DISCOVERIES/DEVELOPMENTS       

Total, Chevron report major find in the U.S. Gulf of Mexico

Total (40%) and Chevron (operator, 60%) have announced a major discovery at the Ballymore prospect, in the U.S. Gulf of Mexico. The prospect, which covers four blocks in the Norphlet play, is in the deep water of the Mississippi Canyon area, nearly 75 mi off the coast of Louisiana. The Ballymore well was drilled by Pacific Drilling’s Sharav deepwater drillship in 6,536 ft of water, and reached an MD of 29,193 ft. According to the operator, the well encountered more than 670 ft of net oil pay with excellent reservoir and fluid characteristics. Arnaud Breuillac, president of E&P at Total, said that the discovery has already been deemed commercially viable, and appraisal plans are now underway. A sidetrack well reportedly is being drilled to further assess the find. 

Chevron, Shell announce large discovery just miles from Perdido, in deepwater GOM

Chevron (40%) and Shell (operator, 60%) have reported a large deepwater find in the U.S. Gulf of Mexico (GOM), approximately 200 mi southwest of Houston, Texas. The Whale well was drilled in the Alaminos Canyon Block 772, to a depth of about 22,948 ft, MD, approximately 10 mi northeast of Shell’s Perdido platform. The company reported that the well encountered more than 1,000 net ft of oil-bearing pay, and appraisal drilling is now underway. The discovery adds to a number of deepwater projects that Shell presently has underway in the GOM, including Appotomattox, Kaikias and Coulomb Phase 2.

ExxonMobil reports hydrocarbon find in Papua New Guinea

ExxonMobil (operator, 49%) reported that hydrocarbons have been encountered at the P’nyang South-2 well, in Papua New Guinea’s Western Province. The onshore well was drilled in petroleum retention license 3, which covers 425 km². It reportedly was drilled to a depth of 8,940 ft, and struck high-quality, hydrocarbon-bearing reservoirs in the Toro and Digimu sandstones. The company says the discovery confirms the field’s southeast extension, and that well results are now being evaluated to assess the field’s resource potential. ExxonMobil’s project partners include Oil Search (drilling operator, 38.5%) and JX Nippon (12.5%). 

Statoil increases resource estimate of North Sea giant

Statoil (operator, 40.0267%)—along with partners Lundin Norway (22.6%), Petoro (17.36%), Aker BP (11.5733%) and Maersk Oil (8.44%)—has announced an increase in overall value of the giant Johan Sverdrup field. The field, which is one of the five largest oil fields on the NCS, is now said to hold estimated resources between 2.1 Bboe and 3.1 Bboe. This is an improvement from the 1.7-3.0 Bboe estimated previously. Additionally, the overall field development’s break-even has been improved to below $20/bbl. According to a company release, the field’s increased value is a direct result of “continued high-quality, in-project execution, good drilling efficiency and further maturation of the resource base.” Margareth Øvrum, executive V.P. for technology, projects & drilling at Statoil, said, “We’ve drilled more wells than planned, more than one year ahead of plan, which has contributed greatly to cost reductions in the project. The wells also make our production plans even more robust and have improved our knowledge of the reservoir, Based on this, we are now able to increase the resource estimate for Johan Sverdrup further.” 

Prospex Oil and Gas reports significant gas discovery onshore Italy

Prospex Oil and Gas (17%)—alongside partners Po Valley Energy Limited (operator, 63%) and United Oil & Gas (20%)—confirmed a significant commercial gas discovery at the Podere Maiar-1d appraisal/redevelopment well, in Italy’s Po Valley region. The well, which is situated on the Podere Gallina Exploration Permit, was drilled in Selva gas field and was targeting contingent resources of about 17 Bcf. It reportedly was drilled to an MD of approximately 4,429 ft. Two gas-bearing reservoirs, C1 and C2, reportedly were encountered in the medium-upper Pliocene sands of the Porto Garibaldi formation. According to the company, flowrates significantly exceeded pre-test expectations of 100,000 scmd. In conjunction with the successful tests, the company says there will be further analysis of the results, to revise contingent resources and reserve estimates.

BP hits two discoveries in the North Sea

BP has announced two new discoveries in the North Sea. The first was struck at Capercaillie, in the Central North Sea’s Block 29/4e. The second find was at Achmelvich, in Block 206/9b, West of Shetland. Capercaillie reportedly was drilled to a TD of 12,303 ft, encountering light oil and gas condensate in Paleocene and Cretaceous-age reservoirs. The company says that, while well data are still being evaluated, a potential tie-back development to existing infrastructure is being considered. Similarly, the Achmelvich well was drilled to a TD of 7,857 ft, encountering oil in Mesozoic-age reservoirs. “These are exciting times for BP in the North Sea, as we lay the foundations of a refreshed and revitalized business that we  expect to double production to 200,000 bpd by 2020 and keep producing beyond 2050,” Mark Thomas, BP North Sea regional president, said in a release. “We are hopeful that Capercaillie and Achmelvich may lead to further additions to our North Sea business, sitting alongside major developments like Quad 204, which came onstream in 2017, Clair Ridge, due to come into production this year, and the non-operated Culzean field, expected to start-up in 2019.” 

BIDDING ROUNDS                

Mexico holds successful deepwater auction, luring regional investment

In a push to lure investment, Mexico held its first of three auctions scheduled for this year. On Jan. 31, the country offered exploration and production licenses for 29 deepwater areas. Oil giants, including ExxonMobil, BP, Royal Dutch Shell and Chevron, are expected to invest tens of billions of dollars into the country’s E&P sector in the coming years. Shell won nine key blocks during the first auction. “We commend Mexico on a historical, successful bid round; for Shell, today’s win marks a competitive, deep water entry in Mexico,” said Andy Brown, Shell’s upstream director. “The proximity and technical similarity of this opportunity to our leading position in the U.S. Gulf of Mexico will allow us to benefit from, and build upon, decades of experience, complementing our position in the region.” The next auction will offer 35 shallow-water areas on March 27. Additionally, there are 37 onshore oil and gas development areas going up for bid on July 25. The auctions are being held as Mexico prepares for the 2018 presidential election. Since beginning his term in 2012, President Enrique Pena Nieto has overhauled the country’s energy industry in an effort to revive it. By opening a tract of land to private drilling companies last year, global oil majors were given the opportunity to invest and operate in Mexico for the first time in nearly 80 years. The country reportedly aims to return crude production to its 2004 peak of 3.4 MMbpd.

Cameroon launches 2018 licensing round for eight onshore, offshore blocks

The Republic of Cameroon’s National Hydrocarbons Corporation has opened a bidding round for eight blocks in the country’s onshore and offshore sedimentary basins. The licensing round—which includes Bomana, Bolongo and Bakassi in the Rio del Rey basin, as well Etinde Exploration, Ntem, Elombo, Tilapia and Kombe/Nsepe in the Douala/Kribi/Campo basin—opened on Jan. 15 and is scheduled to close on June 29. As a proven hydrocarbon province, Cameroon has considerable opportunity for further discovery of oil accumulations in both basins. Large tracts of open acreage reportedly are still available, particularly in the Douala/Kribi/Campo region.

PRODUCTION

Alberta’s Fort Hills project achieves first oil

Nearly 56 mi north of Fort McMurray, in northeastern Alberta’s Athabasca oil sands region, Fort Hills has been touted as one of Western Canada’s top undeveloped oil sands assets. Last month, the Suncor-operated (53.06%) project achieved first oil. According to Total (26.05%), production will ramp up over the next several months to reach a plateau of 180,000 bopd. Suncor says it is expected to reach 90% of its capacity (194,000 bopd) by the end of the year. Teck Resources Limited (20.89%) is a partner in the Fort Hills Energy Limited Partnership, as well. 

ExxonMobil to triple Permian production by 2025

ExxonMobil, one of the largest and most active operators in the Permian basin, has announced plans to triple its total daily output to more than 600,000 boe by 2025. Additionally, the company says tight oil production from the Delaware and Midland basins will increase five-fold during that same period. It also has reported plans to spend more than $2 billion on transportation infrastructure to support its growing Permian operations. As part of its Permian infrastructure, Exxon also has acquired a crude oil terminal in Wink, Texas. The terminal will be expanded to further accommodate output from the Delaware, Central and Midland basins. It reportedly is positioned favorably to transport Permian crude oil and condensate from the Delaware basin, as well as from sources near the Texas-New Mexico border, to the Gulf Coast. The announcement is part of Exxon’s plan to spend $50 billion over the next five years, expanding business in the U.S. The spending program was largely enabled by President Trump’s U.S. tax overhaul, CEO Darren Woods said in a recent blog post.