NOCs committed to investment
Jeremy Beckman • London
National oil companies (NOCs) and supermajors plan to invest over $375 billion in business development this year, according to a new report from Ernst & Young.
Investing for the upturn predicts that almost 70% of the total spend will come from NOCs in South America and Asia, and that by 2015 the largest NOCs will have committed $600 billion to their hydrocarbon sectors.
Despite the International Energy Agency’s cautious estimate for energy demand, investment is still needed in production capacity enhancement projects to offset falling output due to natural field depletion. According to the report’s author Andy Brogan, “most oil and gas companies have indicated that they will spend more than half of their capital investment on upstream operations.”
Among the big NOC spenders, Petrobras plans to allocate $28 billion to its pre-salt areas as part of its $174 billion plan to 2013, the report says, while China’s CNPC will invest $42 billion. However, potential budget shortfalls in the Middle East, CIS and Africa could lead NOCs in these regions to invite foreign investment to maintain or boost their oil production levels, the report claims.
Americas
The Provincial Government of Newfoundland and Labrador has secured a 10% equity stake in the Hibernia South Extension project, via Nalcor Energy – Oil and Gas. It has also agreed to a royalty rate of 50% with the partners in the project, ExxonMobil, Petro-Canada, Chevron, Murphy Oil, Canada Hibernia Holding Corp., and StatoilHydro.
Hibernia South extension contains an estimated 220 MMbbl of recoverable oil, of which 170 MMbbl will be produced via subsea wells connected to Hibernia’s gravity-based structure platform. Hibernia itself has so far produced 670 MMbbl, with revenue to the provincial treasury of $3.9 billion.
In the same region, the Canada-Newfoundland and Labrador Offshore Petroleum Board has issued details of its 2009 Calls for Bids. There will be three separate offerings for exploration licenses, comprising two parcels in the Western Newfoundland and Labrador offshore region, and one each in the Jeanne d’Arc basin and the Laurentian sub-basin. These cover a total area of 513,769 ha (1,269,546 acres). Bids are due in by mid-November.
Centrica has agreed to acquire a 45% interest from Canadian Superior Energy in gas development block 5(c) off the southeast coast of Trinidad. Exploratory drilling on the block, operated by BG Group, has so far identified large reserves of gas, with 650 bcf attributable to the 45% stake.
Subject to approval from the partners and Trinidad’s government, Centrica will gain access to fresh resources which it aims to sell to its customers in North America and the UK. First gas could be produced in 2014.
BPC has made an arrangement under which StatoilHydro will operate the Falcones, Islamorada, and Zapata licenses in the Cay Sal area of the Bahamas. However, the agreement must first be approved by the islands’ government. Limited 2D seismic and satellite data suggest several large structures could be present in the license area.
Petrobras has started production from the Camarupim and Cangoa gas fields off the coast of Espirito Santo. Both developments are part of Brazil’s Plangas gas production program, drawn up in 2006 to harness gas for domestic use.
Camarupim’s output will eventually flow through four wells connected to the FPSOCidade de Sao Mateus, moored in 790 m (2,592 ft) of water, which can process 10 MMcm/d (353 MMcf/d) of gas and 35,000 b/d of light oil. Cangoa’s gas is exported to the Peroa platform. Post-processing, the gas from both fields is transported to the Cacimbas Gas Treatment Unity (UTGC) facility in Linhares.
Africa
BP and Sonangol have made their 18th oil discovery in Angola’s ultra deepwater block 31. The Oberon-1 well, in 1,624 m (5,328 ft) of water, flowed over 5,000 b/d under test conditions. The new find is in the south of the block, 4.3 km (2.7 mi) northeast of the Dione accumulation.
The Somaliland Ministry of Water and Mineral Resources has extended the country’s first hydrocarbon concessions bidding round until Dec. 15. On offer are eight blocks covering offshore and onshore areas. Permits are now expected to be awarded next March.
The geology offshore is said to be analogous to oil-producing basins in Yemen. In preparation for the round, TGS-Nopec is making available 5,300 km (3,293 mi) of seismic, gravity, and magnetic data in the offshore areas and high resolution aeromagnetic data, all acquired during 2007-08.
Europe
Iceland has closed its first offshore licensing round for the northern Dreki area. The National Energy Authority received applications for four blocks from Aker Exploration and Lindir Exploration. Two of these blocks are on the continental shelf between Iceland and Jan Mayen. Any resulting licenses will be issued by end-October.
Gazprom and StatoilHydro have signed a new memorandum of understanding relating to potential joint programs off northern Russia and Norway. The co-operation agreement, valid for the next three years, covers exploration, development, and new technologies to assist E&P and transportation of produced resources. Both parties are already co-operating on the Shtokman gas-condensate development in the Barents Sea.
ACS Cobra Castor UTE has contracted Noble Denton for project management services related to a gas storage scheme in the Mediterranean Sea. The program involves re-developing the abandoned Amposta reservoir off eastern Spain to provide back-up gas to the mainland during periods of peak demand. The planned scope includes a new wellhead platform bridge-linked to a production, utilities, and quarters platform in 60 m (197 ft) of water, with gas injection into the reservoir at rates up to 8 MMcf/d.
Black Sea
Operations should get under way shortly at Melrose Resources’ new Galata gas storage facility offshore Bulgaria. This involved conversion of the Galata platform and reservoir, where production ceased in January. Nearby, Melrose has issued a declaration of commerciality for the offshore Kavarna field, and the company expects to resume drilling on its Kaliakra discovery later this year.
Rosneft has signed a five-year exploration and development agreement with the Ministry of Economy in Abkhazia, formerly part of Georgia. The two parties will co-operate in upstream and downstream projects, and may also jointly develop new technologies for exploration and secondary recovery from offshore finds.
Caspian Sea
Three companies have signed joint exploration and development agreements for the Nursultan block, offshore Kazakhstan. KazmunayGas will hold 51% of the subsoil use contract, the remainder held equally by ConocoPhillips and Mubadala Development Co. The block covers an area of 8,100 sq km (3,127 sq mi), 30 km (18.6 mi) southwest of Aktau, and is said to be strongly prospective for oil and gas. Kazakh LLP has been created to operate the block on behalf of the partners.
Asia-Pacific
Murphy Oil has discovered two new fields in its permits offshore Malaysia. A well on the deepwater Siakap North prospect in block K, offshore Sabah, encountered oil-bearing sands thought to be of similar quality to the company’s producing Kikeh field, 6 mi (9.7 km) distant. The second find came at the shallow water East Patricia prospect in block SK 309 off Sarawak, where the well encountered around 230 ft (70 m) of net gas pay. The location is close to the new Bintulu onshore gas reception facility.
Also in Malaysia, Petronas Carigali has signed a production sharing contract with ExxonMobil for further development of seven offshore oil fields. The two companies will commit a minimum of $2.1 billion to enhanced oil recovery programs, rejuvenation of facilities, and further development.
North Belut topsides.
J. Ray McDermott has loaded out a 14,000-metric ton (15,432-ton) integrated deck from its yard in Batam Island for ConocoPhillips’ North Belut central processing platform. Work started in January 2007, and occupied a workforce of more than 1,200 people at peak. J. Ray also fabricated the platform’s eight-leg steel jacket under a separate contract. North Belut is in Block B of the Indonesian sector of the Natuna Sea, around 60 km (37.3 mi) east-northeast of the Belanak field and its associated FPSO.
Husky Oil China has contracted WorleyParsons for front-end engineering and design for its Liwan 3-1 area development in the South China Sea. Work should be completed in 2010.
Middle East
Egyptian Natural Gas Holding Co. (EGAS) has awarded BP two blocks in the offshore Nile Delta under Egypt’s 2008 bidding round. North Tineh Offshore and North Damietta Offshore are contiguous deepwater concessions, carrying commitments to drill a total of seven exploratory wells over the next six years.
In the same area, Enel and Total have secured the E. El Burullus exploration block, 70 km (43.5 mi) from the north coast in water depths of up to 1,600 m (5,249 ft). The initial four-year exploration phase commitment includes 3D seismic acquisition and drilling.
Hyundai Heavy Industries has delivered the third of three new platforms ordered by ADMA-OPCO for the Umm Shaif field offshore Abu Dhabi. The latest structure is 32 m (105 ft) tall and weighs 7,041 metric tons (7,761 tons). Hyundai was due to complete installation of the facilities and subsea pipelines last month. At peak they should produce 300,000 b/d of oil and 1 bcf/d of gas. ADMA-OPCO has since issued a further platform construction contract for Umm Shaif to NPCC.
Australasia
In New Zealand’s Taranaki basin, the Maari joint venture partners have approved drilling of the Manaia-1 well from the Maari platform, assisted by the jackupEnsco 107. The horizontal extended reach well should get under way in August, targeting a location updip from the 1970 Maui-4 oil discovery well. If successful, the well will be completed and tied into the Maari facilities.
AED has acquired 50% of the Longtom project in the Bass Strait and the surrounding exploration permit VIC/P54 from Nexus. First gas and condensate was expected to flow this month. The field has been developed as a two-well subsea tieback in 56 m (184 ft) of water to Santos’ Patricia-Baleen facilities.
The Ensco 101 on its way to the Remontowa shipyard in Gdansk on the Baltic Sea coast. The rig had been towed from the Dutch sector of the North Sea, where it had been operating, for an overhaul program expected to last 120 days. Work will include general repairs and maintenance, cleaning of the legs, protective coating, gutting of the accommodation block, and installation of new living quarters. The yard had previously upgraded semisubmersible platforms, but this is its first experience with a large drilling jackup. Remontowa claims this is also the highest and widest object to transit through Gdansk Port, with the legs extending 140 m (459 ft) above sea level.
