GENERAL INTEREST Quick Takes
PGNiG to acquire KUFPEC Norway assets for $445 million
PGNiG Upstream Norway AS, an ORLEN Group company, has agreed to acquire all shares of KUFPEC Norway AS, a subsidiary of Kuwait Foreign Petroleum Exploration Co., for $445 million.
Following the deal’s closing—expected by yearend subject to Norwegian authority approvals—ORLEN Group’s natural gas output in Norway will increase by one-third, reaching over 4 billion cu m/year.
With the deal, PGNiG Upstream Norway adds to its existing interests in Equinor Energy AS-operated North Sea producing fields Gina Krog (30%), Sleipner Vest (10%), Sleipner Ost (9.4%), Gungne (10%), and Utgard (6.2%). Gas produced from these fields will be transported to Poland via the Baltic Pipe pipeline. Daily hydrocarbon production is expected to surpass 100,000 boe by end-2024.
The agreement covers acquisition of all shares in KUFPEC Norway along with all its assets and is expected to increase PGNiG’s recoverable reserves to nearly 400 MMboe. Over 80% of these new resources will consist of natural gas.
Wolf Carbon Solutions withdraws Mt. Simon CCS hub application
Wolf Carbon Solutions US LLC has submitted a motion with the Illinois Commerce Commission (ICC) to withdraw its application to build and operate the 12-million tonne/year (tpy) Mt. Simon Hub carbon capture and sequestration (CCS) project. Wolf intends to update and refile an application with the ICC in early 2024.
The 280-mile Mt. Simon system would transport CO2 from Archer-Daniels-Midland (ADM) Co.’s ethanol and cogeneration sites in Clinton and Cedar Rapids, Iowa, to permanent underground storage at its fully permitted and already-operational sequestration site in Decatur, Ill. The company said it “remains committed” to the project.
The move was taken “to address the questions and concerns raised by ICC staff in their recommendation,” said Dean Ferguson, president of Wolf Carbon Solutions. Among these concerns was what the ICC described as the lack of a final agreement between Wolf and ADM.
Navigator CO2 Ventures in October cancelled its 15-million tpy Heartland Greenway CCS pipeline project, citing “the unpredictable nature of the regulatory and government processes involved” (OGJ Online, Oct. 23, 2023).
Vital Energy promotes Hill to senior VP, COO
Vital Energy Inc., Tulsa, Okla., has promoted Katie Hill to senior vice-president and chief operating officer. Hill has been with Vital Energy since September 2022 and previously served as vice-president of operations.
Hill has more than 15 years of operational experience in the energy exploration and production sector, developing engineering and operational teams, integrating and optimizing acquired assets, and leading multi-basin development programs, the company said in a release Nov. 13.
Prior to joining Vital Energy, she served as senior vice-president of operations at Javelin Energy Partners LLC for 2 years. Prior to Javelin, she served in operational roles at Chesapeake Energy for 8 years. She began her career as an engineer with bp in 2008.
Bolivia approves oil contracts signed by YPFB, Occidental subsidiary
Bolivia’s executive power has enacted laws finalizing three hydrocarbon exploration and exploitation contracts signed in January by state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) and Vintage Petroleum Bolivia Ltd., an Occidental Petroleum Corp. subsidiary, valued at $504.5 million.
Laws 1540, 1541, and 1542, decreed on Nov. 10 and published in the official gazette, validate projects in Tarija, Chuquisaca, and Santa Cruz regions in southern and eastern Bolivia.
Law 1540 pertains to the first contract signed this year between YPFB and Vintage for work in the Sayurenda area in Tarija. The project, through an estimated investment of $57.4 million, targets reserves of 35.5 bcf of natural gas and 2.8 million bbl of oil.
Law 1541 formalizes the contract signed for the Yuarenda area in Tarija. The companies are targeting 171.3 bcf of natural gas and 12.8 million bbl of oil through an investment of $252 million.
Law 1542 is a petroleum project in the Caraidanti area in Chuquisaca, Tarija, and Santa Cruz. The contract estimates Vintage will invest $194 million to recover estimated reserves of 163.1 bcf of natural gas and 10.9 million bbl of oil.
According to the Ministry of Hydrocarbons and Energy, Bolivia could realize total oil income of $1.514 billion if all three projects succeed.
Exploration & Development Quick Takes
Shell confirms gas-bearing reservoir in Egypt’s Mediterranean Sea
Shell Egypt drilled the first well in its Mina West three-well exploration campaign in North East El-Amriya block in the Mediterranean Sea. Primary data confirmed the presence of a gas-bearing reservoir.
Further evaluation of the acquired data is required to determine the size and recoverable potential of the discovery, the company said in a release Nov. 21.
The well was drilled by Stena Drilling’s Stena Forth mobile offshore drilling unit (MODU) in about 250 m of water in the Nile Delta.
In September, Shell plc subsidiary BG International Ltd. agreed to farm out a 40% interest in the North East El-Amriya offshore area (Block 3) in the Egyptian Mediterranean Sea to Kuwait Foreign Petroleum Exploration Co. (KUFPEC) subsidiary KUFPEC (Egypt) Ltd. (KEL) (OGJ Online, Sept. 22, 2023).
ConocoPhillips advances Eldfisk Nord project with PSA consent
ConocoPhillips Skandinavia AS has been granted consent by the Petroleum Safety Authority Norway (PSA) for use of Eldfisk Nord infrastructure on Eldfisk field. First production is expected in 2024 (OGJ Online, May 9, 2022).
Eldfisk Nord is targeting additional resources in Eldfisk field. The development concept is a three-by-six slot subsea production system (SPS) with 14 wells, where nine are producers and five are water injectors. The drilling program will be carried out by the jack-up rig West Elara. Eldfisk Nord will be tied back to the Eldfisk complex in the North Sea. Greenhouse gas emissions intensity from the project is estimated at 7 kg CO2/boe. The resource potential is estimated to be 50-90 MMboe.
Eldfisk oil field lies in the southern part of the Norwegian sector in the North Sea, 10 km south of Ekofisk field. Eldfisk was discovered in 1970, and the plan for development and operation (PDO) was approved in 1975. Production began in 1979.
ConocoPhillips Skandinavia AS is operator of Eldfisk field in PL 018 with 35.112% interest. Partners are TotalEnergies EP Norge AS (39.896%), Vår Energi AS (12.388%), Equinor AS (7.604%), and Petoro AS (5%).
Capex returns Vaca Muerta area license after unsuccessful exploration program
Argentinean integrated energy company Capex SA has opted not to continue with a second exploratory period at Parva Negra Oeste area in Neuquén province following 5 years without the discovery of commercially exploitable hydrocarbons, the company said Nov. 22.
Return of the area to Neuquén state-owned Gas y Petróleo del Neuquén (GyP) comes following fulfillment of investment commitments made in 2019 to secure the contract for exploration and potential development and production.
Capex drilled two wells in the 143-sq km block as part of a minimum investment of $19 million to carry out both drillings and build infrastructure for completion. After failing to achieve positive results, Capex will abandon the drillings and return the area to GyP for re-bid.
This is the second time that Parva Negra Oeste has been returned to state control. Before Capex, in 2017, Retama Argentina, a subsidiary of Retamco Operating, forfeited the license for failing to meet assumed investment commitments.
Pakistan Petroleum discovers gas, condensate in Shah Bandar block
Pakistan Petroleum Ltd. made a gas and condensate discovery in District Sujawal, Sindh, Pakistan. This is the second discovery in Shah Bandar block (2467-16) in the southern part of Lower Indus basin.
Exploration well Jhim East X-1 was spudded on Oct. 8, 2023, and drilled to a depth of 2,545 m to test the hydrocarbon potential of upper sands of Lower Goru formation. Potential hydrocarbon bearing zones were identified based on drilling results and wireline logs.
During testing of Lower Goru upper sand (A sand), the well flowed 13.69 MMscfd gas and 236 b/d condensate at wellhead flowing pressure of 2,668 psig on a 32/64-in. choke. Additional evaluation is ongoing.
Pakistan Petroleum is operator of Shah Bandar block (63%) with joint venture partners Mari Petroleum Co. Ltd. (32%), Sindh Energy Holding Co. Ltd. (2.5%), and Government Holdings (Private) Ltd. (2.5%).
Chevron files application for exploration work offshore Namibia
A Chevron Corp. affiliate has filed an application with the Ministry of Environment, Forestry, and Tourism for the Republic of Namibia for an environmental clearance certificate for oil and gas exploration work in PEL 90 in Orange basin offshore Namibia.
The certificate would provide for the drilling of up to five exploration wells and five appraisal wells beginning in fourth-quarter 2024 on Block 2813B which is governed by PEL 90, said Sintana Energy Inc. in a release Nov. 27. Sintana, through its investment in InterOil, holds a 49% indirect interest in Trago Energy (Pty) Ltd., a 10% working interest owner in PEL 90.
In October 2022, Chevron Namibia Exploration Ltd. closed a deal with Trago Energy for an 80% working interest in the license (OGJ Online, Oct. 4, 2022). The license covers 5,433 sq km offshore southern Namibia in water depths of 2,300-3,300 m.
Drilling & Production Quick Takes
Sinopec flows Asia’s deepest well
China Petroleum & Chemical Corp. (Sinopec) struck sizeable oil and gas flows in the deep Yuejin 3-3XC well of its Project Deep Earth NO.1 in Tarim basin, Xinjiang Uyghur Autonomous Region, China. Liquid flow is 200 tonnes/day and gas flow is 50,000 cu m/day.
The well was drilled to a depth of 9,432 m, breaking the record of the deepest onshore well in Asia, the company said. The well was designed for a horizontal distance of 3,400 m (OGJ Online, May 10, 2023).
Project Deep Earth drills into the Shunbei ultra deep carbonate condensate and gas reservoir in Tarim basin. The reservoir has an average burial depth of more than 7,300 m and contains 1.2 billion boe total recoverable reserves.
Norway production up in October, NPD says
Norway’s production averaged 1.981 million bbl in October, the Norwegian Petroleum Directorate (NPD) reported. The figure is up from the 1.797 million bbl produced in September (OGJ Online, Oct. 23, 2023).
Average daily liquids production in October consists of 1.777 million b/o, 183,000 bbl of NGL, and 21,000 bbl of condensate.
Oil production in October is 3.7% less than the NPD’s forecast and 0.7% lower than the forecast so far this year.
Suncor restarts Terra Nova FPSO
Suncor Energy Inc. restarted the Terra Nova floating production, storage, and offloading (FPSO) following completion of the Terra Nova Asset Life Extension project offshore Newfoundland and Labrador. Production is expected to ramp up over the coming months.
The FPSO, which lies about 350 km offshore Canada and can store 960,000 bbl of oil, had been out of service since 2019 following the order by the Canada-Newfoundland and Labrador Offshore Petroleum Board for Suncor to suspend production-related operations due to a crack in the vessel’s hull. The Terra Nova Asset Life Extension project is expected to add 10 years and 70 million bbl of oil to the FPSO’s production capacity (OGJ Online, Nov. 9, 2023).
Suncor is operator of the Terra Nova project with 48% interest. Partners are Cenovus (34%) and Murphy Oil (18%).
Galp spuds Namibia Orange basin exploration well
Galp Energia SGPS SA has spudded the Mopane 2X exploration well in petroleum exploration license (PEL) 83 in Namibia’s Orange basin, said partner Custos Energy (Pty) Ltd. in a Nov. 27 release.
Mopane is the first of two wells which are scheduled to be drilled by the Hercules semi-submersible rig under a contract that provides for two wells and optional testing.
PEL 83, in 250-2,550 m of water, sits directly above Block 2913A, where Shell plc made its Graff-1 light oil discovery, and directly west of Kudu Gas field currently being developed by BW Energy. PEL 83 is also contiguous to Block 2913B where TotalEnergies made its Venus-1 discovery.
Galp is operator of PEL 83 (80%) with partners the National Petroleum Corp. of Namibia (NAMCOR) (10%), and Custos Energy (10%). Sintana has 49% carried interest through its indirect investment in Custos Energy.
PROCESSING Quick Takes
Petrobras terminates LUBNOR refinery sale
Petróleo Brasileiro SA (Petrobras) has terminated the contract for the sale of the 10,400-b/d Lubrificantes e Derivados de Petróleo do Nordeste (LUBNOR) refinery in Fortaleza, Ceará, Brazil, and its associated logistics assets (OGJ Online, Feb. 9, 2023; Dec. 1, 2022).
In May 2022, Petrobras signed a contract with Grepar Participações for the sale of LUBNOR for $34 million. The contract was terminated due to “the lack of compliance with Conditions Precedent,” the company said in a release Nov. 27. Specifics about the conditions were not released.
The company maintains it commitment to the refinery’s operational continuity, to the reliability and availability of its units, and to ensuring safety and respect for the environment and people, it continued.
One of Brazil’s leading asphalt production plants and the country’s only refinery equipped to produce naphthenic lubricants, LUBNOR processes ultra-heavy Brazilian crude oil from Espírito Santo basin and the Ceará cluster.
Eni weighs biofuels expansions
Eni SPA has entered an agreement with Saipem SPA to evaluate potential projects designed to further expand subsidiary Eni Sustainable Mobility SPA’s capacity to produce biofuels, including sustainable aviation fuel (SAF) and renewable diesel.
As part of the Nov. 6 agreement, Eni Sustainable Mobility and Saipem—in which Eni holds a 30.5% stake—will study opportunities involving possible construction of new plants—as well as conversion of existing, conventional crude oil refineries—based on the Eni-Honeywell UOP LLC codeveloped proprietary Ecofining technology for flexible processing of 100% biofeedstocks into SAF and hydrotreated vegetable oil (HVO, or renewable diesel), Eni said.
The agreement aligns with Eni’s aims of further transforming its traditional refining system and adding new sites to expand its current 1.65-million tonne/year (tpy) biorefining capacity to more than 5 million tpy by 2030, the operator said.
Additional details regarding the precise scope of the newly signed agreement have yet to be revealed.
Petrobras, partners process 100% renewable feedstock in Riograndense refinery’s FCC
Petróleo Brasileiro SA (Petrobras), alongside partners Ultrapar Participações SA and Braskem SA, have completed the first phase of a pilot project to test processing of petrochemical products and fuels from 100% renewable materials at jointly owned Refinaria de Petróleo Riograndense SA’s (RPR) 17,000-b/d refinery in Rio Grande, Rio Grande do Sul, Brazil.
Carried out between end-October and early November 2023, the test involved the first processing of 100% soybean oil in the refinery’s existing, conventional fluid catalytic cracker (FCC) using proprietary technology developed by Petrobras’s research and development center (CNEPES), combined with proprietary catalysts from the ReNewFCC line produced in partnership with Fábrica Carioca de Catalisadores SA, a joint venture between Petrobras and Albemarle Corp. subsidiary Ketjen Corp.
In addition to marking the world’s first instance of an FCC processing 100% renewable feedstock, the pilot test proved use of the technology with process and catalyst innovations makes it possible to use 100% renewable raw materials as feedstock to generate fully renewable petrochemical products, the operator said.
The industrial test began during the last week of October, when RPR carried out a maintenance shutdown to prepare the FCC unit to receive and process the 2,000 tonnes of soybean oil according to CENPES’ specifications and guidelines beginning on Nov. 1, according to Petrobras.
With first-phase testing now completed, Petrobras said RPR is preparing to produce petrochemical inputs and renewable fuels such as LPG, maritime fuels, propylene, and bioaromatics (e.g., BTX, or benzene, toluene, and xylene).
The testing also identified that the BTX concentration levels achieved using the special catalysts are capable of meeting levels required to formulate high-performance, nearly sulfur-free gasoline, Petrobras said.
Scheduled for June 2024, the project’s second-phase test will involve the co-processing of mineral feedstock with bio-oil—advanced raw material from non-food biomass—to generate propylene, gasoline. and diesel, all with renewable content.
TRANSPORTATION Quick Takes
Mexico Pacific awards Sierra Madre pipeline EPC contract
Mexico Pacific Ltd. LLC has let an engineering, procurement, and construction (EPC) contract to a joint venture of GDI Sicim Pipelines and Bonatti for the Sierra Madre pipeline project.
The 500-mile Sierra Madre pipeline will be utilized as the primary natural gas supply path for transportation of up to 2.8 bcfd of natural gas from the US border to the first phase of Mexico Pacific’s 15 million tonne/year (tpy) Saguaro Energia LNG plant on the West Coast in Puerto Libertad, Sonora.
Under the lump-sum-turnkey EPC contracts, the GDI Sicim Pipelines and Bonatti joint venture will engineer, procure, and construct the Sierra Madre pipeline with Bonatti’s scope extending to the required compressor stations.
Delfin signs 15-year LNG supply agreement with Gunvor
Delfin Midstream Inc. subsidiary Delfin LNG LLC has signed an LNG sale agreement with Gunvor Group Ltd. subsidiary Gunvor Singapore Pte Ltd.
Under the agreement, Delfin LNG will supply 0.5-1.0 million tonnes/year (tpy) of LNG to Gunvor on a free-on-board (FOB) basis at the Delfin Deepwater Port, 40 nautical miles off the coast of Louisiana, for a minimum of 15 years.
The Delfin LNG Deepwater Port project is expected to support four FLNG vessels with a combined export capacity of up to 13.3 million tpy. Delfin LNG has secured commercial agreements for LNG sales and liquefaction services and is in the final phase towards final investment decision (FID) on its first three FLNG vessels.
In October 2023 Delfin received an extension from the US Federal Energy Regulatory Commission (FERC) for completion of the onshore component of the deepwater port project. Delfin will now have until Sept. 28, 2027, to put the onshore infrastructure in service (OGJ Online, Oct. 9, 2023).
The onshore project, sited in Cameron Parish, La., includes a new 120,000-hp compressor station, a new meter and regulation station at Transco Compressor Station 44, new supply header pipelines consisting of 0.25 miles of new 42-in. OD pipe to connect 1.1 miles of existing line to the new meter station, and 0.6 miles of new twin 30-in. pipe between the meter station and the new compressor station.
Equinor to supply Norwegian natural gas to RWE
Equinor Energy AS has agreed to a 5-year deal to supply Germany’s RWE with Norwegian natural gas. Equinor will supply equivalent to 1-1.5 billion cu m/year (bcmy) of natural gas (the equivalent of 10-15 TWh/year) from now until 2028.
The contract is priced at market terms and the gas will be delivered at Germany’s virtual trading hub THE (Trading Hub Europe).
Earlier this year, the companies detailed a plan to develop large-scale value chains meant to “ensure security of supply and reduce emissions in response to the German-Norwegian Partnership on Climate, Renewable Energy and Green Industry,” they said in a joint release Oct. 30.
The first step is to invest in and develop gas fired power plants in Germany that are ready to use hydrogen as feedstock as soon as it becomes available on an industrial scale in the country. These plants are also subject to the power plant strategy announced by the German government, which aims to create a suitable regulatory framework for new gas-fired power plants, the companies said.
