28 May 2019

Indian institute explores processes for recovery from offshore wells

Researchers at the Indian Institute of Technology (IIT) Madras are engaged in the development of new processes to support oil recovery from mature offshore wells in the country.

The IIT researchers, in collaboration with Australian research laboratories, are researching the effectiveness of ‘Low-Salinity Enhanced Oil Recovery’ (LSEOR).

The research is being led by IIT Madras Department of Ocean Engineering Professor (Petroleum Engineering) Dr Jitendra Sangwai. It is jointly funded by IIT Madras and  the Government of India’s Department of Science and Technology (DST). According to a PTI report, the findings of the research are already published in two journals.

The research is aligned with the Oil and Natural Gas (ONGC)’s plan to explore new Enhanced Oil Recovery (EOR) techniques to boost hydrocarbon output in order to address India’s growing energy requirements.

Sangwai was quoted by PTI as saying: “Our research aims to develop indigenous methods for recovery of crude oil from geological reservoirs, which is a complex process.”

Under the LSEOR, the salinity of seawater that is injected into the rock is reduced to improve the wettability of oil-bearing rocks and ensure better recovery. One of the processes includes extracting oil by injecting sea water into the oil-bearing porous rocks, typically limestone and sandstone, which pushes the hydrocarbons out. However, the efficiency of the process varies on the wettability of the oil-bearing rock.

The research assessed the impact of varying salt concentrations in water to analyse the effect of multiple ions on the wettability of quartz surface, which is the main rock-forming mineral in sandstone reservoirs. The scope of the research also included evaluating the effects of acidity and basicity of oil on wettability during LSEOR.

One of the studies identified that the reduced concentration of divalent cations such as calcium and magnesium in salt water can make the quartz less oil wet-able, while sodium ions have opposite impact. The presence of acidic and basic substances in the oil also reduced salt water wettability.

A separate study tested the effect of surfactants and nanoparticles on low salinity water to change sandstone wettability. It found that surfactants can reduce interfacial tension between the oil and water making the water wet-able. The addition of nanoparticles prevents surfactant absorption in the rock.


24 May 2019

Shell starts production at Appomattox platform in Gulf of Mexico

Royal Dutch Shell has, through its subsidiary Shell Offshore, started production at the Appomattox floating production system in the Gulf of Mexico. The Appomattox floating system is located approximately 129km south-east of Louisiana in the Gulf of Mexico Norphlet formation, in water depths of approximately 2,255m.

It is a joint venture between Shell, who operates the field with a 79% operating interest, and CNOOC subsidiary CNOOC Petroleum Offshore USA (21%).

Appomattox was first discovered in 2010 as the first in a series of commercial discoveries made by Shell in the Norphlet formation. It is the first commercial discovery now brought into production in the Norphlet. The project was expected to start production in 2020, but developments on the Appomattox floating system were completed months ahead of schedule.

In a statement, Shell said: “Appomattox is a story of efficiency through innovation. By way of optimised development planning, better designs and fabrication, and expert drilling execution, Appomattox has realised cost reductions of more than 40% since taking final investment decision in 2015.

“The start of production at Appomattox is only just the beginning of further maximising the flow of resources in the prolific Norphlet surrounding Appomattox.”

The field has an expected production of 175,000 barrels of oil equivalent per day (boepd), and is predicted to increase Shell’s production by approximately 60%. Oil produced from the platform will be transported onshore by the 145km Mattox pipeline, which has a capacity of 300,000 barrels per day.

Shell upstream director Andy Brown said: “That Appomattox was safely brought online ahead of schedule and far under budget is a testament to our ongoing commitment to drive down costs through efficiency improvements during execution.

“Appomattox creates a core long-term hub for Shell in the Norphlet through which we can tie back several already discovered fields as well as future discoveries.”


23 May 2019

BW Offshore to spin off exploration and production company

Norwegian floating production storage and offloading (FPSO) vessel group BW Offshore has announced plans to establish its exploration and production (E&P) subsidiary BW Energy as a separate company.

As a subsidiary, BW Energy was established in late 2016 and has developed a portfolio of upstream oil and gas assets in Brazil and West Africa.  The newly-separated E&P company will also have a diversified portfolio of development and production assets, supported by BW Offshore’s existing FPSOs and positioned for growth based on a “unique low-risk development strategy”.

BW Energy will consist of a 100% working interest (WI) in the Maromba field offshore Brazil, a 73.5% WI in the Dussafu Marin permit offshore Gabon and a 56% WI in the Kudu licence offshore Namibia.

BW Offshore will invite external investors into BW Energy to finance investments at the Dussafu Marin permit and developments at the Maromba field.

Current gross production from the Dussafu field is around 12,000 barrels of oil per day (bopd), with four new production wells expected to increase this production to 20,000 bopd in 2020.

Gross internal recoverable reserves at Dussafu are estimated to be around 80 million barrels of oil equivalent (MMboe), with further material upside potential through exploration and appraisal opportunities in the field.

BW Offshore plans to transfer its rights to interests in the Maromba field to BW Energy, expanding the E&P company’s portfolio. Following the transfer, BW Energy will start development of the Maromba heavy oil discovery, which is expected to yield 100-150 MMboe.

BW Offshore also plans to transfer its interest in the Kudu licence to BW Energy, with all of BW Offshore’s upstream oil and gas assets being held through the E&P company.

BW Offshore CEO Carl Arnet said: “With BW Energy, we have demonstrated our unique ability to move the threshold for commercial development of discovered resources through use of existing FPSOs, fast-track project execution and properly scaled development concepts.

“We will continue to target robust business opportunities based on proven reserves with sequential growth potential and unlock significant value that traditional oil & gas companies are not addressing.

“We have proven the attractiveness of our field development strategy with the Dussafu development. Our E&P activities now have a scale where it is natural to invite external investors to add to BW Energy’s project execution capacity and growth potential.”


23 May 2019

US could soon bring bill to sanction Nord Stream 2 gas pipeline

US Energy Secretary Rick Perry has reportedly said that a bill would soon be passed to impose sanctions on the $12bn Nord Stream 2 gas pipeline project. The proposed bill would place restrictions on the companies involved in the project and would be introduced in the ‘not too distant future’, Reuters reported citing Perry.

The Nord Stream 2 project seeks to transport up to 55 billion cubic metres of Russian natural gas to the key European Union (EU) market via a new natural gas pipeline through the Baltic Sea.

Perry was quoted by Reuters as saying: “The opposition to Nord Stream 2 is still very much alive and well in the US. The US Senate is going to pass a bill, the House is going to approve it, and it’s going to go to the President and he’s going to sign it, that is going to put sanctions on Nord Stream 2.”

Last week, a group of Republican and Democratic US senators introduced a bill that seeks to impose targeted sanctions against vessels used to construct Nord Stream 2 pipeline and other Russian energy projects. Trump criticised the project at a Nato summit in 2018 and questioned Germany for its reliance on Russian gas.

Nord Stream 2 AG, which is implementing the project, is owned by Russian state-owned gas company Gazprom. The project is funded by Uniper, Wintershall, Shell, OMV and Engie under financing agreements reached in April 2017. These five European companies will be responsible for providing long-term financing for 50% of the total project cost.


22 May 2019

Medco Energi completes Ophir Energy acquisition for $517.34m

Indonesia’s Medco Energi Internasional has completed its previously announced acquisition of UK-based Ophir Energy in an all cash offer of £408.4m ($517.34m).

The acquisition was carried out through Medco Energi Global, a subsidiary of Medco. With the completion, Medco now owns Ophir’s entire issued ordinary share capital. The acquisition significantly bolsters Medco’s portfolio with the addition of Ophir’s assets, mostly concentrated in the Southeast Asia.

It is expected to boost Medco’s 2019 pro forma production by nearly 29% to 110 thousand barrels of oil equivalents per day. The combined company’s 2P reserves and 2C resources also improve by 86% to 1,439 million barrels of oil equivalent.

Medco Energi president director Hilmi Panigoro said: “We are delighted to have successfully completed the acquisition of Ophir, which firmly establishes MedcoEnergi as a leading oil & gas player in Southeast Asia.

“This acquisition further underlines our strategy to selectively expand MedcoEnergi’s presence and we believe it will create value for all of our stakeholders.”

In January 2019, Medco proposed to acquire Ophir Energy to strengthen its footprint outside Indonesia. In the same month, the two companies agreed on the recommended cash offer to be made by Medco that amounted to £390.6m ($511.3m). Later in March, the parties agreed to a revised and improved cash offer from Medco.

The Indonesian firm financed the acquisition through a combination of existing cash resources and proceeds received under a credit agreement with Standard Chartered Bank. The cash consideration to be payable to all Ophir shareholders under the deal is expected to be settled by June 2019.


21 May 2019

ExxonMobil in talks with Repsol and Ineos for sale of Gulf assets

ExxonMobil is reportedly in negotiations with Spain’s Repsol and Ineos Group to sell a package of oil fields located in the Gulf of Mexico.

The news about the talks was reported by Bloomberg, citing unnamed sources. One of the sources stated that the sale of the Gulf of Mexico assets could fetch ExxonMobil as much as $1.5bn.

If the talks with Repsol bear fruition and a deal is finalised, it would help the Spanish firm to strengthen its position in the region. For the UK petrochemical company Ineos, the deal could allow it to debut as an oil and gas producer in the Gulf. 

Sources told Bloomberg that ExxonMobil could sign a sale agreement in as soon as a month.

In October 2018, Reuters reported that the US energy giant was exploring the sale of several assets in the Gulf of Mexico region. The report added that ExxonMobil was contemplating the sale of deepwater assets in the Gulf that produce about 50,000 barrels per day of oil.

In the Gulf, the firm owns a 50% stake in development of the Julia oil field, 47% in the Hadrian South natural gas field, 9% in Heidelberg field and 23% in the Lucius oil and gas field. The company is keen to tap offshore areas such as Guyana and Brazil and onshore shale development in the Permian basin.


20 May 2019

Pakistan fails to find oil and gas reserves in latest offshore campaign

Pakistan’s hopes to discover large oil and gas resources off its Karachi coast were dashed after the latest offshore drilling campaign failed to find any hydrocarbon reserves.

The drilling of the Kekra-1 well was terminated after the targeted carbonated reservoir at the site was found to contain only water. The well, spud in January 2019, is situated at Indus G-Block around 280km from Karachi coast.

Making the announcement, Pakistan’s state-owned Oil and Gas Development (OGDC) spokesperson Ahmed Lak told Reuters: “The oil exploration well will be plugged and abandoned.”

OGDC was a partner in the exploration well led by a group which also comprises Eni, Exxon Mobile and Pakistan Petroleum. Eni is the operator of Kekra-1, under an agreement signed in 2012.

However, the spokesperson added the data procured from the drilling as well as other seismic studies will help in future exploration projects. Overall, the project involved an investment of around $100m.

The failure is regarded as a significant blow to the Pakistani government, which hoped to address its growing energy requirements through new offshore oil and gas discoveries. The South Asian nation is estimated to host rich mineral resources with conventional gas reserves of up to 20 trillion cubic feet.

Several attempts to discover oil and gas resources were made in the past, however, all of them remained unsuccessful. In 2005, Dutch company Shell carried out the last offshore activity in Pakistan but it also failed to find any hydrocarbon reserves, reported PTI.


17 May 2019

Australian politicians pledge to assess Bight drilling plans

Australia’s major political parties have announced plans to commission independent assessments of Norwegian energy company Equinor’s plans for drilling in the Great Australian Bight.

The company’s proposed exploration drilling project is in the Stromlo-1 well, located in the EPP 39 licence 372km offshore South Australia.

Equinor is the operator and 100% equity owner of offshore exploration permits EPP 39 and 40, both located in the Great Australian Bight and covering approximately 12,000km2.

Equinor’s operations in the Bight have been met with strong opposition, with thousands protesting in March 2019 over concerns including potential disruptions of the Bight’s natural ecosystems and the potential environmental damage of an oil spill.

The Liberal Party of Australia stated that, if re-elected, it will commission an independent audit of Australia’s National Offshore Petroleum Safety and Environmental Authority’s (NOPSEMA) current consideration of Equinor’s planned operations.

This audit will be commissioned by Minister of Resources Matthew Canavan and Minister for the Environment Melissa Price, who will ask chief scientist Alan Finkel to work alongside NOPSEMA to ensure all environmental considerations are accounted for in Equinor’s plans.

Equinor submitted its environment plan (EP) to NOPSEMA in April 2019 after releasing the draft EP for public comment in February 2019, the first time a draft EP for an offshore exploration well was published before assessment by NOPSEMA.

In a statement, the Liberal Party said: “The Liberal-National Government recognises that the Great Australian Bight and the surrounding region are important to local communities, and the fishing and tourism industries. The region is known for its unique environment and deserves strong protection.

“The Liberal-National Government recognises community concerns around drilling in the Great Australian Bight and community groups are seeking further assurance of environmental protection.”

The Australian Labour Party has also promised action regarding the Bight, stating that one of its first actions, if elected, will be to commission an independent study into the environmental impact on drilling in the Bight.

In a statement, the Labour Party said: “The purpose of the study will be to help inform the decision making of the independent regulator. It will be an independent scientific study to increase the capacity of the independent regulator to properly make an assessment.

“The study will report before the project is approved. Every resources project needs to stack up environmentally and financially.”

The Labour Party’s decision has been welcomed by Greenpeace. Greenpeace senior campaigner Nathaniel Pelle said: “The ALP has clarified and strengthened its position in the days leading up to the Federal election by effectively committing to a moratorium on drilling in the Bight until an independent scientific study into the impacts of drilling is completed.

“A stay of execution is welcome. But it’s clear a total ban on drilling in the Bight is warranted. We already know from modelling produced by BP and Equinor that an oil spill could reach any point on the southern Australian coastline from Western Australia to Coffs Harbour in Northern New South Wales.”

The statements from Australia’s Liberal and Labour parties come ahead of the Australian federal election on 18 May to elect members of Australia’s 46th parliament.