Saturday, June 29, 2013

Technip Wins Brazilian FPSO Contract

French oilfield services firm Technip announced Wednesday that it and partner Techint have been awarded a "substantial contract" by PNBV (a Petrobras subsidiary) to support the construction of the P-76 floating production, storage and offloading (FPSO) unit. Tasks include the topside construction and integration of the unit, as well as providing commissioning and start-up assistance.

Technip said its operating center in Rio de Janeiro will perform the project management, engineering and procurement for the contract. Fabrication, integration and commissioning of 24,000 tons of modules will be performed in Techint's yard in the south of Brazil. The project is scheduled to be completed by mid-2017.

José Jorge Araújo, Technip's senior vice president for onshore Latin America and offshore Brazil, commented in a statement:

"We are delighted to have the opportunity to keep working with Petrobras. This contract strengthens furthermore our presence in the burgeoning Brazilian offshore pre-salt market, where our leading-edge position enables us to meet its high standards and requirements. 

"We fully expect that our partnership with Techint will be a key to the success of the P-76 FPSO. Moreover, this project will contribute to the local economy as it will require approximately 70 percent of Brazilian local content."

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Egypt Awards Oil, Gas Contracts to Accelerate Exploration Pace

Egypt Awards Oil, Gas Contracts to Accelerate Exploration Pace

State-run Egyptian Natural Gas Holding Co. has awarded eight oil and gas prospection projects in the Mediterranean Sea for an overall minimum investment of $1.2 billion as the country seeks to increase its fossil fuel production and reserves.

BP PLC, Ireland's Petroceltic International PLC, Italy's Eni SpA, Edison and IEOC, a subsidiary of Eni group, Canada's Sea Dragon Energy, United Arab Emirates' Dana Gas PJSC and Australia's Pura Vida Energy NL won the blocks, the oil ministry said in a statement posted on its website late Tuesday.

The awards were the result of an international tender which received 13 offers. The winning companies will drill a minimum of 18 wells and will pay $73.2 million for the licenses, it said.

"Issuing international tenders is part of the ministry of oil's strategies to intensify oil and gas exploration activities to secure new energy supplies...and encourage international firms to pump more investments in research, exploration and development," energy minister Osama Kamal said in the statement.

Mr. Kamal has previously said that investments in oil and gas exploration are expected to reach $8.6 billion this year.

Egypt has seen its oil and gas exploration activities slowing over the past couple of years due the continuing unrest since the ousting of former president Hosni Mubarak. The country has been paying hefty premiums for its crude supplies due to the weaker Egyptian pound and difficulties in securing letters of credit for its transactions, while a shortage of state-subsided diesel has already paralyzed transportation in many parts of the country.

Last year, Mr. Kamal allowed private firms to imports gas to meet the country's soaring energy demand.

The civil unrest has also led to a risky economic mix of dwindling foreign-exchange reserves, declining tourism revenue and costly price subsidies, economists said. To prop up the Egyptian currency, the central bank has gone through nearly two-thirds of its foreign-currency reserves, pushing the country to the brink of a liquidity crisis.

Egypt is in the throes of trying to secure a $4.8 billion loan from the International Monetary Fund, a move viewed as critical to rescuing its economy and mending its reputation as a place to do business.

People close to the talks say the IMF wants to see Egypt reduce its subsidy spending as part of a reform plan for the loan. But any subsidy changes will likely only enrage further the legions of poor who rely daily on cheap fuel, making the already uncomfortable summer months all that more unbearable.

Copyright (c) 2013 Dow Jones & Company, Inc.

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MEOS 2013: Re-thinking Energy

MEOS 2013: Re-thinking Energy

The 18th edition of the Middle East Oil and Gas Show (MEOS) – organized in Bahrain's capital city, Manama in March – saw major national oil companies (NOC), international oil companies (IOC) and service providers from 30 countries share their experiences and visions on current issues facing the industry.

Held under the theme of "Transforming the Energy Future", MEOS 2013 provided delegates access to over 140 presentations during 36 technical sessions as well as 50 poster presentations.

Organized by the Society of Petroleum Engineers (SPE), the conference's opening sessions featured high-ranking speakers representing major NOCs and IOCs, who delivered their perspectives of this year's theme.

Delivering the key note speech, H.E. Shaikh Ahmed bin Mohammed Al Khalifa, Minister of Finance and Minister in Charge of Oil & Gas Affairs, Bahrain said that the theme of this year's conference is well chosen.

"Transforming the energy future, is well chosen as we live in an era where change is the norm and agility and pro-activity means the success between success and failure."

The biggest challenge facing the industry today is not the management of the process of change, but the adaptation to the accelerated rate of change that will shift the oil and gas industry in the next new decade, said Shaikh Al Khalifa.

"To adapt, we need to introduce new methods of thinking and new work processes, to be able to meet the challenges faced by the society in general and energy sector in particular."

The game changers that can have potentially the greatest impact the way the oil and gas industry operates will be the unconventional fuel, renewable energy and energy efficiency measures, Shaikh Al Khalifa said.

"But, one of the challenges facing the industry is the availability of skilled human resources. It is important that the industry ensure the continuous investment in human resources to supply the industry with adequate number of skilled engineers."

Keynote speakers included Amin Nasser, senior vice president of, Upstream at Saudi Aramco; Martin Craighead, president and CEO of Baker Hughes; Paal Kibsgaard, CEO of Schlumberger; Sami F. Al-Rushaid, chairman and managing director at Kuwait Oil Company (KOC) and Sara Ortwein, president of ExxonMobil Upstream Research.

Saudi Aramco said that the best way to predict the future is to invent it, Nasser said.

"Just few years ago, peak oil theories were abundant and processing increasing unsustainable demand, however, the industry ingenuity through technology and exploration advancement notably with tight and shale gas in the U.S., has made abundant and natural gas as well."

Addressing the energy challenges for the future, not only for Saudi Aramco but also for international community, Nasser said that this is an integrated solution that not only look for supply side, but also for demand side, for a better and efficient use of the energy.

"This is a solution that must look at the both sides of the coin, and must be fundamentally sustained by new investments, talents and technology," Nasser added.

Speaking about Saudi Aramco's future strategy, Nasser said that his company is focusing on deep water exploration as well as unconventional resources.

"We have very recently expanded our exploration activities in the red sea, and we have completed series of seismic surface surveys. Currently we are drilling our first deep water well," Nasser said. "While our recent push to exploration for natural gas has been very successful and allowed the gas production to more than triple in few years. We are also aggressively targeting unconventional gas."

Meeting the growing energy demand required innovation and cutting edge technology, in order to be able to unlock new resources while gaining energy efficiency, ExxonMobil's Ortwein said.

"This will allow new supply to benefit more lives with less impact on the environment."

"As we look to the future, I have no doubts that the continued development of our people, and successful application of innovative technologies will help us supplying the energy the world's need," Ortwein added.

Meanwhile, Al Rushaid highlighted the future strategy of KOC, and said Kuwait has enough reserves to grow and maintain production capacity at 4 million barrels per day as per its 2030 strategy.

"Our investment plans are strong and schedule to deliver this capacity, and most of the growth is coming from primary and secondary recovery schemes in easy to medium complexity reservoirs," said Al Rushaid. "However, it is our strategy to not over exploits our easy oil, we plan to create a more manage transition to the more difficult oil structure," he added.

Kuwait plans to produce 3 trillion cubic feet of gas per year by 2030, Al Rushaid revealed.

In addition, Baker Hughes' Craighead stressed the importance of understanding the earth's subsurface to the future of energy. Reframing geoscience, Craighead explained, will play a major role in ensuring that the oil and gas industry delivers affordable energy safely, responsibly, and in a manner that is both economically and environmentally sustainable.

"Our industry is no longer solely about the extraction and distribution of hydrocarbons," Craighead said. "Rather, any discussion about energy is essentially a discussion about the much larger picture of survival, opportunity, and community."

The oil and gas industry is no stranger to challenges and uncertainties, Schlumberger's Kibsgaard said.

The industry is putting a lot of effort into advancing the engineered fluid systems. "If you look at the consumption of water in U.S. based fracking, a lot of it has to do with the fact that these are what we call "slick water" fracs.

"This is water and it's sand, so in order to make sure that the sand stays in suspension we need a high rate and a high velocity and we also need a high pressure to be able to frac," he said.

Other highlights during the course of the conference included a special breakfast session entitled "Financing the Change" delivered by H.E. Abdullatif A. Al-Othman, governor and chairman of the board of directors at Saudi Arabian General Investment Authority (SAGIA). The session addressed how the oil and gas industry can manage and finance itself in light of forecasts that approximate 15 trillion dollars will be spent in the next 10 years to meet expected future oil and gas demand.

Technology has played an important role in the development of hydrocarbon resources, and has made the unconventional resources an economically viable source of energy. Recent examples of technologies include horizontal and multi lateral wells, 4D seismic and advanced fracturing techniques.

Panelists at the technology required to unlock unconventional resources agreed that a game-changing area is hydrocarbon resource development that optimizes the application of technology in unconventional gas including shale gas.

More than 300 companies from 30 countries attended the MEO 2013 exhibition, which covered all areas of the upstream oil and gas industry, including production, reservoir management, drilling, completions, measurement systems, geology, geophysics, automation, transportation, health and safety, and information technology.

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Cobalt Reports Drill Stem Test Results for Well Offshore Angola

Cobalt International Energy, Inc. announced that its drill stem test of the lowest interval drilled in the Cameia #2 well in Block 21, offshore Angola, did not produce measurable hydrocarbons. The Cameia #2 drill stem test did however confirm the existence of a lower interval potentially capable of high flow rates across the basin. This interval had not previously been penetrated or tested in the Kwanza Basin.

The Cameia #2 well did confirm the presence of the same high quality hydrocarbon bearing mound reservoir that was penetrated by the original Cameia #1 discovery well.

"While I am disappointed this deep interval did not flow oil to the surface, I am encouraged by this interval's potential for significant flow rates across the basin. This information is important as we continue the evaluation of the Kwanza Basin Pre-salt's upside potential," noted James W. Farnsworth, Cobalt's chief exploration officer. "In addition, as we previously announced, Cameia #2 confirmed the extension of the same exceptional mound reservoir as seen in Cameia #1."

The results of this drill stem test have no bearing on the commerciality of the Cameia Mound Development Project and Cobalt is continuing to work with the Concessionaire to move this project to sanction.

The Diamond Offshore Ocean Confidence (UDW semisub) is now in the process of temporarily abandoning the Cameia #2 well. The wellbore will be used as part of the Cameia Mound Development Project, which is expected to be sanctioned in early 2014. Following this operation the Ocean Confidence will move to and commence drilling the Mavinga #1 Pre-salt exploratory well located adjacent to and north of the Cameia discovery.

Cobalt anticipates that the Pre-salt Lontra #1 exploratory well in Angola Block 20 will spud as planned in the second quarter of 2013. Lontra #1 will be drilled with the Petroserv SSV Catarina (UDW semisub), which is currently in Angola undergoing final acceptance testing.

In addition, the Ocean Rig Olympia (UDW drillship) has spud the Diaman #1 well, located on the Diaba block, offshore Gabon. Diaman #1, which is operated by Total Gabon, will be the first deepwater Pre-salt well drilled in Gabon.

Finally, drilling operations continue in the deepwater Gulf of Mexico on the Ardennes Prospect, located in the prolific Inboard Lower Tertiary play. Cobalt plans to spud three additional wells during 2013 in the West African Pre-salt and the Gulf of Mexico Inboard Lower Tertiary trends.

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Lukoil Executive: Russia Unlikely to Sell Large Rosneft Stake Soon

MOSCOW - The Russian government is unlikely to sell a large stake in state-controlled oil giant OAO Rosneft in the near future and won't give up its dominant position in the energy sector, the deputy chief executive of Russia's biggest non-state oil producer, OAO Lukoil Holdings, said Thursday.

"The state will continue to dominate in the sectors of the economy where it can," Leonid Fedun told the Sberbank Russia Forum 2013.

He added that the current situation in the oil sector reminds him of the mid-1990s, when there were only two sizeable oil companies in Russia: a state-owned one and Lukoil.

The past decade has witnessed the forced bankruptcy of what was once the largest oil producer, OAO Yukos; the takeover of OAO Sibneft by state-owned natural-gas firm OAO Gazprom; and, last month, the acquisition of TNK-BP by Rosneft.

Mr. Fedun said the state will dominate the market until 2018-2019, when it may be faced with falling oil output and will start seeking to improve the management of the companies.

Russian Economy Minister Andrei Belousov said in April the state may reduce its stake in Rosneft by roughly 19% from 69.5% now. Rosneft Chief Executive Igor Sechin opposes the plan.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Hickenlooper’s Misdeed #1 – the Anadarko-Noble Loophole

Governor John Hickenlooper complained about critics saying he is too close to the drilling industry in Colorado. “I am constantly attacked now for being in the pocket of oil and gas, or somehow subservient to their philosophy or their wish,” he said at a lecture last month.

The Governor shouldn’t be surprised about his well-earned reputation. He has shamelessly worked on behalf of oil and gas companies at the expense of the health and wellbeing of Colorado families.

Wattenberg map Map of the Greater Wattenberg area where oil and gas companies are subject to less strict water quality testing rules

When Colorado approved new groundwater rules in January, critics called it the weakest program in the nation for granting a massive exemption in the Greater Wattenberg area of Northern Colorado. Known as the Anadarko-Noble Loophole, this exemption covered 25 percent of all active oil and gas wells in Colorado and a whopping two-thirds of all new drilling permits. In fact, Gov. Hickenlooper’s commission provided the weakest water testing standards and groundwater protections for people living in the most heavily populated part of the state where shale oil fracking and drilling is happening.

But, you don’t have to take our word for it that the Governor is the drilling industry’s best pal. In January, a lobbyist for Chesapeake Energy accidentally emailed a strategy memo that revealed their admiration of the Governor: “His relationship to the oil & gas industry is strong and he has been a national leader speaking out against the anti-fracturing forces that have invaded Colorado.”

Colorado families deserve a governor who puts their health and safety above his favorite drilling industry donors.


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Petronas Denies Signing Pact for Brazil Oil Rights

KUALA LUMPUR - Malaysia's state-run oil and gas company Petroliam Nasional Bhd., or Petronas, hasn't signed any pact with Brazil's OGX Petroleo e Gas Participacoes SA or any other company to purchase rights in a Brazilian oil block, Petronas said in a statement Wednesday. 

The company was responding to media reports that Petronas is in talks to acquire OGX's 40% interest in the Tubarao Martelo oil block in Brazil's Campos Basin. 

Petronas last year bought Canada's Progress Energy Resources Corp. in a 5.18 billion Canadian dollar ($5.1 billion) deal.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Cobalt Reports Drill Stem Test Results for Well Offshore Angola

Cobalt International Energy, Inc. announced that its drill stem test of the lowest interval drilled in the Cameia #2 well in Block 21, offshore Angola, did not produce measurable hydrocarbons. The Cameia #2 drill stem test did however confirm the existence of a lower interval potentially capable of high flow rates across the basin. This interval had not previously been penetrated or tested in the Kwanza Basin.

The Cameia #2 well did confirm the presence of the same high quality hydrocarbon bearing mound reservoir that was penetrated by the original Cameia #1 discovery well.

"While I am disappointed this deep interval did not flow oil to the surface, I am encouraged by this interval's potential for significant flow rates across the basin. This information is important as we continue the evaluation of the Kwanza Basin Pre-salt's upside potential," noted James W. Farnsworth, Cobalt's chief exploration officer. "In addition, as we previously announced, Cameia #2 confirmed the extension of the same exceptional mound reservoir as seen in Cameia #1."

The results of this drill stem test have no bearing on the commerciality of the Cameia Mound Development Project and Cobalt is continuing to work with the Concessionaire to move this project to sanction.

The Diamond Offshore Ocean Confidence (UDW semisub) is now in the process of temporarily abandoning the Cameia #2 well. The wellbore will be used as part of the Cameia Mound Development Project, which is expected to be sanctioned in early 2014. Following this operation the Ocean Confidence will move to and commence drilling the Mavinga #1 Pre-salt exploratory well located adjacent to and north of the Cameia discovery.

Cobalt anticipates that the Pre-salt Lontra #1 exploratory well in Angola Block 20 will spud as planned in the second quarter of 2013. Lontra #1 will be drilled with the Petroserv SSV Catarina (UDW semisub), which is currently in Angola undergoing final acceptance testing.

In addition, the Ocean Rig Olympia (UDW drillship) has spud the Diaman #1 well, located on the Diaba block, offshore Gabon. Diaman #1, which is operated by Total Gabon, will be the first deepwater Pre-salt well drilled in Gabon.

Finally, drilling operations continue in the deepwater Gulf of Mexico on the Ardennes Prospect, located in the prolific Inboard Lower Tertiary play. Cobalt plans to spud three additional wells during 2013 in the West African Pre-salt and the Gulf of Mexico Inboard Lower Tertiary trends.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit http://www.riglogix.com/.

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Our weekly wrap on the top 5 energy stories for the week of June 24th

La Plata County Commissioners sent a letter to Colorado BLM Director Helen Hankins, urging that her office engage in better land use planning, before offering leases to oil and gas companies. They did so out of concern for the damage irresponsible oil and gas leasing could do to landowners, water resources, and Mesa Verde National Park. Drilling could exacerbate air pollution at Mesa Verde. This would harm tourism opportunities, and threats to water supplies could negatively affect landowners in the western part of the county.

A Denver Post review of Colorado Oil and Gas Conservation Commission data found that the Centennial State has been hit with 179 spills so far this year. And, despite what Gov. Hickenlooper likes to claim, a quarter of these spills have led to groundwater contamination. The State of Colorado is charged with holding oil and gas companies responsible for these spills and should levy appropriate fines. So it’s puzzling why Governor Hickenlooper recently gutted legislation that would have set mandatory minimum penalties and increased fines for the companies responsible for the spills.

The previous Congress was the first since the 1960s to protect no additional acres of public land. In an effort to not duplicate that distinction, Rep. Diana DeGette (D-Colo.) introduced legislation that designates three quarters of a million acres of backcountry land as wilderness in areas such as Browns Canyon, Dolores River Canyon, and the Flat Tops addition.

Park Rangers for Our Lands founder and former National Park Ranger Ellis Richard penned a guest blog for Huffington Post Green to talk about the briefing he delivered alongside NPCA’s Dr. James Nation, last week. A standing-room-only crowd listened and asked questions to learn about the threat that encroaching drilling and fracking operations pose to national parks, from a man who spent nearly 30 years protecting them.

Forbes took a look at the forces driving oil and gas drilling in America, and sure enough they’re economic in nature, not regulatory. As oil and gas executives and their allies in Congress continue to try and push more government handouts to billion-dollar companies, too much production could put oil right where natural gas is – in the red.


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Antrim Farms out License to Kosmos

Canada's Antrim Energy announced Thursday lunchtime (UK time) that it has farmed out 75-percent of Licensing Option 11/05 in the Porcupine Basin, offshore Ireland, to independent oil firm Kosmos Energy.

In return for its 75-percent stake, Kosmos will carry the full costs of a planned 3D seismic program within the license area and reimburse Antrim a portion of its exploration costs incurred on the blocks to date.

The license lies adjacent to the Skellig Block, which contains the Dunquin North and South prospects that have been estimated by license partners Providence Resources and Sosina Exploration to potentially contain recoverable hydrocarbons in excess of 1.7 billion barrels of oil equivalent.

Kosmos is the oil company that discovered the Jubilee field offshore Ghana, which currently produces around 110,000 barrels of oil per day. Thursday saw the firm involved in another deal offshore Ireland, when it agreed to farm into 85 percent of two licenses held by Europa Oil & Gas, also in the Porcupine Basin.

Antrim CEO Stephen Greer commented in a company statement:

"Antrim is very pleased to have attracted a partner to this licence, and especially a proven player in the discovery and development of the world class deep sea Cretaceous West African oil fields."

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Max Petroleum Reaches TD at Zhana Makat Well

Max Petroleum Plc, an oil and gas exploration and production company focused on Kazakhstan, announced that the ZMA-A24 development well in the Zhana Makat Field has successfully reached a total depth of 2,858 feet (871 meters), encountering hydrocarbons in Jurassic sandstone reservoirs in line with expectations.

The Company plans to complete the well and then place it on production as soon as practicable. The Zhanros ZJ-20 rig will now move to drill the ZMA-E5 development well in the Zhana Makat Field.

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