The World is Coming to America - For Oil?

From Forbes:

Norway’s national oil company is betting $20 billion that the future of the energy business lies under the U.S. They’re not alone. 

Out the helicopter window, as the muddy waters dumping out of the Mississippi River give way to the deeper and deeper blue of the Gulf of Mexico, the oil and gas gear gets bigger and bigger. Shallow jack-up rigs evolve into spars and tension-leg platforms. Finally, 150 miles out, we descend on the 330-foot-tall, 60,000-ton semisubmersible drill ship Maersk Developer, leased and operated by my host, the Norwegian oil giant Statoil.

The Developer rig is similar to Transocean’s ill-fated Deepwater Horizon. As a semisubmersible it is basically a superstructure sitting on top of two cigar-shaped submarine hulls that are equipped with four dynamically positioned thrusters to keep the rig nearly stationary, even in stormy seas.The Developer is sitting in 3,100 feet of water, its roaring diesel engines turning a drill bit 16,000 feet below the seafloor. The target is a prospect called Kilchurn, 25,000 feet down. In June Statoil completed the Kilchurn well at a cost of some $120 million but was keeping mum on the results.

But this ship is newer and more modern than the Deepwater Horizon, and as everyone on board will tell you—repeatedly—it’s equipped with more safety precautions and redundant systems. The Developer was the

first rig to meet all the new standards required by the Bureau of Ocean Energy Management—because Statoil already had those practices in place. “We haven’t had to change the way we do business,” says Jason Nye, head of Statoil’s Gulf of Mexico operations.

Tested by four decades exploring the unforgiving waters of the Norwegian continental shelf, Statoil has more experience working in waters deeper than 300 feet than any other company in the world. They’ve built some of the biggest structures on earth, like the Troll platform, which measures nearly 1,600 feet from its foundation on the seafloor up to the tip of its flare boom. Statoil’s standards were already good enough that the company received two of the first ten drilling permits issued after BP’s spill.

The message Statoil wants to get across by taking me on this tour is clear: Trust us. That’s understandable, considering that Statoil (which is publicly traded, though 67% of its shares are owned by the government of Norway) is the fifth-largest acreage holder in the Gulf and plans to drill three deepwater wells here this year. But there’s an even bigger reason for the p.r. push: Statoil has more than $20 billion worth of oil and gas assets in the U.S. and has bet still more that drilling into America is the company’s best bet for growth.

Statoil CEO Helge Lund has big plans to increase its output from a current 2.1 million barrels per day to more than 2.5 million by 2020. The U.S. will be the biggest driver of that growth, with production here more than tripling from 150,000 barrels per day today to 500,000. That Lund has chosen to invest this much in the U.S. speaks volumes both about America’s oil and gas future and the state of the industry in the rest of the world.

“There can be no doubt that America is in the midst of an energy renaissance,” says global energy guru Joseph Stanislaw, who now works with Deloitte. Soaring oil output from the Bakken Shale fields, coupled with increased deepwater output primarily from the Gulf of Mexico, has pushed up U.S. domestic oil production by 12% since 2008. This is the first increase in a quarter-century and has confounded predictions that domestic output was set on an inexorable downtrend.

America’s potential oil and gas growth is so great, predicts professor Amy Myers Jaffe of Rice University’s Baker Institute, that by the 2020s the capital of energy will likely have shifted back to the Western Hemisphere, where it was prior to the ascendancy of Middle Eastern mega-suppliers such as Saudi Arabia and Kuwait in the 1960s. Statoil isn’t the only national oil company horning in. After failing to land Unocal in 2005 amid political contretemps, China’s Cnooc has put up $2 billion for joint ventures with Chesapeake Energy and another $2.1 billion to dig into Canada’s oil sands. Sinopec has done a $2.5 billion shale JV with Devon Energy and bought Canada’s Daylight Energy for $2.1 billion. Malaysia’s Petronas is closing on a $5.35 billion takeover of Canada’s Progress Energy. And Korea’s KNOC invested more than $9 billion in U.S. finds.

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