EXPLORATION

TGS extends Declaration multi-WAZ survey in Gulf of Mexico 

TGS has extended its Declaration multi-WAZ (wide-azimuth) survey in the Mississippi Canyon and DeSoto Canyon protraction areas of the Gulf of Mexico. The extension represents a minimum 2,000 km² of additional data to be acquired by CGG, using the single-pass vessel configuration derived from its StagSeis technology. The extension is based on early observations from the fast-track migration of phase one of the Declaration project. TGS COO Kristian Johansen commented, “Expanding the survey to cover the extent of the current, Lower Tertiary, Norphlet fairway will provide data for current, and future, exploration and development objectives.” Acquisition of the extension is expected to complete during second-quarter 2015, followed by fast-track deliverables and final imaging products in 2016.

Obama administration to offer 41 million GOM acres 

U.S. Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper announced on Feb. 5 that Interior will offer, in a March lease sale, 41.2 million acres for exploration and development in the Gulf of Mexico. Lease Sale 235, in the Central Planning Area, will be held in New Orleans, La., on March 18. The sale will be the seventh offshore auction under the administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012–2017. Sale 235 encompasses 7,788 unleased blocks, located from three to 230 nautical miles offshore Louisiana, Mississippi, and Alabama, in water depths ranging from 9 ft to more than 11,115 ft. BOEM estimates the proposed sale could result in the production of approximately 1 Bbbl of oil and 4 Tcfg.

Shell to explore in deep water, offshore Myanmar

Shell and its partner, Mitsui Oil Exploration Co. (MOECO), have signed exploration and production sharing contracts with Myanma Oil and Gas Enterprise for three deepwater blocks. Graeme Smith, Shell’s V.P.  for exploration, Asia and Australia, said, “The three blocks offer an exciting frontier exploration opportunity to apply the advanced deepwater technical capabilities we have built up around the world over the past three decades.” Under the agreements, Shell will assess the potential of deepwater blocks AD-9, AD-11 (Rakhine basin) and MD-5 (Thanintharyi basin). Together, the three blocks cover some 21,000 km², about 300 km offshore, in water depths ranging from 1,800 m to 2,700 m. Shell (90%) operates the three contracts, while MOECO holds the remaining 10%.

Inpex wins blocks offshore Western Australia 

Inpex Browse E&P, a subsidiary of Japan’s Inpex Corporation, has been awarded exploration permits for release areas WA-513-P and WA-514-P. The two blocks cover areas of 335 km² and 415 km², respectively, where the water depth is approximately 300 m to 400 m. They are about 500 km north-northeast of Broome, off the coast of Western Australia. Inpex now holds 13 exploration permits or retention leases in the vicinity of Ichthys gas-condensate field where, as operator, it is developing the Ichthys LNG Project. Exploration of the blocks will help Inpex maximize the potential value of the project. The blocks are situated near large gas reserves that have been discovered, including Ichthys field, as well as Prelude and Concerto gas fields. Inpex Browse will hold a 40% participating interest in the blocks, along with operator Santos (60%).

GOVERNMENT/REGULATORY

Obama vetoes Keystone XL bill passed by U.S. Congress

President Barack Obama has vetoed legislation that would have allowed construction of the Keystone XL pipeline. The U.S. Senate received notification of the veto, hours after the bill formally arrived at the White House. “Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest,” Obama’s veto message said. His veto of the bipartisan legislation drew criticism from industry groups, including API. “Instead of standing with 72% of Americans, including a majority of Democrats, who support the pipeline, this decision continues us down the path of indecision and delay,” said API President and CEO Jack Gerard. “Voters spoke loud and clear last fall, saying they wanted Washington to work together. Unfortunately, the veto today demonstrates some are not listening.” Image courtesy of TransCanada.

BSEE, BOEM issue draft regulations for drilling offshore Alaska

The U.S. Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) have released proposed regulations for future drilling on the U.S. Arctic Outer Continental Shelf. The proposed regulations focus solely on offshore exploration drilling within the Beaufort Sea and Chukchi Sea Planning Areas. The proposed regulations codify, and further develop, current Arctic-specific operational standards that seek to ensure that operators take the necessary steps to plan through all phases of offshore exploration in the Arctic, and conduct safe drilling operations while in theater. These steps include mobilization, drilling, maritime transport and emergency response. The draft regulations codify requirements that all Arctic offshore operators, and their contractors, are prepared for Arctic conditions, and that operators have developed integrated operational plans that detail all phases of exploration programs, for purposes of advance planning and risk assessment. With an emphasis on safe, responsible exploration, the proposed rule also would require operators to submit region-specific oil spill response plans, have prompt access to source control and containment equipment, and have available a separate relief rig to drill a timely relief well, if loss of well control occurs.

Pennsylvania forms oil and gas advisory committee for conventionals

Pennsylvania’s Department of Environmental Protection (DEP) has announced a newly formed Conventional Oil and Gas Advisory Committee (COGAC), to increase transparency and communication about regulation of conventional oil and gas drilling. “Creating this advisory committee will increase dialogue between DEP and the regulated community, as well as broaden the interests we hear from,” Acting DEP Secretary John Quigley said. “Improving communication between all stakeholders and our department will foster stronger environmental safeguards in the future.” COGAC will advise DEP on matters related to conventional oil and gas extraction practices and regulations, and will be structured similarly to DEP’s existing Oil and Gas Technical Advisory Board.

DISCOVERIES

Statoil finds oil near North Sea’s Ekofisk field

Statoil Petroleum, operator of production license 146, said it has made a minor oil discovery in wildcat well 2/4-22 S. The well was drilled about 20 km north of Ekofisk field. The well’s primary exploration target was to prove petroleum in reservoir rocks in the Permian (Rotliegend group). The secondary exploration target was to prove petroleum in reservoir rocks in the Middle Jurassic (Bryne formation). The 2/4-21 well encountered a 27-m oil column in the Rotliegend group, 24 m of which was sandstone of good reservoir quality. The well also encountered oil columns in two intervals in the Bryne formation, where the top interval also extends into the overlying Ula formation of the Upper Jurassic. No oil/water contact was encountered in either of the intervals in the Jurassic. Data acquisition and sampling have been carried out. Preliminary estimates of the discovery’s size range between 4.4 MMbbl and 12.6 MMbbl of recoverable oil equivalent. 

Lundin in minor discovery northeast of Johan Sverdrup

Lundin Norway, operator of production license 674 BS, has hit a minor gas discovery with its first wildcat well on the tract, 26/10-1. The well was drilled about 33 km northeast of the 16/2-6 discovery well on Johan Sverdrup field in the central North Sea, and about 100 km west of Stavanger. The well’s purpose was to prove petroleum in reservoir rocks in the Miocene (Utsira formation). The well encountered a 24-m gas column in the Utsira formation with excellent reservoir quality. It was not formation-tested, but data acquisition and sampling have been carried out. Preliminary calculations of the discovery size are between 1.5 Bcm and 4 Bcm of recoverable gas. The well was drilled to a vertical depth of 995 m below the sea surface and terminated in the Hordaland group. Water depth at the site is 140 m. 

Dana Petroleum discovers oil in Danish North Sea

Dana Petroleum has completed drilling of the Lille John-2 (LJ-2) appraisal well and sidetrack on Lille John oil field in License 12/06 of the Danish North Sea. The LJ-2 appraisal and sidetrack confirmed the presence of sweet, light oil in the Late Miocene sandstone reservoir. The thickness and quality of the sandstone reservoir encountered was found, as expected, to be improved relative to the LJ-1 discovery well drilled in 2011. A production test showed a maximum flowrate of 1,400 bopd, with no sand. Detailed evaluation of the acquired data will now be performed to confirm the exact thickness of the oil pay, to assess the recoverable volumes in the Lille John accumulation.

BUSINESS 

Statoil submits Johan Sverdrup development plan for approval

Statoil and its partners have submitted the plan for development and operation (PDO) for Johan Sverdrup field, phase one, to Norwegian Minister of Petroleum and Energy Tord Lien. The capital expenditures for phase one are estimated at $15 billion, and the expected recoverable resources are projected at between 1.4 and 2.4 Bboe. For the full-field development, capital expenditures are estimated at some $22 billion to $28.5 billion, with recoverable resources of between 1.7 and 3.0 Bboe. Johan Sverdrup will be developed in several phases; phase one consists of four bridge-linked platforms, in addition to three subsea water injection templates. A recovery rate of 70% is targeted, taking into account advanced technology for increased oil recovery. Phase one will have a production capacity in the range of 315,000–380,000 bopd. First oil is planned for late 2019. The partnership, consisting of Statoil, Lundin Norway, Petoro, Det norske oljeselskap and Maersk Oil, has recommended Statoil as the operator for all phases of the field. The partnership has asked the Petroleum and Energy Ministry to determine the final allocation of resources in Johan Sverdrup. Image courtesy of Statoil.

BP, Maersk Training enter five-year contract

BP will offer advanced training programs to its offshore drilling teams, under a new global agreement with Maersk Training. By 2016, Maersk Training, which already works with BP in Europe, plans to open a new state-of-the-art facility in Houston that will feature highly interactive simulators, replicating nearly every critical job on an offshore rig. BP will use the facility to train integrated offshore drilling teams—comprised of BP employees and contractors—in what it calls an “immersive simulation environment.” The hands-on, scenario-based approach goes well beyond traditional classroom training. It allows teams to practice events and joint procedures together, as an integrated unit, rather than as individual contributors. Similar to BP training programs already underway at a Maersk Training facility in Svendborg, Denmark, courses at the Houston facility will incorporate human and organizational factors that frequently are cited as a direct cause, or contributing factor, to offshore incidents.

PRODUCTION

Freeport-McMoRan successfully tests Highlander well

Freeport McMoRan Oil & Gas (FM O&G) announced the results of additional production testing on its Highlander discovery, onshore South Louisiana. The production test, performed in the Cretaceous/Tuscaloosa section, indicated a flowrate of approximately 75 MMcfgd on a 44/64-in. choke, with flowing tubing pressure of 10,300 psi. FM O&G expects to immediately begin production, using facilities in the immediate area. The Highlander discovery well was drilled to a TD of approximately 29,400 ft in first-quarter 2014. Wireline log and core data obtained from the Wilcox and Cretaceous sand packages indicated favorable reservoir characteristics with approximately 150 ft of net pay. A second well has been identified, and future plans are being evaluated in this high-potential area.

Statoil brings Oseberg Delta 2 onstream

Statoil and its partners started production from Oseberg Delta 2, in the North Sea, on Feb. 21. The field’s recoverable reserves are estimated at 77 MMboe. The field, which is tied back to the Oseberg field center, has been developed using two subsea templates, with a capacity for eight wells. The field plan’s initial phase involves three oil producers and two gas injectors. Arild Dybvig, Statoil’s V.P. for fast-track development projects, said, “Delta 2 is an important element in extending the lifetime of Oseberg. It provides a good example of how we can make lesser discoveries profitable by using existing infrastructure, while it is still available.” The start-up of the first well is in line with the development plan and takes place 38 months after the discovery became part of the fast-track portfolio. Total investment is slightly less than $920 million, well below the estimated investment cost, when the project was sanctioned. Oseberg Delta 2 marks a further development on the Delta terrace, where oil has been produced from two wells on an existing template since 2008.

Shell plans Brent Delta decommissioning

A 30-day public consultation, on plans to commence decommissioning of a portion of Brent oil and gas field in the North Sea, began in February. The field has produced around 10% of all UK North Sea oil and gas and generated more than $30 billion in tax revenue for the UK since production began in 1976. The decommissioning program, submitted by Shell for the Brent Delta platform (one of four installations in the field), recommends that the facility’s 23,500-tonne topsides be removed in one piece by a heavy-lift, dedicated vessel. That vessel arrived in Rotterdam during January. Work is underway to strengthen the topsides in anticipation of the lift, which will be one of the heaviest that the North Sea has ever seen.  This single-lift technique will substantially reduce the operation’s risk, cost and environmental impact. If the decommissioning program is formally approved by the UK’s Department of Energy and Climate Change, the topsides will be taken to Able, UK. A second decommissioning program for the remaining infrastructure in Brent field, including Brent Delta’s legs, three other sets of topsides and legs, 140 wells and 28 pipelines, will be submitted when Shell is confident that the proposals are safe, technically achievable, environmentally sound and financially responsible. It will be subject to a separate consultation. Brent Delta stopped production in 2011; Brent Alpha and Bravo ceased in November 2014. Production from the field continues through Brent Charlie.

ACQUISITIONS

Halliburton and Baker Hughes set meetings to approve acquisition

Halliburton and Baker Hughes announced that each company will hold a special meeting of stockholders on March 27, in connection with Halliburton’s pending acquisition of Baker Hughes. Halliburton’s special meeting will be held at the firm’s offices in north Houston, while Baker Hughes’ special meeting will take place at its corporate office near downtown Houston. Halliburton stockholders will vote on whether to approve the issuance of shares of Halliburton common stock in connection with the acquisition. Baker Hughes stockholders will vote on whether to approve the merger, and the agreement and plan of merger, and, on a non-binding, advisory basis, the compensation payable to Baker Hughes’ named executive officers in connection with the merger.  

Talisman shareholders approve $8.3-billion acquisition by Repsol 

Talisman Energy has announced that the holders of its common and preferred shares have approved the proposed arrangement, under which Repsol, through a wholly owned subsidiary, will acquire all of the outstanding shares of Talisman. Of the votes cast, over 99% of holders of each class of shares voted in favor of the agreement at the special meeting of shareholders. It is anticipated that the completion of the transaction will occur during second-quarter 2015, and all regulatory approvals are on track. Image courtesy of Repsol.