World of oil and gas

EXPLORATION

Gazprom Neft starts drilling at Arctic field

Gazpromneft-Sakhalin, a subsidiary of Gazprom Neft, has started drilling a new exploration well in Dolginskoye field, on the continental shelf in the Pechora Sea. The work is being carried out during the ice-free months of 2014, and will involve drilling a single well to a depth of 3,500 m and conducting a full range of geological investigations. Gazprom Neft has worked previously in the area at Prirazlomnoye field. Based on initial studies, the company said that a further program will be drawn up to explore the field and to prepare for exploratory drilling during the ice-free seasons in following years. Drilling and well testing will be carried out in 2014 by the GSP Saturn jackup, which arrived on site in mid-June and is installed directly on the seabed.

CNPC finds oil, gas shows in disputed South China Sea waters

China National Petroleum Corporation (CNPC) reported that, on July 15, it completed drilling and exploration operations at the Zhongjiannan Project, finding both oil and gas shows. The company is now planning a comprehensive assessment of the area’s hydrocarbon horizons, based on geological and analytical data collected previously. Further work is subject to the aforementioned comprehensive assessment. In 2013, CNPC conducted a well site survey at the location, after identifying exploration targets and well locations. On May 2, CNPC started drilling two exploratory wells at the Zhongjiannan Project, and finished drilling the first of these wells on May 27, and the second on July 16. The operation is undertaken by the HYSY-981 drilling platform, run by China Oilfield Services Limited.

Egdon Resources commences drilling Wressle-1 conventional exploration well

Egdon Resources has begun drilling the Wressle-1 conventional oil exploration well in Lincolnshire License PEDL180, to the east of Scunthorpe. Wressle-1 spudded on July 19, and drilling is expected to take approximately 38 days. The planned well will be drilled as a deviated well to a TD of about 2,300 m. It will intersect a number of prospective Upper Carboniferous sandstone reservoirs near the crest of the Wressle structure. The Wressle Prospect is defined by proprietary 3D seismic data, which were acquired by Egdon in February 2012. The prospect is on trend with Crosby Warren oil field and the Broughton-B1 oil discovery, both to the immediate northwest, and the Brigg-1 oil discovery, to the immediate southeast. The gross mean, prospective oil resources at Wressle are estimated to be 2.1 MMbbl. The partners in PEDL180 and Wressle-1 include Egdon Resources U.K. Limited (operator, 25%), Celtique Energie Petroleum Limited (33.33%), Europa Oil & Gas Limited (33.34%) and Union Jack Oil Plc (8.33%).

On June 21, Petrobras began an extended well test (EWT) in the evaluation area known as Iara, on Block BM-S-11, roughly 300 km offshore at a water depth of approximately 2,200 m. The EWT is part of the Discovery Evaluation Program, approved by Brazil’s regulatory agency, ANP. The test is being conducted on well 3-BRSA-1132-RJS (RJS-706), in the western section of the Iara Evaluation Plan, using FPSO Dynamic Producer. The well’s initial production of 29,000 bopd is similar to the output of wells that are producing for commercial purposes in the Santos basin pre-salt area. The Evaluation Plan will expire at the end of 2014, at which time the consortium must submit a declaration of commerciality to ANP. Petrobras operates the consortium (65%), in partnership with BG E&P Brasil Ltda (25%) and Petrogal Brasil S.A (10%).

GOVERNMENT/REGULATORY  

API has published new guidelines for the design, manufacture and use of subsea capping stacks. API’s Recommended Practice for Subsea Capping Stacks, known as RP 17W, applies to the installation of new subsea capping stacks, and can serve as a guide to improving existing equipment. It can aid during the design and manufacturing process, and in developing instructions for preservation, transportation, maintenance, testing and operations. The document also provides guidelines for the deployment, well shut-in and recovery of a subsea capping stack. RP 17W is an industry response to the post-Macondo joint industry task force (JITF) recommendations to enhance subsea well control and containment. This JITF, and others, focused on offshore equipment, operating practices and spill response.

On the heels of a June report announcing untapped resource estimates for Scotland’s Midland shale basin—home to a potential 30 Tcf of gas and 6 Bbbl of oil—the UK has opened its next bidding round for onshore exploration licenses. The Department of Energy and Climate Change (DECC) will oversee the round, which is highlighting shale gas as a cheaper, cleaner fuel source, with Business and Energy Minister Matthew Hancock publishing the most recent details. The licenses offered will give operators the right to begin drilling, but do not represent an absolute agreement to drill, said DECC. Once a license is granted, further drilling applications will require planning permission, as well as environment permits and sign-offs from health and safety officials. There also will be additional planning guidance, and environmental assessments, for exploration that could occur near areas of outstanding natural beauty, UNESCO World Heritage sites, national parks and the Broads.

Croatian Economy Minister Ivan Vrdoljak has opened a public tender for exploration and exploitation of onshore hydrocarbons. This offering is the first in a series of tenders for a total of six blocks, ranging from 2,100 to 2,600 km², in the areas near the Drava River, Eastern Slavonia and Save. This round of concessions will close on Feb. 18, 2015, with contracts expected to be signed for any awarded concessions by the end of June 2015. Croatia recently introduced new petroleum legislation and production-sharing contract terms, in an effort to draw investment into the country’s oil and gas industry. With no new investments between 2007 and 2013, Croatian oil and gas production fell 30%.

DISCOVERIES

Woodside reported that its Toro-1 exploration well, in permit WA-430-P, has intersected approximately 150 m of gross gas (65 m, net gas) pay within the Mungaroo Formation target, offshore Western Australia. The well reached a TD of 3,724 m. Following drilling, wireline logging was conducted and confirmed the presence of a gas column. The well was planned for P&A. Toro is in Western Australia’s Exmouth sub-basin, and is near Woodside’s existing Ragnar-1A discovery. Woodside operates the license.

Shell has hit its third major Norphlet discovery in the Rydberg exploration well. The well is 75 mi offshore, in Mississippi Canyon Block 525, in 7,479 ft of water. It was drilled to a TD of 26,371 ft and encountered more than 400 ft of net oil pay. Shell is completing full evaluation of the well results, but expects the resource base to be approximately 100 MMboe. Together with the Appomattox and Vicksburg discoveries, the total potential of the Norphlet discoveries is now over 700 MMboe. This is the first discovery for the partnership of Shell (operator, 57.2%), Ecopetrol America Inc. (28.5%) and Nexen (14.3%).

GeoPark Limited has discovered a new Chilean oil field with its Primavera Sur 1 well, on the newly acquired Campanario Block in Tierra del Fuego. GeoPark (50%) operates the Campanario Block, in partnership with ENAP. GeoPark drilled and completed Primavera Sur 1 to a TD of 8,025 ft.  A test conducted in the Tobifera formation, at approximately 7,750 ft, resulted in a production rate of approximately 215 gross bpd of 39.9°API oil. The operator said that further production testing will be required to determine stabilized flowrates.

Repsol has struck an oil discovery in Teak field in the TSP Block, east of the island of Trinidad. The TB14 discovery has upgraded the northern portion of the Teak B field that was not known previously, with the newly discovered area estimated to contain over 40 MMbbl of oil-in-place. Repsol (70%) operates the field, partnered by co-venturers Petrotrin (15%) and The National Gas Company of Trinidad and Tobago (15%). Repsol said that it is carrying out a drilling campaign to add new resources and production to the TSP Block. TB14, which has produced 1,200 bopd in testing, is in addition to June’s start-up of the TB13 well, which added 1,384 bopd to the field’s output.

BUSINESS

PRODUCTION

ACQUISITIONS

Statoil said it is divesting its 10% equity in Blocks 38 and 39 of the Kwanza basin, offshore Angola, to Ecopetrol. In Block 39, the 10% divestment is accomplished through two separate, but simultaneous, transactions. Statoil acquired 7.5% from Total under one agreement. Statoil then divested 10% in Block 39 through a separate agreement, reducing its net equity 2.5%. On April 3, Statoil had announced the acquisitions by WRG Angola Block 38 Limited and WRG Angola Block 39 Limited (both 50/50 JVs owned by White Rose Energy Ventures and Genel Energy Plc) of 15% interests in Block 39 (from Statoil) and Block 38 (from China Sonangol International Holdings).  Statoil is also a partner in Blocks 22, 25 and 40 of the Kwanza basin.

Tethys Oil AB has increased an indirect interest in the Rietavas license, onshore Lithuania, from 14% to 30%, as JV partner Chevron has elected to leave the license. The work program, focused on evaluating the license area for conventional and unconventional hydrocarbon potential, will continue as planned, and will not be affected by Chevron’s exit, said Tethys. After adjustments among the shareholders, Tethys’ interest in the Raiseiniai license onshore Lithuania has increased from 26% to 30%.

Inpex reported that its subsidiary, Teikoku Oil (North America) Co., has acquired an additional participating interest in the Lucius project, in the deepwater U.S. Gulf of Mexico. Following this acquisition and the interim redetermination of equity ownership by the project partners, Inpex’s participating interest in the project stands at 7.75309%. The company’s increased participating interest follows Apache’s May 2014 decision to sell all of its participating interest in the project, amounting to 11.669%, to Freeport-McMoRan Oil & Gas. The Lucius project includes portions of Keathley Canyon Blocks 874, 875, 918 and 919.