World of Oil

Petrobras makes sizeable oil find in Campos Basin

Brazilian giant Petrobras has made a new oil find in the shallow waters of the Campos Basin, saying the discovery holds estimated recoverable reserves of 25 million bbl. Petrobras said the 4-PM-53 well hit a 420-ft net pay column of 20°API oil. The well lies close to existing platforms in the Pampo and Bicudo concessions. The company plans to use platforms at Bicudo to develop the discovery, with first oil expected later this year.

NIOC signs $10 billion offshore gas deal

The National Iranian Oil Company (NIOC) has partnered with a local consortium and signed a $10 billion development contract for the massive Kish gas field. The consortium, led by Bank Mellat, is the first of its kind in Iran. Kish is a giant offshore field located near Kish Island in the Persian Gulf. Discovered in 2006, Kish has recoverable reserves of 45 Tcf of gas and 221 million bbl of condensate.

ExxonMobil, MOL pull out of Hungarian project

Falcon Oil & Gas has received written notices from ExxonMobil and MOL Hungarian Oil and Gas Plc, stating that neither company will proceed to the appraisal work program in the joint production and development project located in the Mako Trough in Hungary. Falcon now becomes operator of the contract area and is in discussions with multiple parties to continue evaluation of Falcon’s 247,000 acres under the long-term production license.

New Zealand seeks new bidders for Kahili gas field

New Zealand has invited bids for a 2.3-sq-mi block in the Kahili gas field that has been shut in since a well filled with water five years ago. The project had been expected to produce more than 5 Bcf of gas before it failed in December 2004. Kahili Field was discovered in the North Island’s Taranaki Basin in 2002, and a mining permit was granted in 2004. The tender will close on May 3.

Mitsui to buy $1.4B stake in Anadarko’s Marcellus assets

Japan’s Mitsui has announced plans to take a 32.5% stake in US independent Anadarko Petroleum’s Marcellus Shale gas assets in a deal valued at about $1.4 billion. Under the deal, Mitsui E&P USA will farm into about 100,000 net acres of the shale in north-central Pennsylvania by covering 100% of Anadarko’s development costs in 2010 and 90% thereafter, with the obligations expected to be completed by 2013. Mitsui also has the option to take a direct 32.5% stake in Anadarko’s existing wells in the shale by reimbursing a proportionate share of the US company’s spending on developing the fields. The cost to Mitsui would be about $100 million, Anadarko said in a statement. Anadarko chairman Jim Hackett said the deal reflects the value of the company’s Marcellus Basin assets. He said the company’s holdings on 715,000 gross acres contain gross unrisked resource potential of more than 30 Tcf of gas. He said the company plans to drill more than 4,500 wells in the shale in coming years. The deal is expected to close by March 15.

Aramco plans to inject CO₂ into world’s biggest oil field

Saudi Arabia’s national oil company Saudi Aramco plans to inject carbon dioxide into giant Ghawar Field by 2012, a year ahead of previous plans, a government official said. Ghawar pumped 5 million bpd in 2008, more than half of top oil exporter Saudi Arabia’s output. The kingdom announced plans last year for a pilot project to pump the greenhouse gas into the field to both improve production and reduce emissions. “This is a major project that will be implemented by Aramco by 2012,” said Muhammed al Sabban, head of the Saudi delegation to UN talks on climate change and a senior economic adviser to the Saudi oil ministry.  The project would be entirely financed by Aramco, he added. The kingdom plans to inject 40 MMcfd of CO₂ into the field.

Schlumberger, Smith announce $11.34B merger agreement

Schlumberger Ltd. and Smith International Inc. jointly announced that their boards of directors have unanimously approved a merger agreement in which the companies would combine in a stock-for-stock transaction. Under the terms of the agreement, Smith shareholders will receive 0.6966 shares of Schlumberger in exchange for each Smith share. Based upon the undisturbed closing stock prices for both companies on Feb. 18, the agreement places a value of $45.84 per Smith share, representing a 37.5% premium. Upon closing, and reflecting the issuance of new Schlumberger shares, Smith stockholders collectively will own about 12.8% of Schlumberger’s outstanding shares of common stock. Schlumberger expects to realize incremental pre-tax synergies—after integration costs—of about $160 million in 2011 and about $320 million in 2012. Schlumberger expects the combination to be accretive to earnings per share in 2012. It is anticipated that the closing of the transaction will occur in the latter half of 2010. Schlumberger is already the world’s largest oilfield services company, and the merger will see the Paris- and Houston-based company rake in double the revenues of Halliburton, based on the 2009 revenues of each company, according to The Wall Street Journal.

Rig shortage suspends drilling in Ugandan blocks

A drilling rig shortage has delayed appraisals and drilling activities since the beginning of February in Uganda’s Block 2 and Block 4B, the senior geologist at the country’s petroleum exploration and production department said Feb. 26. As reported by Dow Jones, Dozith Abeinomugisha said only three wells have been drilled in Tullow Oil-operated Block 2, where the largest oil field in the country has been discovered. In Block 4B, licensed to Dominion Petroleum Ltd., he said, “drilling locations have been identified but the company is not able to drill them now due to the lack of drills.”

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