PRODUCTION

BP installs Clair Ridge topside modules

BP and its co-venturers, ConocoPhillips, Chevron and Shell, have safely installed the new Clair Ridge platform’s quarters and utilities (QU) topside modules. The QU platform comprises three modules—the quarters and utilities integrated deck, the power generation module, and the living quarters module. Clair Ridge is a multi-billion-dollar investment in the second phase of development on Clair field, which lies 75 km to the west of the Shetland Islands. The project comprises two, new bridge-linked platforms, and new pipeline infrastructure to connect storage and redelivery facilities on Shetland. The next major milestone will be the installation of the production and drilling platform topside modules, scheduled for summer 2016, with production expected to begin in late 2017. Clair Ridge will be able to produce an estimated 640 MMbbl of oil over a 40-year period, with peak production expected to be up to 120,000 bopd. Clair Ridge is the first sanctioned, large-scale, offshore EOR scheme using reduced salinity water injection (LoSal EOR) to extract a higher proportion of oil over the life of the field. To reduce the environmental impact of the project, the platforms will be powered using dual-fuel power generators, incorporating waste heat recovery technology. Vapor recovery will also be used to capture and recycle low pressure gas for use as fuel or for exporting to shore. “In a challenging time for the industry, this project shows the potential of our basin and why it is so important that we work to ensure a competitive future business,” Trevor Garlick, regional president for BP’s North Sea business, said.

Production underway at Kearl expansion

Production at the Kearl oil sands expansion project in Alberta, Canada, started ahead of schedule and is expected to double overall capacity to 220,000 bpd of bitumen, Exxon Mobil announced on June 16. Ultimately, the expansion project is expected to reach 110,000 bpd. Kearl will access approximately 4.6 Bbbl of resources for more than 40 years. The expansion project consists of three additional trains that use proprietary, paraffinic froth treatment technology to produce
bitumen. The project produces blended bitumen with about the same lifecycle greenhouse gas emissions as average crude oil refined in the U.S. The Kearl project is about 75 km northeast of Fort McMurray, Alberta, and is operated by Imperial Oil Limited, an Exxon Mobil affiliate.

Wintershall announces first gas in Dutch North Sea

Wintershall has expanded its natural gas production in the Netherlands, with the start of output from the unmanned mini-platform L6-B. The so-called minimum facility-platform, off the Dutch North Sea coast, was built in just nine months and brought to its location in June 2014. The platform is in field L6-B—in the middle of a restricted military zone—and Wintershall Noordzee is the first company allowed to operate in this area. The installation needs to be as small as possible, and may well be the smallest topside known. The facility is anchored in the seabed through suction piles, rises about 18 m above the sea, and has three decks, but no helideck. The facility can accommodate a maximum of two producing wells. A pipeline will transport the gas produced at L6-B to neighboring platform L8-P4. According to Wintershall, the mini-platform’s substructure weighs 1,100 tons, while the top side weighs around 100 tons. To compare, L8-P4 weighs 4,500 tons. 

Petrobras sets pre-salt production record

Petrobras’ pre-salt production in May set two new monthly output records. Production handled by the company, including both Petrobras and partner production, reached a new high of 726,000 bopd, up 1.6% on the April figure. This includes Petrobras’ own record output of 519,000 bopd, 3.2% higher than the April figure.

EXPLORATION

Spectrum starts 2D survey offshore Mexico

Spectrum announced on June 11 that its vessel had arrived in Mexico and started acquisition of the company’s Gulf of Mexico 2D campaign, in collaboration with Schlumberger. The first phase of the acquisition program, named Mexico Campeche-Yucatan 2D Regional, comprises 12,200 km of regional lines from the full 44,000-km program. The program will cover areas from the Campeche Escarpment, including ties to Round 1 blocks, the Yucatan shelf and deepwater areas. The survey will also tie with Spectrum’s BigWave program in the U.S. Eastern Gulf of Mexico. Fast Track products will be available starting in July, with final products available in November.

BP, Rosneft ink E&P agreements

Rosneft and BP have signed several agreements, which will serve to strengthen the long-term strategic ties between them. The companies signed final binding agreements for Rosneft’s sale to BP of a 20% share of Taas-Yuryakh Neftegazodobycha (Taas), creating a new JV in East Siberia. The venture will further develop Srednebotuobinskoye oil and gas condensate field, one of the largest in eastern Siberia. The Taas venture also will undertake development of suitable infrastructure for further exploration and development of the region’s reserves. Related to this, Rosneft and BP will jointly undertake exploration of an associated Area of Mutual Interest (AMI) in the region, covering approximately 115,000 km². Rosneft and BP also have agreed to jointly explore two additional AMIs in the West Siberian and Yenisey-Khatanga basins, covering a combined area of about 260,000 km². This agreement commits BP and Rosneft to jointly conduct studies and, if successful, establish new JVs to obtain licenses and perform exploration activities. Any JVs will be owned 51% by Rosneft and 49% by BP. As part of this agreement, Rosneft and BP also will form a JV to carry out further appraisal work on the 2009 Rosneft-discovered Baikalovskiy field inside the Yenisey-Khatanga AMI. Exploration activities in the two AMIs will include screening studies, acquisition of seismic data, and the drilling of exploration wells as new licenses are added.

GOVERNMENT/REGULATORY

OPEC keeps oil production target

OPEC opted to maintain its production target of 30 MMbopd at the organization’s mid-year meeting on June 5. However, according to Bloomberg, the 12-nation organization has been pumping above its official production ceiling for a year. Secondary data cited in OPEC’s June Monthly Oil Market Report, shows that OPEC nations produced 30.975 MMbopd in May, of which 10.107 MMbopd was accounted for by Saudi Arabia. 

Iran sanctions deal would disadvantage U.S. oil

U.S. Sen. Lisa Murkowski (R – Alaska) is continuing her efforts to lift the ban on most U.S. crude oil exports with the release of a new report. The 33-page document, which was released on June 23, argues that sanctions on Iranian oil should not be lifted without also lifting the current ban on U.S. oil exports. “Any deal that lifts sanctions on Iranian oil will disadvantage American companies, unless we lift the antiquated ban on our own oil exports,” Murkowski said. “The impending deal with Iran is at the center of the nexus between national security and energy policy.”

Low prices to slow growth of Canadian oil production

The sharp drop in world oil prices over the past year will slow the growth of Canadian oil production over the next two decades, according to a new report by the Canadian Association of Petroleum Producers (CAPP). The association estimates that production of Canadian oil will increase 43% over 16 years, growing to 5.3 MMbpd by 2030, up from 3.7 MMbpd in 2014. CAPP’s June 2014 forecast had estimated total oil production in 2030 at 6.4 MMbpd. While the two forecasts are similar during the early years of the forecast period, the slower pace of production in the latter years is the result of reduced capital spending intentions, due to the sharp decline in global oil prices. The oil sands remain the primary driver of oil growth in Canada, with production reaching 4 MMbpd by 2030. Conventional oil production in Western Canada, including condensates, is projected at 1.3 MMbpd by 2030. Eastern Canadian offshore production is forecast at 91,000 bopd by 2030. 

DISCOVERIES

Statoil in third Aasta Hansteen area discovery

Statoil and its partners in PL602 have hit a new gas find in the Gymir prospect. The find represents the third discovery in three months in the Aasta Hansteen area. Well 6706/11-2, drilled by the Transocean Spitsbergen, proved a gross, 70-m gas column in the Nise formation with good reservoir qualities. Statoil estimates the volumes in Gymir to be in the range of 6-19 MMbbl of recoverable oil equivalent. Gymir is located 8 km from Roald Rygg and 14 km from Snefrid Nord. “The estimated total volumes in the three discoveries, Snefrid Nord, Roald Rygg and Gymir, amount to 75-120 MMbbl of recoverable oil equivalent, corresponding to about one third of the Aasta Hansteen recoverable volumes,” Dan Tuppen, V.P. of exploration, Norwegian and Barents Sea, said. “The discoveries will now be further evaluated for future tie-in to the Aasta Hansteen facilities, in order to optimize utilization of the infrastructure and prolong the production plateau.” Aasta Hansteen will be the largest SPAR platform in the world and is the biggest ongoing field development project in the Norwegian Sea. Production start-up is expected in 2017.

Nutech reports on Gatwick Airport oil find

UK Oil & Gas Investments announced on June 18 that Nutech had provided the company with an independent report of the oil initially in place (OIP), contained within the 55 mi² covered by the Horse Hill licenses (PEDL137 and PEDL246) near Gatwick Airport, south of London, UK. This evaluation does not include the OIP for the Portland sandstones. The study calculates that the total Jurassic shale plus tight conventional reservoir section of UKOG’s licenses contain a best estimate, or P50, OIP of 9.245 Bbbl. The most significant OIP within the Jurassic section is contained within the shales and tight conventional reservoir limestone sequences of the Kimmeridge, with a calculated P50 total Kimmeridge OIP of 5.230 Bbbl. 

LLOG hits oil in Gulf of Mexico

LLOG Exploration and its partners, Ridgewood Energy and Stone Energy Corp., have drilled a successful exploration test at the Viosca Knoll 959 Crown & Anchor prospect. The initial exploratory well encountered greater than 50 ft of net oil-bearing sand in a high-quality Miocene reservoir. LLOG owns a 60% working interest in the discovery. LLOG is evaluating regional hosts, as pertains to subsea development options for the project.

BUSINESS 

Tendeka wins Austrian sandface completion contract

Tendeka has secured a contract with an international oil and gas company for installation of sand face completion technology in Austria. The installation will include FloRight Ultra premium screens with FloSure autonomous inflow control devices (AICDs) plus SwellRight packers and sleeves. The application is a brownfield development, and requires AICD technology to reduce water cut and unwanted gas production in the latest development phase with horizontal wells. Sand screens will be deployed across the full length of the 500-m lateral with up to 140 AICDs planned to be run in the well as part of the six-figure contract. This marks the first-ever AICD installation in the European land market.

Maersk Training, Seadrill sign agreement

Maersk Training has entered into an agreement with Seadrill, according to which Maersk will deliver its well control training globally under the accreditation of The International Well Control Forum (IWCF). The agreement will cover more than 2,000 assistant drillers, drillers, toolpushers, installation managers, derrickmen and subsea engineers, when they need to renew their well control certification. It will give Seadrill a standardized training process, which previously involved more than 27 schools, and ensure improved safety and performance excellence. Financial details under this agreement were not disclosed. Image: Seadrill.

Aker Solutions, Baker Hughes cooperate on early-phase studies

Aker Solutions and Baker Hughes have agreed to cooperate on early-phase studies to help customers improve the overall economics and value of oil and gas field developments. Aker Solutions’ Front End Spectrum unit and Baker Hughes’ Reservoir Development Services group will provide customers with development concept studies that address the entire value chain—from reservoir understanding and well design, to subsea and topsides facilities, including flow assurance and risk management. Initial customer studies are already underway. 

FMC wins $297-million Shah Deniz contract

FMC Technologies has received an order from BP Exploration (Shah Deniz) Ltd. to supply subsea production systems for well clusters 3-5 of the Shah Deniz Stage 2 project in the Caspian Sea. The order has an estimated value of $297 million in revenue, and it is in addition to the initial order for well clusters 1-2, received in 2014 from BP, operator of the project. Shah Deniz field is in the Azerbaijan sector of the Caspian Sea, approximately 100 km south of Baku. 

MERGERS AND ACQUISITIONS 

WPX adds acreage in Gallup oil play

WPX Energy has completed the purchase of another 14,300 net acres in the San Juan basin’s Gallup oil window, from an undisclosed seller, for approximately $26 million. The acreage purchase represents an estimated 100 gross drilling locations, boosting WPX’s tally in the San Juan Gallup to approximately 500. WPX now owns or controls approximately 100,000 acres in the core of the Gallup oil window, where it has drilled more than 100 wells following a successful discovery in early 2013. 

Hess sells half of Bakken processing unit for $2.68 billion

Hess Corp. has agreed to sell a 50% interest in its Bakken midstream assets to Global Infrastructure Partners, a global infrastructure investor, for a cash consideration of $2.675 billion. Hess and Global Infrastructure Partners will create a premier midstream JV—Hess Infrastructure Partners. The transaction is expected to be completed early in third-quarter 2015. The Hess midstream assets to be included in the JV are:  a natural gas processing plant in Tioga, N.D.; a rail loading terminal in Tioga and associated rail cars; a crude oil truck and pipeline terminal in Williams County, N.D.; a propane storage cavern and rail and truck transloading facility in Mentor, Minn.; and a crude oil and natural gas gathering systems in N.D.

Apache completes sale of Australian operations

Apache Corp. has completed the sale of its Australian subsidiary, Apache Energy Limited, to a consortium of private equity funds managed by Macquarie Corporate Holdings Limited and Brookfield Asset Management Inc. Total proceeds of $1.9 billion are net of $225 million in customary, post-closing adjustments for the period between the effective date, Oct. 1, 2014, and closing.