GOVERNMENT/REGULATORY

Johan Sverdrup development approved

The plan for development and operation (PDO) for Johan Sverdrup field, phase one, has been approved by Norway’s Ministry of Petroleum and Energy. In addition, the associated plans for installation and operation (PIO) for transportation pipelines and power supply from shore were also approved. Johan Sverdrup will be developed in several phases. Phase one consists of four bridge-linked platforms, in addition to three subsea water injection templates. The ambition is a recovery rate of 70%, allowing for advanced technology for increased oil recovery in future phases. The phase one development will have a production capacity in the range of 315,000-380,000 bpd. First oil is planned for late 2019. The Johan Sverdrup partnership consists of Statoil (operator), Lundin Norway, Petoro, Det Norske Oljeselskap and Maersk Oil. 

IWCF launches online system for well control training

The International Well Control Forum (IWCF), the independent organization that sets international well control standards, has launched an online administration system called FORUM. According to IWCF, the system meets the industry’s changing needs and will make the well control training process easier. The simplified online scheduling process replaces the previous paper-based system and provides significant efficiency benefits to the centers. Once a center has scheduled a course, it can allocate places to candidates online instead of completing more paperwork. A second project phase will introduce online exams, which will be available to centers next year. IWCF will continue to offer traditional paper exams, depending on a center’s preference.

UK offers 27 blocks in onshore licensing round

The UK’s Oil & Gas Authority (OGA) announced on Aug. 18 that 27 onshore blocks from the 14th Onshore Oil and Gas Licensing Round will be formally offered to companies. A second group of 132 further blocks has been subjected to detailed assessment under the Conservation of Habitats and Species Regulations 2010, the findings of which are now out for consultation. Subject to the outcome of that consultation, the OGA will announce offers for the second group of license blocks later this year. The licenses for all offered blocks will then be granted after the terms and conditions have been finalized. “Today’s announcement regarding the offer of 27 blocks gives those successful companies assurance about the blocks that they will be formally offered later in the year,” OGA Chief Executive Andy Samuel said in a statement announcing the awards.

MERGERS/ACQUISITIONS

Schlumberger acquires Cameron in multi-billion-dollar deal

Schlumberger and Cameron are to merge in a stock-and-cash transaction valued at $14.8 billion. The agreement was approved unanimously by the boards of both companies. Schlumberger expects to realize pretax synergies of approximately $300 million and $600 million in the first and second year, respectively. The transaction combines two complementary technology portfolios into a “pore-to-pipeline” products-and-services offering to the global oil and gas industry. On a pro forma basis, the combined company had 2014 revenues of $59 billion. “We believe that the next industry technical breakthrough will be achieved through integration of Schlumberger’s reservoir and well technologies with Cameron’s leadership in surface, drilling, processing and flow control technologies,”
Paal Kibsgaard, chairman and CEO of Schlumberger, said. The transaction is expected to close in the first quarter of 2016. 

NEOS acquires land processing business from ION

NEOS GeoSolutions has acquired ION Geophysical’s Denver-based land seismic data processing operation. The addition of this business line expands NEOS’ multi-physics service lines to include seismic data processing and imaging. The rest of ION’s data processing business, including ION’s land data processing capabilities in support of its 3D ResSCAN land programs, is unaffected by this transaction. ION’s Denver processing group has completed nearly 400 subsurface imaging projects since 2003 for customers that include some of the largest international and independent E&P companies in the world. The Denver team specializes in
“hard rock” processing in structurally complex geologic environments, ranging from Bolivia to the Alaskan North Slope.

Accenture to acquire Schlumberger Business Consulting

Accenture has entered into an agreement to acquire Schlumberger Business Consulting (SBC), the management consulting unit of Schlumberger. SBC provides consulting services in strategy; operations; people and transformation; capital projects; and mergers and acquisitions. Founded in 2004, SBC has grown rapidly to become a global consulting firm, with over 250 consultants operating from nine offices worldwide. Following completion of the acquisition, all of the SBC employees and associated knowledge assets are expected to join Accenture and become part of Accenture Strategy. Terms of the acquisition were not disclosed.

Lukoil sells Kazakh assets to Sinopec for $1.09 billion

Lukoil has closed a deal to sell its 50% share in Caspian Investments Resources to China’s Sinopec. The required permits from the state authorities of
 the Republic of Kazakhstan were acquired in late July. According to the contract, Lukoil receives $1.087 billion. Caspian Investments Resources has been participating in the development of five hydrocarbon fields in Kazakhstan—Alibekmola and Kozhasai in the Aktyubinsk region; and Karakuduk, North Buzachi and Arman in the Mangistau region. Lukoil joined these projects in December 2005. Over the last decade, more than 1,600 wells were drilled, oil production capacities were expanded, injection systems were upgraded, and a series of associated petroleum gas utilization facilities was launched. Since 2006, Lukoil’s share of the cumulative production of these fields amounted to over 13 million tonnes of oil and over 300 MMcm of commercial gas. Lukoil continues its participation in oil and gas projects in Kazakhstan, at Tengiz, Karachaganak and Kumkol fields. The company is also a member of the Caspian Pipeline Consortium.

EXPLORATION

Gulf of Mexico lease sale yields puny revenue to Feds

Officials at the U.S. Bureau of Ocean Energy Management (BOEM) may be wondering why they bothered to hold Western Gulf of Mexico Lease Sale 246 on Aug. 19. The sale drew only $22.7 million in high bids for tracts on the U.S. Outer Continental Shelf offshore Texas. This is slightly more than one-fifth the amount that was held for a similar auction a year ago, Western Gulf of Mexico Lease Sale 238, which netted the federal government $109.9 million in high bids. The effects of low oil and gas prices on industry participation were clearly evident. Only five operators participated vs. 14 a year ago, and they submitted just 33 bids compared to 93 in Sale 238. Those bids were for 33 tracts (vs. 81 a year earlier), covering about 190,080 acres (as opposed to 433,822 acres in Sale 238). Officials have to be very disappointed, considering that Sale 246 offered 4,083 unleased blocks, covering about 21.9 million acres, located from nine to 250 nautical miles offshore, in water depths ranging from 16 ft to more than 10,975 ft. 

U.S. clears Shell to drill into Arctic oil-bearing zones

The U.S. Bureau of Safety and Environmental Enforcement (BSEE) announced on Aug. 17 that Shell had received approval, of one Application for Permit to Modify (APM), to conduct exploratory drilling into potential oil-bearing zones offshore Alaska at one of the wells—Burger J—at the company’s Burger prospect. The company remains limited to the top section of its second well, Burger V. Shell submitted the APM, on Aug. 6, to modify the Burger J Application for Permit to Drill (APD), which previously restricted Shell from drilling into oil-bearing zones, since a capping stack was not on hand and deployable within 24 hr, as required by BSEE. The capping stack is now in the region and capable of being deployed within 24 hr. Shell is still prohibited from simultaneously drilling at Burger J and V. 

Schlumberger launches survey in Mexico’s Campeche basin

Schlumberger has expanded its Gulf of Mexico multi-client, wide-azimuth seismic data portfolio with the launch of a new survey in the Campeche basin. The survey will cover 80,000 km², using two fleets of WesternGeco vessels. “We have begun acquisition of high-quality seismic images of the Campeche basin, which, when combined with advanced modeling and interpretation, will help our customers identify new exploration opportunities and minimize risk,” said WesterGeco President Maurice Nessim. Following completion of the acquisition program in early 2016, customers will have access to high-quality images to support future appraisal campaigns in this frontier play.

PRODUCTION

KrisEnergy brings Wassana field online

KrisEnergy Ltd. has initiated oil production from Wassana oil field on the G10/48 concession in the Gulf of Thailand. Wassana production should reach a peak rate of approximately 10,000 bopd, as additional development wells are drilled and completed by the Key Gibraltar jackup. Up to 15 development wells are planned—14 producers and one water disposal well. The Wassana infrastructure comprises a mobile offshore production unit, a mooring buoy and the Rubicon Vantage FSO. The G10/48 contract area covers 4,696 km² over the Southern Pattani basin, in water depths down to 60 m. 

Alvheim production exceeds expectations

Accumulated oil production from the Alvheim area offshore Norway has passed the 300-MMbbl mark, Det Norske reported in August. Average daily production from the 25 producing wells in the greater Alvheim area is around 100,000 boe, of which about 90% is oil. “The field has delivered excellent results and been further developed with new wells and fields since the start-up in June 2008. The positive development does not end here, because there are still remaining resources to exploit in the area,” said Geir Solli, Det Norske’s senior V.P. of operations. Alvheim is the name of Det Norske’s core area of production, and the production vessel at the field.

Gazprom Neft brings new well online at Prirazlomnoye field

Solidifying its role as an Arctic producer, Gazprom Neft has brought its second well into production at Prirazlomnoye field, with output totaling 1,800 t/day, on the Russian Arctic Shelf. The launch of this facility will see production increase more than two-fold in comparison with 2014 output levels at Prirazlomnoye, which stood at 300,000 mt. The depth of the new well extends to more than 4,500 m, with drilling undertaken by Gazprom Burenie LLC. Altogether, the project envisages 36 wells being brought into production, including 19 production wells, 16 re-injection wells, and one absorption well. 

DISCOVERIES

PPL reports gas, condensate discovery

Pakistan Petroleum Limited (PPL), operator of the Gambat South Block with a 65% working interest, has announced another gas and condensate discovery at its Kabir X-1 exploration well in Sanghar District, Sindh, Pakistan. Kabir X-1 was spudded on April 24 and reached final depth, 4,020 m, on June 28. Based on wireline logs, potential hydrocarbon-bearing zones were identified in the Basal Sand of the Lower Goru formation. During initial well testing, Kabir X-1 flowed at 1.94 MMcfgd along with 253 bcpd on a 16/64-in. choke. Well testing is underway to evaluate the potential of the discovery, PPL said in a statement on Aug. 21.

Lundin finds oil in Luno II North prospect

Lundin Norway has struck oil at its Luno II North prospect, offshore Norway. Exploration well 16/4-9 S is in a separate sub-basin northwest of Luno II. The well is on the southwestern flank of the Utsira High, approximately 15 km south of Lundin Petroleum-operated Edvard Grieg field and 4 km northwest of the Luno II discovery well. The well encountered a gross oil column of 23 m in reasonable-quality Jurassic/Triassic conglomeratic sandstones. The pressure data indicate that the petroleum system in the Luno II North discovery is different from that seen in the Luno II discovery. Extensive data acquisition and sampling were carried out in the reservoir. The gross contingent resource range for the Luno II North find, representing the southern part of the prospect, is estimated to be 12 MMboe to 26 MMboe. While the analysis of the economic viability of the various development concepts is ongoing, one possible development solution could be a combined Luno II and Luno II North subsea tie-back to Edvard Grieg field. Luno II is estimated to contain a gross contingent resource range of between 27 MMboe and 71 MMboe.

BUSINESS

OneSubsea to supply 15,000-psi subsea pump system

OneSubsea, a Cameron and Schlumberger company, has been awarded a contract to supply subsea processing systems for Shell Offshore’s Stones development in the Gulf of Mexico. The award follows a Technology Qualification Program and will deliver the industry’s first 15,000-psi subsea pumping system, to be installed at a water depth of about 9,500 ft. The subsea processing systems’ scope of supply includes a dual pump station, with two 3-MW, single-phase pumps and two subsea control modules, a topside power and control module, a barrier-fluid hydraulic power unit with associated spares, as well as installation and maintenance tools. Manufacturing and testing will take place at OneSubsea’s processing center of excellence facility in Horsøy, Norway. The system, which will be tied back to the Stones FPSO, is expected to be ready for delivery in early 2018.

CNOOC, Roc sign South China Sea PSCs

China National Offshore Oil Corp. (CNOOC) has signed two production sharing contracts (PSCs) with Roc Oil (China) Company for Blocks 16/07 and 03/33 in the South China Sea. The blocks are in the Pearl River Mouth basin. Block 16/07 covers 2,743 km² and has a water depth of approximately 100 m. Block 03/33 covers 2,367 km² and has a water depth of 65 m to 145 m. According to the terms of the PSCs, Roc shall act as the operator during the exploration period, and conduct exploration activities in the two blocks, in which all expenditures incurred will be borne by Roc. Once entering the development phase, CNOOC has the right to participate in up to 51% of the working interest in any commercial discoveries on the blocks.

Cobalt sells interest in Angolan blocks for $1.75 billion

Sonangol and Cobalt International Energy have signed a sale-and-purchase agreement, whereby Sonangol will acquire all of Cobalt’s 40% participating interest in Blocks 21/09 and 20/11 offshore Angola for $1.75 billion. The agreement provides for a smooth transition to a new operator and underscores the parties’ commitment to attain the final investment decision for the Cameia development in Block 21/09 by year-end 2015, in order to deliver first oil from Cameia in 2018. Notwithstanding Cobalt’s continuing as operator for an interim period, all costs going forward will be borne by Sonangol. This transaction, which has an effective date of Jan. 1, 2015, is subject to customary Angolan government approvals, which are expected prior to the end of the year. Image: Cobalt.

Wood Group wins major Shell Gabon contract

Wood Group has received a letter of award for a new five-year, multi-million-dollar contract with Shell, to provide services to four onshore oil fields in Gabon. Wood Group PSN (WGPSN) will deliver integrated engineering, construction, maintenance and industrial services to the Rabi, Gamba, Toucan and Koula assets.