World of oil and gas
EXPLORATION |
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Norway reports record number of APA applications |
At the end of the application deadline for “awards in predefined areas (APA) 2014,” on the Norwegian shelf, authorities had received applications from 47 companies. After several oil and gas discoveries were made in the Norwegian Sea during the last year, confidence in new opportunities in the area has grown. The APA scheme helps maintain the activity level and realize the shelf’s value potential. The Norwegian Petroleum Directorate (NPD) will now start evaluating applications. “We are looking for the best applicants, companies with good knowledge, new geological concepts and the best strategy for exploring the areas,” said Sissel Eriksen, NPD’s exporation director. Acreage totaling 109,205 km2 was open for applications this year. Since APA 2013, the APA areas have been expanded by six blocks in the Norwegian Sea and three blocks in the Barents Sea. For APA 2013, NPD received applications from 50 companies for acreage totaling 103,029 km2. Of this, 18,136 km2 were awarded in early 2014. |
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Drilling begins at Brazil’s Libra field |
With a target depth of 5,850 m, the first appraisal well was spudded at Libra field, offshore Brazil, in early August. The super-giant field, 200 km offshore, has estimated resources of between 8 Bbbl and 12 Bbbl, in reservoirs that lie under a thick salt layer. The well kicks off several years of work that will allow Total and its partners to improve their understanding of the field. “The field covers 1,550 km2, and we think it could require as many as 12 FPSOs to develop,” said Total’s Ladislas Paszkiewicz. Once the first systems have been installed, production is scheduled to begin in 2017 and plateau at 1.3 MMbopd in 2030. In 2013, Total significantly increased its operations in Brazil, a country that accounts for 40% of oil discoveries in the last five years. |
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Polarcus finishes Porcupine survey |
Polarcus has completed acquisition of a major multi-client project in the southern Porcupine basin, offshore southwestern Ireland. The survey, undertaken in partnership with ION GeoVentures, saw the 3D seismic vessel Polarcus Amani tow an ultra-wide, 1,350-m receiver array comprising 10, 2-Hz, solid digital streamers, each 8,100 m in length. This large seismic spread, towed at 14 m to maximize weather uptime, enabled the vessel to cover 4,300 km2 in 73 days within a challenging Atlantic frontier environment. The multi-client project provides 3D coverage over Providence Resources’ Drombeg exploration prospect, plus the adjacent open acreage on offer in the current 2015 Atlantic Margin Oil and Gas Exploration Licensing Round. Polarcus and ION GeoVentures are also partnering with SeaBird to acquire up to 6,600 km of regional 2D, multi-client data across the entire basin, with the objective of providing a regional context to this new frontier hydrocarbon province. A preliminary data volume from the 3D survey will be available by the end of 2014, with the final data volume available in March 2015. |
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| Petroceltic, Edison JV wins license in Egypt |
A Petroceltic and Edison International JV was the successful bidder for the North Port Fouad Block, in the Egyptian Natural Gas Holding Company’s 2013 International Bidding Round. North Port Fouad (Block 7), is offshore the Nile Delta and lies to the north of, and immediately adjacent to, the North Thekah Block, which was awarded to a Petroceltic/Edison JV in 2013. The combined area of both licenses exceeds 7,000 km2. There have been no wells drilled on the North Port Fouad Block to date, but regional and seismic evidence indicates that the proven Nile Delta Oligocene and Levantine basin Miocene plays are likely to be present. Major discoveries have been reported in both plays in recent years. North Port Fouad has an initial three-year term and is extendable up to a maximum duration of eight years. |
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GOVERNMENT/REGULATORY |
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| Magnolia LNG passes FERC milestones |
Liquefied Natural Gas Limited’s wholly-owned subsidiary, Magnolia LNG, has achieved two significant milestones in progressing its pending application with the U.S.’s Federal Energy Regulatory Commission (FERC) for its proposed 8-mtpa LNG export project in Lake Charles, La. On Sept. 15, the U.S. Coast Guard issued a Letter of Recommendation approving the project’s waterway suitability assessment. And on Sept. 17, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration issued a Letter of No Objection to FERC, approving the project’s design spill methodology. This is a significant milestone for the project, as it allows FERC to move closer to finalizing its review of safety and engineering design items. To issue a Notice of Schedule for Environmental Review, and the Draft Environmental Impact Statement for the project, FERC requires these inter-agency approvals. |
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| API survey reveals extent of economic growth tied to oil, gas |
API unveiled a new vendor survey on Sept. 9 that demonstrates the diverse array of suppliers, service providers, and other small and mid-sized businesses supporting the U.S. energy renaissance. “Oil and natural gas companies are only one part of a much larger economic success story that is creating job growth, up and down the supply chain,” said API Upstream Group Director Erik Milito. “From the folks who make work gloves to environmental consultants, these businesses represent just a small cross-section of the opportunities created by America’s energy revolution.” API’s 2014 vendor survey lists nearly 30,000 operators, contractors, service companies, suppliers and other vendors that support oil and natural gas operations in every state, and the District of Columbia. |
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| DOE authorizes LNG exports to non-FTA countries |
The U.S. Department of Energy (DOE) has issued the final authorization to Cameron LNG and Carib Energy to export domestically produced LNG to countries that do not have a Free Trade Agreement (FTA) with the U.S. The Cameron LNG Terminal in Cameron Parish, La., is authorized to export LNG up to the equivalent of 1.7 Bcfgd for a period of 20 years. Carib is authorized to export LNG up to the equivalent of 0.04 Bcfgd for a period of 20 years from the proposed liquefaction facility in Martin County, Fla., using approved ISO LNG containers. Federal law generally requires approval of natural gas exports to countries that have an FTA with the U.S. For countries that do not have an FTA with the U.S., the Natural Gas Act directs DOE to grant export authorizations unless it finds that the proposed exports “will not be consistent with the public interest.” |
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DISCOVERIES |
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| AWE, Origin Energy in major gas find in Western Australia |
AWE Ltd., operator of the L1/L2 JV, has announced initial contingent resource estimates for the Waitsia discovery (formerly Senecio Deep) in Australia’s northern Perth basin. The news follows the recently announced upgrade of the 2C contingent resources in Senecio field. After initial analysis of data from the Senecio-3 well, and the existing 3D seismic, AWE estimates that the Kingia/High Cliff Sandstone intervals in Waitsia field have gross contingent resources in the range of 65 Bcf to 1,170 Bcf, with a best estimate (2C) of 290 Bcf. Net to AWE, the combined Senecio and Waitsia fields represent a best estimate (2C) of 180 Bcf of gas. |
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| Eni reports finds in Angola, Ecuador |
On Sept. 17, Italy’s Eni reported an oil discovery in Block 15/06, in the Ochigufu deepwater prospect, offshore Angola. The discovery is estimated to contain 300 MMbbl of oil-in-place. The Ochigufu 1 NFW discovery well will be brought into production in record time. The well is about 150 km off the coast and 9.8 km from the Ngoma FPSO (West Hub). Its proximity to the Ngoma allows an increase in the resource base of the West Hub project, currently underway. The well was drilled by the Ocean Rig Poseidon in a water depth of 1,337 m and reached a TD of 4,470 m. On Sept. 18, Eni reported a discovery in Ecuador at the Oglan-2 exploration well in Block 10, approximately 260 km southeast of Quito. Early estimates suggest that the Oglan discovery potentially contains about 300 MMbbl of oil-in-place. The well, drilled to a TD of 6,450 ft, encountered a 236-ft, net crude oil column (16°API). During a production test, constrained by surface facilities, the well flowed 1,100 bopd. The data acquired in the Oglan well indicate a production capacity, per well, up to 2,000 bopd. |
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BUSINESS |
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| Wintershall buys Statoil assets for $1.25 billion | BASF’s Wintershall is expanding its oil and gas production, and reserves, in the North Sea. Wintershall will acquire, from Statoil, shares in two producing fields, Gjøa (5%) and Vega (24.5%); the Aasta Hansteen development project (24%); the Asterix discovery (19%); and the Polarled pipeline project (13.2%); as well as equity in four exploration licenses in the vicinity of Aasta Hansteen. The shares in the assets comprise reserves and resources (2P/2C) of around 170 MMboe. In addition, the companies agreed that Wintershall will become operator of Vega field. The transaction will be executed with payment of the $1.25-billion purchase price, and will be financially effective, retroactively, to Jan. 1, 2014. In addition, a further payment of up to $50 million will be made, if the Aasta Hansteen field development is executed, according to the current project plan. The closing of the transaction is expected by the end of 2014. Accordingly, Wintershall will raise its daily production in Norway, from 40,000 boe to around 60,000 boe. Wintershall and Statoil also agreed that they will work together on the exploitation of potential in the Vøring basin. | ||
| Statoil suspends a second rig, citing overcapacity | Statoil will lay up the COSL Pioneer rig in fourth-quarter 2014, due to overcapacity in its rig portfolio. As of Sept. 17, the rig was carrying out an assignment on Visund field and was scheduled to complete this work at the end of September. In July, Statoil announced that the Scarabeo 5 drilling rig would be suspended temporarily. “At the moment, we have three rigs contracted from COSL Drilling Europe. Our offshore organization enjoys excellent cooperation with the contractor’s drilling teams, and COSL Pioneer has demonstrated consistent, high efficiency in drilling operations. We are in close dialogue with the contractor concerning how the suspension of the rig will be implemented in practice,” said Statoil’s Tore Aarreberg. The rig is contracted until 2016. | ||
| Higher Permian output, constrained infrastructure increase WTI spread | Increasing production of crude oil in the Permian basin of western Texas, and parts of New Mexico, has outpaced pipeline infrastructure to move the crude to refineries. This has caused prices for crude in the basin (at Midland, Texas) to fall below similar crudes priced at Cushing, Okla., the Energy Information Administration (EIA) reported on Sept. 23. While the price difference between Midland and Cushing has been increasing for almost a year, recent refinery outages in the region have caused it to widen substantially. Several infrastructure projects that will allow more crude to flow from the Permian to the U.S. Gulf Coast are expected to come online soon, which should cause this price difference to narrow. EIA says August Permian basin oil production will be almost 1.7 MMbpd. | ||
PRODUCTION |
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| Gazprom Neft pumps millionth barrel from Arctic well | The millionth barrel of the new grade of oil, ARCO (Arctic Oil), has been produced from the Prirazlomnoye deposit, offshore Russia. On Sept. 15, operator Gazprom Neft announced that the second tanker to deliver the oil to northwestern Europe was being loaded. The first tanker carrying oil from Prirazlomnoye set off from the deposit in April. A further two tankers will transport around 1 MMbbl of oil from Prirazlomnoye field before the end of the year. In total, approximately 2.2 MMbbl will be produced at Prirazlomnoye in the first year of its development. Prirazlomnoye is the world’s first project involving oil extraction on the Arctic shelf by means of a stationary platform. Extraction as part of pilot production began in December 2013. The new oil, ARCO, was first delivered to the global market in April 2014. | ||
| U.S. tight oil technology could add up to 3 MMbpd by 2030 | There continues to be great potential for surprises to the upside in production of U.S. tight oil, according to Wood Mackenzie. “Growth in U.S. tight oil continues to impress as development technology and techniques have yet to mature beyond adolescence,” said Phani Gadde, senior North America upstream analyst for Wood Mackenzie. According to Gadde, additional volumes from EOR will go onstream after 2020, and could add 1.5 MMbopd to 3 MMbopd by 2030. These technologies are in early test phase and not commercial yet, but indicators suggest up to a 100% increase in recovery rates. There are pilot tests that are underway with operators, like EOG, testing it out in the Eagle Ford, added Gadde. “This is going to happen, like horizontal drilling and fracing, leading to another step-change in production technology,” adds Skip York, principal analyst, Americas Downstream, Midstream & Chemicals for Wood Mackenzie. | ||
| Statoil’s Fram H-North, Svalin C start production | Statoil’ s North Sea “fast-track” fields, Fram H-North and Svalin C, have begun production, the company announced on Sept. 10. Fram H-North is in the Troll area and Svalin C is in the Grane area. Preliminary estimates show that Fram H-North contains about 10 MMbbl of recoverable oil equivalents, while the corresponding figure for Svalin C is just over 30 MMboe. Fram H-North is a standard subsea template that can accommodate four wells. Svalin C consists of a subsea facility with two wells. | ||
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| Shell produces first oil from Cardamom in deepwater Gulf | Production is underway from the Cardamom development. Oil from the Cardamom subsea development, 100% Shell-operated, is piped through Shell’s Auger platform. When at full production of 50,000 boed, Auger’s total productive capacity will increase to roughly 130,000 boed. Since its first production in 1994, the Auger facility has received several upgrades to process additional production from new discoveries. Cardamom is Auger’s seventh subsea development. The Cardamom reservoir sits beneath thick layers of salt, in rock more than 4 mi below the sea floor. | ||
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ACQUISITIONS |
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| Total sells assets in Utica shale |
Total’s affiliate, Total E&P USA, has signed an agreement to sell its 25% interest in Cardinal Gas Services LLC, a midstream company in Ohio’s Utica shale play, to E1 Corporation and a consortium led by Samchully—both from Korea—for $400 million, plus an estimated $50-million price adjustment. Since its establishment in 2011, Cardinal has built a significant part of the gas infrastructure in the Utica basin, where it gathers and transports the shale’s fast-growing production. Following this transaction, Total will remain an active participant in the Utica play through its upstream JV with Chesapeake and Enervest, and Cardinal will continue to provide Total with gas gathering and transportation services. |
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| Japan’s Mitsubishi acquires stake offshore Cote d’Ivoire |
Mitsubishi Corporation has agreed to acquire a 20% ownership interest in Block CI-103 from U.S.-based Anadarko Petroleum. Block CI-103 is at a water depth of 2,000 m, 50 km off the coast of Cote d’Ivoire, and is in appraisal. Anadarko, Tullow Oil and Petroci, who are the interest-holders in the block, have received approval to proceed with appraisal operations, having confirmed oil and gas deposits at an exploratory well that they drilled in 2012. |
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