World of Oil and Gas
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Chevron, Rosneft to explore Black Sea ridge |
Chevron has teamed up with Rosneft to explore a ridge in the Black Sea that they said contains some 860 million tonnes of oil. An initial $1 billion investment is planned for exploration work including two wells at the Val Shatsky deposit, and costs could exceed $32 billion if the oil is developed. The companies plan to establish a joint operating company in Russia, with Chevron covering the initial exploration costs, including seismic surveys and drilling. |
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Reliance, Pioneer partner for Eagle Ford venture |
India’s largest private-sector company has agreed to buy a 45% stake in Pioneer Natural Resources’ core acreage in the Eagle Ford Shale of South Texas. Reliance Industries will pay the Texas-based independent $1.315 billion to participate in the largely undeveloped 289,000-acre leasehold. Pioneer, which will serve as development operator, said the deal will support the drilling of 356 horizontal wells in the acreage through 2013. |
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BNK increases European shale acreage to 3.5M |
US shale gas operator BNK Petroleum has been awarded a new concession totaling about 840,000 acres in Saxony-Anhalt, Germany. The new concession brings the company’s total acreage in Europe to 3.9 million gross (3.5 million net) acres in four basins, of which 2.4 million (gross and net) acres is in three basins in Germany. |
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Aker completes Gjøa platform for North Sea |
The semisubmersible platform built by Aker Solutions for the Gjøa oil and gas field offshore Norway started on its journey from the yard at Stord to the North Sea, where installation will take place. Production startup is scheduled for the fourth quarter of 2010. Gjøa will be Statoil’s first floating platform supplied with power from shore and is expected to reduce carbon emissions by about 250,000 tonnes per year. |
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Petrobras budget gets a big boost |
A larger-than-expected five-year budget for Petrobras will be aimed primarily toward development of Brazil’s massive pre-salt offshore oil reserves. The board of the semi-public Brazilian oil company approved an investment plan of $224 billion covering the 2010–2014 period, higher than the $200–$220 billion guidance that was released earlier this year and almost 30% higher than the $174.4 billion earmarked in the previous five-year plan for 2009–2013. The plan includes new projects worth $31.6 billion, $19.7 billion of which is for exploration and production. Overall, $212.3 billion (or about 90%) of total capital expenditures will be invested in Brazilian projects, with the remaining portion going to overseas ventures. A majority of the funds (about 53%) has been earmarked for upstream activities, while 33% will be spent on downstream projects (refining, transport and marketing). Petrobras hopes that the budget hike will help it ramp up production to 3.9 boepd in 2014 and 5.4 boepd in 2020 from the current 2.5 million boepd, largely from the company’s deep and ultra-deep reservoirs lying below the Espírito Santo, Campos and Santos Basins offshore Brazil. The company also reiterated that it expects its two deepwater Gulf of Mexico fields, Cascade and Chinook, to start production in the second half of 2010, despite the six-month moratorium on deepwater drilling in the Gulf. |
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Oil spill relief efforts continue at Macondo well |
BP continues to capture oil and gas from the leaking Macondo well in the deepwater Gulf of Mexico through two separate containment systems as relief wells move closer to their goal of intercepting the blowout well. The lower marine riser package containment cap installed on June 3 is collecting about 16,000 bpd and transporting it to the Discoverer Enterprise drillship, which collects the oil and flares the gas. A second system, which began operating on June 16, is connected directly to the BOP on the seafloor and carries oil and gas through a manifold and hoses to the Q4000 vessel on the surface, which flares both oil and gas. In total, about 24,000 bpd is being collected at the time of this writing, out of 35,000–60,000 bpd that scientists estimate to be flowing from the well. Efforts to install a third collection system have been delayed by Tropical Storm Alex. The first relief well, which was spudded May 2, currently has a measured depth of over 16,000 ft, and is targeting an intercept depth of 18,000 ft. The second relief well, spudded May 16, is at over 10,000 ft MD. Both wells are still expected to be completed in August. |
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US Interior Department begins MMS reorganization |
Former US Justice Department Inspector General Michael Bromwich was named in late June to oversee the fundamental restructuring of the former Minerals Management Service, which was responsible for overseeing oil and gas development on the Outer Continental Shelf. The federal agency, which is part of the Department of the Interior, has been renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, or Bureau of Ocean Energy (BOE) for short. It will comprise three separate entities, each responsible for a different mission of the old MMS: the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement and the Office of Natural Resource Revenue. The MMS restructuring is one of several moves by Interior in the wake of the Macondo well blowout and subsequent oil spill in the Gulf of Mexico. The department also issued directives to lessees and operators on the Outer Continental Shelf implementing stronger safety requirements and blowout prevention requirements. Additionally, Interior ordered a six-month moratorium on deepwater drilling in the Gulf of Mexico. That ban has since been overturned by a US district judge, but the department is seeking to reinstate it both through the appeals process and by issuing a new, revised moratorium order. |
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Acergy, Subsea 7 merge in $2.5 billion deal |
UK-based offshore engineering firm Acergy agreed to buy Subsea 7 for about $2.5 billion in shares to create an expanded line of offerings in seabed engineering and construction under a combined firm valued at $5.4 billion. Under the terms of the agreement, Subsea 7’s shareholders will receive 1.065 Acergy shares for every Subsea 7 share held, a 3% premium. The companies expect annual synergies of at least $100 million within the first three years, from overhead and operating cost savings, more efficient supply chain management and the benefits of an enlarged global fleet. The combined company will retain the name Subsea 7 and will have 43 vessels, 12,000 employees and an orders backlog of $5.3 billion. The deal is expected to close at the end of this year or in the first quarter of 2011. Acergy CEO Jean Cahuzac will head the new company with Subsea 7’s current chairman, Kristian Siem, as chairman of the new company. Subsea 7 CEO Mel Fitzgerald, who is nearing retirement, will serve as a consultant after the merger and will sit on the board. |
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| Aurelian raises output forecast on Romanian gas find | Based on positive test results from its Climauti-1 discovery well in Romania, European-focused Aurelian Oil & Gas expects to increase its total production by 18% over the next seven years. The well, located in the Suceava Block, tested at a rate of 2.7 MMcfd at a flowing tubing-head pressure of about 400 psi. Aurelian said the rate was achieved over a 36-hr test period with a low drawdown of 46 psi. The well, drilled in early June, encountered a 21-ft net gas column in Sarmatian sands at a depth of 1,497–1,521 ft. The Suceava Block is being explored through a 50/50 joint venture with Regal Petroleum. The partners estimate that the gross recoverable gas reserves will be 2 Bcf over the life of the well, and work will start shortly on the installation of a 4-km pipeline to the Bilca gas plant with first gas expected in the fourth quarter of 2010. Also in Romania, Aurelian and two partners have commenced a 45-mi 2D seismic survey on three prospective areas within the Bacau blocks, targeting gas-in-place leads of 147 Bcf. | ||||
| CNPC drops bid for $40B Indonesian gas project | China National Petroleum Corp. (CNPC) on June 15 dropped a bid to take part in the development of the $40 billion Natuna D-Alpha Block gas project in the South China Sea, off the Indonesian province of Riau. CNPC was one of eight giant oil companies that had been shortlisted by Indonesia’s state-owned oil company Pertamina to develop the estimated 46 Tcf on the block—one of the biggest gas accumulations in Asia. The other seven companies pursuing the contract are ExxonMobil, Royal Dutch Shell, Chevron, Eni, Total, StatoilHydro and Malaysia’s Petronas. Pertamina president Karen K. Agustiawan said she had been officially notified by CNPC of the decision, but that the company gave no reason for the withdrawal. Meanwhile, Dwi Martono, president of Pertamina subsidiary PT Pertamina Hulu Energi, said the state company’s partner in the Natuna project will be announced by the end of this year. Pertamina will own a 40% participating interest in the block. | ||||
| Hilcorp gets $400M infusion to develop Eagle Ford | New York-based private equity firm Kohlberg Kravis Roberts & Co. (KKR) will invest up to $400 million in a newly formed partnership created to own and develop Hilcorp Energy’s oil and gas properties in the Eagle Ford Shale of South Texas. The partnership, called Hilcorp Resources LLC, combines a capital commitment from both parties as well as the contribution of Hilcorp’s Eagle Ford acreage position. Upon close, Hilcorp will hold 60% and KKR will hold 40% of the company, with Hilcorp’s management and employees running the day-to-day operations. Over the past year, Hilcorp has acquired about 100,000 net acres in the Eagle Ford, substantially all of which is operated by the Houston-based exploration and development company. Hilcorp is commencing its Eagle Ford development program with two horizontal drilling rigs running in the play. | ||||
| Catcher find may be one of North Sea’s biggest in years | UK producers EnCore Oil and Premier Oil doubled the reserves estimate for their Catcher prospect in the central North Sea with the Catcher East sidetrack, the companies announced June 28. The sidetrack, located in Block 28/9, encountered oil-bearing sandstones very similar to those in the Catcher discovery well, with average porosity of about 34%. Initial analysis indicates 82 ft of net hydrocarbon pay over a gross interval of over 236 ft. The well was drilled to a total depth of 5,931 ft MD, and no oil-water contact was encountered. Initial analysis of the data indicates that Catcher East and Catcher are likely to be part of a single oil accumulation. “Initial analysis suggests that Block 28/9 could possibly contain a series of discoveries that would form one of the larger North Sea oil accumulations of recent years,” said EnCore’s chief executive Alan Booth in a statement. Premier Oil said it had upgraded its oil reserves estimate for the block to 50–80 million bbl of oil, from 25–50 million bbl three weeks earlier. The co-venturers will now integrate the information obtained from this drilling program to determine the next steps for Catcher and an appropriate appraisal program for the license, which will also target other high-potential prospects, most of which have been significantly derisked by the Catcher East success. | ||||
| CNPC may partner with Encana in Canadian gas plays | Encana and China National Petroleum Corp. (CNPC) signed a memorandum of understanding concerning a potential joint-venture investment in the development of some of Encana’s natural gas holdings in the Horn River, Greater Sierra and Cutbank Ridge areas in northeastern British Columbia. In the past three years, Encana has attracted commitments of more than $4 billion of joint-venture capital through multiple agreements in Canada and the US, of which about $900 million is to be invested in 2010. A joint venture with CNPC could contribute greatly to the Canadian gas producer’s annual joint-venture investment target of $1 billion to $2 billion. Under a potential joint venture, Encana would be the operator of all developments, meaning it would drill and complete the wells, build the processing facilities and pipelines and conduct all field work. CNPC would invest capital to earn an interest in the assets and gain an advanced understanding of unconventional natural gas development through an ongoing sharing of technical knowledge. | ||||
| Positive production test results offshore Angola | Maersk Oil reports that it is encouraged by results at the Chissonga oil discovery offshore Angola after a production test at the appraisal well Chissonga-2 flowed 6,650 bpd of 36°API oil on a 36⁄64-in. choke from turbidites of Oligocene age. The Larsen drillship Deep Venture drilled the appraisal well downdip of the Chissonga-1 discovery well in 4,450 ft of water depth in the western part of Block 16. Maersk said the appraisal well reached a TD of 19,857 ft. The company said June 8 that it expects to decide in early 2011 whether to start production. Maersk is the operator of Block 16 and the Chissonga wells with 50% interest in partnership with Angolan NOC Sonangol, which is the concessionaire and holds 20%. Odebrecht Oil & Gas holds 15%, and Devon Energy has the remaining 15%. | ||||
| ONGC plans $1 billion rig acquisition drive | India’s national oil company has outlined an investment of about $1 billion to buy 14 rigs as it looks to control drilling costs in its vast exploration program. Oil and Natural Gas Corp. (ONGC) wants to acquire 10 onshore rigs from India’s state-owned Bharat Heavy Electricals and tender for four offshore rigs. The company now has 115 rigs, of which 85 are onshore and 30 offshore. Of these, ONGC owns 77 and the rest are on lease. The company made 21 discoveries in the fiscal 2009; of the 11 new prospects, one is in deep water, three in shallow water and seven onshore. Bharat Heavy Electricals had stopped making onshore oil rigs 25 years ago but re-entered the business in April 2007. In addition to its rig acquisition program, ONGC plans to recruit 600 engineers over the next six months, of whom 150 are expected to be hired for its drilling activities. | ||||
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