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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (65512)	4/30/2000 3:23:00 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

To: upanddown who wrote (65512)	5/15/2000 2:51:00 PM
From: Razorbak	Respond to of 95453

"FEATURE - Oil Firms Float New Idea for U.S. Gulf Production" Sunday May 14, 3:08 pm Eastern Time By Andrew Kelly HOUSTON, May 14 (Reuters) - Oil companies, seeking to move ever farther out into the U.S. Gulf of Mexico, want to break away from using conventional offshore production platforms that stand on the ocean floor or are anchored to it. Besides the giant platforms that dot the waters off Louisiana and Texas, oil firms hope to persuade the federal government to let them park huge storage tankers in areas of the Gulf too remote to be reached by subsea pipelines. A fleet of smaller shuttle tankers would carry the oil onshore to be refined. More than 60 of the so-called floating production, storage and offloading (FPSO) systems are in use around the world, in areas such as the North Sea, Brazil and West Africa, but current regulations prohibit their use in the U.S. Gulf. "We're very interested in making FPSO shuttling a possible development solution for the Gulf of Mexico," Glenn Bishop, General Manager of deepwater operations in the Gulf of Mexico for Houston-based Conoco Inc. (NYSE:COCa - news), told Reuters. The U.S. Minerals Management Service is currently conducting an environmental and safety review of the floating systems which consist of a permanently moored storage tanker that stores the oil as it is produced. RULING COULD COME IN JANUARY The agency could rule for or against the floating systems in the Gulf as early as January 2001, though the accompanying process of public debate could cause delays, MMS Director Walt Rosenbusch told a recent industry conference in Houston. Among other things, the agency will look at how companies would halt operations when hurricanes, which can play havoc with oil and gas production, sweep through the Gulf. MMS officials said they recalled only one similar offshore installation in U.S. waters, which was operated by Exxon Corp. off the California coast near Santa Barbara until it was replaced by a pipeline and onshore processing facility in 1994. Richard Charter, Marine Conservation Advocate for Environmental Defence, who campaigned against the Exxon facility in California, opposes the idea of long-term storage of oil in large floating structures at sea. "It's like a tanker that's at sea all the time and if something runs into it, or you have a hurricane in the Gulf or an anchor cable breaks, you have a time bomb," he said. But the oil industry is hoping that the U.S. government will approve the use of the floating systems, which they say would give them an important tool for maximizing yields from the nation's most prolific oil-producing region. Echoing the comments of other industry executives, Mike Bell, vice president for deepwater operations at Unocal Corp.(NYSE:UCL - news) said the systems already had demonstrated an acceptable environmental and safety record around the world. If the federal government gives the go-ahead, the floating production and storage systems would probably be deployed first to exploit deepwater fields far away from existing pipelines, Conoco's Bishop said. "Particularly on the smaller more remote fields ... shuttling could potentially provide the only viable solution that we can see at the moment," he said. DEEPWATER OIL INCREASINGLY IMPORTANT Deepwater discoveries far out in the Gulf of Mexico are an increasingly important source of domestic oil production for the United States, which imports far more crude than it produces. According to MMS projections, oil from increasingly deep waters will lift Gulf of Mexico oil production to somewhere between 1.4 million and 1.8 million barrels a day in the next few years from around 1.3 million a day at present. By contrast production in Alaska and Texas peaked in the late 1980s and early 1970s respectively and oil output from both states is now less than that from the U.S. Gulf. Unsurprisingly perhaps, some of the strongest advocates for bringing the floating systems to the Gulf are companies that supply them to the oil industry in other parts of the world, like Houston-based Oceaneering International Inc. (NYSE:OII - news) "The current ban on the use of FPSOs as production systems is a major economic deterrent to the development of the fields in water depths greater than 5,000 feet," Oceaneering Chairman and CEO John Huff told the Offshore Technology Conference. Oceaneering currently has two of the floating production and storage systems working for Exxon Mobil Corp. (NYSE:XOM - news) and BP Amoco Plc (quote from Yahoo! UK & Ireland: BPA.L) off West Africa. Unocal's Bell said the future of deepwater oil development in the Gulf of Mexico does not hinge on approval of the floating systems but that he would still like to add them to his toolkit. "I do believe that having that alternative will tend to drive down costs relative to pipeline solutions," he said. biz.yahoo.com