The industry is going through what oil workers have described as a crisis period. At the time of writing, the oil price has fallen below $54. That's less than half the price predicted by the SNP in their White Paper, which formed the economic basis for their independence case. But more immediate than the politics is the fact the plummeting oil price has resulted in a number of firms cutting the wages of their staff.
SacOil Holdings has started the first phase of its field development operations at its Lagia oil field in Sinai. The company has contracted Schlumberger through its subsidiary Mena International Petroleum Egypt to conduct the initial phase of development. It includes the hydraulic stimulation of the Lagia 6, 7, 8, 9 and 10 wells specifically targeting the intersected productive productive Nukhul geological formation.
The FTSE 100 Index headed lower for a third session in a row today in a slump driven by sliding oil prices and fears of a Greek exit from the euro. London’s leading share index had lost 2%, or 130.6 points, in the previous session and was again lower, by about 0.8%, to 6366, as the markets showed little sign of sparking into life after a dismal start so far to 2015.
A well drilled by Lundin Petroleum has come up dry in the Norwegian sea. The company, through its subsidiary Lundin Norway, had been exploring the hydrocarbon potential of the Kopervik prospect in PL625. The wildcat well 25/10-12S is located 175km west of Huagesund on the west coast and is 20km northwest of the Johan Sverdrup discovery.
Drilling company Archer has received an early termination notice from Talisman Sinopec Energy UK for its modular rig. The Archer Emerald had been contracted out by the company in a two-year contract deal worth $96million and was scheduled to begin in the first quarter of 2016.
Plexus Holdings has received a £1.5million purchase order from Brunei Shell Petroleum (BSP) to provide wellhead systems and services. The contract, for work on three additional exploration wells, runs until 2016. The company will supply both HP/HT and standard pressured wellhead and mudline systems and services.
US oil drillers laid down the most rigs in the fourth quarter since 2009. And things are about to get much worse. The rig count fell by 93 in the three months through December 26, and lost another 17 last week, Baker Hughes Inc. (BHI) data show. About 200 more will be idled over the next quarter as US oil explorers make good on their promises to curb spending, according to Moody’s Corp.
The speed with which the North Sea’s prospects have become engulfed in crisis and doom-laden predictions has taken the world, and not just our own small corner of it, by surprise.
On December 2, Chevron announced that oil and gas production had started at the Jack/St Malo project in the Lower Tertiary trend, deepwater US Gulf of Mexico. Jack and St Malo are among the largest fields in the US Gulf and were discovered in 2004 and 2003. They are located in Walker Ridge blocks 758, 759, and 678 in more than 2,100m of water, some 435km south-west of New Orleans. Drilled to a total depth of 8,839m (29,000ft), the Jack-1 exploration well encountered more than 350 feet (107 metres) of net oil sands pay in a Lower Tertiary Trend.
The chief executive of the newly formed Oil and Gas Authority (OGA) has taken up his new role. Andy Samuel was appointed in November last year following the establishment of the independent body. Its creation was an integral part of the recommendations made by Sir Ian Wood as part of a review into maximising the UK’s offshore oil and gas resources.
Fighter jets dispatched by Libya’s internationally recognised government bombed a Greek-owned tanker ship at an eastern city controlled by Islamist extremists, killing two crew members and wounding two, Libyan and Greek officials said. The bombing highlights the chaos that has gripped Libya since its 2011 civil war that deposed and killed dictator Muammar Gaddafi. Libyan officials apologised for the bombing as the Greek foreign ministry demanded compensation for the victims’ families and punishment for those behind the attack.
Total has confirmed the start-up of oil production from one of its North Sea projects. The Eldesk II project on the PL 018 license of the Norwegian North Sea is producing oil in line with its schedule that was approved in 2011. The company said the venture increase oil recovery of the Eldsk field and has a production capacity of 70,000 barrels of oil inequivalent per day.
The oil market is set for “more problems” this year as increasing supplies from countries including Russia and Iraq add to the global glut that drove prices almost 50% lower in 2014, according to Morgan Stanley. Output may increase from fields in West Africa, Latin America, the US and Canada in addition to more exports from Russia and Iraq, offsetting concerns of reduced production in Libya, analysts including New York-based Adam Longson sai. Iran may raise overseas shipments by about 500,000 barrels a day if western sanctions against the country are lifted, according to the report.
A project headed by Tamarack Valley Energy experienced a "record" exit production rate toward the end of last year. Canada-based Tamarack said its drilling program in the Wilson Creek contributed to a rise in production rates during the last two weeks of December. Rates averaged at 9,700 boe/d with all 10.9 net wells drilled in the fourth quarter were brought on production last month.
From tomorrow, Asda and Morrisons are reducing their petrol and diesel by 2p a litre. It means Asda customers will pay no more than 105.7p a litre for petrol, with diesel being 112.7p a litre. This is Asda’s 14th fuel cut since the end of September, with 21p a litre coming off its petrol price in total and 17p a litre off its diesel.
A new joint corporate broker has been appointed by LGO Energy as it gears up for 2015. FirstEnergy Capital LLP will take on the role with immediate effect with Old Park Lane Capital plc will continuing as joint broker.
At the outset, let me make the following clear: First, the UK offshore oil and gas industry faces some very serious challenges but it is NOT in danger of being wiped out. While the industry is certainly not enjoying the best of health right now, it can and will recover. Second, the troubles we face are not all down to the recent fall in the price of oil, that is a serious complication but it is not the root cause. Third, while I am certain that these problems can and will be overcome, the cure, if it is to be effective and lasting, requires urgent, positive and collaborative action by all stakeholders across Industry and Government over the coming weeks, months and years.
Unconventional oil and gas (UOG) operations in the US that involve fracturing may be harming human health. By inference, research being carried out at the University of Missouri may sound alarm bells in the UK and wider EU where shale gas extraction (and oil) industry has yet to start. Up to now in the US, discussions have largely concentrated on potential air and water pollution from chemicals used in these processes and how it affects the more than 15million Americans living within one mile of UOG operations.
Singapore-based Dyna-Mac has been awarded a contract worth a preliminary estimate of $89million to construct FPSO topside modules and one flare tower for BW Offshore. The company’s prepatory work is for the vessel which will operate at Premier Oil’s Catcher oil fields in the North Sea.
Oil prices have crashed and the North Sea is hurting badly, with the likelihood that this is going to be a prolonged downturn . . . at least for the bulk of this new year, if not longer. Capital investment in the North Sea could halve by 2017 unless there is urgent reform of the tax regime in light of a big drop in the price of crude oil, according to Oil & Gas UK, which is hoping for good things from the Treasury before the May election following promises made early last month. And Wood Mackenzie has estimated that 32 potential European oil field developments worth more than $85billion (£55billion) are waiting for approval and could be at risk if oil prices continue to slump. A high proportion of those projects have a break-even price higher than $60 per barrel and many are in the UK sector.
A North Sea helicopter was forced to return to an airport after it was struck by lightning on its way to an oil platform, it has emerged. The Bond-operated EC225 was carrying 11 passengers and two crew at the time off the incident, off the coast of Aberdeen. The helicopter has now been taken out of service until it is examined by engineers to see if the aircraft was damaged during the lightning strike.
Oil major BP could face a sizable fourth quarter loss on its Rosneft share caused by the 47% slide in the ruble over the past three months. According to reports, city analysts have had forecast losses to be as much as $750million. BP currently has a 19.75% shareholding in the Russian energy company which it acquired in 2013.
A weakening oil price meant BP and Royal Dutch Shell remained under pressure despite a steady start to the year for the FTSE 100 Index. BP shares topped the fallers board with a decline of 1.5% as the price of Brent crude slipped to $56 a barrel due to ongoing fears of a supply glut.
Rockhopper Exploration has been awarded a 40% share in an offshore block in Croatia in a partnership deal with Eni. Block 9 is located in shallow waters of the Northern Adriatic gas province and contains the previously discovered Ksenija accumulation along with the Klaudija prospect. The company said the anticipated work programme consists of seismic acquisition, processing and re-processing during the first exploration phase, with the drilling of a well in the second exploration phase.
Gulf Keystone Petroleum said seven wells are now producing at its Shaikan production facilities. A further well is expected to come online this month in the Kurdistan region of Iraq where operations are taking place. The company said total daily production has been gradually increasing since last month, with the company’s 400,000 gross barrels of oil per day target being reached shortly before New Year.