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OE Press: 2016 / October

OE Press: 2016 / October (74)

Monday, 31 October 2016 09:43

Woodside completes Senegal deal, FAR disputes it

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Exploration firm Far Ltd. has disputed announcements by both Woodside Petroleum and ConocoPhillips that a deal between the two firms over assets in Senegal has completed. 

The deal has seen Woodside acquire 100% of the shares in ConocoPhillips' Senegal business, for US$440 million, including adjustments amounting to $90 million, giving it a 35% stake in three offshore exploration blocks, Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore, containing the huge SNE and FAN deepwater oil finds. 

However, FAR, a partner in the blocks, says that the deals are subject to the rights of partners to pre-empt and Senegal Government approval. FAR believes a valid pre-emptive rights notice has not been issued to the JV partners by Conoco, and the firm says it is not aware that the Government has advised COP of its approval of the deal.

In a statement issued by ConocoPhillips, Matt Fox, executive vice president, Strategy, Exploration and Technology at ConocoPhillips, said: “We experienced a transparent and cooperative relationship with the Senegalese government and appreciated their support throughout a very successful exploration and appraisal campaign. By completing this sale we are progressing our broader exit from deepwater exploration, which will further increase our capital flexibility and reduce the cost of supply of our portfolio.”

In April, FAR said the SNE field contains at least 560 MMbbl, justifying "a significant commercial development."

Read more

SNE justifies significant commercial development

Monday, 31 October 2016 09:33

Kraken FPSO sets out for deep water

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First oil on EnQuest's Kraken heavy oil field in the UK North Sea is on track for 1H 2017 after the floating production, storage and offloading (FPSO) vessel for the project set out for a deepwater anchorage. 

Vessel operator Bumi Armada Berhad said the Armada Kraken FPSO had completed its shore-based commissioning activities at the quayside at Keppel Offshore & Marine in Singapore and had also completed the vessel’s inclination testing program. 

The FPSO, Bumi's first FPSO set for the North Sea, has set sail to a deep water anchorage, to undertake commissioning work on the water injection pumps, HSP power fluid pumps, sulphate reduction packages, lifeboats and fire, water and deluge systems. 

Sailaway to the North Sea is on schedule this quarter as planned. The journey from Singapore to the Kraken field is expected to take approximately 50 days and the unit is expected to deliver first oil in 1H 2017.   

In September, EnQuest said it had cut the cost of the Kraken development by a further US$150 million, thanks to progress on the drilling campaign and subsea workscopes. 

The cost of the development, was to be reduced to about $2.9 billion, said the firm. Costs on the project had already been reduced by $425 million, since project sanction.

Monday, 31 October 2016 09:05

Statoil increases stake in Bryding

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Statoil has agreed to acquire Wintershall Norge’s 25% interest in the 11 MMboe recoverable Byrding project on the Norwegian Continental Shelf (NCS).

The move will increase Statoil's interest in the project (previously called Astero) from 45% to 70%. Byrding (PL090B) is an oil and gas discovery in the northern part of the North Sea, near the Troll/Fram area, operated by Statoil.

The Byrding development includes a duo-lateral well drilled from the existing Fram H-Nord subsea template, through which oil and gas from Byrding will flow to the Troll C semisubmersible production facility. Oil and gas will be piped from there through existing pipelines to Mongstad and Kollsnes respectively.

In August, Statoil and its partners submitted a plan for development and operation for Byrding. Originally a US$420 million (NOK3.5 billion) project, costs have been cut to $120 million (NOK 1 billion). The field is scheduled to come on stream in Q3 the 2017. 

“Byrding is a low cost project that is profitable in the current oil price environment. Through this transaction, we further deepen our position in a core area for Statoil,” says Gunnar Nakken, Statoil’s senior vice president for Operations West.

The agreement is a further acquisition by Statoil in core areas, following an increase in the Wisting discovery in the Hoop area of the Barents Sea in September and transactions for the Utgard field near Sleipner in the North Sea during 2015 and 2016.

Monday, 31 October 2016 08:39

OGA gets 29 applications for licensing round

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The Oil and Gas Authority (OGA) has attracted 29 applications covering 113 blocks in the latest offshore licensing round which targeted under-explored areas of the UK Continental Shelf (UKCS).

The 29th frontier licensing round, launched on 27 July 2016, is the first licensing round in two decades to focus on frontier areas. Applications were received from 24 companies ranging from multinationals to new country entrants. Some of the proposed work programs include firm well commitments.

Frontier areas on offer included the East Shetland Platform and the Rockall Trough and Mid-North Sea High areas which were the focus of the 2015 UK Government funded seismic acquisition program. The OGA subsequently provided an openly available, geophysical dataset allowing companies to identify and target a range of opportunities. 

“Despite the difficult climate, industry has responded strongly to our offer, using analysis and insights to identify new prospects and submit high quality applications on blocks that did not attract interest in recent licensing rounds,” said Andy Samuel, chief executive, OGA.

The upcoming 30th offshore licensing round will cover mature areas of the UKCS, and will offer significant opportunities, including some blocks not available since the 3rd licensing round.

The recently completed 2016 UK Government funded seismic acquisition program of Southwest Britain and the East Shetland Platform will inform future frontier licensing. More than 13,500km of new seismic data plus approximately 20,000km of reprocessed legacy seismic data is scheduled to be released to industry in Q2/Q3 2017.

Image: 29th frontier licensing round map/ Oil and Gas Authority

Read more:

OGA launches 29th UKCS licensing round

Monday, 31 October 2016 07:33

EMAS takes loss in Q3

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EMAS Offshore announced net loss of US$265.3 million for the full year ended 31 August 2016 due to revenue decline in its offshore support vessel (OSV) unit.

Net loss for the three months ended 31 August 2016 stood at $98.5 million.The group recorded revenue of $167.6 million, as compared to revenue of $247.2 million a year ago.

This decline in revenue was the result of continual weakness in the offshore industry leading to markedly lower demand as well as general over-supply OSV segment, the firm said.

Gross loss for the year stood at $49.8 million as compared to gross profit of $29.4 million in the previous corresponding period.

Captain Adarash Kumar, EMAS Offshore CEO said, “The market continues to paint an extremely challenging landscape for the Group. Amidst this, one bright spot for the group is that we are starting to see signs of stabilization in utilization rates though daily charter rates are expected to remain depressed for a considerable period of time.”

In the offshore support and accommodation services division, offshore support vessel achieved an utilization rate of 55% for FY2016. In the offshore production services division, the single FPSO vessel continues to perform well, with an operational uptime of close to 100% for FY2016.

“Looking ahead, we believe that FY2017 will continue to be an extremely challenging period for the group. The divestment of our FPSO1 has allowed us the flexibility to rework our costs and capital allocation, and streamlined our operational focus,” Kumar said.

“In terms of geographical expansion, West Africa continues to be a strategic market for the group. In anticipation of new business engagements, we intend to deploy more vessels in West Africa and also increase our presence in India.”

Image of the Lewek Constellation, from EMAS.

Friday, 28 October 2016 12:56

Statoil, YPF in Argentina pact

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Norwegian giant Statoil and Argentina’s state owned company YPF have entered a cooperation agreement to study the offshore areas of Argentina.

Darre, Dodson. Image from YPF.

YPF CEO Ricardo Darre, and Statoil’s Executive VP of Exploration Tim Dodson, signed a cooperation agreement, which mainly covers the continental slope of Argentina’s offshore. 

The area extends over 360,000sq km ranging from the border with Uruguay to 45 ° latitude (north of Comodoro Rivadavia, Chubut province), where water depths vary between 500-3500m.

The area is thought to be high potential and high risk, and both companies believe there may be several hydrocarbon prospects to be investigated in the basins of Salado, Colorado and Argentina. 

The agreement provides for the study of new 2D seismic to be acquired in an area of common interest. In the second stage, Statoil and YPF will process, analyze and interpret the information obtained. 

“So far, exploratory efforts in the Argentine Sea were focused in shallow waters of the continental shelf, in the basins of the Salado and Colorado; in addition to others made in the waters of the basin of the Golfo San Jorge and Malvinas basin,” YPF said. “In recent years, YPF made a comprehensive study of the offshore South Atlantic (Uruguay and Argentina) covering all basins and includes the potential in deepwater.

Global offshore oil production (including lease condensate and hydrocarbon gas liquids) from deepwater projects reached 9.3 MMb/d in 2015. Deepwater production, or production in water of depths greater than 125m, has increased 25% from nearly 7 MMb/d a decade ago. Shallow water has been relatively less expensive and less technically challenging for operators to explore and drill, but changing economics and the exhaustion of some shallow offshore resources has helped to push producers to deepwater or, in some areas, ultra-deepwater (UDW) (at depths of 1500m or more) resources. The share of offshore production from shallow water in 2015 was 64%, the lowest on record.

Globally, offshore oil production accounted for about 30% of total oil production over the past decade. In 2015, offshore production was 29% of total global production, a moderate decrease from 32% in 2005.

Advancements in drilling technology, dynamic positioning equipment, and floating production and drilling units have made prospects viable that were previously unreachable. Although technological advancements have made new areas accessible, deepwater projects require more investment and time compared to shallow waters or onshore developments. As a result, most nations with offshore assets operate only in shallow water.

In areas with deepwater operations, production has grown significantly, and in many cases overtaken shallow water production. The majority of deepwater or UDW production occurs in four countries: Brazil, the US, Angola, and Norway. Each of these countries has realized an increasing share of crude oil production from deepwater or UDW projects over the previous decade. The US and Brazil together account for more than 90% of global UDW production, with UDW production expected to increase in 2016 and 2017 in both countries.

Brazil leads the world in the development of deepwater and UDW projects. Brazil has increased deep and or UDW production from 1.3 MMb/d in 2005 to 2.2 MMb/d in 2015. An increasing amount of Brazil’s production comes from pre-salt resources found under thick layers of salt at extreme depths. The coast of Angola shares similar geologic features with the coast of Brazil because of the separation of the African and South American tectonic plates during the Early Cretaceous period, around 150 million years ago. These geological similarities have led producers in Angola to target several major basins for pre-salt exploration.

Friday, 28 October 2016 08:35

Inpex hits gas off Japan

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Inpex made a gas find at an exploration well offshore the Shimane and Yamaguchi prefectures in Japan.

The Transocean M.G. Hulme Jr., from Inpex.

The Transocean M.G. Hulme Jr. semisubmersible drilling rig  drilled to 2900m below the sea floor about 130km northwest of the Shimane Prefecture and approximately 140km north of the Yamaguchi Prefecture, at some 210m water depth.

A thin gas reservoir in a shallow zone as well as some gas indications in deeper zones were encountered, in addition to what Inpex describes as unexpected, strong gas indications suggesting the presence of a high pressure gas column in the deepest zone.

“Based on the findings of a gas reservoir in the shallow zone and gas indications in the deeper and deepest zones in this area, which has not been drilled since the 1980s, Inpex will conduct a detailed analysis and evaluation of data obtained through the drilling operations in order to continue the exploration of prospects in this area,” the company said.

Drilling was conducted as part of a project commissioned by the Agency of Natural Resources and Energy of the Ministry of Economy, Trade and Industry (METI) of Japan for the agency’s “Heisei 26~28 Domestic Offshore Drilling Program in Japan.”

Read more:

Inpex spuds well offshore Japan

Friday, 28 October 2016 03:40

IOG to submit Vulcan Satellites plan next year

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UK explorer Independent Oil and Gas (IOG) has completed the acquisition of 100% of the shares of Oyster Petroleum, a subsidiary of Verus Petroleum.

Oyster holds southern North Sea licenses containing the Vulcan East, Vulcan North West and Vulcan South fields, collectively the Vulcan Satellites.

The deal was for an initial consideration of £1 million, with a further £0.75 million payable nine months after completion and then further payments of up to £3.25 million on the achievement of certain milestones.

The move increases IOG's 2C recoverable resources by 320.7 Bcf or 53.45 MMboe. The Vulcan Satellites require no further appraisal and IOG is progressing exclusive discussions regarding an export route for its SNS gas hubs.  

The firm says it will now be able to build on the current preliminary field development plan, with a view to submitting a final plan it next year.

IOG's CEO Mark Routh said: "The acquisition is a very good fit for IOG alongside our Blythe hub and is a vital step forward in IOG’s plan to become a significant operator in the Southern North Sea. We are confident the acquisition will help us deliver our strategy of developing existing discoveries through common infrastructure and capturing valuable synergies."

Friday, 28 October 2016 03:32

TGS expands Atlantic margin data set

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TGS is expanding its North West Atlantic Margin (NWAAM) multi-client library in the Mauritania, Senegal, Guinea-Bissau and Conarky Basin (MSGBC).

It has plans to acquire more than 11,500km of long-offset broadband 2D seismic data as well as magnetic and gravity data, in the Republic of Guinea, Guinea Bissau and the AGC joint exploration zone between Guinea Bissau and Senegal. 

This investment is being undertaken together with PGS and in cooperation with GeoPartners. Acquisition of this first phase of the NWAAM expansion will start in November 2016.

The NWAAM2017 seismic survey has been designed to infill, extend and complement the TGS NWAAM2012 2D survey which helped with recent commercial discoveries in the MSGBC basin. A 12km, deep-tow streamer will enable the recording of high quality broadband 2D seismic data, which will image the pre-rift, syn-rift and post-rift plays evident in this basin.

"This new seismic acquisition confirms TGS commitment to the leading frontier basin in Africa, where TGS already has over 28,000 km of 2D data and over 18,000sq km of 3D data," says Kristian Johansen, CEO for TGS.

This TGS survey is being undertaken with the seismic vessel, BGP Dong Fang Kan Tan 1.

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