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E&P Notes
Nine Months After Discovery, Eni Starts Offshore Angolan Oil Field
Eni achieved first oil at the Agogo oil field located in the 15/06 Block offshore Angola. The startup comes just 9 months after the field was discovered thanks to the use of a floating, production, storage, and offloading (FPSO) unit, the N’Goma production hub that is less than 10 miles away.
The Italian oil and gas company said it drilled the production well in a water depth of around 5,500 ft and achieved an initial production rate of close to 10,000 B/D. Peak output is expected to reach 20,000 B/D in the coming weeks. Eni estimates the field holds more than 650 bbl of crude and says the potential may increase after more delineation wells are drilled.
ExxonMobil: Another Guyana Discovery, Ups Reserves
Uaru is the name of ExxonMobil’s 16th discovery in the waters offshore Guyana.
The Uaru well is found within the Stabroek Block and is located about 10 miles to the northeast of the Liza field, which achieved first production in December. ExxonMobil reports that it found 94 ft of oil-bearing sandstone reservoir while drilling the well in a water depth of 6,342 ft.
The international major also announced that the 15 discoveries it made prior hold an estimated 8 billion BOE—an increase of 2 billion BOE from its previous estimate. ExxonMobil did not break down the figure into estimated quantities of crude or natural gas.
EIA: US Crude and Renewables Will Coexist for Decades
The makeup of the US energy sector is on the fast track to diversification—placing natural gas and renewable sources in a head-to-head race over the next decade for the nation’s most dominant source of electric power.
Meanwhile, the future remains bright for US oil and gas production as well as the country’s newly established export profile. A critical byproduct of the energy transition will be lower
to only modestly growing CO2 emissions.
This is all according to the US Energy Information Administration’s (EIA) Annual Energy Outlook 2020 that is used by government officials to steer energy policy and the business world to guide future investments.
Lundin Petroleum Joins Decarbonization Movement
Lundin Petroleum aims to become carbon neutral by 2030, joining a growing cadre of European-based oil and gas companies making similar commitments. The Swedish oil and gas company will also change its name to Lundin Energy—disposing of “Petroleum”—later this year if shareholders approve the move.
The company said it will drastically reduce its carbon footprint to address the oil and gas industry’s dual challenge of mitigating climate change while still providing enough energy resources to meet global demand.
Schlumberger, Halliburton Downsize Fracturing Services
The world’s two largest oilfield service firms are moving quickly to reduce their exposure to the slowing North American unconventional sector by laying down substantial portions of their fracturing fleets.
Schlumberger and Halliburton told investors on earnings calls not to expect a market turnaround in either the US or Canada any time soon, while playing up the importance of markets elsewhere.
The companies began last year as the number one and two providers of pressure pumping services in North America; Halliburton providing 4.6 million horsepower and Schlumberger 2.6 million horsepower.
Oilfield Giant McDermott Files for Bankruptcy
Houston-based McDermott announced that it is entering into a pre-packaged restructuring program that will be carried out under the scope of the US Chapter 11 process. The move will effectively eliminate the oilfield engineering and construction company’s debt load of $4.6 billion.
McDermott said in a statement that the arrangement has the support of two-thirds of its creditors and that all ongoing projects will continue without disruption. The company said late last year that it holds a project backlog valued at $20 billion.
Eni, ADNOC Sign Carbon Capture Agreement
Eni and Abu Dhabi National Oil Company (ADNOC) have signed a memorandum of understanding for the joint development of research initiatives aimed at creating advanced technology solutions for the reduction, capture, usage, or confinement (CCUS) of CO2 emissions. The agreement will cover the five offshore projects in Abu Dhabi in which Eni is an equity participant.
The agreement also will explore processes and technologies to promote the “circular economy”—the regenerative economic approach that is aimed at eliminating waste and continually using and reusing resources—over the traditional linear approach. The CO2 will be used to improve the hydrocarbon recovery factor and will be permanently stored.
Israel Starts Exporting Natural Gas to Egypt
Israel has begun exporting natural gas to Egypt under what has been called one of the most important deals to have been signed by the neighboring countries since their historic 1979 peace treaty.
The terms of the deal call for Dolphinus Holdings, a private firm in Egypt, to purchase 85 Bcm of gas, worth an estimated $19.5 billion, from Israel’s Leviathan and Tamar offshore fields over 15 years via a subsea pipeline connecting Israel and Egypt’s Sinai Peninsula. Gas from Leviathan will be supplied to Dolphinus at a rate of 2.1 Bcm per year, rising to 4.7 Bcm per year by the second half of 2022, according to Delek Drilling, one of the partners in Leviathan and Tamar. Israel will initially export 200 MMcf/D, according to Egyptian industry sources.
Federal Investigators Probe Central Texas Blowout
The US Chemical Safety Board will send a team to central Texas to investigate a blowout that killed three service company employees working on a Chesapeake Energy well.
The board looks into major accidents in the energy sector, such as the blowout in Oklahoma that killed five workers in 2018, searching for the cause and changes that could reduce the risk of it happening again.
The victims were using a service rig last week to install hardware in the well, according to a news report quoting a Chesapeake spokesperson, Gordon Pennoyer. One man died at the scene, while two others who were rushed to hospitals died in the days that followed.
Report: BP Pulling Out of Iraq Field
BP is pulling out of Iraq’s giant Kirkuk oil field after its current exploration contract expired and a new deal was not reached for the field’s expansion, according to the Reuters news agency.
The supermajor told Iraqi authorities in January that its staff would be leaving the oil field, which is located in the north of the country. BP’s 2013 $100-million service contract expired at the end of 2019, sources told Reuters. BP apparently told Iraq that the development did not meet its expectations.
Talos Shares Zama Reserves Audit of Mexico Field
Talos Energy has released the results of a new independent evaluation of its Zama discovery offshore Mexico, which estimates the asset holds about 670 million BOE in recoverable resources. The estimates are in line with Talos’ pre-appraisal estimates of 400–800 million BOE.
The Zama field is the first discovery made by a foreign company in the Mexican side of the Gulf of Mexico (GOM) following the historic opening of the country’s oil and gas sector in 2015.
Details of the reserves audit were shared amid ongoing negotiations between Houston-based Talos, Mexico’s state-owned oil company Pemex, and Mexican regulators over revenue sharing through unitization.
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