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E&P Notes
Pemex Makes 500 Million Barrel Discovery
It is being welcomed as the biggest discovery of oil in Mexico in more than 30 years. Mexican state oil company Pemex said that it found a reservoir in the southeastern state of Tabasco that holds more than 500 million BOE.
The onshore discovery was made in May at a site called Quesqui after a test well was drilled and seismic data analyzed. The company said that the Quesqui-1 exploratory well is producing 4,500 B/D with the potential to produce 75,000 B/D.
Taking part in the announcement was Mexican President Andres Manuel Lopez Obrador, who campaigned on a promise to revitalize Pemex, the world’s most indebted oil company.
Colombia Awards 14 Onshore Blocks
Colombia’s National Hydrocarbons Agency (ANH) has awarded 14 onshore blocks as part of its second Permanent Area Assignment Process (PPAA) 2019 auction, resulting in at least $512 million in committed investment.
Calgary-based Colombia producers Canacol Energy and Parex Resources led all firms by gaining three blocks each, with one more counteroffer from Parex pending review.
Canacol’s three blocks are in the Lower and Middle Magdalena Valleys. The company said it expects to begin exploratory work on the blocks in 2020 and aims to drill in 2021 and 2022. It committed to drill five wells total, of which three will come on the VMM-49 block in the Middle Magdalena Valley.
Short-Term Headwinds and Fundamental Long-Term Change Will Challenge Oil and Gas Industry in 2020
Uncertainties in many areas remain a challenge to performance and investment in the oil and gas industry, says Deloitte in its 2020 Oil, Gas, and Chemical Industry Outlook. The firm advises companies that balancing coming disruptive forces associated with energy transition and sustainability with day-to-day positioning will be increasingly crucial next year.
The report identified three factors affecting the current business outlook.
Weakening economic growth in the US, Europe, and China
Trade disputes that have expanded beyond Asia to include Europe
Political risk, including the US election, the outcome of the Brexit cycle in Europe, and ongoing tensions in Middle East, both between multiple states and non-state actors with different objectives
Equinor, Total, Aker Launch Subsea CO2 Injection R&D Project
Subsea CO2 separation and injection would represent a major step-forward in the effort to turn the dream of a “subsea factory” into a reality. Announced this week, a joint-industry project has been launched to see whether the required technology can be economically developed.
The project is being led by Oslo-based engineering firm Aker Solutions along with oil and gas firms Equinor, Total, and Pertamina. Additional support comes from the CO Capture Project which includes BP, Chevron, and Petrobras as members.
In a release, Aker said it “has developed new concepts for subsea processing of well streams from CO2-flooded oil fields, in which CO2-rich gas is separated, compressed and reinjected back into the reservoir.” The hydrocarbon gas can then flow to a topside facility.
ADNOC To Boost Oil Production from Giant Bab Field
Abu Dhabi National Oil Company (ADNOC) has awarded a $489-million engineering, procurement, and construction (EPC) contract to Greek firm Archirodon Construction Overseas in a project that will sustain long-term crude oil production of 485,000 B/D from the giant onshore Giant Bab Field, 160 km southwest of Abu Dhabi city.
The scope of the upgrade project includes development of producing wells, water injection wells, artificial lift wells, well-bays, let-down stations, water injection clusters, and other infrastructure. The contract has a term of 39 months.
Led By the Permian, US Flaring and Associated Gas Production Hit New Highs
The volume of gas that is flared or vented in the Permian Basin surpassed all previous levels during the third quarter of this year, according to a report from Oslo-based Rystad Energy.
The market intelligence firm said Permian operators in Texas and New Mexico are averaging more than 750 MMcfd, up from the estimated 600–650 MMcfd flared or vented in the previous 9 months.
A separate report from the US Energy Information Agency (EIA) highlighted that Permian output topped 5.8 Bcf/D of associated gas in 2018—more than half of the basin’s total gas output.
Petrobras Starts Production from Pre-Salt Berbigao Field
Petrobras has started crude oil and natural gas production from the P-68 floating production, storage, and offloading (FPSO) vessel in the Berbigao field in the pre-salt Santos Basin.
The FPSO, located 230 km off Rio de Janeiro state in 2,280 m of water, can process 150,000 B/D of oil, compress 6 million million m of natural gas, store 1.6 million bbl of oil, and accommodate 154 workers.
New wells are expected to be connected to the FPSO in the coming year from both the Berbigao field and Sururu field. The project as a whole will consist of 10 production wells and seven injector wells.
Oxy Advances Post-Merger Divestment Program
Occidental Petroleum has closed on deals totaling $1.7 billion as part of its divestment program following its $38-billion takeover of Anadarko Petroleum, which closed 8 August.
Oxy has completed the formation of a strategic partnership with Colombia’s Ecopetrol, announced in July, to develop 97,000 net acres in the Midland Basin of west Texas for $750 million in cash plus $750 million in carried capital. Oxy said the partnership will allow it to accelerate its development plans in the Midland, where it currently has minimal activity.
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