Posts Tagged ‘Marvin Odum’

JANUARY 12, 2012

HOUSTON (Dow Jones)–Royal Dutch Shell (RDSA, RDSA.LN) is confident it will be able to drill for oil and natural gas in Alaska’s arctic region this summer as it hopes to overcome its remaining legal challenges.

“We still have a few not insignificant hurdles to get past, but it looks that we will be drilling,” Marvin Odum, president of Shell Oil Co., the U.S. unit of the Anglo-Dutch giant, said in prepared remarks delivered at a conference in Houston.

Shell recently received various federal environmental permits to drill in Alaska’s Chukchi and Beaufort Seas, but environmental groups have filed lawsuits challenging those approvals.

-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; isabel.ordonez@dowjones.com

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By JONATHAN FAHEY, AP Energy Writer: 30 December 2011

ALAMINOS CANYON BLOCK 857, GULF OF MEXICO (AP) — Two hundred miles off the coast of Texas, ribbons of pipe are reaching for oil and natural gas deeper below the ocean’s surface than ever before.

These pipes, which run nearly two miles deep, are connected to a floating Shell platform that is so remote they named it Perdido, which means “lost” in Spanish. What attracted Shell to this location is a geologic formation found throughout the Gulf of Mexico that may contain enough oil to satisfy U.S. demand for two years.

While Perdido is isolated, it isn’t alone. Across the Gulf, energy companies are probing dozens of new deepwater fields thanks to high oil prices and technological advances that finally make it possible to tap them.

The newfound oil will not do much to lower global oil prices. But together with increased production from onshore U.S. fields and slowing domestic demand for gasoline, it could help reduce U.S. oil imports by more than half over the next decade.

Eighteen months ago, such a flurry of activity in the Gulf seemed unlikely. The Obama administration halted drilling and stopped issuing new permits after the explosion of a BP well killed 11 workers and caused the largest oil spill in U.S. history.

But the drilling moratorium was eventually lifted and the Obama administration issued the first new drilling permit in March. Now the Gulf is humming again and oil executives describe it as the world’s best place to drill.

“In the short term and the medium term, it’s clearly the Gulf of Mexico,” says Matthais Bichsel, a Royal Dutch Shell PLC board member who is in charge of all of the company’s new projects and technology.

By early 2012 there will be more rigs in the Gulf designed to drill in its “deep water” — defined as 2,000 feet or deeper — than before the spill.

In November, Perdido began pumping oil from a field called Tobago; the well begins 9,627 feet below the surface of the Gulf. No other well on the globe produces oil in deeper water and that’s about as deep as the Gulf gets. For drillers, that means the entire Gulf is now within reach.

“We are at the point where … depth is not the primary issue anymore,” says Marvin Odum, the head of Royal Dutch Shell’s drilling unit in the Americas. “I do not worry that there is something in the Gulf that we cannot develop … if we can find it.”

From a distance, Perdido looks like an erector set perched on an aluminum can. This can, or “spar,” is a 500-foot-tall steel cylinder that sits mostly underwater, serving as a base for the equipment and living quarters above. It is stuffed with iron ore to lower its center of gravity, keeping the whole operation from bobbing in the water like a cork. The spar is tethered to the sea floor 8,000 feet below with ropes and chains.

Oil and natural gas are pumped to Perdido from nearby wells drilled by an onboard rig and from faraway wells drilled by satellite rigs. Water and other impurities are then removed from the oil and gas, which gets sent hundreds of miles through an undersea pipeline to terminals and refineries along the Gulf coast.

Perdido, which pumps the equivalent of 60,000 barrels of oil and natural gas a day, will eventually yield 100,000 barrels per day from 35 wells in a 30-mile radius, according to Shell. It will likely produce oil for decades — in all, as much as 360 million barrels of oil and 750 billion cubic feet of natural gas, according to Wood Mackenzie.

As global oil demand climbs past 89 million barrels a day and traditional onshore and shallow water fields are depleted, the deep waters of the Gulf and off the coasts of South America, West Africa and Australia are playing an increasingly important role.

In 2000, 1.5 million barrels of oil per day were produced from deepwater fields around the globe, or 2 percent of global production. In 2011, that number grew to 5.5 million barrels, or 6 percent of global production. By 2020, deepwater oil will account for 9 percent, according to IHS CERA.

The Gulf is attractive for many reasons. Its oil fields are enormous; it straddles the world’s biggest consumer of oil; it’s in a politically stable part of the world; and drillers can easily tap into a vast network of pipelines and refineries. Also, despite industry complaints, the cost of royalties, taxes and regulation in the U.S. are among the lowest in the world.

“Everybody wants to be there,” says Mohammad Rahman, the lead Gulf analyst for Wood Mackenzie.

By early 2012, there will be 40 deepwater rigs in the Gulf, up from 37 before the BP spill, according to Cinnamon Odell of ODS-Petrodata. BP received its first permit to drill in late October.

The Gulf produces an average of 1.5 million barrels of oil per day, according to Wood Mackenzie. That’s 27 percent of U.S. output and 8 percent of U.S. demand.

Thanks to more accurate imaging technologies, drillers are able to see under geologic formations that used to confound geologists. In June, ExxonMobil Corp. said it found 700 million barrels of oil — one of the biggest discoveries in the Gulf in last decade. In September, Chevron and BP also announced major finds, thought to be in the hundreds of millions of barrels of oil.

Many of the Gulf’s recent discoveries are in a geologic formation known as the Lower Tertiary, formed between 23 million and 65 million years ago. Perdido, which is operated by Shell and owned jointly by Shell, Chevron and BP, is the first to produce oil from this formation. Analysts say it could hold 15 billion barrels of oil.

As the BP disaster made clear, drilling in deep water presents difficulties and dangers. Last month a Chevron well in the deep waters off of Brazil ruptured and spilled 2,400 barrels of oil into the Atlantic after Chevron underestimated the pressure of the oil field it was tapping.

Perdido only recently reached its monthly production target after a year of operation because of difficulties getting oil and gas from the seabed to the platform. New devices designed to separate oil and gas on the sea floor have not performed as well as Shell hoped. It has taken months of adjustments made by underwater robots and other equipment on the platform to fix the problems.

Challenges like this have helped push the average cost of producing oil in the deepwater Gulf to $60 a barrel, according to IHS CERA, near the highest level ever. But with oil close to $100 a barrel, the expense is well worth it.

After all 35 wells are drilled for Perdido, its owners will likely have spent $6.2 billion on the project, according to Wood Mackenzie. But along with the risks, the Gulf offers great rewards: Perdido could ultimately generate $39 billion in revenue and $16 billion in profits.

Jonathan Fahey can be reached at http://www.facebook.com/Fahey.Jonathan .

Copyright © 2011 The Associated Press. All rights reserved.

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Oct 31 (Reuters) – Royal Dutch Shell (RDSa.L) is “very interested” in onshore U.S. shale oil, but the company is focusing on less developed plays to bypass the pricey competitive rush for more established acreage, the head of Shell’s Americas operations said on Monday.

Marvin Odum told Reuters in an interview that oil majors likely will move into shale oil plays faster than they did during the natural gas shale boom.

He also said he expected the Keystone XL Canada-to-Texas pipeline to be approved despite opposition and that Shell’s joint-venture Motiva Enterprises’ refinery in Port Arthur will be well positioned to process heavy Canadian crude transported in the line.

(Reporting by Kristen Hays)

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Christine Dobby Oct 24, 2011 – 5:41 PM ET

TORONTO — The U.S. government is likely to approve the Keystone XL pipeline in part because of the economic benefits that would come along with the controversial US$7-billion project, the head of Royal Dutch Shell’s North American operations, predicted Monday.

In fact, the economic benefits attendant on the energy industries in North America in general are even more important than energy independence, Marvin Odum, president of Shell Oil Co. and upstream director of Royal Dutch Shell’s subsidiary company in the Americas, said at a Toronto conference.

“As you get a real balance of environmental concerns with pipeline safety concerns, with energy security, with the creation of jobs and with the improvement in the economy as a whole, I think a decision will be made to proceed with that pipeline,” Mr. Odum said. “It actually feels pretty obvious to me that will be the decision so that’s my expectation of the government.”

The United States is expected to make a decision on the fate of the TransCanada pipeline, which will transport heavy oil from the Alberta oil sands to refineries on the U.S. Gulf Coast and already has regulatory approval in Canada, by the end of the year.
“From the oil sands perspective, the Keystone XL pipeline is an extremely important part of developing that resource and will be a critical supply artery to the U.S.,” said the executive, who was the keynote speaker at the lunch session of the fifth annual Toronto Forum for Global Cities conference hosted by the International Economic Forum of the Americas.

Anglo-Dutch Shell is one of Canada’s biggest oil sands developers as a 60% partner in the giant Athabasca Oil Sands Project in Alberta.

On the subject of energy security or independence, Mr. Odum said it’s an “interesting goal” but not one he sees as a “primary driver.”

“As I look across North America… the supply potential is enormous and it’s changed dramatically over the last four or five years,” he said, pointing to the development of natural gas plays and the oil sands as well as other resources in Mexico and Alaska.

“So with all of that within reach of North Americans, it could clearly drive us toward the direction of energy independence, but I think the bigger driver in the near term is the economic benefit that comes from that, the number of jobs that come from that,” Mr. Odum said.

He said the United States should consider connections with friendly trade partners like Canada and Mexico as well as a number of South American countries as part of the idea of energy independence more broadly.

Mr. Odum also addressed the controversy over hydraulic fracturing or “fracking” used to extract natural gas from shale reservoirs and said companies can address this through transparency in what they’re doing.

“This is a case where the arguments have gotten away from businesses and industry,” he said. “It actually never should have been a big issue. These are relatively small components in the fracture treating fluids that we put in the ground.”

He noted that all of the components of the fracturing fluid Shell uses are listed on its website, although for proprietary reasons, the specific percentages are not disclosed.

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A rig and supply vessel at work in the Gulf off the coast of Louisiana. Associated Press

By RUSSELL GOLD

The Gulf of Mexico has staged a comeback as a source of oil for big energy companies, little more than a year after the Obama administration largely shut down drilling in the wake of the largest offshore oil spill in U.S. history.

The burst of activity comes as the government prepares to toughen its oversight of offshore drilling. On Wednesday, federal regulators probing the Deepwater Horizon disaster issued a report that recommended numerous changes.

Drilling has returned to near-normal levels in the Gulf. There are 23 rigs currently drilling wells in water deeper than 3,000 feet, according to federal statistics. That is the same number as two years ago.

The activity is being driven by a series of massive deep-water oil discoveries in the Gulf this year. They follow equally impressive finds in 2009 and early 2010, before the Deepwater Horizon disaster.

The new oil is being found in deeply buried rock that is highly pressurized and drilling must be carefully monitored to avoid disasters.

The report issued Wednesday by the Bureau of Ocean Energy Management, Regulation and Enforcement included recommendations for more surprise visits to drilling-rig engine rooms. It also called for beefed-up requirements about disclosure of incidents where drillers nearly lost control of a well but got it under control.

On Tuesday, federal regulators proposed giving offshore workers the right to stop operations if they believe an activity poses a danger.

On Wednesday, Andy Radford, a senior policy adviser with the American Petroleum Institute, a Washington, D.C.-based trade group, said that the recommendations are “in line with what industry and the government have already been doing” based on previous investigations.

A Bureau of Ocean Energy Management spokeswoman says the agency “has made a significant effort to educate operators on our rules, processes, and upcoming reorganization over the past year.”

It’s unclear how long the renewed love affair between the Gulf and Big Oil will last. The latest spate of finds is located very deep and many are close to the edge of U.S. territorial waters.

BHP Billiton PLC and Chevron Corp. last week announced separate oil discoveries. Both are over 100 miles out to sea in more than 4,000 feet of water. In all, they contain several billion barrels of oil, enough to keep the Gulf of Mexico a major producing region for years to come.

BP PLC, which contracted the Deepwater Horizon rig, is still actively, albeit quietly, pursuing the Gulf’s energy riches, despite facing massive civil litigation related to its exploded well. It has a large stake in the recent BHP Billiton discovery and has two rigs under contract working on developing its giant Atlantis deep-water find, according to federal filings. A BP spokesman declined to discuss its gulf activities, but said it has always owned up to its responsibilities for the spill.

The size of the discovered oil is good news for coastal communities fearful that the regulatory reaction to last year’s spill would scare away oil companies and reduce the number of high-paying offshore rig worker jobs.

“In talking to folks, there is a good sense of optimism, people are cautiously optimistic,” says Joey Durel, president of Lafayette Parish, La., a major hub of offshore support activity.

The exploration has been driven by high oil prices as well as improved technologies that allow geologists to remotely detect oil before drilling. “Every time you start to see something you think is played out, we get a new seismic image,” said Bobby Ryan, Chevron’s vice president for global exploration, “and we see opportunities in areas where we thought there weren’t any more.”

Recent announcements have bumped up the number of Gulf of Mexico oil fields with one billion barrels of recoverable oil to at least four fields. There have only been a dozen such “super giants” discovered in the U.S. over the past century.

The industry’s success is notable because of both the size of the finds and their complexity. Royal Dutch Shell PLC’s 2009 Appomattox discovery was the first time the industry tapped into a reservoir in the ancient Jurassic-era rocks. Anadarko Petroleum Corp.’s Lucius find in 2009 and Shell’s 2010 Cardomon Deep discovery both hit oil beneath large salt canopies, using new technologies that allow companies to look beneath the opaque salt with seismic-search tools.

Tadeusz Patzek, chairman of the Petroleum and Geosystems Engineering Department at at the University of Texas at Austin, said the industry has a growing appetite for risky exploration.

“I would bet that many of these structures may have been known since the 1980s,” he said. But they are so difficult to drill—often in more than a mile of water and require five-mile long wells into high pressure, high temperature rocks—that companies haven’t tried to tap into them until recently.

Much has changed since April 2010, when the Deepwater Horizon drilling rig caught fire and sank. The industry and government regulators say they have made strides to prevent a similar accident. Entirely new deep-water containment systems meant to stop out-of-control wells spewing oil on the seafloor have been built.

In 2010, companies produced about 1.54 million barrels of oil a day from the Gulf, according to the Bureau of Ocean Energy Management.

A moratorium on deep-water drilling put in place in May 2010 and officially lifted in October hurt production. The U.S. will produce 1.43 million barrels of oil a day from the Gulf’s federal waters in 2011, according to projections from the Energy Information Administration. That’s 13.5% less than the 1.65 million barrels a day that the agency expected to produce this year in an estimate calculated just before the Deepwater spill.

Phil Weiss, an analyst for Argus Research, projects that the finds by Chevron and Billiton, as well as a recently disclosed one by Exxon Mobil Corp., could each add between 100,000 and 200,000 barrels of oil a day to production.

Marvin Odum, head of Royal Dutch Shell’s U.S. operations, said his company had all of its drilling rigs active again for the first time since before the Deepwater Horizon incident.

“The clarity around the rules that exist now is good and the fact that permits are moving through the system…should be a pretty clear signal that the system is working and is getting more efficient,” Mr. Odum said in an interview.

But some environmentalists worry the industry and government have moved too quickly to resume normal levels of activity in the deep water.

“We’re perhaps getting a bit ahead of ourselves,” says Peter Lehner, executive director of the Natural Resources Defense Council. “We have made some, but not adequate, progress.”

—Daniel Gilbert contributed
to this article.

Write to Russell Gold at russell.gold@wsj.com

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Shell, Europe’s largest oil company, says it must decide by October whether to assume that U.S. regulators will issue all 35 permits it would need to explore under the Beaufort and Chukchi seas next year during the four mildest months, from July to October.

June 30, 2011

HOUSTON -(Dow Jones)- There was no emergency in oil markets to warrant the globally coordinated oil release announced last week, a top executive from oil giant Royal Dutch Shell PLC (RDSA) said Thursday.

“That oil is there for emergency purposes. Do I consider now an emergency? I have to say I don’t,” said Marvin Odum, president of Shell Oil Co., the U.S. unit of the Anglo-Dutch giant. “It doesn’t change the middle- to longer-term picture. The conversation we need to be having is about the long-term supply issue.”

The executive said the best way to combat high oil prices was letting oil companies to increase crude production by tapping U.S. hydrocarbons resources.

The International Energy Agency said last week it would offer 60 million barrels of oil in an effort to offset oil supply disruptions in the Middle East. Half of these 60 million barrels will come from the U.S., which was accepting bids this week.

Separately, Odum said the company will make a decision in the next three or four months on whether it will be able to drill in Alaska’s Arctic waters next year. He said the company is hopeful it will be able to obtain the pending permits the company need in order to start drilling because there was a ” coordinated” effort from the Obama administration to help the company get through the process.

Shell still has to obtain a number of permits from the federal government in order to go ahead with its $3.5 billion investment to drill in the state’s Beaufort and Chukchi seas. Shell’s plans have been delayed by environmental lawsuits and permit issues on top of calls for better spill prevention and containment capabilities following BP PLC’s (BP, BP.LN) oil spill disaster in the Gulf of Mexico last year.

-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; isabel.ordonez@ dowjones.com

(END) Dow Jones Newswires 06-30-111753ET Copyright (c) 2011 Dow Jones & Company, Inc.

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By John Donovan

In the article below, part of a major PR campaign, Shell Oil President Marvin Odum (right) asks a public concerned about Shell onshore operations, including hydraulic fracturing (fracking), to place its trust in the integrity of Shell and its global operating principles.

It is therefore timely to reflect on the repeated assurances of Shell business principles and code of ethics contained in the Form 20-F returns Shell filed with the U.S. Securities & Exchange Commission in the run up to the reserves scandal, which turned out to contain fraudulent declarations of oil and gas reserves.

There are links below to one such declaration filed by Shell in March 2003: Every page was marked “FOIA Confidential Treatment Requested” – a request for exemption from the U.S. Freedom of Information Act. This particular Form 20-F was filed 10 months before news of the reserves scandal broke.

Why should anyone believe Shell this time, when it conned investors and the public so recently in one of the biggest securities frauds in history? A scandal which brought to an end the Shell Transport/Royal Dutch Petroleum partnership which had lasted for a 100 years.

Examples of the repeated references to Shell business principles and related code of ethics can be found on pages 2,12 & 23 of “Part 3″ accessible below.

Form 20F Return in 5 Parts

Part 1 (31 pages)

Part 2 (31 Pages)

Part 3 (41 Pages) (see pages 2, 12 & 23)

Part 4( 41 Pages)

Part 5 (39 Pages)

Examples of news articles arising from the fraud:

The Times: How Shell blew a hole in a 100-year reputation: 10 January 2004

The West Australian: Investors howl for Shell’s blood: 12 January 2004

London Evening Standard: Shell bosses lied to the City: 19 April 2004

(Former executives, led by ex-chairman Sir Philip Watts, admitted they had repeatedly lied to investors about the true level of Shell’s oil and gas reserves.)

Houston Chronicle: ‘Sick and tired about lying’ at Shell: 19 April 2004

Bloomberg: Shell Loses AAA Credit Rating: 19 April 2004

Shell bosses ‘fooled the market’: 19 April 2004

The Guardian: Trail of emails reveals depths of deceit at the heart of Shell: 20 April 2004

he Guardian: Shell admits it misled investors: 20 April 2004

The Independent: Lies, cover-ups, fat cats and an oil giant in crisis: 20 April 2004

The Scotsman: Shell admits reserve ‘lies’: 20 April 2004

SHELL ARTICLE: Shell Principles Provide Framework, Accountability for Company’s Global Tight/Shale Oil and Gas Operations

ASPEN, Colo., June 29, 2011 /CNW/ — Today, from the 2011 Aspen Ideas Festival, Shell makes its Global Onshore Tight/Shale Oil and Gas Operating Principles available to the public with examples of how the company delivers them. Shell has a rigorous set of five global operating principles that provide a tested framework for protecting water, air, biodiversity, and the communities in which Shell operates.

Shell is openly sharing these operating principles to address public concern about tight/shale oil and gas development – especially regarding hydraulic fracturing – encourage feedback and challenge from our stakeholders, and drive continuous improvement. Shell also supports regulation and enforcement that reinforces responsible operating practices and continues to improve the industry’s overall performance.

“We understand there is concern around the development of shale gas, and we must give the public more knowledge of how we operate,” said Marvin Odum, President, Shell Oil Company. “People have asked the industry for transparency; we have listened and are responding.”

Specific on water, hydraulic fracturing has attracted a great deal of attention in recent months. As an example of how we deliver these principles, which are now described online, Shell mandates a stringent well construction standard that focuses on the use of safe drilling and completion processes, including reducing the risk of water contamination.

Further, Shell supports the disclosure of chemicals used in hydraulic fracturing fluids, monitoring of groundwater, and a reduction in the amount of water used in the drilling process. Shell does not fracture wells unless it has pressure tested the wellbore for integrity. And, the company recycles as much water at each project as reasonably practicable. For example, in the Marcellus Shale, Shell recycles almost 100% of produced fluids, substantially reducing our fluid waste and reducing the amount of water volumes needed for hydraulic fracturing.

In the last decade, the industry has discovered an abundance of natural gas. Of the world’s 250-year supply of gas estimated by the International Energy Agency (IEA), almost half is contained in shales, tight sandstones, and coal beds. More than one-third of the global gas-production increase, forecasted by the IEA over the next 25 years, could come from these sources.

“If the innumerable benefits of natural gas are to be realized, we must address the concerns of citizens and share the principles that we hold ourselves to at Shell,” said Odum. “These principles manage the risk we know exists when producing energy, but just as importantly, they demonstrate our operational integrity and focus on collaboration, underpinning our belief that natural gas can be produced safely and responsibly.”

(Reuters) – The Gulf of Mexico remains a “very strategically important” area for Royal Dutch Shell’s (RDSa.L) Americas arm both in terms of exploration and the company’s consideration of buying more assets, Marvin Odum, president of Shell Oil Co, said on Monday.

We’ve been growing our business there, mostly through exploration,” Odum said at the Reuters Global Energy and Climate Summit. “If something becomes available, I guarantee we’ll be looking at it.”

Odum also said it was an opportune time to acquire more dry shale gas acreage despite low natural gas prices, as more drilling can help find “sweet spots” to improve Shell’s overall portfolio.

Odum said he expects “imminent” approval from federal regulators for a drilling permit in the company’s Appomattox field in the deepwater Gulf, and the company’s Perdido oil and gas platform is producing about 40 percent of its capacity of 100,000 barrels per day of oil from five wells.

(Reporting by Kristen Hays; Editing by Matthew Lewis)

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June 8, 2011

LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSA.LN) has taken the final investment decision for the multi-billion dollar development of its deepwater Cardamom oil and gas field in the Gulf of Mexico, the Anglo-Dutch energy company said Wednesday.

“This is another sizable deep-water investment by Shell that strengthens energy supplies to the USA. It will also secure employment for more offshore workers,” said Shell Upstream Americas Director Marvin Odum. (Right)

(END) Dow Jones Newswires
06-08-111427ET
Copyright (c) 2011 Dow Jones & Company, Inc.

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