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Gazprom-led Nord Stream 2 has signed financial agreements with five major energy companies, including supermajor Shell, for the Nord Stream 2 pipeline project.

Nord Stream 2 pipeline signing. Image from Uniper Twitter.

In addition to Shell, financial deals were signed with France’s Engie, Austria’s OMV, and Germany’s Wintershall, and Uniper.

“These five European energy companies have committed to provide long-term financing for 50% of the total cost of the project, which is currently estimated to be US$10.3 billion (€9.5 billion),” Nord Stream 2 said. “Each European company will fund up to $1 million (€950 million).”

“Gazprom is and will remain the sole shareholder of the project company, Nord Stream 2 AG,” the company confirmed.

The 1220km Nord Stream 2 gas pipeline, with a total capacity of 55 Bcm a year, will provide a direct link between reliable Russian gas reserves and European gas consumers from the coast of Russia via the Baltic Sea to Greifswald, Germany. Construction work will begin in 2018 and will be completed by the end of 2019.

“The financial commitment by the European companies underscores the Nord Stream 2 project’s strategic importance for the European gas market, contributing to competitiveness as well as medium and long-term energy security especially against the background of expected declining European production,” Nord Stream 2 said.  

Earlier this month, Nord Stream began the environmental impact assessment (EIA) procedure in Russia for the project by disclosing relevant project documents.

The company also finalized a contract with Allseas for the offshore pipelay of the pipeline though the Baltic Sea, with work for both lines to start in 2018 and 2019. Allseas will use three pipelay vessels for the project; the mega vessel Pioneering Spirit, Solitaire and Audacia.

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Nord Stream 2, Allseas ink pipelay deal

Ithaca Energy shareholders have approved a proposed takeover bid from Delek Group that will expand the Israeli company's presence in the North Sea. 

Image from Delek Grou

According to Ithaca, the offer of US$1.44 (CAD$1.95) per share has been accepted by its shareholders.

“Following the take up and payment for the tendered shares, DKL Investments Ltd., a wholly owned affiliate of Delek, will own and control 323,158,890 common shares, representing approximately 76% of the issued and outstanding shares of the company,” Ithaca said in a statement. 

Ithaca said that the offer is being extended for a mandatory extension period until 3 May 2017 to provide shareholders who have not yet tendered their common shares to the offer an opportunity to do so. 

Delek is prepared to pay $350 million (CAD$ 470.5 million) for 70.23% of Ithaca’s shares, not including the shares owned by the Delek or its affiliates.

The Israeli company will now hold 76% of Ithaca’s common shares.

“Having taken control of Ithaca, the Group will commence to consolidate its financial statements,” Delek said. “At this point, this profit is estimated at approximately NIS 150 million ($41 million).”

The takeover deal was first announced in early February, when Israel made a $524 million offer for Ithaca. 

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Israel's Delek in Ithaca takeover bid

Thursday, 20 April 2017 08:54

Woodside ups Myanmar well count

Woodside Petroleum has added a fifth well to its Myanmar drilling program, following successful results from the Thalin deepwater discovery. The company also revealed it has made some progress in narrowing alternative ideas for the development of Browse basin offshore Western Australia, which does not seem to include a floating liquefied natural gas (FLNG) concept.

Map of Thalin. From Woodside.

The Thalin-1B appraisal well, a re-entry and sidetrack of Thalin-1A, was spudded in late February. The sidetrack was successful and Thalin-1B acquired 99m (100% recovery) of core and wireline logs over the objective reservoir interval, Woodside confirmed in its Q1 2017 report.

Block AD-7 is in the Bay of Bengal, some 100km offshore of the west coast of Myanmar. Water depth at Thalin-1A is 836m, which is the northern part of the Rakhine Basin.

Woodside says that initial multi-rate drill stem test results from the lower reservoir section of Thalin-1B demonstrated sustained flow rates of approximately 50 MMcf/d for a 50-hour flow period on a 48/64in choke. The deliverability test indicated excellent reservoir quality, and preparations for a drill stem test of the upper reservoir are continuing.

Woodside’s plans include for the Thalin-1B to be followed by the Thalin-2 appraisal well in Block AD-7. An additional firm exploration well has been committed to as part of the 2017 Myanmar drilling campaign, which now comprises five firm wells consisting of two appraisals and three exploration wells; and two contingent wells. Two exploration wells will be drilled in Block A-6 after Thalin-2, followed by a further exploration well in Block AD-7.

Production testing of the Thalin field in Myanmar established high reservoir deliverability and reservoir properties in line with expectations, says Woodside.

“In Myanmar, our interpretation of seismic data has identified an additional low-cost exploration target with upside potential in Block A-6, which contains the Shwe Yee Htun-1 discovery. This increases our Myanmar firm well schedule for 2017 to five,” says Woodside CEO Peter Coleman.

Offshore Australia, Woodside says that along with its joint venture partners in the Browse Basin, it has made significant progress in narrowing alternative concepts for the development of Browse.

“Woodside prefers a concept utilizing existing LNG process infrastructure on the Burrup Peninsula, subject to reaching acceptable terms with the Burrup infrastructure owners. Woodside continues to target the selection of a Browse development concept in 2H 2017,” says the company.

In March 2016, Woodside and its partners scrapped plans for the struggling Browse FLNG mega project, as a result of the current economic and market environment.

The Browse FLNG development, which was expected to reach a final investment decision in 2H 2016, is based on three FLNG facilities utilizing Shell’s FLNG technology and Woodside’s expertise to commercialize the Brecknock, Calliance and Torosa fields.

The fields, 425km offshore north of Broome at 300-700m water depth, are expected to contain gross (100%) contingent resources (2C) of 15.4 Tcf of dry gas and 453 MMbbl of condensate. The Torosa field, the first of the fields discovered, was found in 1971. Brecknock followed in 1979, and Calliance came later in 2000.

Also off Western Australia, Woodside says that environmental approval was obtained for the Swell-1 exploration well offshore Exmouth. Swell-1 is targeting a deep undrilled Triassic fault block. It is scheduled to spud in mid-2017.

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Woodside prepares for 2017 Myanmar drilling campaign

Woodside, partners shelve Browse FLNG

ExxonMobil’s Hebron platform will be towed from the Bull Arm construction site next month, on its way to the Hebron field offshore Newfoundland and Labrador.

The Hebron platform being towed from Bull Arm. Arrival to the field is expected in May. Image from Natural Resources Twitter.

Hebron is in the Jeanne d’Arc Basin, 350km southeast of St. John’s at 93m water depth. Discovered in 1980, it is expected to contain 700MMbbl of recoverable resources, and is the province’s fourth offshore oil project. First oil is set for late-2017.

On 18 April, a pre-tow event was held, according to ExxonMobil Canada Public and Government Affairs Advisor Lynn Evans.

“Today, we are celebrating a momentous achievement in Newfoundland and Labrador with the tow-out celebration of Hebron. Massive in scale, the Hebron project has been of tremendous benefit to the province’s economy and will continue to make a significant contribution to offshore production,” says the Honorable Dwight Ball, Premier of Newfoundland and Labrador. “With recoverable reserves estimated at over 700 MMbbl, Hebron is poised to join the billion barrel club and take a prominent place in our province’s oil and gas history along with the Hibernia, Terra Nova and White Rose fields.”

Hebron is being developed using a stand-alone concrete gravity based structure (GBS). The GBS consists of a reinforced concrete structure designed to withstand sea ice, icebergs and meteorological and oceanographic conditions. It has been designed to store approximately 1.2 MMbbl of crude oil. The GBS will support an integrated topsides deck that includes a living quarters and facilities to perform drilling and production.

ExxonMobil Canada Properties operates the Hebron project with 35.5% stake. Co-venturers include Chevron Canada (29.6%), Suncor Energy (21%), Statoil Canada (9%), and Nalcor Energy (4.9%).

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Hebron GBS time-lapse

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