With Siberia’s aging oil fields slowly running dry, Russia is turning to a natural gas by-product to help maintain crude production and meet President Vladimir Putin’s target of 10 million barrels a day. As companies including OAO Gazprom, OAO Novatek and OAO Rosneft get new Siberian gas fields up and running, they’re also boosting output of condensate, a prized, ultra-light form of crude that’s a common component of underground gas reserves. Condensate is especially important now because it’s not covered by sanctions on Russia’s oil industry that have targeted Arctic drilling and shale projects.
Last month’s arrival of the Goliat floating production unit in Norwegian waters on the back of a Dockwise heavy lift ship is a milestone for a project that is running around two years behind schedule and massively over budget ... at least 50%. It had been expected onstream late 2013, then this slipped into 2014 and now it is supposed to be later this year, fully 15 years since the oilfield was discovered in 2000. Goliat is located on production licence 229, which was awarded in the Barents Sea Round in 1997. The licensing round was initiated by the authorities in order to promote interest in the Barents Sea as an oil & gas region.
Having been made redundant as a result of the oil price collapse in 1986, colourfully determined James McCallum is no stranger to the personal and corporate pain caused by volatility in commodity price. However, it was redundancy that encouraged him to eventually set up his own company, so unleashing his own entrepreneurial streak. This was to lead to the creation of the building blocks for Senergy, now LR Senergy – a global diversified energy services business with over 600 people. Here he explores with Energy why the current crisis is a defining moment in time for the oil & gas industry; it is a time when others may be pushed into their own adventures . . . by getting fired by an employer bent on slimming down . . . cost cutting. McCallum: “As the oil price hovers around $50, we are embarking on a crucial period that will define the industry’s future. Spiralling costs of exploration and production in the industry are price differentiating energy plays and it is clear the current cost base cannot be sustained.
Scottish engineer Weir Group has teamed up with Rolls-Royce Power Systems (RRPS) company MTU for a new joint-venture to produce a power system to make hydraulic fracturing, or fracking, more efficient. Weir manufacturers hydraulic fracturing pumps, while MTU describes itself as a market leader in heavy-duty industrial diesel engines. The joint-venture – announced at the OTC oil and gas show in Houston – involves Glasgow-based Weir’s oil and gas division, whose global operations include a sales office in Aberdeen.
McDermott International has received a contract amendment from KJO (Al-Khafji Joint Operations) for a platform in the Hout field. The platform is located 26 miles of Al-Khafji in the divided zone between Kuwait and the Kingdon of Saudi Arabia. Work on the brownfield project is expected to be executed through the second quarter of 2017 and is included in McDermott's first quarter 2015 backlog.
Erin Energy has commenced production from its Oyo-8 well block located in OML 120 offshore Nigeria. The company is the operator of the Oyo field and has a 100% working interest in the block. The well is epected to produce 7,000 barrels of oil per day.
Saudi Arabian stocks traded near a six-month high as investors awaited an announcement by the country’s regulator on rules opening up the market to foreigners for the first time. The Tadawul All Share Index rose and fell as much as 0.3 percent before trading 0.2 percent lower at 12:18 p.m. in Riyadh. Al Rajhi Bank, the lender with the biggest weighting on index, added 0.2 percent. The Riyadh-based Capital Market Authority will publish the final regulations today to allow foreigners direct access to its stock market starting June 15. The rules will be enacted June 1. “There is nervous anticipation in the market,” Mohammed Al-Suwayed, a Riyadh-based financial analyst and partner at SPT Investors LLC, a market-analytics company, said by phone. “Investors are not very sure what sort of changes there will be, hence the fluctuation.” OPEC’s biggest oil exporter is removing barriers to one of the world’s most-restricted major stock markets as it pursues a $130 billion spending plan to boost non-energy industries. Investors from outside the six-nation Gulf Cooperation Council currently access shares listed on the country’s $572 billion market through equity swaps and exchange-traded funds. The CMA may allow institutional investors with a minimum of 18.75 billion riyals ($5 billion) under management to invest directly in the stock market, according to the draft rules published in August.
Mazarine Energy has made an oil discovery in Tunisia with its partner ETAP. The find was made in the Cat -1 (Chouchet El Atrous) well in the Zaafrane permit by the company’s subsidiary Mazarine Energy Tunisia. Mazarine Energy executive chairman Edward Van Kersbergen said: “We are delighted to announce the first discovery in the Zaafrane permit.
Chile's state oil company ENAP is set to postpone projects in the Ecuadorian Amazon as a result of the oil price decline. According to reports, both the country's central government and local authorities have agreed to the move. Last month, Ecuador signed an $82million production contract with ENAP for the oil block Paraiso-Biguno-Huachito.
Repsol has made a new gas discovery in Bolivia at the Margarita-Huacaya block. The Spanish company said the find increases reserves in the Caipipendi area with investment in phase three of the project expected to reach $293million by 2018. Repsol currently produces 18 million cubic metres of gas in Bolivia, with Margarita-Huacaya earmarked as one of 10 key projects in the company’s 2012-2016 strategic plan.
What happens to a wealthy, oil-reliant nation when crude prices collapse and unprecedented monetary easing threatens to scupper returns for its sovereign wealth fund? Yngve Slyngstad, who manages Norway's $900 billion wealth fund, has said many times in the past year that in a low-and even negative-interest rate world the fund will not be able to hit its expected 4 percent real return. The real world impact is that fiscal spending will need to be checked. The Norwegian government has a self-imposed rule capping use of the fund's money in its budget to the expected return. That has meant increased spending each year, in krone-terms, as the fund has ballooned in size. The current minority coalition said in October it will use a record 164 billion kroner ($21.8 billion) in 2015, or about 3 percent of the fund.
Oil explorers idled rigs in US fields for the 21st straight week, extending an unprecedented retreat in drilling that has curbed domestic output and helped crude prices rally. Rigs targeting oil in the US declined by 24 to 679, Baker Hughes Inc. said on its website Friday, the lowest level since September 2010. Texas’s Eagle Ford formation lost the most, dropping seven to 91, the Houston-based field services company said. The Williston Basin, home of North Dakota’s prolific Bakken shale, added a rig for the first time in five months.
LGO has spudded a well in its Goudron Field. Well GY-672 was spudded on April, 15 and log interpretation has confirmed the the presence of recoverable hydrocarbons.
MSIS has invested more than £1million in its rental fleet and a new facility in Aberdeenshire. The 17,500 square foot base within the Kirkwood Commercial Park in Inverurie comprises a workshop, yard and warehouse.
BP Shipping celebrated its 100-year anniversary yesterday, making it the longest continually operating company in the group. Formed on April 30, 1915 as the British Tanker Company, the business has contributed to two world wars, the Great Depression, the closures of the Suez Canal, and the impact of oil nationalisations on the world economy and the movement of oil and gas. It has also played a role in the evolution of safer and more environmentally sustainable shipping practices including inert gas systems, crude oil washing and double hulling.
Kina Petroleum has spudded the Raintree-1 exploration well in Papua New Guinea. The well in PPL 337 is operated by Heritage Oil under a farmout agreement between Heritage and KPL. Raintree is designed to test a carbonate reef and will be drilled to a target depth of between 800-1000metres at which point logging operations will happen.
A 10-member supreme council for state-run oil company Saudi Aramco has been created by Saudi Arabia. The company, which is headed by the country's deputy crown prince, revealed the changes in a statement. It also provided details of the company's annual meeting in Seoul, South Korea, last week.
Optimism has continues to fall in the UK oil and gas industry according to the first quarter Oil & Gas UK Business Sentiment Index. It shows confidence in the sector has dropped from minus 23 points to minus 31 on a -50/+50 scale. The index measures a number of economic indicators including business confidence, activity levels, business revenue and investment and employment.
The new chief executive of Oil & Gas UK has taken up her position with the industry body. Deirdre Michie was appointed by the board of Oil & Gas UK in February and has today formally taken over from Malcolm Webb. Following a brief handover, Malcolm will formally retire on May 31st.
A vast majority of north-east firms are either already suffering a negative impact from lower oil prices or expect it soon, a survey has revealed. Companies across the region were canvassed for the Aberdeen and Grampian Chamber of Commerce (AGCC) North East Business Week (NEBW) study, and the scale of fallout from the oil and gas industry downturn is among the findings. AGCC’s research unit carried out the research on behalf of the chamber and its NEBW partners – Elevator, the Federation of Small Businesses and the Scottish Council for Development and Industry.
Big Oil’s profit engine has gone into reverse, taking it back to the days when oil was just $28 a barrel. Profits from global explorers’ oil and gas wells for the first quarter of 2015 revisit the early 2000’s, just before demand from China began driving commodity prices upward. Exxon Mobil Corp.’s oil and gas earnings dropped by almost two-thirds to the lowest since 2003, spurring a 46 percent decline in overall profit from a year earlier, the company said on Thursday. ConocoPhillips’ net income plunged 87 percent -- its worst results for any first quarter since 2001, according to data compiled.
Hundreds of jobs could be secured after energy services firm Cape secured a two-year contract extension with oil major BP. The deal, for work in the North Sea, is worth an estimated $153million. Cape will supply a range of services to six BP assets in the North Sea.
Oil giant Shell is said to be pushing ahead with plans to explore for oil in the Arctic Ocean near Alaska despite strong opposition from environmental groups. The company is said to be preparing vessels to begin a two-year programme to explore two to three wells in the Chukchi Sea off the coast of Alaska. Shell's chief financial officer Simon Henry said work was "currently on track".
Statoil has completed the sale of its share in the Shah Deniz production sharing agreement to Petronas. The Norwegian company sold off its 15.5% participating interest in Shah Deniz, 15.5% share in the South Caucasus Pipeline Company, 15.5% share in the SCPC holding company and 12.4% share in the Azerbaijan Gas Supply Company (AGSC).
The North Sea oil and gas industry raised a toast to its champions of safety at an awards ceremony in Aberdeen yesterday. Six awards were handed out at this year’s UK Oil and Gas Industry Safety Awards to people and companies who went the extra mile to keep employees out of harm’s way. Vic Retalic, HSE and security manager of Premier Oil, was recognised for his creative approach to communicating health and safety messages, which includes the use of cartoons. He took the Safety Leadership Award home from the event at the Aberdeen Exhibition and Conference Centre (AECC).