DISCOVERIES & DEVELOPMENTS

LNG Canada moves forward with Canada’s first LNG export facility

LNG Canada—with JV partners Shell (40%), Petronas (25%), PetroChina (15%), Mitsubishi Corp. (15%) and KOGAS (5%)—have taken FID on Canada’s first large-scale export facility in Kitimat, British Columbia. According to LNG Canada, the export plant has been designed to achieve the lowest carbon intensity of any major plant operating in the world today. Fluor Corp.’s JV with JGC Corp. has been contracted to provide the engineering, procurement, fabrication and construction on the project, which initially will consist of two liquefaction units for a total of about 14 million tons per year of LNG. It was reported, however, that LNG Canada has the option to expand to four units. “We believe LNG Canada is the right project, in the right place, at the right time,” said Shell CEO Ben Van Beurden. “Supplying natural gas over the coming decades will be critical as the world transitions to a lower carbon energy system. Global LNG demand is expected to double by 2035 compared with today, with much of this growth coming from Asia, where gas displaces coal.” 

CNOOC’s Penglai project begins production in the Bohai Sea, offshore China

CNOOC (operator, 51%), alongside partner ConocoPhillips (49%), has reported first oil from Penglai 19-3 field 1/3/8/9, in the south central Bohai Sea, nearly 50 mi southeast of Penglai City, China. The Bohai Sea is the innermost bay of the Yellow Sea, on the northeastern coast of China.According to ConocoPhillips, Penglai field remains the largest of its kind in China, as well as one the most productive oil assets ever developed in the country. The field—with an average water depth between about 88 ft and 108 ft—is utilizing existing facilities, including two wellhead platforms and a central processing platform. There reportedly are two wells producing at this time. At peak production, the project is expected to reach approximately 58,700 bopd in 2020. In a release, CNOOC CEO Yuan Guangyu said, “Successful production commencement of Penglai 19-3 oil field 1/3/8/9 comprehensive adjustment project will strongly support Bohai [and] to stabilize its production at 30 million tons for another 10 years.”

Wintershall gets the go-ahead for Nova development, offshore Norway

Wintershall Norge AS (operator, 35%)—alongside partners Capricorn Norge AS (20%), Spirit Energy (20%), Edison Norge AS (15%) and DEA Norge AS (10%)—has been granted approval for the Nova development, nearly 75 mi northwest of Bergen, Norway. The plan for development and operation (PDO) includes two subsea templates on the ocean floor that will be tied back to Neptune Energy’s Gjøa platform (pictured). “As well as selecting the most economically robust solution for developing the Nova field, utilizing existing infrastructure is the most environmentally friendly solution,” Wintershall Norge Managing Director Hugo Dijkgraaf said in a release. Gjøa reportedly will provide lift gas to the field and water injection for pressure support, as well. According to Wintershall, the field’s total recoverable reserves are estimated at approximately 80 MMboe, of which the majority is oil. 

Total reports significant gas find offshore UK

Total (operator, 60%) has announced a significant gas discovery on the Glendronach prospect, situated offshore UK, West of Shetland. The company says it encountered nearly 138 ft of net pay in a high-quality Lower Cretaceous reservoir, after drilling to a final depth of approximately 14,147 ft. Preliminary tests from the discovery, which is on Block 206/04a, confirm good reservoir quality, permeability and well production deliverability, with estimated recoverable resources of approximately 1 Tcf. “Glendronach is a significant discovery for Total, which gives us access to additional gas resources in one of our core areas and validates our exploration strategy. Located on an emerging play of the prolific West of Shetland area, the discovery can be commercialized quickly and at low cost by leveraging the existing Laggan-Tormore infrastructure,” said Arnaud Breuillac, president of E&P at Total. Total’s partners include Ineos E&P UK Limited (20%) and SSE E&P UK Limited (20%).

BP to proceed with Vorlich development, in the central North Sea

BP has received approval from the UK Oil and Gas Authority (OGA) for the Vorlich development, targeting 30 MMboe in the central North Sea. According to the company, the project is part of a program of North Sea subsea tie-back developments that seek to access important new production from fields that are near existing infrastructure. Vorlich is a two-well development that is situated nearly 150 mi east of Aberdeen. It will be tied back to the FPF-1 floating production facility (operated by Ithaca Energy), in the center of the Greater Stella Area production hub. Scott Robertson, the OGA’s Central North Sea area manager, said that Vorlich “will make an important contribution to [the] Maximizing Economic Recovery UK priority.” It is being developed alongside Alligin field, another satellite field, situated West of Shetland, that will be tied back to the Glen Lyon FPSO vessel (pictured). It is estimated to contain recoverable resources of 20 MMbbl. Both fields are anticipated to come onstream in 2020. Vorlich partners include BP (operator, 66%) and Ithaca Energy (34%), while BP (operator, 50%) and Shell (50%) are partners in Alligin field. 

Block 7 Consortium gets approval for Zama appraisal plan, offshore Mexico

Talos Energy received approval from the National Hydrocarbons Commission (CNH), the Mexican oil and gas regulator, for appraisal of the Zama discovery. The discovery—which is situated approximately 37 mi offshore Dos Bocas, in Block 7—was the first offshore exploration well drilled by the private sector in Mexico’s history. It is estimated to contain more than 1 Bbbl, and it was reported that resources could extend into neighboring blocks. According to the company, the appraisal plan includes three new reservoir penetrations and is expected to conclude by mid-2019. Utilizing the Ensco 8503 semisubmersible rig, the first appraisal well, Zama-2, is expected to spud in fourth-quarter 2018. Talos is operator of the Block 7 Consortium, with a 35% participating interest. Partners include Sierra Oil and Gas (40%) and Premier Oil (25%).

First gas reported from Bainet, in northeastern Romania

Raffles Energy (operator) and Prospex Oil and Gas (50%) have achieved first gas at Bainet gas field, in the Exploration Area of northeastern Romania’s EIV-1 Suceava concession. The 378-mi² concession—which contains an undeveloped discovery (Grancesti SE-1), as well as several other prospects—is home to two producing gas fields that are operated by Raffles Energy (Climauti and Dornesti South). Bainet-1 was drilled to a TD of over 1,968 ft in November 2017, encountering more than 26 ft of net gas pay. The field has been connected to the Bilca gas processing plant, via a 1.3-mi flowline tie-back, to existing production infrastructure. The operator reportedly is targeting an initial flowrate of 0.7 MMscfd. According to Prospex Oil and Gas, the field’s production rate will be adjusted according to well performance and market demand.

BUSINESS

Neptune Energy completes acquisition of VNG Norge

Neptune Energy closed its acquisition of VNG Norge in late September, becoming one of the top five independent producers on the Norwegian Continental Shelf (NCS). The transaction, which was announced in June, significantly strengthens the company’s equity position in the greater Njord area. It now holds a 22.5% interest in Njord, as well as a 30% interest in the Fenja development project. As operator of Fenja, Neptune says it will bring the subsea development onstream in 2021 as a tie-back to the Njord production hub. Through the acquisition of VNG Norge, Neptune adds three producing fields, two development projects and 42 licenses to its existing portfolio. In 2017, VNG Norge reported net production of 4,000 boed, with a significant ramp-up planned by 2022 as new production comes onstream. Likewise, net reserves and resources were estimated to be more than 50 MMboe.

Encana to divest San Juan assets for $480 million

Encana Oil & Gas, a wholly-owned subsidiary of Encana Corporation, has agreed to sell its San Juan assets, in northern New Mexico, to DJR Energy, LLC, for $480 million. The company will divest about 182,000 net acres, which deliver an average production of approximately 5,400 boed, including 3,900 bpd of liquids. DJR Energy, a private upstream company based in Denver, Colo., will have a total of over 350,000 net acres in the San Juan basin, following the acquisition. Likewise, it reportedly will produce over 6,000 boed and hold an inventory of over 1,100 drilling locations across the area. The transaction is expected to close during the fourth quarter, with an effective date of April 1, 2018.