02 June 2010

North Amethyst pumps first oil

A few things to note about the news that the White Rose extension field – called North Amethyst – pumped its first oil this week;

  1. It took only four years to go from discovery to production. reducing the time from discovery to production is huge for the future of the offshore industry.
  2. Tiebacks.  Expect to see more of them as Terra Nova dries out, for example.  Floating platforms are the most cost-effective way to exploit the numerous small fields that have already been discovered offshore. The gang at Terra Nova and eventually at White Rose can just float their hulls around, hook up to underwater pipes and pump the crude cheaply, efficiently and in a way that should be as environmentally sound as oil production can be.
  3. An established royalty regime is a key part of promoting development.  That’s what worked for this deal and helped speed up development. Thankfully, while the 2007 energy plan called for a complete overall of the royalty regime, the generic regime is still in place.  Given the rate the current crowd do things, we wouldn’t see a royalty regime to replace the current one for decades.  As it is, the existing, pre-2003 royalty regimes – not the Old Man’s tweaks – are producing the lion’s share of offshore cash these days.

-srbp-

4 comments:

WJM said...

As it is, the existing, pre-2003 royalty regimes – not the Old Man’s tweaks – are producing the lion’s share of offshore cash these days.

That won't stop the mythmakers from letting you believe it's all about Him, and it certainly won't encourage them to disabuse people of the misconception.

Ed Hollett said...

Well the freshie-gulpers believe lots of things that aren't true.

And on one very significant part of their platform I know they before the year is out they will have the entire shape of the world utterly destroyed.

No details for public consumption yet but let's just say it is going to be fun to watch when the story breaks.

Wm. Murphy said...

As it is, the existing, pre-2003 royalty regimes – not the Old Man’s tweaks – are producing the lion’s share of offshore cash these days.


so that must that the "tweaks" are at least producing something?

Good on the pre 2003 crowd for negotiating the lions share...good on the post 2003 crowd for "tweakin" the regime.

It is good, isn't it? Or is your point that your crowd is better than the other crowd.

Ed Hollett said...

You see, Murph, if you actually read things instead of pursuing your usual game of gainsaying based on random thoughts or making essentially partisan jabs like these you'd know that the tweaks have produced nothing yet since the conditions under which they work haven't been met.

In other cases, like Hebron, there is no project pumping oil so we don't know what they will produce at all. if you actually read the royalty regime however (there's that pesky reading requirement again) you can see that the lion's share of the royalty - and in practice - potentially all the royalty will come from the old pre-2003 regime.

I know these are pesky things like facts and details but when you consistently ignore them you wind up looking as foolish as you did the other day with your comment about salaries.

I notice by the way you never bothered to answer the question.