Jeremy Beckman • London
Upstream set for slow revival
Wood Mackenzie’s latest market overview predicts a revival in global upstream spending in 2011, with investments climbing thereafter to around $350 billion in 2012. This is still down on last year’s five-year peak of $370 billion.
The First Hints of Recovery in Global Spending claims that in the current economic climate, the industry will continue to favor regions offering low political risk and fiscal stability, namely the US, Canada, Australia, and parts of Europe. Investments by national oil companies, which have sustained the few pockets of growth in countries such as Brazil, Saudi Arabia, and Abu Dhabi, should hold steady at around $100 billion/year in real terms over the next five years.
Americas
Pemex has discovered oil in the Leek structure, its first deepwater well this year in the Mexican sector. The company plans to step up this activity next year by taking delivery of two deepwater rigs.
Recently, Pemex contracted CGGVeritas for the country’s largest ever deepwater seismic survey, comprising over 75,000 sq km (28,958 sq mi) of 3D data. Analysts believe this area could hold up to 30 Bboe, more than half Mexico’s estimated remaining reserves.
In the shallow water Mexican sector, Cameron will provide 16 multiphase pumping systems for installation on three platforms on the KuMaloobZaap field under an $86-million contract. The pumps will be manufactured by Leistritz in Germany, and will be designed to raise pipeline delivery pressure and crude production rates. They are due to be installed in 2011.
BP Trinidad and Tobago has produced first gas from its Savonette field 50 mi (80.5 km) offshore southeast Trinidad. Savonette has been developed by the fourth in a series of normally unmanned “clone concept” platforms. The 1,898-metric ton (2,092-ton) jacket and 871-metric ton (960-ton) topsides were both built at the Trinidad Offshore Fabricators yard in La Brea.
Production, averaging 600 MMcf/d of gas with associated condensate, is routed to the Mahogany B platform for processing via a 26-in. (66-cm), 5.3-mi (8.5-km) subsea pipeline. From there it heads via existing infrastructure to Atlantic LNG’s liquefaction plant.
The recent Perla gas discovery in the Gulf of Venezuela is a giant, Repsol confirms, with recoverable reserves of 1-1.4 Bboe. The Perla 1X well in the Cardon IV block, operated jointly by Repsol and Eni, test-flowed 570,000 cu m/d (20 MMcf/d) of gas and 620 b/d of condensate. Rates were constrained by rig equipment restrictions.
Petrobras has found further oil with its latest well in the Santos basin pre-salt Tupi evaluation area. Tupi North-East was drilled in 2,115 m (6,399 ft) of water, 18 km (11.2 mi) northeast of the Tupi discovery well. According to partner BG Group, the well penetrated a 250-m (820-m) thick section of carbonate reservoirs, wireline tests confirming the presence of 28º API oil.
The result supports estimates of 5-8 Bboe recoverable within the Tupi accumulation, BG adds. Drillstem tests were to be conducted on the latest discovery to evaluate reservoir productivity.
In the Campos basin, Subsea 7 will fabricate and install new gas and oil export lines with a total length of 80 km (49.8 mi) for the latest phase of Petrobras’ Roncador development. The pipelines will connect the P-55 and PRA-1 platforms: installations should get under way in the second half of next year.
Shell plans to drill two exploration wells next summer in the Beaufort Sea off Alaska using the drillshipM/V Frontier Discoverer. The US Department of the Interior Minerals Management Service (MMS) has approved the plans for leases 195 and 202, subject to conditions. The proposed drilling area is confined to the far western part of Camden Bay, and also involves use of a tending ice management vessel.
Mediterranean Sea
Australian company Cooper Energy is aiming to develop the shallow water Hammamet West oil field in the Gulf of Hammamet. The field, discovered in 1967, lies within the Bargou exploration permit awarded to Cooper in 2005. Two wells proved oil within the Birsa sandstone formation and the deeper Abiod carbonate formation.
Cooper estimates oil in place at over 200 MMbbl, but needs improved structural definition before committing to development. CGGVeritas was due to acquire 3D seismic over the structure this month, the results of which will be used for a third well (Hammamet-3), expected to cost $20-30 million to drill. The currently favored development concept is a small, normally unmanned, platform exporting oil and gas to the mainland via a multi-phase pipeline.
West Africa
Shell has contracted Saipem to engineer and install subsea facilities for the deepwater Bonga North-West development off Nigeria. The field, in license OML 118, will be produced through 12 subsea wells connected to the existing Bonga infrastructure. Saipem’s scope includes 32 km (19.9 mi) of pipe-in-pipe flowlines, water injection lines, and umbilicals. The pipelay vesselsSaipem FDS and Saipem 3000 will perform the bulk of the installations during 2012–2013.
Also in Nigeria, local company Oando has agreed with Gazprom for joint development of oil and gas assets and infrastructure in the Gulf of Guinea and sub-Saharan West African regions.
Eni’s Cabaca Norte oil discovery in 500 m (1,640 ft) water depth offshore Angola appears to be the largest to date in block 15/06. During production tests, the well tested over 6,500 b/d from Miocene sands, with rates constrained by surface equipment. The partners plan further drilling in the area in order to accelerate development of a second production hub, in northeast of the block. Studies to develop a first hub in the northwest are under way, focusing on the Sangos and N’Goma discoveries. The partners include Petrobras, Statoil, and Total.
Total also has found oil with its first well on block 17/06, in the northwestern part of the concession. Gardenia-1, drilled in 977 m (3,205 ft) of water, encountered hydrocarbon reservoirs in Miocene and Oligocene intervals, with the Miocene section test-flowing 4,000 b/d of 25º API oil. Further drilling on the block is imminent.
Kosmos Energy has further success with its latest appraisal well in the West Cape Three Points block offshore Ghana. The Mahogany-4 well encountered 39 m (128 ft) of net oil pay and 4 m (13 ft) of wet gas pay stacked in four reservoir sands, similar to those intersected during previous drilling on the structure. The block partners a follow-up well to the southwest, Mahogany Deep-2, using the deepwater drillshipAban Abraham.
Dana Petroleum has a letter of intent to acquire a 23% interest in Hyperdynamics’ concession offshore the Republic of Guinea. The 80,000-sq km (30,888-sq mi) permit encompasses Guinea’s entire offshore acreage.
Hyperdynamics has already acquired 2D seismic data and started a new $10 million 2D survey last month. On completion of the 9,000-km (5,592-mi) data-set, the company will determine which parts of the concession to relinquish, a stipulation of its recently signed Memorandum of Understanding with Guinea’s government.
Black Sea/Caspian Sea
The governments of Russia, Turkey, and Italy have signed accords for a proposed oil export pipeline between Turkey’s Black Sea coast and its Mediterranean coast. Eni has been involved in the project since 2005, and owns 50% of TAPCO, the designated contractor for the Samsun-Ceyhan pipeline.
Under one of the agreements, Eni, Calik Holdings, JSC Transneft, and Rosneft will work together to define the economic and contractual conditions for Russian oil companies to participate in the project. The pipeline will be laid along the route of existing pipelines, and should facilitate safer crude transport across the Bosphorus and Dardanelle straits.
BUE Turkmenistan has a $14-million contract to provide construction support services for a new platform in the Turkmen sector of the Caspian Sea. Malaysian Marine and Heavy Engineering, a joint venture between Petronas and Technip, is building and installing the Magtymguly Collector Riser (MCR-A) platform. BUE will deploy a fleet of seven vessels, including three anchor-handlers and two pipelay support barges, to transport and assist with installation of the topsides and pipelay foundation from the platform’s location to an existing onshore gas terminal.
Middle East
J. Ray McDermott’s derrick bargeDB 101 has installed the last of three sets of topsides and pipeline risers onto the QW8 jacket offshore Qatar for the Qatargas 3 & 4 project. After positioning the 38-in. (97-cm) riser and the 2,000-metric ton (2,205-ton jacket), the vessel installed helideck and flare boom structures. The facilities were then due to undergo commissioning and hook-up in readiness for first gas.
Iranian contractors were preparing recently to install the first platform for the South Pars Phase 16 project in the Persian Gulf, designed to produce 50 MMcf/d of gas and 80,000 b/d of condensate. The platform’s 1,700-ton (1,542-metric ton) jacket was fabricated by IOEC at Khoramshahr.
According to a report by Iran’s Petroenergy Information Network (Shana), NIOC subsidiary Petropars was expecting to sign a $5.6-billion contract to develop phases 27 and 28 of South Pars, collectively designed to generate 2 bcf/d of gas and 80,000 b/d of condensate.
India
Bengal Energy International (BEI) has bid successfully for block CY-OSN-2009/1 in the southern Cauvery basin, a shallow water area of some 1,362 sq km (526 sq mi). The company expects to sign a production-sharing contract with India’s government early next year. Commitments include acquisition of 310 line km (193 mi) of 2D seismic and 81 sq km (31 sq mi) of 3D data during the first four years of the license.
Offshore India’s southern Tamilnadu province, Hundustan Oil Exploration Co. has produced first gas from the PY-1 field. All the gas has been contracted to Indian utility GAIL. At peak, the field should deliver 1.4 MMcm/d (49.4 MMcf/d).
In the deepwater Krishna Godavari basin off India’s east coast, Reliance Industries has been drilling the KGV-D3-R1 exploratory well in the KG-DWN-2003/1 (D3) license, using Transocean’sDeepwater Expedition. Water depth is around 1,964 m (6,443 ft). The well, with a target sub-surface depth of 4,710 m (15,453 ft), was due to probe the potential of various Miocene sands.
Asia-Pacific
Sabah Shell Petroleum has commissioned the MMC AMEC joint venture for basic engineering studies for the deepwater Malikai project offshore Malaysia. According to AMEC, this is the first deepwater FEED contract to be executed in Malaysia, the scope comprising studies for the flowlines, risers, topsides, and hull for the proposed Malikai platform, 110 km (68.4 mi) off Sabah state. This will be a dry-tree, tension-leg design, with the topsides supported on a buoyant semisubmersible structure connected to the seabed by tendons.
Also offshore Malaysia, a partnership between Talisman and Petronas Carigali has been awarded production-sharing contracts for blocks SB309 and SB310, in water depths of up to 150 m (492 ft). Previous exploration has focused on the shallower sections of the licenses, with the deeper sections under-explored. Commitments include 1,300 sq km (502 sq mi) of new 3D seismic over both blocks, and a total of eight wells.
CNOOC has achieved first oil from its Luda (LD) 27-2 field in eastern Bohai Bay ahead of schedule. The field, in 25 m (82 ft) of water, 104 km (64.6 mi) northwest of Qinhuangdao City is currently produces 11,000 b/d from 11 wells. To reduce costs, it has been developed jointly with the adjacent LD 32-2 field, due onstream by year-end. The combined facilities comprise two wellhead platforms, one production/storage platform, and 34 production wells.
Yantai Raffles Offshore is set to take ownership of the Sanlian Longkou shipyard in Shandong, China, for RMB 291 million ($42.6 million). It plans to develop the yard, which has over 400,000 sq m (154,441 sq mi) of land, into one of the world’s largest jackup rig fabrication sites.
Australasia
Apache and Kuwaiti company Kufpec are teaming with Chevron to develop the Wheatstone LNG hub offshore Northwest Australia. They will supply gas from Julimar and Brunello discoveries, and will become equity partners in the Wheatstone facilities. The project’s first phase will involve constructing two processing trains at Ashburton on the mainland with combined capacity of around 8.6 million tons/yr (7.8 million metric tons/yr).
At the same time, the two parties decided to pull out of Woodside’s rival Pluto LNG project. Woodside remains in discussions with various other third parties about feeding gas from their fields in the Carnarvon basin through Pluto. It also aims to prove further supplies via a 20-well-plus exploration campaign in the Greater Pluto Area.
