GENERAL INTEREST Quick Takes
Anadarko reports net loss for 2Q earnings
Anadarko Petroleum Corp. reported a net loss of $1.025 billion for this year’s second quarter. The loss includes certain items typically excluded by the investment community in published estimates, the company said.
In total, these items increased the net loss by $1.274 billion on an aftertax basis—one being the Chevron Corp. merger termination fee and other merger transaction costs of $1.042 billion (OGJ Online, May 19, 2019).
The company recorded revenue of $3.44 billion for the quarter, while net cash provided by operating activities totaled $776 million.
Anadarko’s sales volume of oil, natural gas, and natural gas liquids totaled 68 million boe, or an average of 744,000 boe/d, which included 434,000 b/d of oil.
Anadarko’s US onshore assets averaged sales volume of 484,000 boe/d during the second quarter, which included 207,000 b/d of oil. Anadarko’s volumes from the Gulf of Mexico averaged 158,000 boe/d during the quarter, which included 130,000 b/d of oil. Internationally, the company averaged 102,000 boe/d during the second quarter, which included 97,000 b/d of oil.
Qatar Petroleum due interests off Guyana
Qatar Petroleum has agreed to acquire interests in two exploration blocks offshore Guyana from Total SA.
QP will acquire 40% of Total’s 25% participating interest in the Orinduik block. The block lies 120 km offshore and covers 1,800 sq km in 70-1,400 m of water. Partners are operator Tullow Oil Ltd. with 60% and EcoAtlantic with 15%.
QP also will acquire 40% of Total’s 25% participating interest in neighboring Kanuku block. The block lies 100 km offshore and covers 5,200 sq km in 70-800 m of water. Partners are operator Repsol with 37.5% and Tullow Oil with 37.5%.
Three exploration wells are planned on the blocks this year. The Jethro well is currently being drilled on the Orinduik block (OGJ Online, Feb. 4, 2019). Another is planned. One well is planned on the Kanuku block (OGJ Online, Feb. 5, 2018).
The deal is subject to approval by the government of Guyana.
Inpex US Offshore to acquire Gulf of Mexico stakes
Inpex US Offshore LLC has agreed to acquire 40% participating interests in Keathley Canyon Blocks 921 and 965 and Walker Ridge Blocks 881 and 925 in the deepwater Gulf of Mexico from Anadarko Petroleum Corp.
The adjacent blocks cover 93.2 sq km in 2,150-2,700 m of water about 380 km off Louisiana. Anadarko operates the blocks and will retain 60% interests.
They are close to Lucius and Hadrian North oil fields on blocks in which Inpex holds interests.
Karoon acquires Bauna oil field offshore Brazil
Karoon Energy Ltd., Melbourne, has signed an agreement to acquire a 100% operating interest in Bauna field in concession BM-S-40 in the Santos basin offshore Brazil for $665 million.
The concession has two producing reservoirs—Bauna and Piracaba—both of which are tied back to the leased Cidade de Itajai floating production, storage, and offloading vessel. Another undeveloped discovery called Patola is nearby.
Karoon said the reservoirs are currently producing 20,000 b/d of light, sweet crude before planned development workovers.
Robert Hosking, Karoon managing director, said the acquisition also is expected to deliver material operational and logistical synergies for the potential development of the company’s existing wholly owned southern Santos basin assets, Neon and Gola.
“The company has been working hard for 3 years to acquire a high-quality production asset with robust economic returns,” Hosking said.
The purchase price will be offset by operating cash flows from the effective sale date of Jan. 1, 2019.
The transaction is subject to final Brazilian regulatory approval, which is expected during first-half 2020.
Neptune to acquire interests off Indonesia
Neptune Energy, London, has agreed to acquire interests in two production-sharing contracts in the Kutei basin offshore East Kalimantan, Indonesia, from Eni SPA.
It will acquire a 20% working interest in the East Sepinggan PSC, where Merakes natural gas field is under development, and a 30% working interest in the exploratory East Ganal PSC.
Eni operates Merakes field, which it is developing with five wells completed subsea in 1,500 m of water and tied back to the Jangkrik floating production unit 35 km northeast (OGJ Online, Mar. 25, 2019). It has a discovery nearby designated Merakes East.
Eni also operates Jangkrik field, which is in the Maura Bakau PSC, with Neptune as a partner.
Exploration & Development Quick Takes
Eni confirms Agogo find, plans production
While confirming northward extension of its Agogo oil discovery offshore Angola, Eni SPA said it will start production from the field before yearend (OGJ Online, Mar. 13, 2019).
The first appraisal well, Agogo-2, cut 58 m of 31º gravity oil in Miocene and Oligocene sandstones exhibiting what Eni described as “excellent petrophysical characteristics.”
The Ocean Rig Poseidon drillship drilled the highly deviated well to 3,949 m TD in 1,700 m of water 3 km northwest of the Agogo-1 discovery well.
Like Agogo-1, the appraisal well found hydrocarbons below salt diapirs. Eni said it confirms 650 million bbl of oil in place and indicates further potential in the northern part of the field.
It estimated production potential at more than 15,000 b/d of oil and said it plans further appraisal of the discovery.
First production will be tied back to the N’Goma floating production, storage, and offloading vessel about 23 km away as well as on Block 15/06.
Eni operates the block with a 38.8421% interest. Sonangol P&P has 36.8421%, and SSI Fifteen Ltd. has 26.3158%.
Eni well finds gas, condensate off Vietnam
Eni Vietnam encountered natural gas and condensate in exploration well Ken Bau 1X in the Song Hong basin offshore Vietnam.
Drilled to 3,606 m TD, the well encountered several gas and condensate-bearing sandstone intervals interbedded with Miocene shale. Estimated net reservoir thickness is more than 100 m.
Eni plugged the well due to technical problems above deeper prospective levels. It plans further drilling next year.
Eni operates 5,900-sq-km Block 114 with a 50% interest, which it acquired from Essar E&P in 2012. Essar retains 50%.
Audit hikes Khor Mor, Chemchemal reserves
Reserves of Khor Mor and Chemchemal natural gas fields in the Kurdistan region of Iraq have been increased by 10% after an independent audit, reports a partner.
Dana Gas said the increase results partly from inclusion of Khor Mor oil reserves in the estimate.
Dana Gas and Crescent Petroleum, both of Sharjah, jointly operate the fields through Pearl Petroleum, in which they hold 35% interests each.
Pearl, also of Sharjah, announced expansion plans for the fields earlier this year (OGJ Online, Mar. 7, 2019).
Gaffney, Cline & Associates conducted the new reserves audit.
From results reported by Dana Gas net to its Pearl interest, proved and probable reserves of Khor Mor and Chemchemal fields are calculated to have increased to 3.106 billion boe from a 2016 estimate of 2.829 billion boe.
Gas reserves of the fields declined to 12.6 tcf from 15.1 tcf in 2016 while reserves of condensate increased to 389 million bbl from 311 million bbl.
The new report added proved and probable reserves of 38 million tonnes of LPG and 51 million bbl of oil.
Other Pearl partners are OMV, MOL, and RWEST, 10% each.
Ukraine outlines more production-sharing agreements
Ukraine has outlined three more blocks to be offered through oil and gas production-sharing agreement tenders in the country’s continuing series of licensing rounds to reduce its dependence on natural gas imports.
The Interagency Commission of Ukrainian government approved official documents for three blocks on 3,800 sq km to be tendered by Oct. 31.
The three blocks are in proved petroleum provinces with well-developed midstream infrastructure and widely covered by geophysical surveys.
The Ohtyrska block covers 672 km in the Sumy, Poltava, and Kharkiv regions. Ichnyanska block covers 2,086 sq km in the Chernihiv region. Grunivska PSA block covers 1,082 sq km in the Sumy and Poltava regions. All three blocks are in the Dnipro-Donets basin.
As of July 26, Ukraine had opened a total of 38 onshore and 1 offshore blocks, covering a gross 25,000 sq km, for public competitive bidding through online auctions.
Santos gets nod for NT shale gas exploration
Santos Ltd., Adelaide, has received approval from the Northern Territory government for the resumption of drilling in its onshore McArthur basin shale gas exploration program.
It is the first environmental management plan to be awarded for onshore shale gas exploration in the Northern Territory since the drilling moratorium was lifted in early 2018. Specifically, the approval is for the drilling of the Tanumbirini 2H and Inacumba 1/1H wells in exploration permit EP161 in the basin east of Daly Waters. Santos has 75% interest in the block.
Approval for the resumption of drilling follows last month’s approval for civil works at and around the well locations as well as for the acquisition of 2D seismic data. Santos drilled Tanumbirini-1 in 2014 and found encouraging gas indications.
The nearly 2-year moratorium and subsequent 16-month implementation process has been completed after the Northwest Territory government enacted the recommendations of its scientific inquiry into onshore hydraulic fracturing.
The recommendations implemented include the creation of detailed codes of practice, the shifting of responsibility for approvals to the environment minister, improvements to the transparency and disclosure requirements, amendments to the Water Act, and the release of a series of “no-go zones” for oil and gas activity in the territory.
OGDCL wildcat flows oil, gas in Pakistan
Oil & Gas Development Co. Ltd., Islamabad, reported an oil and gas discovery in the Sagnhar district of Sindh Province, Pakistan. Its Pandhi 01 exploratory well flowed on test at equipment-limited rates of 9.12 MMscfd of gas and 520 b/d of oil with wellhead flowing pressure of 840 psi from the basal sand of the Cretaceous Lower Goru formation. The well was drilled to 3,600 m on the Bitrism block.
OGDC is operator with a 95% interest. Government Holdings (Pvt.) Ltd. has a 5% carried interest.
Second-phase Otakikpo development approved
Green Energy International Ltd., Abuja, will drill seven wells and expand processing facilities in second-phase development of Otakikpo oil field on Oil Mining License (OML) 11 in Nigeria’s Niger Delta (OGJ Online, July 1, 2019). The work will boost production to 20,000 b/d of oil from 6,000 b/d.
The Department of Petroleum Resources has approved the new development phase, which also includes construction of a 1.3 million-bbl onshore terminal and a 17-km pipeline between the terminal and an offshore loading system.
Otakikpo field is 60 km southeast of Port Harcourt.
Drilling & Production Quick Takes
US Gulf of Mexico drillship fleet at 96% utilization
Drillship demand in the US Gulf of Mexico stood at 96% utilization as of mid-July compared with a 76% utilization for the same time a year ago, reports Westwood Global Energy Group.
Westwood’s RigLogix said 24 units out of a 25-unit fleet are either working or committed to beginning contracts in the next few months. RigLogix tracks the offshore rig market.
The one stacked unit reportedly is being considered as a candidate to be cold stacked soon unless it secures work. If that rig were cold stacked, the utilization rate would become 100%.
Terry Childs, head of RigLogix, said the utilization rebound timing is slightly ahead of what RigLogix had forecast. “On the supply side, there has been a healthy amount of movement in and out of the region, and that will continue to be the case for the remainder of 2019,” Childs said.
Four drillships are expected to depart for contracts in Central America and South America shortly. One of the four was overseas but came to a Brownsville, Tex., shipyard for some minor repairs. One drillship now working offshore Mexico will return to the US gulf for a contract starting in September.
Currently, Shell Oil Co., Chevron Corp., and BP PLC have more than 50% of the contracted fleet under their control. Shell has six drillships under long-term contracts, while Chevron accounts for four units. BP has three units currently contracted with a fourth coming in January 2020.
ConocoPhillips, Wintershall to develop Neuquen basin
ConocoPhillips has signed an agreement with Wintershall Dea to acquire interest in and jointly develop the Aguada Federal and Bandurria Norte blocks in the central Argentine province of Neuquen. The blocks hold unconventional oil and natural gas resources in the Vaca Muerta shale formation.
ConocoPhillips will acquire a 45% interest share in the Aguada Federal block. Wintershall, as operator, will retain a 45% share in the block (97 sq km). The remaining 10% are held by Gas y Petroleo del Neuquen SA (GYP). ConocoPhillips also will acquire a 50% share in the nearby Bandurria Norte block (105 sq km). Wintershall retains 50% and operatorship.
Wintershall has conducted pilot projects in both blocks and production testing is currently ongoing (OGJ Online, Mar. 17, 2015; May 17, 2017). The transaction is expected to be closed this year, subject to approval by the relevant authorities.
Eni reports production start in Egypt
Oil production has started from the South West Meleiha development lease in Egypt’s Western Desert, Eni reports.
AGIBA, which operates the lease for Egyptian General Petroleum Corp., recently made two near-field discoveries on the Meleiha development lease, Eni said.
In the South West Meleiha area, production began at about 5,000 b/d from two wells and is expected to reach 7,000 b/d in September. The oil is treated at the Meileiha Plant operated by AGIBA, which is equally held by Eni’s IEOC imot, and EGPC.
The companies made the discoveries last year and plan further exploratory drilling. Through IEOC, Eni holds a 50% interest in South West Meleiha. EGPC holds the remainder.
AGIBA’s near-field discoveries are on the Basma and Shemy prospects. Two Basma wells are producing oil from the Jurassic Khatabta formation. A Shemy prospect well is testing oil in Early Cretaceous Matruh sands.
In the same area, AGIBA has deepened existing wells into the Cretaceous Alam El Bueib formation, yielding incremental production of about 6,000 b/d of oil.
Elsewhere in Egypt, Eni tested gas from Miocene Abu Madi sands in the El Qar’a-NE1 well in the Nile Delta area.
During clean-up, the well delivered 17 MMscfd of gas and condensate. Eni plans to tie the well to the Abu Madi gas plant operated by Petrobel, in which IEOC and EGPC hold 50% interests each.
Petrobel operates the El Qar’a exploration lease, in which interests are EGPC, 50%; IEOC, 37.5%; and BP, 12.5%.
In the Gulf of Suez, meanwhile, Petrobel has an oil discovery on a new structure on the Sidri South exploration prospect. The Sidri-23 well has been placed on stream through nearby facilities. Petrobel plans to develop the discovery, on the Abu Rudeis Sidri development lease, with about 10 wells.
South-Khadyryakhinskoye gas flow starts
Novatek-Tarkosaleneftegas has started commercial production at South-Khadyryakhinskoye natural gas field in the Purovsky district of Russia’s Yamal-Nenets Autonomous Region. Capacity is 1 billion cu m/year, according to parent company Novatek.
The field is in the South-Khadyryakhinskiy license area near Novatek’s North-Khancheyskoye field.
Novatek acquired the license in December 2017 with its acquisition of AO South-Khadyryakhinskoye and AO Eurotek from AR Oil & Gas BV, joint venture of AO Neftegazholding and Repsol.
PROCESSING Quick Takes
ExxonMobil commissions Beaumont PE expansion
ExxonMobil Corp. has started production on a new high-performance polyethylene line at its Beaumont, Tex., polyethylene (PE) plant (OGJ Online, Nov. 15, 2016).
The newly commissioned 650,000-tonne/year unit increases production of granular and pelletized PE at Beaumont by 65%, bringing overall site capacity to nearly 1.7 million tpy.
ExxonMobil said the Beaumont expansion builds upon supply advantages created by two performance PE lines previously commissioned in 2017 at the company’s manufacturing site in Mont Belvieu, Tex., that, together, will help meet strong global demand growth for PE.
The Beaumont PE expansion comes as part of ExxonMobil’s 10-year, $20-billion “Growing the Gulf” investment initiative first announced in 2017 (OGJ Online, Feb. 25, 2019).
IOCL lets contract for Panipat refinery
Indian Oil Corp. Ltd. (IOCL) has let a contract to McDermott International Inc. to provide process technology for a grassroots fluid catalytic cracking (FCC) unit at IOCL’s 314,000-b/d Panipat refinery and petrochemical complex in Haryana, India, north of New Delhi.
As part of the contract, McDermott will deliver technology licensing, basic engineering, proprietary equipment, training, and technical services for an FCC unit that will be equipped with INDMAX technology, which—developed in partnership with IOCL—is licensed by McDermott’s Lummus Technology division, the service provider said.
The INDMAX FCC forms part of IOCL’s project to expand petrochemicals production at the Panipat refining complex.
This FCC unit is part of a refinery expansion project for IOCL to grow into petrochemicals at the complex in Panipat, McDermott said.
McDermott, which valued the contract at $1-50 million, confirmed the award will be reflected in its second-quarter backlog. A timeframe for completion of the project was not disclosed.
TRANSPORTATION Quick Takes
FERC issues draft EIS for Southgate gas pipeline
The US Federal Energy Regulatory Commission’s staff issued a draft environmental impact statement (EIS) on July 26 for Mountain Valley LLP’s proposed Southgate natural gas pipeline project in Virginia and North Carolina. It is designed to transport 375 MMcfd of gas, FERC noted.
FERC said the project would involve the construction and operation of 73.7 miles of 16- and 24-in. pipe as well as the Lambert compressor station in Virginia; four meter stations, interconnects and taps; four pig launchers and receivers at three locations; eight mainline valves; and other associated facilities.
Contractor yards, staging areas, temporary extra workspaces, and access roads would be associated with construction of the proposed facilities, FERC said. The staff concluded that the project’s approval would result in some adverse environmental impacts, but the impacts would be reduced to less-than-significant levels through implementation of the FERC staff’s recommendations and Mountain Valley’s proposed avoidance, minimization, and mitigation measures.
Comments on the draft EIS will be accepted through Sept. 16, FERC said.
Novatek lets EPC contract for Arctic LNG 2 project
Novatek and partners let an engineering, procurement, and construction contract to TechnipFMC for the Arctic LNG 2 project in Russia’s Gydan Peninsula in West Siberia.
Novatek plans three liquefaction trains at the 19.8 million-tonne/year Arctic LNG 2 project with capacities of 6.6 million tpy each on gravity-based structure platforms. Gas will come from Utrenneye field.
TechnipFMC will execute the project under a lump sum and reimbursable basis. It will cover the EPC of the three LNG trains and associated topsides, which will be manufactured on a modular basis in Asian and Russian yards.
Technip values the EPC contract at over $1 billion. The consolidated contract value to TechnipFMC for Arctic LNG 2 is $7.6 billion.
In June, CNOOC Ltd. and its subsidiary CEPR Ltd. signed an agreement with Novatek and Ekropromstroy LLC, a wholly owned subsidiary of JSC Novatek, to acquire a 10% equity interest in Arctic LNG 2 LLC (OGJ Online, June 7, 2019).
YPF advances LNG exports with carrier deal
YPF SA has reached a preliminary agreement with Excelerate Energy LP for a carrier charter to export LNG produced from Exmar’s Tango FLNG unit in Bahia Blanca, Argentina. The final agreement is expected soon, and operations are to start the start of September.
The gas, produced mainly from Vaca Muerta shale field in Argentina’s Neuquen region, will be processed by the Tango FLNG unit at the Mega port in Bahia Blanca and then transported by the 138,000-cu m Excalibur carrier. The operation to load product to the carrier will take 45 days.
The vessel, provided by Excelerate, will be in service to YPF until May 2020. It will be one of two ships that YPF will utilize to transport Argentine LNG to the global market.
YPF commissioned its first cargo of about 25,000 cu m in May, becoming the first Argentine company to export LNG in its history.
