BUSINESS               

Shell sells UK North Sea assets, Gabon onshore interests

Shell has reported the divestiture of a parcel of UK North Sea assets to Chrysaor. The assets, which sold for approximately $3.8 billion, include Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Area, Everest, Lomond, Erskine and the Greater Armada cluster, as well as a 10% stake in Schiehallion. In addition to the sale of assets, Shell reportedly agreed to transfer 253 staff to Chrysaor upon completion of the transaction. Congruently, Shell has announced the sale of all of its onshore oil and gas interests in Gabon. The $628-million sale reportedly includes Rabi, Toucan/Robin, Gamba/Ivinga, Koula/Damier and Bende/M’Bassou/Totou, which are operated fields; Atora, Avocette, Coucal and Tsiengui West, which are non-operated fields; and associated infrastructure between Rabi to Gamba, and the Gamba Southern export terminal. Shell says that its Gabon assets produced approximately 41,000 boed in 2016. In addition to acquiring the assets and 430 local employees, Assala Energy reportedly will assume $285 million in debt. These deals reportedly are part of Shell’s $30-billion divestment program.

Hess Corp. sells interests in Norway and Denmark, exits Equatorial Guinea 

After nearly 20 years of operations in the Rio Muni basin, Hess Corporation has sold its assets in Equatorial Guinea to Kosmos Energy. In addition to the $650-million asset sale in Equatorial Guinea, the company has announced the sale of its interests in Norway and Denmark. “With the continued success of our asset sale program, we are focusing our portfolio on higher-return assets and reducing our break-even oil price,” explained CEO John Hess. “Proceeds from these asset sales, along with cash on the balance sheet, will prefund development of our world-class investment opportunity in offshore Guyana, where we have participated in one of the world’s largest oil discoveries of the past decade—positioning our company to deliver more than a decade of cash-generative growth and significant value for our shareholders.” The discovery offshore Guyana reportedly may hold as much as 2.5 Bbbl of oil. Including a divestiture of Texas properties in June, Hess has sold nearly $3.3 billion in assets this year. This reportedly amounts to about 16% of the company's overall production volumes. 

Saudi Aramco and Rowan Companies move forward with JV operations

ARO Drilling, an offshore drilling contractor that manages its own fleet of high-specification jack-ups in Saudi Arabia, has commenced operations. The company is a 50-50 joint venture between Saudi Aramco and Rowan Companies. The companies, which have been collaborating since 2006, have agreed to purchase 20 future newbuild rigs. Each of the newbuilds, which are to be constructed by a Saudi Aramco JV, will have a 16-year drilling commitment upon delivery. Delivery reportedly is expected between 2021 and 2030. Additionally, Saudi Aramco will sell a jack-up to the JV company and Rowan will sell two jack-ups, following the completion of their current contracts. This reportedly is expected to take place in late 2018. President and CEO Tom Burke said, “We are extremely pleased to announce the launch of ARO Drilling. This is a groundbreaking joint venture that supports Saudi Arabia’s Vision 2030, and provides Rowan with an unparalleled long-term growth opportunity throughout the next decade and beyond.” The launch of ARO Drilling is expected to help satisfy the region’s rising demand for drilling services, as its offshore drilling market continues to expand.

Gulf Publishing, Quest Offshore to jointly operate leading offshore conference

Gulf Publishing Company (GPC), parent of World Oil, and Quest Offshore Resources (QOR) have formed Gulf Quest LLC to jointly offer offshore conferences, including Marine Construction Engineering Deepwater Development (MCEDD). This global deepwater technology event will be in its 15th year and will benefit from the combined resources of QOR and GPC’s World Oil. GPC President and CEO John Royall said, “The global industry needs one place to meet and discuss challenges and solutions for operators in deep water, especially in the current industry climate. With its superior technical content, and history of support from the major operators, MCEDD offers that meeting place.” The 2018 event is scheduled to take place April 9–11 in Milan, Italy. The conference is expected to cover topics including macro industry issues and trends; subsurface; well and drilling technology and assets; subsea technologies; pipelines; flowlines and risers; floating production systems; and marine construction.

Rosneft acquires interest in Egypt’s giant Zohr field

Rosneft has acquired a 30% stake in Zohr field, the largest gas field in the Mediterranean Sea, from Eni.  Eni estimates approximately 850 Bcm of potential gas resources at Zohr field. According to the company, the acquisition—which is valued at $1.125 billion—will enable it to share significant experience in offshore field development, using existing competencies in offshore production. Its partners include Eni (60%) and BP (10%). Rosneft CEO Igor Sechin said, “Having closed the deal to acquire a stake in the concession agreement for the development of Zohr gas field, Rosneft has entered the world class project. It opens up the opportunities for the company to reinforce its positions in the promising and strategic region, broadens potential of our trading division, and enhances our mutually beneficial cooperation with Egypt.” 

REGULATORY      

Oil majors move deeper into Brazil’s pre-salt during bidding round

During the Oct. 27th bidding round, international operators lined up for a chance to invest in Brazil’s pre-salt region.  Output in the region has surged to 1.3 MMbopd and major oil companies are taking notice of its value, particularly in the deep waters of the Santos basin. Through the auction of eight blocks, Brazil reportedly expected to lure billions in new investments. Among the blocks awarded, the Carcará North Block was won by a consortium made up of Statoil, ExxonMobil and Galp. The Alto de Cabo Frio-Oeste Block, also in the Santos basin, was awarded to a consortium including Qatar Petroleum, Shell and CNOOC. In addition to the Carcará and Alto de Cabo Frio-Oeste blocks, there were winning bids from Shell and Total for a block adjacent to Shell’s Gato do Mato field, as well as bids from Petrobras, Shell and Repsol for Sapinhoá field. Just days after the bidding round, Brazil announced that it will join the International Energy Agency (IEA) as an association country. It was reportedly another step toward a more sustainable energy future.

Interior Secretary Zinke announces largest lease sale in U.S. history

United States Secretary of the Interior Ryan Zinke has announced a proposed, region-wide oil and gas lease sale in the Gulf of Mexico. Proposed Lease Sale 250 will offer about 76,967,935 acres in federal waters offshore Texas, Louisiana, Mississippi, Alabama and Florida. Scheduled for March 2018, the sale reportedly will include all available unleased areas (14,375 blocks) on the Outer Continental Shelf. This means that it will exceed last year’s regional lease sale by approximately 1 million acres, making it the largest oil and gas lease sale in U.S. history. “In today’s low-price environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation, and a pillar of President Trump’s plan to make the United States energy dominant,” said Zinke. Senator Lisa Murkowski also commented on the administration’s decision. She explained that “we should all support responsible development, because it creates high-paying jobs, strengthens national security, and keeps energy affordable for our families and businesses.”

EXPLORATION & PRODUCTION       

Statoil strikes oil in UKCS sidetrack well

Statoil and its partners have struck oil in the outer Moray Firth on the UK Continental Shelf (UKCS). The Verbier sidetrack well proved a minimum of 25 MMbbl of recoverable oil around the wellbore. Because the main wellbore encountered a water-filled sand, a sidetrack well was drilled to assess the remaining potential up-dip. According to the company, the sidetrack discovery could range between 25 MMbbl and 130 MMbbl of oil. However, further appraisal is needed. Jez Averty, senior V.P. of exploration in Norway and the UK, said, “This is an encouraging result for Statoil and the UK team. We have proven oil in good-quality sands with good reservoir properties, but significant work remains, most likely including appraisal, to clarify the recoverable volumes and to refine this range.” 

ExxonMobil brings number of Guyana discoveries to five

In addition to discoveries at Liza, Payara, Snoek and Liza Deep, ExxonMobil has announced its fifth discovery offshore Guyana. The company reported that the Turbot-1 well—which was drilled to a depth of 18,445 ft in 5,912 ft of water—encountered a reservoir of 75 ft of high-quality, oil-bearing sandstone in its primary objective. The well is situated in the southeastern part of the Stabroek Block, approximately 30 mi southeast of Liza field. “The results from this latest well further illustrate the tremendous potential we see from our exploration activities offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Co. ExxonMobil’s subsidiary, Esso E&P Guyana Limited, is operator with a 45% interest. Partners include Hess Guyana Exploration (30%) and CNOOC Nexen Petroleum Guyana Limited (25%).