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OE Press: 2016 / April

OE Press: 2016 / April (92)

Friday, 29 April 2016 03:48

Premier completes E.ON deal

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UK-based independent Premier Oil has completed its deal to by E.ON's UK North Sea assets.

On 13 January 2016, Premier announced that it had agreed to acquire the whole of E.ON's UK North Sea assets for a net consideration of US$120 million.

Premier will acquire interests in licenses concentrated in the central North Sea, West of Shetlands and the southern gas basin. 

Acquired asset interests include:

  • Tolmount (50%, operatorship) – one of the largest discoveries in the southern North Sea gas basin in recent years, with 200 Bcf-1 Tcf estimated gross resources.
  • Elgin-Franklin (5.2%, Total operated) - world class asset currently producing 114,000 boe/d with operating costs of c.$8/boe
  • Huntington (25%, operatorship) - currently produces c.15,000 boe/d with remaining reserves of 10 MMboe. Premier’s interest will increase to 100%.
  • Babbage (47%, operatorship) – currently produces from five wells with infield and near-field growth opportunities

Tony Durrant, Premier's CEO, commented: “We are pleased to have completed the acquisition of the UK North Sea assets from E.ON which strengthens Premier’s position in the UK North Sea, adding high quality assets at a compelling valuation of only $1.6/boe. The acquired assets have had a strong start to 2016, performing ahead of expectation, adding immediate cash generative production of over 17,000 boe/d and provide future opportunities to enable us to deliver value for our shareholders.”

Friday, 29 April 2016 03:25

Global, Eco receive Namibia extensions

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Two Namibia focused explorers have been granted permission to move into their next phases of exploration on blocks offshore Namibia by the country's authorities.

Eco Atlantic has been allowed to move forward on licenses PEL 030 (Cooper Block), PEL 034 (Guy) and PEL 033 (Sharon). 

The Cooper Block, Sharon Block and Guy Block licenses have been extended into the first renewal phase, until 14 March 2018. However, Eco has relinquished 50% of the area of Sharon, in shallow waters, and 50% of Guy, in an ultra-deep water area. 

Meanwhile, Africa-focused explorer Global Petroleum's Exploration License covering Blocks 1910B and 2010A in the Walvis Basin offshore Namibia, has been extended into Phase 2.

Phase 3 is for a duration of 24 months from 3 December 2015, with a reduced Minimum work program which does not now contain a well commitment. Previously Phase 1 of the License was extended for one year until December 2015, in return for an additional work program, involving further modelling using both seismic and gravity data.

"The results of this combined seismic and gravity work has proved to be very encouraging with regard to the hydrocarbon potential in Global’s offshore blocks," the firm says. "Notably the work has increased confidence in a syn-rift oil play in the outboard or deep water region offshore Namibia and the likely presence of both reservoir and source within the company’s blocks. 

"Combined with the existing prospect portfolio within the blocks, this has improved Global’s views on the overall prospectivity of the acreage. Reprocessed 2D seismic has now been purchased and is currently being evaluated by the company’s technical team."

Friday, 29 April 2016 03:11

Schlumberger drops out of Fortuna LNG

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Schlumberger and Ophir have terminated discussions over a move which could have given the oilfield services firm a 40% stake in the Fortuna floating LNG development offshore Equatorial Guinea. 

Earlier this year, Schlumberger had reached a heads of terms agreement with Ophir over the project, shortly after signing a memorandum of understanding with floating LNG technology provider Golar LNG. 

Following due diligence, Ophir and Schlumberger were unable to complete the transaction on the terms agreed in the heads of terms.  

However, Ophir says the project is still moving forward, albeit with a delay. Engineering, procurement, construction, installation and commissioning contract bids having been received and forward upstream capex from final investment decision to first gas has been further reduced from US$600 million (gross) to $450-500 million (gross).  

Ophir is also in discussions with a number of other parties over participation in and funding of the Fortuna FLNG project. 

A development and production plan was submitted to MMIE on schedule and in accordance with the PSC in March 2016. But, Ophir says final investment decision (FID) is now due in Q4 2016, with first gas forecast for early 2020.  

Nick Cooper, CEO at Ophir, said: "The Fortuna project workstreams are progressing towards FID. We have been reviewing a number of options and our discussions continue with other quality counterparties that can offer an attractive source of funding. In addition, the reduction in the capex to first gas has lowered the project breakeven oil price to approximately $40/bbl.

"We continue to work closely with Golar, the prospective offtakers and the other potential partners and remain confident that we will take the FID in 2016."

In a statement released by Golar LNG, the company reaffirmed that's Schlumberger's withdrawal from the Fortuna/Ophir development will not in any way influence the framework agreement which has been signed between Golar and Schlumberger.

The target of this framework agreement is to develop integrated solutions for stranded gas assets. Significant efforts have been put into this over the last months and the results have confirmed to both parties the commercial attractiveness and the technical viability of the FLNG concept as a solution for rapid modernization of stranded gas.

The partnership is currently exploring several specific opportunities.

Although a commercial agreement between Ophir and Schlumberger was not reached, Golar will independently continue to work with Ophir with the target to reach an FID for the Fortuna development this year.

Thursday, 28 April 2016 13:07

McDermott completes Otis tieback in GoM

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McDermott International has successfully completed the installation scope associated with the Otis development in the Gulf of Mexico on behalf of LLOG Exploration Offshore.

Image of Delta House, from LLOG.

McDermott’s lay vessel North Ocean 105 (LV 105) completed the deepwater subsea tieback from the Otis well in Mississippi Canyon 79 to the Delta House floating production system in water depths ranging from 3861-4420ft. 

The scope of work consisted of project management, engineering, and installation of 70,000ft of insulated rigid flowline and insulated steel catenary riser as well as a control umbilical, PLEM jumper and associated flying leads. The flowline and riser were fabricated at McDermott’s new spoolbase and marine facility in Gulfport, Mississippi. All engineering and project management functions were completed in McDermott’s Americas, Europe and Africa headquarters in Houston.

“This marks an important milestone for the McDermott organization as the first project executed in its Gulfport Spoolbase and the first installation of a steel catenary riser by the LV 105,” said Scott Munro, McDermott VP for Americas, Europe and Africa. “The execution of the Otis project has positioned McDermott for success on our other 2016 reel lay projects, including Anadarko Caesar Tonga Phase II. This project demonstrates our commitment to adding value to the subsea tieback market and is the foundation for McDermott to establish itself as the reel lay contractor of choice for our customers in the Gulf of Mexico.”

Read more:

McDermott wins Otis subsea work

Thursday, 28 April 2016 06:11

Lukoil prepares for Filanovsky drilling

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Russia's Lukoil gas started driving in marine risers at the Vladimir Filanovsky field in the Caspian Sea, ahead of planned development well drilling operations.

Risers, required to reinforce wellheads, ensure circulation and environmental safety at drilling operations, are driven down in the sea bottom to a depth of 120m, says Lukoil. It is planning to drill 13 wells at the field. 

The living quarters platform (LQP-1) topside for the Vladimir Filanovsky field arrived at its north Caspian Sea destination from Krasnye Barrikady shipyard in Russia’s Astrakhan region, in 2014. 

It is one of a number of facilities in the field, including an ice-resistant stationary platform for drilling operations, a central processing platform, and a riser block, connecting connect the infield pipelines and export pipelines. All will be interconnected with bridges, and the platform is planned to be connected to Yury Korchagin fields.

First oil had been expected for 2015 or early 2016. 

Thursday, 28 April 2016 06:08

Petrofac takes on BP's Miller

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Petrofac has been awarded a duty holder contract from BP to support the late life management of the Miller platform, in the UK central North Sea.

The contract is for "life of asset" but has a four-year ceiling at which point extension options will be reviewed as required. Petrofac will assume duty holder responsibility for the non-producing Miller asset.

Within this scope the company will manage all aspects of on and offshore activities to enable a smooth transition from BP and in preparation for the next phase of the planned decommissioning program for Miller.  

The last day of production on Miller took place in July 2007. Since then BP has undertaken well abandonment and topsides clean up on the asset and anticipates that the topsides will be removed during 2017 or 2018. BP will remain the license owner for Miller and they will continue to pursue and evaluate a range of options for decommissioning the asset fully.  

The appointment of Petrofac as duty holder enables BP to accelerate this process and to leverage Petrofac’s existing knowledge of the asset and its experienced and asset-familiar teams.  

Win Thornton, VP Decommissioning, Global Projects Organisation, BP said: “I am pleased that we are making another step towards the efficient decommissioning of Miller with the award of a duty holder contract to Petrofac. The award is the culmination of an extensive market engagement and contracting process in which Petrofac demonstrated strong alignment to the Miller decommissioning project drivers.” 

This award builds on Petrofac’s relationship with BP. It has been supporting BP’s global operations since 2012, supplying BP’s North Sea assets, including Miller, with its maintenance, metering and valve requirements.

Thursday, 28 April 2016 04:54

Wood Group wins significant BP Caspian work

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Wood Group has won a new five-year contract with BP-operated projects, valued at US$500 million, to deliver services to eight facilities, offshore Azerbaijan.

Effective immediately, Wood Group PSN (WGPSN) will provide engineering, procurement and construction management services (EPCM) under the contract, which has the option of two, two year extensions.

Creating approximately 200 new positions, WGPSN will support the following platforms: Chirag, Central Azeri - production drilling quarters, Central Azeri - compression and water processing, East Azeri production drilling quarters, West Azeri- production drilling quarters, Deep Water Gunashli - drilling and utility quarters, Deep Water Gunashli - pressure compression and water utilities and Shah Deniz Stage 1.

This latest contract builds on Wood Group’s continued support of BP-operated projects offshore Azerbaijan. Wood Group Kenny is already providing subsea engineering services to these eight platforms under a multi-million dollar contract announced in October 2015, which also includes support of BP's existing subsea infrastructure in the Gulf of Mexico, UK and Norwegian continental shelves.

Thursday, 28 April 2016 03:40

Record wind order for Siemens

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German multinational Siemens has received its largest order for its 7MW turbine to date.

The company is to supply, install and commission 102, 7MW wind turbines, each with a rotor diameter of 154m, for the East Anglia ONE project, led by ScottishPower Renewables, a subsidiary of Spain's Iberdrola.

The 714MW wind power plant will be the largest project in terms of capacity for Siemens so far. Once operational in 2020, the electricity generated by the project is expected to be sufficient for around 500,000 homes. Siemens will additionally be responsible for servicing the wind farm for an initial period of five years.

Michael Hannibal, CEO Offshore of the Siemens Wind Power and Renewables Division. "This represents the largest single order ever for our direct-drive, 7MW wind turbine. The decision to go with our innovative wind turbines underscores the contribution made by these units to reducing the costs of offshore wind power." 

The East Anglia ONE offshore wind power plant is to be installed about 45km off the British east coast over an area of 300sq km. The 102 Siemens direct-drive wind turbines of type SWT-7.0-154 will be installed on jacket foundations. The nacelles shall be manufactured in Cuxhaven, Germany. Siemens plans to produce the corresponding wind turbine blades for East Anglia ONE at its Hull facility. The port of Great Yarmouth will serve as pre-assembly harbor for the project. The first wind turbines are scheduled to be installed in the summer of 2019, with the start of commercial operation scheduled for 2020.

Siemens has also been awarded a long-term service agreement which includes remote monitoring and diagnostics services to help ensure the long-term reliability, performance and availability of the wind turbines. The logistics approach will feature the availability of a helicopter that will be based near Lowestoft port and used mainly in winter when the use of crew transfer vessels (CTVs) is not feasible due to high wave conditions and rough seas.

This marks the second offshore wind project between Siemens and ScottishPower Renewables. Siemens previously supplied this partner with wind turbines with a total capacity of 389 MW for the West of Duddon Sands project in the Irish Sea.

Having installed nearly 2100 wind turbines to date, with a total capacity of more than 7GW, Siemens is the leading provider for offshore wind turbines worldwide. The company also has 6.7GW of offshore wind capacity under service contracts and is a leader in offshore grid connections.

Wednesday, 27 April 2016 15:09

Seadrill sells off SepuraKencana stake

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Seadrill has sold its remaining stake of approximately 490 million shares in SapuraKencana in a US$195 million deal.

The proceeds from the share sale will provide additional liquidity and will be used for general corporate purposes.

Earlier this month, Seadrill announced it will cut 112 jobs from its workforce that were supporting the West Capricorn drilling rig in the Gulf of Mexico, effective 1 May.

In 2014, Seadrill first farmed down its stake of the Malaysian offshores service provider.

Read more:

Seadrill to cut 112 jobs in Houston

Wednesday, 27 April 2016 12:38

Byron to deepen SM71-1

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Byron Energy will further its efforts at the SM71-1 well in the Gulf of Mexico after encountering the presence of oil in three intervals, according to partner Otto Energy.

A quad combo porosity logging run has been acquired and 7 5/8in casing has been run and cemented to a depth of 6820ft measured depth (2078m) /6471ft true vertical depth (1972m). Based on the initial logging results, Otto has determined preliminary estimates of net true vertical thickness (TVT) oil pay counts for the SM71 #1 well are as follows: I3 sand with 17ft TVT net oil pay, J sand with 24ft TVT net oil pay, and D5 sand with 91ft TVT net oil pay.  

The quad combo log, which includes neutron/density and sonic porosity data, is currently undergoing complete analysis, however, log experts, including those from Baker Hughes, confirm that the log demonstrates the presence of oil across all three pay intervals identified in the company’s previous release earlier this month.  These zones are correlative and analogous to productive zones from the SM71 and adjacent SM72 fields.  A final, processed version of the log will be available later this week and will be used for further analysis to determine final net pay counts in the I3 sand, J sand and D5 sands. Additionally, Isotube samples from each sand interval have been sent to a laboratory for full analysis of hydrocarbon properties including estimates of API gravity and BTU content.  

The SM 71 reserve and resource estimates, incorporating the results of the SM 71 #1 well, will be updated as soon as practicable by independent reserves certifier, Collarini and Associates.  

Deepening of well to test further oil potential  

Given the excellent results delivered in the drilling to date, the joint venture has elected to deepen the well by approximately 600ft/182m to the original planned TD of the SM71 #1 well to ensure the entire package of D5 Sand lobes have been evaluated.  Further the D6 Sand, a secondary pre-drill target lies below the D5 Sand and will also be evaluated by deepening the well.  The cost to deepen the well to the original permitted depth of 7452ft MD/ 6900ft TVD (2272m MD/ 2104m TVD) will be within the original AFE well cost estimate.  
Current operations are installing and testing blow out preventers, picking up 3 1/2in drill pipe prior to re-commencing drilling operations mid-week. The well should reach total depth late this week.  

“The SM-71 #1 well has delivered an excellent start to Otto’s drilling campaign in the Gulf of Mexico and is an early vindication of Otto’s entry into the region through its staged, optional, farm-in transaction with Operator, Byron Energy.  We are very encouraged by these results and look forward to evaluating the deeper D6 sand interval in the coming week, which has the potential to add further to the success of this well. Pleasingly, and due to operational efficiency, the cost of testing of this deeper target is expected to remain within the original AFE amount.  We are seeing significant shareholder value being created with this drilling campaign and we look forward to achieving our goal of a return to production in 2017,” Otto’s managing director, Matthew Allen said.

Read more:


Byron hits at GoM SM 71 well

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