ExxonMobil Taps FMC for Julia Equipment

Exxon Mobil Corp. has awarded FMC Technologies, Inc. a subsea equipment order for the Julia development in the Gulf of Mexico. FMC's scope of supply includes six subsea trees, a manifold and associated tie-in equipment.

"FMC Technologies is pleased to provide ExxonMobil with subsea systems for this offshore project," said Tore Halvorsen, FMC Technologies' senior vice president, subsea technologies, in a statement. "We look forward to supporting ExxonMobil as they overcome the technological challenges of this ultra deepwater development."

Julia was discovered in 2007 and is estimated to hold almost 6 billion barrels of oil. The field is located in the Walker Ridge area in about 7,000 feet of water. The $4 billion project is expected to start producing in 2016. Phase 1 of the development will be designed to produce 34,000 barrels of oil per day from six subsea wells connecting to the Jack/St. Malo production facility.

Development drilling on the field is planned to kick-off in 2014 in waters ranging from 4,000 to 8,700 feet.

ExxonMobil operates the field with a 50 percent stake while Statoil holds the remaining percentage.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Ruspetro Reports Progress with Appraisal Drilling

West Siberia-focused Ruspetro reported Wednesday that it has made progress with appraisal drilling at its field in the Khanty-Mansiysk region.

Ruspetro said that preparations – including pipelines, power, road and bridge access – had been completed at the Pad 4 area in the gas/condensate part of the field and that drilling had commenced. The company will use drilling here to continue its appraisal and characterization of the gas/condensate formations.

Meanwhile, rig build-up preparations are ongoing at the Pad 23 area, which is located in the crude oil-producing western part of the field, and two further wells are to be converted into water injectors in the Pad 21 area during the third quarter of 2013.

Ruspetro said that its average production rate for the first quarter of the year was 5,986 barrels of oil per day. During April, this production rate fell to 5,452 bopd.

Ruspetro Chief Executive Don Wolcott commented in a statement:

"In line with the plan laid out at our Strategic Review Presentation of 12 April, we are pleased with the progress made in our appraisal drilling program. Pad 4 has now been completed, with infrastructure in place and drilling commenced. Appraisal drilling from Pad 4 will enable us to further delineate the gas and condensate reservoir in the North.

"Drilling from Pad 23 will delineate the productive sands going west from the prolific crude oil producing Pad 21 area. Our discussions with Sberbank are progressing and we are confident that they will be completed in the first half of 2013."

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Chevron, YPF Sees Argentina as Possible Shale-Oil Pioneer

BUENOS AIRES - Just as U.S. companies have revolutionized the global shale-gas industry, businesses working in Argentina have the opportunity to set new standards in shale-oil production, according to executives from Argentina's state-run oil company, YPF SA, and Chevron Corp.

YPF Chief Executive Miguel Galuccio and Ali Moshiri, president of Chevron's Latin America and African operations, said Argentina's unique geology and infrastructure give the country advantages over other shale-oil and gas producing nations.

"From the geological point of few, after the U.S., Argentina is No. 2. Some people say China is No. 2 but really...in terms of shale oil Argentina is No. 2," Mr. Moshiri said in a meeting with the foreign press Wednesday.

Argentina's shale-oil and shale-gas reserves are located mainly in the Vaca Muerta formation, which means "dead cow" in Spanish, in the Andean province of Neuquen.

"The potential in Vaca Muerta is big enough to make Argentina energy independent," Mr. Moshiri said.

And that is exactly what Argentina is seeking after years of declining oil and natural-gas production turned the country into a net energy importer. Argentina now spends billions of dollars each year to import expensive gas from Bolivia and Trinidad and Tobago even though it is sitting on vast reserves.

Argentina ranks third in the world, behind China and the U.S., in potentially recoverable shale-gas reserves, with 774 trillion cubic feet, according to a study by the U.S. Energy Information Administration. Argentina is also thought to be home to vast quantities of shale oil.

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Statoil, Noble Ink Deal for Newbuild Jackup

Statoil ASA has awarded a drilling contract valued at $655 million, including mobilization costs, to Noble Corp. for a newbuild ultra-high specification jackup.

The rig, an enhanced version of Statoil's Cat J specifications, will begin a four-year drilling contract in the third quarter of 2016 for Statoil at the Mariner project in the UK North Sea.  Statoil is operator of Mariner, located on the East Shetland Platform approximately 150 miles east of the Shetland Isles.

The newbuild jackup will be based on the Gusto MSC CJ-70-150 design, and uniquely suited to operate over a very large platform or in a subsea configuration in the Norwegian sector.  It will be capable of operating in up to 492 feet (150 meters) of water in harsh environments, with total drilling depth capacity of 33,000 feet (10,000 meters). The rig also will be capable of deploying either a surface or subsea blowout preventer when drilling wells in these challenging environments.

"We believe that the fundamentals of the high-specification jackup market segment will continue to be strong in the decade ahead," said Noble President and Chief Executive Officer David W. Williams in a statement Tuesday. "This unit is designed to meet some of the industry's most stringent operating requirements and supports Noble's ongoing commitment to increasing the technological and operational capabilities of our fleet."

Zug, Switzerland-based Noble is negotiating a contract for the new jackup, which will have construction and delivery costs of approximately $690 million, including project management, spares and start-up costs, but excluding capitalized interest.

The deal will position Noble strategically with a key North Sea operator, and continues to recent trend among offshore drillers opting to build jackups versus additional ultra-deepwater floaters, according to a May 14 analyst note from Tudor Pickering and Holt.

Noble has eight jackups currently operating in the North Sea, and is expected to deploy several of its JU-3000N newbuilds to the region, but has no rigs currently working for Statoil, according to a May 14 GHS Research analyst note.  GHS also sees opportunity for second newbuild in the future. However, the economics of the deal aren't attractive when the build cost and cash flows are combined versus the recent newbuild drillship and jackup awards obtained by Noble.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Second DST Test Successfully Completes Lengo Appraisal

AWE Limited reported that a second successful drill stem test was conducted at the Lengo-2 appraisal well that is situated in the Bulu Production Sharing Contract offshore East Java, Indonesia. The test achieved a maximum gas flow rate of 21.2 million standard cubic feet per day (MMcf/d).

AWE, a partner on the field, reported that two further cores were cut in the Kujung I reservoir from 2,485 to 2,571 feet, recovering an estimated 79 feet of carbonate Kujung I reservoir formation. Gas samples were collected and a final result of the compositional analysis from both DST tests is expected in coming weeks.

"The results from the two DSTs at Lengo-2, combined with the data we have previously acquired from the Lengo-1 well, will be used by the Joint Venture as the basis for evaluating the future commercial development potential of the Lengo field," said Bruce Clement, AWE's managing director in a statement. "The growing domestic energy market in East Java is an attractive destination for this gas resource, should it prove commercial."

The Randolph Yost (300' ILC) jackup is drilling the appraisal well to a total depth of about 2,717 feet. Upon completion of the logging program, the well will be plugged and abandoned as planned.

KrisEnergy Satria Limited operates the license with a 42.5 percent stake. Partners include AWE Limited (42.5%), PT Satria Energindo (10%) and PT. Satria Wijaya Kusuma (5%).

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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.
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Greenland Minister: Will Issue New Oil Exploration Licenses

COPENHAGEN - Greenland's new government has clarified its stance on allowing more offshore oil exploration with the small Arctic territory's new minister of industry and minerals saying that new licenses will be handed out as current licenses are turned in.

Jens-Erik Kirkegaard, in an interview at a conference in Copenhagen, said "we would like to stick to the current level of activity." He said more licenses will be handed out--including licenses for new areas--once current licenses are turned in, and more licenses will be granted after old ones are turned in 2013 and likely also in 2014.

The total level of exploration activity in Greenland isn't expected to increase or decline for the time being.

Mr. Kirkegaard's statements differ from the stance that the Social Democratic Siumut party--under newly installed Prime Minister Aleqa Hammond--was expected to take. In March, after her party took the largest number of seats in parliamentary elections, coalition agreements said that the government would be "reluctant" to offer more licenses and that existing licenses would be under more scrutiny.

The disclosure was greeted with optimism by environmental activists such as Greenpeace due to the impression that Greenland would halt exploration activities. Mr. Kirkegaard, however, sought to clarify the government's position.

Greenland technically belongs to the Kingdom of Denmark and relies on the Danes for massive subsidies needed to keep public finances afloat. However, Greenland operates under a self-rule regime and is looking to better develop its massive mineral and oil reserves so that it can become more financially independent from Denmark.

Among the companies holding licenses in Greenland are Royal Dutch Shell PLC, Statoil ASA and A.P. Moller-Maersk AS. The U.S. Geological Survey has estimated that the Greenlandic basin contains around 17 billion barrels of oil, but so far none has been extracted for export.

Dealing with Greenland's rich collection of resources will be atop Ms. Hammond's agenda after her Siumut Party collected 43% of the votes in a March election. The Inuit Ataqatigiit, or IA, previously ruled Greenland and, over the past four years, has worked to open up the secluded country to mining companies and others capable of advancing a variety of mining projects, including a plethora of rare-earth minerals, natural gas and other resources.

Ms. Hammond has vowed to put in place more-stringent financial requirements on foreign companies looking to eventually profit in Greenland. In March, she told The Wall Street Journal that she plans to demand royalties from companies as they set up exploitation activities.

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ConocoPhillips Awards FMC with Bayu Undan Phase III Contract

ConocoPhillips Australia Pty. Ltd. and FMC Technologies Inc. have signed a contract for the supply of subsea equipment for its Bayu-Undan gas and condensate project in the Timor Sea. The contract is valued at $26 million.

Bayu Undan, which has been in production since April 2004, is undergoing a third phase of development. The contractor will supply subsea trees, wellheads, jumper kits and associated control systems.

During the first half of 2013, the Bayu-Undan Phase 3 development will focus on procuring long-lead items and securing contracts for a semisubmersible drilling rig, the company said. A final investment decision is expected in mid-2013 and will be followed by further detailed engineering and procurement activities. Drilling is anticipated to commence in the second quarter of 2014.

"FMC Technologies is pleased to provide ConocoPhillips with the subsea systems required to develop this field," said Tore Halvorsen, FMC Technologies' senior vice president, subsea technologies, in a statement.

The field sends hydrocarbons to the Darwin LNG plant which converts gas from the field into LNG for sale to Tokyo Electric and Tokyo Gas in Japan. In 2012, the company sold 148 billion gross cubic feet of LNG.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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EnQuest on Track for Kraken Go-Ahead

UK independent EnQuest reported Wednesday that it is on course to submit a field development plan for its Kraken development in the UK North Sea during the current quarter. The firm said it expected to sanction the development of Kraken later in 2013.

"EnQuest's growth and execution remain on course.  We are on track to submit the field development plan (FDP) for Kraken by mid-year and to sanction the project later in 2013.  The well results in north Kraken are in line with expectations and give further confidence in the field development," EnQuest Chief Executive Amjad Bseisu commented in a company update released Wednesday morning.

Bseisu also noted that EnQuest completed its acquisition of eight percent of the Alba field, which he said has similar characteristics to Kraken, in the first quarter.  

"Alba adds four non-operated wells to the twelve wells that EnQuest had originally planned for 2013," he said.

Meanwhile, the firm's Alma/Galia project remains on track for first production during the fourth quarter of 2013 and dry dock work on the EnQuest Producer vessel is now complete.

EnQuest said that its average production during the first four months of the year amounted to 20,494 barrels of oil equivalent per day, compared with 20,976 boepd over the same period in 2012.

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Baghdad Blasts Turkey/Kurdistan Deal

ISTANBUL - A Turkish state-run oil firm struck a deal with Exxon Mobil Corp. and Iraq's semiautonomous Kurds to develop projects in northern Iraq, Turkey's leader said Tuesday, an agreement fraught with political risks for the energy-rich region. 

The deal thrust Turkey into a long-standing feud between Iraq's central government and the Kurdistan Regional Government over who has rights to northern Iraq's vast energy resources and raised tensions with Baghdad, which called it illegal. 

The deal could help underpin a peace accord that Turkey is negotiating to end a three-decade conflict with its own Kurdish population as it enters a delicate phase, analysts say. It could also help Turkey meet rising energy demand and raise Ankara's sway in the oil-rich region next door. 

Prime Minister Recep Tayyip Erdogan's announcement came two days before he was scheduled to meet in Washington with President Barack Obama, whose support could help propel the deal forward. 

The White House is caught between a desire to support the aspirations of Turkey, a Washington ally, and trepidation that empowering regional Iraqi authorities like the Kurds could alienate Iraq Prime Minister Nouri al-Maliki, who is seeking to extend Baghdad's influence across the divided country. 

U.S. officials also fear setting a precedent for allowing regional governments to strike independent resource deals could destabilize Mr. Maliki's government during a time when Sunni-Shiite tensions in Iraq are mounting. 

The Obama administration called for talks between Iraq's central government and the regional Kurdish government to resolve the issue. "Our position on energy trade from Iraq has been consistent and remains unchanged: The United States doesn't support oil exports from any part of Iraq without the appropriate approval of the federal Iraqi government," said Caitlin Hayden, a spokeswoman for the National Security Council. 

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Revised Hydraulic Fracturing Rule Available for Comment Period

An updated draft rule that would empower the Bureau of Land Management (BLM) to regulate hydraulic fracturing on U.S. federal and Indian lands will be made available for an additional 30-day public comment period before the rule is finalized.

The "common sense" regulatory update is needed to bring rules originally written in the time of Sony Walkmans and Atari video games into the 21st century, Secretary of the Interior Sally Jewell told reporters in a conference call on Thursday.

"Regulations need to keep pace with advances in technology," said Jewell, noting her oil and gas industry experience and knowledge of how hydraulic fracturing works and the need to safely tap U.S. oil and gas resources.

BLM, an agency within the Department of Interior (DOI), initiated plans to update federal hydraulic fracturing regulations in late November 2010, when federal and state officials and NGO representatives discussed the need to modernize hydraulic fracturing regulations. Using information gathered from eight public forums across the United States and consultation with tribal officials, an initial proposed rule was written and released in May 2012, said DOI Deputy Secretary David J. Hayes during the conference call.

The updated proposed rule takes into account the more than 177,000 comments gathered in a 120-day comment period last year from the oil and gas industry, tribal officials, and other stakeholders. In January, BLM said it would publish an updated proposal to maximize flexibility, facilitate coordination with state practices and ensure operators utilize best practices on public lands.

"We look forward to receiving additional comments, and feel it is important to move forward as stewards of the state with sound regulations," Hayes noted.

The updated rule focuses solely on hydraulic fracturing and retains the three main components of the original proposal, requiring operators to disclose the chemicals they use in hydraulic fracturing, improving assurances for wellbore integrity to confirm that fluids are not contaminating groundwater, and requiring oil and gas operators to have a water management plan in place to handle flowback water.

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Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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