Offshore

President Bush signaled Wednesday that he is open to some of the offshore drilling proposals floating around on Capitol Hill provided they do not allow drilling closer than 100 miles to shore.

If high attendance levels at the recent Offshore Technology Conference (OTC) in Houston are any indication, activity levels in the oil patch are expected to strengthen over the next few years, said Raymond James in its latest energy “Stat of the Week.”

BHP Billiton LNG International announced a program to reduce air emissions from its proposed offshore liquefied natural gas (LNG) receiving terminal, which has taken the lead in the race to build an LNG project on the U.S. West Coast. The Australian company made its announcement as the California State Lands Commission concluded a series of four public hearings on a revised draft environmental impact report (EIR) last Wednesday in Oxnard, CA.

The subsea valve at Matagorda 758 on the Matagorda Offshore Pipeline System (MOPS) was successfully closed late Wednesday afternoon and some production was to be brought back online Thursday, MOPS operator Northern Natural Gas said. Thirteen receipt point meters had been allocated to zero March 1 after a leak was detected upstream of the Matagorda 686 platform (see Daily GPI, March 2). “Upon establishment of required flow, a pig will be launched from platform 686,” Northern said. “Depending on the amount of liquids received, it is expected that the MOPS system receipts and deliveries will be shut in for 12-24 hours for liquids handling operations.” Production on all platforms downstream of the Matagorda 758 subsea valve is expected by Saturday, but the Mustang Island 782 SS, 782/785 SS and 787/805 platforms, which are upstream of the valve, must remain shut in until repairs are completed.

Trunkline said that as part of post-hurricane inspections required by the federal Minerals Management Service, it discovered that its lateral offshore Louisiana from Ewing Bank 305 to Grand Isle 82 apparently shifted from its pre-storm location. “At this time, Trunkline is unaware of any specific damage to the lateral,” the pipeline continued. “However, the nature of the observations requires that Trunkline reduce pressure on the lateral until further information can be obtained and analyzed.” Trunkline said it cut production on the lateral to zero, and until further notice no nominations are being accepted from Stone Energy’s Ewing Bank 305 platform.

Pioneer Natural Resources Co. announced Wednesday that its Pioneer Natural Resources USA subsidiary has closed the sale of certain deepwater Gulf of Mexico assets to Marubeni Offshore Production (USA) Inc., a subsidiary of Marubeni Corp., for cash proceeds of $1.3 billion before normal closing adjustments, which are currently estimated to be approximately $140 million. Dallas-based Pioneer said it expects to record an after-tax gain associated with the sale of approximately $425-475 million.

Offshore drilling foe Sen. Bill Nelson (D-FL) said Friday he intends to place a hold on the nomination of two-term Gov. Dirk Kempthorne to be the next secretary of Interior, citing concerns over the nominee’s friendly view of the oil and natural gas industry.

Houston-based independent Ultra Petroleum Corp., which explores for natural gas in the Green River Basin of Wyoming and offshore China, plans to file a 15-day automatic extension notification with the Securities and Exchange Commission relating to its Annual Report on Form 10-K for 2005 after identifying “certain deficiencies in its internal controls,” the company said in a statement. The extension will allow the company more time to prepare its consolidated financial statements and the work required to complete management’s assessment of internal controls over financial reporting in accordance with Section 404 of Sarbanes-Oxley and the rules of the Public Company Accounting Oversight Board. Ultra said it will disclose weaknesses in its financial reporting system and related remediation activities in its Form 10-K. Ultra expects to make its filing by March. 31.

Citing logistics setbacks, Northern Natural Gas (NNG) said Sunday it is now anticipating return to service of platforms downstream of the Matagorda 758 platform on the Matagorda Offshore Pipeline System (MOPS) sometime during Wednesday’s gas day. NNG, the operator of MOPS, said this schedule is contingent on any other weather or logistics issues. Upon closure of the subsea valve at Matagorda 758, there will be three upstream platforms that must remain shut in until all repairs are completed, NNG said. Prior to the weekend it had anticipated the possible restoration of some service in the leak-affected segment of MOPS by the start of Tuesday’s gas day (see Daily GPI, March 6).