The M/V Tycoon as seen on January 10. Photo: AMSA

The Australian Maritime Safety Authority (AMSA) said today that it has contracted Titan Salvage to remove the wreckage of the M/V Tycoon from the cliffs of Christmas Island and work will begin immediately.

The Panamanian-flagged M/V Tycoon broke free its moorings in severe weather on January 8 and grounded along the cliffs on Christmas Island.  The vessel had approximately 102 tons of intermediate fuel oil, 11,000 liters of lubricant oil, 32 tons of diesel oil and approximately 260 tons of phosphate onboard when she grounded.

Since the grounding, the vessel has been left untouched and deteriorating by its registered owners, Singapore’s Tycoon Navigation SA, who is ultimately responsible for the removal.

Fed up with inaction of the company, the Australian Government in April announced that it was stepping in to take over the removal of wreckage after funding for the operation was approved.  The government added that it will take action to recover those costs from the vessels owner.

The operation to remove the wreckage is expected to take eight weeks.

MV ID Integrity, note the red over red "not under command" lights displayed on the ship's masthead, image courtesy AMSA

**UPDATE**

From the Australian Marine Safety Authority:

One of the commercial tugs, PT Kotor, rendezvoused with the ID Integrity at approximately 10:30am AEST today.

At 11:30am AMSA was advised that the tug had connected a towline to the ID Integrity and they are now travelling at slow speed in a south-easterly direction (i.e. way from the Outer Reef) awaiting the arrival of the larger tugs.

AMSA’s Emergency Towage Vessel (ETV) Pacific Responder is now scheduled to be on scene around 3:00pm. Once on scene it will provide assistance as required and remain on station until the third tug, the PB Leichhardt, arrives and has connected a tow line.

MV ID Integrity, a Handymax tanker managed by ID Wallem Shipmanagement was enroute to Townsville, Australia from Shanghai on Friday when it suffered an engine breakdown approximately 175 nautical miles northeast of Cairns.  According to the Australian Maritime Safety Authority (AMSA), the breakdown occured at approximately 6PM Australian Eastern Time on 18 May.

While ID Integrity’s crew continues to repair the engine, two tugs have been dispatched to the scene and the AMSA has also tasked the Emergency Towage Vessel (ETV) Pacific Responder. The first tug is due on scene on Sunday morning (20 May).

ID Wallem noted this evening that their ship, while is drifting westwards north-west of Cairns, has passed safely over Shark Reef.  The unladen vessel is now expected to continue to drift safely in open water until the first tug arrives on scene at 9am EST on Sunday morning.

The AMSA notes that RCC Australia is also communicating with other vessels in the area which may be able to provide assistance.

In the video the 68,789 dwt bulk carrier, Grand Rodosi, absolutely destroys the much smaller tuna boat, Apollo S, while moored at the wharf in Port Lincoln, South Australia.  The Apollo S quickly sank (at least once the Grand Rodosi had unpinned it) and the wharf was damage in the collision.

Click here to view the embedded video.

Additional information can be found on this incident HERE.

The Pyrenees Floating Production, Storage and Offloading facility, Western Australia, image courtesy BHP Billiton

SYDNEY (Dow Jones)–Australia’s government on Sunday said it has awarded 12 new petroleum exploration permits for off the coast of Western Australia and Victoria state. Among the eight companies to win the permits–the tender process received 46 bids–are BHP Billiton (BHP, BHP.AU), Bass Strait Oil Company, WHL Energy and Woodside Petroleum (WOPEY, WPL.AU).

“Liquefied natural gas exports are forecast to significantly expand in Australia over the next two decades,” said Martin Ferguson, resources minister in a release.

“With these new permits, we hope to see discovery of new oil and gas reserves, which could translate into more jobs and growth for our economy.”

The new permits are expected to spark some A$303 million in investment over the next three years, according to the government.

-By Enda Curran, Dow Jones Newswires

Yep. Queensland Nickel Group's Chairman of The Board, Professor Clive Palmer.

MELBOURNE–Australian billionaire Clive Palmer has formed a shipping business to handle ore freight for his Queensland Nickel Group, with plans to commission four 64,000-metric-ton vessels from the Chinese shipyard already tasked with building a 21st-century version of the passenger liner Titanic.

Palmer said in a statement Friday that the new business, Asia Pacific Shipping Enterprises, will operate the fleet of ships out of Singapore. The vessels are to be built by state-owned CSC Jinling Shipyard.

Queensland Nickel owns the Palmer Nickel & Cobalt Refinery near Townsville on the coast of Queensland state, and the Styx Coal development project in central Queensland. It also owns golf courses and resorts.

“This is an exciting time for the Queensland Nickel Group of companies, which has an expanding international footprint across Asia and the South Pacific region,” Palmer said. “The group has been expanding from minerals processing activities to embrace tourism and hospitality, resource exploration and development and shipping opportunities.”

Palmer said earlier this week that he had commissioned CSC Jinling to build Titanic II, a luxury cruise ship that will have the same dimensions as its ill-fated namesake, with 840 rooms and nine decks. His new shipping company, Blue Star Line Pty. Ltd., plans a fleet of luxury liners alongside the Titanic II, which is scheduled to make its maiden voyage in late 2016, he said.

-By Robb M. Stewart, Dow Jones Newswires

Copyright © 2012 Dow Jones & Company, Inc.

- By ExxonMobil Connection

The ExxonMobil Drilling team this month commenced operations on the Jansz-lo driling program for the Gorgon LNG Project off Western Australia.

ExxonMobil is the Jansz-Io Work Operator and is responsible for drilling and completing the first phase of the Jansz-lo drilling program, which consists of 10 wells.

Drilling at Jansz-Io is expected to take around two years and will use ExxonMobil technology.  This technology relates to the design of the wells, and, in particular, the application of specialised techniques to allow enhanced production.  The 10 Jansz-Io wells will be drilled to a total measured depth of between 3500 and 4500 meters in water depths of 1350 meters.

ExxonMobil has signed a contract with Transocean to secure the Deepwater Frontier drillship, which underwent extensive upgrades prior to commencement of the drilling program.

Transocean operates globally with a fleet of 135 modern offshore drilling rights including drillships, semisubmersible rigs and jackup rigs.  The Deepwater Frontier is one of 36 dynamically positioned drillships and semisubmersibles operated by Transocean.

The Deepwater Frontier is 221 meters long and designed for deepwater drilling in a range of offshore environments.  It is a deepwater, dynamically positioned drillship capable of drilling to around 9,100 meters in water depths up to around 3,000 meters.

The Deepwater Frontier was inspected and upgraded prior to commencing work in Australia to ensure continued operational integrity and regulatory compliance.  A complete refurbishment and full recertification of the blow-out preventers (BOP) to Original Equipment Manufacturer standards was undertaken while BOP control systems were also upgraded for enhanced operational performance.  Improvements were also made in areas such as fire protection and power supply systems.

ExxonMobil’s knowledge and global drilling experience offer the skill and technical capability needed to undertake the Jansz-lo development drilling safely and responsibly.

The Gorgon Project is operated by an Australian subsidiary of Chevron and is a joint venture of the Australian subsidiaries of Chevron (about 47 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).

The new ship will look exactly like this, only newer.

An Australian billionaire has announced his plans to build the Titanic II, a modern-day replica of the ill-fated liner that sank over 100 years ago.

Clive Palmer, a coal mining magnate from Queensland, and his newly established Blue Star Line, have commissioned China’s state-owned CSC Jinling Shipyard to build the ship to the exact dimensions as the original, which at the time was the largest vessel ever constructed.

“It will be every bit as luxurious as the original Titanic, but of course it will have state-of-the-art 21st century technology, and the latest navigation and safety systems,” Palmer said in a statement.

Palmer said the new vessel has been designed with the help of a special research team to ensure historical accuracy, and will feature the four unmistakeable smoke stacks of the original, which will serve simply for show.

The only real changes from original would be what you can’t see, including welding rather than riveting, a bulbous bow, diesel power, and enlarged rudder and bow thrusters, according to Palmer.

The new ship is expected to be completed in 2016 and will sail on its maiden voyage from, where else, England to New York.

Clive Palmers fortune is estimated to be over $5 billion, making him the fifth richest person in Australia. The price of the project has not been disclosed.

Skandi Atlantic, image via MarineTraffic.com

DOF announced today that they have signed a NOK 225 million contract with Apache Energy Limited for the use of the anchor handling tug supply vessel, Skandi Atlantic, offshore Australia.  The firm period of the contract is 900 days commencing in May 2012.

Skandi Atlantic is owned by Aker DOF Deepwater AS (ADD) and is the last vessel of 6 sister vessels built at the STX OSV yard in Vietnam.

Chief Executive of DOF ASA, Mons S. Aase, comments:

The contract with Apache is a strategic important contract for both DOF and ADD. It is the first long term contract we win in the Australian market for AHTS vessels.

DOF presently operates 8 vessels in the region. We expect a growing demand for our vessels and services in the region and our ambition is to grow our fleet and organisation out of our Perth office.

The ADD vessels have proven to be well suited for operations world wide. Two vessels are now operating in Asia Pacific on long term contracts, two in the North Sea spot market and one on long term contract in Brazil. We expect a good market for these vessels in all three regions.

DOF ASA operates 74 vessels around the world within three segments in relation to strategic types of activities and vessel types – Platform Supply Vessels (PSV), Anchor Handling Tug Supply Vessels (AHTS) and Construction Support Vessels/Subsea Vessels (CSV). In addition, the group also owns and operates a fleet of state of the art and highly sophisticated ROVs.

Chevron Australia's Managing Director Roy Krzywosinski

(Dow Jones) Chevron Corp. (CVX) said Tuesday its oil and gas production will inch up this year but it expects output to jump 20% in five years as massive liquefied natural gas projects in Australia commence operations.

During the company’s annual meeting with analysts in New York, Chevron executives said production will rise 0.26% to 2.68 million barrels of oil equivalent per day this year, and to 3.3 million barrels of oil equivalent per day by the end of 2017. Those estimates are up from 2.67 million barrels of oil equivalent per day it produced in 2011. The 2017 projection is based on an oil price average of $79 a barrel, the company said.

Chevron, based in San Ramon, Calif. and the second largest U.S. oil company by market value after Exxon Mobil Corp. (XOM), said annual production could vary depending on oil prices. The company has in place several share production sharing contracts with foreign governments that give more production to national oil companies–and less to international oil companies– when oil prices rise.

Light, sweet crude oil for April delivery on the New York Mercantile Exchange was 30 cents lower, at $106.04 a barrel, in a range of $105.85 to $107.13 a barrel.

Chevron’s future growth will be driven by a handful of large oil and gas projects worldwide. The liquefied-natural-gas Gorgon project in Australia is on track to start production in 2014 and still expected to cost $37 billion, the company said. Construction of development wells is expected to start this year.

Chevron’s $29 billion Wheatstone LNG project, also in Australia, is scheduled to start production in 2016.

The first shipment of Chevron’s LNG project in Angola is expected in the second quarter and the project is expected to reach peak production of 175,000 barrels of oil equivalent per day.

Asked about the possibility that company could use some of its abundant cash –$15 billion– to increase dividends or make acquisitions, Chevron Chief Executive John Watson said the company’s priority is to fund a string of capital projects. The executive, however, hinted things could change once these projects advance. “I don’t want to pile up cash on the balance sheet indefinitely,” Watson said. “As we get closer to those projects on line, our need to carry cash on our balance sheet will diminish.”

Chevron also answered questions about its outlook for Brazil, where it is facing legal actions from authorities related to an offshore oil spill in November. “It remains to be seen what the future holds for our business there,” Watson said. “We need to be treated fairly and we need to be treated consistently. The rhetoric has been very high.”

Chevron, which has already been fined more than $50 million for the spill, said it believes its employees reacted timely and responsible to the incident.

Chevron also said that outside the U.S., it is trying to develop shale gas in countries where there is a market for natural gas, such as Poland, Argentina and China. It said it has begun drilling for unconventional oil and gas resources in China as part of a joint study with China Petrochemical Corp., known as Sinopec Group, which covers 940,000 acres.

In Argentina, the company plans to start exploratory drilling this year in the 110,000 acres it has in El Trapial, while it plans to start its second well in Poland this quarter. The company plans to begin exploration drilling in Romania this year.

Company executives, however, warned global shale gas exploration is nascent and still uncertain. Unlike the U.S., where companies have already drilled many wells allowing them to understand shale formations, international drilling is beginning and the performance of the formation is basically unknown, executives said.

Speaking to reporters on the sidelines of the meeting, Watson said low natural gas prices “have surprised everyone” and that he believes the supply glut caused by the development of shale gas in the U.S. will continue “for some time.” Natural gas prices fell to a fresh decade-low last week below $2.40 per British thermal unit.

Watson attributed high oil prices to “financial money moving into commodities”, international events and a “tightness” in the global supply-demand equilibrium.

The company confirmed that its capital expenditure budget for this year is expected to be $32.7 billion.

-By Isabel Ordonez and Christian Berthelsen; Dow Jones Newswires

Technip's Global 1200 laying pipe, image courtesy Crowley Shipmanagement

Technip was awarded a pipeline installation contract by Woodside Energy Limited for the Greater Western Flank Phase 1 Project located 130 kilometers North West of Karratha in Western Australia.

Woodside Chief Executive Officer and Managing Director, Peter Coleman said the project would maintain offshore supply to the Karratha Gas Plant and support the North West Shelf Project’s ongoing marketing efforts for domestic gas and LNG.

“This Project will continue to maximise the value of existing infrastructure and demonstrates ongoing investment in Australia’s largest resource project” Mr Coleman said.

This pipeline will link the Goodwyn GH and Tidepole fields via a subsea tie-back to the existing Goodwyn A (GWA) platform and represents the next major development for the Woodside-operated North West Shelf Project.

The contract scope includes load out, transportation and installation of 16 kilometers of 16” gas flow line from the Tidepole manifold to the GWA platform.

Technip’s operating center in Perth, Australia will execute the contract, with the support from the Singapore office. Offshore installation will be carried out by the Global 1200 or the Global 1201, two flagship vessels that joined Technip’s fleet through the recent acquisition of Global Industries.

About the Karratha Gas Plant
Located 1260 km north of Perth, Western Australia and covering approximately 200 hectares, the Karratha Gas Plant includes five LNG processing trains, two domestic gas trains, six condensate stabilization units, three LPG fractionation units as well as storage and loading facilities for LNG, LPG and condensate.

One of the most advanced integrated systems in the world, the Karratha Gas Plant has the capacity to produce:

• Domestic gas - 12,000 tonnes/day (firm customer commitments equate to approximately 600TJ per day)
• LNG –  52,000 tonnes/day
• LPG –  4,200 tonnes/day
• Condensate –  165,000 barrels/day

In 2008 annual LNG production capacity at the Karratha Gas Plant increased to 16.3 million tonnes with the start-up of a fifth, 4.4 million tonne-a-year LNG processing train.

About the Greater Western Flank Development
The North West Shelf Venture is progressing pre-development studies, including appraisal drilling of Tidepole-2, to define
the development plan sequence for commercialisation of the undeveloped petroleum resources in the Greater Western
Flank (GWF) area.

This area, to the south-west of the Goodwyn A platform, contains 14 fields which are estimated to hold approximately three trillion cubic feet of recoverable gas and approximately 100 million barrels of condensate. Concept selection and front end engineering design for the GWF development is expected in 2010.