroon), Pointe Noire (Republic of Congo) and São Tomé City (São Tomé) to strengthen its presence in the Central Africa region and the French speaking African countries. In addition to its longer established offices, Geofor has significant working experience in Niger, Chad and Equatorial Guinea.

Geofor is an onshore/nearshore geotechnical company, which delivers drilling services and has highly specialized engineers and geologists in the fields of geotechnical consulting, hydrology, and land survey.

The company was established in 1989 and has over 25 years of experience working in most countries in Africa. The client base includes major oil and gas companies and key mining clients. In addition, Geofor is active in infrastructure and water supply projects.

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Suncor approves facility to test water treatment, recycling technologies

Suncor Energy and five industry partners have announced an estimated $165 million funding commitment to sanction the construction of a dedicated Water Technology Development Centre (WTDC).

The WTDC, to be located at Suncor' s Firebag facility, will be used to test water treatment and further develop recycling technologies. The goal of the WTDC is to shorten the timeframe needed to develop and commercialize new technologies, as well as significantly enhance existing technologies.

"The WTDC will help us speed up the pace of innovation, while collaboratively managing the risks and costs of technology development," said Steve Williams, Suncor president and CEO. "We expect to see strong benefits by conducting different tests simultaneously, using process fluids in real world conditions to pilot new technologies and prove their commercial viability."

The centre is being pursued as a joint industry project convened under Canada' s Oil Sands Innovation Alliance (COSIA), with testing to begin by early 2017. In addition to Suncor, the partner companies include Canadian Natural Resources Limited, Devon Canada Corporation, Nexen Energy ULC, Shell Canada Energy and Husky Oil Operations Limited.

Knowledge

"Moving forward on the WTDC is a demonstration of the tangible progress that COSIA is making by bringing companies together to share knowledge and advance innovation," says Dan Wicklum, chief executive of COSIA. "The research and testing conducted at the WTDC will allow participating companies to test drive more technologies than could be evaluated by each company alone. This helps to deliver our vision of accelerated environmental performance improvement in Canada' s oil sands."

The structure of the joint industry project will see Suncor construct, own and operate the WTDC while collaborating with the other partners on design, construction and operations -- including specific tests. As a dedicated test facility, the WTDC is expected to overcome the barriers that are common to field testing at commercial production facilities, which are not typically designed to accommodate simultaneous testing of water treatment technologies.

Testing priorities will include minimizing fresh water use and maximizing reliability for steam assisted gravity drainage production. The facility is expected to provide industry with the opportunity to develop new ways of approaching water treatment and recycling, resulting in positive environmental, social and economic outcomes.

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Planned LNG import terminal for Indonesia: GDF SUEZ continues its international development of gas infrastructures

GDF SUEZ has recently signed a new cooperation agreement protocol with Perusahaan Gas Negara (PGN), the principal Indonesian operator in the field of natural gas distribution and transportation. The agreement relates to a feasibility study for an onshore LNG terminal in northern Java. This agreement is the result of a collaboration between the Energy International business line and the Infrastructures Branch.
 
On signing the agreement, Jean-Claude Depail, EVP, in charge of Infrastructures business line for GDF SUEZ, declared that "This new agreement represents a significant milestone in developing gas infrastructure projects in Indonesia as part of a long-term strategic partnership with PGN. This partnership is an important new example of the Group' s development strategy for international gas infrastructures that will facilitate access to energy supplies for countries experiencing rapid growth."
 
Experience acquired by the GDF SUEZ Group in managing gas infrastructures has been the foundation for such cooperation agreements. PGN will benefit from technical assistance from the different units of the GDF SUEZ Infrastructures business line, particularly in terms of optimising network operations and maintenance and facilitating the commissioning of the new LNG terminal.

The current agreement follows a prior agreement signed in February 2014, which also includes plans for cooperation in training PGN employees in the field of gas technologies, both in France and Indonesia.

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Gazprom Neft inks drilling, fracturing agreement with C.A.T. oil AG

C.A.T. oil AG, a provider of oil and gas field services in Russia and Kazakhstan, signed a framework agreement with Gazprom Neft on drilling and hydraulic fracturing services on June 17, 2014.

The agreement guarantees full utilization of four new drilling rigs and one new fracturing fleet until the end of 2016 and foresees conclusion of respective service agreements between the operating subsidiaries of Gazprom Neft and C.A.T. oil.

The new drilling and fracturing capacities will be successively deployed in the field from September to December 2014 and are part of C.A.T. oil’s growth strategy.
 
In November 2013, C.A.T. oil announced its 2014-16 investment program of EUR 390 million aiming at expansion of its operating capacities by around 33% for fracturing, 55% for sidetracking and 170% for drilling by the end of 2016 as compared to the end of 2013

For 2014, C.A.T. oil has ordered six drilling rigs, four sidetracking rigs and one fracturing fleet. Execution of the program and manufacturing of the ordered new capacities are fully on schedule.

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U.S. crude exports in April rise to highest level in 15 years, says EIA

The U.S. exported 268,000 bpd of crude oil in April (the latest data available from the U.S. Census Bureau), the highest level of exports in 15 years, reported the U.S. Energy Information Administration. Exports have increased sharply since the start of 2013, and have exceeded 200,000 bpd in five of the past six months. The increase in crude exports is largely the result of rising U.S. crude production, which was 8.2 million bpd in March.

To export crude oil from the U.S., a company must obtain a license from the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce. Under export licensing requirements, the following kinds of transactions will generally be approved:

Exports from Alaska' s Cook Inlet
Exports to Canada for consumption or use therein
Exports in connection with the refining or exchange of strategic petroleum reserve oil
Exports that are consistent with international energy supply agreements
Exports of foreign-origin crude
Exports of California heavy crude up to an average of 25,000 bpd
Temporary exports or exchanges

Licenses for other exports of U.S.-origin crude are considered on a case-by-case basis. For such other exports, the regulations describe the characteristics of transactions that will generally be approved as in the national interest.

Almost all of the crude oil exported from the U.S. has been delivered to Canada, and most of the recent increase in crude oil exports has been from the U.S. Gulf Coast (PADD 3). Gulf Coast crude exports averaged 134,000 bpd in first-quarter 2014, a 283% increase over 2013' s record high of 35,000 bpd. In first-quarter 2014, nearly 75% of Gulf Coast exports have left the region from the Houston-Galveston district, in Texas. The remaining barrels were loaded in Port Arthur, Texas, and New Orleans, La.

Exports from the East Coast (PADD 1) averaged 30,000 bpd in first-quarter 2014, down slightly from 2013 levels, but up from 9,000 bpd in 2012. First-quarter exports from PADD 1 were evenly distributed between the Port of New York and Portland, Maine, which is the starting point of a pipeline that delivers crude to refineries in the Montreal area. Exports of crude from the Midwest (PADD 2) have long been a source of crude for refineries in Sarnia, Ontario.

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