February 2012
News & Resources

World of Oil and Gas

Offshore Cyprus licensing round to begin

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Vol. 233 No. 2




Offshore Cyprus licensing round to begin

Recent natural gas discoveries in the region have prompted the Republic of Cyprus to proceed with its second licensing round, to be held at the end of this month. Already, according to news reports, a host of international companies, including Petrobras, Gazprom, Petronas, Total, BP and ExxonMobil, have expressed interest in the licensing round, which will include 12 reportedly hydrocarbon-rich offshore blocks.  In December, Texas-based Noble Energy announced that it had discovered gas resources in Block 12 amounting to between 5 and 8 Tcf of gas. The find, however, has frustrated relations between Cyprus and Turkey, which refuses to recognize Cyprus’s sovereignty in the area.

Norway awards 60 new oil production licenses

Norway has awarded 60 new production licenses to 42 oil companies in the “biggest ever” award in so-called predefined areas, said Energy Minister Ola Borten Moe.  The companies were awarded 34 licenses in the North Sea, 22 licenses in the Norwegian Sea and four licenses in the Barents Sea. The licenses are situated in mature areas on the Norwegian Continental Shelf, where 27 companies have been awarded operatorships.

PGS begins 3D survey in Angola presalt play

Petroleum Geo-Services (PGS) has kicked off a 26,000-sq-km, 3D seismic survey in Angola’s presalt province following approval of recent block awards in the burgeoning play. The shoot is being carried out in the Kwanza and Benguela basins by the Norwegian seismic contractor’s vessel Ramform Valiant, which will be joined by a second unit, PGS Apollo. Data processing is due to start in March. The survey is being jointly funded by BP, Total and Statoil, which recently secured operatorships on two blocks each, in the deepwater Kwanza basin licensing round.

Repsol rig arrives in Cuba

Saipem’s semisubmersible drilling rig, Scarabeo 9, has arrived in Cuba to begin drilling a deepwater well. The rig will drill for Repsol YPF and was inspected by U.S. officials during a stopover in Trinidad & Tobago. U.S. offshore regulators said that the vessel complies with existing international and U.S. standards. The rig is scheduled to start drilling later this year. Cuba has limited experience with offshore oil exploration. In 2004, Cuba drilled a deepwater well that received little notice. Since then, the U.S. Geological Survey has said that there could be a substantial amount of untapped oil off the Cuban coast.

Tullow partners with Shell in Atlantic

Tullow Oil said it will team up with Royal Dutch Shell to jointly explore for oil and gas at select frontier sites in and around the Atlantic Ocean. Tullow said the two firms have signed a non-binding memorandum of understanding. The firms will look for the types of risky oil finds that have become Tullow’s hallmark and have helped transform it from a little-known prospector into one of the fastest growing energy firms in Europe.

Eni gains new Barents Sea exploration license

Eni has been awarded a new exploration license in the Barents Sea, just east of Goliat field, by the Norwegian Ministry of Petroleum and Energy. The license area covers 431 sq km in water depths ranging from 400 to 450 m. If exploration is successful, any development would benefit from the proximity to Goliat field, thereby minimizing the time to market. Eni has been present in Norway since 1965 and produces around 135,000 boepd in the country.


ConocoPhillips seeks JV partner in Alberta

ConocoPhillips is seeking a 50/50 joint-venture partner for its oil-sands projects in Western Canada. The third-largest U.S. energy company aims to sell an interest in its Surmont, Thornbury, Clyden, Saleski, Crow Lake and McMillan Lake projects, most of which are undeveloped or, like Surmont, at an early stage of production. ConocoPhillips says its oil-sands assets are producing 12,000 bopd, but have a potential peak production of more than 500,000 bopd. They are spread over 715,000 acres in northeastern Alberta and may have 30 billion bbl of oil in place.

Total acquires stake in Utica play

France’s Total has entered into a joint venture with Chesapeake Exploration to acquire a 25% share in Chesapeake’s and EnerVest’s liquids-rich area of the Utica shale play across 10 counties on the eastern side of the state of Ohio. Total paid Chesapeake and EnerVest about $700 million in cash for acquiring these assets. The JV covers about 619,000 net acres. Chesapeake will continue to operate the joint acreage. To date, 13 wells have been drilled across the acreage, with very promising results seen in terms of productivity and liquid content.

Statoil selects Spar platform to develop Luva field Norway’s Statoil, together with its partners, has selected a Spar platform to develop Luva field in the Norwegian Sea. Luva field sits outside existing infrastructure and has a water depth of 4,265 ft. It may be the first field to have a Spar platform on the Norwegian Continental Shelf (NCS). The concept includes two subsea templates, with four wells on each, and one satellite template housing one well.

Chesapeake output cut may boost prices Chesapeake Energy Corp. is curtailing production in response to low natural gas prices, stating that mild winter temperatures have pressured U.S. natural gas prices to levels that are not economically attractive. The company will immediately curtail 500 MMcfd of gas production, reflecting about 8% of its total output, and could cut another 300 MMcfd in the future.

Poland’s PGNiG sees its gas output at 4.9 Bcm in 2013 Polish state-controlled firm PGNiG expects to produce 4.7 Bcm of natural gas this year and 4.9 Bcm in 2013, when it expects to double output off Norway’s shore. The plan includes 4.4 Bcm of gas that PGNiG expects to produce each year in Poland. PGNiG also plans to produce 660,000 metric tons of crude oil this year (13,377 bopd) and 1.24 MMt (25,200 bopd) in 2013.

Estimates on Israel’s Leviathan field both up and down The Israeli partners in the offshore Leviathan natural gas and oil field have revised the estimated amount of gas reserves in the field upwards to 20 Tcf from 16 Tcf. The partners also revised downwards the potential oil reserves to 600 million bbl from 3 billion bbl. The revisions are due to new government requirements for how energy companies estimate the amount of potential oil and gas reserves. Operated by Noble Energy, Leviathan is expected to begin producing natural gas by 2016. It is one of several natural gas reserves to have been discovered offshore Israel in recent years. The other large reserve, Tamar, is expected to go onstream later this year. 

Apache gains Anadarko basin acreage via Cordillera acquisition

Apache Corp. said that it will acquire Cordillera Energy Partners, a privately held company, for $2.85 billion. Cordillera’s operations include about 254,000 net acres in the prolific Granite Wash, Tonkawa, Cleveland and Marmaton plays in western Oklahoma and the Texas Panhandle. In addition to estimated proved reserves of 71.5 MMboe and net production of 18,000 boepd, Cordillera has assembled an acreage position with significant resource potential, including 14,000 potential drilling locations in liquids-rich Anadarko basin plays. A self-funded development drilling program begins in 2013.

Iraq, Lukoil award $998-million W. Qurna contract 

Iraq and Russia’s Lukoil have awarded a $998-million deal to South Korea’s Samsung Group to develop Phase 2 of super-giant West Qurna oil field. Samsung will build a central oil processing facility. Lukoil and Statoil were awarded a 20-year service contract for West Qurna Phase 2 in Iraq’s second licensing round held in December 2009. The companies are due to get the southern field pumping at a rate of 1.8 MMbopd, with first oil planned for early 2013.

Inpex, Total approve $34-billion Australian LNG project Inpex Corp. and Total have given the green light to building one of Australia’s most expensive energy projects at an estimated cost of $34 billion over the next five years. The Ichthys gas export development will tap a remote, deepwater field off Australia’s northern coast containing an estimated 12.8 Tcf of natural gas. Gas from Ichthys field will be piped to a plant in Darwin that can produce 8.4 MM metric tons of LNG each year for seven Japanese utilities and Taiwan’s CPC Corp. 

Oil India will invest $200 million in international shale   State-run Oil India Ltd. plans to buy shale gas assets worth up to $200 million and is scouting for potential acquisitions in the U.S. and Australia. Simultaneously, the firm seeks to gain in-the-field shale expertise ahead of India’s plans to auction blocks in the country. India is seeking to tap into its shale gas resources, to meet rising gas demand from power plants and factories. Oil India joins other Indian companies, such as Reliance Industries Ltd. and GAIL (India) Ltd., which have already acquired acreage in the U.S. Oil India chairman N.M. Borah stated that the company is targeting Texas’ Eagle Ford region, but did not provide further details.

Firms reach $159-million settlement for Bohai oil leaks ConocoPhillips and China National Offshore Oil Corp. (CNOOC) have agreed to pay around $159 million to settle compensation claims resulting from oil spills in Bohai Bay, off northeastern China. The compensation agreement with China’s Ministry of Agriculture stemmed from June 2011 leaks at the Penglai 19-3 oil field. Following a partial shutdown last summer, the Chinese government in early September ordered a complete halt to production at the field, which produced an average 56,000 bopd in 2010. In two accidents in June, 3,343 bbl of oil and mud used in drilling leaked through the seafloor near platforms at the field, which is 51%-owned by CNOOC. 

Iraq delays energy bidding round  Iraq has postponed by a month-and-a-half its fourth oil-and-gas bidding round, to May 30 and 31, when it will auction 12 promising exploration blocks to international companies. The ministry had previously said that the fourth auction would be held April 11 and 12. Iraq’s Oil Ministry announced that the reason behind the delay is a continuation of discussions with international companies regarding a proposed model contract for the bidding round. So far, the licensing auction date has been changed four times. Of the 46 firms pre-qualified to bid, some 37 companies have paid participation fees and bought data packages for the 12 blocks, which are estimated to hold 29 Tcf of gas and 10 billion bbl of oil.

BOEM to hold GOM lease sale   The Bureau of Ocean Energy Management (BOEM) announced that it will hold a new oil and gas lease sale in the Gulf of Mexico. The sale, set to be held on June 20 in New Orleans, will cover roughly 38 million acres of available, unleased areas offshore Louisiana, Mississippi and Alabama. BOEM estimates that the sale could produce finds up to 1 billion bbl of oil and 4 Tcf of natural gas.

Statoil makes another high-impact Barents Sea find   Statoil, along with partners Eni Norge and Petoro, has made a substantial oil discovery in the Havis prospect in the same license as Skrugard field in the Barents Sea. This is the second high-impact discovery in the North in nine months. Well 7220/7-1, drilled by semi Aker Barents, has proved a 48-m gas column and a 128-m oil column. Statoil estimates the volumes in Havis to be between 200 and 300 million boe. The provisional, updated total volume estimate for the Skrugard and Havis discoveries in PL532 is between 400 and 600 million boe.

Kuwait Energy makes Gulf of Suez oil find Kuwait Energy struck a new oil discovery in Egypt’s Ahmad-1X well, in the Gulf of Suez’s Area A concession. The Ahmad-1X well was drilled to a depth of 6,922 ft. An initial test recorded a flowrate of 890 bopd from the Kareem formation. This discovery brings the total number of oil, gas and condensate finds made by Kuwait Energy in Egypt, since 2008, to 14. Kuwait Energy operates Area A and holds a 70% working interest. Omani independent Petrogas E&P holds the remaining 30%.

OGX hits find in Santos wildcat Brazil’s OGX has identified the presence of hydrocarbons in the Albian and Aptian sections of well 1-OGX-63-SPS, in the shallow waters of the Santos basin. A hydrocarbon column of 3,280 ft was encountered in Albian reservoirs, with about 360 ft of net pay. Results indicate high quality sands in the Aptian reservoir. OGX holds a 100% working interest in this block.

Chevron hits thirteenth find offshore Western Australia   Chevron announced a natural gas discovery by its Australian subsidiary in the Exmouth Plateau area of the Carnarvon basin, offshore Western Australia. The Satyr-3 well encountered about 243 ft of net gas pay. The well is 113 mi north of Exmouth in the WA-374-P permit area, and was drilled in 3,688 ft of water to a depth of 13,369 ft. Exmouth operates the permit area and holds a 50% interest, with ExxonMobil and Shell each holding 25%. 

Anadarko finds largest pay yet in well offshore Mozambique Anadarko Petroleum Corp. said that its seventh discovery well offshore Mozambique has found the largest pay of any well in the complex to date. The Lagosta-2 appraisal encountered 777 total net ft of natural gas pay in multiple zones, supporting recoverable resource estimates of 15-30 Tcf in the discovery area on the block. The well was drilled to 14,223 ft TD in a water depth of 4,813 ft in Offshore Area 1 of the Rovuma basin.  

Treaty Energy makes oil discovery in Belize   Treaty Energy Corp. reported drilling success on its first oil well, San Juan #2, in Belize. The well is adjacent to the Port of Big Creek in the Stann Creek District. Cursory field examinations indicate lime characteristics with good porosity and high saturation. On-site personnel concluded that the characteristics are very similar to some of the great oil producing zones in Texas, specifically the Ellenburger Lime, Hope Lime, Caddo Lime and Edwards Lime. 

Pemex confirms Veracruz hydrocarbon find   Pemex’s exploratory well Puskon-1, drilled 37 mi off the coast of Tuxpan, Veracruz, proved the existence of an active petroleum system in the area. The well was drilled to evaluate the potential for the Mesozoic formation, which extends over an area of about 7,722 sq mi. Puskon-1 was set to reach a TD of 26,657 ft, but confirmed the presence of wet gas at 23,622 ft and recorded temperatures and pressures higher than predicted at 25,039 ft.


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