GENERAL INTEREST — Quick Takes
Relief well planned to stop gas leak in gulf
At presstime last week, a flow of natural gas continued to fuel a fire on a jack up rig in the Gulf of Mexico, causing the derrick and drill floor structure to collapse, while responders reviewed plans to drill a relief well. The troubled well, operated by Houston-based Walter Oil & Gas Corp., was drilled in 154 ft of water about 55 miles off Louisiana.
The US Bureau of Safety and Environmental Enforcement said a fire-fighting vessel was spraying a water curtain to provide heat protection for the rig until the well can be brought under control. US Coast Guard cutters are enforcing a safety zone around the scene and assessing rig conditions.
Drilling contractor Hercules Offshore said the extent of damage to the jack up currently is undetermined.
BSEE engineers planned to review a permit application from Walter Oil & Gas to drill a relief well. BSEE must approve details on the proposed well, its casing, and cementing programs before drilling begins.
Officials were setting up a Command Center to monitor efforts to secure the gas well following a well-control incident on an unmanned platform on South Timbalier Block 220.
The incident happened July 23, resulting in a subsequent fire on the rig hours later. The Hercules 265 jack up was completing on a sidetrack well to prepare Well A-3 for production when a gas leak prompted the evacuation of 44 workers from the jack up (OGJ Online, July 24, 2013).
An investigation into cause of the loss of well control is under way. Observers aboard multiple flights surveying the scene report a very light sheen that dissipates quickly.
Fieldwood to buy gulf shelf assets from Apache
Fieldwood Energy LLC has acquired the Gulf of Mexico shelf business from Houston-based Apache Corp. for $3.75 billion. The properties comprise more than 500 blocks and 1.9 million net acres. The deal is based on an effective date of July 1.
Apache said it will retain 50% of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested. As part of the transaction, Fieldwood hopes to retain Apache's gulf shelf employees.
As of yearend 2012, total proved reserves attributable to the assets were 239 MMboe, of which more than 55% is oil and more than 75% is developed. Current production exceeds 95,000 boe/d and is more than 90% operated.
Fieldwood and Apache also agreed to jointly participate in deep exploration opportunities on the acquired assets targeting a robust inventory of high potential prospects including subsalt horizons around known producing fields.
Fieldwood is a Houston-based portfolio company of Riverstone Holdings LLC, a New York-based private equity firm.
Apache previously announced plans to divest $4 billion in assets by yearend as part of its ongoing portfolio assessment and to focus on more recently acquired properties.
UK outlines proposed tax break for shale gas
The UK government outlined a proposed tax regime for shale gas, including a new shale gas allowance based on existing field allowances for oil and gas production.
The proposed allowance would reduce the tax on a portion of a company's production income to 30% from 62%, the UK Treasury said in a statement. No UK shale gas wells are on production yet.
A recent report by the British Geological Survey revealed that there is more than twice as much shale gas in the north of England than there was previously thought in the entire country.
Alongside this, new guidance was published July 10 explaining to industry and local communities how applications for exploratory shale gas developments should proceed through the planning system.
The local planning guidance complements measures to help support the shale gas industry. Decisions will be made by councils in a locally led planning process.
The government said it plans a 3-month consultation on the proposed tax break before putting the proposal before Parliament. Called shale gas "pad" allowance, the proposal could go into the finance bill next year, a treasury official told reporters.
Goodrich to buy more marine shale assets
Goodrich Petroleum Corp. agreed to pay $26.7 million for a 66.7% working interest in producing assets in the Tuscaloosa marine shale in Louisiana.
The transaction involves 185,000 net acres and remains subject to adjustments. Closing is expected by Aug. 22.
The owner of the other 33.3% working interest in the producing assets and leasehold will work jointly with Houston-based Goodrich to develop the assets.
Goodrich did not name the 33.3% interest holder.
Gross oil production associated with the properties averaged 750 b/d of oil during March.
Goodrich Chief Executive Officer Walter G. Goodrich said the transaction provides his company with proved developed producing reserves and infrastructure as well as future development opportunities.
The independent has interests in the Haynesville shale and Cotton Valley trend in East Texas and North Louisiana, the Eagle Ford shale oil window in South Texas, and in the Tuscaloosa marine shale of South Mississippi and Louisiana (OGJ Online, June 13, 2011).
Exploration & Development — Quick Takes
NETL continues fracing study; report due by yearend
A US Department of Energy study continues to monitor for any signs of groundwater contamination stemming from hydraulic fracturing on the Marcellus shale formation in Pennsylvania, but it's too early to draw any conclusion, the National Energy Technology Laboratory said in a July 19 statement.
"We are still in the early stages of collecting, analyzing, and validating data from this site. While nothing of concern has been found thus far, the results are far too preliminary to make any firm claims," NETL said. The statement came after some media outlets reported preliminary findings were available.
"We expect a final report on the results by the end of the calendar year." NETL said.
NETL is the lead research and development office for DOE's Office of Fossil Energy. Researchers based in Pittsburgh are monitoring a specific area after having injected fracturing fluids containing indicators that they can track to determine if the fluids migrate to drinking water supplies.
Third French Guiana deepwater wildcat dry
A Shell affiliate has found extensive development of the targeted sands but no indications of hydrocarbons and will plug the GM-ES-4 exploratory well offshore French Guiana.
Third in a four-well program that followed the Zaedyus-1 oil discovery, GM-ES-4 went to a total depth of 6,292 m and penetrated and logged both the primary and secondary reservoir objectives of the Cebus prospect. The Stena ICEMax drillship will now drill GM-ES-5.
Interests in the Guyane Maritime license are Shell 45%, Tullow Oil PLC 27.5%, Total SA 25%, and Northpet, a company owned 50-50 by Northern Petroleum PLC and Wessex Exploration PLC, 2.5%.
GM-ES-5 will be located on the Cingulata fan with the objective of determining the oil-water contact of the Zaedyus-1 discovery by measuring the pressure in the water leg as well as gathering geological data from deeper unpenetrated sections (see map, OGJ, June 4, 2012, p. 43).
Solimar cuts thick, oily Temblor at San Joaquin well
Solimar Energy Ltd., Melbourne, said its Kreyenhagen Ranch 2-33 well in the northwestern San Joaquin basin in California has encountered more than 600 ft of Temblor formation heavy oil sands with oil present throughout.
The well, drilled at a 48° angle, went to 1,472 ft measured total depth. Schlumberger is analyzing logs to determine rock and fluid properties including oil and water saturation. Results are expected within a week.
The well is in a gazetted field area that has 13-18° gravity oil in a trap of the same type as giant Coalinga oil field to the north, Solimar said. Four suspended wells are available for reentry. The Temblor sandstone lies below the fractured McClure (Monterey) shale and above the fractured Kreyenhagen shale.
Solimar will complete the well and place it on production using a completion rig in due course to obtain reservoir fluid samples and to evaluate the production performance of a deviated well on primary production.
Solimar plans to include the well in an upcoming steam pilot test scheduled for early 2014 and has received the key permit for the steam EOR pilot.
The company has signed a farmout with a Canadian public company for an appraisal and development joint venture on 1,720 acres. The farmee is providing the funding, while Solimar remains operator.
Iraq Tawke horizontal well gauged at 25,000 b/d rate
The Cretaceous reservoir at Tawke field in the Kurdistan Region of Iraq is flowing at a record rate of 25,000 b/d of oil from the first horizontal well, said DNO International ASA, Oslo.
By comparison, the highest flowing vertical Tawke field well averages 10,000 b/d, the company said (OGJ Online, June 11, 2013).
The Tawke-20 horizontal well previously averaged 8,000 b/d from each of the first four of 10 fractured corridors penetrated by a 600-m horizontal section in the Cretaceous reservoir. Each of the remaining six corridors also averaged 8,000 b/d.
With tests complete, the well has been placed on production but is subject to wellbore and surface facilities limitations.
Bijan Mossavar-Rahmani, DNO International's executive chairman, said, "Our next task is to optimize production from Tawke-20 while assessing the potential of horizontal wells in terms of drilling efficiency, well recovery factor and overall Tawke field output capacity."
DNO International is drilling Tawke-23 preparing to spud Tawke-21, both horizontal wells.
DNO International holds a 55% interest in and operates the Tawke license. Genel Energy PLC has 25% and the Kurdistan Regional Government 20%.
Drilling & Production — Quick Takes
Shell lets FPSO contract for Stones project
Shell Offshore Inc. let a contract to SBM Offshore for the supply and lease of a floating production, storage, and offloading vessel for its Stones field development in the Gulf of Mexico.
Stones field, 200 miles southwest of New Orleans in the gulf's Walker Ridge area in 9,500 ft of water, is estimated to contain more than 2 billion boe in place (OGJ Online, May 23, 2013).
Once installed, the FPSO would be the deepest development of its kind in the world, according to Shell. The newly converted Suezmax FPSO will have a turret with a removable buoy that will allow it to be disconnected in the event of an approaching hurricane. The FPSO's mooring system also will have the ability to adjust line tension during operations.
The FPSO has a processing capacity of 60,000 b/d of oil and 15 MMcfd of gas and 800,000 bbl of storage capacity.
In March 2012, Shell and SBM Offshore signed an agreement for the supply of medium and small FPSOs on a lease-and-operate basis.
Shell operates Stones field and is its sole interest holder.
Shell to raise production at projects off Brazil
Royal Dutch Shell PLC, along with partners Petroleo Brasileiro SA (Petrobras) and Oil & Natural Gas Corp., will increase production at its deepwater projects at Parque das Conchas and the Bijupira-Salema fields offshore Brazil.
Four new production wells will be drilled at the Bijupira-Salema fields as part of a redevelopment that is expected to increase production there to 35,000 boe/d in 2014. The fields, which lie in 400-900 m of water, have produced nearly 100 million boe since the project came online in 2003. Shell holds 80% in the project; Petrobras, 20%.
Shell will begin Phase 3 of its Parque das Conchas project, which lies on Block BC-10 in more than 2,000 m of water, by installing subsea infrastructure at the Massa and Argonauta O-South fields, which will connect to the Espirito Santo floating production, storage, and offloading vessel, the hub of the project (OGJ Online, Oct. 15, 2010).
Once operational, Phase 3 will reach a peak production of 28,000 boe/d. Shell's share of the project is 50%, with Petrobas at 35% and India's ONGC at 15%.
Shell expects to have Phase 2 of the project, which will incorporate the Argonauta O-North field, online later this year. Phase 2's production is expected to reach 35,000 boe/d.
As a whole, the BC-10 project has produced more than 70 million boe since its start-up in 2009.
Shell has two FPSOs in operation offshore Brazil—the Espirito Santo and the Fluminese at the Bijupira-Salema fields.
Chevron lets £550 million in subsea contracts
Chevron North Sea Ltd. has let several contracts totaling £550 million for subsea development work for its Alder and Rosebank deepwater projects offshore the UK.
Rosebank field, which lies 80 miles northwest of the Shetland Islands in 3,600 ft of water, is Chevron's first deepwater development in the UK (OGJ Online, July 9, 2012). The field was discovered in 2004 and is estimated to hold 240 million boe of potentially recoverable resources, Chevron said.
Rosebank field will be developed using a floating production, storage, and offloading vessel, production and water injection wells, subsea facilities, and a gas export pipeline.
Alder field, meanwhile, was discovered in 1975 and lies 100 miles off Scotland and 37 miles from the UK-Norway median line. The high-pressure, high-temperature (HPHT) gas-condensate field lies in 492 ft of water and will be developed via a subsea tie-back to the existing Britannia Bridge Linked Platform (BLP) on Block 16/26.
Chevron let the subsea equipment vendor contract for the Rosebank project to OneSubsea UK Ltd. (formerly Cameron Ltd.). The contract includes the engineering, supply, and manufacturing of subsea manifolds, trees, and control systems. Equipment manufacturing will take place at various locations in the UK, including OneSubsea UK's facility in Leeds.
Chevron also let three contracts for its Alder project to Technip, OneSubsea UK, and Aker Solutions.
Rosebank field partners are operator Chevron 40%, Statoil (UK) Ltd. 30%, OMV (UK) Ltd. 20%, and DONG E&P (UK) Ltd. 10%. Chevron has a 70% interest in and is operator of Alder field.
Chevron will make a final investment decision on Alder field later this year and on Rosebank in 2014.
PROCESSING — Quick Takes
Iraqi gas plant restored to full LPG sendout capacity
Dana Gas PJSC and Crescent Petroleum, joint operators of the Kor Mor LPG plant in Iraq's Kurdistan region, have completed a $15 million reconstruction and upgrade to the loading and sendout areas of the plant following a 2012 accident involving a third-party tanker operator.
The latest LPG loading safeguarding and control technology, according to the companies' announcement, "enhances safety and control over the loading process."
The Kor Mor LPG plant now can produce as much as 900 tonnes/day (almost 11,000 b/d) for markets in the neighboring regions.
Total cumulative petroleum production by the companies in their major gas operations in the Kurdistan region has now reached 88 million boe from continuous production since October 2008 with a total investment of more $1 billion, said the operator's announcement.
Production has reached a peak of 88,000 boe/d and averages 80,000 boe/d, which includes 340 MMcfd of gas and 15,000 b/d of condensate. Plans for further expansion in investment and production levels are under discussion with the Ministry of Natural Resources, the companies said.
In total, more than 415 bcfd of gas and 18 million bbl of condensate and liquids have been produced by the companies since 2008, with the gas supply to local power stations enabling 2,000 Mw of electricity generation for the Kurdistan region.
Technical achievements of the project, the companies said, include achieving first gas in a record 15 months, installation of a 180-km gas pipeline across mountainous terrain that required the clearing of minefields; installation of new gas processing plant; and successfully drilling to tertiary reservoir formations at depths of 2,300 m.
Sasol lets Louisiana plant FEED contract
Sasol has let the front-end engineering and design contract for its project to produce ethylene, vehicle fuel, and other products at its Lake Charles, La., chemical complex to Fluor Corp. (OGJ Online, Dec. 3, 2012).
The project includes an ethane cracker able to produce 1.5 million tonnes/year of ethylene and a gas-to-liquids plant with capacity to produce 4 million tonnes/year of transportation fuel.
Midstream JV lets contract for Utica plant
Utica East Ohio Midstream LLC (UEO) has let a $5 million engineering and procurement support contract to ENGlobal Corp., Houston, for a cryogenic gas processing plant in Leesville in southwestern Carroll County, Ohio.
ENGlobal's scope consists of engineering and procurement support services for a control room, condensate stabilization unit, site grading, and design integration services for the 200 MMcfd cryogenic unit. The company expects to begin work immediately with project completion anticipated in second-quarter 2014.
UEO is a joint venture of M3 Ohio Gathering LLC, Access Midstream Partners LP, and EV Energy Partners LP and operates UEO Buckeye, a large midstream complex in eastern Ohio that includes plants at Kensington and Leesville (OGJ Online, Feb. 18, 2013).
The complex currently includes 800 MMcfd of natural gas processing and associated NGL fractionation, loading, and terminaling.
The Leesville plant is the second in the UEO Buckeye complex that will recover NGLs in the liquids-rich Utica shale play.
TRANSPORTATION — Quick Takes
Transco files to expand Mobile Bay gas lateral
Williams Partners LP's Transco natural gas pipeline has filed an application with the US Federal Energy Regulatory Commission to expand a compressor station and provide additional firm transportation capacity to the US Southeast by second-quarter 2015.
The Mobile Bay South III expansion project is designed to provide 225 MMcfd of firm transportation on Transco's Mobile Bay Lateral from the Station 85 4A Pooling Point and other receipt points at Station 85 in Choctaw County, Ala., to interconnections with Florida Gas Transmission and Bay Gas Storage in Mobile County, Ala.
The proposed expansion would involve adding compression at Station 85 along with upgrading existing equipment in Washington and Mobile counties, Ala. Transco expects to begin construction in second-quarter 2014, pending regulatory approval.
The company estimates project cost at $50 million.
Lukoil opens bidding for North Caspian gas pipeline
OAO Lukoil is accepting bids for construction of its North Caspian-region Artesian-OOO Stavrolen natural gas pipeline. The 263.3-km, 28-in. OD pipeline will carry 8 billion cu m/year. Lukoil expects it to enter service May 2015.
Associated gas produced at Lukoil's North Caspian oil fields will move via the pipeline to a polyethylene/polypropylene plant at the Stavrolen industrial site, in the Stavropol region of Russia.
Market-grade gas will travel from Stavrolen to the Gazprom pipeline system. Lukoil expects Stage 1 of gas processing for the polymer plant to enter service in 2015 at 2 bcm/year. The complex has one of the largest pyrolysis units in Russia at 350,000 tonnes/year ethylene.
Lukoil plans to build power transmission lines along the pipeline route—including 22 transformer substations, 24 control points, telecommunication lines, and other infrastructure facilities—to ensure its efficient operation.
The pipeline will be equipped with a leak detection system and an electrochemical protection system, as well as other technical security devices, Lukoil said.
Stavrolen is a Lukoil subsidiary.