Gazprom confirms large gas discoveries in Russian Arctic waters
Russian oil and gas company Gazprom has found two offshore gas fields in the Russian Arctic containing a total of 500 billion cubic meters of gas.
Well testing at Rusanovsky licensed block in Kara Sea. Source: Gazprom
Gazprom has said that the Federal Agency for Mineral Resources approved the expert opinions of the State Reserves Commission with regard to the discovery by Gazprom of new hydrocarbon fields on the shelf of the Yamal Peninsula, namely the Dinkov and Nyarmeyskoye fields.
The Dinkov field is situated within the Rusanovsky licensed block in the Kara Sea. Gazprom says the field is unique in terms of gas reserves as its recoverable reserves in the С1+С2 categories total 390.7 billion cubic meters.
The Nyarmeyskoye field is located in the Nyarmeysky licensed block, also int in the Kara Sea. In terms of gas reserves, it is a large field with the recoverable amount of 120.8 billion cubic meters in the С1+С2 categories.
The discoveries were made by COSL’s Nan Hai Ba Hao semi-submersible drilling rig, Russian news websites have reported.
Gazprom secured the subsurface use licenses for the Rusanovsky and Nyarmeysky licensed blocks in 2013. Since then, 3D seismic surveys covering 5,790 square kilometers have been carried out within these blocks, with two exploration wells drilled in 2018. Gazprom also has subsurface use licenses for the Leningradskoye and Rusanovskoye fields on the Kara Sea shelf.
The region has been fruitful for the Russian oil and gas companies as Gazprom’s compatriot Novatek last year made one of the world’s biggest offshore discoveries of the year in the Ob Bay of the Kara Sea – the North-Obskoye field
Greenpeace activists have reportedly blocked entrances to BP’s headquarters in London.
The environmentalist organization tweeted on Monday morning: “We’ve just shut down @BP_plc’s offices in central London. This is a #ClimateEmergency.”
Greenpeace on said its activists were blocking entrances to BP’s London HQ.
“[The activists] have set up camp inside specially designed containers. BP can’t continue as if it’s business as usual in this #ClimateEmergency we’re in. #BPshutdown,” Greenpeace tweeted.
The group has said its activists are “prepared to stay there until BP agrees to stop searching for new oil & gas and take the #ClimateEmergency seriously.”
Offshore Energy Today has reached out to BP seeking comment and confirmation of Greenpeace’s claims of the shutdown of BP’s offices.
A BP spokesperson responded:”We welcome discussion, debate, even peaceful protest on the important matter of how we must all work together to address the climate challenge, but impeding safe entry and exit from an office building in this way is dangerous and clearly a matter for the police to resolve as swiftly as possible.”
Offshore Energy Today understands that BP employees not able to access the building are working either remotely or from other offices.
EMGS allocates vessel for Barents Sea seismic survey
May 17th, 2019
Atlantic GuardianTom Gulbrandsen and EMGS
Offshore staff
TRONDHEIM, Norway – Electromagnetic Geoservices (EMGS) will mobilize the Atlantic Guardian for a fully pre-funded multi-client 3D controlled source EM survey in the Norwegian Barents Sea.
The contract value for the survey, due to start shooting shortly, is $1.25 million. The survey is expected to be executed in 2Q 2019.
Australia’s major parties to audit offshore regulator’s decision on Great Australian Bight drilling
In the days leading up to the Australian federal election – scheduled for Saturday, May 18 – the Liberal Party of Australia has informed it will commission an independent audit of NOPSEMA’s, the country’s offshore regulator, current consideration of exploration in the Great Australian Bight.
The Great Australian Bight. Source: Equinor
Namely, Equinor’s plans for offshore exploration in the Great Australian Bight are currently being reviewed by the country’s independent offshore regulator, NOPSEMA.
The Liberal National Government said in a statement on Thursday it had recognized the importance of the Great Australian Bight and the surrounding region to local communities, and the fishing and tourism industries.
“The region is known for its unique environment and deserves strong protection,” the Liberal Party said in the statement, claiming that Australia has one of the safest regimes for offshore oil and gas in the world.
The industry is overseen by Australia’s independent regulator NOPSEMA (National Offshore Petroleum Safety and Environmental Management Authority), which was established on January 1, 2012.
“The Liberal National Government recognizes community concerns around drilling in the Great Australian Bight and community groups are seeking further assurance of environmental protection,” the party said.
The Liberal National Government will commission an independent audit, to be conducted by the Chief Scientist, to provide this additional level of assurance to the community.
According to the statement, the independent audit will be jointly commissioned by the Minister for Resources and the Minister for the Environment. The Chief Scientist will be asked to work with NOPSEMA to assure all environmental considerations are thoroughly considered as part of the assessment process and decision making of the independent regulator. The audit will be conducted in tandem with the assessment process.
Exploratory drilling proposals will continue to be assessed by NOPSEMA, which has an independent assessment process underway under Australian law.
Equinor’s drilling plans
To remind, Norway’s oil and gas giant Equinor in April filed an environment plan to Australian offshore regulator for its proposed petroleum drilling activity in the Great Australian Bight amid claims by environmental groups of it being too risky. Following the submission of the plan, NOPSEMA started the formal assessment of the plan, under which a proposed activity must be found to meet all legislative requirements to proceed.
Through its assessment, NOPSEMA said it would consider potential environmental impacts from the proposed activity to ensure appropriate precautions are taken. The regulator’s decision was initially expected by May 23, 2019.
Equinor Australia is the sole titleholder of exploration permit EPP39, located in the Ceduna Sub-basin in Commonwealth waters off southern Australia. As part of the permit commitment, Equinor plans to drill the Stromlo-1 exploration well, which is located approximately 400 km southwest of Ceduna and 476 km west of Port Lincoln and in a water depth of approximately 2,240 meters.
Equinor plans to spud the Stromlo-1 exploration well in late 2020. The duration of the drilling of the well is expected to be approximately 60 days.
Labor calls for study into oil spill impact
Meanwhile, Australian Labor Party has also said that, if elected, one of its first acts will be to commission an independent scientific study into the impact of an oil spill in the Great Australian Bight. The purpose of the study will be to help inform the decision making of the independent regulator.
The Labor said that it will be an independent scientific study to increase the capacity of the independent regulator to properly make an assessment and that the study will report before the project is approved.
In a statement on Thursday, May 17 environmental organization Greenpeace welcomed the Labor Party’s new commitment that a Shorten Labor government would block Equinor’s oil drilling approval from proceeding in the Great Australian Bight until an independent scientific study into the impacts of an oil spill is completed.
Greenpeace senior campaigner Nathaniel Pelle said: “A stay of execution is welcome. But it’s clear a total ban on drilling in the Bight is warranted.”
He added: “The Labor Party has responded to the growing calls from international experts, surfers, the fishing industry, and everyday Australians who love our beaches, by delaying this dangerous proposal to drill for oil in the Great Australian Bight pending an independent inquiry.”
“If Bill Shorten is elected on Saturday, and is truly committed to putting the environment before oil company profits, he’ll go one step further and rule the project out completely,” said Pelle.
Regulator delays decision
While it was unclear at first how either of the parties’ proposals for independent studies would be done in practice, as NOPSEMA was initially expected to make its decision by May 23, the regulator issued a statement on Friday, May 17 changing the deadline.
In the statement the regulator said it was “unable to make a decision on their environment plan for proposed exploration drilling in the Great Australian Bight within the initial 30 day assessment period. The next decision point is now scheduled for 27 June 2019.”
The Great Australian Bight drilling plans have also been met with resistance by the Australian Greens and its Senator Sarah Hanson-Young who said that the party would not let “Australian tourism and fishing industries be put at risk for the sake of multinational corporate profits, no matter what spin Equinor tries to put on it.”
Schlumberger using Google Cloud for E&P applications
World’s largest oilfield services company Schlumberger is teaming up with Google Cloud to develop exploration & production solutions aimed at helping with seismic processing and field development.
Illustration; Image source: Schlumberger
Schlumberger on Wednesday said ti had renewed and significantly expanded its agreement with Google Cloud to develop cloud-native E&P applications.
The oilfield services firm expects the agreement will help its customers acquire actionable insights from data and harness the power of Google’s cloud infrastructure and artificial intelligence (AI) capabilities.
Schlumberger has deployed its oil and gas petrotechnical software suite on Google Cloud Platform (GCP) to perform seismic processing, interpretation, and subsurface modeling.
Hinda Gharbi, Executive Vice President, Schlumberger Reservoir & Infrastructure: “Our strategic collaboration with Google Cloud enables Schlumberger and our customers to take advantage of the latest digital technologies to unlock the value in all data for making critical business decisions,” said “Using GCP, Schlumberger is launching several cloud-native applications for its customers, including global exploration screening, seismic processing, field development planning, and production optimization workflows…”
“To succeed in the oil and gas industry, companies must truly embrace digital transformation,” said Robert Enslin, President of Global Customer Operations, Google Cloud. “Through this collaboration, we are combining Schlumberger’s petrotechnical domain knowledge and expertise in high-performance computing, and 3-D data visualization with Google Cloud’s proven experience in data analytics, AI and infrastructure. Together, we will provide E&P customers with the insights, efficiencies, and technologies they need to drive innovation.”
CGG CEO, Sophie Zurquiyah (image courtesy of CGG).
French seismic company CGG has started its first multi-client ocean bottom node (OBN) survey in the U.S. Gulf of Mexico. The survey is being carried out in the north-central region of the Gulf of Mexico.
CGG said OBN survey would provide well-sampled, full azimuthal coverage with long offsets, “to deliver exceptional data for imaging the geologically complex structures in Mississippi Canyon.”
Acquisition services are being provided by Seabed Geosolutions and the data will be processed by CGG Geoscience’s Subsurface Imaging in Houston.
CGG said the survey would provide an improved definition of drilling targets, with preliminary data expected to be available in the third quarter of 2019.
“Supported by industry prefunding, CGG’s Mississippi Canyon Node survey paves the way for further CGG multi-client OBN surveys in the future,” CGG said.
Sophie Zurquiyah, CEO, CGG, said: “We are pleased to initiate our first multi-client OBN survey, in this strongly growing market, as clients take advantage of the enhanced geologic understandings that OBN data and advanced imaging can deliver.”
Seabed Geosolution, the company carrying out the survey, in a separate statement said the ocean bottom nodes would be deployed by remotely operated vehicles to 2,100-meter water depths, “illuminating a challenging target area in one of the deepest offshore production areas in the world.”
Stephan Midenet, CEO, Seabed Geosolutions: ‘We are excited to embark on our first OBN project with CGG over the highly prospective Mississippi Canyon area using our proven CASE Abyss node technology. The survey will combine our expertise in ocean bottom seismic operations with CGG’s advanced OBN imaging technology and experience.’
Map showing the location of CGG’s Mississippi Canyon Node survey.
O&G exploration is back, deepwater attracting most attention, report says
Oil and gas exploration is back and deepwater sweet spots are attracting the most attention, energy intelligence group Wood Mackenzie’s industry survey has shown.
Illustration: A semi-submersible drilling rig and a supply vessel / Image source: Pexels
According to Wood Mackenzie’s eleventh yearly oil and gas exploration survey, in which 259 senior energy leaders took part, the exploration industry optimism is back, profits have returned and the prospects look good.
Dr. Andrew Latham, Wood Mackenzie’s vice president, exploration said: “We’re seeing a continued recovery in the exploration sector, and this borne out by the drilling plans and new licenses we’re seeing.
He said that, according to the survey, conventional exploration is still viewed as the primary resource replacement option. The survey also showed that lower costs, both for exploration and development, are key to exploration’s return to value creation.
Wood Mackenzie said that high-quality prospects in deepwater sweet spots, such as Brazil, Guyana, the Gulf of Mexico and the East Mediterranean, are attracting the most attention. Just in Guyana, Exxon has made thirteen oil and gas discoveries since 2015, and has ordered two FPSOs for the development of Liza discovery. ExxonMobil is also evaluating plans to add another exploration drillship, which would be Exxon’s fourth drillship in Guyana focused on exploration works.
According to Wood Mackenzie’s exploration survey, the global exploration budget will total about $40 billion in 2019, half of which will be spent on drilling, while 25% is earmarked for geological and geophysical surveys.
Digitalization spend set to increase
Also, Wood Mackenzie says that digitalization today accounts for about 8% of the total spend, but this will increase as new seismic processing techniques, machine learning and AI become fundamental tools for explorers.
Dr. Latham said: “Digitalisation offers exploration the possibility of better resolution of the subsurface, better seismic modeling and growing use of automated interpretation.
He added: “Digitalisation has become a consistent feature on our surveys. The survey results back up our expectation that the exploration industry, led by the majors, will spend billions each year on digitalization.”
Dr. Latham said that efficiency gains – hard-won during the downturn – mean that doing more with less is now standard. And while there is more investment in the exploration pipeline, that cash goes farther than before. According to our survey, the industry is confident that it can break even with an average oil price of around $50 per barrel.
Around 22% of the survey respondents believe that exploration can break even with Brent in a $55- $60/bbl band, while a further 18% are comfortable in the $45-$50/bbl range.
Four years ago, Woodmac says, before the oil price crash, companies were looking at a break-even price of around $80/bbl. According to survey respondents, exploration’s economics have been improved by the move towards less project complexity. Explorers are looking at prospects in less challenging basins, and as Dr. Latham noted, this not only cuts costs, it helps improve drilling time – in some cases by as much as 30% – and allows for quicker project development.
About 36% of those surveyed said they would be investing more on exploration this year, while only 13% had reduced their budgets from last year. An even greater number (38%) said they planned to drill more wells this year while just 10% of respondents expect their well count to be lower than in 2018.
Delek’s $965M Gulf of Mexico buy falls through as Equinor jumps in
Norwegian oil firm Equinor has exercised its preferential rights to buy Shell’s 22.45% interest in the Caesar Tonga oil field in the U.S. Gulf of Mexico for $965 million.
Map by Equinor
The announcement comes a month after Israel’s Delek reached a deal to buy’s Shell’s stake for the same amount, but the transaction was subject to Caesar Tonga partners not exercising preferential rights.
The acquisition will lift Equinor’s interest from 23.55% to 46.00%. Anadarko remains the operator with a 33.75% interest, and Chevron retains its 20.25% interest.
The Caesar Tonga field is located 180 miles (290 kilometers) south-southwest of New Orleans in the Green Canyon area and is one of the largest deepwater resources in the US Gulf of Mexico. Equinor’s current share of production from Caesar Tonga is 18,600 boepd (net to Equinor).
“We are pleased to increase our presence in the US, one of our core areas. This is an asset we understand well, and our larger interest will deliver significant additional free cash flow from day one”, says Christopher Golden, Equinor’s senior vice president for Development and Production International, North America Offshore.
Golder said: “Deepwater Gulf of Mexico forms an important part of Equinor’s portfolio. This deal will strengthen our position in this prolific basin and build on the recent discovery in the Blacktip well. Later this year we will be drilling the Equinor-operated Monument prospect, which has the potential to further develop our position in the Gulf of Mexico,” adds Golden.
The transaction will have an effective date of 1 January 2019. The closing of the sale will be subject to customary consents and approvals.
The agreement was subject to the right of first refusal held by the three other co-owners in the field, meaning that Equinor’s Monday announcement will make Delek’s agreement with Shell void.
First oil from the Caesar-Tonga field was produced in March 2012. Anadarko completed its eighth development well at the field in the second quarter of 2018. The well was tied back to the Constitution Spar and came online in the third quarter of 2018. Total average production at Caesar-Tonga is over 70,000 boe/d.
Eidesvik said on Monday that the master time charter agreement includes services for seismic source and node-handling vessels.
As a first call-off under this agreement, Eidesvik has been awarded new contracts by Seabed Geosolutions for the seismic source vessel Vantage and the node-handling vessel Subsea Viking.
The company said that the new contracts are in direct continuation of the existing contracts, and the duration is approximately three months with further options.
Both vessels are then booked until the fourth quarter 2019, Eidesvik said.
Jan Fredrik Meling, Eidesvik CEO & President, said: “We are very pleased with the contract awards, and we look forward to further developing our relationship with Seabed Geosolutions.”
Houston-based oilfield services provider Weatherford will file for a Chapter 11 bankruptcy protection as part of an agreement with a group of its senior noteholders.
The company on Friday said it had reached a restructuring support agreement with noteholders holding 62% of the Company’s senior unsecured notes. Weatherford said the restructuring support agreement would lead to a “comprehensive deleveraging of the Company’s balance sheet and an approximately $5.8 billion reduction of the Company’s funded debt.”
The proposed plan entails the company’s unsecured noteholders exchanging approximately $7.4 billion of senior unsecured notes for approximately 99% of the equity in the Company and $1.25 billion of new tranche B senior unsecured notes.
“The proposed comprehensive financial restructuring would significantly reduce the Company’s long-term debt and related interest costs, provide access to additional financing and establish a more sustainable capital structure,” Weatherford said.
“Weatherford expects to implement the Restructuring Agreement through a “pre-packaged” Chapter 11 process and expects to file U.S. chapter 11 and Irish examinership proceedings[…]. As part of this process, Weatherford intends to continue engaging in discussions with and begin soliciting votes from, its creditors in connection with a proposed Plan of Reorganization prior to filing,” the company added.”
The restructuring agreement contemplates Weatherford will continue operating its businesses and facilities without disruption to its customers, vendors, partners or employees and that all trade claims against the Company (whether arising prior to or after the start of the Chapter 11 Cases) will be paid in full in the ordinary course of business.
“We expect a restructuring will provide us with improved liquidity and greater financial stability and flexibility to make investments to enhance our platform while we continue to invest in the resources necessary for our business to grow.”
Mark A. McCollum, President and CEO of Weatherford said: “During the past year, we have been executing a company-wide transformation to fundamentally improve the way we operate our business and to strengthen Weatherford for the long run. Despite the challenging market dynamics our industry continues to face, we believe that our transformation strategy, which is designed to improve our execution capabilities, lower our cost structure and create efficiency to allow us to better price our products and services, will position Weatherford for long-term success.
“However, we still face a high level of debt that affects our ability to make investments in our company and implement further elements of our transformation plan. We are pleased that our noteholders recognize the long-term value Weatherford can create with an improved balance sheet as we work to achieve the full potential of our business transformation. We expect that the new capital structure will allow us to continue to capitalize on our momentum and build a truly integrated service company with sustainable profitability and long-term growth potential.”
McCollum said: “We are taking these actions to ensure we can do an even better job of meeting our commitments to all of our key stakeholders by creating the strongest Weatherford possible. We do not anticipate any operational disruptions as a result of this announcement. Our customers, partners, employees and vendors should not experience any changes in the way we do business, and we expect their experience will improve after restructuring is complete.
“We expect a restructuring will provide us with improved liquidity and greater financial stability and flexibility to make investments to enhance our platform while we continue to invest in the resources necessary for our business to grow.”
Weatherford, which provides equipment and services to the oil and gas exploration and production industry, both onshore and offshore, recorded a net loss of $481 million in the first quarter of the year, compared to $245 million in the first quarter of 2018.
The company reported revenues revenues of $1.3 billion in the first quarter of 2019, a decrease of $77 million, or 5%, compared to the first quarter of 2018.
Weatherford blamed revenue decline on lower activity levels in Canada and the United States, as well as decreased revenues associated with the divested land drilling rigs in the Middle East and North Africa, partially offset by higher revenues from integrated service projects and product sales in Latin America and higher Completions activity in the Eastern Hemisphere
