25 March 2019

OGA launches UK’s first oil and gas national data repository

The UK Oil and Gas Authority (OGA) has launched the UK’s first oil and gas National Data Repository (NDR), in what it claims to be one of the largest ever single open data releases.

The NDR contains 130 terabytes of geophysical, infrastructure, field and well data. This is, the OGA says, the equivalent of around eight years’ worth of HD movies. This data covers more than 12,500 wellbores, 5,000 seismic surveys and 3,000 pipelines.

OGA chief information officer Simon James said: “The NDR creates research opportunities for both technology and analysis. For the industry, it means access to a huge data pool to harness digital technology, relieves them of the regulatory requirement to retain information, and enhances collaboration. For the OGA, it means sustainable curation, maximising data for MER while enabling compliance monitoring.”

The goals of the NDR include helping to recover 20 billion barrels of oil and gas and creating more exploration activity, as well as unlocking new investments and technologies.

OGA director of corporate Nic Granger said: “The world is arguably entering a ‘fourth industrial revolution’, with data at its heart. The National Data Repository is a UK first and is an important milestone in our vision to enable open, transparent data.

“The platform makes data available for machine learning and artificial intelligence and offers the opportunity to uncover new prospects and previously overlooked plays.”

The OGA says it expects the NDR to play a role in the energy transition of the UK oil and gas industry, with the reservoir and infrastructure data supporting future carbon capture, usage and storage projects.

On 22 March 2019, the OGA announced it had secured a $1.1m (£900,000) grant from the Better Regulation Executive’s Regulator’s Pioneer Fund for a project to support the UK oil and gas industry in transitioning to renewable forms of energy.

BP North Sea regional president Ariel Flores said: “Effective use of data can be a game-changer in the oil and gas sector, delivering improved safety, reliability and efficiency, yet the value of existing datasets are never fully realised.

“The NDR should bring about a step change, bolstering the UK’s digital infrastructure and liberating data flows to unlock a wealth of new opportunities that could ultimately boost recovery.”


22 March 2019

Global oil prices remain stable as OPEC supply cuts continue to dominate

Global oil prices remained stable marginally below their 2019 peaks as supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) continue to dominate the market.

Brent crude oil futures gained 6 cents from their last close to trade at $67.92 per barrel, while US West Texas Intermediate (WTI) futures edged 5 cents higher to settle at $60.04 a barrel, reported Reuters.

OPEC members, along with key non-affiliated allies including Russia, have restricted crude output by 1.2 million barrels per day (Mbpd) to support global oil prices. The move has supported the market with prices reaching nearly a four-month high. However, increasing concerns of economic growth prevented crude prices from further increase.

Economic growth has slowed down across North America, Europe and Asia, which in turn may reduce fuel consumption.

Investment bank RBC Capital Markets told the news agency that oil is ‘still below the fiscal breakeven level in a number of OPEC countries’, implying extension of OPEC supply cuts beyond June this year.

RBC said: “We believe that OPEC is likely to extend the deal for the duration of 2019 when they next assemble in Vienna in June.”

The oil market is also supported by the ongoing US sanctions against key petroleum producers Iran and Venezuela. US crude oil production has crossed 12.1 Mbpd, making it the largest producer ahead of Russia and Saudi Arabia. This rise in production is offsetting the impact of sanctions and OPEC supply cuts.


22 March 2019

Oil and Gas Authority secures $1.1m grant to research offshore renewables

UK regulator Oil and Gas Authority (OGA) has secured a $1.1m (£900,000) grant from the Better Regulation Executive’s Regulator’s Pioneer Fund to begin a project that will explore the potential of a more integrated offshore energy sector.

OGA is collaborating with the Department for Business, Energy and Industrial Strategy (BEIS), The Crown Estate, Ofgem and other stakeholders in this project to support the UK oil and gas industry in transitioning to renewable forms of energy.

Short-term plans include testing for potential regulatory and technical opportunities, while long-term plans will look at using energy integration to maximise the value of the UK Continental Shelf.

The project will explore the mix of storage solutions and energy sources needed to help the industry transition to a low carbon economy. These include the capture, storage and transport of carbon dioxide using existing infrastructure, powering of offshore platforms from renewable sources, monetising gas produced via in-situ power generation and the offshore production and transportation of hydrogen.

OGA chief executive Andy Samuel said: “This is a really exciting opportunity to advance the energy transition agenda, looking at practical steps that can be taken and how we as regulators can support that.

“Oil and gas will be required to power our economy and heat our homes for the foreseeable future, but to me, it is clear there are great opportunities now to more closely link up all forms of offshore energy production to generate power more cleanly and efficiently.”

The Crown Estate head of energy development Will Apps said: “As managers of the seabed around England, Wales and Northern Ireland, we are pleased to be working with the Oil & Gas Authority and other partners to support this project, helping to pave the way for greater market innovation in the critical area of energy integration, and support the UK’s ongoing transition to a low carbon energy mix.”


22 March 2019

US Gulf of Mexico lease sale receives $244m in high bids

The US Department of Interior (DOI) has announced that Gulf of Mexico Lease Sale 252 has received more than $244m in high bids for 227 tracts covering 5,103km² in federal waters.

The figure is significantly higher compared to Lease Sale 251, the immediate last lease sale that generated $178m in high bids.

DOI assistant secretary for land and minerals management Joe Balash said: “Today’s lease sale shows strong bidding by established companies, which indicates that the Gulf of Mexico will continue to be a leading energy source for our nation long into the future.

“The results from today will help secure well-paying offshore jobs, while generating much-needed revenue to fund everything from conservation to infrastructure.”

A total of 30 companies participated in Lease Sale 252 submitting a combined $283.78m for all bids. Oil and gas majors such as Shell, Equinor, BP, Anadarko, Total, Chevron and Hess were among the winning bidders.

Shell placed high bids for 87 tracts, followed by Anadarko and BP with 27 and 23 tracts respectively. Equinor had the highest bid of around $24.5m for a single tract.

Lease Sale 252 was the fourth offshore sale carried out under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Programme. The sale included 14,699 unleased blocks in the Gulf of Mexico’s Western, Central and Eastern Planning Areas. The blocks are situated from three miles to 231 miles offshore in water depths ranging from 3-3,400m.

The programme includes ten region-wide lease sales for the Gulf region, which is estimated to have high potentiality with suitable oil and gas infrastructure already established.


21 March 2019

Energy Institute launches corrosion guidance for oil and gas

UK-based professional membership body, the Energy Institute (EI) has released guidance and training to help oil and gas operators manage the issue of corrosion.

The second edition of the EI’s ‘Guidance for corrosion management in oil and gas production and processing’ has been updated and expanded from its first iteration, published in 2008.

The guidance incorporates case studies and details corrosion mechanisms to help operators with corrosion management.

Attendees at a launch event at the Aberdeen Exhibition and Conference today will hear from oil and gas operators as well as UK regulator Health and Safety Executive (HSE).

EI technical director Martin Maeso MEI said: “When we fill up the car or turn on the gas or lights at home we’re unlikely to think about the significant challenges presented by corrosion to those working to produce the energy we all need.

“Whether it’s producing oil and gas or generating wind power, this industry operates in some of the most challenging conditions – in particular in extreme weathers and deep seas offshore.

“The EI is proud that this document is turned to by professionals the world over as the de facto standard for managing the impact of corrosion on daily operations and in prolonging the life of assets.”

HSE principal specialist inspector of materials and corrosion Louise Atkin said: “Corrosion presents a serious asset integrity threat to offshore production and processing facilities, and so as a regulator we need to have confidence that good practices are being observed to achieve regulatory compliance.

“The EI’s guidance is a great example of the industry rising to this challenge. It follows a sensible and proportionate approach, ensuring health and safety management of corrosion risks in the energy sector is easier and more effective for everyone involved.”

In addition to the guidance, EI will also launch a new online ‘Corrosion Under Insulation’ learning course, providing competency and foundational knowledge needed for visual inspection of “asset integrity threats.”

Total specialist materials and corrosion engineer Dr David Hillis said: “The EI’s corrosion management guidance is indispensable for oil and gas operators working to protect the environment they work in while getting the most out of their assets.

“Corrosion can cost operators millions of pounds every year, so use of this guidance presents an opportunity to make significant savings and improve profitability for operators.”


21 March 2019

Oil prices drop after hitting four-month high

Crude oil prices have slipped after reaching a four-month peak as supply cuts and the US sanctions on Iran and Venezuela continue to support.

International Brent crude oil futures were trading at $68.54 a barrel after touching its highest levels of $68.69 a barrel since 13 November last year, reported Reuters. US West Texas Intermediate (WTI) crude futures dropped 12 cents to $60.11 per barrel. In the earlier session, WTI traded at $60.33 per barrel, its peak levels since 12 November 2018.

Since the beginning of 2019 crude prices continued to edge higher, driven by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC). OPEC’s crude oil output dropped from 32.8 million barrels per day (bpd) in mid-2018 to 30.7 million in February. Ongoing US sanctions against prominent oil producers Iran and Venezuela also continued to support.

ANZ bank was quoted by Reuters as saying: “Venezuelan exports to the U.S. have finally dried up, after the sanctions were placed on them by the U.S. administration earlier this year.”

Oil supplies from Iran also dropped as the US has planned to reduce its crude exports by around 20% by forcing other countries to reduce their imports from the Middle Eastern country.

Global oil prices also received support from falling US crude oil stockpiles. According to Energy Information Administration, the inventories dropped by 9.6 million barrels to 439.5 million barrels.The fall is primarily attributed to soaring US exports which stood at 3 million barrels per day (Mbpd), nearly double compared to 2018 levels.


20 March 2019

UK offshore industry needs £200bn investment: OGUK report

Oil industry trade body Oil & Gas UK (OGUK) published its flagship Business Outlook 2019 report into the offshore oil and gas industry on Wednesday, which indicates continued uncertainty in commodity markets is reinforcing investor caution.

This, combined with exploration and production companies keeping a sustained focus on cost and efficiencies, is the “new reality” of the UK offshore oil and gas industry according to the report.

OGUK chief executive Deidre Michie said: “Our report finds an industry that’s getting better at what it does, getting smarter in how it does it and is well-positioned to deliver attractive returns on investment within this environment, maintaining our global competitiveness.

“This is the new reality and we need to embrace it. However, challenges remain across parts of the supply chain, with revenues and margins still under pressure and cash flow stretched. If capabilities and resources are to stay anchored here in the UK, there must be a competitive proposition for supply chain companies to invest in too.”

The report shows that production in the UK has increased by 20% over the past five years following 14 years of decline, despite drilling activity being at record low rates.

Despite these low levels of activity, up to 485 million barrels of oil equivalent (Mboe) has been discovered from exploration wells drilled in 2018. Production from the UK Continental Shelf (UKCS) provided around 60% of the UK’s oil and gas, reducing reliance on imports.

The report also noted that the UK’s corporate landscape has become increasingly diverse over 2018, with the largest ten exploration and production (E&P) companies accounting for just over half of production in 2018 compared with 66% in 2008.

Business Outlook 2019 notes that momentum is building around exploration activity with up to 15 exploration wells expected over 2019, including what the report describes as “several potentially high-impact prospects.”

Michie said: “With focus on adding a generation of productive life to the basin, our report reveals around £200 billion will need to be spent to find, develop and operate the reserves of the future.

“This is a UK industry which is critical for security of energy supply, at the heart of the move to a lower carbon economy, supports hundreds of thousands of jobs and contributes billions to the economy. With the new reality clear and clarity around the future potential, there is all to play for.”

More new projects were approved in 2018 than the previous three years combined, generating over £3.3bn of new capital investment and 400Mboe of new reserves. OKUG expects a similar number of new reserves in 2019.


19 March 2019

Aker BP makes oil and gas discovery in North Sea Bøyla field

Norwegian oil exploration and development company Aker BP has made an oil and gas discovery of up to 21 million standard cubic metres (Sm3) of recoverable oil equivalents in the Bøyla field in the North Sea.

Aker BP concluded drilling of the wildcat well 24/9-14S and the horizontal appraisal well 24/9-14A. The appraisal well was drilled 2650m northwest of the 24/9-14S wildcat well.

The 24/9-14A and 24/9-14S wells are the first exploration wells in production licence 869 on the Norwegian continental shelf of which Aker BP is the operator, having been awarded the licence in APA 2016.  Aker BP discovered reservoirs in the licence in February 2019.

The wells were drilled by the Scarabeo 8 drilling rig, which is set to drill a combined wildcat and test production well in North Sea production licence 340, where Aker BP is also the operator.

The 24/9-14S wildcat well was drilled to respective vertical and measured depths of 2,097m and 2,252m below sea level, with the objective of proving the presence of petroleum and gauging the reservoir potential.

Appraisal well 24/9-14A was drilled to respective vertical and measured depths of 1,847m and 4,398m below sea level, with the objective of investigating the lateral extent and reservoir potential of injectites in the area.

The 24/9-14A well encountered several injectite zones bearing oil and gas totalling 540m, with many sandstone layers with variable reservoir properties.

Wildcat well 24/9-14S encountered an oil column of 38m and a gas column of 30m, which the Norwegian Petroleum Directorate says has“very good to excellent reservoir properties.”

Preliminary estimates place the size of the discovery between 10-21 million Sm3 of recoverable oil equivalents, with the nearby 24/9-3 oil discovery being considered part of this discovery.

Aker BP exploration senior vice president Evy Glørstad-Clark said: “The exploration success at Froskelår Main is an encouraging result of a long-term strategy to unlock the exploration potential in the Alvheim area. This strategy has involved extensive data acquisition and detailed technical analysis.

“The Froskelår Main discovery represents a significant addition to the resource base in the Alvheim area. The discovery also illustrates the significant resource potential yet to be uncovered on the Norwegian Continental Shelf.”