GENERAL INTEREST — Quick Takes
Total names successors after death of de Margerie
Convening after the sudden death of Chairman and Chief Executive Officer Christophe de Margerie, the board of Total SA has unanimously appointed Thierry Desmarest as chairman and Patrick Pouyanne as CEO and president of the executive committee (OGJ Online, Oct. 21, 2014).
Desmarest is a member of the board and honorary chairman. He previously served as CEO before relinquishing the post to de Margerie in 2007 as the positions of CEO and chairman were split (OGJ Online, Feb. 16, 2007; May 11, 2007). Pouyanne has served as president of refining and chemicals and a member of the executive committee (OGJ Online, Nov. 29, 2011).
Desmarest's role as chairman will conclude at yearend 2015 in accordance with the age limits stipulated in the group's bylaws. The positions of chairman and CEO will then be recombined.
De Margerie died Oct. 20 in the crash of a private airplane at Vnukovo Airport in Moscow. Three crew members also perished when the aircraft collided during takeoff with snow-removal equipment.
De Margerie, who joined the Total organization in 1974, became chief executive officer in February 2007 and chairman and chief executive officer in May 2010. A graduate of the Ecole Superieure de Commerce in Paris, he earlier worked in Total's finance department and exploration and production division. He was 63.
Statoil's Lund to join BG Group as CEO
BG Group has appointed Helge Lund as chief executive officer and as an executive director, effective Mar. 2, 2015. Lund has served as president and CEO of Statoil ASA since 2004 (OGJ Online, Mar. 11, 2004).
The move comes months after former CEO Chris Finlayson resigned as CEO and executive director, giving way to Andrew Gould to take over as interim executive chairman (OGJ Online, Apr. 28, 2014).
In response, Statoil's board has appointed Eldar Saetre as acting president and CEO. He's served as executive vice-president of marketing, processing, and renewable energy since 2010 and a member of the company's corporate executive committee since 2003.
Statoil says Saetre played an essential role during its merger with Norsk Hydro's oil and gas division, implementing an updated strategy for marketing of natural gas to Europe, and leading improvement work at the company's onshore facilities.
Statoil's board has established a subcommittee to conduct the search for the company's next chief executive.
Stover elected as Noble president, CEO
Noble Energy Inc. reported that the company has elected David L. Stover as president and chief executive officer. Stover succeeds Charles D. Davidson as chief executive officer. Davidson earlier this year announced plans to retire effective May 1, 2015 (OGJ Online, Apr. 15, 2014).
Stover has previously served as the company's president and chief operating officer. Davidson will continue to serve as the company's chairman until Noble holds its 2015 annual meeting at which time he will be leaving the board.
Southwestern to acquire Marcellus, Utica assets
Southwestern Energy Co., Houston, has agreed to acquire assets in the southern Marcellus shale and a portion of the eastern Utica shale in West Virginia from Chesapeake Energy Corp., Oklahoma City, for $5.375 billion.
The deal, expected to close in the fourth quarter, encompasses 413,000 net acres and 1,500 wells in northern West Virginia and southern Pennsylvania along with related property, plant, and equipment. Average working interest in the properties is 67.5%.
Of a total of 435 horizontal wells, 256 are operated and producing in the Marcellus and Utica and an additional 179 are nonoperated or nonproducing in the Marcellus and Utica.
Net production in September totaled 336 MMcfd of gas equivalent, of which 55% is gas, 36% are NGLs, and 9% is oil. As of Dec. 31, 2013, net proved reserves associated with these properties totaled 221 million boe.
Southwestern Energy will assume a portion of Chesapeake's firm transportation and processing capacity commitments. Based on capacity and expected future commitments, the company's preliminary plans are to begin with 4-6 rigs next year and increase to 11 rigs by 2017.
Southwestern Energy estimates that it can drill for a minimum of 20 years maintaining that 11-rig pace. By yearend 2017, the reserve mix for the company is estimated to be one-third each for the Fayetteville, northeast Marcellus, and the newly acquired West Virginia and Pennsylvania properties, compared with two-thirds for the Fayetteville and one-third northeast Marcellus as of the day the deal took place.
Southwestern previously purchased 162,000 net acres in the Marcellus from Chesapeake for $93 million, giving Southwestern Energy 337,000 net acres in the play upon closing of the deal (OGJ Online, Apr. 30, 2013). Earlier this year, Southwestern Energy agreed to purchase 312,000 net acres in the Niobrara shale from Quicksilver Resources Inc. and Swepi LP, a unit of Royal Dutch Shell PLC, for $180 million.
As of May, the total value of sales and divestitures for the year made by Chesapeake totaled more than $4 billion (OGJ Online, May 16, 2014).
Exploration & Development — Quick Takes
Alaska awards Beaufort Sea leases after ANWR review
Alaska's Division of Oil and Gas awarded two Beaufort Sea leases pending since 2011 and published tract maps for Nov. 19 Beaufort Sea and North Slope lease sales that accurately reflect the Arctic National Wildlife Refuge's western boundary following a thorough review.
The division, which is part of the state's Department of Natural Resources, took the actions on Oct. 21 after Alaska sought priority conveyance of nearly of nearly 20,000 acres of uplands following its assertion that the US Fish & Wildlife Service did not properly map ANWR's western boundary (OGJ Online, Oct. 20, 2014).
"I'm pleased that we are now able to award these leases to the 2011 bidders and clarify the acreage that is available for oil and gas exploration in this highly-prospective region," Natural Resources Commissioner Joe Balash said.
"Our next step is to determine how the state's assertion will affect existing leases on tidal and submerged lands along the ANWR boundary," he said.
Shell makes gas find offshore Gabon with Leopard-1 well
Shell Gabon reported a natural gas discovery offshore Gabon with 200 m of net pay in a presalt reservoir. The Leopard-1 well was drilled on license BCD10 to a total vertical depth of 5,063 m in 2,110 m of water about 145 km offshore.
Shell operates the license with 75% participating interest. China National Offshore Oil Corp. Ltd. holds the remaining 25% interest, which it acquired from Shell in mid-2012 (OGJ Online, July 25, 2012).
The companies said they plan an appraisal program.
BOEM proposes central Gulf of Mexico Lease Sale 235
The US Bureau of Ocean Energy Management (BOEM) has proposed Gulf of Mexico central planning area Lease Sale 235 for March 2015 in New Orleans. BOEM will make available 7,477 tracts covering 43.5 million acres offshore Louisiana, Mississippi, and Alabama.
Blocks range 3-230 nautical miles offshore in 9-11,000 ft of water, and include those within-or partially within-the 3 statute mile US-Mexico boundary area subject to the terms of the US-Mexico Transboundary Hydrocarbon Agreement.
BOEM estimates the proposed sale could result in production of 460-894 million bbl of oil and 1.9-3.9 tcf of natural gas.
The sale is the seventh offshore sale under the Obama administration's Outer Continental Shelf oil and gas leasing program for 2012-17. The first six sales offered more than 60 million acres and netted $2.4 billion.
Statoil proves oil near Grane field in North Sea
Statoil ASA proved a 25-m oil column in the D-structure of the Heimdal formation north of the North Sea's Grane field.
Appraisal well 25/8-18 S, part of PL169, was drilled to respective vertical and measured depths of 1,863 m and 1,867 m below the sea surface in 129 m of water, and was terminated in the Shetland Group in the Upper Cretaceous.
"Well 25/8-18 S appraised the D-structure and proved substantial additional oil volumes in an excellent sandstone reservoir," said May-Liss Hauknes, Statoil vice-president for exploration in the North Sea.
The D-structure is on the Utsira High, 7 km north of Grane field and in the immediate proximity of the Grane F oil discovery made by Statoil in 2013 (OGJ Online, May 28, 2013). The D-structure was originally penetrated in 1992 by well 25/8-4, which encountered just 1 m of oil showing about 6 million bbl. That discovery was made by Norsk Hydro Produksjon AS.
"This is a result of a recent reevaluation of the area done by the partnership. New seismic and improved subsurface mapping have given us new confidence in the D-structure and allowed to mature it towards a drilling decision," Hauknes added.
Gro Aksnes, Statoil vice-president for area development in Operations West, said, "Tie in to the nearby Grane field is one of the development solutions that will be evaluated for the discovery."
The estimated volume of the discovery is 30-80 million bbl of recoverable oil.
The well, drilled by Transocean Inc.'s Transocean Leader semisubmersible drilling rig, will be permanently plugged and abandoned. The rig will proceed to carry out permanent plugging of discovery well 25/11-16 (Svalin), also in PL169.
Statoil operates PL169 with 57% interest. Partners are Petoro AS with 30% and ExxonMobil E&P Norway AS with 13%.
Lundin finds oil, gas with Alta well in Barents Sea
Lundin Norway AS has discovered oil and natural gas with the Alta exploratory well in the southern Barents Sea, according to the company and the Norwegian Petroleum Directorate.
The well was drilled 20 km northeast of Lundin's Gohta discovery well 7120/1-3 (OGJ Online, July 21, 2014).
Lundin said the latest well, 7220/11-1, encountered a gross hydrocarbon column of 57 m, with 11 m gas and 46 m oil in carbonate rocks of good reservoir quality.
Two production tests were performed in the oil zone, producing at a maximum rate of 3,260 b/d and 1.7 MMcfd.
Preliminary estimates of the size of the discovery are 14-50 million standard cu m of recoverable oil and 5-17 billion standard cu m of recoverable gas, NPD said. Lundin said the gross recoverable resource range is estimated at 125-400 MMboe, with the oil resource range estimated at 85-310 million bbl.
The well was drilled to a vertical depth of 2,221 m below the sea surface, and was terminated in the Ugle formation from the Late Carboniferous period, NPD said. Water depth is 388 m.
Alta is the first exploration well in production license 609, which was awarded in the 21st licensing round in 2011. Further delineation is planned for 2015.
Lundin Norway holds 40% in PL 609. RWE Dea Norge AS and Idemitsu Petroleum Norge AS each have 30%.
The Alta was drilled by Island Drilling Co. ASA's Island Innovator semisubmersible drilling rig, which will move to PL 625 to drill wildcat 25/10-12 S for Lundin.
"This discovery is another positive step in relation to proving up sufficient resources in the Loppa High area of the Barents Sea to enable the development of oil production infrastructure," said Ashley Heppenstall, president of Lundin Petroleum AB. "The Loppa High area is impacted by the Gulf Stream and as such is ice-free all year and far from the maximum southern edge of the ice edge," Heppenstall said.
Drilling & Production — Quick Takes
ADMA-OPCO, BP sign EOR agreement
Abu Dhabi Marine Operating Co. (ADMA-OPCO) and BP have signed an agreement on new technology for enhanced oil recovery (EOR) in carbonate reservoirs.
The companies reached the agreement during a recent visit to the UK by ADMA-OPCO officials who visited BP laboratories, according to news agency UAEinteract.
The Carbonate Ionic Design EOR study includes conducting a single-well chemical tracer test and laboratory tests to evaluate potential in stacked carbonate reservoirs in four shallow-water fields: Lower Zakum, Umm Shaif, Umm Lulu, and Nasr.
More than 30 technical experts from BP are seconded into ADMA-OPCO, the news agency said. About 3,000 employees work on the fields, with 60% being Emirati nationals. Production from the ADMA concession began in 1963.
Ali R. Al-Jarwan, ADMA-OPCO chief executive officer, said the company has "an aspiration to reach a recovery factor of 70%" for the fields.
BP has a 14.67% share in the ADMA-OPCO joint venture. Abu Dhabi National Oil Co. has 60%, Total SA 13.33%, and Japan Oil Development Co. 12%.
Oil production begins at Umm Lulu off Abu Dhabi
Inpex Corp. reported the start of oil production from Umm Lulu field offshore Abu Dhabi.
The field lies about 30 km northwest of Abu Dhabi City and is using facilities from adjacent Umm Al-Dalkh field. Inpex holds 12% in both fields.
Full field development is under way at Umm Lulu, with peak production expected to reach 105,000 b/d (OGJ Online, Aug. 29, 2013).
Oil is transported via subsea pipeline to Zirku Island and eventually supplied to Asian markets.
Inpex said its subsidiary, Japan Oil Development Co. Ltd., has jointly developed the field with Abu Dhabi National Oil Co., BP PLC, and Total SA.
PROCESSING — Quick Takes
Cellulosic ethanol plant starts in Kansas
Abengoa, Seville, Spain, has begun producing cellulosic ethanol, required for blending into gasoline, at a 25-million-gal/year plant at Hugoton, Kan.
The plant is the second cellulosic ethanol facility to start up recently. POET-DSM Advanced Biofuels LLC, Sioux Falls, SD, started a plant with equivalent capacity in Emmetsburg, Iowa, early in September.
At full capacity, the Abengoa plant will convert 1,000 tons/day of biomass into ethanol and use residual biomass solids to generate 21 Mw of electricity for its own use and local sales.
The company said it expects most of the biomass to come from within 50 miles of the plant, 80% of it composed of irrigated corn stover with the rest wheat straw, milo stubble, and switchgrass.
Abengoa received a $132.4 million loan guarantee and a $97 million grant through the US Department of Energy to support construction of the facility.
Federal law mandates sales of cellulosic ethanol, receives a tax credit up to $1.01/gal, by refiners and importers.
Because the industry has developed below congressional projections, the US Environmental Protection Agency sets requirements below the statutory target, which this year is 1.75 billion gal of ethanol equivalent.
EPA hasn't finalized volumetric requirements for this year.
Neste inks deal for Rotterdam refinery biopropane
Neste Oil Corp. has let a contract to SHV Energy BV, the Netherlands, to market and sell biopropane that will be produced from a recently announced unit to be built at its 800,000-tonne/year Rotterdam renewable diesel refinery (OGJ Online, Oct. 6, 2014).
Over the agreement's 4-year period, Neste Oil will supply a total of 160,000 tonnes of biopropane, which SHV Energy plans to sell in several European markets, Neste Oil said.
To date, SHV Energy already has initiated discussions with customers in France, Germany, Benelux, Scandinavia, and the UK, Neste Oil said.
The biopropane distribution agreement, which is the first of its kind in the world, will contribute to carbon savings by offering cleaner alternatives to high-carbon fuels upon which populations in currently off-grid areas depend, the companies said.
A value of the distribution contract was not disclosed.
First announced in September, the more than $77 million Rotterdam refinery biopropane project includes construction of a biopropane unit with a production capacity of 30,000-40,000 tpy, as well as associated storage tanks and pipework (OGJ Online, Sept. 10, 2014).
Earlier this month, Neste Oil let a contract to Neste Jacobs Oy of Findland for engineering, procurement, and construction management for the project, on which construction was set to begin immediately.
Neste Oil said it expects production and sales of biopropane to start by yearend 2016.
Petron advances Bataan refinery revamp
Petron Corp., Mandaluyong City, Philippines, has started up major units that form part of the $2 billion Refinery Master Plan 2 (RMP-2) upgrade project at its 180,000-b/d Bataan refinery at Limay, about 150 km southwest of Manila.
The company commenced crude oil feed into the new Vacuum Pipestill 2 on Sept. 30 and plans to commission additional units in the coming weeks, Petron said both in an Oct. 12 posting to its Facebook account and an Oct. 13 notice filed with the Philippines Stock Exchange Inc. (PSE).
RMP-2, which includes a total of 19 new units, is scheduled to begin full commercial operation by early 2015, according to Petron, who began the project in 2011 to boost Bataan's production capacities and make the plant more competitive in the Asia-Pacific region (OGJ Online, Sept. 23, 2014; Jan. 17, 2012).
In a May 12 presentation to investors, Petron said the RMP-2 expansion was nearly completed and due to begin commercial operation during this year's fourth quarter.
Designed to help ensure fuel supply security in the Philippines by lessening dependence on imports, RMP-2 will enable the Bataan refinery to run at full processing capacity by allowing it to convert current negative margin fuel oil into higher-value fuels such as gasoline, diesel, and petrochemicals, the company said in a May 20 disclosure to PSE.
The project also will equip the refinery with the flexibility to expand the quality and sources of crude supplies processed at the site, according to Ang.
In addition to the building of new units and upgrades to existing installations, RMP-2 also involves a Logistics Master Plan (LMP) that further integrates Petron's supply chain in order to better meet its customers' fuel needs.
The LMP will include construction of new storage tanks in strategic locations at the refinery, as well as modernization of a trucking fleet for improved product transportation, Petron said.
Following the full commissioning of RMP-2, Petron will be the only oil company in the Philippines capable of locally producing more stringent and environment-friendly Euro 4 quality fuels as required by 2016 under a mandate from the country's Department of Environment and Natural Resources, according to Petron.
TRANSPORTATION — Quick Takes
Tesoro to acquire QEPFS for $2.5 billion
Tesoro Corp. affiliate Tesoro Logistics LP has agreed to acquire QEP Resources Inc.'s wholly owned subsidiary QEP Field Services LLC (QEPFS), including its 58% partnership interests in QEP Midstream Partners LP for $2.5 billion. The deal is expected to close in the fourth quarter.
The deal includes what Tesoro describes as strategically located natural gas gathering and processing assets in the Rocky Mountains, Uinta basin, and North Dakota, expanding the company's growth opportunity into gas midstream business.
QEPFS owns majority interest in the Rendezvous Gas Services LLC partnership, which gathers gas in western Wyoming for Pinedale Anticline and Jonah field producers for delivery to multiple interstate pipelines.
QEPFS owns 38% of Uintah Basin Field Services LLC, as well as 50% of Three Rivers Gathering LLC, both of which operate gas-gathering facilities in eastern Utah.
The company also owns and operates a 21-mile, 20-in. pipeline that extends from the Blacks Fork gas processing plant complex in southwest Wyoming to the Muddy Creek compressor station about 6 miles south-southwest of Opal in Lincoln County.
QEP Resources during the past year moved to spin off QEPFS into a separate publicly traded company. (OGJ Online, June 27, 2014).
Central Petroleum joins Australia gas pipeline push
Central Petroleum Ltd., Brisbane, has jumped on the bandwagon associated with the recent proposals to build a Northern Territory-to-Moomba gas pipeline to link stranded natural gas fields in the Northern Territory to markets in eastern Australia (OGJ Online, Oct. 14, 2014).
Central Petroleum has announced it is in exploratory discussions with potential gas purchasers to supply 10-15 petajoules/year of gas from late 2017.
The company, which holds interest in gas fields, undeveloped discoveries, and exploration acreage throughout onshore Northern Territory, is hoping to have gas sales commitments in place by December that would underwrite a major reserves upgrade program.
Recently it has said it plans to prove as much as 200 petajoules of conventional gas in its permits if sufficient markets can be established.
The planning began early this year with the $35 million (Aus.) acquisition of Magellan Petroleum Australia's gas assets in producing Palm Valley field and undeveloped Dingo field in the Amadeus basin (OGJ Online, Feb. 24, 2014).