GENERAL INTEREST Quick Takes
Canadian province seeks oil and gas growth
The government of Newfoundland and Labrador has published a plan for oil and gas industry growth that envisions the drilling of more than 100 exploration wells and a doubling of oil and gas production by 2030.
An industry-government group called the Oil & Gas Industry Development Council developed the plan, Advance 2030.
The document targets oil and gas production of more than 650,000 boe/d by 2030. Current oil production, from four offshore fields, is about 210,000 b/d.
Stressing collaboration and innovation, the plan identifies these "focus areas":
• Immediate (within 24 months): Drive exploration, modernize the governance structure, ensure global competitiveness, enhance local supply chain, accelerate development, support innovation, increase industry promotion, and "workforce of tomorrow."
• Midterm (2022): Develop basin-specific plans, expand integrated operations, develop a natural gas development plan, and supply and service diversification.
• Long term (2030): Commercial natural gas production, sustained energy production, exploitation of value-added opportunities, supply and service industry growth, and "world-class energy cluster."
Novatek, Aramco seek gas collaboration
Novatek, Moscow, and Saudi Aramco have signed a memorandum of understanding to collaborate on natural gas projects.
Subjects include LNG supplies, development of LNG markets, gas exploration and production, and research and technology development.
Novatek produces gas and condensate in Russia's Yamal-Nenets Autonomous Region. Last December, it started up the first of three planned LNG trains, with capacities of 5.5 million tonnes/year each, at its Yamal LNG plant in the Russian Arctic.
"Novatek's strategy envisages rapidly growing our LNG production and attracting international partners," said Leonid Mikhelson, chairman of the company's management board in a statement announcing the MOU.
Officials of the Russian and Saudi governments have been discussing cooperative investment as their countries lead efforts by the Organization of Petroleum Exporting Countries and a group of 10 cooperating nonmembers to limit oil production in support of crude oil prices.
OMV selling upstream interests in Pakistan
OMV has agreed to sell its exploration and production interests in Pakistan to Dragon Prime Hong Kong Ltd., Hong Kong, for €157 million, subject to adjustments.
OMV Pakistan holds interests in five development and production leases and operates the productive Sawan, Miano, Latif, Gambat, and Mehar blocks. Gross production is about 170 MMscfd of natural gas and 1,450 b/d of condensate.
The company also holds interests in five exploration blocks and operates four of them.
Excluded from the deal is OMV's 10% interest in Parco, a joint venture between Pakistan and Abu Dhabi.
Australia, East Timor reach deal maritime boundary deal
Australia and East Timor have reached a treaty agreement over their disputed maritime border as well as "a pathway" to develop the Greater Sunrise offshore gas fields in the Timor Sea, according to the Permanent Court of Arbitration in The Hague.
A statement released following talks in Kuala Lumpur last week said that under the agreement, the share of revenue from the offshore gas fields will differ depending on downstream benefits that arise from different development concepts.
The agreement will establish, for the first time, a single maritime boundary in the Timor Sea between the two countries.
The statement added that representatives of the two governments will meet Mar. 6 at the United Nations headquarters in New York to sign the new treaty.
The arrangement was set up last year following arbitration hearings in The Hague after which the court announced that agreement had been reached "on the central elements of a maritime boundary delimitation between them in the Timor Sea," but that the details would remain confidential until the deal was finalized.
The Woodside Petroleum Ltd.-led Sunrise joint venture said it hopes the commission's conclusions and the signing of the treaty will provide fiscal and regulatory certainty needed to develop the fields for the benefit of all parties.
Exploration & Development Quick Takes
UK seismic dispute headed for court
Ineos Shale has received permission to pursue in court its disputed application for a seismic survey to assess shale-gas potential in Nottinghamshire, England.
The Oil and Gas Authority (OGA) referred the issue to the High Court after the National Trust, a conservation group that administers protected land, rejected the planned 250-sq-km 3D survey over Clumber Park.
The trust said it opposed any activity that might lead to production of fossil fuels.
Ineos Shale said the OGA "noted the UK government's support for a shale industry in the UK and that the geophysical survey is required to explore for resources in its licensed area."
Commercial Director Lynn Calder said the company considered legal action "the last resort."
It said the trust "wouldn't even have discussions with us in this case owing to a political objection to shale gas."
Ineos Shale recently encountered county-level opposition to a vertical core test it wants to drill near the village of Marsh Lane (OGJ Online, Feb. 7, 2018).
ONGC launches Bokaro coalbed methane development
India's Oil & Natural Gas Corp. (ONGC) is targeting 2 million cu m/day from three coalbed methane blocks in Jharkhand state. The operator spudded the BE No. 95 development well on Feb. 25, launching a field development plan to drill 30 wells within the following year. The operator reported 22 of these would be vertical with 8 planned is inclined, all with a depth ranging 400-1,400 m.
In conjunction with its drilling program, ONGC has also broke ground for a gas collecting station to be constructed by Tata Projects in Khudgara village in Gomia, Bokaro district. The GCS will process 800,000 cu m/day once completed in June 2019. The operator also is installing two early production systems, each handling 50,000 cu m/day, that will be completed by December.
ONGC's Bokaro field development plan calls for 141 development wells with an estimated peak production of 750,000 cu m/day. Early monetization is planned for first-quarter 2019. In total, the entire CBM project will encompass 350 wells within three blocks in Jharkhand: Bokaro, Jharia, and North Karanpura, with an estimated cost of 6,500 crore.
Petronas farms into FAR's Gambia offshore blocks
FAR Ltd., Perth, has signed a farmout agreement with Malaysia's Petronas in which the state firm will take a 40% interest in each of FAR's offshore Gambia permits—Blocks A2 and A5.
Petronas will fund 80% of the costs, up to a $45-million cap, of the forthcoming Samo-1 wildcat to be drilled on the A2 block later this year. Based on the deal's completion date of Mar. 31, FAR is to be paid an estimated $13.5 million for reimbursement of back costs as well as a cash consideration. Petronas also will fund FAR's share of non-well costs up to a maximum of $1.5 million.
FAR will retain a 40% interest in each permit and will remain operator through the exploration phase of the A2 and A5 licenses, including the drilling of Samo-1. Petronas has the right to become operator of any resulting development program.
Samo-1 will be the first exploration well drilled offshore Gambia since 1979. FAR says the prospect has the capacity to hold resources of 825 million bbl of oil. It has two target intervals and is on trend with FAR's SNE oil field in neighboring Senegal waters immediately to the north.
The farmout deal is subject to ministerial approval for the Gambian government along with joint venture consents.
FAR entered Gambia offshore permits in 2017, itself farming into 80% of the A2 and A5 blocks from African-American company Erin Energy Corp. for $5.18 million and the promise of funding Erin's costs of the Samo well up to $8 million.
Drilling & Production Quick Takes
ExxonMobil shuts Hides gas plant after PNG quake
ExxonMobil Corp., operator of the PNG-LNG project, has shut its Hides gas-conditioning plant in the wake of a powerful 7.5 magnitude earthquake that shook the Papua New Guinea highlands region in the early hours of Feb. 26.
The initial quake was followed by more than a dozen aftershocks, each with a magnitude of 5.0 or more, the latest on Feb. 27.
The epicenter was about 100 km southwest of Mendi, the capital of the Southern Highlands.
ExxonMobil said it believed that Hides plant administration buildings, living quarters, and a mess hall had been damaged, prompting the company to put plans in place to evacuate nonessential staff. The company added that it had suspended flights into the nearby Komo airfield until the runway could be surveyed.
Joint venture partner Oil Search Ltd. released a statement on Feb. 27 saying that all its staff and contractors, located at the company's more than 20 operating sites, have been accounted for and there have been no reports of any serious injuries.
Inpex gets 10% of concession off Abu Dhabi
Inpex Corp., Tokyo, has received a 10% interest in the Lower Zakum concession offshore Abu Dhabi under an agreement with Abu Dhabi National Oil Co.
Inpex paid a participation fee of $600 million. ADNOC earlier awarded a 10% interest in the concession, which has a 40-year term, to a group of state-owned Indian companies led by ONGC Videsh Ltd. (OGJ Online, Feb. 12, 2018).
Production of Lower Zakum field, now about 400,000 b/d, is to increase to 450,000 b/d.
ADNOC Offshore operates the concession with a 60% interest.
Inpex also paid $250 million to extend its interests in the Satah and Umm Al Dalkh concession for 25 years.
It maintains its 40% stake in Satah oil field and increases its interest in Umm Al Dalkh oil field to 40% from 12%. ADNOC and Inpex plan to raise production capacities to 25,000 b/d at Satah and to 20,000 b/d at Umm Al Dalkh.
ADNOC continues negotiations for the remaining 20% of the Lower Zakum concession available to foreign companies.
Inpex held an interest in what is now the Lower Zakum concession through its wholly owned subsidiary JODCO, a partner in the now-divided Abu Dhabi Marine Areas concession.
EOG-operated Uinta basin gas well producing
The Stagecoach 111-20H well in the Uinta basin in Utah, operated by EOG Resources Inc., is producing natural gas in commercial quantities, said Foothills Exploration Inc., Denver, following drilling, completion, and flow testing.
The well was spudded on Sept. 15, 2017, and Foothills Exploration acquired a 21% working interest in the well in October 2017. The well has been online for 30 days and production tubing is expected to be set in the near term, the company said.
The well was classified as confidential with the State of Utah Division of Oil, Gas & Mining by EOG Resources, and only limited data can be provided.
Bapex picks JV for three Bangladeshi wells
Bangladesh Exploration & Production Co. Ltd. (Bapex) has selected a joint venture drilling and services contractor from Azerbaijan to drill two exploration wells and one appraisal well.
Socar AQS will drill onshore wells in Bangladesh designated Semutang Dakkhin 1, Begumganj 4, and Modarganj 1.
State Oil Co. of the Azerbaijan Republic holds 51% of Socar AQS. Absheron Qazma, a unit of Noble Oil Services of Baku, holds 49%. Bapex and Socar AQS also signed a memorandum of understanding covering cooperation on oil and gas projects in Bangladesh beyond the new drilling contract.
OVL, GeoPark form Latin American venture
ONGC Videsh Ltd. (OVL) of India and GeoPark, Santiago, Chile, have formed a partnership to jointly acquire oil and gas exploration and production projects in Latin America.
A statement said the objective is "building a large-scale, economically profitable and risk-balanced portfolio of assets and operations across Latin America," which it called "one of the most attractive regions in the world for oil and gas investments."
OVL is a wholly owned international investment subsidiary of state-owned Oil & Natural Gas Corp. GeoPark holds licenses in Argentina, Brazil, Chile, Colombia, and Peru, operating more than 61,000 boe/d of oil and natural gas production, 33,000 boe/d net to its interests.
PROCESSING Quick Takes
CNOOC to cut emissions at Hainan refinery
CNOOC Oil & Petrochemicals Co. Ltd., the refining arm of China National Offshore Oil Corp. (CNOOC), has commissioned a new wet-gas scrubbing system to minimizes atmospheric emissions of fine particulate and sulfur oxides from a 1.2 million-tonne/year fluid catalytic cracking unit (FCCU) at subsidiary CNOOC Dongfang Petrochemical Co. Ltd.'s Hainan refining and petrochemical complex at Dongfang City in southern China's Hainan Province.
Fitted by Beijing Milestone Technologies under license from DuPont Clean Technologies, the new Dupont BELCO EDV wet-gas scrubber comes as part of the refinery's extensive investments in technology to reduce emissions and improve quality of gasoline and diesel production at the site to meet new Chinese national emissions standards, DuPont said.
The system installation at Hainan joins CNOOC's existing use of BELCO scrubbers to control emissions from a 4.9 million-tpy FCCU and 1.2 million-tpy FCCU at subsidiary CNOOC Huizhou Refining & Chemical Co. Ltd.'s 12 million-tpy integrated refining complex at the Daya Bay Economic & Technological Development Zone in Huizhou in China's Guangdong province, according to the service provider.
Together, MSTN and DuPont have licensed and supplied over 60 new BELCO EDV wet-scrubbing systems for FCCUs in China, preventing over 200,000 tpy of air pollutants from sulfur oxides and fine particulate emissions to the atmosphere.
SCOOP-STACK-Merge play due gas gathering system
Cardinal Midstream LLC, Dallas, has started construction on Cardinal Midstream III LLC's Iron Horse natural gas gathering and processing system that will span Oklahoma's Canadian, Grady, Caddo, and McClain counties to serve producers in the SCOOP-STACK-Merge play of the Anadarko basin.
Construction is under way on the development's first phase, which includes a gathering system that will consist of more than 100 miles of high and low-pressure natural gas gathering pipeline and multiple compressor stations, the operator said.
First-phase development also will include construction of a proprietary UOP Russell 200-MMcfd modular cryogenic natural gas processing plant in Grady county that will be designed and fabricated to meet Cardinal's requirements for increased NGL recoveries from the area's gas stream.
Scheduled for startup in this year's third quarter, the Iron Horse gas plant is designed to accommodate additional expansions to bring total processing capacity to 600 MMcfd to serve future production growth, Cardinal said.
While the Iron Horse system already is anchored by a long-term acreage dedication from Austin-based Travis Peak Resources LLC, Cardinal III also is in discussions with other producers in the area to bring gas onto the system.
Supported by a capital commitment of $250 million from EnCap Flatrock Midstream, San Antonio, Cardinal III is the third company the Cardinal management team has formed in partnership with EnCap Flatrock, following the previous successes of Cardinal Midstream I LLC and Cardinal Midstream II LLC.
Gazprom Neft lets contract for Omsk delayed coker
PJSC Gazprom Neft has let a contract to Maire Tecnimont SPA subsidiaries for work related to a project designed to expand delayed coking capacity at its 21.4 million-tonne/year Omsk refinery in Western Siberia as part of the operator's ongoing modernization program to reduce environmental impacts and improve processing capacities, conversion rates, energy efficiency, and production qualities at the site (OGJ Online, Dec. 9, 2013).
Tecnimont SPA and Tecnimont Russia LLC will deliver engineering, procurement, and construction management (EPCm) services for implementation of a new delayed coking complex with a feed capacity of 2 million tpy, Maire Tecnimont said on Feb. 15.
With an overall value of about $215 million on a multicurrency basis, the EPCm contract was awarded under a lump-sum scheme for the EP phase and a reimbursable scheme for the Cm phase, according to the service provider.
Maire Tecnimont plans to complete its scope of work on the project within a tight schedule of 29 months from the contract-signing date due to availability of most long-lead items, which Gazprom Neft previously purchased and installed at the site (OGJ Online, July 26, 2017).
South Africa's Enref refinery undergoing upgrade
Engen Petroleum Ltd. has shut down its 125,000-b/d Enref refinery in Durban, South Africa, for 45 days of routine planned maintenance.
Initiated on Feb. 5 and scheduled to run until Mar. 30, the turnaround comes as part of the refinery's ongoing maintenance program designed to ensure safe, reliable operations at the plant, Engen said.
While it did not disclose specific units involved in the scheduled outage, the firm said current turnaround activities will include works focused on essential plant maintenance and inspection activities as well as process-regeneration activities.
Regarding operations during the maintenance outage, Jehan Zaib, the refinery's general manager, said the operator has implemented detailed planning schedules to mitigate any potential capacity issues to keep disruptions to a minimum.
Majority owned by Malaysia's Petroleum Nasional Bhd.'s (Petronas) 80%, Engen produces about 17% of South Africa's refined products at the Enref refinery, the country second largest.
TRANSPORTATION Quick Takes
Crude line planned for Powder River basin
Tallgrass Energy Partners, Leawood, Kan., and Silver Creek Midstream LLC, Irving, Tex., will jointly develop a crude oil pipeline for Powder River basin production in Wyoming.
The 80-mile, 16-in. Iron Horse Pipeline will connect a gathering system and terminal in Converse County with a terminal Tallgrass is building at Guernsey in Platte County.
About half the pipeline will be new. The other half will be converted gas pipeline.
Tallgrass has agreed to contribute the gas-conversion segment, between Labonte and Guernsey, now owned by Tallgrass Interstate Gas Transmission LLC.
It operates a crude line connect to the Guernsey terminal, Pony Express.
In conjunction with formation of the joint venture, Tallgrass has agreed to sell its 50-mile Powder River basin gathering system to Silver Creek, which plans further construction.
The acquired and expanded gathering system will feed the Silver Creek Midway Terminal, which will deliver crude into Iron Horse.
The pipeline will have initial capacity of 100,000 b/d of crude and can be expanded. Tallgrass will operate and own 75% of the system. Silver Creek will own the remainder.
Anadarko further advances Mozambique LNG project
Anadarko Petroleum Corp. reported that Mozambique LNG1 Co. Pte. Ltd.—the jointly owned sales entity of the Mozambique Area 1 Lda. coventurers—has entered into a long-term LNG sale and purchase agreement with Electricite de France SA (EDF). The offtake agreement calls for the supply of 1.2 million tonnes/year of LNG to EDF over 15 years.
Anadarko is developing Mozambique's first onshore LNG plant consisting of two initial LNG trains with a total capacity of 12.88 million tpy to support Golfinho-Atum field located entirely within Offshore Area 1, where the firm and its partners have discovered 75 tcf of recoverable natural gas resources.
Anadarko operates Offshore Area 1 (26.5% working interest). Partners are ENH Rovuma Area Um SA 15%, Mitsui E&P Mozambique Area1 Ltd. 20%, ONGC Videsh Ltd. 10%, Beas Rovuma Energy Mozambique Ltd. 10%, BPRL Ventures Mozambique BV 10%, and PTTEP Mozambique Area 1 Ltd. 8.5%.
Last year Anadarko finalized two agreements with the government of Mozambique that would allow the firm to design, build, and operate marine facilities for the LNG project in the northern part of the country (OGJ Online, July 31, 2017).
OVL reported to drop LNG from Farzad B plan
State-owned ONGC Videsh Ltd. of India is reported to have dropped plans for a gas-liquefaction project in Iran in an apparent effort to advance development of Farzad B gas field.
OVL operates a group that discovered the offshore field under an exploration service contract with National Iranian Oil Co. that expired in 2009, after the field was declared commercial.
The group, which also includes state-owned Indian Oil Corp. Ltd. and Oil India Ltd., has been unable to win development rights. Last year, it proposed investment of $11 billion to develop the field and related export facilities.
According to press reports in India and Iran, OVL has agreed to concentrate on field development and leave export planning to Iranian authorities.
OVL is reported to want to drill an appraisal well to reassess cost, one of the items of disagreement in development negotiations.