FIRST GAS FROM CYGNUS SOUTHERN NORTH SEA FIELD EXPORTED TO UK
Engie E&P UK Limited says that first gas from the Cygnus development has been exported to the Bacton gas terminal in North Norfolk on the UK's North Sea coast. Cygnus, located in license areas P1055 and P1731, 150 kilometers (about 93 miles) off the coast of Lincolnshire, is expected to contribute 5% of the UK's total gas production - supplying sufficient gas to heat the equivalent of 1.5 million UK homes. The project added approximately £1.3 billion (US$ 1.6 billion) to the UK economy and supported nearly 5,000 jobs during its five-year development period.
The Cygnus complex, with four platforms, a total of 10 wells and two subsea structures, serves an estimated field size of 250 square kilometers from which it is expected to achieve plateau production of 250 million cubic feet per day.
The partners are evaluating further opportunities in the Greater Cygnus area with the aim of bringing additional volumes through Cygnus when capacity becomes available.
Equity interests are operator Engie E&P UK Limited (38.75%) and partners Centrica (48.75%) and Bayerngas (12.5%).
The Cygnus gas field was first discovered in 1988 by Marathon Oil. Engie E&P's subsequent subsurface data analysis, innovative geological thinking and leading-edge geophysics enabled this discovery to become the largest gas field development in the Southern North Sea in over 25 years.
The development was sanctioned in 2012, following the UK government's decision to introduce a field allowance for new large gas fields in shallow water. The field is located off the coast of Lincolnshire in depths of less than 25 meters. Cygnus holds estimated 2P (proved and probable) reserves of approximately 110 million barrels of oil equivalent.
The development consists of four platforms including two drilling centers. he central Alpha complex comprises three bridge-linked platforms: a wellhead platform with 10 drilling slots; a processing and utilities unit; and a quarters platform with the central control room. The second location is an unmanned satellite wellhead platform (Bravo), with a further 10 well slots, approximately 7 kilometers northwest of Alpha. Gas is exported via a 55-kilometer pipeline connecting Cygnus to the Esmond Transmission System pipeline, which terminates at Bacton in Norfolk.
ANADARKO'S DEEPWATER GOM ACQUISITION RAISES EXPECTATIONS
Anadarko Petroleum Corp. has closed the acquisition of Freeport-McMoRan Oil & Gas's deepwater Gulf of Mexico assets. The transaction is effective Aug. 1, 2016. Anadarko also increased its oil-growth expectations and discussed plans to further accelerate its rig activity in the Delaware and DJ basins. In addition, the company provided an update on its deepwater drilling activities in the Gulf of Mexico, highlighted by successes at Warrior and Phobos, which add to its inventory of future tieback opportunities, as well as a successful development well in the Heidelberg field.
Anadarko says the acquisition doubles its ownership in the Lucius development to about 49%; doubles its Gulf of Mexico production to more than 160,000 net barrels of oil equivalent per day; adds three operated deepwater facilities, bringing Anadarko's total operated facilities to 10; and enhances cash flow to allow the company to accelerate activity in the onshore Delaware and DJ basins.
As a result of the latest acquisition, Anadarko now operates the largest number of floating production facilities in the deepwater Gulf of Mexico, which allows the company to leverage this infrastructure into new investment opportunities, said Al Walker, Anadarko's chairman, president, and CEO.
At the time the acquisition was announced, Anadarko indicated the acquired assets would generate substantial free cash flow over time, which would facilitate increased investment in the US onshore and position the company to deliver a five-year compounded oil growth rate of 10% to 12% in a $50 to $60 oil-price environment. In anticipation of closing the acquisition, Anadarko added two rigs in each of its Delaware and DJ basin positions early in the fourth quarter. Going forward, the company plans to further increase activity in each area, with expectations of ending the first quarter of 2017 with 14 operated rigs in the Delaware Basin and six operated rigs in the DJ Basin. This compares to seven operated rigs and one operated rig in each of these basins, respectively, at the end of the third-quarter 2016. The company's new investments in these basins generate rates of return of 35% to more than 60% at today's prices.
"As a result of our large and well-located acreage positions, improving cost structure, midstream infrastructure advantages, and commodity-price outlook, we now believe we have the ability to deliver a five-year compounded annual oil growth rate of 12% to 14%, while investing within expected cash inflows," said Walker.
Further highlighting the value of Anadarko's deepwater Gulf of Mexico tieback and exploration program, the company today announced its Warrior exploration well encountered more than 210 net feet of oil pay in multiple high-quality Miocene-aged reservoirs. The Warrior discovery is located approximately 3 miles from the Anadarko-operated K2 field and is expected to be tied back to its Marco Polo production facility. Anadarko is the operator at Warrior with a 65% working interest. Other partners include Ecopetrol (20%) and Mitsubishi Corporation Exploration Co., Ltd. (15%).
At the Phobos appraisal well, which is located about 12 miles south of the Anadarko-operated Lucius facility, the company has already encountered more than 90 net feet of high-quality oil pay in a Pliocene-aged reservoir similar to the nearby Lucius field. This secondary accumulation was present in the Phobos discovery well and will be evaluated for tieback to the Lucius facility. Meanwhile, drilling is ongoing toward the primary objective in the Wilcox formation. Anadarko has a 100% working interest at Phobos.
At the Heidelberg field, the fifth production well currently being drilled has encountered the reservoir sand with more than 150 net feet of oil pay to date. The well will be completed immediately following drilling operations and is expected to be brought on production early next year.
ZION OIL & GAS GETS APPROVAL TO DRILL OIL WELL IN ISRAEL
The State of Israel has officially approved Dallas-based Zion Oil & Gas's drilling date and license extension request in the Megiddo-Jezreel License, a large area south and west of the Sea of Galilee that includes the Jezreel and Megiddo valleys. The license gives Zion the exclusive right to explore in the area. A recent independent study by international consulting company Beicip-Franlab found that Israel's Levant Basin contains up to 6.6 billion barrels of oil. Zion's 99,000-acre license in within the Levant Basin.
Zion stated that it is well positioned to take advantage of Israel's growing demand for energy.
"We are 'all hands on deck' moving toward the goal of preparing the drill site for construction to move the drilling rig to spud the well," said Victor Carrillo, Zion's CEO.
"Our teams in Israel and the United States have remained focused with the purpose of aggressively moving forward with the project," said Dustin Guinn, Zion's president. "Our project team, inclusive of operations, exploration, finance and accounting, and administrative, have diligently proceeded with the intent that, pending funding, we should easily meet the deadlines outlined by the Israeli Petroleum Commissioner.
MURPHY AND TOTAL AWARDED EXPLORATION BLOCKS IN MEXICO
France's Total has been awarded exploration licenses on three blocks in offshore Mexico, following the country's first competitive deepwater bid round. In addition, Arkansas-based Murphy Oil Corp. said that a joint venture led by its Mexican subsidiary, Murphy Sur, S. de R.L de C.V., was the high bidder for Block 5 during Mexico's fourth phase, round one deepwater auction.
Block 5 is located in the deepwater Salinas Basin covering about 2,600 square kilometers (1,000 square miles). Water depths in this block range from 700 to 1,100 meters (2,300 to 3,600 feet). The initial exploration period for the license is four years and includes a work program commitment of one well.
Total will be the operator of Block 2 in the Perdido Basin with a 50% interest, while ExxonMobil has the remaining 50%. The block covers a surface area of 2,977 square kilometers at water depths ranging from 2,300 to 3,600 meters.
In the Salina Basin, Total has won a participating interest of 33.3% alongside Statoil (33.4%), and BP (33.3%), in Blocks 2 (2,381 kilometers) and 3 (3,287 kilometers).
BERNHARD SCHULTE COMMENCES MANAGEMENT OF REFORMA PEMEX
Bernhard Schulte Shipmanagement (BSM) says that its Mexico-based Ship Management Center has begun management of the Reforma Pemex, the first of two offshore "flotel" accommodation vessels owned by Petroleos Mexicanos International (PMI) and chartered to the Mexican national company, PEMEX.
Commencing operations in January 2017, the Reforma Pemex set sail in late November from the Barrera Shipyard in Vigo, Spain, en route to the Gulf of Mexico where she will host up to 700 PEMEX personnel working on offshore fields in the Gulf of Campeche area.
Reforma Pemex is 131 meters in length with a beam of 27 meters and provides hotel accommodations and services for 700 offshore personnel. The ship has a service speed of 12 knots and is fitted with a "walk-to-work" motion-compensated gangway system that enables a transfer of workers between the offshore platforms and the accommodation vessel.
With a strong focus on safe operational activity, technical and crew management services are provided by BSM Mexico, with offices in Mexico City and Ciudad del Carmen.
