Industry news

Sonatrach terminates Ain Tsila field contract with Sunny Hill Energy

16 april | projects

Algerian national energy company Sonatrach has seized Sunny Hill Energy’s 38.25% stake in the Ain Tsila gas field in south-east Algeria.

Sunny Hill Energy, formally Petroceltic International, held a contractual interest in the asset through its wholly owned subsidiary Petroceltic Ain Tsila.

Sonatrach terminated the contract without offering any compensation, alleging that Petroceltic failed to fulfil contractual obligations.

In response, Sunny Hill Energy said it will claim $1bn in compensation from Sonatrach as it has invested hundreds of millions of dollars in the project.

Sunny Hill Energy chairman Angelo Moskov said: “Sonatrach has acted in an aggressive and irrational manner. Their expropriation of our interest without compensation is the type of action expected in Hugo Chavez’s Venezuela and not from a country like Algeria that proclaims to respect the rule of law.

“This unwarranted action will be highly damaging to the attempts by Algeria to attract foreign investment into the country.

“We have strong legal advice that this action by Sonatrach is without legal merit. We have fully met our contractual obligations including providing our full share of resources required for the operation of the joint venture with Sonatrach.”

The field development plan was approved in 2012 and was planned for commissioning in 2017.

It is estimated to have a production capacity of 10 million cubic metres per day of gas, 17,000 barrels per day of LPG and 11,500 barrels per day of condensate.

Sonatrach, however, plans to develop the project with target to commence production in November 2022.

15 april | security

Houthis rebels attack Saudi Aramco’ oil facilities in Jazan

Yemeni rebel group Houthis has claimed that it attacked Saudi Aramco’s oil installation in the refinery town of Jazan in Saudi Arabia using drones and missiles.

This is the second attack by the Iran-aligned group on Saudi Aramco’s facilities within a week.

The Houthis’ Al-Masirah television reported that the attack also targeted a site that houses Patriot anti-missile batteries and other ‘sensitive facilities’ in Jizan region.

A total of 11 missiles and explosive-laded drones were reportedly used by the Houthis to attack Aramco’s facilities, reported Al-Masirah TV.

Houthi military spokesman Yehya Sarea was cited by Al-Masirah TV as saying: “The attack was accurate and caused a huge fire in the site.”

However, the Saudi Arabian military intercepted four drones and five ballistic missiles, reported the state-run Saudi Press Agency.

The fragments from the interception landed on the Jazan University, triggering a fire with no injuries reported.

The fire has been brought under control, according to the Saudi Arabia-led coalition fighting the Yemen’ Houthis.

15 april | drilling

Total to defer drilling application for offshore block in South Africa

Oil major Total has reportedly decided to delay application for drilling work at the block 11B/12B offshore South Africa.

Reuters reported the development citing a letter from SLR, the consultancy that is undertaking the environmental and social assessment for the project.

In its letter, the consultancy said: “This letter serves to notify you that TOTAL E & P South Africa BV has decided to postpone their application for the additional drilling and associated activities in Block 11B/12B at this time.

“Thus, the application for Environmental Authorisation of the additional drilling and associated activities in Block 11B/12B has been withdrawn.”

The development is seen as a setback to South Africa, which is considering options to minimise its dependence on coal to produce power.

South Africa, which is alleged to be one of the biggest CO₂ emitters in the world, produces more than 80% of its total power from coal-fired plants.

Following the discovery of two gas fields in block 11B/12B by Total, the South African government suggested using gas from these fields as feedstock at the PetroSA GTL refinery at Mossel Bay.

The two gas fields, Brulpadda and Luiperd, located about 175km off the southern coast were discovered by the company in 2019 and 2020.

14 april | workforce

Study unveils “significant” mental burden of remote workforce during Covid-19

A new global report from the International SOS Foundation and Affinity Health at Work has unveiled the impacts of the Covid-19 pandemic on the mental and physical health of offshore and seafaring/maritime and mining remote rotational workforce.

The ‘Mental Health and the Remote Rotational Workforce’ report has shed a light on the psychological impact of the unique mode of working, enhanced by the pandemic, and has revealed that 40% of all respondents experienced suicidal thoughts on rotation, some or all the time (compared to an average of 4%-9% in other industries).

The results have also indicated that 52% reported a decline in mood and their mental health suffered whilst on rotation, 62% had worse mental health than the population norm, while the off-rotation percentage remained at a high of 31%.

International SOS Foundation medical director wellness and non-communicable disease Dr Rodrigo Rodriguez-Fernandez said: “There is an urgent need for increased focus, understanding, and strategies to mitigate mental ill-health and promote better mental health of the remote rotational workforce.

“This is highlighted in our survey, which uncovers significantly high levels of critical mental ill health issues, including suicidal thoughts and depression. The Covid-19 environment has also added increased stress on this already pressured working arrangement.”

The study has also revealed that almost a quarter (23%) of the surveyed remote rotational workers experienced emotional exhaustion, or burnout, on a weekly basis. While 46% experienced higher stress levels while on rotation, 23% reported that they received no psychological support from their employers.

University of London occupational psychologist Dr Rachel Lewis said: “We would expect burnout to be between 2%-13% in the general population, so the almost quarter that we see from the survey is particularly high. Burnout can have a serious impact, both personally and professionally, on the ability of an individual to carry out their role.

“Remote rotational work may come with the perks of higher pay, but with its propensity to be isolating at the best of times. On and offshore, working pressures and varying shift patterns also add their weight. And this is not to mention the impact of the current pandemic, which has seen many remote workers unexpectedly away from family and friend networks for longer than anticipated.”

While there is a silver lining that the majority of respondents felt that their health and safety were prioritised with a strong sense of community and support from co-workers and managers, organisations urge further caution.

9 april | fire

CNOOC hunts for three missing people after fire on offshore platform

China National Offshore Oil Corporation (CNOOC) has said that it continues to search for three personnel who went missing following a fire outbreak at a production platform in Bohai Bay off China.

In its filing with the Hong Kong stock exchange, the company said that the blaze broke out at the V29 well of its V platform in the Penglai 19-3 field off China’s northern coast on 5 April 2021.

The fire occurred while the company was undertaking emergency response procedures and well kill operations to control shallow gas overflow during drilling operation at the well V29.

CNOOC said that the fire was brought under control the following day.

CNOOC added: “The company carried out an oil spill check, and placed oil booms around the platform.”

Although 99 out of the 102 people on the platform were evacuated, the remaining three staff are still missing.

As part of the search and rescue mission, the company has dispatched helicopters, vessels, and drones.

CNOOC estimates the impact of the incident to be up to 600,000 barrels on its annual production.

6 APRIL | deal

Delek in talks to divest stake in Israeli offshore gas field for $1.1bn

Israel’s Delek Drilling is reportedly negotiating to divest its stake in Tamar gas field located in the Levantine basin of the Eastern Mediterranean Sea.

According to financial news website Calcalist, the Israeli firm intends to sell its entire stake in the field for $1.1bn.

The company is required to offload its stake in the Tamar field under a government framework to boost competition in the sector.

One source familiar with the matter was cited by Israeli business news agency Globes as saying: “To renew interest in the market on the deal and there is no indication that there are any advanced talks.”

Delek Drilling owns a 22% stake in the Tamar project and its other partners include Noble Energy (25%), Isramco (28.75%), Tamar Petroleum (16.75%), Dor Gas (4%), and Everest (3.5%).

The field produces natural gas through six subsea wells. The production wells are connected to the processing and production platform, a system for gas and condensate transmission from the platform to the shore, via a subsea production system.

In brief

ExxonMobil temporarily slashes output at Liza-1 project offshore Guyana

ExxonMobil has reportedly reduced production output at its Liza-1 project offshore Guyana by at least 75% after it detected problems with the gas compressor.

Equinor awards $530.6m electrical support contracts to ABB and Siemens

Equinor has awarded ABB and Siemens Energy contracts to provide electrical equipment services on all its assets located on the Norwegian continental shelf (NCS).

Eni makes oil discovery in Cuica exploration prospect offshore Angola

Italy’s Eni announced a new light oil discovery in Cuica exploration prospect in Block 15/06 offshore Angola.

Vår Energi gets drilling permit for four wells in Norwegian North Sea

Vår Energi has secured a drilling permit from the Norwegian Petroleum Directorate for four wells in the production license 027 in the Norwegian section of the North Sea.

Santos announces FID on $3.6bn Barossa gas project in Australia

Santos has announced a final investment decision (FID) on the $3.6bn Barossa gas and condensate project, located offshore Northern Territory, Australia.

6 APRIL | DEAL

Malaysia and Brunei sign deal to develop two offshore oil fields

The governments of Malaysia and Brunei Darussalam have formalised a unitisation agreement to develop two oil fields in their maritime boundary.

The deal will see the joint development of the Gumusut-Kakap and Geronggong-Jagus East offshore oil fields by Malaysian national oil company Petronas and the National Unitisation Secretariat of Brunei.

Petronas said that the joint development would enhance the value derived from the two oil fields for the countries.

Petronas president and group CEO Tengku Muhammad Taufik Tengku Kamadjaja Aziz said: “Having now formalised this landmark agreement, PETRONAS believes that both parties can look forward to continuing the strong momentum towards developing our nations’ energy sectors for the long-term growth and prosperity of both Brunei and Malaysia.”

The Gumusut-Kakap field lies in waters up to 1,200m deep. It includes the joint development of two ultra-deepwater discoveries, Gumusut and Kakap.

These fields are located within blocks J and K, approximately 120km offshore from Sabah, Malaysia.

The Gumusut-Kakap project involves 19 subsea wells, which are tied back to a floating production system.

Last month, Petronas and Abu Dhabi National Oil Company signed a strategic framework agreement to explore opportunities across the full oil and gas value chain.

5 april | operations

Petronas subsidiary declares force majeure on Yetagun field offshore Myanmar

PC Myanmar (PCML), a subsidiary of Malaysia’s oil and gas company Petronas, has declared force majeure on its Yetagun gas and condensate field located offshore Myanmar.

Covering an area of approximately 24,130km², the Yetagun gas and condensate field spans in blocks M12, M13, and M14 in the Gulf of Martaban, Andaman Sea.

Petronas said that force majeure on the field has been issued due to gas production depletion at the field.

It follows the wells’ deliverability challenges, which resulted in reduced production rate below the technical threshold of the offshore gas processing plant.

PCML country head Liau Min Hoe said that the Yetagun field was producing well below the technical turndown rate of its facilities before the cessation of production.

Hoe added: “There has been a drastic decline in production level due to subsurface challenges in the field since January 2021 and it has further deteriorated recently.

“Continuing to produce at a low rate would impose significant risks to the integrity of our assets and the safety of our people. As a responsible operator, we had to temporarily cease production and declare force majeure.

“We have put in place an intervention plan to mitigate the matter, and have informed the host authority, our partners and gas buyer of our decision.”