22 november 2018
PermianChain launches blockchain network for oil and gas sector
Canadian blockchain solutions provider PermianChain Technologies has launched the Permian Token (XPR), which will underpin all the holding rights to the value of potential but undeveloped oil and gas reserves.
The objective of the new crypto asset-class is to eliminate the layers of bureaucracy while significantly reducing broker and administrative fees.
XPR is also expected to minimise and improve investment efficiency, thereby attracting several new investors to the oil and gas sector.
Through the new system, PermianChain aims to reduce the amount of complexity currently experienced in trading oil and gas.
The company stressed the complex nature of the agreements and the difficulty in transfers without substantial cost additions, adding that the existing system involves several steps before oil and gas reaches downstream.
The inefficiencies could discourage potential investors from investing in the oil and gas market and subsequently reduce the sector’s potential liquidity and value, PermianChain stated.
PermianChain has held up the Permian Token’s smart contract system as a solution to replace these complex agreements.
The solution is based on the PermianChain, which is a blockchain network currently being developed by the company.
PermianChain Technologies co-founder Mohamed El-Masri said: “Many private oil and gas opportunities are structured with an upfront fee due to their exclusivity and inaccessibility.
“Advisers and brokers take a proportion of the profit simply for placing investors’ money in the deal, which means charging higher investment costs to cover administrative and brokerage tasks, rather than helping the project itself.
“It also means that the offering company’s incentive is often to fill the deal quickly to protect their balance sheets in the short-term. There are currently over 1.6 trillion barrels of potential oil reserves globally. The Permian Token helps public organisations and private sector oil companies use them more efficiently.”
PermianChain expects to list around 250 million barrels of potential oil and gas reserves on the blockchain network.
21 november 2018
China and Philippines sign joint oil and gas exploration MoU
The governments of China and the Philippines have signed an agreement to carry out joint oil and gas development in the South China Sea.
In addition to several other deals in multiple sectors, the agreement was signed during Chinese President Xi Jinping’s visit to the Philippines.
His visit represents the first state visit by a Chinese leader in 13 years, in what is seen as a sign of improving relations between the two countries.
However, Philippines President Rodrigo Duterte caused a tectonic shift when he veered the country away from its traditional ally, the US, and towards China after assuming office in 2016.
Describing the presidential visit as ‘a landmark moment in our shared history’, Duterte said: “We have turned a new page and we are ready to write a new chapter of openness and co-operation.”
The parties did not release the details of the oil and gas agreement’s framework.
However, Philippines opposition senator Antonio Trillanes released a draft framework, which stated that the proceeds from joint exploration would be shared equally between the countries and the existing disputes would be resolved through consultation, the Financial Times reported.
The proposed joint exploration is being condemned by opposition leaders as they feel the deal would undermine the Philippines’ sovereignty over the disputed region.
Trillanes and fellow opposition senator Francis Pangilinan urged Duterte not to sign any agreement that ‘diminishes the Philippines’ exclusive rights’ and violates the country’s constitution, according to the publication.
An international tribunal in The Hague in 2016 rejected Beijing’s territorial claims in the South China Sea and ruled in favour of the Philippines.
The area of the South China Sea off the coast of the Philippines’ Palawan Island is believed to house rich energy deposits.
The Philippines Government suspended oil and gas exploration in the region in 2015.
According to philstar.com, the draft agreement stipulates the formation of working group that is expected to comprise members from the China National Offshore Oil (CNOOC) and an energy firm to be appointed by the government.
Once the working group finalises details of the joint exploration, CNOOC and the designated Philippine energy company are expected to enter a contract.
20 november 2018
Husky Energy oil spill the largest in Newfoundland history
Canadian oil and gas company Husky Energy has reported a spillage of 250m3, or 1,572 barrels, of oil, offshore the Canadian province of Newfoundland. The Husky Energy oil spill is said to have resulted from a leaky flowline connecting the White Rose oilfield to the SeaRose FPSO storage vessel.
The company noticed the leak while restarting production after poor weather conditions forced a temporary shutdown in operations. Since then, the White Rose field, as well as other oil producing projects in the region, has once again halted production, until the Canada-Newfoundland and Labrador Offshore Petroleum Board deems the area safe to restart operations.
After releasing details of the spill, Husky Energy spokesperson Colleen McConnell stated that the firm was now investigating the local area for oil sheens and impact on wildlife. Husky Energy has begun underwater surveys to determine the true effects of the leakage.
Other projects offshore Newfoundland were affected, including production at ExxonMobil’s Hebron and Hibernia fields, and the Terra Nova project currently operated by Suncor Energy.
ExxonMobil announced that production at Hebron had ‘safely resumed’ on Monday, while the Hibernia field has yet to restart operations.
This Husky Energy oil spill is said to be the largest to occur in Newfoundland’s history, eclipsing the Petro Canada (now part of Suncor Energy) incident in November 2004, when around 1,000 barrels of crude oil leaked into the sea from the Terra Nova FPSO vessel.
While there were no injuries to oil workers during the bad weather conditions and subsequent spillage, environmental groups raised concerns over the damage of oil spills on the local Arctic marine environment.
“This is the inevitable nightmare scenario where extreme weather is making it impossible to determine how much oil has been spilled, much less try to clean it up,” said Greenpeace Canada senior energy strategist Keith Stewart in a statement.
Canada’s Atlantic projects produce around 280,000 barrels of oil per day. Wood Mackenzie director of upstream Canada Mark Oberstoetter said that temporary standstills in production in the area are unlikely to affect global oil markets, and production should resume quickly.
20 november 2018
Gazprom confirms completion of TurkStream offshore section
The TurkStream pipeline system that will transport Russian gas across the Black Sea to Turkey has achieved a key milestone with the completion of its offshore section.
Russian state-owned oil and gas company Gazprom is building the TurkStream project with two 930km-long parallel offshore pipelines with a combined capacity of 31.5 billion cubic metres of gas per year.
While the first pipeline will deliver gas to Turkey, the second will cater to European countries.
Gazprom subsidiary South Stream Transport handled the construction of the offshore section, while the contract for both pipelines was awarded to Allseas Group.
Allseas deployed the Pioneering Spirit pipelaying vessel to complete the construction.
Turkey President Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin attended a ceremony to mark the completion of the offshore section, and gave the command to weld the final joint of the second line of the gas pipeline.
Gazprom Management Committee chairman Alexey Miller said: “Construction of TurkStream, a new gas pipeline connecting Russia and Turkey via the Black Sea, is entering its final stage.
“The work is well ahead of schedule: the offshore section of the gas pipeline was completed as early as today instead of in December as planned earlier.”
Miller added that the pipeline will ensure energy security in Turkey and the countries of southern and southeastern Europe.
Gazprom expected to bring the gas pipeline into operation by the end of next year. The project work will now include the onshore section.
The offshore pipelines will start near Anapa, on the Russian coast, and end on the Turkish coast, around 100km west of Istanbul.
Turkey’s state-owned pipeline operator Botas will build the pipeline’s onshore section, which will carry the gas from the coast to the Luleburgaz distribution centre.
19 november 2018
Mexico approves drilling plans for five offshore projects
Mexico’s oil regulator National Hydrocarbons Commission (CNH) has approved the drilling plans for five offshore projects.
The projects have a total investment commitment of $380m, Reuters reported. One of these projects is a shallow water block operated by Talos Energy, with a $251m investment commitment.
Since 2015, the country’s oil regulator has given approvals for more than 100 oil and gas projects. CNH has so far approved the drilling of 23 exploration wells for 2019.
Mexico City-based oil analyst Gonzalo Monroy was quoted by Reuters as saying: “These exploration plans are basically the bet that the international market has made on the potential of these projects.”
Talos and its partners, which include Premier Oil and Sierra Oil & Gas, are expected to drill at least one new well in January 2019 as part of the Area 7 contract.
The drilling programme will be carried out next to the Zama discovery made in 2017. The consortium will also drill a second ‘contingent’ well.
Talos has awarded a contract to McDermott International to provide design work and engineering services for the Zama project.
McDermott is set to execute the contract with io oil & gas consulting, a joint venture between McDermott and Baker Hughes, a GE company (BHGE).
Other companies to have won approvals for drilling plans include Lukoil and Eni.
Lukoil is planning to drill its Otomi-Oeste well between September and November next year. The company is also set to incur an expenditure of $72m on its Area 12 block in 2019.
Eni is looking to drill its Saasken-1 well in its Area 10 block with a planned $51m investment next year. The company will also invest $5m in the Area 14 block.
Meanwhile, the regulator also approved a plan submitted by Spanish firm Repsol for its Area 11 block.
16 november 2018
Australia’s ACCC approves $2.15bn Santos-Quadrant Energy deal
The Australian Competition and Consumer Commission (ACCC) has said that it will not oppose Santos’ $2.15bn acquisition of Quadrant Energy.
The approval represents the fulfilment of all outstanding conditions for the proposed deal.
Santos now expects to complete the transaction in the coming weeks. The acquisition will give the company increased ownership of low-cost, long-life conventional natural gas assets in Western Australia.
Santos managing director and CEO Kevin Gallagher said: “It is materially value-accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier.”
“We already have very significant growth projects across our five core assets, and Quadrant’s recent oil discovery at Dorado is another exciting opportunity for us.”
Santos and Quadrant jointly own gas processing facilities and associated fields at Varanus Island and Devil Creek.
Following an investigation, ACCC ruled that the transaction is not likely to reduce competition in the supply of gas to domestic customers in the state.
ACCC chairperson Rod Sims said: “The ACCC considers that a combined Santos/Quadrant will continue to face strong competition from a range of suppliers, including large LNG producers such as Chevron and Woodside.
“Most market participants believe the Western Australian domestic gas market is currently oversupplied. While the demand-supply balance could tighten in future, the ACCC considers that the proposed acquisition will not have a significant impact on future gas prices.”
As part of the investigation, the regulatory body consulted relevant government departments and market participants.
Santos signed an agreement in August to acquire Quadrant in a transaction expected to deliver synergies ranging between $30m and $50m a year.
The agreement came after Quadrant and its joint venture partner Carnarvon Petroleum discovered the Dorado oil field that is regarded as one of the biggest discoveries ever made offshore Western Australia.
Earlier this year, Santos rejected a $15bn acquisition bid from US firm Harbour Energy.
15 november 2018
OGA receives 36 applications for UK’s latest offshore licensing round
The Oil & Gas Authority (OGA) has received 36 applications covering 164 blocks under the UK’s 31st offshore licensing round.
Around 35 companies have submitted bids for exploration blocks in frontier areas of the UK Continental Shelf (UKCS), including the Atlantic Margin, East Shetland Platform, Mid North Sea High, and the English Channel, with an aggregate area exceeding 370,000km².
The bids will now be assessed by the OGA and the winners will receive acreage in these frontier areas.
The OGA expects to offer awards to successful bidders during the second quarter of 2019.
OGA exploration and new ventures head Dr Nick Richardson noted that there is a 50% increase in the number of blocks applied for since 2016.
Richardson said: “The OGA has received applications on some blocks on the East Shetland Platform, which have never been previously licensed, underlining the positive impact of ongoing government-funded data initiatives.
“The recent publication by the OGA of a comprehensive re-evaluation of the UKCS’s Yet-to-Find potential points towards an additional exploration resource base of 4.1 billion barrels of oil equivalent (Bboe) in prospects and leads and 11.2Bboe in plays, largely in frontier areas, with a bias towards gas-rich opportunities.”
“Whilst the UKCS offers a rich and attractive set of exploration and field development opportunities, the OGA continues to be concerned by low levels of drilling activity.”
He called on the industry to do more in terms of exploring for new resources to improve future domestic energy security.
14 november 2018
Petrobras begins production at P-75 platform in Búzios field
Petrobras has commenced oil and natural gas production at its P-75 platform in the pre-salt area of the Santos Basin, offshore Brazil.
The P-75 floating production, storage, and offloading (FPSO) platform is located in the Búzios field at a water depth of 2,000m.
The FPSO will be able to produce up to 150,000 barrels of oil and six million cubic metres of natural gas, through ten producing wells.
According to Petrobras, the oil production will be offloaded by relief vessels while gas will be drained by pre-salt pipeline routes.
Prior to P-75, the company started production at three other platforms this year, including the FPSO Cidade Campos dos Goytacazes in the Tartaruga Verde field, the P-69 in the Lula field and the P-74 in the Búzios field.
The P-69 FPSO platform began production in October.
The company expects to bring onstream two more platforms, including the P-67 in the Lula field and the P-76, which is anticipated to go to the Búzios field next month.
Petrobras noted that the six systems will contribute to the increase of the company’s anticipated production of its 2018-2022 Business and Management Plan.
Discovered in 2010, Búzios field began production using P-74 in April. P-75 represents the second unit installed in the field.
The company believes the field has high production potential and plans to add three more platforms to it by 2021.
The remaining platforms are also expected to have the same production capacity as the P-75.