DISCOVERIES/DEVELOPMENTS       

Exxon, Hess report eighth discovery offshore Guyana

ExxonMobil Corp. (affiliate Esso E&P Guyana Limited, operator, 45%)—alongside partners Hess Guyana Exploration Ltd. (30%) and CNOOC Nexen Petroleum Guyana Limited (25%)—reported another find offshore Guyana, in the southern part of the Stabroek Block. After being drilled to a depth of 18,057 ft in 6,365 ft of water, the Longtail-1 well encountered approximately 256 ft of high-quality, oil-bearing sandstone reservoir. Accordingly, ExxonMobil announced that it will add a second exploration vessel, in addition to the Stena Carron drillship (pictured), offshore Guyana. The vessels will operate alongside one another to explore the 6.6-million-acre block’s numerous high-value prospects. “The Longtail discovery is in close proximity to the Turbot discovery, southeast of Liza field,” Steve Greenlee, president of ExxonMobil Exploration Co., said in a release. “Longtail drilling results are under evaluation. However, the combined estimated recoverable resources of Turbot and Longtail will exceed 500 MMbbl of oil equivalent, and will contribute to the evaluation of development options in this eastern portion of the block.” 

Norway’s Johan Castberg development gets the go ahead

Equinor’s Johan Castberg project has been approved by the Norwegian parliament. The field—situated in the Barents Sea, approximately 68 mi north of Snøhvit field—holds estimated resources of between 400 MMboe and 650 MMboe. The projected volume of resources reportedly makes it the largest and, therefore, most important oil and gas project in the Barents Sea, to date. The $12.3-billion project, in water depths of 1,181-1,279 ft, involves the joint development of Skrugard, Havis and Drivis fields. It reportedly will be developed with a large FPSO and a full subsea system, which will include 30 wells distributed on 10 templates and two satellite structures. This makes it the world’s largest subsea field development. According to the company, first oil is scheduled for 2022. To read more about developments offshore Western Europe, see page 66.

Eni reports discovery in Angola’s deep offshore Block 15/06

Eni announced a new oil discovery offshore Angola, in Block 15/06. The Kalimba-1 NFW well, situated about 31 mi southeast of the Armada Olombendo FPSO, was drilled to a TD of 6,236 ft and encountered a 75-ft net oil pay of high-quality oil in the Upper Miocene sandstones. It was drilled by the West Gemini drillship (pictured). According to the company, data acquired from the wellsite indicate a production capacity in excess of 5,000 bopd. Overall, the find is estimated to hold between 230 MMbbl and 300 MMbbl of light oil, in place. The company said that the new discovery sets the stage for new exploration opportunities in the southern part of the block which has, to date, been considered largely gas-prone. Eni is operator of the block, with a 36.8421% stake, while partners Sonangol P&P and SSI Fifteen Limited hold 36.8421% and 26.3158% stakes, respectively. 

PRODUCTION       

Petrobras begins production at Tartaruga Verde field, offshore Brazil

Petrobras reported the start of production at Tartaruga Verde field, situated nearly 79 mi off the coast of Rio de Janeiro, in the southern part of the Campos basin. The field is producing by means of the Cidade de Campos dos Goytacazes FPSO. The field has a capacity to process up to 150,000 bopd and 3.5 MMcmgd. The field contains two reservoirs: Tartaruga Verde, and Tartaruga Mestiça. According to Petrobras, this is the second platform to start operations this year. It is expected to increase the company’s production under its 2018-2022 business and management plan.

OPEC reaches its decision on production boost

OPEC officials met in Vienna with the hope of reaching an agreement to boost output. Iran expressed its unwillingness to participate in a deal. Iranian Oil Minister Bijan Namdar Zanganeh said it was suggested that instead of increasing output, participants could end excessive cuts. Iran is facing pending U.S. sanctions. OPEC, however, insisted that it was necessary to ease consumer anxiety about high oil prices, and increase global production. Saudi Arabia, under pressure from U.S. President Trump, alluded to a more modest supply boost, while Russia pushed for a quota increase of up to 1.5 MMbpd. Ultimately, the  meeting resulted in a deal to increase production by 600,000 bpd. 

President Energy doubles output at Argentina’s Puesto Flores field

President Energy announced the successful workover of three previously producing wells at Puesto Flores field, in Argentina’s Rio Negro Province. The wells have been put back into production, increasing the field’s output level 50%. The field is now producing approximately 2,100 bopd. The company reported that work on the first three wells of its workover program was completed under budget, and work on an additional well has prolonged the campaign. The program now consists of seven production well workovers and one water injection conversion. Overall, Puesto Flores field has 26 wells, 17 of which are producing, according to the company. The concession is situated in the prolific Neuquén basin, where President Energy is operator with a 90% working interest. Chevron had been the sole owner and operator of the field for more than 15 years, until President Energy acquired it in September. The acquisition included Puesto Flores and Estancia Vieja fields, and added about 5.46 MMboe of net independently assessed 2P reserves to the company’s portfolio. 

BUSINESS               

Baker Hughes gets dropped from GE portfolio, lands key contract win in Australia

Following a strategic review, GE is refocusing its portfolio, repositioning its Healthcare division as a stand-alone company and concentrating more on its aviation, power and renewable energy businesses. As a result, the company announced that it will divest its 62.5%-stake in Baker Hughes, a GE company (BHGE). The divestiture, which is expected to take place over the next two to three years, is expected to strengthen GE’s balance sheet and support its $25-billion debt reduction plan. Meanwhile, BHGE seems determined not to miss a beat, landing two substantial contracts from Chevron Australia Pty Ltd. during the same week. Under terms of the agreements, BHGE will supply subsea production and well completion equipment for the second development phase of Gorgon. Visal Leng, president of BHGE’s APAC, explained, “An in-country team will also support testing, installation and commissioning activities and, once the second stage is brought online, will provide operational support to maintain equipment availability, along with storage and maintenance of spare parts and tooling.”

Shell divests interests in Draugen, Gjøa in Norway

Through its affiliate A/S Norske Shell, Shell has agreed to sell its Draugen (44.56%) and Gjøa (12%) interests to OKEA AS for $556 million. The deal is part of Shell’s $30-billion divestment program, as the company looks to further simplify its portfolio. Draugen sits in the southern part of the Norwegian Sea and produces oil from the Rogn and Garn formations. Gjøa (pictured) is in the northern North Sea, where it is a regional production hub. According to the company, Shell’s share of the assets’ production amounted to about 25,000 boed last year, which represents approximately 14% of its overall Norwegian production in 2017. Following regulatory approval, the transaction is expected to be complete during fourth-quarter 2018. Upon completion of the deal, OKEA will assume operatorship of Draugen. 

Hess to sell interest in Utica shale acreage

Hess Corporation has announced that it will divest its JV interests in the Utica shale play of eastern Ohio. The company has agreed to sell the acreage to Ascent Resources for a net cash consideration of approximately $400 million. The divestiture consists of about 39,000 net acres, including 26,000 net undeveloped acres. The assets being sold are reportedly forecast to average 14,000 boed of net production during 2018, about 70% of which is expected to be residue gas. According to the company, the divestiture is part of its strategy to focus its portfolio on operations with a higher return rate. CEO John Hess said, “Proceeds from this transaction will be used to invest in our higher-return growth opportunities in Guyana and the Bakken, and to fund the company’s previously announced share repurchase program.” The deal reportedly is expected to close by the end of third-quarter 2018.