GENERAL INTEREST Quick Takes
Chevron shuts production from Tamar field offshore Israel
Chevron Mediterranean Ltd. has suspended production from Tamar gas field in the southeastern Mediterranean due to violence stemming from the attack of Israel by Hamas the first weekend in October.
“Due to the situation, the security establishment ordered to temporarily stop the supply of natural gas from the Tamar reservoir, and the economy’s energy needs will be met with other fuels,” Israel’s energy ministry said in an update Oct. 10.
In a situation assessment notice, the Director General of the Ministry of Energy and Infrastructure, Kobi Blitstein, emphasized that the top priority is connecting the disconnected customers to electricity.
The 100-sq km Tamar reservoir lies 90 km west of Haifa about 5,000 m subsea. Natural gas is extracted through six production wells, which each produce 7.1-8.5 million cu m/day of gas. The natural gas flows through two 140-km pipelines to the Tamar platform where most of the gas processing takes place. Gas is then transmitted via pipeline to the onshore terminal in Ashdod, and into the Israeli market through the INGL national gas pipeline with a portion exported to Jordan and Egypt.
“Under the guidance of Minister Israel Katz, the Ministry is constantly working to ensure the functional continuity of the energy sector, in all its parts. We continue to closely monitor the events and prepare for all scenarios, in coordination with the relevant ministries and the various bodies,” Blitstein continued.
TotalEnergies sells 40% interest in Angola Block 20 to Petronas
TotalEnergies EP Angola Block 20 has finalized the sale of 40% interest in Block 20 in the Kwanza basin in Angola to Petronas Angola E&P Ltd. (PAEPL) for $400 million.
TotalEnergies remains operator of the block with 40% interest. Partners are PAEPL (40%) and Sonangol Pesquisa e Produção SA (20%.
Block 20 contains the Cameia and Golfinho oil discoveries, which lie around 150 km southwest of Luanda. The discoveries are expected to be developed through a system of subsea wells connected to a floating production, storage, and offloading (FPSO) with an oil production capacity of 70,000 b/d, which will be the seventh FPSO developed by TotalEnergies in Angola.
The project will include technologies to minimize green house gas emissions and the infrastructure will be designed for zero flaring, with the associated gas entirely reinjected into the reservoirs, the operator said.
Blocks 21/09 and 20/15 were merged into Block 20/11 (Block 20) by presidential decrees in July 2023.
Civitas adds Permian basin assets in $2.1-billion deal with Vencer Energy
Civitas Resources Inc., Denver, agreed to acquire oil producing assets in the Midland basin in Texas from Vencer Energy LLC, the upstream arm of trader Vitol, in a cash and stock deal valued at $2.15 billion. In a release Oct. 4, Civitas said the deal increases its Permian basin scale and balances the portfolio between premium Permian basin and Denver-Julesburg (DJ) basin positions.
Civitas entered the Permian basin earlier this year through separate agreements with affiliates of Hibernia Energy III LLC and Tap Rock Resources LLC.
The deal with Vencer will add about 44,000 net acres in the Midland basin across five counties with current production of about 62,000 boe/d (50% oil). Pro forma for the acquisition, Civitas’ 2024 estimated Permian basin production is expected to be about 170,000 boe/d (50% oil).
With the deal, Civitas would gain an estimated 400 gross development locations primarily in the Spraberry and Wolfcamp formations.
At closing, expected in January 2024, Civitas expects to hold more than 1,200 high-quality oil development locations in the Permian basin.
Vencer is currently running three rigs on the Midland basin assets and Civitas expects to reduce the rig count to two in 2024, said Jefferies analysts in an equity research note Oct. 4. In 2024, Civitas expects to run four rigs in Midland basin, two in Delaware basin, and two in DJ basin. Further, Jefferies said, based on Civitas guidance, it expects the operator to maintain its 149 gross well pace in the DJ basin and complete 97 wells in Midland basin and 46 wells in Delaware basin.
Vencer Energy acquired the assets from Hunt Oil Co. in 2021.
With the added assets, Civitas expects its 2024 total company production will be 325,000–345,000 boe/d and total capital expenditures will be $1.95–2.25 billion.
Suncor to acquire TotalEnergies’ Fort Hills oil sands assets
Suncor Energy, Calgary, has agreed to purchase TotalEnergies EP Canada Ltd., which holds a 31.23% working interest in the Fort Hills oil sands mining project and associated midstream commitments, for $1.468 billion (Can.) (US$1.1 billion).
The acquisition adds 61,000 b/d of net bitumen production capacity and 675 million bbl of proved and probable reserves to Suncor’s existing oil sands portfolio.
For months, the companies had been evaluating what remained of a previous deal Suncor struck with TotalEnergies in which Suncor would have acquired the Fort Hills asset interest plus Surmont in situ assets.
That particular deal was halted by a preemption right to TotalEnergies’ 50% interest in Surmont exercised by ConocoPhillips in June for $4 billion (Can.) (US$3.0 billion) plus contingent payments (OGJ Online, June 5, 2023; Apr. 27, 2023). The deal between ConocoPhillips and TotalEnergies closed today, Oct. 4. ConocoPhillips now owns 100% of Surmont and will continue as operator.
Upon closing of the deal, expected before end-2023, Suncor will own 100% of Fort Hills, which along with its 100% ownership of Firebag and MacKay River in-situ assets, provides the company with additional long-life, physically integrated bitumen supply to maximize the utilization of its wholly owned Base Plant upgraders post the end of the Base Mine life.
Exploration & Development Quick Takes
Kosmos Energy discovers oil in Gulf of Mexico Tiberius exploration well
Kosmos Energy discovered oil in the US Gulf of Mexico at the Tiberius exploration well in about 7,500 ft of water and will undertake rock and fluid analysis to confirm the production potential of the reservoir.
The operator will work with partners on subsea development options. The discovery is about 6 miles southeast of the Occidental-operated Lucius SPAR production platform, enabling a short tie-back in the event of a development.
Tiberius was drilled to a total vertical depth of about 25,800 ft. The well tested a four-way structural trap in the outboard Wilcox trend in Keathley Canyon block 964 and encountered about 250 ft of net oil pay in the primary Wilcox target.
Wireline logging is complete, and casing is currently being run to the target depth to enable the well to be used as a future oil producer.
Kosmos is operator of the well (33.34%) with partners Occidental Petroleum Corp. (33.33%) and Equinor ASA (33.33%).
GeoPark, Hocol find hydrocarbons onshore Colombia
GeoPark Ltd. and Ecopetrol subsidiary Hocol encountered hydrocarbons in a second oil well drilled in Llanos basin in central Colombia.
The well, Toritos 1, is part of Block Llanos 123, in the Meta department, where GeoPark serves as operator in the 50-50 partnership.
The well, drilled in rural Cabuyaro municipality, reached total depth in September. Hydrocarbons were found in the Barco (Guadalupe) and Gachetá formations, the companies said in a joint release.
The companies have initiated the testing phase, and the well is producing about 1,400 b/d of heavy crude oil with an API gravity of 14 degrees from the Barco (Guadalupe) formation.
The discovery follows an August discovery in the Saltador 1 well, which produces about 765 b/d of oil.
In total, production from Block Llanos 123 exceeds 2,100 b/d of oil, the companies said.
GeoPark and Hocol expect to obtain permits to begin drilling the Bisbita Centro 1 exploration well before yearend.
bp lets subsea pipeline completion contract
bp PLC has let a contract to Allseas to complete subsea pipelay for the ultra-deepwater Greater Tortue Ahmeyim (GTA) natural gas project on the maritime border between Mauritania and Senegal.
The contract covers installation of about 75 km outstanding on the two 16-in. export pipelines with field termination assemblies (FTAs) in water depths of 1,500-2,800 m, and four 10-in. CRA infield lines with FTAs up to 2 km long in 2,800 m of water.
Allseas will undertake GTA offshore pipelay works early December 2023 using the construction vessel Pioneering Spirit which has 2,000-tonne tension holding capacity. Installation support will be provided by Allseas’ offshore construction support vessel Oceanic.
bp and Allseas commercial and engineering teams designed the installation with a J-lay solution. To install the 10 FTAs, Pioneering Spirit will be fitted with a special 1,000-tonne J-mode installation frame, designed in-house and built at Allseas’ Heijningen fabrication yard in the Netherlands.
GTA is 120 km offshore in water depth of 2,850 m and holds estimated gas resources of 15 tcf. Phase 1 will export gas from four subsea wells to an FPSO about 40 km offshore at which the gas will be processed for export to a 2.3-million tonne/year (tpy) floating LNG plant (Gimi) 10 km offshore.
bp is operator at GTA with partners PETROSEN, Société Mauritanienne des Hydrocarbures (SMH), and Kosmos Energy.
Drilling & Production Quick Takes
Pemex reduces crude oil production target to 1.88 million b/d
Petróleos Mexicanos (Pemex) has lowered its crude oil production target for 2024 to 1.887 million b/d from 1.95 million b/d, director Octavio Romero Oropeza said Oct. 10.
The projection falls below the official’s previous estimate and even further from the 2 million b/d noted by President Andrés Manuel López Obrador.
Speaking before the Chamber of Deputies as part of President Andrés Manuel López Obrador’s Fifth Government Report, Romero Oropeza said crude oil production from January to September amounted to 1.882 million b/d. He estimated that by end-October, production would rise to 1.885 million b/d and reach 1.886 million b/d by end-2023.
Out of the total 1.954 million bbl produced daily in the country, private companies contribute 3%, while the rest is attributed to the Mexican state-owned company, Romero Oropeza said. A similar situation exists in the national gas market, where Pemex holds a 98% market share in Mexico, he said.
The Pemex director said that by the end of López Obrador’s 6-year term in 2024, the company would conclude with the processing of 1.6 million b/d with 320,000 b/d processed through the Olmeca refinery in Dos Bocas, Tabasco state.
ConocoPhillips approved to start Tommeliten A
ConocoPhillips Skandinavia AS has been granted approval by the Norwegian Petroleum Directorate to start-up Tommeliten A gas and condensate field in PL 044 in the North Sea. ConocoPhillips estimates that around 24 million std cu m (150 million bbl) of oil equivalent can be recovered from the field.
Tommeliten A is transboundary southwest of Ekofisk field in the southern part of the Norwegian sector with a marginal share on the UK shelf. The field contains two subsea templates with enough space to accommodate 12 wells. Tommeliten A will include 11 development wells, seven of which will be completed as of start-up. The operator expects to complete the four remaining wells during first-quarter 2024. The twelfth well slot will be reserved as a potential future replacement well.
The wellstream will be routed to Ekofisk for further processing and export. Gas will be exported to Emden in Germany, while oil and wet gas will be routed via pipeline to Teesside in the UK.
ConocoPhillips expects the field to come on stream this month.
OKEA starts production at Hasselmus gas discovery
OKEA ASA started production from the Hasselmus gas discovery on the western edge of the Trøndelag platform in the Norwegian Sea, 7 km northwest of the Draugen platform.
Hasselmus is a subsea tieback to Draugen. A single well (6407/9-9 T2) was drilled on the Hasselmus structure by A/S Norske Shell in 1999 which encountered a 16 m gas column and a 6.8 m oil column in high quality sands at a depth of 1,700 m.
The Hasselmus project is expected to recover about 1.65 billion standard cu m of natural gas and will restart export of associated gas and NGL from Draugen.
PROCESSING Quick Takes
QatarEnergy secures financing for Ras Laffan petrochemicals project
QatarEnergy and Chevron Phillips Chemical Co. LLC (CPChem) have secured $4.4 billion financing for the Ras Laffan petrochemicals project, a world scale integrated polymers complex in Ras Laffan Industrial City, Qatar.
The senior debt financing package is comprised of commercial and Islamic facilities as well as Export Credit Agency financing.
The petrochemicals project is a joint venture between QatarEnergy (70%) and CPChem (30%). Final investment decision was taken in January (OGJ Online, Jan. 9, 2023).
The complex, expected to begin production in late 2026, consists of an ethane cracker with a capacity of about 2.1 million tons/year (tpy) of ethylene. It also includes two polyethylene trains—which will use a CPChem loop slurry process—with a combined output of 1.7 million tpy of high-density polyethylene polymer products. The complex is expected to raise Qatar’s overall petrochemical production capacity to almost 14 million tpy.
The two companies also are constructing a joint venture integrated polymers plant on the Texas Gulf Coast, which is expected to be operational in 2026.
Petrobras’ refineries ramp up utilization in third-quarter 2023
Petróleo Brasileiro SA (Petrobras) boosted utilization of its refineries during third-quarter 2023 to achieve the best performance of its refining business since 2014.
By end-September 2023, Petrobras’ nine refineries reached an overall utilization rate of 97%, marking a second consecutive month to reach that level, the operator said on Oct. 10.
Improved performance of the refining units during August and September increased the total utilization factor (FUT) of the refineries for third-quarter 2023 to 95.8%, the highest FUT since 2014 when the refining system achieved an FUT of 98%.
Petrobras’ 434,000-b/d Refinaria de Paulínia (REPLAN) refinery in Paulínia, São Paulo—Brazil’s largest refinery—broke its utilization record in September, processing the highest volume of crude oil since February 2015, Petrobras said.
REPLAN’s September processing rate averaged 427,000 b/d for total of 12.8 million bbl processed by the month’s end to result in an FUT of 98.4%, according to the operator.
The nine refineries’ production of oil products during third-quarter 2023 also exceeded records, with output of S-10 diesel reaching 464,000 b/d compared to a previous high of 419,000 b/d produced in second-quarter 2023.
The refineries’ third-quarter 2023 production of gasoline increased to 423,000 b/d to hit the refining system’s highest quarterly gasoline output since fourth-quarter 2013.
Petrobras said the refineries’ improved performance and product output during third-quarter 2023 resulted from high operational reliability and availability of the refining units combined with efficient logistics and market service operations, all of which were supported by enhanced technology and process digitalization.
According to the latest data available from the operator, Petrobras—in addition to REPLAN—currently owns and operates its:
- 88,000-b/d Refinaria Abreu e Lima (RNEST) refinery in Ipojuca, Pernambuco, in northeast Brazil.
- 208,000-b/d Presidente Getúlio Vargas refinery (REPAR) in Araucária, Paraná.
- 170,000-b/d Refinaria Presidente Bernardes (RPBC) refinery in Cubatão, São Paulo.
- 252,000-b/d Refinaria Henrique Lage (REVAP) refinery in São José dos Campos, São Paulo.
- 157,000-b/d Refinaria Gabriel Passos (REGAP) refinery—including a set of pipelines of more than 720 km—in Betim, Minas Gerais.
- 201,000-b/d Refinaria Alberto Pasqualini (REFAP) refinery in Canoas, Rio Grande do Sul, in southern Brazil.
- 239,000-b/d Duque de Caxias (REDUC) refinery in the Baixada Fluminense area of Brazil’s Rio de Janeiro state.
- 57,000-b/d Refinaria de Capuava (RECAP) in Mauá, São Paulo.
Sinopec’s Ningbo refinery lets contract for new production unit
China Petroleum & Chemical Corp. (Sinopec) has let a contract to Lummus Technology LLC to license technology for a new petrochemicals unit to be installed at subsidiary Sinopec Ningbo Zhenhai Refining & Chemical Co.’s (NZRCC) 461,890-b/d integrated refining complex in Ningbo City, Zhejiang Province, China.
As part of the Oct. 11 contract, Lummus will deliver licensing of its proprietary Novolen technology for a grassroots unit equipped to produce 500,000 tonnes/year of polypropylene, the service provider said.
Lummus confirmed its scope of work under the order also includes providing basic design engineering of the new polypropylene plant, related project engineering services, and training.
Alongside enabling a sustainable route for polymers production, NZRCC’s implementation of Novolen technology at the new plant will allow the operator flexibility to produce a multigrade slate of polypropylene products at reduced capital and operating costs, Lummus said.
TRANSPORTATION Quick Takes
Equitrans, PHMSA reach Mountain Valley pipeline agreement
Equitrans Midstream Corp. has entered a consent agreement with the US Pipeline and Hazardous Materials Safety Administration (PHMSA) under which its Mountain Valley natural gas pipeline (MVP) team will accelerate both its previously planned series of inline inspections to verify the integrity of the pipeline and the regulatory timeline for conducting comprehensive cathodic protection surveys.
The agreement also acknowledges that transparently outlining the steps being taken to responsibly complete construction is of critical importance in reinforcing public confidence in the pipeline’s safe operation. KTA-Tator Inc. will serve as the project’s independent, third-party coating expert, endorsing MVP’s coating procedures and continuing a comprehensive field audit of its coating activities.
Equitrans said that it does not expect the terms of the agreement to have a material impact on project cost or schedule. The company plans to complete the 303-mile, 2-bcfd pipeline by end-2023.
Earlier this year, the US Court of Appeals for the Fourth Circuit dismissed three lingering lawsuits against MVP. The pipeline, which has faced nearly continuous legal challenges since construction began in 2018, will transmit gas from West Virginia to Mid-Atlantic US markets.
MOL, Petronas, MISC to develop liquefied CO2 carriers
Mitsui OSK Lines Ltd. (MOL) has principally reached an agreement with Petronas CCS Ventures Sdn Bhd, a wholly owned subsidiary of Petroliam Nasional Berhad (Petronas), and MISC Berhad (MISC) for the potential establishment of a joint venture to invest in the development and monetization of liquefied carbon dioxide (LCO2) carriers for carbon capture, utilization, and sequestration (CCUS) projects.
In February 2022, MOL concluded an MOU with Petronas, and in June 2023, obtained approval in principle (AiP) for the design of an LCO2 carrier and floating storage and offloading (FSO). MISC recently became a partner in this collaboration and will cooperate with MOL in the development of various transport methods, mainly LCO2 carriers, as well as the optimal business model for addressing various transport needs in the future, according to the companies.
The 2022 MOU centered on the study of LCO2 for conducting CCUS business within the Asia Pacific and Oceania region. MOL described its role as studying specifications of LCO2 tankers from the standpoint of the entire CCUS value chain with the aim of establishing the optimal means of ocean transport for captured CO2.
Both Det Norsk Veritas AS (DNV) and the American Bureau of Shipping (ABS) earlier this year approved MOL’s LCO2 design. ABS also issued an AiP for the FSO. Both the carrier and the FSO were jointly developed by MOL, Petronas, and the Shanghai Merchant Ship Design & Research Institute.
Petronas, TotalEnergies Carbon Neutrality Ventures, and Mitsui & Co. Ltd. earlier this year agreed to develop carbon storage on the Malay peninsula including both saline aquifers and depleted offshore fields.
Balticconnector natural gas pipeline shuts down
Gasgrid Finland Oy and Estonian gas transmission system operator Elering AS have shutdown operations of the 7.2-million cu m/day (MMcmd) Balticconnector offshore natural gas pipeline between the two countries. The companies noticed an unusual drop in pressure in the pipeline shortly before 2 a.m., Oct. 8, 2023, and suspected a leak, shutting its valves in response.
Investigation is ongoing, with no damage yet confirmed and the cause of any possible damage unknown. Repair could take several months or more, depending on the extent of the damage.
The Finnish gas system is stable and supply has been secured through the 5-billion cu m/year (13.7-MMcmd) Inkoo LNG smaller Hamina LNG terminals, Gasgrid said, adding that the terminals’ combined capacity would allow Finland to meet its gas supply needs even through the coming winter. For the time being, market participants have been instructed to order supplies through the terminals to ensure continuity.
Finland last year took delivery of Excelerate Energy Inc.’s floating, storage and regasification unit Examplar for service as the Inkoo terminal. The vessel is on a 10-year charter with Gasgrid Finland.