GENERAL INTEREST Quick Takes
Shell to buy Total’s deepwater Brunei unit
Royal Dutch Shell PLC has agreed to the purchase by one of its subsidiaries of Total E&P Deep Offshore Borneo BV, which holds an 86.95% interest in exploratory Block CA1 offshore Brunei for $300 million. The block, more than 100 km offshore, covers 5,850 sq km in 1,000-2,500 m of water. Total is operator. Other interests are Murphy Oil, 8.05%, and Petronas, 5%.
Total, of which the company to be acquired is a wholly owned subsidiary, said the deal is part of a program to sell $5 billion of noncore assets during 2019-20. Another subsidiary, Total E&P Borneo BV, operates Block B, 50 km offshore, as a 37.5% partner in a joint venture with Shell Deepwater Borneo Ltd., 35%, and PB Expro, 27.5%.
Mahararajalela Jamalulalam field on Block B has produced natural gas and condensate since 1999.
Qatar Petroleum new operator of two fields
Qatar Petroleum has become operator of Idd El-Shargi North Dome and Idd El-Shargi South Dome oil fields off Qatar, replacing Occidental Petroleum of Qatar Ltd. Oxy’s development and production sharing agreements for the fields expired Oct. 6.
Qatar Petroleum announced last year it would become operator of Idd El-Shargi North Dome field, discovered in 1960 about 85 km off Doha (OGJ Online, Oct. 15, 2018). The companies later agreed on transfer of the other field.
Oxy held 100% working interests. Its net shares of production last year were 50,000 boe/d from Idd El-Shargi North Dome and 5,000 boe/d from Idd El-Shargi South Dome.
Trump nominates Brouillette as next Energy Secretary
US President Donald Trump nominated Deputy US Energy Sec. Dan R. Brouillette to be Energy Secretary, succeeding Rick Perry, who said he would resign by the end of the year.
Prior to becoming Deputy Energy Secretary in 2017, Brouillette was senior vice-president and head of public policy at USAA, the nation’s leading provider of financial services to the US military community, and a vice-president at Ford Motor Co., where he led the automaker’s domestic policy teams and served on its North American operating committee.
His previous federal government positions included chief of staff on the US House of Representatives’ Energy and Commerce Committee and Assistant US Energy Sec. for Congressional and Intergovernmental Affairs from 2001 to 2003. He also is a former state energy regulator, having served as a Louisiana State Mineral and Energy Board member from 2013 to 2016.
PwC survey notes near-term Irish pessimism
Pessimism has surged about the next 2 years in the Irish oil and gas industry after the government’s announcement of a ban on future oil licensing, according to an annual survey by PwC Ireland (OGJ Online, Sept. 25, 2019). But optimism remains high about future oil and gas discoveries.
Ireland produces small amounts of natural gas offshore.
The share of PwC survey respondents rating the Irish oil and gas industry’s 2-year outlook unfavorable jumped to 79% from 22% in last year’s survey. Yet 58% of respondents this year said they’re optimistic about petroleum reserves yet to be discovered, compared with 51% last year.
The survey, conducted during autumn, included Irish and international companies involved with oil and gas production, exploration, and services in the country. The share of respondents expecting to continue Irish exploration increased to 57% this year from 49% last year.
And all respondents this year said they plan some investment in Irish exploration during the next 2 years. Last year, 16% of respondents said they planned no near-term investment.
Ronan MacNioclais, lead partner in PwC’s Ireland Oil and Gas practice, cited increased uncertainty about the global economy and the government’s move against oil exploration, which he said “has caused major concern and uncertainty in the industry.”
Total building third Japanese solar park
A wholly owned Total subsidiary has started construction of its third and largest solar plant in Japan. Total Solar International is building the 52-Mw capacity Miyagi Osato Solar Park plant at Osato, Miyagi Prefecture. Start-up is due in 2021.
Miyagi Osato Solar Park GK will operate the plant. It’s a special purpose company owned by Total Solar, 90%, and SB Energy Corp., a Japanese subsidiary of SoftBank Group, 10%. Other Total Solar plants in Japan are Miyako Solar Park, 25 Mw, and Nanao Power Plant, 27 Mw (OGJ Online, June 3, 2019).
Exploration & Development Quick Takes
Gas find opens play off Mauritania-Senegal
The BP Orca-1 exploration well has opened a new play in the inboard gas trend offshore Mauritania and Senegal, reports Kosmos Energy (OGJ Online, Sept. 23, 2019).
Targeting a previously untested Albian play, the well encountered 36 m of net gas pay in “excellent quality reservoirs,” Kosmos said. Drilled to 5,266 m MD in 2,510 m of water about 125 km offshore Mauritania, the Orca-1 also extended the existing Cenomanian play fairway by confirming 11 m of net gas pay downdip of the Marsouin-1 discover well on the crest of the anticline. Kosmos estimated gas initially in place at Orca-1, 7.5 km from the anticline crest, at 13 tcf.
“We believe the Orca-1 and Marsouin-1 have derisked up to 50 tcf of gas initially in place from the Cenomanian and Albian plays in the BirAllah area, more than sufficient resource to support a world-scale LNG project,” Kosmos said in a press release.
A deeper, untested Aptian play has been identified in the area. Interests are BP, operator, 62%; Kosmos, 28%; and SMHPM, 10%.
Valeura to test Devepinar-1 well in Turkey
Valeura Energy Inc., Calgary, will begin testing the Devepinar-1 well in the Thrace basin of Turkey after a fourth test of its Inanli-1 well flowed natural gas and condensate (OGJ Online, Sept. 26, 2019). The fourth test targeted Eocene Kesan sandstone at 3,681-3,723 m, a gross section interpreted to have 37.6 net sand with porosity above 3% and average porosity of 6.8%.
With artificial lift to assist clean-up after placement of 100 tonnes of proppant, the well was flowed for 10 days. Average net gas output was 306 Mcfd with flow over the final 24 hr of 1.71 Mcfd. The test yielded condensate at the rate of 23 bbl/MMcf of gas, with 97 bbl/MMcf in the last 24 hr.
Water production was 98 b/d in the last 24 hr and declining.
A planned fifth test of shallower zones will not occur, Valeura said, to ensure the well can be reentered.
With partner Equinor, Valeura is assessing potential of a basin-centered gas accumulation with the Yamalik-1, Inanli-1, and Devepinar-1 wells.
In Devepinar-1, 20 km west of Inanli-1, it will concentrate on testing deeper zones. The well had higher porosities than the Inanli and Yamalik wells through the target reservoir and will be the first deep well to be stimulated and tested in the western end of the basin.
Vaalco: Discovery confirms Etame upside potential
Vaalco Energy Inc., Houston, said operations are under way to plug back to a shallower depth and drill the Etame 9H horizontal development well in the Gamba reservoir after encountering Gamba and Dentale oil sands from the Etame 9P appraisal well.
Drilled to 10,260 ft TD, the well targeted the subcropping Dentale reservoir beneath the Vaalco-operated Etame field offshore Gabon (OGJ Online, Sept. 13, 2019).
The discovery verifies the presence of a Dentale oil column first identified in the Etame 4V well drilled in 2001, the company said. It encountered 35 ft of good-quality Dentale oil sands with 27% porosity and 3,000 md of permeability.
Vaalco estimates gross recoverable oil resources of 2.5-10.5 million bbl of oil present in subcropping Dentale reservoirs. The identified oil column was thicker than expected in the Gamba reservoir, which may result in higher ultimate oil recovery from the planned Etame 9H and Etame 11H, the company said.
Vaalco did not encounter hydrogen sulfide in either the Gamba or Dentale reservoirs.
Completion of Etame 9H is delayed into December as the company retrieves drill pipe and tools lodged in the wellbore after reaching total depth.
The company will assess the viability of drilling future Dentale development wells “as we aim to extend the overall life of the field by continuing to add reserves and production,” said Vaalco Chief Executive Officer Cary Bounds.
Woodside reaches FID for Pyxis hub project
Woodside Petroleum Ltd., Perth, has reached a final investment decision for its Pyxis hub project in the Carnarvon basin offshore Western Australia. The development includes the subsea tieback of the Pyxis, Pluto North, and Xena-2 infill wells in production license WA-34-L.
Peter Coleman, Woodside’s chief executive officer, said the development will support the future operation of the Pluto LNG project as well as the Pluto North West Shelf pipeline interconnector between the Pluto and North West Shelf LNG plants on the Burrup Peninsula and Woodside’s broader Burrup Hub vision.
The latter vision includes the development of the Browse basin gas fields and the Scarborough gas fields via connections to the Burrup plants.
In line with the Pyxis FID, Woodside has let TechnipFMC what it is calling a “significant” contract ($75-250 million) for the development of Pyxis and Xena fields.
The contract involves integrated engineering, procurement, construction, and installation where Technip FMC will design, manufacture, deliver, and install subsea equipment including a subsea production system, flexible flowlines, and umbilicals.
The contract is the first call-off under the recently executed 5-year frame agreement between TechnipFMC and Woodside. This agreement enables collaborative development of projects for Woodside through early engagement and utilization of TechnipFMC integrated execution solutions.
Drilling & Production Quick Takes
Chiswick well lifts Greater Markham flow
Spirit Energy doubled natural gas production from the Greater Markham Area straddling the UK and Dutch borders in the southern North Sea with a new well in Chiswick field.
The C5Y well added 25 MMscfd of production, bringing Greater Markham output to 50 MMscfd.
The Noble Hans Deul jack-up rig will return to the area later this year for unspecified work on the C4 well that will further boost flow from Chiswick.
In addition to Chiswick, the Markham hub includes Markham, Grove, and Kew fields.
The Markham J6A platform is the staffed processing hub for the area. It’s a six-legged, steel-jacket structure installed in 1991. Gas and condensate flow from it via the WGT pipeline and extension to the onshore terminal at Den Helder, Netherlands, for separation, conditioning, and distribution.
Chiswick and Grove are normally unstaffed installations.
The C5Y is the fifth well drilled at Chiswick and the first since 2010. Spirit holds a 100% interest.
Chiswick, discovered in 1984, and Grove, discovered in 1971, started production in 2007.
Kew field, discovered in 1988, started production in January 2014 as a tie-back to Chiswick.
Atrush field reaches 45,000 bo/d in Kurdistan
Total oil production from Atrush field in Iraq’s Kurdistan region has reached 45,000 b/d, reported Vancouver, BC-based ShaMaran Petroleum Corp., holder of a 27.6% working interest in Atrush block.
The field, which lies 85 km northwest of Erbil, is one of the largest new oil developments in the region. First discovered in 2011, the field began oil production in July 2017 (OGJ Online, July 3, 2017). After 2 years of production Atrush field has produced 17 million bbl of oil, all of which has been sold to the Kurdistan regional government.
ShaMaran maintains its Atrush average production guidance for this year of 30,000-35,000 bo/d with target exit rates reaching 45,000-50,000 bo/d.
“The installation and commissioning of the early production facility, on an accelerated basis, at the Chamanke-E drilling location allowed for additional processing capacity to be available ahead of schedule and bringing online the increased well capacity from the year-to-date well drilling and workover program. We look forward to continuing further upward on this path,” said ShaMaran Pres. and Chief Executive Officer Adel Chaouch.
Transocean says semi features hybrid storage
Transocean Ltd. has deployed what it calls the first hybrid energy storage system aboard a floating drilling unit. The system is on the Transocean Spitsbergen harsh-environment, ultradeepwater, semisubmersible drilling rig, which is working currently in Equinor-operated Snorre field offshore Norway.
Transocean said its patented hybrid power technology, developed in partnership with Aspin Kemp & Associates, reduces fuel consumption and increases reliability of a dynamically positioned rig by capturing energy generated during normal rig operations.
The energy is stored in batteries and used to power the rig’s thrusters. This operational and safety enhancement targets a 14% reduction in fuel use during normal operations, leading to a reduction in air emissions.
Paleo plans Joffre residual oil production
Paleo Resources Inc., Calgary, has identified two suspended wells it operates in the Joffre D-3 B Pool in Alberta as residual-hydrocarbon recompletion candidates after testing oil and gas in a third well.
During a 72-hr test, the Paleo 9-22 well flowed naturally at average rates of 231.27 b/d of oil and 462.63 Mcf of gas with 63.07 b/d of water from perforations at the top of the Late Devonian Leduc formation at 2,163-67 m.
The well established the current water contact in the Leduc D-3 B Pool reservoir and confirmed the remaining thickness of the oil column by electric logs and production testing.
The company said the two suspended wells penetrated the remaining oil column but were perforated below the residual 12.36-m oil column.
It plans to seek permits for and install expanded sour service production facilities to handle oil and gas from the wells.
Logs indicated an earlier Paleo Resources well on the Joffre B Pool lease, 103/09-22-039-26W4M/0, penetrated 5 gross m of residual hydrocarbon-bearing Leduc formation. The well encountered the top of porosity in the formation 7.36 m below the highest well drilled in the field.
The operator said Joffre B Pool wells have produced 6 million bbl of oil and 9 bcf of gas from the Leduc formation since 1986.
PROCESSING Quick Takes
Alberta adjusts downstream investment aid
Provincial assistance for the diversification of petrochemical feedstocks will continue in Alberta as the government ends incentives for petrochemicals feedstock infrastructure and partial upgrading of bitumen.
The feedstock diversification program offers royalty credits to large, privately funded projects that convert ethane, methane, or propane into plastics, fabrics, and fertilizers.
A second round of the program that began last year committed $1.1 billion to diversification projects, applications for which were suspended after confirmation of $150 million of assistance (OGJ Online, Mar. 13, 2018).
Minister of Energy Sonya Savage and Associate Minister of Natural Gas Dale Nally, whose United Conservative Party won control of the Alberta government last April, on Oct. 23 confirmed the feedstock diversification program will continue with resumption of decision-making on existing applications.
To be discontinued are the Petrochemicals Feedstock Infrastructure Program and Partial Upgrading Program, which a press release said “carry a higher financial risk to government and ultimately to Albertans.”
The government also will not continue with a request for proposals for refinery projects, “which would have also included potential government support.”
Aramco advances naphtha complex at Ras Tanura
Saudi Aramco has completed delivery and installation of major equipment as part of its previously announced clean-fuels project under implementation at its 550,000-b/d Ras Tanura refinery in Saudi Arabia’s Eastern Province, along the Persian Gulf (OGJ Online, Jan. 13, 2017).
Now installed, the 544-tonne naphtha-splitter column is the main feeder to the refinery’s new naphtha complex, which will include the world’s largest continuous catalytic reforming (CCR) and isomerization units—with a total operating capacity of 90,000 b/d and 65,000 b/d, respectively—as well as a new 138,000-b/d naphtha hydrotreater, Aramco said.
The naphtha-splitter column will split hydrotreated naphtha into light and heavy naphtha for the naphtha hydrotreating unit, as well as control the benzene precursors, which will then be sent to the isomerization unit.
The column’s objective is to prepare the feeds to downstream units to meet the acceptable level of the impurities in the feed to the new CCR and isomerization units, according to Aramco.
The clean-fuels project aims to support Aramco’s corporate objective of effectively supplying diesel and gasoline products that comply with future Aramco gasoline and diesel quality specifications conforming to Euro-5 fuels quality standards.
India easing oil marketing requirements
India is relaxing entry requirements for retail marketers of gasoline and diesel.
The Cabinet Committee on Economic Affairs approved changes to a 17-year-old policy covering authorization to market transportation fuels “to bring it in line with the changing market dynamics and with a view to encourage investment from private players, including foreign players, in this sector.”
Among changes is a lowering of the required net worth of foreign applicants to the rupee equivalent of $35 million, one-eighth its former level. Also, a requirement that investors in retail oil marketing be oil and gas companies has been eliminated.
BASF advances capacity expansion at Antwerp complex
BASF SE is moving forward with its previously announced plan to expand production capacity of ethylene oxide (EO) and EO derivatives at subsidiary BASF Antwerpen NV’s Verbund manufacturing site in Antwerp, Belgium (OGJ Online, July 24, 2018).
At a total investment amounting to more than €500 million, the expansion will add a second large EO plant at the site to increase production capacity by about 400,000 tonnes/year, as well as involve additional investments in various installations for EO derivatives, including nonionic surfactants, glycol ethers for automotive applications, and other alkoxylates, BASF said.
Phased start-up of the expansion is scheduled for 2022.
The expansions come as part of BASF’s plan to further strengthen its backward integration into EO to support continued growth of its customers in downstream markets.
In Europe, BASF—the largest producer of EO derivatives in the region—operates EO plants with a combined capacity of 845,000 tonnes/year in Antwerp and Ludwigshafen in Rhineland-Palatinate, Germany.
TRANSPORTATION Quick Takes
Mubadala agrees to invest in NextDecade
NextDecade Corp., Houston, will receive a capital boost from Mubadala Investment Co., sovereign investment firm of Abu Dhabi, as it moves toward a final investment decision on the Rio Grande LNG project in Brownsville, Tex. (OGJ Online, Sept. 18, 2019).
The companies have agreed to the purchase by Mubadala of $50 million of NextDecade common stock in a private placement.
NextDecade awaits final approval by the Federal Energy Regulatory Commission for its 27-million-tonne/year Rio Grand project, which will liquefy natural gas from the Permian basin and Eagle Ford shale. It expects to make a final decision about project investment in the first quarter next year.
It’s working with Enbridge Inc. on the possible construction of the Rio Bravo Pipeline, twin 42-in. pipelines to carry as much as 4.5 bcfd of natural gas 137 miles from the Agua Dulce area of Texas to Rio Grande LNG.
NextDecade also has made initial federal regulatory filings for a 16.5-million-tonne/year liquefaction plant proposed at Texas City called Galveston Bay LNG.
Plaquemines LNG gets DOE non-FTA export approval
Venture Global Plaquemines LNG LLC has received US Department of Energy approval for exports of domestically produced LNG to any country with which the US does not have a free trade agreement but with which trade is not prohibited. The company’s 20 million-tonne/year liquefaction plant will be on the Mississippi River, in Plaquemines Parish, La., about 20 miles from the Port of New Orleans.
Under the order, Plaquemines LNG will have authority to export up to 3.4 bcfd of natural gas as LNG. The US Federal Energy Regulatory Commission authorized Plaquemines LNG to site, construct, and operate the plant on Sept. 30.
The plant will use 18 1.2 million-tpy liquefaction blocks developed in two phases and four 200,000-cu m storage tanks. It will also include as many as three marine loading berths capable of receiving LNG carriers up to 185,000 cu m capacity. Plaquemines LNG plans to begin commercial operations of Phase 1 in late 2022 and Phase 2 in 2023.
Including today’s announcement, DOE has approved 38.06 bcfd of exports in the form of LNG and compressed natural gas to non-FTA countries. Of this approved amount, about 15 bcfd of export capacity is in various stages of operation and construction across eight large-scale projects. Among the LNG export projects currently under construction is Venture Global’s Calcasieu Pass project, which recently reached a final investment decision after having received its final regulatory approvals from FERC and DOE earlier this year.
LNG exports from the US have reached 5 bcfd.
