World of Oil and Gas
World of Oil and Gas
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| EXPLORATION | |||||
Lebanon
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Lebanon’s Ministry of Energy and Water completed the pre-qualification of companies for the First Offshore Licensing Round. The opening date for the licensing round was Feb. 15, 2013, with a closing date for submission of bids on March 28, 2013. The pre-qualification data are due by April 18, 2013. To date, there have been no wells drilled offshore Lebanon, with only seven wells drilled onshore. |
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Rosneft, ExxonMobil to add new licenses to Arctic Shelf JV
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Exxon Mobil Corp. and Rosneft will add more licenses to their JV to develop hydrocarbon resources on Russia’s Arctic shelf, a person familiar with the agreement said. Some of the 12 Arctic licenses that Rosneft received will be developed jointly with Exxon, the source said. Rosneft CEO Igor Sechin said that the company would sign an agreement to develop the new licenses. In addition to Exxon, Rosneft has partnership deals with Italy’s Eni and Norway’s Statoil to develop offshore resources. |
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Shell may cancel second summer of Arctic drilling due to rig damages |
Royal Dutch Shell plans to send its two Arctic offshore rigs, Kulluk and Noble Discoverer, to Asia for extensive repairs. This may mean the cancellation of Shell’s second summer of drilling in the U.S. Arctic Ocean, unless it can find replacements fit to do the work, something that may prove to be a challenge. Rigs able to operate in harsh Arctic conditions are rare and, even if found, would have to be modified and receive U.S. governmental blessing to operate in a remote and environmentally sensitive area in less than five months. This delay is the latest bump in what has been a tough road to Arctic drilling for the Anglo-Dutch oil giant, underscoring the increasing difficulty that big oil companies have in finding large deposits of conventional oil. If Shell cannot drill this summer, it will have to wait until 2014 to get another shot at finding oil in the Beaufort and Chukchi seas, a high-profile and expensive effort that is being closely watched by investors and U.S. regulators. |
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UNCONVENTIONALS |
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Qatar’s $1-billion gas recovery project set to begin
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Qatar Petroleum, Qatargas and RasGas Company Limited have given the initial go-ahead to a key, $1-billion environmental project to recover gas being flared during LNG ship loading at the Port of Ras Laffan. The effort, which is part of the Common Facilities Projects at Ras Laffan Industrial City in the north of Qatar, is known as the “Jetty Boil-Off Gas Recovery Project.” The project will enable boiled-off gas to be collected from LNG ships and compressed at a central facility. The compressed gas will then be sent to LNG producers to be consumed as fuel or converted back into LNG. This project, when fully operational, will recover the equivalent of about 0.6 mtpa of LNG. |
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| ConocoPhillips Looking to reduce APLNG, oil sands stakes | ConocoPhillips plans to sell some parts of its stakes in expensive developments such as the Australia Pacific LNG project and in the Canadian oil sands in order to steer more cash to its U.S. shale plays, CEO Ryan Lance told analysts. The company has already announced plans to shed billions of dollars in assets as it seeks to focus on fast-growing shale plays in the U.S., but the new potential sales could generate more cash and would free up cash for higher-margin projects. |
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| BP signs 20-year LNG agreement with Freeport | Freeport LNG Expansion has entered into a binding 20-year Liquefaction Tolling Agreement (LTA) with BP for 4.4 Mtpa. This is equivalent to the production capacity of the second train of Freeport LNG’s proposed natural gas liquefaction and LNG loading facility on Quintana Island near Freeport, Texas. The LTA with BP will commence upon completion of construction of the second liquefaction train. In July 2012, Freeport LNG executed LTAs with Osaka Gas Co., Ltd. and Chubu Electric Power Co. for a total of 4.4 Mtpa. The Osaka Gas and Chubu Electric LTAs will begin once construction of the initial liquefaction train is completed. |
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PRODUCTION |
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| Petrobras begins oil production at Santos basin field | Petrobras has begun production at Bauna field offshore Brazil. The company plans to ramp up output in the coming months at the BMS-40 Block location. The production platform is connected to just one well, 9-SPS-88, but will be linked to another 10 wells in the coming months, the company said. It is the third new production unit started by Petrobras in 2013. | ||||
| PdVSA-Repsol venture goes online | Spain’s Repsol began oil production at its Petrocarabobo JV with state energy monopoly Petroleos de Venezuela (PdVSA) in the South American country’s vast Orinoco heavy oil belt. The tapping of the first well puts forward “an accelerated plan” for developing the oil block, Repsol said in a statement. The Spanish company said the project aims to produce 30,000 bopd in the first development phase and 90,000 bopd in the second phase, but didn’t specify when it plans to reach those targets. Repsol said Petrocarabobo is slated to produce 400,000 bpd of heavy oil in coming years, and includes the eventual construction of an upgrader facility that is needed to convert the region’s tar-like crude into a usable, exportable commodity. PdVSA holds a 60% stake in Petrocarabobo while Repsol, which was part of a consortium on foreign companies to invest in the block, owns 11%. |
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| TNK-BP targets U.S. tight oil | Russian oil producer TNK-BP wants to secure access to U.S. tight oil projects to gain expertise that can be used on deposits in Russia, said the company’s senior V.P. for international projects, Boris Zilbermints. Russia has potentially huge tight oil resources in Western Siberia, where output at its main Soviet-era fields is waning. TNK-BP is a JV recently acquired by Rosneft. Zilbermints said he’d had no contact with Rosneft on integration. He said the integration process would begin after the takeover closed, expected in the first half |
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BUSINESS |
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| Nexen-CNOOC tie-up gets U.S. approval | Nexen Inc. said that the Committee on Foreign Investment in the U.S. (CFIUS) has approved CNOOC’s $15.1-billion acquisition of Nexen, clearing the last significant hurdle in the deal—China’s biggest overseas acquisition to date. The Canadian government approved the deal in December, after an extensive review of its own foreign investment rules and its policy toward state-owned enterprises in particular. Britain also green-lighted the deal. U.S. and British authorities needed to sign off, because Nexen controls significant assets in the Gulf of Mexico and the North Sea. The CFIUS approval came after the companies agreed to resubmit their application in front of the committee, a multi-agency group in Washington that reviews significant foreign investment in the U.S. The approval marks a significant milestone for CNOOC, which had pushed hard into the U.S. energy patch in the middle of the last decade, bidding for Unocal Corp., a deal that officials rejected. |
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| BP, Reliance to invest $5 billion in India’s KG block | BP and Reliance Industries plan to jointly invest more than $5 billion in the next three to five years, to boost gas output in a block off India’s east coast. Reliance is struggling with declining output at the KG block, in the Krishna-Godavari basin. The fall in output from India’s largest gas find has also affected the country’s overall natural gas supplies, hurting the plans of industries, including power and fertilizer, which use the fuel. BP and Reliance plan to invest in a series of projects to develop around 4 Tcf of natural gas resources. In 2011, Reliance sold a 30% stake |
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REGULATORY AFFAIRS |
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| Total CEO wants French shale gas ban lifted | The ban on shale gas fracturing in France should be lifted, said Total Chairman and CEO Christophe de Margerie. “The first thing to do for a proper debate is to know what we’re talking about. Today, we’re speaking about something that hasn’t even been studied,” de Margerie said. In 2011, France banned all shale gas extraction through hydraulic fracturing, also known as fracing, because of environmental concerns and fears over polluting water tables. Even though the country is believed to harbor one of Europe’s largest shale gas reserves, the ban was confirmed by President Francois Hollande, when he came to power last year. Industrial firms and energy groups have been dismayed, claiming that shale gas could contribute to energy independence and lower energy prices, helping to boost French companies’ competitiveness. In spite of the renewed ban and the lack of additional studies over the potential shale gas reserves, the debate between environmentalists and shale gas supporters in France remains heated. Total is in “advanced talks” with a Chinese partner to explore in that country and expects to start drilling in Denmark later this year. It’s also investing in projects in Poland. | ||||
| U.S. court approves Transocean’s $1-billion civil settlement | A U.S. court in New Orleans has approved a $1-billion civil settlement between drilling contractor Transocean Ltd. and the Department of Justice over the Deepwater Horizon spill. Transocean agreed to pay $1 billion to settle Clean Water Act penalty claims, a figure that the Department of Justice called a record amount. The company also agreed to beef up its operational safety and emergency response capacities in drilling rigs operating in the U.S. The agreement was entered last January, along with a $400-million settlement of criminal fines and penalties related to the incident. Another U.S. judge approved the settlement of criminal fines last week. BP, which leased the rig, has also reached a settlement with the Department of Justice over criminal fines, but it is slated to begin trial for civil penalties that could amount to billions of dollars. | ||||
| One-third of U.S. Gulf rigs to be inspected for faulty bolts |
U.S. authorities ordered subsea equipment on 24 Gulf of Mexico drilling rigs to be inspected for faulty bolts that are to blame for a drilling mud spill on a deepwater drilling rig. A safety alert issued to offshore drillers by the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said that bolts, connecting blowout preventers manufactured by a subsidiary of GE Oil & Gas to other subsea well equipment, need to be inspected and replaced. It’s believed that the bolts connecting the equipment, which is designed to shut-in a well during an emergency, can crack, due to improper manufacturing techniques. About one-third of the drilling rigs operating in the Gulf of Mexico appear to have equipment that uses the bolts, according to BSEE officials. | ||||
DISCOVERIES |
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| Petrobras finds sub-salt oil in ultra-deep waters | Brazil’s Petrobras has discovered oil in an ultra-deepwater area that the company obtained from the government, a development that could heighten interest in a planned auction of similar offshore exploration acreage set for later this year. The company said that the Florim well struck oil under a thick layer of salt that has yielded some of the largest oil discoveries in the past 30 years. Florim lies in exploration acreage given to Petrobras as part of the government’s 2010 capitalization of the company, which included a nearly $70-billion share sale and rights to produce 5 Bbbl of crude oil from the so-called “rights transfer” areas. Global oil producers are expected to line up for a shot to buy into one of the world’s most-promising oil frontiers later this year, when Brazil plans to hold its first-ever auction of sub-salt exploration acreage under new production sharing agreements. The subsalt auction is part of a series of exploration-concession bidding rounds planned by the country in 2013 after a nearly five-year hiatus. Florim was the sixth well drilled in the rights transfer acreage. | ||||
| Gran Tierra finds oil find in Peru | Gran Tierra Energy said that initial drilling results from the Bretaña Norte 95-2-1XD exploration well in Peru indicate oil-saturated reservoir with a gross oil column of 99 ft. It was encountered 48-ft higher than oil discovered at Bretaña-1, four km away. Three cores encompassing 90% of the oil-bearing reservoir section were acquired successfully. Oil samples have also been acquired and are being analyzed. Along with a testing program that is currently being designed to test reservoir productivity, they will assist in determining the discovery’s commerciality. | ||||
| Chevron hits 20th gas discovery offshore Australia in four years | Chevron Corp. announced its 20th gas find off the Western Australian coast since mid-2009, following further drilling success in the Exmouth Plateau area, located in the prolific Carnarvon basin. The Kentish Knock South-1 discovery well encountered approximately 246 ft of net gas pay in the upper Mungaroo sands. The well is in the WA-365-P permit area, approximately 173 mi north of Exmouth off the Western Australian coast. The well was drilled in 3,832 ft of water to a TD of 10,056 ft. Chevron Australia operates WA-365-P with a 50% interest, while Shell Development (Australia) holds 50%. | ||||
| Eni finds more oil in Egypt’s Western Desert |
Eni has hit a new oil discovery in the NFW well, Rosa North 1X, located in the Meleiha Concession, in the Western Desert of Egypt. The drilling of Rosa North 1X is part of Eni’s strategy to refocus exploration activities in Egypt by targeting deeper oil plays in the Western Desert. The well encountered total oil pay of around 80 m in multiple, good-quality sandstones of the Bahariya, Alam El Bueib, Khatatba and Ras Qattara reservoirs. The well has been tested successfully in the reservoirs flowing 43°–48° API oil at very good rates. Development of the discovery foresees the drilling of at least two field wells in 2013. Production from each well is estimated at 2,000 bopd. Production at Rosa North Field is expected to reach 5,000 bopd in the first 12 months, and will be delivered to the nearby processing facilities at Meleiha field. | ||||
| Harvest hits oil in pre-salt offshore Gabon | A sidetrack of Harvest Natural Resources’ Dussafu Tortue Marin (DTM)-1 well, in the pre-salt waters off Gabon, has encountered 65 ft of oil pay in the primary Dentale reservoir. The sidetrack has better reservoir character and an apparently similar fluid level to that encountered in the vertical well. Initially drilled in 380 ft of water to a vertical depth of 11,260 ft, the sidetrack was drilled 1,800 ft from the original wellbore. Several other stacked sands with oil shows were encountered; however, due to a stuck downhole tool, logging operations in the sidetrack were terminated early before pressure data could be collected to confirm connectivity. The well was suspended, pending future appraisal and development activities. | ||||
| WPX strikes large gas find in Colorado | WPX Energy has confirmed a 16-MMcfd test flow in a discovery well in western Colorado. The well has since been choked back substantially to optimize reservoir performance and ensure maximum resource recovery. In the month of January, it produced at an average rate of 12 MMcfd. WPX has the lease rights to approximately 180,000 net acres of the Niobrara/Mancos shale play that underlies the company’s expansive leasehold position in the Piceance basin. WPX has drilled more than 4,000 wells in the Piceance basin, mostly in the tight sandstones of the Williams Fork formation. | ||||
| TAQA makes North Sea oil discovery |
Abu Dhabi National Energy Co. (TAQA) said it has discovered oil at the new Darwin field in the North Sea, off the coast of Scotland. Two oil columns were discovered during the Darwin drilling program, which started in November. One well has been suspended for the purpose of future well testing. TAQA acquired a 50% interest in the Darwin acreage during February 2012. The field is next to the TAQA-operated Cormorant South, North Cormorant and Pelican fields in the northern North Sea. The reserve’s potential of the Darwin oil discoveries, in conjunction with NW Hutton field re-development, is being re-evaluated. In February, TAQA started first production from Cormorant East field. | ||||
Comments? Write: editorial@worldoil.com |
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FROM THE ARCHIVE
- 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)
