BUSINESS/MERGERS/ACQUISITIONS

Golar, Schlumberger JV to target stranded gas

Golar LNG and Schlumberger have joined forces to create OneLNG, a JV to develop low-cost gas reserves to LNG. According to the companies, the combination of Schlumberger’s reservoir knowledge, wellbore technologies and production management capabilities, with Golar’s low-cost FLNG solution, will offer gas resource owners a faster and lower-cost development, thereby increasing the net present value of their resources. Golar and Schlumberger have 51/49 ownership of the JV, respectively.

McDermott, N-KOM ink cooperation agreement

McDermott International and Nakilat-Keppel Offshore Marine (N-KOM) have announced a memorandum of understanding for an exclusive cooperation agreement to pursue offshore engineering, procurement, construction and installation (EPCI) projects within Qatari waters. Under the five-year agreement, McDermott and N-KOM, the JV shipyard between Qatar’s Nakilat and Keppel Offshore & Marine, will develop an integrated approach to projects in Qatar by leveraging McDermott’s experience in offshore EPCI projects, and N-KOM’s ship repair and offshore construction facility at the Erhama Bin Jaber Al Jalahma Shipyard, strategically located in Qatar. McDermott will serve as the prime contractor to customers and lead engineering with its teams based in Dubai, as well as its Global Engineering Center in Chennai, India. McDermott will also lead procurement and installation with vessels mobilized from its fleet. N-KOM will serve as subcontractor and perform fabrication from its Qatar facility.

ConocoPhillips sells Senegal assets to Woodside

ConocoPhillips is to sell its 35% interest in three exploration blocks offshore Senegal, which include the SNE and FAN discoveries. The agreement, which is through subsidiaries of ConocoPhillips and Australia’s Woodside Petroleum, is for $350 million plus net customary adjustments of approximately $80 million. According to a statement announcing the sale, the three blocks—Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore—had a net carrying value of approximately $250 million as of May 31. The transaction is expected to close by the end of the year.

Chevron approves $37-billion Tengiz expansion

Tengizchevroil, Chevron Corporation’s 50%-owned affiliate, is proceeding with the development of its Future Growth and Wellhead Pressure Management Project (FGP-WPMP), which will increase production at Tengiz oil field, in Kazakhstan, by about 260,000 bpd. FGP-WPMP is expected to cost $36.8 billion, which includes $27.1 billion for facilities, $3.5 billion for wells and $6.2 billion for contingency and escalation. The project will raise Tengizchevroil’s total production to approximately 1 MMboed.

Expro secures major well testing contract in India

Expro has been awarded new contracts from India’s Oil and Natural Gas Corporation (ONGC). Worth in excess of $17 million over three years, the contracts will see Expro work on ONGC’s assets throughout western and eastern areas of India, including offshore Mumbai, onshore Rajamundry and the Krishna-Godavari basin. The contracts comprise Expro’s 15K and 10K surface well testing packages for HPHT and conventional wells, and will be supported from Expro’s facilities in-country.

Weatherford, IBM collaborate on production optimization

Weatherford has signed a joint initiative agreement with IBM to collaborate on the development of new products and services that leverage IBM advanced analytics and Internet of Things capabilities on the IBM Cloud and strengthen Weatherford’s production optimization technologies. Through the joint initiative, Weatherford and IBM will develop new analytics solutions that are based on Weatherford’s production optimization and engineering software platform; its supervisory control and data acquisition (SCADA); and its sensors and controllers. The jointly-developed solutions will be part of the company’s new Reservoir Solutions global business unit, and is dedicated to providing integrated offerings that help its clients lower their operating costs and increase production.

EXPLORATION/DISCOVERIES

Large gas hydrate deposits found in Indian Ocean

The USGS has assisted in the discovery of large, highly enriched accumulations of natural gas hydrate in the Bay of Bengal. According to the agency, this is the first discovery of its kind in the Indian Ocean that has the potential to be producible. The discovery is the result of the most comprehensive gas hydrate field venture in the world, to date, and drew on scientists from India, Japan and the U.S. This was the second joint expedition investigating gas hydrate potential in the Indian Ocean. The first expedition—also a partnership between scientists from India and the U.S.—discovered gas hydrate accumulations, but in formations that are unlikely to be producible. However, the gas hydrate accumulations discovered during the second expedition are in coarse-grained, sand-rich depositional systems in the Krishna-Godavari basin and are made up of sand-rich, gas-hydrate-bearing fan and channel-levee gas hydrate prospects. The next step will involve production testing, to determine if natural gas production is practical and economic.

Shell in deepwater Gulf of Mexico discovery

Shell has reported a new discovery in the deepwater U.S. Gulf of Mexico. The initial estimated recoverable resources for the Fort Sumter well are more than 125 MMboe. According to Shell, further appraisal drilling and planned wells in adjacent structures could considerably increase recoverable potential in the vicinity of the Fort Sumter well. According to Ceri Powell, executive V.P., Exploration, Shell, the well’s “proximity to our nearby discoveries in the area, and to highly prospective acreage to the southeast, makes Fort Sumter particularly significant.” The Fort Sumter well was drilled in Mississippi Canyon Block 566, approximately 73 mi southeast of New Orleans, La., in a water depth of 7,062 ft, to an MD of 28,016 ft. The block is nine square miles in size and is wholly operated by Shell. An appraisal sidetrack well was later drilled to an MD of 29,200 ft.

PRODUCTION

Noble Energy starts production at Gunflint

Noble Energy has started production at the company’s Gunflint development in the deepwater Gulf of Mexico. The two-well field is ramping up and is anticipated to reach a minimum gross production of 20,000 boed, with oil representing approximately 75% of the volumes produced. The net amount to Noble Energy is expected to be at least 5,000 boed, with potential for additional volumes dependent upon available capacity at the third-party host facility. The Gunflint development, at Mississippi Canyon Block 948, is a subsea tie-back to the Gulfstar One facility. Noble operates Gunflint field with a 31.14% working interest. Other working interest owners include Ecopetrol America, with 31.50%, Samson Offshore Mapleleaf, with 19.13%, and Marathon Oil, with 18.23%.

Marathon Oil achieves first gas from Alba B3 compression platform

Marathon Oil has achieved first gas production through its new Alba B3 offshore compression platform off Equatorial Guinea. Production from the new platform allows Marathon to convert approximately 130 MMboe of proved undeveloped reserves, more than doubling the company’s remaining proved developed reserve base in the country. “The Alba B3 compression project will allow us to maintain plateau production for the next two years, mitigating base decline, while extending the Alba field’s life by up to eight years,” said Mitch Little, V.P., Conventional, Marathon. Marathon Oil’s wholly owned subsidiary Marathon E.G. Production Limited holds an approximately 65% working interest in Alba field and is the operator; Noble Energy owns the remaining stake. 

Devon Energy reports record-setting STACK well

Devon Energy Corp. has reported a record-setting well in the over-pressured oil window of the STACK play in Kingfisher County, Okla. The Pony Express 27-1H was drilled with a 5,000-ft lateral and achieved a 30-day average rate of 2,100 boed, consisting of 1,500 bopd, or 70% of the production mix. Oil productivity from the Pony Express is the highest of any Meramec well drilled in the play, to date, on a per lateral foot basis.

Tenth well commissioned at Badra field

Gazprom Neft Badra, a subsidiary of Gazprom Neft, has commissioned its tenth production well (P-07) at Iraq’s Badra field. Together with the other wells at the field, the P-07 well is in free-flow production. With production volumes at the newly launched well now at 6,527 bopd, its commissioning brought daily production at the field to 67,000 bopd. Three other wells were also commissioned at the field earlier this year, collectively producing 24,000 bopd. The drilling of four further wells—P-10, BD-2, P-14 and P-19—is ongoing, with construction expected to be completed in early 2017.

GOVERNMENT/REGULATORY

BOEM ups offshore financial assurance requirements

The U.S. Bureau of Ocean Energy Management (BOEM) has updated its financial assurance and risk management requirements for companies holding oil and gas leases in federal waters. According to the bureau, the new requirements will ensure that U.S. taxpayers never have to pay for decommissioning and removing a company’s offshore production facilities. However, IPAA said the requirements will drive independent producers out of the offshore. IPAA’s Dan Naatz, senior V.P, Government Relations and Political Affairs, said, “To date, industry has absorbed 100% of its liability with zero cost to U.S. taxpayers, proving that the current financial assurance system works. One thing is clear, today’s directive is not a ‘balanced’ solution for America’s independent producers and, unfortunately, their voice has been ignored throughout the process of this rulemaking.”

UK opens up frontier acreage in new licensing round

The UK’s Oil and Gas Authority (OGA) has launched the 29th Offshore Licensing Round with more than 1,200 blocks on offer to support the OGA’s objective of maximizing economic recovery from the UKCS. Companies can apply for new licenses to drill in a number of frontier areas of the UKCS, some of which were part of last year’s government-funded seismic campaign. The program targeted under-explored areas of the UKCS, and significantly improved the previously sparse data coverage in the Rockall Trough and Mid-North Sea High regions. Companies have until 14:00 on Oct. 26, 2016, to apply.