World of oil and gas
PRODUCTION |
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BP announces first oil from West Chirag in Caspian Sea |
The Azerbaijan International Operating Company (AIOC), operated by BP, has begun oil production from the West Chirag platform, as part of the Azeri-Chirag-Gunashli (ACG) field development in Azerbaijan’s sector of the Caspian Sea. Start-up of the West Chirag platform completes the Chirag Oil Project (COP), sanctioned in 2010. Production began from one of the pre-drilled wells, J05, on Jan. 28. The oil will first pass through the newly-installed processing facilities on the platform, before being exported to the Sangachal Terminal, via a new, in-field pipeline linked to an existing 30-in. subsea export pipeline. Production will increase through 2014, as the other pre-drilled wells are brought online. The West Chirag platform has been installed in a water depth of about 170 m, between the existing Chirag and Deepwater Gunashli platforms. The design oil capacity of the new platform is 183,000 bopd. The gas export capacity is 285 MMcfd. |
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Petrobras’ P-55 begins operations in Roncador field |
Petrobras’ P-55 semisubmersible platform, one of the strategic projects in the company’s 2013–2017 Business and Management Plan, started up Dec. 31 in the Campos basin’s Roncador field. The P-55 is part of Roncador’s field Module 3 project, and will be connected to 17 wells, 11 of which are oil and gas producers, plus six water injectors. Oil and natural gas will be transported from the platform via submarine pipelines connected to the unit, to the oil and gas offloading system of the Campos basin. The P-55 is installed at a water depth of 1,800 m, with a processing capacity of 180,000 bopd, compressing capacity of 6.0 MMcm of natural gas, and water injecting capacity of 290,000 bbl. Weighing 52,000 t, and with an area of 10,000 sq m, it is the biggest semisubmersible ever built in Brazil, and is one of the largest structures of its kind worldwide. |
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Chevron makes final investment decision on UK’s Alder field |
Chevron said that its UK subsidiary, Chevron North Sea Limited, has reached a final investment decision and received approval from the UK government to proceed with development of Alder field, in the central North Sea. The project has a planned design capacity of 110 MMcfgd and 14,000 bcpd. First production is expected in 2016. The field will be developed via a single subsea well, tied back to the existing Britannia platform, a distance of 17 mi. Chevron North Sea Limited operates the project (73.684%), with co-venturer ConocoPhillips (UK) Limited (26.316%). |
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| Gazprom Neft produces first oil at Badra field |
Gazprom has completed successful well-testing of its BD4 appraisal well in Iraq’s Badra field. Potential production capacity was tested through the sequential testing of six drilled strata, followed by final testing of all pay horizons. A natural flowrate of 7,000 bopd was recorded. Testing continues at two other wells at the same field. This year will also see work begin on the drilling of six production wells under the company’s contract with China’s ZPEC. The infrastructure necessary to bring the field into commercial production in 2014 is also nearing completion. Work continues on the construction of a 170,000-bopd central gathering facility, the first line of which will have a capacity of 60,000 bopd. |
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| GDF SUEZ announces first gas from North Sea’s Juliet field |
GDF SUEZ has initiated gas production from Juliet field, a subsea development on the western flank of the Southern Gas basin, 39 km east of the Lincolnshire coastline in the UK. Initial gas has been produced from the Juliet West well, the first of two wells to be drilled. The second well (Juliet East) is expected to come onstream later in first-quarter 2014. At plateau, the wells will produce approximately 80 MMcfgd. Produced gas is being transported by a 22-km pipeline to the Pickerill A platform, and then transported onshore via an existing export pipeline to the Theddlethorpe gas terminal. The Juliet reservoir is a fully appraised Rotliegendes Leman Sandstone reservoir, with gross associated reserves of 11.6 MMboe. |
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GOVERNMENT/REGULATORY |
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| Algeria seeks to end oil output drop with exploration bids |
In an effort to increase stagnating liquids output, Algeria has invited companies to bid for exploration rights on 31 plots, totaling an area the size of Sweden. A deadline of Aug. 6 has been set for firms to submit bids as part of the country’s fourth competitive petroleum exploration tender. Algeria, Africa’s top gas producer, opened bidding Jan. 22, and is set to sign contracts Sept. 5. In total, the plots offered make up roughly 450,000 sq km, and may contain both conventional and unconventional reserves. Alergia’s output was essentially unchanged last year. In 2013, higher taxation, corruption probes and terror attacks on projects all contributed to a slowdown in exploration. With the bidding, originally scheduled for early 2013, Sonatrach will remain a mandatory partner in all exploration projects, with a minimum stake of 51%. |
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| Total CEO says Iran to woo companies with “sexy” contracts |
According to Total CEO Christophe de Margerie, Iran will offer operators contracts that are better than before, following the lifting of a trade embargo against the country. When the U.S. tightened sanctions against Iran in 2009, Total pulled out of work at South Pars gas field, and will be able to restart the project, should the company re-enter the country. Continued negotiations regarding the lifting of sanctions largely depend upon Iran’s commitment to limit its nuclear program to power generation, only. Led by Hassan Rouhani, the country lists as its top priorities the development of South Pars, and the redevelopment of existing fields. Any Iranian production would likely come after 2017, said de Margerie. The International Energy Agency estimated that purchasers imported 1.07 Mmbopd from Iran in 2013 despite the embargo. |
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| Study: Keystone pipeline would have minimal impact on climate |
A recently-released review conducted by the U.S. Department of State has found that the impact of the Keystone XL pipeline on the climate would be minimal. According to department officials, the proposed project would not increase carbon emissions significantly, because Alberta’s oil sands would be developed anyway. Although the report’s findings do not mark a final decision, the review signals a positive move, as President Obama has said he would not approve the project, if it would increase carbon pollution. A final decision would likely come after questions concerning energy needs and diplomatic relations can be addressed. TransCanada applied more than five years ago for a permit to build the 830,000-bopd pipeline, which would cross the U.S.-Canadian border, connecting oil sands with refineries on the Gulf Coast. For additional details, see pages 19, 36, 72 and 122. |
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EXPLORATION |
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| Shell, Gazprom Neft JV starts drilling horizontal well at Bazhenov |
Salym Petroleum Development, a Shell-Gazprom JVin Russia, has started drilling the first horizontal appraisal well in the Bazhenov formation in Upper Salym, as a part of a pilot project that will construct five horizontal appraisal wells during 2014–1015. The wells, which target Siberia’s shale oil deposits, will employ multi-frac technology. During the last three years, SPD drilled three vertical exploration wells in Upper Salym, in addition to conducting 3D seismic, coring and well logging activities. |
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| ERHC Energy completes airborne FTG survey of Kenya Block 11A |
ERHC Energy has completed an airborne, full-tensor, gravity gradiometry (FTG) survey of Block 11A, in northwestern Kenya. Bell Geospace, which flew the FTG on ERHC’s behalf, acquired 14,943.8 line km. ERHC is in the process of awarding the contract for a 2D seismic survey of at least 1,000 km in the block, in compliance with the work program. The company said that preliminary results confirmed that the Lotikipi basin extends into Block 11A. ERHC operates the block, which encompasses approximately 11,950 sq km, and is to the northwest of the Lokichar basin. |
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| Partners to undertake 3D seismic survey on Alaska’s North Slope |
Royale Energy and its partner, Rampart Energy, plan to begin a 120-sq-mi, 3D seismic survey on Alaska’s North Slope next month. SAE Exploration was awarded the seismic acquisition contract, which is anticipated to take 30 days. Rampart Energy is exploring two areas of the North Slope for both conventional and unconventional oil. The company signed a farm-in agreement in May 2013 for leases owned by Royale Energy. |
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Chariot completes seismic acquisition offshore Namibia |
Chariot Oil & Gas has completed its 2,128-km, 2D seismic survey in Southern Block 2714B, offshore Namibia. Chariot operates the block (85%), in conjunction with NAMCOR (10%, carried interest) and Quiver Oil (5%, carried interest). The survey was contracted to, and carried out by, Dolphin Geophysical, to provide further detail on the region’s shallower petroleum system. |
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Mubadala Petroleum moves forward in Malaysia |
Mubadala Petroleum has reached agreement with Shell to swap equity in two exploration blocks offshore Malaysia. Under this agreement, Mubadala Petroleum will gain a 20% interest in deepwater Block 2B, while Shell will gain a 20% interest in Block SK320. Block 2B is operated by Shell, and Mubadala Petroleum operates Block SK320, while Petronas Carigali is a participant in both blocks. The campaign in Block SK320 has yielded two new gas discoveries, Pegaga and Sintok, to add to the existing M5 discovery. Sintok-1 was drilled to a depth of 2,775 m, into the main target reservoir, and penetrated a 290-m, gas-bearing carbonate reservoir. | ||
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ACQUISITIONS |
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| Fieldwood Energy acquires SandRidge business unit | Fieldwood Energy has acquired SandRidge Energy’s Gulf of Mexico and Gulf Coast business unit for $750 million. SandRidge will retain a 2% overriding royalty interest in two identified exploration prospects. Total proved reserves attributable to the acquired entities’ assets were reported to be 57.2 MMboe, of which 51% are oil. | ||
| Chaparral Energy acquires Panhandle Marmaton assets | Chaparral Energy, based in Oklahoma City, has closed the acquisition from Cabot Oil & Gas of its Panhandle Marmaton assets for $160.1 million. The transaction is expected to add approximately 2,000 boed, based on Cabot’s September 2013 production, and 66,000 net acres to Chaparral’s existing position in the Panhandle Marmaton play. The acquisition essentially doubles Chaparral’s holdings to 126,000 net acres in the play. In Beaver and Texas Counties, Oklahoma, and Ochiltree County, Texas, production from the purchased assets is approximately 81% oil, with total reserves estimated to be approximately 32.0 million boe, and proved reserves estimated at 5.5 million boe. | ||
| Centor enters agreement for Canadian shale oil resources | Centor Energy has completed a sale-and-purchase agreement to acquire a 55% working interest in a shale resource with more than 1.1 billion bbl of recoverable oil in the Pasquia Hill region of east-central Saskatchewan. The leases cover qualified 21,658 acres. The property’s resources are estimated based on analysis of previously-completed geological surveys, core drilling programs and laboratory testing. | ||
DISCOVERIES |
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| Minor oil, gas deposit found near Heidrun field | Faroe Petroleum Norge was set to complete drilling of wildcat well 6507/10-2 S, approximately 13 km south of the Heidrun platform. The well’s primary exploration target was to prove petroleum in Middle Jurassic reservoir rocks (Garn and Ile formations). The secondary exploration target was to prove petroleum in Lower Jurassic reservoir rocks (Tilje formation). A roughly 12.5-m oil column and 12-m gas column were encountered in the Garn formation. Preliminary discovery estimates range from 1 to 2.5 MMcm of recoverable oil equivalents. This is the first exploration well in license 645. | ||
| Statoil finds gas, oil in North Sea’s Askja prospects | Statoil, together with its PL272 partners, has struck a gas discovery in the Askja West prospect, and an oil find in the Askja East prospect of the North Sea. Exploration wells 30/11-9 S and 30/11-9 A, drilled by the Ocean Vanguard rig, are between Oseberg and Frigg fields, and about 13 km southeast of the Statoil-operated Krafla/Krafla West discoveries. Main wellbore 30/11-9 S tested the Askja West prospect, and proved a net gas column of 90 m in Late and Middle Jurassic rocks. Sidetrack 30/11-9 A tested the Askja East prospect, and proved a net oil column of 40 m in the same geological formations. Statoil estimates the total recoverable volumes in the two prospects to be in the range of 19 to 44 MMboe. | ||
| Cobalt hits fourth Angolan pre-salt discovery | Cobalt International Energy, in partnership with Sonangol and the Block 21 partners, has struck the first discovery in the Syn-rift interval of the Bicuar #1A pre-salt, deepwater exploratory well, offshore Angola. The well was drilled successfully to an MD of 5,739 m, and encountered approximately 56 m of net pay from multiple pre-salt intervals. Results confirmed the existence of both oil and condensate in multiple intervals. This is Sonangol’s and Cobalt’s fourth deepwater, pre-salt discovery offshore Angola. | ||
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| Tullow Oil finds oil in two exploration wells |
Tullow Oil has made oil discoveries at the Amosing-1 and Ewoi-1 exploration wells in Block 10BB, onshore northern Kenya. Following these results, in addition to recent discoveries, the company has updated its estimate of discovered resources in this basin to over 600 MMbbl of oil. Tullow believes that the overall potential for the basin is in excess of 1 billion bbl. Based on drilling results, wireline logs and reservoir fluid samples, Amosing-1 has intersected a net oil pay of 160 to 200 m. Ewoi-1 has encountered a net pay of 20 to 80 m. Following the completion of logging operations, the wells will be suspended for future flow testing. |
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DISCOVERIES |
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| ONGC inks MoU with Mitsui for E&P cooperation |
A memorandum of understanding (MoU) between India’s ONGC and Japan’s Mitsui & Co. was signed Jan. 24. The agreement provides for cooperation in E&P, for both conventional and unconventional petroleum and natural gas opportunities, in India and other countries. In August 2012, ONGC and Mitsui entered into an MoU for wide-ranging cooperation in the gas and LNG business. In March 2013, Mitsui entered into another MoU with ONGC, BPCL and New Mangalore Port Trust for a feasibility study of a LNG terminal at Mangalore. |
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| Statoil and partners terminate the Kristin gas export project |
The Kristin Gas Export Project (KGEP) partners have decided to terminate the project, due to unsustainable economics. KGEP—a pipeline connection between Kristin field and Polarled—was sanctioned by the project’s partners (Statoil 53.4%, Petoro 35.6% and GDF Suez 11%) in conjunction with the Polarled project sanction, in late 2012. KGEP represented less than 5% of the Polarled volumes, and the termination does not influence the Polarled project execution. KGEP included Kristin platform modifications and a 30-km pipeline to tie into the Polarled pipeline. The opportunity for the future connection of Kristin field to the Polarled pipeline is still an option. |
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| Amec to purchase Foster Wheeler for $3.2 billion |
UK oil and gas engineering firm Amec has agreed to buy Foster Wheeler for $3.2 billion, with the former expecting to close the deal, subject to conditions, in second-half 2014. Foster Wheeler, which would take two seats on the UK board, agreed not to seek out other offers prior to Feb. 22, when agreement on the final terms is expected. Previously, Amec offered as much as $1.1 billion in August for Kentz Corp., to expand its energy construction and services business, but the Irish company rejected the offer. Amec is valued at $5.3 billion. |
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