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US sanction regimes continue to evolve for Russia, Iran, Cuba

Russian sanctions highlight how companies can be immediately impacted by sectoral sanctions. For example, ExxonMobil had a relatively short time frame to stop drilling operations in Russia’s Kara Sea after sanctions were announced in 2014.

Business prospects must be balanced with careful risk management, understanding of local challenges and well-drafted contracts By Jennifer Bickley, Chamberlain, Hrdlicka, White, Williams & Aughtry Since early 2014, the US has seen a significant number of changes to the sanctions imposed by the Department of Treasury’s Office of Foreign Asset Control (OFAC). These changes have, or may have in the future, a meaningful impact on the oil and gas industry. Generally, OFAC’s purpose in imposing sanctions is to support the US’ foreign policy and national security goals through sanctions that are imposed on (i) individuals/entities through a published list of those persons with whom US persons/entities cannot do business (SDN List); (ii) targeted trade areas (sectoral sanctions) and targeted individuals ...

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Dayrates down, but rig demand remains stable in Middle East

Shelf Drilling’s Galveston Key jackup is drilling development wells in the UAE for National Drilling Company. The rig has a maximum drilling depth of 21,000 ft and can work in up to 300-ft water depths.

While drilling markets remain depressed around the world, the Middle East still stands as a growth market. In this region, demand for drilling rigs appear to be relatively stable and is likely to continue growing in 2017 and beyond. “Few rigs have come off contract without going back to work,” said Niels Espeland, President, International at Grey Wolf Oilfield Services. “The Middle East has been stable throughout the cycles. Due to its unique drivers, there’s always been growth regardless of the global market cycles.”

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‘Permian Panic’ draws operators, boosts US onshore rig count

Scandrill’s Scan Vision rig is working for Anadarko in the Permian Basin. The 1,500-hp AC rig was recently upgraded and includes a multidirectional walking system for pad drilling that has a total lift capacity of 2.4 million lb. Scandrill plans to eventually update its whole fleet with AC kits. All of the company’s remaining SCR rigs have been fitted with 7,500-psi, 1,600-hp mud pumps.

Low oil prices may be leaving the global drilling industry cold, but right now the Permian Basin is red hot. It’s so hot that people are calling it the “Permian Panic” – companies are rushing to snap up acreage because it is considered the lowest-cost US tight oil play with the best producing rock in North America. “The Permian is the key of all the tight oil plays,” said Skip York, VP Integrated Energy at Wood Mackenzie. The firm estimates that approximately a quarter of global oil and gas mergers and acquisitions (M&A) this year have taken place in the Permian.

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D&C News

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Drilling of the first production well has begun on the Maersk Oil-operated Culzean field in the UK. The well is the first of six production wells to be drilled on the high-pressure, high-temperature (HPHT) field, with continuous drilling activity planned over the next five years. First gas is expected to be produced from Culzean in 2019.

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D&C Tech Digest

Halliburton’s RapidStart Initiator Sleeves were able to establish a flow path from the casing ID to formation after 10 months in a Permian Basin well.

An operator in the Permian Basin recently ran two Halliburton RapidStart Initiator sleeves, designed for selective multistage frac and plug-and-perf operations, in a cemented long-string horizontal application. The operator, working out of Midland, Texas, needed a pressure-operated toe sleeve that could run in a cemented long-string horizontal application. To ensure well integrity, they wanted to perform a casing test prior to opening the sleeve. From there, they would establish a flow path from the casing ID to the formation, allowing them to pump the first stage of the frac job, then pump down the frac plug and perforating guns for the second stage.

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ADIPEC to launch new program targeting cybersecurity

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Cyber threats and attacks against the oil and gas industry are becoming increasingly complex and sophisticated, targeting both IT and OT infrastructures. Industry experts are calling for continuous improvements to cybersecurity safeguards and protocols in oil and gas facilities in order to protect valuable company information and key operational equipment, as well as to maintain operations in a safe and secure manner. Recent figures from Cybersecurity Ventures show that spending on protection against cyber-attacks is forecast to be a market worth US$13.43 billion by 2019 in the Middle East and Africa region alone. Meanwhile, US-based ABIresearch forecasts global cybersecurity spending on oil and gas critical infrastructure to reach US$1.87 billion by 2018. “In 2016, there is an urgency for nations ...

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Burke: Positive indicators point to potential recovery first for shales; offshore must wait longer

The drilling industry is seeing some positive signals. One is that CAPEX reductions, a leading indicator for the industry, are starting to slow down, 
Thomas Burke, President and CEO of Rowan Companies and 2016 IADC Chairman, said at the IADC Houston Chapter Luncheon on 11 October.

In hindsight, the indicators of an impending downturn were clear back in 2014 or even earlier. Still, when it hit, the downturn caught most of the industry by surprise. This has caused massive disruptions as companies realized that their assumptions and projects were flat wrong, Thomas Burke, President and CEO of Rowan Companies, said at an IADC Houston Chapter luncheon on 11 October. Further, Mr Burke, who also serves as 2016 IADC Chairman, pointed to the difficulties that drilling contractors face in planning for their business. “When you have to make investments in expensive assets that are going to last a long time, it takes a lot of capital, and you have to make assumptions about what’s going to happen,” he said. “We have to make long-term decisions based on short-term oil prices.”

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Sleep enhancement strategies targets better sleep for night-shift workers

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By Kelli Ainsworth, Editorial Coordinator The reduced concentration, slower reaction time and impaired decision making that result from insufficient sleep can have serious repercussions for process safety, Koos Meijer, a Human Factors Consultant with KM Human Factors Engineering, said at the 2016 IADC Human Factors Conference in Galveston, Texas. Because the brain produces hormones to make us feel alert or tired based on light, night-shift workers – who can be found on every working drilling rig – are particularly vulnerable to poor-quality sleep. “Our body finds it hard to completely adapt to night work schedules because of these inconsistent light cues,” Mr Meijer said in his presentation on 4 October. KM Human Factors Engineering took its cue from NASA, which ...

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ExxonMobil: Rig technologies must be differentiated between what’s needed and what’s not

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The industry can and must improve its safety and economics through the development and application of new rig technologies, Andre Luyckx, Upstream Drilling and Subsurface Manager for ExxonMobil, said at the 2016 IADC Advanced Rig Technology Conference in Galveston, Texas. “If the rigs that we operate aren’t safe and they’re not profitable, they’re nonstarters,” Mr Luyckx said in a keynote address on 13 September. However, the industry must be careful to differentiate which technologies are needed for each project.

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