EXPLORATION/PRODUCTION

BP reports third gas find in North Damietta Concession, Egypt

In Egypt’s East Nile Delta region, BP has announced another gas discovery in the North Damietta Offshore Concession. Qattameya Shallow-1, is about 60 km north of Damietta City, 30 km southwest of Salamat and just 35 km west of the Ha’py offshore facilities. It was reportedly drilled to a TD of 1,961 m, in a water depth of approximately 108 m. It was drilled using the El Qaher II jackup. According to BP—which holds 100% equity in the discovery—the wireline logs, pressure data and fluid samples confirmed the presence of 37 m of net gas pay in high-quality Pliocene sandstones. Hesham Mekawi, regional president of BP North Africa, said, “We believe development of Qattameya could help unlock the resources in other nearby discoveries with similar shallow, low-pressure characteristics. This is part of our long-standing commitment to Egypt and to unlocking Egypt’s energy potential.” 

Maersk Oil reports first oil from Flyndre field, North Sea

Maersk Oil’s Flyndre field, in the UK and Norwegian North Sea, began producing on March 26. First oil reportedly travelled 25 km via pipeline to the Repsol/Sinopec-operated Clyde platform. Situated approximately 293 km southeast of Aberdeen, in Blocks 30/13 and 30/14 of the UK North Sea, and 325 km southwest of Stavanger, in Block 1/5 of the Norwegian North Sea, the field straddles the median line between the UK and Norway. Developed as a subsea tie-back with a single production well, the field’s production rate is expected to peak at about 10,000 bopd, with production continuing until at least 2023. Maersk Oil CEO Gretchen Watkins said, “Flyndre first oil represents new production for both the UK and Norway and we’re pleased to have worked with partners on both sides of the border to deliver this development.” Partners in the Flyndre field development include Maersk Oil (65.941%), Repsol Sinopec Resources UK Limited (22.739%), Repsol Sinopec North Sea Limited (4.24%), Maersk Oil Norway AS (6.255%), Statoil Petroleum AS (0.471%) and Petoro AS (0.354%).

Statoil wildcat hits gas east of Alve field, Norwegian Sea

As operator of production licence 159 B, Statoil Petroleum reported that the drilling of wildcat well 6507/3-12 and appraisal well 6507/3-12 A was complete in early March. Drilled about 6 km east of Alve field in the northern part of the Norwegian Sea, and about 200 km west of Sandnessjøen, both wells proved gas. According to Statoil, the primary exploration target for wildcat well 6507/3-12 was to prove petroleum in Middle Jurassic reservoir rocks, while also collecting geological data if Cretaceous sandstones were in fact present. Well 6507/3-12 reportedly encountered a total gas column of about 7 m in a Late Cretaceous sandstone layer, with good reservoir properties. In the primary and secondary exploration targets, the well encountered approximately 30 m of aquiferous sandstones in the Garn and Not formations, and about 65 m of aquiferous sandstone in the Ile and Tofte formations—all with good-to-moderate reservoir properties. The primary target for well 6507/3-12 A was reportedly to delineate the Cretaceous gas discovery in the Lysing formation. Statoil reported that drilling of Well 6507/3-12 A was halted, however, due to technical problems regarding presumed gas-filled sandstone. The company said that no further attempts were made to drill the appraisal well. According to the company, preliminary estimations show that the discovery could contain between 1 and 5 Bscm of recoverable gas. The wells, which are the third and fourth exploration holes to be drilled in production licence 159 B, will be permanently plugged and abandoned.

Total starts production at Moho Nord project, offshore Congo

Total reported the start of production at the Moho Nord deep offshore project, approximately 75 km off the coast of the Republic of Congo’s Pointe-Noire. The field is developed through 34 wells that are tied back to a new TLP—which is the first for Total in Africa—and to Likouf, a new floating production unit. Oil is processed at Likouf before it is exported via pipeline to the Djeno onshore terminal, which is also operated byTotal. With a total production capacity of 100,000 boed, Moho Nord is the largest oil development in the country, to date. As operator, Total holds a 53.5% interest in the project. Its partners include Chevron Overseas (Congo) Limited (31.5%) and Société Nationale des Pétroles du Congo (15%).

BUSINESS, MERGERS AND ACQUISITIONS 

Schlumberger, Weatherford form hydraulic fracturing JV

Schlumberger Ltd. and Weatherford International Plc are working together on the formation of a new JV, to be called OneStim. The JV, which is set to close before the end of the year, is expected to rival Halliburton as the world’s top fracing service provider. Schlumberger reportedly will act as operator of the hydraulic fracturing partnership, with 70% ownership. Weatherford is said to retain 30% ownership, and is to receive a one-time payment of $535 million. The collaboration comes at a pivotal time for Weatherford, particularly, as the company prepares to welcome a new CEO in April. Additionally, the company recently has been forced to limit frac jobs, as prices for frac work have dropped considerably, making it difficult to sustain the business. Some of the industry’s largest oilfield service providers are experiencing similar struggles. Baker Hughes, for one, partnered with GE after its proposed merger with Halliburton was denied regulatory approval. While that deal is still undergoing regulatory review, it is expected to become another service company to rival Halliburton.

Marathon Oil to acquire acreage in northern Delaware basin for $700 million

Marathon Oil Corp. has entered an agreement to acquire approximately 21,000 net acres, primarily in the Permian’s northern Delaware basin. The New Mexico acreage is being acquired from Black Mountain Oil & Gas and other private sellers for $700 million. It contains primary targets in the Wolfcamp and Bone Spring plays, with roughly 400 boed of production. Total resource potential is reportedly estimated at about 550 MMboe. According to Marathon Oil, the acquisition is scheduled to close during second-quarter 2017. “Combined deals provide us more than 90,000 acres in the Permian, over 70,000 of which is concentrated in the northern Delaware,” said Lee Tillman, president and CEO of Marathon Oil Corp. “While we expect to pursue additional trades and grassroots leasing, this bolt-on achieves the scale necessary for efficient long-term development in the basin.”

GOVERNMENTAL/REGULATORY

Trump continues efforts to overturn energy rules imposed by Obama

The Trump administration has continued its efforts to reverse some of former President Obama’s stringent energy regulations. In early March, it was reported that the Interior Department had begun to weigh Eni’s bid to drill in Arctic waters north of Alaska, where an estimated 27 Bbbl of oil and 132 Tcf of natural gas are said to exist. Because Eni’s exploration well would be situated in an area that it had formerly leased from the federal government, the Executive Order issued by Obama in December 2016 would not apply. Eni reportedly said in a statement that it plans to begin drilling by the end of the year, if the plan is approved. If approved, the plan could prompt further exploration in the region. Additionally, President Trump was applauded for the Executive Order issued in late March, in favor of energy independence. “Action by President Trump is an important step toward increasing American competitiveness and recognizing that our industry is part of the solution to advancing U.S. economic and national security goals,” said Jack Gerard, API president and CEO. “Smart, common sense and science-based guidance and regulations will help our nation’s energy renaissance continue to provide benefits for American consumers, workers and the environment.” Scott Pruitt, EPA administrator, said that the order will ensure a “pro-growth and pro-environment approach” to energy regulation.

South Sudan, Equatorial Guinea to collaborate on African oil and gas

Equatorial Guinea’s Minister of Mines and Hydrocarbons, Gabriel Mbaga Obiang Lima, and South Sudan’s Minister of Petroleum, Ezekiel Lol Gatkuoth, have signed a Memorandum of Cooperation, establishing a solid bilateral relationship between the two African producers. The partnership is expected to promote oil and gas infrastructure projects, as well as collaboration between respective national oil companies, Nilepet and GEPetrol. The cooperation will allow both nations to exchange information on policy and regulation, as well as knowledge of licensing rounds and investment. “The sharing of resources and knowledge between African oil and gas countries is critical,” said Lima. “Going forward, Equatorial Guinea will work closely with South Sudan for the benefit of our people and our national economies. The lines of communication are open, and we look forward to a deep and lasting collaboration.” The partnership comes at a crucial time for both nations, as South Sudan aims to more than double its production rate, and Equatorial Guinea nears the close of its EG Ronda 2016 licensing round.