UPSTREAM NEWS
Energy Ventures earmarks $200M for North Sea investment
Independent private equity firm Energy Ventures has earmarked $200 million to help boost North Sea businesses during challenging times for the oil and gas industry.
Tomas Hvamb, Energy Ventures' Aberdeen-based investment director, said: "Energy Ventures is one of the few oil and gas private equity funds investing at this time. In the past 20 months we have made three platform investments in the North Sea and a total of 11 investments including add-ons in the same period.
"The additional funding of $200 million which we have set aside is testament to the commitment we have to the area. We believe in the North Sea and the opportunities it continues to offer for domestic and international growth.
"We look to partner with talented management teams in service and technology companies with high growth potential and seek to invest between $10 million – $40 million in each company.
"Energy Ventures will invest in proven companies where we can see where our capital can provide a strong capital base to support the company and management in their next growth phase. At a time when activity levels in the industry have been down, many companies are under pressure from the banks to de-lever their balance sheet and we can assist in this."
Rowan, Saudi Aramco to Create Offshore Drilling Company
Rowan Companies plc and the Saudi Arabian Oil Company (Saudi Aramco) have signed, through their subsidiaries, an agreement to create a 50/50 joint venture to own, operate, and manage offshore drilling rigs in Saudi Arabia.
The new joint venture company will use Rowan's established business in Saudi Arabia as its base with a scope of operations covering Saudi Arabia's existing and future offshore oil and gas fields. The new company is anticipated to commence operations in the second quarter of 2017.
At commencement of operations of the new company, Rowan will contribute three of its jack-up drilling rigs and Saudi Aramco will contribute two of its jack-up drilling rigs. Rowan will contribute an additional two jack-up rigs as they complete their current Saudi Aramco contracts in late 2018. The new company will also manage the operations of five Rowan jack-up rigs currently in Saudi Arabia, until their associated drilling contracts expire, which then may be released, leased by or contributed to the new company thereafter. Rowan and Saudi Aramco have committed the new company to purchase future newbuild rigs that will be constructed in Saudi Arabia.
Latham & Watkins LLP represents Rowan Companies plc in the transaction.
In a flashnote following the announcement, Evercore ISI analysts commented on the JV, calling it a "nice, creative approach" with an important customer.
"As part of the Kingdom's "2030 Vision", the JV's leadership will be comprised by a Rowan nominated CEO and head of operations while Saudi Aramco will nominate the Chairman of the Board and CFO. All Rowan rig personnel working in Saudi Arabia will continue to work for the new company, and the new company will "begin hiring and training" a domestic workforce to meet its long term growth objective."
The analysts continued, "There are currently 44 jackups contracted in Saudi Arabia, of which two are owned by Saudi Aramco (SAR 201, 202). Rowan is Aramco's largest independent drilling contractor at nine units, followed by Ensco and Shelf Drilling with six jackups each."
Chevron starts production at UK Alder Field
Chevron North Sea Ltd. has started production at Alder, a high-pressure, high-temperature (HPHT) gas condensate field in the Central North Sea.
"First gas at Alder represents a significant milestone for Chevron and highlights our commitment to investing and developing resources in the UK," said Greta Lydecker, managing director, Chevron Upstream Europe. "The safe and successful completion of this project was underpinned by strong collaboration between Chevron and Alder co-venturer ConocoPhillips. Alder supports our goal of helping maximize the economic recovery of the UK, adds significant production to our portfolio, and helps extend the field life of Britannia, an important asset to Chevron in the North Sea."
Alder is a single subsea well tied back, via a 28 kilometer pipeline, to the existing ConocoPhillips-operated Britannia Platform, in which Chevron holds a 32.38% non-operated working interest. The project has a planned design capacity of 110 million cubic feet of natural gas and 14,000 barrels of condensate per day. Production from the HPHT Alder Field is expected to ramp up over the coming months.
More than 70% of the Alder development work was executed by UK based companies.
First gas for Petronas' first floating LNG facility, PFLNG SATU
Petronas' first floating liquefied natural gas (LNG) facility, PFLNG SATU achieved its first gas milestone on November 14, 2016, from the Kanowit gas field, offshore Sarawak.
The introduction of gas from the KAKG-A central processing platform at the field ignited the PFLNG SATU flare tower. Petronas hopes to unlock gas reserves in Malaysia's remote and stranded gas fields.
Petronas' acting vice president LNG Assets, Development & Production Adnan Zainal Abidin said the first gas milestone signified the commencement of commissioning and startup for the floating LNG facility that will soon progress towards commercial operations and first cargo.
PFLNG SATU made its 2,120 nautical mile journey from Okpo, South Korea to the Kanowit gas field on May 14, 2016, for its offshore phase of commissioning. Fitted with an external turret for water-depths of between 70 meters and 200 meters deep, PFLNG SATU will extract natural gas via a flexible subsea pipeline for the liquefaction, production, storage and offloading processes of LNG at the offshore gas field.
Designed to last up to 20 years without dry-docking, PFLNG SATU has the flexibility to be redeployed to multiple locations to better access marginal and stranded gas fields of Malaysia.
Aker BP starts up Viper-Kobra offshore Norway
Aker BP has started production from the Viper-Kobra structures via a subsea tieback to the Alvheim FPSO in the Norwegian North Sea.
Development costs came in on budget at around $217 million, and included drilling of two wells, subsea installations, pipelines, and hook-up.
Kobra was discovered in 1997 in production license 203, and Viper was discovered in 2009 in production license 203 in 2009.
However, the accumulations constitute part of the Alvheim field and development was therefore included in the plan for development and operation for Alvheim.
The scope comprised a new subsea installation with a pipeline tied into the Volund manifold. The four well slots accommodate one well each on Viper and Kobra, with two slots remaining for potential future wells in the area.
Aker BP estimates that the two reservoirs each contain about 4 MMbbl of recoverable oil including gas. The total recoverable is 9 MMboe.
Aker expects the initial production rate to average approximately 15,000 boe/d.
Aker BP operates the Alvheim license in partnership with ConocoPhillips and Lundin Norway.