Mexico

Interior Secretary Dirk Kempthorne said the department will take a “fresh look” at the flawed 1998 and 1999 deepwater Gulf of Mexico leases that are costing the federal government billions of dollars in lost royalties.

Beset by safety problems and still recovering from last year’s Gulf of Mexico storms, BP plc reported in an interim update Wednesday that its 3Q2006 oil and natural gas production year-over-year will be flat and will fall sequentially from 2Q2006 to 3.8 million boe/d from 4.01 million boe/d. Houston-based Marathon Oil Corp., meanwhile, said its quarterly production is in line with forecasts.

Beset by safety problems and still recovering from last year’s Gulf of Mexico storms, BP plc reported in an interim update Wednesday that its 3Q2006 oil and natural gas production year-over-year will be flat and will fall sequentially from 2Q2006 to 3.8 million boe/d from 4.01 million boe/d.

As it continues to restore its Gulf of Mexico (GOM) infrastructure damaged in last year’s hurricanes, Chevron Corp. said it now expects 3Q2006 U.S. natural gas liquids (NGL) and gas production volumes to increase 1.4% sequentially over 2Q2006.

Mariner Energy said it restarted about 50 MMcfe/d of gas production from its Ochre and Pluto deepwater Gulf of Mexico projects, which were shut in because of hurricane activity last year and in 2004. Ochre, located in Mississippi Canyon Block 66, was shut in following Hurricane Ivan. Production has been restored at about 10.5 MMcfe/d. Mariner operates Ochre with a 75% working interest and Stone Energy has a 25% working interest. Pluto, located in Mississippi Canyon Block 718, was shut in for the drilling and completion of a new well. Start-up was delayed due to Hurricane Katrina. Production from Pluto has recommenced and the well is currently producing at a gross rate of 40 MMcfe/d. Mariner expects to achieve a gross production rate in the range of 40-50 MMcfe/d. Mariner operates Pluto with a 51% working interest and W&T Offshore has a 49% working interest. Mariner estimates that most of its remaining production shut in due to the damage caused by the 2005 hurricanes will recommence during the fourth quarter of 2006.

Chevron Corp. expects 3Q2006 U.S. natural gas liquids (NGL) and gas production volumes to increase 1.4% sequentially over 2Q2006, as it continues to restore its Gulf of Mexico (GOM) output that was shut-in during last year’s hurricane season.

Mariner Energy said it restarted about 50 MMcfe/d of gas production from its Ochre and Pluto deepwater Gulf of Mexico projects, which were shut in because of hurricane activity last year and in 2004. Ochre, located in Mississippi Canyon Block 66, was shut in following Hurricane Ivan. Production has been restored at about 10.5 MMcfe/d. Mariner operates Ochre with a 75% working interest and Stone Energy has a 25% working interest. Pluto, located in Mississippi Canyon Block 718, was shut in for the drilling and completion of a new well. Start-up was delayed due to Hurricane Katrina. Production from Pluto has recommenced and the well is currently producing at a gross rate of 40 MMcfe/d. Mariner expects to achieve a gross production rate in the range of 40-50 MMcfe/d. Mariner operates Pluto with a 51% working interest and W&T Offshore has a 49% working interest. Mariner estimates that most of its remaining production shut in due to the damage caused by the 2005 hurricanes will recommence during the fourth quarter of 2006.

BP plc plans to “retrieve and rebuild” all of the seabed production equipment from the Thunder Horse field in the deepwater Gulf of Mexico (GOM), a significant setback which could push the ramp-up to mid-2008 — as much as three years longer than originally anticipated.

BP plc plans to “retrieve and rebuild” all of the seabed production equipment from the Thunder Horse field in the deepwater Gulf of Mexico (GOM), a significant setback which could push the ramp-up to mid-2008 — as much as three years longer than originally anticipated.