PRODUCTION

St. Malo waterflood project sanctioned,
contributing to deepwater GOM recovery rate 

A waterflood project has been sanctioned at St. Malo field, about 280 mi south of New Orleans. The project, which is Chevron’s first in the deepwater Wilcox trend, is expected to contribute an estimated recovery of more than 175 MMboe. With an estimated remaining production life of about 30 years, St. Malo is said to be positioned for “highly economic brownfield development,” according to Chevron President of North America E&P Steve Green. St. Malo was developed alongside Jack field, with subsea completions flowing back to a single host semisubmersible situated between the two fields. The fields’ oil export pipeline is the largest of its kind (24-in. diameter) ever to be placed at that water depth (7,000 ft). Chevron’s (51%) St. Malo partners include MP Gulf of Mexico, LLC (25%); Equinor Gulf of Mexico, LLC (21.5%); Exxon Mobil Corp. (1.25%) and Eni Petroleum U.S., LLC (1.25%).  

First export reported from Touat gas development
in Algeria 

Neptune Energy (65%) and Sonatrach (35%) have reported first gas export production from the Touat gas development in Algeria. The development, situated nearly 870 mi southwest of Algiers, is comprised of 19 development wells, a gas treatment plant for gas and stabilized condensate, with a gathering network and export pipelines. According to Neptune, Touat—which is expected to produce for more than 20 years—will deliver approximately 75,000 boed, or 450 MMscfg, at plateau. This reportedly will represent about 6% of the country’s total gas exports. “With Phase I complete, we now look forward to implementing Phase II, which covers the remaining eight fields, which will help to maintain the plateau of 450 MMscfd for many years to come,” Philip Lafeber, Neptune V.P. for North Africa and Asia-Pacific, said in a release. 

Snefrid Nord gas field starts production on
the NCS 

Equinor and its partners have started production from Snefrid Nord gas field, which was the first discovery to be tied back to Aasta Hansteen field (pictured), in the Norwegian Sea. It also reportedly sets a new NCS depth record; its template having been installed at a water depth of nearly 4,295 ft. The field’s recoverable resources are estimated at 27.5 MMboe, with some condensate. According to the company, this will extend plateau production from Aasta Hansteen by almost an entire year. At plateau, Snefrid Nord is expected to produce 4 MMcmgd. Siri Espedal Kindem, senior V.P. for operations north, said in a release, “We are pleased to see that the Snefrid Nord project has led to ripple effects and activity on the Helgeland coast.” As the first field to be tied back to Aasta Hansteen, Snefrid Nord reportedly opens the door for more potential satellites to be developed in the area. Image: Roar Lindefjeld and Bo B. Randulff, Equinor. 

INDUSTRY NEWS/TRENDS

Significant resource potential identified offshore Newfoundland

According to the 2019 Oil and Gas Resource Assessment—released by Nalcor Energy-Oil and Gas and Beicip-Franlab, in partnership with the Government of Newfoundland and Labrador—an additional potential of 3 Bbbl of oil and 5.8 Tcfg has been identified offshore Newfoundland. The assessment is based on new data covering nine parcels on offer in the Carson-Bonnition and Salar basins. This area is within the Canada-Newfoundland and Labrador Offshore Petroleum Board 2019 South Eastern Newfoundland Call for Bids, scheduled to close Nov. 6. Jim Keating, executive V.P. of offshore development at Nalcor Energy, said that a hydrocarbon presence has been confirmed, “which is an important insight in this frontier basin, due to the limited number of wells and no discoveries to date in the area.”

Oil market shrugs off attacks on Saudi Arabia crude production 

Aerial strikes on key Saudi Arabian oil fields and crude processing facilities in late September knocked 5.7 MMbpd of daily production offline, totaling 5% of global oil supply. In the days following the attack, crude prices spiked, and Saudi Aramco resorted to drawing upon its network of crude storage reserves to meet delivery obligations. Damaged facilities were brought back online in a matter of days, however, and the inherent risk to production revealed by the attacks failed to impact oil prices in the longer term. Asian refiners, who favor Medium, Light and Extra Light crudes, will continue to pay a $3/bbl premium over the Middle East benchmark for November, but Brent and WTI prices have returned to pre-attack rates. The gathering clouds of a broad economic recession appear to outweigh fear of another disruption to one of the world’s largest suppliers of crude oil; OPEC+ members are expected to discuss extending their current production cuts well into 2020 at their next meeting in December. “There are things that are real, and things that are perceived. We are driven by negative expectations,” Saudi Energy Minister Prince Abdulaziz Bin Salman said of the matter.

EIA projects a shift in global energy trade, infrastructure amid rising consumption 

According to the U.S. Energy Information Administration (EIA), world energy consumption will grow by nearly 50% between 2018 and 2050. In its International Energy Outlook 2019, the agency projects that the majority of this growth will come from regions where consumption of energy is driven by strong economic growth, particularly in Asia. “Energy consumption was greater in Asia than in any other region in 2018, and we project that consumption will almost double between 2018 and 2050, making Asia both the largest and fastest-growing region in the world for energy consumption,” said Linda Capuano, EIA administrator. “This long-term trend of Asian energy consumption to support growing economies strongly influences the extraction, refining and transport of oil, natural gas and other fuels.” Because Asian consumption is rising faster than supply is growing, global trade patterns and infrastructure investments could shift, according to the outlook. 

DISCOVERIES & DEVELOPMENTS          

Russia’s Arctic LNG 2 project receives FID 

Total (10%)—alongside partners Novatek (60%), CNOOC (10%), CNPC (10%) and Japan Arctic LNG (10%)—has approved FID for the Arctic LNG 2 project, on Russia’s Gydan Peninsula. “Arctic LNG 2 will leverage the success of the Yamal LNG project and will deliver competitive LNG to the markets in four years’ time,” said Total Chairman and CEO Patrick Pouyanné. The project reportedly will have a production capacity of 19.8 MM tons per year and is expected to export its first LNG cargo by 2023. Its second and third trains are anticipated to start up by 2024 and 2026, respectively. According to Total, the project has very low upstream costs with the development of the resources of the giant Utrenneye onshore gas and condensate field. The installation of three concrete gravity-based structures in the Gulf of Ob will contribute to significant capex reduction compared to that of Yamal LNG. Additionally, its close proximity to Yamal LNG reportedly will allow Arctic LNG 2 to leverage synergies with existing infrastructure and logistics facilities. 

Guyana’s Stabroek Block produces another oil find
with Tripletail-1 well 

Guyana’s prolific Stabroek Block has produced yet another oil discovery, adding to its previously estimated recoverable resource of more than 6 Bboe. The Tripletail-1 well, drilled in 6,572 ft of water in the Turbot area, encountered approximately 108 ft of high-quality oil-bearing sandstone reservoir. It was drilled by the Noble Tom Madden drillship about 3 mi northeast of the Longtail discovery. The drillship reportedly will now move to drill the Uaru-1 well, about 6 mi east of Liza field. Mike Cousins, senior V.P. of exploration and new ventures at ExxonMobil, said that the discovery “helps to further inform the development of the Turbot area.” Meanwhile, the major’s E&P activity is progressing in other areas of the 6.6-million-acre block, as well. The Stena Carron drillship is presently drilling the Ranger-2 well and the Noble Bob Douglas drillship is completing development drilling for the Liza Phase 1 project. Additionally, ExxonMobil plans to add a fourth drillship, the Noble Don Taylor (pictured), to the block this month. Image: Noble Corp. 

Valhall facility gets the go ahead in Norway

The Norwegian Petroleum Directorate (NPD) has granted consent to start up Aker BP’s Valhall West Flank facility in the North Sea, approximately 180 mi from shore on the NCS. A further development of Valhall field, with reserves estimated at 60 MMboe, West Flank is an unmanned facility with 12 well slots. “Valhall West Flank is an important measure for further exploitation of the resources in a mature field,” Tove Francke, NPD assistant director for development and operations, North Sea South, said in a release. The facility’s start-up reportedly is planned for this fall.

Joe discovery opens new oil play offshore Guyana 

Tullow Oil has opened a new Upper Tertiary oil play offshore Guyana, in the Guyana basin. The company’s Joe-1 exploration well was drilled by the Stena Forth drillship (pictured) in about 2,559 ft of water. The well, drilled to a TD of approximately 7,135 ft, encountered nearly 46 ft of net oil pay in a high-quality oil-bearing sandstone reservoir. According to Tullow (operator, 60%), this is the first oil find in the Upper Tertiary and de-risks the petroleum system to the west of the Orinduik Block, where a significant number of Tertiary and Cretaceous age prospects have been identified. The company—alongside partners Total E&P Guyana BV (25%) and Eco (Atlantic) Guyana Inc. (15%)—reportedly will evaluate data from the discovery, as well as data from the Jethro-1 discovery announced in August to determine next steps in an exploration and appraisal program. The company also is awaiting the outcome of its non-operated Carapa-1 well, on the Kanuku license, which is being drilled by the Rowan EXL II jackup rig. Image: Tullow Oil.