Several giant LNG developments earlier this decade suffered from runaway costs and delivery slippage. Can the industry deliver projects on time and on budget in this new investment cycle? During a panel discussion at the recent Davos 2019, World Econominc Forum's Annual Meeting, Hess CEO John Hess summarized the importance of US shale production.
Calgary-based Pembina Pipeline Corp. has entered into agreements to acquire Kinder Morgan Canada Ltd. and the US portion of the Cochin Pipeline system from Kinder Morgan for a total purchase price of approximately $4.35 billion. Seven years after discovering commercial reserves in the northern part of the country, the Kenyan government and a group led by Tullow have accepted a bid from the Chinese trading company to purchase its first shipments of crude. Trafigura confirmed that it had begun shipments from the Permian to Corpus Christi via the pipeline, which has a 670,000-B/D capacity. Operator Plains All American announced last week that it had completed work on the pipeline. The private investment firm said it will partner with Treeline Well Services, one of the largest private rig providers in Canada, to build its service fleet following acquisition of the company.
Premium acreage costs in the Permian have increased industry interest in acreage swaps, divestment, and M&A activity. Several oil and gas CEOs are ranked highly in CEOWorld's 2019 list of Best CEOs. Digital oil and gas applications are expanding by leaps and bounds, providing insights and improving decision making and execution. Here are the top areas which could significantly improve business bottom line. Petrobras’s supercomputer Fênix is among the world’s 500 biggest computers and ranks first in Latin America.
Even with oil and gas prices at historical lows, top quality resources continue to be developed to meet the global demand of approximately 91 million B/D of oil and 332 Bcf/D of natural gas. TWA Forum Section Editors Craig Frenette, Samuel Ighalo, Winston Kosasi, and Rodrigo Terrazas interviewed experts from a diverse set of project types and discussed the development of the projects in the current economic context. Logan Popko, manager of asset development at Cenovus Energy speaks on the Christina Lake oil sands project; Ron Dusterhoft, technology fellow for production enhancement at Halliburton, talks about unconventional shale assets; Pete Hagen, general manager, commercial, at Chevron Australia, shares his insight on the Gorgon and Wheatstone liquefied natural gas projects; and Daniel Picard, special adviser to the director of the Libra Project, Petrobras (on secondment from Total), focuses on the offshore pre-salt megaproject, Libra, in Brazil. Logan Popko (LP): Despite the recent surge in oil supply from US tight oil plays and international production, high-quality, large volume resources continue to be scarce across the world and I believe that development of the Canadian oil sands will be critical to meeting the world's increasing energy demand. The technology we apply at the Christina Lake oil sands project is called steam-assisted gravity drainage (SAGD). It involves drilling horizontal wells to target a resource that is too deep to mine and then injecting steam into it to mobilize oil that can be as hard as a hockey puck at initial reservoir conditions.
The effects of oil price volatility on operators and service companies, technological advances, safety and environmental risks, economic and regulatory impacts, and sustainability were highlighted in the sessions and discussions during the annual Offshore Technology Conference (OTC) held 4–7 May in Houston. More than 94,700 attendees from 130 countries gathered to exchange ideas and opinions. It is the sixth largest attendance in the conference's 47-year history. This year's conference also had 2,682 companies exhibiting, up from 2,568 in 2014, representing 37 countries.
The sold-out exhibition was the largest in show history at 695,005 ft2, including outdoor exhibits, up from 680,025 ft2 in 2014. The effects of oil price volatility on operators and service companies, technological advances, safety and environmental risks, economic and regulatory impacts, and sustainability were highlighted in the sessions and discussions during the annual Offshore Technology Conference (OTC) held 4–7 May in Houston. More than 94,700 attendees from 130 countries gathered to exchange ideas and opinions. It is the sixth largest attendance in the conference’s 47-year history. This year’s conference also had 2,682 companies exhibiting, up from 2,568 in 2014, representing 37 countries. International companies made up 42% of exhibitors. The event featured 11 panel sessions, 29 executive keynote presentations at luncheons and breakfasts, and nearly 300 technical paper presentations. Speakers from major, independent, and national oil companies, federal and regional government officials, and academics presented their views on a variety of topics such as future industry directions, operational integrity, and risk management.
Asia Pacific’s energy sector is on the brink of major change. New areas are opening to foreign investment, national oil companies are adopting more aggressive E&P strategies, and the supply/ demand balance is shifting. This month’s JPT contains a special supplement outlining these and other trends and challenges and describes what to expect in the region’s upstream sector over the next several years.
One of the major changes under way in the Asia Pacific region is the sharp rise in energy consumption, which is leading to an increase in oil imports and cutting into gas available for export. Several major liquefied natural gas (LNG) projects are under construction or in the planning stages to help meet the increased demand for gas, which may eventually overtake oil as the region’s main hydrocarbon source.
Nowhere is the shift in the global energy balance more evident than in China. BP’s Energy Outlook 2035, published in January, predicts that by 2035 China will be the world’s largest energy importer and alone will account for more than a fifth of global demand. Changes are forecast for India as well, with its energy production rising by 112% and its consumption by 132% over the same period.
Significant policy shifts are occurring in China as well. The country’s leadership is pushing for changes in its energy sector that will better balance energy and economic growth with environmental protection. Liberalization of local fuel prices will be a financial boost for China’s major oil companies—Sinopec, China National Offshore Oil Corp. (CNPC), and PetroChina—allowing them to invest more both domestically and internationally. China’s state-owned companies are expected to continue to be aggressive at overseas mergers and acquisitions. The most recent deal was in November, when CNPC bought Petrobras’ oil and gas assets in Peru for USD 2.6 billion, reinforcing China’s growing presence in Latin America.
China continues to show interest in international unconventional plays, as the Asia Pacific region’s unconventional sector remains largely untapped. Only two shale plays have produced commercial volumes of gas thus far—one in China and one in Australia—and shale gas exploration wells have been drilled only in China, Australia, and India. The US Energy Information Administration estimates significant volumes of shale gas and shale oil resources in those countries as well as in Thailand and Indonesia.
Population in the Asia Pacific is forecast to rise significantly over the next 2 decades, putting additional strain on energy capabilities. Currently, about one-fifth of the region’s population still does not have access to electricity. This highlights the need for additional energy infrastructure and suggests that energy demand will only increase over the short to medium term. Although parts of Asia have exported gas, regional gas consumption is now competing to keep those supplies at home. And many of the oil fields in the area—in places such as Vietnam, Thailand, and Malaysia—are mature and in decline, which will lead to increased reliance on oil imports, primarily from the Middle East. JPT
On the stark expanse of the Milne Point field on the Alaska North Slope, the BP Mount Elbert well tests the reservoir productivity of methane hydrate in a joint project with the National Energy Technology Laboratory of the US Department of Energy during 2007. In the 2008 Circum-Arctic Resource Appraisal (CARA), covering 33 geologic provinces considered prospective for petroleum, the United States Geological Survey (USGS) calculated that the sum of the mean estimates for each province indicated that 90 billion bbl of oil, 1,669 Tcf of gas, and 44 billion bbl of natural gas liquids (NGL) remain to be found in the Arctic, of which 84% was expected to lie in offshore areas. The study included only resources that are technically recoverable, that is, those considered recoverable using existing technology. "The extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on Earth," the study said. The challenges may explain exactly why that is so and cause some to conclude that these areas will always be underexplored, with many of these estimated resources never developed.