Skip to comments.Two-thirds of oil and gas leases in Gulf inactive
Posted on 03/29/2011 11:25:31 AM PDT by safetysign
An Interior Department report to be released Tuesday says more than two-thirds of offshore oil and gas leases in the Gulf of Mexico are sitting idle.
According to the report, obtained by The Associated Press, those inactive swaths of the Gulf could potentially hold more than 11 billion barrels of oil and 50 trillion cubic feet of natural gas. The report also shows that 45 percent of all onshore oil and gas leases are inactive.
(Excerpt) Read more at news.yahoo.com ...
Top Ten Ways Govt is Preventing Federal Onshore U.S. Production
Explaining Exploration and Production Timelines (Offshore)
A lease is only a rental agreement with no guarantee that the leased area contains any oil or The time line from lease to production in the OCS can vary from four to ten years depending on water depth at the lease location, the drilling depth needed to reach the target reservoir, the distance from shore and from infrastructure, the geological characteristics of the reservoir and complexity of production facilities design. Capital costs can be considerable for OCS projects, particularly those in deepwater. Marine seismic surveys can cost upwards of $200,000 per day.
The cost of offshore exploratory wells can range from $25 million to more than $100 million for some deepwater prospects. It is not unusual for a company to spend more than $100 million on an exploratory well only to come up empty with a dry hole. If a company actually finds commercial quantities of oil or natural gas, the subsequent design and installation of the deepwater production facilities may cost in excess of $1 billion to design and install.natural gas. In fact, most leased areas do not contain oil and gas in commercial quantities.
In this context, the timeline for OCS exploration and production can include:
Six months to a year for MMS administration and execution of lease sales in unleased areas.
One year for preliminary geological investigation and selection of areas of interest for additional seismic data acquisition.
One year to two years to acquire and to process 3D (and new wide azimuth) seismic data, and to identify drillable prospects from this data.
As much as a year or more to contract and schedule a drilling rig.
Six to 10 months for drilling and completion of an exploratory well.
Six months to a year for follow up evaluation of drilling results, which can include drilling a sidetrack well.
Another two to three years for additional delineation drilling, and formulation of a plan for reservoir development if the exploratory well proves successful. During this time, the company also is working on pre-permit studies, permitting, and design and procurement for production facilities, including surface and subsurface equipment and systems,
One year or more for facilities installation, followed by development drilling, which may take from one to two additional years. During this period, the company is involved in design, permitting, engineering, procurement and installation of a pipeline or offshore mooring system to bring the production to market.
One recent example is Anadarkos Independence Hub, a natural gas facility located in 8,000 ft of water about 120 miles from Mississippi. The lease was purchased in the Sale 181 area in December 2001. The first exploratory well was drilled in 2003, with first production seen in mid-2007.
Why are they inactive?
Story doesn’t say.
Seems like if there was money to be made, they’d be active.
According to the report, obtained by The Associated Press, those inactive swaths of the Gulf could potentially hold more than 11 billion barrels of oil and 50 trillion cubic feet of natural gas.
Or potentially they hold nothing. In the richest of areas around the world, which those are not, 2 of every 3 holes (and each hole costs millions of dollars) drilled produce nothing at all.
The companies didn’t drill because their seismology analysis said the odds of success were poor. This is true in more and more places around the world.
The leases are inactive because Osama Obama BANNED offshore drilling a YEAR ago! The ban is STILL in place.
The list, ping
Let me know if you would like to be on or off the ping list
Probably because Obama banned drilling.
And even if they could drill, they will be slow to do so because of the power of the Federal Gov't which could crashing down on their head at the slightest "misstep".
So the question now becomes, how long have they been idle? Is it directly related to the Obama administration’s policies or were they idle before he was inaugurated?
It would be nice if the report would actually explain whey they are inactive.
Why are they inactive?
How long have they been inactive?
Where they ever active?
Is so, when, how long and how much did they produce ?
Why did they stop being active?
Great reporting there.
Really? The posted story does not say that.
Do you have a cite for why these leases are inactive?
No, that would be TMI.
Can’t have that
Reporting all facts would be too close to blaming Obama.
http://www.freerepublic.com/focus/f-news/2687990/posts (US clears more deepwater oil drilling in Gulf (2nd permit in 2 weeks))
http://www.freerepublic.com/focus/f-news/2681457/posts (Interior issues first deepwater drilling permit since BP spill ) (posted end of Feb 2011, nearly a year after Macondo blowout)
Remember, all deepwater permits were revoked after the blowout. That one is still being fought in court, with the feds (Obama, Salazar) just winning an appeals court battle. Normally hundreds of permits would have been issued.
http://www.freerepublic.com/focus/f-news/2689317/posts (Appeals court issues a stay on drilling ruling)
Most AP reporters are ignorant, with memories of fleas. The intelligent ones have an agenda. And not a good agenda, either.
We *are* permitting Petrobras to drill however:
http://www.freerepublic.com/focus/f-news/2693388/posts (Petrobras gets permit for U.S. deep waters)
Because we need to *import* our own oil, from Brazil apparently.
How many of these inactive leases are deep water?
From what I’ve heard in the industry, most of them. That actual number would have to be a government one though. Doubt you’ll see it printed anywhere unless they want you to see it.
Lots of unemployed former oil workers around these parts though. Their rigs are going to/have gone to Brazil and Venezuela. These rigs were running this time last year. Now, not so much with the working and running. Here, at least.
Most of them are deep water? That doesn’t seem right.
I guess I’ll go digging for myself
Yes. I am in the oil and gas INDUSTRY! The so-called “moratorium” was lifted, BUT THEY STILL ARE NOT ISSUING DRILLING PERMITS! The OFFSHORE BAN lives on. Now we have a “Permitatorium”!
Last week, the Interior Department approved the first deep-water drilling permit since a five-month moratorium on the practice was lifted in October. But the oil and gas industry says the process must move faster or more rigs will leave, jobs will be lost and U.S. offshore oil production will decline.
Now shut up, get back to work and pay your taxes serf!
That is the goal!
Seems to me the vagueness is being used here at FR to promote the “Obama is stopping all drilling” meme.
I’m sure the vagueness is being used elsewhere to promote the Big Oil is lazy and greedy” meme.
I don’t see much evidence of either one
But you are aware that bans have been put in place. So, 1 + 1=. 2
Or we can just give the rights over to Brazil instead...after all soros has big stakes in the Brazilian co that will be drilling in OUR gulf.
Are the bans related to the ‘inactive’ leases in the story?
No one will answer this, and the story craftily doesn’t say either.
That says a lot to me.
But I guess we have an Idiot-In-Chief in the White House...