Aker Kvaerner has expanded its workload with new contracts. First, the company has deepened its stake in the Chinese market by signing two deals with China National Offshore Oil Corp. (CNOOC). One is for the delivery of a complete marine drilling riser system and associated equipment, while the other is for delivery of mooring equipment to a new deepwater semi submersible drilling unit. Contract values were undisclosed.
The marine drilling riser system will be manufactured and delivered out of Aker Kvaerner Subsea’s manufacturing center in Malaysia. Delivery is scheduled for the second quarter 2010. Aker Kvaerner subsidiary, Aker Kvaerner Pusnes, will deliver its mooring equipment to CNOOC’s drilling rig.
Husky Operations Ltd. is also working with Aker Kvaerner subsidiary AKCS Offshore Partner. The contract is in connection with production and operations of the White Rose field. The contract is valued at nearly CAN$75 million for a period of five years, with the option for renewals for fifteen successive periods of one year each. AKCS Offshore Partner consists of Aker Kvaerner Offshore Partner AS (40%), SNC–Lavalin Inc. (40%), and G.J. Cahill and Co. Ltd. (20%).
PXP divests $1.75B in properties
Plains Exploration & Production Co. (PXP) and certain of its subsidiaries have executed definitive purchase and sale agreements to sell oil and gas properties for roughly $1.75 billion to a subsidiary of Occidental Petroleum Corp. and XTO Energy Inc.
Fifty percent of PXP’s working interests in oil and gas properties located in the Permian basin, West Texas, and New Mexico will be sold to Oxy. Oxy will be the operator of all the assets currently operated by PXP and will apply its CO2 expertise to enhance future development and production growth; and 50% of PXP’s working interests in oil and gas properties located in the Piceance basin in Colorado to Oxy and retain a 50% working interest in these properties. PXP will remain the operator.
The transaction is expected to close on or before the end of the first quarter 2008 subject to customary closing conditions and adjustments.
Certain of PXP’s subsidiaries have entered into a definitive purchase and sale agreement with XTO Energy Inc. to sell PXP’s interests in oil and gas properties located in the San Juan basin in New Mexico and in the Barnett shale in Texas. PXP will receive $180 million of cash and XTO’s 50% working interest in the Big Mac 3–D prospect area located on the Texas Gulf Coast. PXP will have a 100% working interest in the Big Mac 3–D prospect area, covering roughly 50,000 net lease acres in the 275 square mile 3– D. The transaction is expected to close on or before the end of the first quarter 2008 subject to customary closing conditions and adjustments.
Lehman Brothers Inc., J.P. Morgan Securities Inc., and Jefferies Randall & Dewey acted as financial advisors to PXP on these transactions.
According to Standard & Poor’s Ratings Services, the ratings and outlook on Occidental Petroleum Corp. (A–/Positive/A–2) would be unaffected by the company’s plans to the aforementioned interests from PXP.
The purchases, which S&P expects to be funded from available cash, support credit quality, and were factored into the ratings service’s recent revision of the company’s outlook to positive. S&P expects the company to selectively undertake acquisitions in its core areas of operations, such as the Permian, as part of its acquire–and–exploit business strategy.
First Reserve commits $350M to Cobalt International Energy
First Reserve Corp. has joined Cobalt International Energy LP’s investor group with a $350 million commitment. First Reserve joins Goldman Sachs, Riverstone Holdings, KERN Partners, and Cobalt management in this investment.
“In its first two years of existence, Cobalt has assembled a world–class team of scientists, technical professionals and managers, said William E. Macaulay, chairman and CEO of First Reserve. “Pairing their expertise with the latest geophysical data, tools and processes, the team has captured a set of deepwater assets to rival that of most super–independents and some of the major oil companies.
Cobalt was the high bidder for 53 blocks in October ‘07’s Gulf of Mexico lease sale, placing it third in the industry’s largest offshore leasehold auction in 24 years. The company submitted $211 million in high bids, and won more highly contested blocks, 13, than any other company participating in the sale. Assuming all blocks are awarded, Cobalt will own a total of 107 blocks, 69 of which are Cobalt operated. This acreage inventory is sufficient to feed the company’s exploration plan for the next five years.
In Cobalt’s deepwater focus areas, the sale offered access to a larger number of prospective blocks than has come available since the watershed sales of 1996–97. Aggressive bidders in those sales established a presence in the deepwater that has, until this year, been impossible to duplicate.
Houston–based Cobalt International Energy was formed in 2005 and is an oil and gas exploration and production company that focuses on the Deepwater Gulf of Mexico and other high–potential global basins.
First Reserve Corp. is the oldest and largest private equity firm specializing in the energy industry.
Anadarko strikes oil at Gulf of Mexico West Tonga prospect on Green Canyon
Anadarko Petroleum Corp. has discovered oil at its West Tonga prospect on Green Canyon block 726 in the deepwater Gulf of Mexico. The discovery well, located in roughly 4,700 feet of water, was drilled to a total depth of 25,680 feet and encountered over 350 feet of net oil pay in three subsalt Miocene sands. Anadarko operates West Tonga with a 37.5% working interest. Partners in the discovery include StatoilHydro with a 25% working interest, Chevron with a 20.5% working interest, and Shell with a 17% working interest.
Bob Daniels, Anadarko senior vice president of worldwide exploration said, “West Tonga is indicative of our exploration program in the deepwater Gulf, which focuses on prospects in the Miocene and Lower Tertiary plays that have estimated recoverable resources of more than 100 million barrels of oil equivalent. Coupled with the Caesar discovery (Anadarko 20%, Shell 62.5%, and StatoilHydro 17.5%), West Tonga gives Anadarko and our partners two significant fields that potentially could be tied back to the Constitution spar.”
Anadarko also is drilling both the Atlas prospect located on Walker Ridge block 155, and the Terrebonne prospect located on Green Canyon block 452. Atlas is a 30,000–foot lower Miocene test, operated by Anadarko with a 68% working interest. Repsol E&P USA Inc. has a 20% working interest and Ridgewood Energy Corp. holds a 12% working interest. Terrebonne, which is operated by Woodside Energy Inc., is a 26,000–foot upper Miocene test. Anadarko has a 33.33% working interest in Terrebonne. Plains Exploration & Production Co. holds a 25% working interest.
Marathon makes eleventh discovery on Block 32 offshore Angola
Marathon Oil Corp.’s subsidiary, Marathon International Petroleum Angola Block 32 Ltd., has participated in a new deepwater discovery on Block 32 offshore Angola. Alho is the 11th discovery on Block 32 and the 26th overall discovery in Marathon’s deepwater exploration program on Blocks 31 and 32 which began in 2001.
The Alho–1 discovery well is located roughly 100 miles off the Angolan coast in 5,273 feet of water. The well was drilled to a total depth of 16,343 feet and encountered oil bearing reservoirs in the Oligocene section. During drill stem testing the well flowed at a rate of 5,400 b/d of 26 degree API oil. Alho is located 6 miles northwest of the previously announced Cominhos discovery.
The concessionaire of Block 32 is Sonangol, Angola’s state–owned oil company. Marathon holds a 30% interest in Block 32, along with the operator TOTAL Exploration and Production Angola (Block 32 Ltd.) with 30%, Sonangol P&P with 20%, Esso Exploration and Production Angola (Block 32) with 15%, and Petrogal with 5%.
ATP achieves first production at Wenlock
ATP Oil & Gas Corp. is seeing first production from its Wenlock W1 well in Block 49/12a of the Southern Gas basin of the UK North Sea. The company’s wholly–owned subsidiary, ATP Oil & Gas Ltd., is the operator and owns a 100% working interest. The well tested at a rate of 58 MMcf/d, the limit of the test equipment, in July 2007.
T. Paul Bulmahn, ATP chairman and president stated, “ATP delivered a step change in year–end exit rate from 67 MMcfe/d at year–end 2005 to over 170 MMcfe/d at year–end 2006. For 2007, ATP once again set ambitious objectives to take production to a record 300 MMcfe/d by year–end. Wenlock production should continue to ramp up during the next few weeks to help us achieve this milestone.”
The Wenlock W1 well was completed in the Rotliegend Leman sandstone in two fault blocks. One fault block contained the targeted proved undeveloped reserves included in ATP’s year–end 2006 reserve report. The second fault block contained additional natural gas reserves which were not included in ATP’s 2006 reserve report as proved reserves.
ATP believes a portion of the reserves in the second fault block will be classified as proved in ATP’s 2007 reserve report. Located in 75 feet of water, the Wenlock W1 well is the first phase of the company’s development plan in this hub area.
Apache’s Jade–4 Tests 23.8 MMcf, 2,107 b/d from AEB formation in Egypt’s Western Desert
Apache Corp.’s Jade–4 well in Egypt’s Western Desert test–flowed 23.8 MMcf of natural gas and 2,107 barrels of condensate per day from the Jurassic Alam El Bueib–3G (AEB) formation.
The Jade–4 is adjacent to the Jade–1x discovery, which logged 217 feet of AEB pay and 66 feet in the Jurassic Upper Safa formation in March 2007. The discovery was completed as a gas producer from the Upper Safa after a test of 25.6 MMcf of gas per day. The Jade–4 was drilled to test the potential of the AEB – one of the most prolific reservoirs in the greater Khalda Concession. The latest well logged 234 feet of net pay in the AEB.
In addition to the discovery well, the Jade–2x well is producing gas and condensate after testing over 20 MMcf of gas per day from each of two AEB sands, and the Jade–4 is being completed as a gas and condensate producer. In addition, oil pay was identified in another AEB sand behind casing in the Jade–1x and Jade–4. The Jade field is located in the quarter–million–acre Matruh Concession. Apache holds a 100% contractor interest in the block.
Apache Corp. is an oil and gas exploration and production company with operations in the US, Canada, Egypt, the UK North Sea, Australia, and Argentina.
Petrobras America appoints Alliance Owner’s Engineer for first FPSO in GoM
Alliance Engineering, part of international energy services company John Wood Group PLC, has been appointed Topsides Owner’s Engineer by Petrobras America, a subsidiary of Petrobras, for the first floating, production, storage, and offloading vessel (FPSO) to be used in the US Gulf of Mexico.
Alliance will assist Petrobras for up to a three–year period with two scopes of work for the Cascade and Chinook fields. Alliance will support Petrobras with verification of the topsides design for a leased FPSO early production system (EPS). The FPSO is planned to be on location for five years. In addition, as part of a full field development (FFD) scope, Alliance will assist Petrobras with the selection and planning of the final solution to replace the EPS and produce the fields over a longer term.
The FPSO will have an oil storage capacity of 600,000 barrels, an oil processing capacity of 80,000 b/d and a gas export capacity of 16 million standard cubic feet per day. Located in 8,500 feet of water, the FPSO will be the deepest installation of its kind to date.
With offices in Houston and Denver, Alliance Engineering is an independent services provider to the domestic and international oil and gas industry.
Chevron signs natural gas agreement in Thailand; partners with MIT for ultra–deepwater development program
Chevron Thailand Exploration and Production Ltd. and its co–concessionaires signed a Gas Sales Agreement with PTT Public Co. Ltd. (PTT) for blocks 10–13 in the Gulf of Thailand. The agreement is expected to boost natural gas supplies from these blocks by 500 MMcf/d.
The offshore blocks represent nearly 50% of Chevron’s current operating areas in the Pattani basin and include Erawan, Satun, Funan, Baanpot, Jakrawan, Plamuk, Yala, Pla Daeng, Trat and Platong operating areas in the Gulf of Thailand. Chevron has working interests in the operating areas within these blocks ranging from 60% to 80%.
Supply is expected to increase with a 330 MMcf/d expansion of the Platong field, including a new central processing platform, as well as an additional 170 MMcf/d from existing platforms.
This agreement follows the recent production period extension for blocks 10–13 for an additional 10 years, from 2012 to 2022. Chevron’s co– concessionaires in the blocks include MOECO and PTTEP.
Chevron operates more than 180 platforms in the Gulf of Thailand with 2006 total average daily production of more than 144,000 barrels of oil and condensate and 1.6 billion gross cubic feet of gas. Historically, the company and its joint venture partners have invested more than $12 billion in Thailand’s oil and gas sector and paid the cumulative royalty of nearly $3.5 billion (1981 – 2006).
In related news, Chevron Corp. and Massachusetts Institute of Technology (MIT) have joined forces to formulate an energy research program to develop remote, ultra–deepwater exploration and production technology.
The $5 million Chevron Remote and Ultra–Deepwater Research Program will focus on developing the technologies required to access hydrocarbons in water depths up to and greater than 3,000 meters in a safe, cost effective, and environmentally friendly manner.
The program includes the sponsorship of two named fellowships – the Chevron Energy Fellows – and makes Chevron a sustaining member of the MIT Energy Initiative (MITEI), which was created to address global energy issues.
The five year program will also support MITEI’s energy research seed fund to promote the development of a broad range of novel, innovative energy technologies and concepts across the Institute.
Professor Ernest Moniz, director of MITEI, said: “Conventional oil and gas supplies will play a critical role in meeting global energy demand for at least the next several decades, and advanced technologies are essential for producing these essential resources in environmentally sensitive ways.”
Don Paul, vice president and chief technology officer Chevron said, “Chevron is drilling at depths once thought impossible, and partnerships such as these are critical if we are to keep pushing the boundaries of possibility.”
