Siemens increases rated output from 340 MW to over 375 MW.

Siemens Energy has successfully completed trial operation of the the world’s most powerful gas turbine, the SGT5-8000H, in the Irsching 4 power plant right on schedule.

After 1500 operating hours, 1200 at full load, and evaluation of the measured data the machine’s original rated output of 340 megawatts (MW) was raised to 375 MW in simple cycle duty. In combined cycle operation output will increase by 40 MW to more than als 570 MW.

These 40 MW are sufficient to supply a further 220,000 people with electricity. Expansion of the plant to a combined cycle station has in the meantime commenced. In 2011, E.ON will take over the world’s most environmentally friendly fossil-fueled power plant.

The test results fully meet the high expectations of the Siemens engineers. “With its energy efficiency and high performance level the new gas turbine is a prime example of climate protection,” said Michael Suess, CEO of the Fossil Power Generation Division of Siemens Energy. “Compared to the first advanced combined cycle plants the new gas turbine reduces annual CO2-emissions by approximately 45,000 metric tons,” added Suess. That is equivalent to the annual CO2 emissions from approximately 25,000 mid-range cars clocking up 20,000 km a year.

“In Irsching, Block 4, we were able to experience the performance of the world’s most efficient gas turbine for ourselves,” said Bernhard Fischer, Member of the Managing Board of E.ON Energie AG and E.ON’s CTO. “Expansion is currently under way to a combined cycle power plant. With its commissioning in the year 2011, it will similarly set new standards when it comes to efficiency and output,” added Fischer.

High efficient gas turbines are part of the Siemens environmental portfolio with which the company earned revenues of nearly EUR19 billion in fiscal 2008, That is, equivalent to about a quarter of Siemens’ total revenue and makes Siemens the world’s leading provider of eco-friendly technology.

The Siemens Energy Sector is the world’s leading supplier of a complete spectrum of products, services and solutions for the generation, transmission and distribution of power and for the extraction, conversion and transport of oil and gas. In fiscal 2008 (ended September 30), the Energy Sector had revenues of approximately EUR22.6 billion and received new orders totaling approximately EUR33.4 billion and posted a profit of EUR1.4 billion. On September 30, 2008, the Energy Sector had a work force of approximately 83,500.

Source: Siemens Energy
Further information: www.siemens.com/energy

Chevron delivers

Chevron is well positioned to deal with difficult market conditions given its strong balance sheet, numerous new growth projects coming onstream and a disciplined approach to cost management, executives said at the corporation’s annual meeting with financial analysts in New York in March. ‘We are continuing to execute our key strategies,’ Dave O’Reilly, chairman and CEO, told the meeting. ‘We’re moving legacy projects to development, we’re moving resources to reserves, and we’re continuing to deliver our industry-leading exploration program.’

George Kirkland, executive vice president, upstream and gas, added: ‘Over the next two years, we expect new project startups and continued ramp-ups to contribute production of 650,000 barrels per day. In addition, the depth of our portfolio provides us with the flexibility to optimize project timing to take advantage of lower expected capital costs.’

Outlining future growth, Kirkland focused on Chevron’s LNG portfolio, particularly Gorgon and Wheatstone in Australia, as well as the crude oil opportunities in the Lower Tertiary trend in the deepwater US Gulf of Mexico. ‘We’ve made substantial progress on both Gorgon and Wheatstone in the past 12 months. We expect Gorgon to be sanctioned during the second half of 2009, and Wheatstone is advancing toward front-end engineering and design later this year,’ he said.

Referring to the company’s high-profile Jack and St Malo discoveries in the Gulf of Mexico, Kirkland said FEED work has begun for a production facility that will have a capacity of between 120,000-150,000boe/d. The facility will co-develop the Jack field and the nearby St Malo, which are estimated to have combined recoverable resources in excess of 500 million barrels.

OE-April 2009

The economic slowdown ‘creates opportunities for Shell to reduce supply chain costs, as spare capacity in the services industry comes into play’, declared CEO Jeroen van der Veer when he presented the Royal Dutch Shell 2009 strategy update in The Hague last month. ‘We don’t have a crystal ball on oil prices, so we are planning on the basis that the downturn could last more than a year.’ Shell launched very few new projects in 2007/08, to avoid the peak in the cost cycle. This pause, combined with Shell’s global scale, gives new opportunities to reduce supply chain costs ahead of launching new projects, he said.

Van der Veer added that Shell is continuing with plans to build new upstream and downstream capacity, while managing the near-term challenges of the global economic slowdown. The company will invest some $31-$32 billion in 2009. Major upstream investments currently under way include: developing oil and gas fields with more than 1 million boe/d of capacity, which will generate 2-3% annual production growth early in the next decade, to 2012 and 6.5 million tonnes per year of new LNG capacity, an increase of 40% over 2008 levels. Pre-FID options upstream could add more than 1 million boe/d of additional capacity, from a resources base that can support growth to at least 2020.

OE - April 2009

Perdido

Shell Oil’s record-setting Perdido project in a remote part of the deepwater Gulf of Mexico’s Alaminos Canyon passed another key milestone mid-March when Heerema’s Thialf crane barge installed the spar platform’s 9500-ton topsides in around 8000ft of water. Hookup and commissioning is now under way (see ‘Deepwater Roundup’ feature, and installation report).

Russ Ford, Shell’s technology vice president for the Americas, said: ‘Perdido is a technological tour de force that is opening up a new frontier for global oil & gas production. Once the global economy recovers, the energy challenge will return with a vengeance, and new sources of energy will be required. Producing oil safely and responsibly this far out and this deep should allay concerns about industry access to the 85% of the US Outer Continental Shelf that remains undeveloped.’

April 2009 OE

While Tupi test stalls

Brazilian state operator Petrobras stopped the extended well test at its pre-salt Tupi field after detecting what it believed to be a manufacturing issue with bolts used in the subsea tree at Tupi Sul. Although subsea inspection carried out in the area detected neither leaks nor damage to the equipment, Petrobras elected to shut down the well while a replacement wet tree assembly was installed.

Petrobras said the issue was unrelated to aspects concerning field production or technology and that it would not affect the development of the Santos Basin’s pre-salt cluster.

Tupi Sul, in 2140m of water, had been producing about 14,000b/d as part of a 15-month extended well test for the field when the consortium of operator Petrobras and partners BG and Galp Energia brought the field onstream at the beginning of May. In late June, the FPSO Cidade de São Vicente serving Tupi Sul offloaded its first cargo, transferring 315,000 barrels to the Nordic Spirit.

The well test is intended to gather technical data to help in the appraisal and development of the other discoveries in the Santos Basin, like Iara, Iracema, Júpiter, Bem-te-Vi and Caramba. According to Petrobras, the results so far have been in line with expectations. Estimates are that Tupi contains 5-8 billion boe of recoverables. OE

Issue: August 2009

The ‘green shoots’ of economic recovery could be nipped in the bud if oil prices, driven by rising demand and insufficient investment, approach last year’s highs, according to a new report from Douglas- Westwood.

In Oil: what price can America afford?, author Steven Kopits, who heads Douglas- Westwood’s New York City office, notes that ‘oil played a central role’ in each of the six recessions the US has endured over the past four decades, including those that followed the Arab oil embargo of 1973 and the 1979 Iranian revolution. Historically, the US economy grew well when oil consumption expenditures remained at 2% of GDP or less, Kopits noted, and suffered a recession whenever expenditures exceeded 4% of GDP. Price volatility also appears to play a role: ‘Whenever oil prices have increased by more than 50% year-on-year,’ he said, recessions have followed close behind – including the tech bust of 2001, which is rarely linked to the price of oil.

Those statistics could help lawmakers predict the likely outcomes of different energy policy strategies as Washington weighs the environmental and economic effects of measures aimed at reducing CO2 emissions, the report continued.

As the world digs out of the current recession, concerns are also emerging that renewed demand could mean renewed volatility. Saudi oil minister al-Naimi has warned that underinvestment in oil capacity could produce price spikes of $150/bbl or more. And the investment bank Macquarie recently predicted that spare oil capacity could evaporate by 2013, causing a repeat of the oil price rally of 2Q 2008. If the historic model holds up, that could bode ill for the US: ‘Should oil return’ to $150/bbl, said Kopits, ‘the statistics are not ambiguous. Expect a recession, and a severe one at that.’ OE

Issue: August 2009

BP made a giant oil discovery, at its Tiber Prospect in the deepwater Gulf of Mexico. The well, located in Keathley Canyon block 102, approximately 250 miles south east of Houston, was drilled to a total depth of approximately 35,055 feet, making it one of the deepest wells ever drilled by the oil and gas industry. The well found oil in multiple Lower Tertiary reservoirs. Tiber is operated by BP, with a 62% working interest with co-owners Petrobras.

It estimates that the new pool beneath the ocean's surface could contain more than 3 billion barrels.

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