World of oil and gas

EXPLORATION

BG Group finds hydrocarbons offshore Kenya, analysis needed

The BG Group-operated Sunbird-1 well has reached a final depth of 2,850 m below the drill floor, using the Deepsea Metro-1 drillship. The well, at a water depth of 723 m, is in Kenya’s Block L10A. The top of the Sunbird Miocene Pinnacle Reef was penetrated at just under 1,584 m, subsea. The reef has been found to contain a hydrocarbon column; however, the column’s vertical extent has not yet been determined. Hydrocarbon samples have been recovered for detailed analyses. According to the company, at this early stage of results interpretation, it is not yet in a position to properly and fully estimate the vertical extent of the hydrocarbon column and the potential hydrocarbon volumes, or to provide an accurate assessment of their nature. BG group was also unable to comment on whether the volumes discovered appear to be commercial or sub-commercial.

InterOil begins drilling exploration well in Papua New Guinea

InterOil has started drilling the Bobcat-1 exploration well in PPL 238, in the Gulf Province of Papua New Guinea. Bobcat-1 is designed to assess the hydrocarbon potential of the carbonates within the Bobcat structure, and to gather data on shallow marine carbonate reservoir presence, quality and preliminary hydrocarbon volumes. The well will be drilled vertically to a TD of 3,134 m. The well is expected to take approximately 90 days to drill, log and test, contingent on drilling conditions.

Statoil drills dry well north of Fram field in North Sea

Statoil, operator of production license 248 C, was in the process of concluding the drilling of wildcat 35/11-16 S at press time. The well was drilled about 5.5 km north of Fram field, in the northern North Sea, and about 130 km northwest of Bergen, Norway. The well’s objective was to prove petroleum in Upper Jurassic reservoir rocks (intra-Draupne formation sandstones). It was drilled from production license 248 C, with an exploration target in license 090 B, in a water depth of 367 m. The well encountered approximately 9-m, net, intra-Draupne formation sandstones, with relatively good reservoir properties. Only traces of petroleum were encountered; the well is classified as dry. Data acquisition and sampling have also been carried out, and the well will now be permanently plugged and abandoned. Well 35/11-16 S was drilled by the Songa Trym rig, which will now proceed to the adjacent production license 90, to drill wildcat 35/11-17, also operated by Statoil.

Lundin Petroleum, through its wholly-owned subsidiary, Lundin Norway, has begun drilling appraisal well 16/2-19, on PL265, in the northern part of the Johan Sverdrup discovery. The well’s main objective is to investigate the Jurassic presence, reservoir thickness, quality and distribution on the northeastern edge of the discovery, approximately 2.2 km north of appraisal well 16/2-12, and 3.2 km southeast of appraisal well 16/2-9s. The planned TD is approximately 1,990 m below mean sea level, and the well will be drilled by the Ocean Vanguard semisubmersible. Drilling is expected to take approximately 45 days. Statoil Petroleum is the PL265 operator, with 40% interest. Partners include Petoro (30%), Det norske oljeselskap (20%) and Lundin Norway (10%).

PRODUCTION

Energy sector employees in the U.S. can help accelerate economic growth and employment by supporting sound energy policies and education, job training and career development, said Exxon Mobil Chairman and CEO Rex W. Tillerson. During a speech to a building trades union conference in Washington, D.C., Tillerson noted that since the recession that began in late 2007, oil and gas employment has increased 40%, and in states where oil production is rising, overall employment growth has outpaced the rest of the U.S. “The oil and natural gas industry now supports 9.8 million jobs, and the average job in oil and gas production pays roughly seven times the federal minimum wage,” Tillerson said. “The U.S. energy sector now accounts for $1.2 trillion of the U.S. economy, equal to 8% of our gross domestic product. And thanks to technological breakthroughs and visionary projects, in 2013 our nation became the world’s leading producer of energy from oil and natural gas.”

Statoil, with co-venturer Exxon Mobil, has announced the results from its first drill-stem test in the Block 2 discoveries offshore Tanzania. The Zafarani-2 operation tested two separate intervals and flowed at a maximum 66 MMcfgd, constrained by equipment, and confirmed good reservoir quality and connectivity. The drill-stem test operation was performed through a re-entry in Zafarani-2, which is at a 2,400-m water depth. The production well rate potentials are estimated to be higher than the equipment-constrained rates obtained during the test. The Zafarani-2 operation will be followed by the Zafarani-3 well, which concludes the planned appraisal in the Zafarani reservoir, the cornerstone for a field development in Block 2.

Petrobras reported that production at Cascade and Chinook fields, in the Gulf of Mexico, has hit 40,000 bopd, a new output record. Cascade has three wells in operation, while Chinook has two wells. The record production levels followed the bringing onstream of two new wells, Chinook-5 and Cascade-6, which contributed an additional 28,000 bopd, compared to the previous 12,000-bopd output. The fields are some 260 km south of the Louisiana coast and 24 km apart, in a water depth of 2,500 m. The wells have an average depth of 8,000 m, and are connected to the BW Pioneer, the first FPSO approved for use in the U.S. portion of the Gulf. Petrobras operates both fields.

In a presentation during the 2014 World Heavy Oil Congress, Ruben Figuera, director of new developments in the Orinoco Oil Belt for PDVSA, said the company is moving forward with a series of new heavy oil developments in the area, to facilitate a significant production increase, leading to the development of major infrastructure. The projects, developed by PDVSA through several JVs, will enable increased production, in the realm of 2.02 MMbpd of heavy crude, with qualities from 16°API to 32°API, by 2019. The projects have seen a $3.2-billion investment in the last two years, for the development of processing facilities, pipelines, terminals and other infrastructure components, and have an estimated 20% recovery factor.

DISCOVERIES

Faroe Petroleum struck a discovery with its Pil exploration well in the Norwegian Sea. The well (6406/12-3S) encountered a gross, hydrocarbon-bearing reservoir section with approximately 135 m of oil, and 91 m of gas, in the Jurassic reservoir of the Rogn formation. This has proved to be an effective reservoir at Shell’s Draugen oil field, 60 km to the northeast. Preliminary results, based on extensive coring, wireline logs and pressure data, show that the well has encountered oil and gas in reservoir sands with a very high net-to-gross ratio. Extensive data have been collected, including the coring of the hydrocarbon-bearing zone; the well’s partners have decided that a drill stem test will be undertaken, once TVD has been reached. Subject to positive test results, an immediate sidetrack well is expected to be drilled.

Jura Energy has made a commercial gas discovery at the Maru East-1 exploration well, in Pakistan’s Guddu Block. The well was completed in the Eocene-aged Pirkoh limestone formation. During a short-duration, post-stimulation test, on a 32/64-in. choke, the well flowed gas at a rate of 3 MMcfgd, with a wellhead flowing pressure of 450 psi and a heating value of approximately 700 Btu/scf. Maru East-1 is approximately 1.5 km from existing Guddu pipeline infrastructure. Anticipated future production from the discovery is expected to be entitled to a gas price of $6/MMBtu, under Pakistan’s Petroleum (Exploration & Production) Policy from 2012.

Petrobras has completed the drilling of two wells in the Santos basin Transfer of Rights area. Results have confirmed the discovery of 29°API oil in the pre-salt reservoirs, referred to as Florim and Entorno de Iara. Well 3-BRSA-1215-RJS (3-RJS-725), informally referred to as Florim 2, is at a water depth of 1,972 m, 7 km north of discovery well Florim and roughly 200 km off the coast of Rio de Janeiro. The well reached a TD of 5,679 m. The second well, 3-BRSA-1172-RJS (3-RJS-722), informally referred to as Entorno de Iara 2, is at a water depth of 2,249 m, 7 km northwest of discovery well Entorno de Iara and 225 km off the coast of Rio de Janeiro. A 526-m oil column was confirmed at Etorno de lara 2.

Det Norske in minor find northeast of Snøhvit field

Det norske oljeselskap, operator of production license 659, has drilled wildcat 7222/11-2, about 80 km northeast of Snøhvit field, in the Barents Sea. The well encountered a gross oil column of about 30 m in the Kobbe formation, of which roughly 20 m is in sandstone, with much poorer reservoir quality than expected. Preliminary assessments indicate that the discovery is not commercially interesting. This exploration well is the first of its type in production license 659, and was drilled by the Transocean Barents drilling rig.

BUSINESS

GOVERNMENT/REGULATORY 

Energy XXI and EPL Oil & Gas, Inc., have signed a definitive merger agreement, pursuant to which Energy XXI will acquire all of EPL’s outstanding shares for total consideration of $2.3 billion, including the assumption of debt. As a result of the merger, Energy XXI will become the largest public independent producer on the Gulf of Mexico shelf, with production of approximately 65,000 boed. EPL owns working interests in 37 producing fields, mainly concentrated within nine core producing areas. An estimated 91% of proved reserves, 88% of production and 91% of revenues are associated with the Ship Shoal, East Bay, South Timbalier, South Pass 78 and 49, West Delta, Main Pass, Eugene Island and South Marsh complexes.

Oil Search has completed its acquisition of the Pac LNG Group Co. holding (22.835% gross interest) in Petroleum Retention License 15 (PRL 15), containing the Elk and Antelope gas discoveries, in Papua New Guinea. According to Oil Search’s managing director, Peter Botten, the company’s entry into the PRL 15 JV will provide the company with an ability to play a role in determining the optimal route to commercialization of Papua New Guinea’s largest undeveloped gas resource.

Imperial Oil Ltd., a Canadian energy company majority-owned by Exxon Mobil, has agreed to sell some assets to Whitecap Resources Inc. for roughly $774 million, as it sharpens its focus on larger oil sands projects. The company is focusing its efforts on unconventional production; it spent $11.7 billion to bring the Kearl oil sand project online in 2013. In August, Imperial teamed with Exxon Mobil, owner of 70% of its stock, to buy more oil sands acreage for $680 million.