GENERAL INTEREST — Quick Takes
Anadarko sells stake in offshore Mozambique Area 1
Anadarko Petroleum Corp. agreed to sell a 10% stake in its offshore Mozambique Area 1 to ONGC Videsh Ltd., a wholly owned unit of Oil & Natural Gas Corp. Ltd., for $2.64 billion.
After closing, expected by Dec. 31, Anadarko will remain Area 1 operator with 26.5% working interest. Closing is subject to preferential rights by partners and governmental approvals.
Area 1, in deepwater Rovuma basin, contains the Prosperidade and Golfinho-Atum natural gas complexes that hold an estimated 35-65 tcf of recoverable gas.
In cooperation with Mozambique's government and others, Anadarko said it will continue developing an LNG park scheduled to begin operations in 2018.
Al Walker, Anadarko chairman, president, and chief executive officer, said Anadarko will invest the pending sale proceeds in US projects in Wattenberg field, Eagle Ford shale, Permian and Powder River basins, and Gulf of Mexico offshore plays.
Anadarko's Area 1 partners include Mitsui E&P Mozambique Area 1 Ltd. 20%, BPRL Ventures Mozambique BV 10%, Videocon Mozambique Rovuma 1 Ltd. 10%, and PTT Exploration & Production PLC 8.5%.
Petroleum product consumption sets record high
The world's consumption of petroleum products reached a record high of 88.9 million b/d in 2012, as declining consumption in North America and Europe was more than outpaced by growth in Asia and other regions, according to a recent study by the US Energy Information Administration.
The study examines regional trends in petroleum consumption between 1980 and 2012.
Asia's consumption increased by 4.4 million b/d between 2008 and 2012. In 2009, Asia overtook North America as the world's largest petroleum-consuming region, fueled by demand increases from China and India. According to EIA's projections, China is expected to replace the US as the world's largest net oil importer this fall.
US consumption was reduced in 2011 and 2012 as a result of higher oil prices and increased fuel efficiency of light-duty vehicles. Motor gasoline consumption, which makes up almost half of total US liquids fuel consumption, fell by 290,000 b/d between 2010 and 2012.
Petroleum use in Europe has declined consecutively since 2006, due to weak economic performance and government policies in favor of energy efficiency. Europe's petroleum use declined of 780,000 b/d in 2009 and 570,000 b/d in 2012.
BLM seeks comments on geophysical projects in Utah
The US Bureau of Land Management's Moab, Utah, field office has requested comments on two proposed geophysical projects.
It said it is seeking comments about 3D seismic work Fidelity Exploration & Production Co. has proposed in the Hatch Point area about 12 miles southwest of Moab.
The Lion Mesa 3D geophysical survey would cover 50 sq miles in San Juan County, the field office's Aug. 23 notice said. Written comments will be accepted until Sept. 12.
BLM's Moab field office also requested comments on an environmental assessment of potential impacts from the proposed Horse Point Anticline 2D geophysical project in southeastern Utah's Book Cliffs.
It said Geokinetics USA Inc., on behalf of National Fuel Corp., proposes conducting an operation consisting of two parallel seismic survey lines totaling six linear miles in the Middle and Horse Canyon areas. Written comments will be accepted until Sept. 19, the field office's notice indicated.
BLM seeks comments on Desolation Flats system
BLM's Rawlins, Wyo., field office is seeking comments on proposed infrastructure in Desolation Flats natural gas field.
Samson Resources Co. and Mountain Gas Resources LLC proposed new access roads, two pipelines, two compressor stations, and a high- and low-pressure loop pipeline in their Endurance/Barricade Gas Infrastructure Project, it said Aug. 21.
The activity would involve 42,240 acres of primarily public land, with a small amount of state-owned land, 25 miles southwest of Wamsutter, Wyo. in Sweetwater County, it said. Comments will be accepted until Sept. 6, the notice said.
Exploration & Development — Quick Takes
Statoil makes third Flemish Pass basin discovery
Statoil ASA made its third oil discovery in the Flemish Pass basin offshore Newfoundland and Labrador. Statoil is calling the discovery "encouraging."
The Bay du Nord discovery, which was drilled in 1,100 m of water on EL 1112 about 500 km northeast of St. John's, Newf., is the Norwegian firm's second discovery so far this year offshore Newfoundland. In June, the company made an oil strike with its Harpoon prospect, also drilled on EL 1112; Harpoon lies about 10 km north of the Bay du Nord find (OGJ Online, June 19, 2013). In June 2012, Statoil found oil with its Mizzen well, which it estimates could hold 100-200 million bbl of oil (OGJ Online, June 21, 2012). Bay du Nord lies about 20 km south of Mizzen (see map, OGJ Feb. 14, 2005, p. 34).
Tim Dodson, Statoil exploration executive vice-president, said that as the volumes of both the Bay du Nord and Harpoon wells continue to be evaluated, Statoil is developing a greater understanding of the geology and potential of the basin.
"The Flemish Pass basin is a strategic part of Statoil's global exploration portfolio. We are now planning to return to the area for further appraisal drilling in the future," Dodson noted.
The Bay du Nord and Harpoon wells were drilled using Seadrill Ltd.'s West Aquarius semisubmersible drilling rig.
Statoil used its proprietary seismic techniques to evaluate the potential of the Bay du Nord prospect, said Eric Finnstrom, Statoil senior vice-president, exploration, for North America.
Speaking to reporters on Aug. 27 in Houston, Finnstrom said the discovery is believed to be very large although it's too early to estimate reserves or discuss potential volumes yet.
"With the Bay du Nord discovery, we now have the makings of a core position in Canada," Finnstrom said. Currently, Statoil's core areas are Norway and the Gulf of Mexico.
Statoil, operator of Bay du Nord and Harpoon, holds 65% interest; Husky Energy Inc. holds the remainder.
Canacol has Middle Mag oil discovery in Colombia
Canacol Energy Ltd., Calgary, said it has made an oil discovery in a shallow conventional Tertiary Lisama sandstone reservoir in Colombia's Middle Magdalena Valley but technical problems resulted in the well not being deepened to the Cretaceous La Luna and Simiti unconventional formations.
Planned total depth of the Oso Pardo-1 well in the Santa Isabel exploration and production contract area was 10,199 ft measured depth.
The well penetrated the Lisama sandstones as anticipated at 3,390 ft MD with good oil and gas shows while drilling, and drilled through the Umir formation with similarly good oil and gas shows in two separate oil filled sandstone intervals at 3,665 and 3,800 ft MD, respectively.
Petrophysical evaluation of the open hole logs acquired indicate 88 ft of oil pay in the Tertiary sandstones: 60 ft of oil pay in the Lisama with 25% average porosity and 28 ft of oil pay in two separate Umir sandstones with 16% average porosity. The technical problems were encountered while drilling the Tertiary section.
Under a farmout from ConocoPhillips, Canacol exercised its option to continue shallow operations on a 100% cost basis with the objective of conducting a series of cased-hole production tests of the Umir and Lisama sandstones.
Upper Umir sandstone perforations at 3,666-85 ft stabilized at 205 b/d of 23.3° gravity oil with a 9.67% water cut and 107.54 Mcfd of gas. Water cut decreased steadily over 13 days on the jet pump.
Management believes the water to be completion fluid as more than 2,000 bbl of drilling fluid were lost into the Umir and Lisama sandstones and analysis of the pressure build-up performed at the end of the test indicated heavy formation damage related to the drilling process. This damage will be remediated with a small acid stimulation prior to the zone being brought on long-term production test.
Canacol perforated Lisama at 3,399-3,427 ft MD and tested a small amount of heavy oil of less than 10° gravity and filtrate on a jet pump. The entire reservoir interval is believed to contain heavy oil, and Canacol is considering various techniques that could be used to establish commercial production from this heavy oil discovery in the future.
The company is designing a stimulation for the Upper Umir sandstone in order to remove the formation damage and improve productivity and anticipates placing the well on long-term production test once the appropriate permit has been received, within a period of one month. As per the farmout agreement, Canacol has the right to receive 100% of the crude oil produced from the Umir and Lisama sandstones, subject to ANH approval.
The discovery is the first on the contract area, and Canacol looks forward to drilling the next well.
Vegas, TransGlobe tap two zones in Western Desert
Vegas Oil & Gas SA and TransGlobe Energy Corp. have a Cretaceous oil and Jurassic gas-condensatediscovery on the 50-50-held, 102,000-acre East Ghazalot block in the Abu Gharadig basin in Egypt's Western Desert.
The North Dabaa-1X exploratory well was drilled to a total depth of 14,740 ft and cased. Based on open hole well logs and samples, the well encountered 8 ft of net oil pay in the Cretaceous Abu Roash formation and 23 ft of net gas-condensate pay in the Jurassic Khatatba formation.
A 72.5-hr flow test of Khatatba at 9,882-9,906 ft recovered 48.9 MMcf of gas and 4,893 bbl of 56.9° gravity condensate on 18/64-in. to 64/64-in. chokes with corresponding wellhead drawdowns of 2% to 44%. This represents average rates during the entire flow test of 16.2 MMcfd and 1,620 b/d.
An extended flow period of 26 hr on a 64/64-in. choke resulted in rates of 26 MMcfd and 2,571 b/d. Shut-in periods were interspersed, but no detailed well test analysis has been performed. The test results are not necessarily indicative of long-term performance, TransGlobe said.
The Jurassic new pool discovery will require more drilling to determine the extent and commerciality, and the Abu Roash oil zone will be completed and production-tested at a future date. The well was drilled, cased, completed, and tested for an estimated $6.6 million.
The North Dabaa-1X discovery is 1.4 km east of the TransGlobe's newly awarded 100% working interest South Ghazalat concession which is awaiting government ratification.
Sri Lanka says six ultradeepwater blocks available
Six ultradeepwater blocks around Sri Lanka's coast are available, said the Petroleum Resources Development Secretariat.
The blocks range from 18,000 to 26,000 sq km and will be awarded outside the current offshore bid round.
Awards will be based on "the experience and capability of the applicant" and the proposed work commitment.
The basic framework for the agreement is 2 years for data acquisition, processing, and interpretation, followed by 1 year for discussions with the PRD Committee on potential next steps.
A pre-bid clarification meeting was held in Colombo. Sri Lanka is taking bids until Nov. 29 on 13 offshore blocks in the Cauvery and Mannar basins (OGJ Online, July 8, 2013).
Drilling & Production — Quick Takes
IADC forms well-control training, assessment body
The International Association of Drilling Contractors said it formed the Well Control Institute (WCI), a new industry body that will provide the drilling industry with "a single, universal well-control training and assessment standard." WCI is expected to be fully operational by mid-2014.
"Preventing the unwanted release of hydrocarbons is the primary process safety concern at all stages of a well's life cycle. Proper personnel training is an essential element in preventing unwanted releases," IADC said. "The WCI is a cross-industry initiative to deliver a step-change in operational integrity and well-control incident prevention. The goal is to develop a professional and consistent approach to ensuring competence and credentials of everyone involved in all aspects of well control."
The WCI brings together all sectors of the drilling community to define and implement a new well control standard, which will build on the recommendations of the OGP Wells Expert Committee, IADC's Well Control Advisory Panel, and other industry stakeholders.
The training and assessment standard developed by WCI will focus on learning and learning retention and will provide rig-role-directed learning objectives with an emphasis on kick detection and well shut-in. It will focus on the use of realistic simulation in a team environment and provide a reliable, secure and trusted testing process. The flexible curriculum will cover all well construction disciplines and specialized practices and will offer continuous opportunities for new learning with an enhanced frequency of assessment.
"Existing well control training systems, including IADC's WellCAP program, were originally based on decades-old regulatory frameworks. The WCI presents a unique opportunity to rethink what needs to be focused on for effective well control training and to modernize the industry's training efforts through new methods and technology. In addition, the WCI has the potential to perform as a resource for collecting data to help improve well control equipment and practices," IADC said.
Shell Offshore advances deepwater gulf development
Shell Offshore Inc. has let a contract to Technip for the engineering, procurement, and installation of subsea infrastructure for its Stones field in the Walker Ridge area of the Gulf of Mexico. The Stones development will host the deepest floating production, storage, and offloading unit in the world, says Shell, and will be the major's first FPSO in the gulf. Stones field lies in 9,500 ft of water.
Technip will install the subsea production system and Stones lateral gas pipeline, inclusive of associated project management, engineering, and stalk fabrication.
Technip's operating center in Houston will perform the overall project management. The flowlines and risers will be welded at Technip's spoolbase in Mobile, Ala. The offshore installation is expected to be performed in second-half 2014 by Technip's Deep Blue deepwater pipelay vessel.
In July, Shell let a contract to SBM Offshore for the supply and lease of a FPSO, which has a processing capacity of 60,000 b/d of oil and 15 MMcfd of gas and 800,000 bbl of storage capacity (OGJ Online, July 23, 2013). Shell and SBM Offshore signed an agreement for the supply of medium and small FPSOs on a lease-and-operate basis in March 2012. In May, Shell let a subsea equipment contract to FMC Technologies Inc. (OGJ Online, May 23, 2013).
Stones field was discovered in 2005 and includes eight Outer Continental Shelf lease blocks in the gulf's Lower Tertiary trend. The field is estimated to hold more than 2 billion boe in place.
Sidetrack hikes Osprey to top Cook Inlet platform
Miller Energy Resources Inc., Huntsville, Tenn., said its Cook Inlet Energy unit is producing its RU-1A sidetrack well in Alaska at a reduced rate while it conducts formation analysis after having brought the wellbore online on Aug. 17 at more than 700 b/d of oil at 5% water cut.
The subsidiary will adjust pump speed and increase production accordingly in order to preserve reservoir integrity and maintain optimal reservoir pressure.
The companies said the sidetrack, which encountered oil throughout the Hemlock formation and in the top of the West Foreland formation, produced at more than twice the historical IP rate. The sidetrack has 455 gross ft of perforations. TD is 15,050 ft measured total depth.
Oil production from the Osprey platform has averaged 2,180 b/d and including gas more than 2,500 b/d of oil equivalent. With the addition of the RU-1A output, the companies estimated that Osprey is now the single highest producing oil platform in Cook Inlet. The rig will now sidetrack the RU-5 well.
ExxonMobil unit grants gravel-pack license
ExxonMobil Upstream Research Co. has granted Weatherford International Ltd. a limited license to produce and deploy patented sand-control and completion technologies internationally for ExxonMobil and ventures in which it participates.
The proprietary Alternate Path technology creates alternate flow paths called shunt tubes in the downhole tool used for packing gravel during cased and open-hole well completions in sand-prone reservoirs. The shunt tubes allow packing to continue when sand prematurely blocks the well annulus by diverting the gravel slurry around sand blockages and through distributed portholes to fill voids in the annulus.
Drilling & Production — Quick Takes
Sinopec ethylene plant comes on stream
Sinopec Wuhan Co. reported that its 800,000-tonne/year ethylene project had produced its first batch of "qualified products," marking the plant's successful commissioning and start-up.
The project includes 11 greenfield major production units with public utilities and supporting facilities. It was built in 3 years with a total investment of $2.7 billion and will produce 2.3 million tonnes/year of more than 20 kinds of products.
Sinopec said the project is "pivotal" in the company's 11th 5-year plan and the most important project in Hubei province.
Oneok Partners to buy Powder River basin assets
Oneok Partners LP reported it will invest $440 million in the natural gas liquids-rich area of Wyoming's Powder River basin. The natural gas distributor intends to purchase a 50-MMcfd natural gas processing facility in western Converse and Campbell counties for $305 million from Merit Energy and invest $135 million to upgrade and construct gas gathering and processing related infrastructure, NGL gathering pipelines, and well connections.
The partnership expects to close the transaction during this year's third quarter and complete the related infrastructure projects in second-half 2014. As part of the acquisition, Oneok Partners will receive long-term acreage dedications and fee-based and percent-of-proceeds agreements with producers.
In addition to the Bakken NGL pipeline, Oneok Partners currently operates 1,000 miles of gas gathering pipelines in the Powder River and Wind River basins.
TRANSPORTATION — Quick Takes
Gulf Coast Pipeline 'slightly behind schedule'
Construction of TransCanada Corp.'s 36-in. OD, 485-mile, Keystone Gulf Coast Pipeline (KGCP) is slightly behind schedule, according to Genscape Inc.'s most recent aerial surveillance of the project. TransCanada described construction on Aug. 20 as more than 90% complete, with an expected in-service date of yearend. Genscape believes this estimate to be optimistic and sees first-quarter 2014 as more realistic. The bulk of work remaining on the project is centered on the Cushing pumping station and along the pipeline right-of-way, Genscape said.
At TransCanada's Cushing terminal, four of the seven newly constructed tanks have hydrotested with a fifth tank currently hydrotesting. Mixer installation and tank pipeline connections, however, have yet to be completed for any of the seven new tanks, Genscape said. The firm believes completed tank capacity and associated connections are necessary for KGCP's 3.2-million bbl initial linefill and that it will take 40-60 days to fill the line once construction is complete. The terminal, when complete, will have 2.25-million bbl of storage.
Genscape observed exposed pipe near the Tupelo, Bryan, Delta, and Lake Tyler, Tex. sites. It observed crews working on pipeline connectivity along the ROW. The Cromwell, Bryan, and Winnsboro pumping stations each have four pumps installed, according to Genscape, and pipeline infrastructure looks to be nearing completion. Ground preparation continues at the Tupelo, Delta, and Lake Tyler facilities.
KGCP will ship oil from Cushing to Nederland, Tex., with an initial capacity of 700 million b/d, expandable to 830 million b/d.
Inpex terminal receives first LNG shipment
Inpex Corp. said the first LNG carrier for its Naoetsu LNG terminal arrived Aug. 27. Offloading from the 285-m Tangguh Foja is expected to be completed by Aug. 28. The carrier's cargo tank capacity is 154,800 cu m.
The arrival is related to a July 31 agreement between Inpex and Chubu Electric Power Co. Inc.
The terminal is in Joetsu City, Japan. Inpex said it will continue with commissioning work, with a second LNG carrier scheduled for December and full-scale commercial operation slated for January 2014. Construction of the Inpex terminal began in 2009.
Plains discontinues NGL pipeline JV with Keyera
Plains All American Pipeline LP's wholly owned subsidiary Plains Midstream Canada ULC (PMC) has discontinued its joint pursuit with Keyera Corp. of the construction and operation of the proposed Western Reach NGL pipeline system.
Western Reach would have extended from the Gordondale area of northwestern Alberta to the NGL hub in Fort Saskatchewan, consisting of two newbuild pipelines, one dedicated to a mixture of propane, butane, and condensate (NGL mix) and the other to segregated condensate service (OGJ Online, Apr. 11, 2013). The 570-km Western Reach would have crossed the Deep basin, including the Montney and Duvernay zones.
PMC said it is continuing to evaluate opportunities to participate in expected Deep basin NGL growth, whether through other newbuild opportunities, expansion of existing systems, or both.
Keyera earlier this month announced a joint venture with Kinder Morgan Energy Partners LP to build a crude oil rail loading terminal in Edmonton next to Keyera's diluent terminal (OGJ Online, Aug. 2, 2013).
