GENERAL INTEREST — Quick Takes
Harvest Natural Resources discussing sale, spinoff
Harvest Natural Resources Inc., Houston, has begun exclusive negotiations for the sale of its outstanding shares to the Venezuelan subsidiary of Pluspetrol SA, Buenos Aires.
Under the proposed deal, Pluspetrol Venezuela SA would retain Harvest's 32% interest in Petrodelta SA, and Harvest's non-Venezuelan assets would be contributed to a new company called SpinCo, which would be spun off to Harvest's shareholders. SpinCo would be managed by Harvest's current management team.
Interests subject to the spinoff are in Gabon, Indonesia, Colombia, and China.
Harvest reached an agreement last year to sell its Venezuelan holdings to state-owned PT Pertamina (Persoro) of Indonesia, but the Indonesian government later rejected the $725-million deal, from which Harvest expected net proceeds of about $525 million (OGJ Online, Feb. 20, 2013).
Petrodelta holds 247,113 gross acres encompassing six fields in eastern Venezuela, from which production recently averaged 43,000 b/d of oil.
Sonangol to buy offshore Angola interest from Marathon
Sonangol EP agreed to buy Marathon Oil Corp.'s 10% interest in offshore Angola Block 32 for $590 million, and Marathon said it also plans to buy 4,800 net acres in South Texas Eagle Ford for $97 million.
Marathon's sale of its stake in Block 32 is expected to close in the fourth quarter.
"With the anticipated sale of our interest in Angola Block 32, we have now completed or agreed to divestitures totaling approximately $3.5 billion, surpassing the $3 billion upper end of our stated 3-year target," Marathon Oil Chief Executive Officer Lee M. Tillman said.
Since spinning off its downstream assets in 2011 as Marathon Petroleum Corp., Marathon Oil has concentrated on US unconventional liquids plays. Few details on the Eagle Ford acquisition were immediately available.
Meanwhile, Marathon Oil announced another offshore Angola sale in June as it continues to divest properties and to buy back its own stock.
The sale of Marathon's stake in Block 32 offshore Angola remains subject to finalization of definitive agreements, the satisfaction of customary closing conditions, and obtaining necessary government, regulatory, and third-party approvals. Upon closing, the sale to Sonangol takes Marathon Oil's asset sales to $3.5 billion since 2011.
In June, Marathon Oil sold a 10% interest in Angola Block 31 to Sinopec Group for $1.5 billion.
Sea Dragon to sell stake in Kom Ombo concession
An undisclosed private company will acquire the entire 50% interest held by a unit of Sea Dragon Energy Inc., Calgary, in the Kom Ombo concession in the Kom Ombo basin in southern Egypt.
Consideration is $6 million in cash, and closing is expected around Sept. 30.
Operated by Dana Gas, which holds the other 50% interest, the concession lies 1,000 km south of Cairo. The concession, acquired in April 2010, consists of two producing fields, Al Baraka and West Al Baraka. Production totals 412 b/d of oil. Management estimates of the concession reserves as of the end of 2012 were a gross 1.3 million bbl of oil.
Sea Dragon said it reviewed its strategy and asset portfolio and found Kom Ombo to be noncore. It will reinvest funds from the sale in its Egypt Gulf of Suez fairway producing assets where the company recently acquired the Shukheir Marine concession.
Exploration & Development — Quick Takes
Noble Energy makes deepwater gulf gas discovery
A group led by Noble Energy Inc. reported making a natural gas discovery with its Troubadour prospect in the deepwater Gulf of Mexico. The well, drilled in Noble's Big Bend/Troubadour Rio Grande area, was drilled to a total depth of 19,510 ft in 7,273 ft of water on Mississippi Canyon Block 699. Reservoir and fluid measurement logs identified 50 ft of net gas pay in a high-quality Miocene reservoir, Noble said.
"Results from the well have provided critical new information that indicates a greater than previously predicted oil recovery in the Rio Grande complex," Noble said. "Discovered gross resources in this area are now estimated at between 50 and 100 million boe, with 75% representing oil volumes. We are moving forward our development planning as subsea tiebacks to an existing host facility. Initial project sanction is targeted by the end of this year and first production is planned toward the end of 2015," the company said.
The Troubadour discovery well is being temporarily abandoned for future development. Following completion of operations at Troubadour, Noble plans to move the drilling rig to the Dantzler prospect on MC Blocks 738/782. Dantzler is operated by Noble with a 65% participating interest and is targeting a resource range, based on 75th and 25th percentile probabilities, of 50-220 million boe gross. Results from the exploration well are anticipated by yearend.
Noble operates Big Bend with a 54% participating interest and Troubadour with a 60% interest. Other interest owners at Big Bend include Red Willow Offshore LLC 15.4%, Houston Energy Deepwater Ventures V LLC 10.6% and W&T Offshore Inc. unit W&T Energy VI LLC 20%. W&T Energy VI LLC and Deep Gulf Energy II LLC participate in Troubadour with 20% each.
In late-2012, a group led by Noble discovered 150 ft of net oil pay in two high-quality Miocene reservoirs in a Big Bend prospect that reached 15,989 ft in 7,200 ft of water on MC Block 698 (OGJ Online, Nov. 28, 2012).
BP makes gas discovery with Salamat well
BP Egypt reported what it was calling a "significant gas discovery" with its deepwater Salamat exploration well in the East Nile Delta. BP said Salamat is the deepest well ever drilled in the Nile Delta. It is the first well in the North Damietta Offshore concession granted in February 2010 and operated by BP.
The well, which reached a total depth of 7,000 m, was drilled in 649 m of water using the sixth-generation Maersk Discoverer semisubmersible rig. The wireline logs, fluid samples, and pressure data confirmed the presence of gas and condensate in 38 m net of Oligocene sands in Salamat, BP said. Further appraisal will be required to better define the field resources and to evaluate the options for developing the discovery.
"Success with Salamat proves hydrocarbons in the center of a 50-km long structure. With a hydrocarbon column in excess of 180 m, the discovery increases our confidence in the materiality of the deep Oligocene play in the East Nile Delta," said Mike Daly, BP executive vice-president, exploration.
Hesham Mekawi, BP Egypt regional president, said that standalone and tie-back options to the nearby Temsah development are currently being evaluated.
The Salamat discovery lies 75 km north of Damietta city and only 35 km northwest of the Temsah offshore facilities. BP has 100% equity in the discovery.
Lundin group to test Gohta oil find in Barents Sea
A unit of Lundin Petroleum AB, Stockholm, plans to drillstem test a Permian carbonate oil discovery in the Barents Sea offshore Norway.
Lundin Norway AS as operator for exploration license PL492 said the 7120/1-3 exploratory well on the Gohta prospect was designed to prove oil in Triassic sandstone and Permian carbonate reservoirs. It encountered the Triassic sandstone target according to prognosis, but the reservoir was water-filled.
The well encountered a gross 75-m oil column beneath a gross 25-m gas-condensate cap in dolomitized and karstified carbonate in the Permian target. The oil-water contact is at 2,365 m below mean sea level.
The well, 35 km northwest of Snohvit field, has been cored, logged, and sampled. The Transocean Arctic semisubmersible drilled Gohta to 2,525 m below MSL in 342 m of water.
Lundin Norway is the operator of PL492 with 40% interest, DNO ASA has 40%, and Norwegian Energy Co. ASA 20%.
Results released for well in Kazakh sector of Caspian
The first exploratory well in the Zhambyl structure of the Kazakh sector of the Caspian Sea flowed oil and gas from the Middle Jurassic, two partners reported.
The ZB-1 well was drilled to 2,200 m from May to August. Tests resulted in a production volume of 24 cu m/day through a 6.35-mm choke from one zone and 110 cu m/day with a 12.7-mm choke from another.
KazMunayGas and partner Korean Consortium KC Kazakh BV reported the results. Operator of the well is Zhambyl Petroleum.
Exploration work will continue with 3D seismic studies in Zhambyl and drilling of exploratory well ZT-1 in the Zhetysu structure.
Drilling & Production — Quick Takes
Kashagan oil field starts production
North Caspian Operating Co. BV (NCOC), on behalf of the North Caspian Sea PSA Consortium, reported the start of oil and gas production from giant Kashagan field offshore Kazakhstan. Completion of the facilities required for initial production was reached at midyear (OGJ Online, July 1, 2013).
Phase 1 status has been reached at a cost of $41.2 billion, NCOC said. The first phase entailed the completion and operation of offshore and onshore facilities with capacity to produce as much as 180,000 bo/d from 20 wells. Phase 2 will involve completion of remaining facilities that will increase production to 370,000 bo/d; currently these facilities are mechanically completed and under commissioning. A total of 40 wells are planned for Phase 1.
Kashagan field represents the largest oil accumulation in the North Caspian Sea with estimated reserves of 35 billion bbl OOIP with 9-13 billion bbl recoverable.
Kashagan spans an area of 75 km by 45 km and lies at 4,200 m in 3-6 m of water about 80 km offshore Atyrau in the northern part of the Caspian Sea.
Since January 2009, NCOC acts on behalf of seven coventure consortium partners: KazMunayGas, Eni SPA, ExxonMobil Corp., Royal Dutch Shell PLC, and Total SA, 16.81% each; ConocoPhillips 8.4%, and Inpex 7.56%. Execution of operations is delegated to four agent companies: Agip KCO, Shell Development Kashagan (SDK), ExxonMobil Kazakhstan Inc., and NCPOC, a joint venture of KMG-Kashagan BV and SDK.
During the first phase of Kashagan production, about half the produced gas will be reinjected into the reservoir. Separate pipelines will carry produced liquids and raw gas to the Bolashak plant, which will treat oil for export. Some of the processed gas will be returned to the field to fuel operations, and some will fuel the onshore plant.
RWE Dea starts gas production in Egypt
RWE Dea Egypt has started natural gas production from its Disouq concession onshore Egypt's Nile Delta. The project encompasses the development of seven gas fields in the area to produce a total of 11.4 billion cu m of gas. Disouq is the first gas project to be brought on production by RWE Dea as operator in Egypt.
RWE Dea said the start of Disouq production, in which RWE Dea Egypt is sole interest holder along with state partner Egyptian Natural Gas Holding Co., has been delivered to the Egyptian grid. Production is expected to ramp-up progressively during the commissioning period to reach a rate of 1.4 million cu m/day of gas. A peak production level of 4-4.5 million cu m/day is expected to be achieved in mid-2014 when a central treatment plant will start producing.
The gas produced from this project is expected to contribute materially towards supplying the growing energy market in Egypt.
RWE Dea plans to produce the total volume of 11.4 billion cu m of gas in the first two project phases. The company also plans to develop additional natural gas potential in the areas adjoining the reservoirs already discovered and belonging to the concession.
The Disouq concession is in the Kafr el Sheikh Governerate in Egypt's gas-rich region of the Nile Delta that reaches to the Mediterranean Sea. The concession currently comprises a total area of 3,217 sq km and was awarded to RWE Dea in July 2004. RWE Dea launched production after its North Sidi Ghazy-1-2 development well yielded positive results (OGJ Online, Aug. 28, 2012).
Cuadrilla submits planning application for well
Cuadrilla Resources Ltd. said it decided to submit a new planning application to cover the flow testing of an oil exploration well at Lower Stumble, Balcombe, in southern England.
The new application will cover the same well testing as outlined in a 2010 permit, but the new application also will include revised planning boundary lines showing the extent of a horizontal well. The application will not include additional drilling or any hydraulic fracturing, Cuadrilla said.
An original planning application's boundary delineation covers the surface drilling site area.
"Our decision to make a new application for the well testing activity, rather than an extension of previously approved activity, is to resolve any potential legal ambiguity around how the planning boundary should be drawn for a subsurface horizontal well," Cuadrilla said in a Sept. 4 news release.
Cuadrilla temporarily halted drilling at Balcombe during August because of opposition from environmental activists.
Previously, Cuadrilla delayed plans for drilling and fracturing exploration wells at its licenses in the Bowland shale in northern England pending environmental impact assessments (OGJ Online, Mar. 14, 2013).
At yearend 2012, the UK government lifted a moratorium on fracturing as part of the government's effort to stimulate energy investments and reduce dependence on gas imports (OGJ Online, Dec. 24, 2012).
The mortarium was imposed while the UK government looked into events around a Cuadrilla shale-gas well near Poulton-le-Fylde (OGJ Online, Nov. 3, 2011).
Centrica extends FPSO contract for Chestnut field
Centrica Energy will extend its contract for a cylindrical floating production, storage, and offloading vessel in Chestnut field in the central UK North Sea until March 2016.
The Hummingbird Spirit, owned by Teekay, has produced more than 13 million bbl of oil since 2008 (OGJ Online, Sept. 23, 2008). The field, 200 km northeast of Aberdeen, produces about 7,000 b/d.
PROCESSING — Quick Takes
Mongstad refinery upgrade due study
Statoil has let a contract to Foster Wheeler AG's Global Engineering & Construction Group to study feasibility of an upgrade of the 203,000-b/cd Mongstad refinery. Foster Wheeler said the upgrade is expected to include installation of a vacuum distillation unit and new diesel hydrotreaters.
The project aims to address crude-quality flexibility requirements and to increase production of diesel, including ultralow-sulfur diesel.
A study of technologies and costs is due by yearend.
The refinery is owned by Mongstad Refining, in which Statoil holds 79% interest and Shell the rest.
Flint Hills buys its sixth ethanol plant
Private refiner Flint Hills Resources, Wichita, has acquired a 110-million-gal/year corn-based ethanol plant in Arthur, Iowa, from Platinum Ethanol (OGJ Online, Jan. 7, 2011).
It didn't disclose terms.
Flint Hills operates refineries in North Pole, Alas.; Rosemount, Minn.; and Corpus Christi, Tex., with combined crude oil capacity of nearly 670,000 b/d.
The Arthur facility becomes its sixth ethanol plant. Located elsewhere in Iowa and in Fairmont, Neb., the other plants have combined capacity of 550 million gal/year of ethanol.
TRANSPORTATION — Quick Takes
Leaders commission section of Kazakhstan-China line
Chinese President Xi Jinping and Kazakhstan President Nursultan Nazarbayev held a commissioning ceremony Sept. 7 in Astana for the first section of Phase II of the Kazakhstan-China Gas Pipeline.
Phase II will have two sections. The 1,143-km first section extends from Bozoy in Aktobe Province to Shymkent in South Kazakhstan Province, and is ready for natural gas delivery. The 311-km second section from Beyneu in Mangystau Province to Bozoy is expected to be completed in 2015.
The 1,454-km Phase II pipeline is designed to transport 10 billion cu m/year and has the potential of 15 billion cu m.
China National Petroleum Corp. and KazMunaiGas signed an agreement for construction and operation of the pipeline in August 2007. In 2008, the Asia Gas Pipeline LLP joint venture was formed for construction and operation management.
The Phase I project—the section of the Central Asia-China Gas Pipeline in Kazakhstan—has a total length of 1,302 km. Lines A and B of the project are in operation with a designed deliverability of 30 billion cu m/year. Line C—which extends parallel to Lines A and B—has a deliverability of 25 billion cu m/year and is slated for completion by yearend (OGJ, Oct. 22, 2012, p. 22).
AGP lets contract for Kazakhstan compression
Asia Gas Pipeline LLP (AGP) has let a contract to Rolls-Royce for the supply of 12 RB211 gas-turbine driven pipeline compressor units for four compressor stations along Kazakhstan's 1,115-km Line C Gas Pipeline, part of the 1,833-km Central Asia-China Gas Pipeline network.
When it reaches full capacity in 2016, the Central Asia-China Gas Pipeline network will transport as much as 55 billion cu m/year from Turkmenistan and Uzbekistan, through Uzbekistan and Kazakhstan, to China. The Line C Pipeline will contribute up to 25 billion cu m/year of this capacity, including the potential to supply gas inside Kazakhstan.
AGP awarded contracts to Rolls-Royce in 2009 for eleven RB211 for its Line A and B pipelines.
Earlier this year, PetroChina let a contract to Rolls-Royce for the supply of six RB211-driven compressor units for use on its Third West-East Pipeline Project (WEPP 3), bringing the total sold for use on the China-Central Asia network to 56 at that time. Line C will connect with WEPP 3 (OGJ Online, Jan. 17, 2013).
AGP, a joint venture of Kazakhstan's KazMunaiGaz and China's National Petroleum Corp., spent $175 million on the purchase.
Rolls-Royce will manufacture and package the equipment for Line C in Montreal, Que., and Mount Vernon, Ohio.
Trans Adriatic Pipeline begins land easement
Trans Adriatic Pipeline AG (TAP) has started its land easement and acquisition activities for the 870-km TAP system through Albania, Greece, and Italy.
Last month, BP PLC, State Oil Co. of Azerbaijan Republic (SOCAR), and Total SA—all members of the international consortium developing Shah Deniz gas field in Azerbaijan—exercised their option to join TAP (OGJ Online, Aug. 23, 2013).
BP and SOCAR each took a 20% share, while Total acquired a 10% stake. Major European gas transit operator Fluxys also joined the group, taking a 16% stake in the project. Other shareholders are Statoil 20%, E.On 9%, and Axpo 5%.
"TAP has authorized its contractors to start surveys for collecting detailed information on the landowners living along the pipeline corridor to complement the existing cadastral data," TAP partners said. The goal is to identify rightful land owners, establish property boundaries, and evaluate the affected properties, they said.
TAP is carrying out its activities in accordance with the international standards of the European Bank for Reconstruction and Development to ensure that all those affected living along the line's corridor are compensated fairly and transparently, partners said.
TAP will transport gas from the giant Shah Deniz II field in Azerbaijan to Europe. The pipeline will connect with the Trans Anatolian Pipeline near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in southern Italy.
Spectra ups contract volumes on Express crude line
Spectra Energy Corp and Spectra Energy Partners reached new long-term agreements for shipments on the Express crude oil pipeline between Hardisty, Alta., and Casper, Wyo.
An open season on the line increased contracted commitments to 225,000 b/d from 119,000 b/d, with the average contract length growing to more than 11 years from 1.5 years.
Contracts stemming from the open season are effective as early as October and phase in over 2 years.
Express pipeline has a design capacity of 280,000 b/d and connects to the Platte pipeline system in Casper. A connection to Front Range Pipeline LLC will also supply CHS Inc.'s 55,000 b/d Laurel, Mont., refinery beginning fourth-quarter 2014 (OGJ Online, Feb. 14, 2013).
Spectra bought the Express-Platte Pipeline System from Kinder Morgan Energy Partners LP and its partners (Ontario Teachers' Pension Plan Board and Borealis Infrastructure) earlier this year.
CORRECTIONOGJ incorrectly stated Range Resources Corp.'s natural gas production in the OGJ150 special report (OGJ, Sept. 2, 2013, p. 34). Range's US gas production of 216.6 bcf should have ranked them No. 17 in the US and No. 20 worldwide. |
