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October 1, 2012

September’s top stories: Palestine and Israel negotiate and Shell prepares to drill

September saw Lebanon prepare to drill for offshore gas, while Palestine negotiated with Israel to develop gas off the Gaza Strip and Shell secured a permit to begin drilling in the Beaufort Sea, Alaska. wraps up the key headlines from September 2012.

By Heidi Vella

Lebanon to start drilling for offshore gas reserves


In September Lebanon announced it is set to commence offshore natural gas drilling, after it found a large number of gas reservoirs along its coast.

Gebran Bassil, Lebanese energy minister, told reporters on a tour of the area the country "is technically ready to start issuing permits to enable extraction."

About 12 trillion cubic feet of natural gas was found to be available for extraction off the southern coast, which the minister feels would be sufficient to meet the country’s power production needs for about 99 years and also allow it to ease the debt burden.

Palestinian National Authority seeks permission for Gaza Strip fields


The Palestinian National Authority (PNA) started negotiations with Israel, seeking permission to develop natural gas fields off the coast of the Gaza Strip, reported Reuters.

The development may ease PNA’s fiscal crises caused by shortfalls in international aid.

Peace envoy and former UK Prime Minister Tony Blair initiated the talks on behalf of PNA, which will levy tariffs on any revenues generated from private pumping in the earmarked area.

Shell secured limited drilling permit in Beaufort Sea

Royal Dutch Shell secured a limited drilling permit from the US Department of Interior’s Bureau of Safety and Environmental Enforcement to drill one exploration well in the Beaufort Sea, off of northern Alaska.

"Shell’s current permit will be bound by similar restrictions as the Chukchi permit."

The national agency also approved a similar permit for drilling approximately 1,400ft down in the Chukchi Sea three weeks before, as it could not bring required oil-spill equipment to the site.

Shell’s current permit will be bound by similar restrictions as the Chukchi permit, and will not drill any oil or gas-bearing zones.

Chevron encounters gas-pay offshore Australia


Chevron Australia, a subsidiary of Chevron, in September encountered gas pay at the Satyr-2 well located in the Greater Gorgon Area of the Carnarvon Basin, offshore of Australia.

The well, located in the WA-374-P permit area around 120km north-west of Barrow Island, has been drilled to a total depth of 3,796m in 1,088m of water.

Satyr-2 exploration well is the company’s 15th discovery in Australia since mid-2009. Chevron Australia is the operator of the project with 50% interest, while other co-partners include Shell and Exxon Mobil, each holding a 25% stake respectively.

Falkland Oil and Gas reports Loligo well discovery

Exploration company Falkland Oil and Gas discovered gas at the Loligo well, located offshore of the Falkland Islands.

"Exploration company Falkland Oil and Gas discovered gas at the Loligo well."

The company said initial well results prove the main hydrocarbon phase within the T1 to T5 aged reservoir objectives is gas. However, the extent of liquid content has not been proved.

Drilled to a depth of 4,043m, the 42/07-01 Loligo well penetrated six Tertiary aged reservoir objectives, comprised of the T1, T1 deep, T2 (Trigg), T2 deep (Trigg deep), T3 (Three Bears) and T5 targets, on the basis of their seismic amplitude responses.

BP accused of gross negligence over Deepwater Horizon


The US Department of Justice accused BP of "gross negligence and willful misconduct" regarding the 2010 Deepwater Horizon oil spill disaster.

According to its court filings, the department cited several examples which hold the British company responsible for the largest oil spill in US history.

BP will face trial in the state of New Orleans in January 2013, and if the charges are proved, the company will be ordered to pay up to $21bn in civil damages under the Clean Water Act.

UK announces tax breaks for North Sea oil and gas


UK Chancellor George Osborne in September unveiled a new tax measure to support investment in older fields by allowing companies to shield some income from the supplementary charge on their profits.

Under the new measure, companies can shield up to £250m of income in qualifying ‘brown field’ projects or £500m for projects in fields paying Petroleum Revenue Tax, from the 32% supplementary charge rate.

Osborne said the tax allowance brings good news for the North Sea, including new jobs and broader economic benefits.

Eni makes new gas discovery off Mozambique

"Mamba North East 2 was drilled to a total depth of 5,365m in 1,994m of water and encountered 200m of gas pay."

Italian oil and gas company Eni made a new natural gas discovery at the Mamba North East 2 exploration prospect in the eastern part of Area 4, offshore of Mozambique.

The well is located approximately nine kilometres east of Mamba North East 1 and around 23km from Mamba South 1, 60km off the Capo Delgado coast.

Mamba North East 2 was drilled to a total depth of 5,365m in 1,994m of water and encountered 200m of gas pay in stacked multiple high-quality Oligocene, Eocene and Paleocene sands.

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