Dana Petroleum has completed drilling of the Lille John-2 appraisal well and side-track on the Lille John oil field in the Danish North Sea. The appraisal well and side-track confirmed the presence of sweet, light oil in the Late Miocene sandstone reservoir. The company said the thickness and quality of the sandstone reservoir encountered in LJ-2 was found, as expected, to be improved relative to the LJ-1 discovery well drilled in 2011.
Oil & Gas
CAMAC Energy has completed its onshore seismic acquisition on blocks L-1B and L-16 in Kenya. The 2D seismic programme was conducted by BGP Kenya and covers 700 kilometres on L-1B and 325km on L-16. The objective of the acquisition is to identify potential exploration targets in the Paleozoic, Jurassic, Cretaceous, and Middle to Lower Tertiary sections, which are known to be oil-bearing in the East Africa region.
CNOOC has signed two production sharing contracts with SK Innovation for Blocks 04/20 and 17/03 in the South China Sea. The two blocks are located in the Pearl River Mouth Basin in water depths of between 50-100 metres.
Inspection, maintenance and repair specialist N-Sea has launched its third diving support vessel. The Edradour represents a £1.5million investment for the company and will be utilised in the company’s IMR operations in the North Sea, as well as in Holland and Germany.
Scotland’s largest petrochemical plant at Grangemouth is unlikely to have a long-term future unless an indigenous shale gas industry can be developed, according to the firm that owns it. Chemicals giant Ineos proposes using shale gas as a raw material for its chemicals plants, and has revealed plans to put millions into exploration. But developing the industry could be stalled or even prevented after the Scottish Government announced a moratorium on granting planning consents for hydraulic fracturing, or “fracking” - the means of extracting the gas.
Beset by falling prices, the oil industry is looking at about 50,000 existing wells in the U.S. that may be candidates for a second wave of fracking, using techniques that didn’t exist when they were first drilled. New wells can cost as much as $8 million, while re-fracking costs about $2 million, significant savings when the price of crude is hovering close to $50 a barrel, according to Halliburton Co., the world’s biggest provider of hydraulic fracturing services. While re-fracking offered mixed results in the past, earning it the nickname “pump and pray,” the oil crash is forcing companies to pursue new technologies to produce oil more cheaply.
Russia, where energy production provides more than half of state revenue, is preparing for a battle with oil producers over taxing the country’s most vital industry.
Baker Hughes is set to make job reductions in the US. According to reports, the company will temporarily close a plant in Louisiana with the loss of 60 positions. The move is part of wider staffing changes being made across the company.
Alberta is in discussions with Alaska about shipping oil-sands crude through the US state to the Pacific as approval for the southbound Keystone XL pipeline languishes in Washington. The Alaska plan would involve constructing a pipeline along the Mackenzie River valley and then west to existing ports on the US coast, Alberta Premier Jim Prentice said in an interview in New York. Alaskan ports have been staging points for maritime crude shipments for decades.
Lukoil has commenced arbitration proceedings against China’s Sinopec after claims the company refused to complete a sale and purchase agreement. The company said it signed a deal in April last year for the sale of a 50% stake in Caspian Resources for $1.2billion.
Tullow Oil is poised to record losses of $1.9billion when it reveals its full-year results this week. The company, which recorded $313.2million in pre-tax profits in 2013, could see a dividend cut and job losses as it looks to balance its finances. According to reports, Tullow Oil has already warned investors it could face $2.7billion in write-offs.
Leading oil industry figure Sir Ian Wood has warned six billion barrels of oil reserves could be lost unless radical measures are taken by the UK Government. According to reports, he said a third of what remains under the seabed - estimated to be worth around £200billion - could be abandoned. Sir Ian's comments come ahead of the budget with industry leaders calling for significant changes to take hold to its current fiscal regime.
Central Petroleum has reached an agreement with Power and Water Corp for the early sale of gas under a gas sale and purchase agreement. The new arrangement will allow the company to begin selling approximately 2TJ/day of gas from its Palm Valley Gas Field in advance of the commencement of the Dingo Gas field. The company said the sale of early gas from Palm Valley will be incremental to the current gas production already occurring from Palm Valley under a sale agreement with Santos.
Russian stocks gained for a fifth day and the ruble strengthened after oil’s biggest weekly advance in four years and as talks on a ceasefire in Ukraine continued. The Micex Index of stocks rose 2% to reach the highest level since April 2011 with food retailer Magnit leading the advance. The ruble jumped 2% against the dollar. Government bonds climbed after central bank governor Elvira Nabiullina said policy makers are unlikely to reverse last month’s surprise interest rate cut. Russian assets have been pummeled by falling oil prices and intensifying fighting in Ukraine. Today’s rebound follows a rally in the price of Brent and the prospect for a lasting agreement to end the fighting.
Statoil and its licence partners have chosen an unmanned wellhead platform as the concept for the Oseberg Future development phase I project in the North Sea. The platform will be controlled from the Oseberg field centre and three concept studies have been made. It will have no living quarters, helicopter deck or lifeboats.
Providence Resources has reached an agreement with a partner to develop the Barryroe field in the Celtic Sea. The company provided few details on the farm-in, which is said was subject to closing conditions, particularly the required level of financing. Providence currently holds an 80% interest in Barryroe, which is located in SEL 1/11 and LO 12/4 in the North Celtic basin, through its subsidiary EXOLA Limited with Landsdowne Oil and Gas holding the remaining 20% interest.
Egdon Resources will undertake a longer term production test following positive free-flow results from Wressle-1. The company said ongoing well test operations in licence PEDL 180 have now been completed in the Ashover Grit, the first of three potentially hydrocarbon bearing zones identified in the well. An interval of 9.5metres was perforated and following an initial ‘clean-up’ flow, oil production of 80 barrels of oil per day were achieved during a 16 hour main flow period along with 47,000 cubic feet of gas per day.
The new boss of exploration firm BG Group is starting a month early today, a week after it took a multibillion-pound hit from the plunge in oil prices. Helge Lund, who is joining after a decade at Norwegian energy giant Statoil, takes charge after the group sidestepped the threat of a shareholder revolt in the wake of an outcry over his pay package. Mr Lund had been expected to take the helm on March 2 but BG said the date “has been brought forward following agreement last week from his former employer to release him from his contractual commitments”.
Oil held gains after the biggest weekly advance in almost four years as signs of a drilling slowdown in the US bolstered speculation that companies are cutting back crude production amid a global glut. Futures were little changed in New York after rising 7.2% last week. Drillers reduced the number of rigs in service by 83 to 1,140, the lowest level since December 2011, according to data from Baker Hughes Inc. Oil workers at two BP Plc plants in the Midwest joined the biggest strike at refineries across the nation since 1980 as negotiations on a new labor contract stalled. Oil slid almost 50% last year as US producers pumped crude at the fastest pace in more than three decades. The Organization of Petroleum Exporting Countries also resisted calls to cut supply, signaling it would fight to maintain market share. Venezuela wants OPEC to discuss steps to halt price fluctuations, according to Oil Minister Asdrubal Chavez.
Statoil has found more resources in the Krafla area of the North Sea in Norwegian waters . The company, along with PL035 partners, said the main Tarbert appraisal well and the small oil discovery in the Krafla North prospect in December has increased the “robustness” of the field development project. Statoil has completed a two-well programme in the Krafla area which is located 25kilometres southwest of Oseberg South in the North Sea.
Offshore standby vessel operator Atlantic Offshore Rescue (AOR) has appointed a new managing director. Matthew Gordon joined the Aberdeen company at the start of the year and replaces John Bryce, who gives up the helm after playing a key role in the firm’s recent growth. Mr Bryce will continue to be involved in AOR in a consultancy capacity, the company said.
Crude production dropped 20% since October at a venture that a Chevron Corp. unit operates in the Wafra fields, which Kuwait is developing with Saudi Arabia, according to two people with direct knowledge of the matter. Daily output dropped to 180,000 barrels from about 200,000 barrels last month and 225,000 barrels in October, said the people, who asked not to be identified because the matter isn’t public. Two rigs are halted and more may be idled in the coming months because Saudi Arabian Chevron Inc. faces problems operating wells due to a lack of personnel after Kuwait stopped issuing and renewing work permits in October, they said.
US oil workers at two BP Plc plants in the Midwest are joining the biggest strike at refineries across the nation since 1980 as negotiations on a new labor contract were suspended until next week. Workers at BP’s Whiting refinery in Indiana and the Toledo plant in Ohio that it co-owns with Husky Energy Inc. notified management that they’ll be joining the strike at 11:59 p.m. on Saturday, Scott Dean a spokesman for BP, said. The United Steelworkers, which represents 30,000 US oil workers, has suspended negotiations with Royal Dutch Shell Plc, bargaining on behalf of employers, until next week.
A subsea business controlled by a Norwegian venture capital firm has been put into liquidation just months after changing hands in a £17million deal. Reef Subsea AS, along with its subsidiary Technocean Subsea, has filed for bankruptcy in what is considered to be one of the first major casualties in the North Sea due to new low oil prices. The firm’s sister company, Reef Subsea UK, is not in administration it has been confirmed. The UK division, which is owned by the same venture capital firm, Hitechvision, is based in Thornaby, Stockton-on-Tees and has an Aberdeen-based operation at Altens.
The average US rig count for last month was down almost 200 from December 2014. The Baker Hughes rig count shows the figure for January was 1,683 – down 199 – from the 1,822 counted in December. The average Canadian rig count for January 2015 was 368, down seven from the 375 counted the previous month and down 136 from the 504 counted in January 2014.