Linc Looks to Start Shale Oil Production Works in the Arckaringa Basin

Linc Energy revealed Wednesday that it will be moving into production drilling in the Arckaringa Basin, following two independent reports confirming the presence of shale oil in the onshore basin, South Australia.

A report prepared by Gustavson estimated that the Stuart Range, Boorthanna and Pre-Permian unconventional reservoirs could hold unrisked prospective resources of up to 233 billion barrels of oil equivalent (boe), while a separate report by DeGolyer and MacNaughton (D&M) estimated that the region could hold unrisked prospective resources of up to 103 billion boe.

"These conclusions presented by Gustavson and D&M are consistent with [our] view that formations within the Arckaringa Basin have excellent resource play potential with total organic carbon levels, permeability, porosity and thickness that compare favorably to prolific U.S. plays such as the Bakken and Eagle Ford," Linc said in its disclosure.

"The estimates provide strong encouragement that the balance of the basin may also be prospective for conventional hydrocarbon deposits and suggests that additional work on conventional resource potential is justified," Linc added.

The company has appointed Barclays Bank for advice on strategic options, including the introduction of an experienced shale operator to joint venture the development of this shale play. Linc's Managing Director Peter Bond told Rigzone Wednesday in an interview that the company will take around six months to identify a suitable operator.

"We are keen to work with both international and local partners, especially Asian partners," Bond said. 

After selecting a partner, Bond intends to develop the company's assets in the Arckaringa Basin through the drilling of both exploration and production wells. The company is also exploring the possibility of doing horizontal drilling in its permits. 

Linc, through its wholly owned subsidiary SAPEX, currently holds seven petroleum licenses that cover a total of 21,224 square miles (54,970 square kilometers) in the 31,000 square miles Arckaringa Basin. Linc has also obtained approval for an additional petroleum license that would add another 3,649 square miles to the area of interest.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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ABS Updates Dynamic Positioning Requirements

ABS, a provider of classification services to the global offshore industry, has released the ABS Guide for Dynamic Positioning Systems as a significant update to present classification requirements to reflect industry advancements in the use of dynamic positioning (DP) systems.

"The use of DP systems has been expanded not only in terms of the number of vessels outfitted with the systems, but also in the increasing advancement of DP technologies," said Vice President, Energy Project Development, Ken Richardson, noting that the vast majority of newbuild floating mobile offshore drilling units will have DP capability.

"DP reliability is particularly important in frontier areas where deepwater drilling is reaching greater depths, and in challenging harsh-weather environments around the world," Richardson explains. "The new Guide provides standards for enhanced notations to guide clients in selecting the level of compliance for a vessel’s DP capability, which broadens the notation choices, increasing the likelihood of getting a unit outfitted with the most appropriate system for each application."

The new Enhanced System (EHS) notation encourages robust designs of DP systems by providing optional requirements. The multiple levels of EHS notation – for power, control and fire protection – provide owners with the flexibility to tailor the notation to the most important components of the system for the unit’s intended operations.

Because these newbuilds will work around the globe, the ABS Guide for Dynamic Positioning Systems offers an optional notation for Station-Keeping Performance (SKP). The notation allows owners to select equipment based on North Sea conditions or to select environmental criteria specific to the intended areas of operation.

The DP Guide also includes detailed procedures for assessing available thrust, taking into account thruster interactions (thruster-thruster, thruster-hull, thruster-current), which is especially useful in the early stages of design.

In developing the new ABS Guide for Dynamic Positioning Systems, ABS drew, not only on its years of related experience with DP installations, but also on expertise from equipment manufacturers, owners, operators and industry experts. Part of that process included a workshop in Houston where more than 40 experts participated in a discussion about DP systems and what the industry needs. The results of this event steered the development efforts that produced the recently released Guide.

"This truly collaborative approach to Guide development allows ABS to work with industry to provide guidance that facilitates continued safe operations as the industry’s needs evolve,” says ABS Vice President for Offshore Technology Bret Montaruli. "We understand that DP system reliability is vital to operational safety. And we developed the new Guide to address the diverse and growing needs of the industry with respect to DP systems."

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BP Delivers First Gas Shipment to Israeli Offshore Buoy

JERUSALEM--BP PLC (BP.LN) began delivering liquefied natural gas to Israel via an offshore buoy Thursday to help meet Israel's energy needs until it begins production of local gas from an offshore field later this year, government officials said.

The buoy was built off the Israeli coast by government-owned Israel Natural Gas Lines Co. at a cost of 500 million shekels ($134 million).

The gas is meant to satisfy the needs of the state-owned Israel Electric Co. until at least April, when Israel's offshore Tamar reserve will begin supplying gas.

"This is an important step for guaranteeing Israel's energy independence," Uzi Landau, minister of energy and water resources, said at a ceremony Thursday as the first ship filled the buoy with gas.

The Israeli gas shortage follows the cancellation by East Mediterranean Gas Co. of its supply deal with Israel last year in the wake of political changes in Egypt and numerous attacks sabotaging its pipeline in the Sinai Peninsula.

Since 2008, Egypt had supplied Israel with about 40% of its energy needs, or about 1.7 million cubic meters of gas a year. Israel relied on the local offshore Yam Tethys reserve for the remaining 60%. But after the cancellation of the Egyptian deal, and the depleting of the Yam Tethys reserve, the electric company turned to more expensive sources of fuel, such as diesel, that pushed up electricity prices and forced Israel Electric to depend on government guarantees to issue more bonds.

The electric company hasn't disclosed how much it is paying BP for the gas, or how much gas it planned to buy.

"But the cost of the buoy is much higher than the gas," said Elad Krauss, energy sector analyst at Harel Finance Ltd. in Tel Aviv. "There is no savings by buying gas from the buoy over diesel for the next few months."

But Mr. Krauss said that although the buoy was a large investment, and will not be used on a regular basis after the local Tamar field begins to produce gas, it does offer stability and security to Israel's energy supply, something that has been lacking.

In the case that something goes wrong with Tamar, the buoy will allow foreign companies to supply gas to Israel, Mr. Krauss said. Currently, Israel only has one gas pipeline, the closed one from Egypt, which is unlikely to reopen in the near future.

Israel's offshore Tamar field contains 9 trillion cubic feet of gas and is scheduled to begin production later this year. Another larger offshore gas field, Leviathan, that contains 16 trillion cubic feet of gas is slated to begin production later this decade. These two fields will eventually meet all of Israel's gas needs and turn the country into a gas-exporter, although the government has yet to specify how much gas it will allow for export.

Israel Natural Gas Lines contracted Italy's Micoperi Marine Contractors to build the bouy, which can accept up to 3 million cubic meters of gas a year.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Anton Oilfield Appoints Non-Executive Director, Chairman of QHSE

Anton Oilfield Services Group, the leading independent oilfield services provider in China, announced the appointment of Jean Francois Poupeau as a non-executive director of the Group, effective Jan. 21, 2013.

With over 27 years of in-depth experience in oilfield services, Poupeau currently holds the position of Executive Vice President at Schlumberger, where he has taken various management positions. Schlumberger is a minority shareholder of the Group and holds approximately 19.8 percent of the issued share capital of the Group as of the date of this release.

The Group is committed to the highest standards of corporate governance aimed at enhancing shareholders' value. The board has appointed Poupeau as chairman of the newly established QHSE Committee of the board tasked with providing guidance and advice on the quality, health, safety and environment strategies of the Group to ensure that the quality of the Group's services meets the international standards. As a non-executive director, Poupeau will not be involved in the daily operations of the Group. The board believes that Poupeau's rich industry and management experience will help bring the world's leading standards in corporate governance and QHSE to the Group.

Commenting on his appointment, Poupeau said: "I am glad to join the board of directors of Anton Oilfield as a non-executive director of this oilfield services provider with vast growth potential in China. I look forward to working with the board and assist Anton Oilfield's management in business operations in support of Anton Oilfield's existing independent development strategy."

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Dart Declares Scottish Coal-Bed Methane Test a Success

Coal-bed methane specialist Dart Energy International reported Monday that a three-month production test of its Airth 12 well in Scotland has been successfully completed.

The well which was completed in March 2012 and brought online in June was operated continuously for three months on a controlled production test basis. Sustained flow rates in excess of 500,000 standard cubic feet of gas per day were achieved, with peak rates in excess of 800,000 cubic feet per day. Dart said the well was held back from its maximum potential to minimize gas flaring.

Declaring the production test as a success Dart is now curtailing gas production at Airth 12 in order to preserve the gas for ultimate commercial production, although it will flow some gas for on-site electricity generation.

Dart is now awaiting regulatory approval before it can carry out further field development at Airth. The firm already has a gas sales agreement in place with SSE, the UK's second-largest utility.

Dart CEO John McGoldrick commented in a statement:

"We have invested significant capital in this area and are proud to be the first company to generate electricity from CBM natural gas in Scotland. During our Airth 12 well production test we have achieved sustainable and continuous flow-rates, significantly higher than any other CBM well production in Europe."

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Tullow Completes Acquisition of Spring Energy Norway

Tullow Oil announced Tuesday Spring Energy Norway CEO Roar Tessem is to become managing director of Tullow's Norwegian companies now that Tullow has completed its acquisition of Spring.

Tullow said the acquisition has already brought success for Tullow when last week Spring was awarded 13 licenses in Norway's 2012 Awards in Predefined Areas licensing round. Four of these licenses will be operated by the company.

The new licenses are highly complementary and mostly adjacent to current acreage held. The new acreage is located in all three areas of the highly prospective Norwegian Continental Shelf: the North Sea, the Norwegian Sea and the Barents Sea.

Tullow is also awaiting the results of applications both it and Spring made in Norway's 22nd licensing round.

Tullow Chief Executive Aidan Heavey commented in a statement:

"I am delighted to welcome our new colleagues to Tullow and I look forward to working with them. The quality of their business and staff has been underlined by their exceptional performance in Norway's most recent licensing round in which over 40 Norwegian and international companies participated."

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Uganda to Auction 13 Oil Blocks in 2013

KAMPALA, Uganda - The Ugandan government is planning to auction at least 13 oil blocks in the Albertine Rift Basin this year as soon as the government lifts a ban on the licensing of new acreage, Uganda's junior energy and minerals minister said Wednesday.

Peter Lokeris said the planned auction will allow international oil companies to bid for exploration acreage in the basin, where existing companies have discovered deposits of as much as 3.5 billion barrels of crude oil.

The government has demarcated a total of 17 oil blocks in the region, Mr. Lokeris said. Four of the blocks were licensed before Uganda imposed a licensing ban on new acreage in 2007. The remaining blocks will be auctioned as soon as President Yoweri Museveni enacts a new law lifting the licensing ban.

"Competitive rounds for new acreage will be guided by the new petroleum...some of the acreage previously licensed to oil companies has been returned to government through relinquishment requirements and the expiry of licenses" Mr. Lokeris told Dow Jones Newswires on the sidelines of an oil conference in Kampala, the Ugandan capital.

The licensing round will be Uganda's first since it imposed the ban in 2007, which was put in place following the confirmation of commercial oil reserves. Oil exploration companies have since made a flurry of discoveries in the country, increasing the size of Uganda's oil reserves from around 300 million barrels in 2006 to 3.5 billion barrels to date.

Mr. Lokeris said oil exploration companies operating in the Lake Albertine Rift Graben have had a success rate of around 87%, finding oil in 76 oil wells out of the 87 wells drilled so far.

"Preparations for development of some of these discoveries is ongoing before production can commence...This is an exciting time for the country" he said.

Companies with licenses in the country so far include U.K.-based Tullow Oil PLC, France-based Total SA and China's Cnooc Ltd. The three companies are planning to invest around $10-12 billion to develop oil fields in four blocks as Uganda continues plans to join the ranks of African oil producers.

Companies such as Italy's Eni SpA, Russia's Lukoil Holdings, and India's Essar Oil Ltd. have expressed interest in acquiring oil licenses in the country. 

Copyright (c) 2012 Dow Jones & Company, Inc.

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Mahalo Project Spuds First Step-Out Core Hole

Scrubber Gully 2 is the first of four step-out core holes to be drilled following the recent drilling of pilot production wells in the Mira field.

Scrubber Gully 2 is located approximately three miles southeast of the Mira field pilot wells and is approximately 152 miles west of Gladstone in central Queensland. The well is expected to reach a total depth of approximately 1,640 feet.

Scrubber Gully 2, and three further step-out core holes, will be cored through the reservoir section to further extend the area available for booking reserves in the Mahalo block.

Comet Ridge currently has a 35 percent interest in ATP 337P Mahalo, having divested a five percent interest in the asset to Stanwell Corporation in an agreement announced in September 2011. Under the terms of that agreement, Stanwell Corporation Limited will fund Comet Ridge's expenditure for the Mahalo field and Mira field pilot schemes and step-out drilling. The agreement also gives Stanwell Corporation an option to purchase half or all of Comet Ridge's equity in the Mahalo block, based on 2P reserves booked.

Equity participants in ATP 337P Mahalo are Comet Ridge Mahalo Pty Ltd (35%), Stanwell Corporation Limited (5%), Australia Pacific LNG Pty Ltd (30%) and Santos QNT (30%).

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UTEC Makes Management Appointments in Scotland, Italy

Offshore survey company UTEC announced Wednesday that it has made two new management appointments in Scotland and Italy.

UTEC has appointed Jamie Laing and Andrew Stenson as general managers of its Aberdeen and Naples office respectively. Laing, who has worked for UTEC since early 2009, joined the oil and gas industry in 1988 and has extensive experience of the offshore survey sector.

Stenson has 25 years' experience in land, marine and transition zone surveys – and has worked in Europe, Africa, South America, Canada, the Middle East and the Far East.

UTEC said the appointments represent a significant step forward in its growth plans.

"Our focus on the growth of the business during 2012 created the requirement for this new role in Aberdeen and Jamie’s broad ranging personal skills meant he was the right man for the job," UTEC Managing Director Kevin McBarron said.

"In Naples, the culmination of the year's expansion plans led to the promotion of Carlo Pinto in the role of regional sales manager, so we are delighted that Andrew has accepted the general manager's position to further strengthen the team in Italy." 

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