GENERAL INTEREST — Quick Takes
Hess to sell Thailand assets for $1 billion
Hess Corp. has sold its interests in Thailand's Sinphuhorm and Pailin fields to PTT Exploration & Production PCL (PTTEP) for $1 billion, effective July 1, 2013.
The two assets produced a combined average of 17,000 boe/d net to Hess in 2013. The company disclosed its plans to sell assets in Thailand and Indonesian in April 2013 (OGJ Online, Apr. 30, 2013).
In December, Hess entered into two separate agreements with a joint venture of PT Pertamina and PTTEP to sell its interests in the Pangkah and Natuna A assets offshore Indonesia for $1.3 billion (OGJ Online, Dec. 2, 2013).
Both sales are part of a large-scale divestiture Hess undertook last year with the purpose of repaying the company's debt and strengthen its balance sheet.
Alberta allocates spending for CCS projects
The government of Alberta has budgeted $144 million (Can.) this year for two projects it is supporting for carbon capture and sequestration (CCS) related to oil sands development (OGJ Online, Feb. 26, 2013).
The province plans to invest nearly $1.3 billion over 15 years in the projects, the Alberta Carbon Trunk Line and Quest project, which are to start up in 2015 and store 2.76 million tonnes/year of carbon dioxide.
The 240-km Alberta Carbon Trunk Line will collect CO2 from Industrial Heartland upgraders and carry the gas to fields for use in enhanced oil recovery. The Quest project, led by Shell Canada, will capture and sequester in the subsurface CO2 from the Scotford upgrader near Fort Saskatchewan.
Nexen names chief executive officer
Nexen Energy ULC, a wholly owned subsidiary of CNOOC Ltd., has selected Fang Zhi as chief executive officer. Fang succeeds Kevin Reinhart, a 20-year company veteran who oversaw the acquisition of Nexen by CNOOC in 2012 (OGJ Online, Jan. 12, 2012; Feb. 26, 2013).
Fang, currently executive vice-president, has served 30 years for CNOOC, which specified that the move will not change Nexen's strategy and priorities as a wholly owned subsidiary.
Moore named Gulfport Energy chief executive
Michael G. Moore has been named chief executive officer and a director of Gulfport Energy Corp., Oklahoma City. He had been interim chief executive and chief financial officer. He joined Gulfport Energy in 2000 and became president in August 2013.
J. Ross Kirtley was promoted to chief operating officer. He joined the company in May 2013 and became chief operating officer of Gulfport Energy's Ohio activities in September (OGJ Online, Dec. 10, 2013).
Also, Michael S. Reddin, chairman, president, and chief executive of privately held Davis Petroleum Corp., was appointed to the Gulfport Energy board of directors.
Exploration & Development — Quick Takes
Shell makes deepwater gas find offshore Malaysia
Royal Dutch Shell PLC has made a natural gas discovery with the Rosmari-1 well, which was drilled 135 km offshore Malaysia on Block SK318.
The well, drilled to a total depth of 2,123 m, encountered a 450-m gas column. Shell said the discovery is a positive indicator of the gas potential in the area.
"This adds to Shell's sequence of recent exploration successes in Malaysia, with these discoveries expanding the company's heartlands positions," said Iain Lo, Shell Malaysia chairman.
Last month, Sabah Shell Petroleum Co. Ltd. let a contract to Flowserve Corp. for supply of custom designed water injection and liquid transfer pumps for the Malikai oil field project 68 miles offshore Sabah, Malaysia (OGJ Online, Mar. 6, 2014).
Shell operates Block SK318 with 85% interest. Petronas Carigali Sdn. Bhd. holds the remaining interest.
Total discovers oil deep offshore Ivory Coast
Total Exploration & Production says its Saphir-1XB exploratory well discovered oil in deep water off Ivory Coast.
The well, drilled in 2,300 m of water, is the first on Block CI-514. Drilled to 4,655 m, it encountered 40 m of net pay containing 34° API oil.
The company said it will evaluate the discovery and focus on its extension to the north and east.
Total E&P Cote d'Ivoire operates Block CI-514 with a 54% interest. CNR International has 36%, and Petroci Holding 10%. Canadian Natural Resources called it "an important discovery."
Total has interests in three other offshore exploration licenses in Ivory Coast: CI-100, CI-515 and CI-516. It plans to drill exploratory wells in Blocks CI-515 and CI-516 by yearend.
The group is continuing to analyze an oil discovery made on Block CI-100 in 2013 (OGJ Online, Apr. 25, 2013).
Also offshore Ivory Coast, CNR International expects to begin a 10-well development drilling program in Espoir field in this year's second half, and a 6-well phase of development at Baobab field late this year or early in 2015.
Simba Energy to conduct 2D seismic survey in Kenya
Simba Energy Inc., Vancouver, BC, has signed an agreement with Bell Geospace to conduct a comprehensive airborne full-tensor gradiometry (FTG) survey on Block 2A in Kenya. The 30-day survey is expected to start in early May.
The program contemplates flying 6,044 line km over two target areas within Block 2A about 2,150 sq km over the central portion of the block covering the company's earlier defined primary and secondary target areas south-southeast from the city of Wajir and within the southern extents of the Mandera basin; and 850 sq km along the block's southern boundary over the eastern margins of the Anza basin.
Simba said it expects that data from the FTG survey will serve to provide for a more focused and cost-effective 2D seismic well location targeting program planned for later this year.
The data from this FTG survey also will be combined with some additional 2D seismic data expected shortly from Taipan Resources Inc., which was recently granted permission to acquire limited 2D seismic on Block 2A. Simba said it begin interpretation of the processed 2D seismic data along with the FTG data once they are received.
Simba was awarded Block 2A by Kenya's Ministry of Energy in 2011 (OGJ Online, Aug. 3, 2011). A year later, the company acquired 750 sq km of passive seismic (OGJ Online, Apr. 16, 2012).
Repsol drills dry hole offshore Trinidad and Tobago
Spain's Repsol has drilled a dry hole with its Pinter One offshore Trinidad and Tobago's east coast. The dry hole represents a major failure for the company, which has been trying to boost its falling crude production from its Teak Samman and Pouis acreage.
Repsol began drilling Pinter One on Dec. 26, 2013, and wrapped up the well in February after reaching its total depth of 13,000 ft.
The failure also has major implications for the announced discovery of 32 million bbl of recoverable reserves by Bayfield Energy, which has since been sold to Trinity Exploration & Production Co.
Bayfield in 2012 announced on the London Stock Exchange that it made a discovery with its EG8 well on Galeota Block and that the discovery extends into Repsol's acreage.
EG8 was deviated from its surface location towards the southwest in order to target the crestal area of mapped horizons in the prospective EG2/EG5 Central fault block. The well encountered 10 hydrocarbon-bearing sandstone reservoir zones between 1,364 ft and 6,000 ft below mean sea level. Preliminary analysis showed the vertical thickness of net hydrocarbon-bearing sands. It was drilled to a total depth of 8,133 ft with well sands totals of 421 ft, of which 352 ft is gas and 69 ft is oil.
Trinity Chief Executive Officer Joel Monty Pemberton told OGJ that while his company was aware of the failure, it was not sure to what extent the size of the company's discovery has been negatively impacted. He said it was logical to expect it meant the size of the discovery will have to be downgraded, but he could not tell without the information from the well.
Drilling & Production — Quick Takes
Gazprom Neft loads first oil shipment from Arctic field
JSC Gazprom Neft has loaded its first shipment of oil produced from Prirazlomnoye field, 60 km offshore on the Russian Arctic shelf. The field was discovered in 1989 and is the only Russian hydrocarbon development project in the Arctic shelf.
The 70,000-ton load of oil will be delivered to consumers in northwestern Europe by the Mikhail Ulyanov and Kirill Lavrov oil vessels, which were built on Gazprom's request for shipping oil from Prirazlomnoye. Gazprom said 300,000 bbl of oil are expected to be shipped from the field this year.
The field's recoverable oil reserves total 71.96 million tons, with projected oil production expected to reach 6 million tons/year after 2020.
This is the first time that Arctic oil has entered the global market. The oil was traded among refining companies in northwestern Europe during the first quarter.
"Today's event is highly important for strengthening Russia's position in the global oil market. We increased the flexibility and reliability of oil supply to almost any part of the world," said Gazprom Management Committee Chair Alexey Miller.
Gazprom said part of the feedstock will be sold under long-term contracts once Prirazlomnoye production is increased.
Drilling, production, storage, end-product processing, and loading are conducted on an offshore ice-resistant stationary platform that Gazprom says "fully excludes any oil spills during production, storage, and loading processes." Production from the platform began in December.
Gazprom Neft is operator of Prirazlomnoye; wholly owned subsidiary Gazprom Neft Shelf is license holder.
Suncor reports oil sands employee fatality
Suncor Energy Inc. reported that an employee fatality occurred at its oil sands site on Apr. 20.
The company said emergency service personnel responded at 11:30 a.m. after an employee was severely injured while working. The employee was immediately transported to the Northern Lights Regional Health Centre in Wood Buffalo, Alta., where he was pronounced deceased.
Suncor said it's working with the appropriate authorities and will complete a full investigation into the cause of the incident.
The name of the individual was not released.
Petrobras hits production record in Santos, Campos
Petroleo Brasileiro SA (Petrobras) recently reached an oil production record of 428,000 b/d in company-operated fields in the Santos and Campos basins.
The company said the new mark was a result of the increased output that came with the Mar. 17 launch of operations from the P-58 platform in the Parque das Baleias area of northern Campos.
The platform has been producing 50,000 b/d through three presalt wells. Petrobras holds 100% of the rights in the area.
Twenty-four production wells have been drilled overall, of which 15 are in the Campos and nine in the Santos. Production from Campos and Santos has reached 222,000 b/d and 206,000 b/d, respectively.
Fifteen more production wells are expected to start up by yearend, of which 11 will be in the Santos and four in the Campos.
Of the 15 wells, two are connected to the Cidade de Sao Paulo floating production, storage, and offloading vessel, five to the Cidade de Paraty FPSO, one to the P-48 platform, and three to the P-58 platform. The remaining four wells will be split between the the Cidade de Ilhabela FPSO and the Cidade de Mangaratiba FPSO, both of which are slated to be installed and start producing in this year's second half.
Petrobras last year reported plans to increase net production from its offshore presalt formation in the Campos and Santos to more than 2 million b/d of oil by 2020 (OGJ Online, May 7, 2013).
PROCESSING — Quick Takes
KNPC finalizes contracts for Clean Fuels Project
Kuwait National Petroleum Co. (KNPC) has finalized lump-sum turnkey contracts previously let to three groups of oil and gas service providers for work related to its Clean Fuels Project (CFP) at the Mina Abdullah and Mina Al Ahmadi refineries in southern Kuwait (OGJ Online, Feb. 19, 2014).
KNPC officially signed the three contracts Kuwait on Apr. 13 with JGC Corp., Petrofac, and Fluor Corp., all of which head separate consortia of firms tapped for the project, KNPC said.
KNPC awarded a $3.4 billion contract in February to a joint venture of Fluor Corp., Daewoo Engineering & Construction Co., and Hyundai Heavy Industries Co. to design, construct, and commission the Mina Abdullah Package 2 CFP, with an additional $3.7 billion contract let earlier that month to a consortium led by Petrofac for CFP-related work related at its Mina Abdullah and Shuaiba refineries.
KNPC in March awarded JGC Corp. and its partners GS Engineering & Construction and SK Engineering & Construction a $4.9 billion contract to provide engineering, procurement, construction as well as commissioning assistance and testing services for CFP-related work at Mina Al Ahmadi, JGC said.
With the official signing of contracts concluded, Kuwaiti government officials on Apr. 16 held a workshop for team leaders at the Mina Al Ahmadi and Mina Abdullah refineries and project consultant Foster Wheeler that focused on identifying and developing a plan to address potential risks associated with implementing the CFP, according to KNPC.
Kuwait's CFP is designed to reconfigure the country's three refineries and, in conjunction with grassroots construction planned at Al Zour, nearly double total refining capacity to 1.4 million b/d.
Under the CFP, KNPC will integrate and upgrade the 270,000-b/d Mina Abdullah and 466,000-b/d Mina Al Ahmadi refineries and ultimately close the 200,000-b/d refinery at Shuaiba following the completion of the Al Zour refinery (OGJ Online, Dec. 3, 2013). The newly integrated refineries will operate as a merchant complex with total capacity of about 800,000 b/d, the company has said.
LyondellBasell ends talks to sell French refinery
LyondellBasell has ceased discussions with Sotragem SA, Monaco, for the sale of its shuttered 105,000-b/d Berre refinery in France to Sotragem SAM.
After a comprehensive analysis, the company determined that Sotragem offered neither acceptable commercial terms nor any guarantee for a viable takeover of the refinery with an actual restart of its operations, LyondellBasell said.
While it continues to operate the petrochemical plant on the site, LyondellBasell halted refinery operations at Berre in January 2012 amid challenges facing the European refinery market.
Sotragem, a petroleum products trading firm, came forward in September 2013 as the sole bidder for the Berre refinery, which was offered for sale beginning in 2011, LyondellBasell said (OGJ Online, June 7, 2011).
Despite the ending of talks with Sotragem, LyondellBasell said it remains committed to its core business operations at the Berre petrochemical cluster, adding that it has implemented projects to enhance the competitiveness of its Berre cracker and downstream activities at the site over the past 2 years.
Suncor begins maintenance at Quebec refinery
Suncor Energy Inc. has started planned maintenance at its 137,000-b/d refinery in Montreal, Que. The scheduled maintenance will last about 4 weeks, Suncor said.
Impacts to refinery throughput and utilization as a result of the maintenance were not disclosed, but Suncor said it has factored these into the company's annual guidance.
The company also said it has made necessary arrangements to ensure sufficient finished products are available and expects all customer supply agreements will be met during the maintenance period.
Maintenance under way at Baku refinery
State Oil Co. of Azerbaijan Republic (SOCAR) has started additional maintenance on units within its 239,000-b/d Heydar Aliyev (formerly New Baku) refinery at Baku, Azerbaijan.
Both the vacuum distillation and atmospheric towers at the plant are undergoing installation and repair work.
Installations and repairs for the refinery's vacuum distillation column, including the replacement of vacuum heat exchangers, are slated to last 30 days, while work on the atmospheric column is scheduled for 21 days, according to SOCAR.
The company added that major repair work also remains under way on the refinery's catalytic cracking unit (OGJ Online, Apr. 11, 2014). SOCAR did not disclose current production rates at the plant.
TRANSPORTATION — Quick Takes
Alaska passes bill to advance state's LNG project
Alaska's state legislature has passed Senate Bill 138, which would advance a large-diameter, 800-mile natural gas pipeline project to transport production from Alaska's North Slope (ANS) to a 15-18 million tonne/year LNG plant on the state's south-central coast.
The project will now move into the pre-frontend engineering and design phase to further refine the cost and engineering aspects. The bill affirms the commercial agreement signed by the state, Alaska Gasline Development Corp. (AGDC), the producers, and TransCanada Corp. to advance the Alaska LNG project (OGJ, Jan. 27, 2014, p. 25).
Passage of SB 138 also expands the role and mission of AGDC, enabling it to carry the state's equity interest in the project's infrastructure, particularly the liquefaction and marine facilities. AGDC said it also will continue to aggressively pursue the advancement of the Alaska Stand Alone Pipeline (ASAP) project parallel to the Alaska LNG project.
"SB 138 is a huge validation of the legislature's decision to create an Alaskan-owned pipeline development company," said AGDC Pres. Dan Fauske. "AGDC will now lead the state's participation in this exciting LNG export project, while continuing to advance ASAP, the smaller in-state alternative."
Alaska Gov. Sean Parnell (R) previously described the move toward a larger-diameter pipe as "a simple answer to a complex question about how to lower the cost of getting Alaska's gas to Alaskans: Get more gas in the pipe (OGJ, Jan. 28, 2013, p. 14)."
The larger diameter will allow enough gas to be shipped to both meet the state's needs and still have material for export, while creating the economies of scale necessary to maximize project efficiency and reduce costs.
EPP to build Gulf Coast ethane export plant
Enterprise Products Partners LP (EPP) plans to build a fully refrigerated ethane export plant on the Texas Gulf Coast. EPP has executed long-term contracts to support the development, designed to have an aggregate loading rate of about 10,000 bbl/hr, or as much as 240,000 b/d. EPP expects the plant, which it describes as the largest in the world, to begin operations in third-quarter 2016.
EPP will integrate the plant with its Mont Belvieu complex, which includes more than 650,000 b/d of NGL fractionation capacity and 100 million bbl of NGL storage. The company brought its eighth Mont Belvieu fractionator online late last year, bringing its system-wide capacity to more than 1 million b/d (OGJ Online, Nov. 19, 2013).
The company estimates that US ethane production exceeds US demand by 300,000 b/d and that this surplus could reach 700,000 b/d by 2020, even after estimated incremental demand from planned ethylene production. A recent study by Simmons & Co., however, sees ethane rejection peaking at 545,000 b/d in 2015 and general oversupply remaining through 2016, after which the 2017 startup of seven petrochemical plants increases consumption by 520,000 b/d and absorbs incremental supply (OGJ Online, Sept. 1, 2013).
Turkey, Gazprom mull Blue Stream capacity increase
Turkey and OAO Gazprom have discussed a possible increase in natural gas capacity of the Blue Stream gas pipeline to 19 billion cu m/year from 16 bcm/year. Blue Stream, which extends through the Black Sea, handles more than half of all gas purchased by Turkey from Russia. Gazprom said an increase in capacity would not require laying additional strings.
Turkey is Gazprom's second-largest sales market in Europe behind Germany. Gazprom supplied Turkey with 26.7 bcm of gas in 2013. Russian gas also is supplied to Turkey through the Trans-Balkan gas line.
The relationship in the gas sector between the two countries dates back to 1984, when Turkey and the then-Union of Soviet Socialist Republics signed the gas supply agreement.
