World of oil and gas
EXPLORATION |
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Freeport-McMoRan successfully tests Louisiana discovery |
Freeport-McMoRan Oil & Gas (FM O&G) announced a successful production test from its Highlander discovery, onshore South Louisiana in the Inboard Lower Tertiary/Cretaceous trend. Performed in the Cretaceous/Tuscaloosa section, the test indicated a flowrate of approximately 43.5 MMcfgd, of which roughly 21 MMcfgd are net to FM O&G. The test was done on a 22/64-in. choke, with flowing tubing pressure of 11,880 psi. FM O&G expects to begin production in 2015, using facilities in the immediate area. The Highlander discovery well was drilled to a TD of approximately 29,400 ft during first-quarter 2014. Wireline log and core data obtained from the Wilcox and Cretaceous sand packages indicated favorable reservoir characteristics, with approximately 150 ft of net pay. FM O&G has identified multiple prospects in the Highlander area, where it controls rights to more than 60,000 gross acres. FM O&G operates the Highlander well with a 72% working interest and approximately 49% net revenue interest. |
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Eni to explore offshore Portugal |
Eni has finalized a farm-in agreement with Petrogal, a wholly owned subsidiary of Portuguese company Galp Energia, for the acquisition of a 70% stake and operatorship of the Gamba, Santola and Lavagante permits. The agreement will guarantee the exploration rights for an unexplored area of 9,100 km2 offshore Portugal. The exploration permits were awarded to Petrogal in 2007 by the Portuguese state. The agreement is part of Eni’s strategy, aimed at diversifying and expanding its exploration portfolio. |
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Israel to see wildcat drilling on Golan Heights |
Rig site preparations got underway on the Golan Heights last month, as officials cleared the way for exploratory drilling in the area. “We hope that within the first two weeks of February, we can start the actual drilling,” Afek Oil & Gas CEO Geoffrey Rochwarger told The Jerusalem Post. Afek was awarded the 395-km2 license in 2013, and, earlier this year, the Northern District Committee for Planning and Building approved the company’s plans—which amount to a three-year program with up to 10 wells—to search for conventional oil in the region. The project, however, faced opposition from environmentalists and a group of local residents. Nevertheless, on Dec. 23, the High Court of Justice determined that the council’s decision stands, and site preparation got underway on Dec. 30. Afek Oil and Gas is a subsidiary of Genie Energy Ltd., a New Jersey-based company. |
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| BP, SOCAR to explore shallow water around Absheron Peninsula |
BP and SOCAR have signed a new production sharing agreement (PSA) to jointly explore for, and develop, potential prospects in the shallow-water area around the Absheron Peninsula in Azerbaijan’s sector of the Caspian Sea. This new agreement is part of the government’s plan to ensure that all of Azerbaijan’s offshore areas are fully explored. The PSA was signed by SOCAR President Rovnag Abdullayev, on behalf of the government of the Republic of Azerbaijan, and Gordon Birrell, BP’s regional president for Azerbaijan, Georgia and Turkey. The PSA contract area stretches along the margins of the Caspian basin, to the south of the Absheron Peninsula. The acreage features water depths of up to 40 m, with potential reservoir depths of 3,000-5,000 m. |
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GOVERNMENT/REGULATORY |
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| Noble Energy requests hearing with Israel’s Anti-trust Authority |
Noble Energy and its partners in Leviathan field, offshore Israel, have been advised by the Israel Anti-trust Authority of its decision to not submit the Consent Decree to the Anti-trust Tribunal for final approval. In response, Noble Energy and its partners have requested a hearing on the topic with the Anti-trust Authority, which Noble Energy expects to occur in the near future. In March 2014, Noble Energy, its partners, and the Anti-trust Authority reached agreement for the Consent Decree that included the divestiture of Tanin and Karish gas fields. This agreement is a key component for the final investment decision (FID) on the Leviathan development. Noble President and CEO David L. Stover said, “We are disappointed in this latest communication from the Anti-trust Authority. Final resolution of this item, as well as a number of other regulatory matters, is required before we proceed with additional exploration or development investments in our Israel business.” And Noble Chairman Charles D. Davidson said, “The actions of the Anti-trust Authority are another disturbing example of the uncertain regulatory environment in Israel.” |
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| Obama rules Alaska’s Bristol Bay off-limits for leasing |
U.S. President Barack Obama has designated the waters of Bristol Bay as off-limits to consideration for oil and gas leasing. The decision to withdraw the area from all future oil and gas leasing extends, indefinitely, a temporary withdrawal that Obama issued in 2010 and was set to expire in 2017. The North Aleutian Basin Planning Area, which includes Bristol Bay, consists of approximately 32.5 million acres, a portion of which was leased in the mid-1980s but never developed, due to litigation. The previous administration set in motion a new lease sale for 2011, which would have opened approximately 5.6 million acres—about one-fifth of the planning area—for drilling. U.S. Sen. Lisa Murkowski (Rep. – Alaska), questioned the timing of the announcement and voiced concern that the Obama administration is out-of-step with Alaska’s most pressing needs. |
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| EIA: OPEC net oil export revenues seen falling in 2014, 2015 |
Based on crude oil market assessments in the Short-Term Energy Outlook, the U.S. EIA estimates that members of OPEC, excluding Iran, will earn about $700 billion in revenue from net oil exports in 2014, a 14% decrease from 2013 earnings and the lowest earnings for the group since 2010. OPEC earnings declined in 2014 largely for two reasons: decreases in the amount of OPEC oil exports and lower oil prices, with the 2014 average for Brent crude oil projected to be 8% below the average 2013 price. For similar reasons, revenues for OPEC (excluding Iran) in 2015 are expected to fall further, to $446 billion, 46% below the 2013 level. Brent crude oil is projected to average $68/bbl in 2015, down from $100/bbl in 2014 and $109/bbl in 2013, the EIA’s Today in Energy reported Dec. 17, 2014. |
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DISCOVERIES/APPRAISALS |
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| Centrica hits minor gas find northeast of Aasta Hansteen |
Centrica Resources Norge, operator of production license 528 B, has struck a minor gas discovery in wildcat well 6707/10-3 S, drilled about 20 km northeast of Aasta Hansteen field in the Norwegian Sea. The primary and secondary exploration targets for the well were proving petroleum in Upper Cretaceous reservoir rocks. The well encountered a total gas column of about 12 m in the Kvitnos formation, with good reservoir properties. The entire reservoir zone, including the water zone, has a gross thickness of about 200 m. Reservoir rocks were encountered in the secondary exploration target with 25 m of thickness in the Lysing formation, which was tight and aquiferous. Preliminary calculations of the discovery size are between 2 Bcm and 8 Bcm of recoverable gas. The licensees will assess well results with regard to profitability. |
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| Exxon makes second Argentine discovery |
Exxon Mobil and Gas y Petróleo del Neuquén have made a second, unconventional oil-and-gas discovery in Argentina’s Neuquén Province. In the liquids-rich area of the Vaca Muerta play, the La Invernada X-3 well was drilled to a TMD of 15,374 ft. The well’s horizontal leg extends for 3,280 ft. The discovery is operated by ExxonMobil Exploration Argentina S.R.L. Drilled on the La Invernada Block, the well flowed at an average rate of 448 bopd and 1.0 MMcfgd on a 12/64-in. choke during its first test. Data analysis and additional studies are being conducted to fully evaluate the find. Appraisal wells will also need to be drilled before a commercial decision can be made. La Invernada X-3 is among the best producing wells in the Vaca Muerta play. Over 60 days, the well produced 31,400 boe. This latest discovery is 12.4 mi from Exxon’s oil discovery on the Bajo del Choique Block. ExxonMobil Exploration Argentina S.R.L holds an 85% WI in the La Invernada and Bajo del Choique Blocks, and Gas y Petroleo del Neuquén holds 15%. |
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BUSINESS |
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| BG starts shipments from $20-billion QCLNG project | BG Group started loading the first LNG cargo from its Queensland Curtis LNG (QCLNG) facility on Dec. 28, 2014, the company said in a statement. The vessel being loaded was the Methane Rita Andrea. The second LNG cargo from the facility will be loaded onto the Methane Mickie Harper, which was expected in Gladstone during the first week of January. QCLNG is the world’s first LNG project to be supplied by coal seam gas. The start of production from the plant’s first LNG train is the result of more than four years of development and construction on Curtis Island. The project will expand further with the start-up of the second train during third-quarter 2015. At plateau production, expected during 2016, QCLNG will have an output of around 8 MMt of LNG per year. | ||
| Statoil reduces stake in Marcellus shale, nets $394 million | Statoil will reduce its working interest in the company’s non-operated Marcellus shale asset from 29% to 23%, following a $394-million transaction with Southwestern Energy. “The transaction reduces Statoil’s non-operated holdings at an attractive price, demonstrating the value of the Marcellus assets,” said Torstein Hole, Statoil’s senior V.P. and U.S. onshore head. The transaction covers 515,000 acres in the southern part of the Marcellus, in which Statoil holds an average 29% working interest. The divested share of the southern Marcellus represents approximately 30,000 acres. Statoil’s third-quarter 2014 production from the Marcellus amounted to 130,500 boed, of which approximately 4,000 boed came from the assets included in the transaction. Statoil and Southwestern have put in place a new joint development agreement. The transaction is expected to close during first-quarter 2015. | ||
| Technip scraps bid to take over CGG | Technip has abandoned its bid to buy CGG. On Nov. 10, Technip approached CGG’s board of directors, with a view to making an offer on the company. Following press leaks, Technip set out the main elements of its offer on Nov. 20. Responding to CGG’s reaction to this approach, Technip put forward a number of alternative options to a tender offer. However, the discussions of these options did not result in any form of agreement, and, as a result, Technip announced on Dec. 14 that it no longer intended to file a tender offer for CGG. | ||
PRODUCTION |
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| BP reports first oil from North Sea field | BP has announced the start of production from Kinnoull field in the central North Sea. Kinnoull reservoir, developed as part of a wider rejuvenation of the Andrew field area, is tied back to BP’s Andrew platform, 230 km east of Aberdeen, and is expected to enable production there to be extended by a further decade. To access the reservoir, a new subsea system has been installed, together with a 700-t, topside processing module on the Andrew platform. Production is now carried from Kinnoull field to the Andrew platform via a 28-km subsea pipeline bundle for processing, and onward export via the Forties pipeline system and the CATS pipeline system. Production from Andrew and Kinnoull is forecast to peak at over 50,000 boed. | ||
| Petrobras’ pre-salt production passes 700,000 bopd | Oil production in fields operated by Petrobras, in the pre-salt of both the Santos and the Campos basins, reached the 700,000-bpd mark on Dec. 16, the company said. About 74% of this volume—523,000 bopd—corresponds to Petrobras’ share. The 700,000-bopd production level was reached only eight years after the first oil discovery at the pre-salt layer, and only six months after output hit the 500,000-bopd mark in June. Only 34 production wells contributed to the 700,000-bopd figure, which proves the high productivity of the fields already discovered in the pre-salt layer. Sixteen of these wells are in the Santos basin, which is responsible for 61% of the volume produced in the pre-salt—approximately 429,000 bopd. The remaining 18 wells are in the Campos basin, and are responsible for the remaining 39%—273,000 bopd. Pre-salt oil is produced from 12 different platforms, eight of which produce exclusively from that geologic layer. | ||
| Gazprom Neft brings third well online at Iraq’s Badra field | Gazprom Neft has brought a third well into production at Iraq’s Badra oil field. The commissioning of the new well ensures sustainable production of at least 15,000 bopd. Drilling of a further three wells at Badra field is continuing, under a contract previously concluded with China’s ZPEC. Initial results from the prior drilling of three wells at Badra have revealed this deposit to have one of the most complex geological structures in Iraq. All necessary infrastructure at Badra, allowing for the production and transportation of crude oil, was constructed within a three-year period, with first oil achieved in December 2013. Full-scale field infrastructure testing commenced in May 2014. The field has been in commercial production since last August. | ||
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| Lundin realizes first oil from Norwegian field | Lundin Petroleum achieved first oil from Brynhild field in the North Sea on Dec. 25. Situated in Block PL148 of the Norwegian North Sea, Brynhild is a subsea tie-back to Pierce field, operated by Enterprise Oil in the UK sector. Brynhild is estimated to contain gross reserves of 23.1 MMboe, and production is in excess of the forecast, gross plateau rate of 12,000 bopd. Drilling of the third development well is ongoing, and the fourth and final development well will be completed in 2015. The production facility for Pierce and Brynhild fields is the Haewene Brim FPSO. Lundin Norway, a wholly owned subsidiary of Lundin Petroleum, operates PL148 with a 90% interest. Talisman Energy Norge holds the remaining 10% interest. | ||
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ACQUISITIONS |
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| Repsol in $8.3-billion takeover of Talisman |
Repsol said it will acquire 100% of the shares of Talisman Energy for $8.3 billion, plus assumed debt of $4.7 billion. The deal will transform Repsol into one of the world’s largest privately owned energy groups. The acquisition will add a significant exploration portfolio and high-quality productive assets in North America and Southeast Asia, as well as Colombia and Norway, among others. Once the transaction is complete, North America’s weight in the resulting company will increase to almost 50% of capital employed in exploration. Latin America will represent 22%. The acquisition of Talisman will increase the Repsol Group’s output by 76%, to 680,000 boed, and will boost reserves 55% to 2,353 Bboe. |
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| Woodside to farm-in with BP in Nova Scotia |
Woodside has finalized an agreement with BP to farm into offshore blocks in the Scotian basin, off the coast of Nova Scotia, Canada. BP accepted Woodside’s offer to acquire a 20% participating interest in exploration licenses 2431, 2432, 2433 and 2434. BP will remain operator. The licenses cover 14,000 km2 in water depths ranging from 500 to 3,600 m. The future work program is anticipated to include the drilling of exploration wells from 2017 forward. |
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- Applying ultra-deep LWD resistivity technology successfully in a SAGD operation (May 2019)
- Adoption of wireless intelligent completions advances (May 2019)
- Majors double down as takeaway crunch eases (April 2019)
- What’s new in well logging and formation evaluation (April 2019)
- Qualification of a 20,000-psi subsea BOP: A collaborative approach (February 2019)
- ConocoPhillips’ Greg Leveille sees rapid trajectory of technical advancement continuing (February 2019)
