EXPLORATION

Norway launches expanded licensing round

Norway’s Ministry of Petroleum and Energy has announced this year’s licensing round for the geologically well-known areas on the Norwegian Continental Shelf—Awards in Predefined Areas (APA) 2015. The objective is to award new production licenses in these areas at the beginning of 2016; the application deadline is Sept. 2. “History has shown us that the APA-rounds have been very important for value-creation and for the activity level on the Norwegian Continental Shelf,” said Minister of Petroleum and Energy Tord Lien. In APA 2015, there is an expansion of the predefined area by 35 blocks in the Norwegian Sea, including blocks close to Aasta Hansteen field, and the Pil and Bue discoveries at Haltenbanken. In the Barents Sea, the area has been expanded, with 11 blocks close to the Alta and Gohta-discoveries. 

BOEM kicks off review of Shell’s Arctic drilling plan

The U.S. Bureau of Ocean Energy Management (BOEM) deemed Shell Gulf of Mexico, Inc.’s revised multi-year Chukchi Sea exploration plan (EP) as ready for a formal review last month and invited the public to submit their views. The revised EP describes Shell’s proposal to conduct exploration drilling in the shallow waters of the Chukchi Sea’s Outer Continental Shelf, off the northwest coast of Alaska. After determining that the revised EP and accompanying information submitted by Shell were sufficient to begin a full regulatory and environmental analysis, BOEM announced that it had deemed the revised EP submitted. The bureau has 30 calendar days to analyze and evaluate the EP in accordance with federal law. Shell’s revised EP proposes to continue the multi-year Chukchi Sea exploration program that the company began in July 2012. This program includes drilling up to six wells within the Burger Prospect, in approximately 140 ft of water, about 70 mi northwest of the village of Wainwright, Alaska. Shell will conduct its operations using the drillship M/V Noble Discoverer and the semisubmersible, Polar Pioneer, with each vessel providing relief-well capability for the other. The units and their supporting vessels would depart the Chukchi Sea at the conclusion of each drilling season.

ConocoPhillips deepwater wells disappoint

ConocoPhillips has struck out with two deepwater exploration wells, one offshore Angola and the other in the Gulf of Mexico. The company’s Omosi-1 well, in Block 37, offshore Angola in the Kwanza basin, was drilled to a TD of 20,666 ft. A gas column of approximately 525 ft was encountered in the primary objective reservoir. No further activity is planned. The well has been plugged and abandoned. Meanwhile, in the Gulf of Mexico, the Harrier prospect in Mississippi Canyon Block 118 was drilled to a TD of 19,400 ft. No commercial hydrocarbons were encountered.

TGS, Dolphin to conduct survey in western Barents Sea

TGS has signed a joint venture agreement with Dolphin Geophysical to acquire 4,500 km² of 3D, multi-client seismic data over the western part of the Hammerfest basin in the Barents Sea. The survey will provide industry with broadband data over APA acreage not previously covered by modern multi-client 3D. Successful exploration of remaining resources in this area could provide the key to commercial production development in this part of the Barents Sea, TGS said. The new survey is based, and planned, on TGS’ and Dolphin’s existing data, and G&G knowledge in this geographical area. The new project links Dolphin’s Gotha 3D survey with TGS’ Finnmark Platform 3D survey.

GOVERNMENT

Exxon Mobil exec calls for action on U.S. LNG exports

The U.S. is at risk of losing economic opportunity, and the ability to solidify its role as a global leader in energy production, unless the government moves to approve LNG exports, according to Rob Franklin, president of Exxon Mobil Gas & Power Marketing Company. “If policymakers don’t revisit and redress some significant legal and regulatory problems…then the U.S. could be left behind during one of the great, historic developments in global energy and trade,” Franklin said last month during a speech at the Johns Hopkins School of Advanced International Studies in Washington D.C. Exxon Mobil has embarked on a $10-billion project to convert the LNG regasification terminal at Golden Pass, Texas, into an LNG export terminal. In support of this effort, an application to export to non-FTA countries was submitted to federal officials more than two years ago, but no decision has been made. “If we are serious about having a U.S. LNG industry, and capturing the tremendous opportunities in front of us, then we need to ensure that the case of LNG exports does not become just another casualty of bureaucracy,” Franklin said.

Obama admin releases draft offshore well control regulations

U.S. Secretary of the Interior Sally Jewell unveiled proposed regulations for offshore well control last month. The measures include more stringent design requirements and operational procedures for well control equipment used in offshore operations. “This rule builds on enhanced industry standards for blowout preventers to comprehensively address well design, well control and overall drilling safety,” Jewell said. The proposed rule addresses the range of systems and equipment related to well control operations. The measures are designed to improve equipment reliability, building upon enhanced industry standards for BOPs and blowout prevention technologies. The rule also includes reforms in well design, well control, casing, cementing, real-time well monitoring and subsea containment. The well control measures would implement multiple recommendations from various investigations and reports on the Deepwater Horizon incident. 

DISCOVERIES

Statoil’s Yeti prospect proves oil in Gulf of Mexico

Statoil has made an oil discovery in its Miocene Yeti prospect in the Gulf of Mexico. “The Yeti discovery expands the proven sub-salt Miocene play further south and west of Big Foot field,” said Statoil’s Jez Averty, senior V.P., exploration, North America. “We are analyzing data to determine the size of the discovery, to consider future appraisal options.” The Yeti discovery was made in Walker Ridge Block 160, which is approximately 9 mi south of Big Foot field, and 7 mi from Cascade field. All of the blocks making up Yeti were accessed by the current owners in recent years. Yeti was drilled by the Maersk Developer, a sixth-generation semisubmersible. According to Statoil, the company’s drilling efficiency with Yeti was among the best of any well drilled in Walker Ridge, achieving a rate of approximately 400 ft/day. Statoil is the operator (50%) of Yeti; its partners are Anadarko (37.5%) and Samson (12.5%).

Repsol in Algerian gas discovery

Repsol has struck its third gas discovery in the Illizi basin, in southeastern Algeria. The discovery, in the Tan Emellel Sud-Ouest-2 (TESO-2) exploration well, in the Sud-Est Illizi Block, is the continuation of an already successful exploration campaign in the high-potential area. The gas discovery was made at a depth of 1,307 m, and well testing delivered a flowrate of 175,000 cmgd and 90 bcpd on a 32/64-in. choke. Repsol aims to drill at least four more additional wells to appraise the previous discoveries within the Sud-Est Illizi Block.

Kosmos Energy reports play-opening find offshore Mauritania

Kosmos Energy’s Tortue-1 exploration well, drilled to test the Tortue West prospect, in Block C-8 offshore Mauritania, has made a play-opening gas discovery, the company said. Based on the preliminary analysis of drilling results and intermediate logging to a depth of 4,630 m, Tortue-1 intersected 107 m of net hydrocarbon pay. A single gas pool was encountered in the primary Lower Cenomanian objective. The Lower Cenomanian is comprised of three excellent-quality multi-Darcy reservoirs totaling 88 m in thickness over a gross hydrocarbon-bearing interval of 160 m. A fourth zone, 19-m thick, was penetrated within the secondary Upper Cenomanian target over a gross hydrocarbon-bearing interval of 150 m. “Volumetrically, the Tortue-1 well has far exceeded our pre-drill expectations, and has discovered a large-scale gas resource,” said Kosmos Chairman and CEO Andrew G. Inglis.

BUSINESS

BP sells stake in CATS pipeline for $486 million

BP has agreed to sell its equity in the Central Area Transmission System (CATS) business in the UK North Sea to Antin Infrastructure Partners for $486 million. BP operates CATS with a 36.22% stake, and Antin—an independent European infrastructure manager—already owns a majority interest (62.78%) in the business, following a deal with BG Group last year. The other partners are ConocoPhillips, with a 0.66% interest, and Eni, with the remaining 0.34%. “CATS has been a great business for BP but, aligned to the recommendations of the Wood Review, we believe securing this new owner will ensure a better long-term future for this key piece of North Sea infrastructure,” Trevor Garlick, regional president, BP North Sea, said. BP aims to complete the sale and transfer of operatorship before the end of 2015. 

Inpex buys stake in Abu Dhabi oil fields

Inpex Corp. has acquired a 5% participating interest in the ADCO Onshore Concession in Abu Dhabi. The acquisition is based on a 40-year agreement with the Supreme Petroleum Council of the Emirate of Abu Dhabi and the Abu Dhabi National Oil Company (ADNOC), effective Jan. 1, 2015, following Inpex’s participation in a bid. The concession is made up of 15 principal onshore oil fields in Abu Dhabi, of which 11 are in production, and four remain undeveloped. Combined, these make up one of the world’s largest oil deposits, producing 1.6 MMbpd. In partnership with ADNOC and ADCO, Inpex plans to proceed with development work aimed at increasing oil production to 1.8 MMbpd by 2017.

Baker Hughes suspends well count amid downturn

Baker Hughes has suspended the quarterly publication of the U.S. onshore well count. In response to the recent market downturn and internal initiatives to reduce costs, the company has prioritized its resources to support the ongoing publication of the weekly North America and monthly international rig counts, a spokesman said.

PRODUCTION

Eni doubles output in Egypt’s Western Desert

Eni has reached a record level of production—70,000 bopd—in Egypt’s Western Desert, doubling its output in the area in just three years. The increase was mainly achieved, thanks to the Melehia development lease, 290 km west of Alexandria. In Melehia, Eni’s production has reached 54,000 bopd following the exploration successes obtained in the deep plays of Lower Cretaceous and Jurassic age, where the company is carrying out intensive exploration, appraisal, workover and production optimization activity. The remaining part of the production in the area comes from three other development leases (Ras Qattara, Raml and West Razzak). In January, Eni signed a new concession agreement to operate in the Melehia Southwest Block, where exploration activities, on the same deep plays, will start within the year. Eni deems this concession as a key element for the sustainability of future production growth in the Egyptian Western Desert.

Statoil officially opens Valemon 

Norwegian Petroleum and Energy Minister Tord Lien officially opened the Valemon gas and condensate field in the North Sea on April 16. Expected recoverable reserves from the field are 192 MMboe. Valemon is the first new Bergen-operated platform since Kvitebjørn was put onstream 10 years ago. Condensate from Valemon will be piped to Kvitebjørn for processing and then forwarded to Mongstad, while the gas will be transported to Heimdal for processing and then sent to market. “Valemon is thereby extending the life of Heimdal, which was scheduled to be shut down in 2014, as a gas hub in this part of the North Sea,” Arne Sigve Nylund, Statoil’s executive V.P. for development and production, Norway, said. 

EPA highlights drop in methane emissions from gas production 

A new report from the EPA shows continued decline in methane emissions from natural gas production, API said. “The latest inventory shows that U.S. producers continue to make dramatic improvements, with net methane emissions from natural gas production falling 38% since 2005,” said Howard J. Feldman, API senior director of regulatory and scientific affairs. The EPA also reported that methane emissions from hydraulically fractured natural gas wells are down 79% since 2005. 

Lundin reports first oil from Malaysia’s Bertam field 

Lundin Petroleum’s wholly owned subsidiary, Lundin Malaysia, achieved first oil from Malaysia’s Bertam field on April 5. Bertam field began production from four pre-drilled development wells. The remaining production wells will be drilled sequentially and put onstream through the remainder of 2015, with the field’s gross plateau rate of 15,000 bopd expected to be achieved by late 2015. The field is on Block PM307, offshore the eastern side of Peninsular Malaysia. Lundin Malaysia is the operator (75%), and Petronas Carigali holds the remaining 25%. Bertam field has been developed with a wellhead platform adjacent to a spread-moored FPSO, in a water depth of 75 m.

MERGERS/ACQUISITIONS

Shell scoops up BG Group in $70-billion merger 

Royal Dutch Shell and BG Group are to merge in a $70-billion cash-and-stock transaction. The merger should be completed early next year, with 2016 acting as a year of consolidation during which the combined company will “bed down” its portfolio and launch asset sales and cost-saving programs, Simon Henry, Shell’s CFO, told analysts.  The companies are expecting asset sales totaling $30 billion, from the combined portfolio, from 2016 to 2018, Henry added. 

Ithaca Energy sells Norwegian business to MOL

Ithaca Energy Inc. has entered into an agreement to sell its wholly owned subsidiary, Ithaca Petroleum Norge, for an initial consideration of $60 million. The company also has the ability to earn additional bonus payments of up to $30 million, dependent on exploration success from the existing license portfolio. Pursuant to the agreement, Ithaca Norge will be acquired by MOL Nordsjon, a wholly owned subsidiary of Hungarian-listed MOL. The transaction has an effective date of Jan. 1, and it is expected to complete in the third quarter of 2015.

SOCAR assumes operatorships as Statoil completes Shah Deniz sale

SOCAR assumed operatorship of the Azerbaijan Gas Supply Company (ASGC) and commercial operatorship of the South Caucasus Pipeline Company (SCPC) on May 1, positions which were previously held by Statoil. The change follows the completion of the transaction between Statoil and Petronas regarding the sale of Statoil’s 15.5% participating interest in the Shah Deniz production sharing agreement, 15.5% in SCPC, and 12.4% in AGSC.