Cal Dive Makes a Big Splash with Pemex Contract

Pemex Exploracion y Produccion (PEMEX) awarded Cal Dive International, Inc. two additional contracts totaling $188 million on top of a previously awarded contract in March.

In March, Cal Dive received a contracted to engineer, procure, install and commission 7 miles (12 kilometers) of 8-inch subsea pipeline and associated tie-ins on four existing platforms located in the Abkatun-Pol-Chuc field in the Bay of Campeche.  

The newly-minted contract is for the procurement, installation and commissioning of a 29 mile-long pipeline of 20-inch diameter and associated tie-ins to an existing platform. Offshore work construction on this portion of the contract will commence in the third quarter using two of the company's vessels and a third-party unit.

The second contract is for the procurement, installation and commissioning of 6 miles (9 kilometers) of two medium diameter subsea pipelines and associated tie-ins to existing platforms. Offshore construction for this contract is expected to commence in the fourth quarter of 2013 and should be completed by the end of the second quarter 2014.

"With the $63 million Pemex contract we announced in March, total contract awards with Pemex this year currently stand at $250 million," stated Cal Dive's Chairman, President and Chief Executive Office Quinn Hebert, in a released statement. "These awards increase our total Company backlog to over $400 million, our highest level in five years. We believe these awards demonstrate Pemex's confidence in Cal Dive as a reliable contractor. These recent contract awards not only secure work for the second half of 2013, but also provide significant visibility for the first half of 2014 when our domestic business is historically slow due to the winter work season. Also, we continue to bid for additional work in Mexico that would mostly benefit our 2014 results."

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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OMV Petrom to Redevelop Oprisenesti Field

BUCHAREST - Romania's largest oil and gas group OMV Petrom plans to invest about 90 million euros ($115.7 million) by the end of this year to redevelop its Oprisenesti oil field in the eastern county of Braila, the company said in a statement Friday, news agency Mediafax reports. 

The project targets unlocking additional oil reserves of 8 million barrels of oil equivalent. 

"OMV Petrom is constantly investing in new technologies and secondary recovery methods to redevelop mature fields in Romania in order to improve the oil and gas recovery rate and stabilize production levels," said Johann Pleininger, member of OMV Petrom's executive board, responsible for exploration and production. 

Oprisenesti is a mature oil field, in production for almost 50 years, with a daily production of around 2% of the total oil production of Petrom in Romania, the oil company said. 

The redevelopment project entails drilling 30 new wells, as well as the construction of a water treatment station, a new pipeline transport network and three new pump stations. 

Oprisenesti is one of the six redevelopment projects Petrom plans to implement between 2013 and 2015. Total investment in the six projects is estimated at EUR400 million. 

Petrom is 51.01% owned by Austrian oil and gas group OMV AG, while the Economy Ministry holds a 20.64% stake.

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

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Rig Released for Nervesa Drill

Italy-focused Sound Oil confirmed Friday that the land rig it will use to drill the first appraisal well on its onshore Nervesa asset is on its way to the drill site.

Sound said that LP Drilling, the operator of the contracted TB2100S drilling rig, informed it that drilling operations in the Netherlands are now complete and that the rig has been released from the site in Holland.

Earlier in May, Sound said that it expected to spud the Nervesa appraisal well by the end of the month.

Nervesa is a gas discovery estimated at some 21 billion cubic feet. It was discovered by ENI in 1985. Sound CEO James Parsons said in March that the successful drilling of the asset will be “the first step in unlocking the significant value inherent in the Sound Oil portfolio”.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Kuwait: The Transformation Game

Kuwait's first commercial production of oil began in 1946, some 65 years ago. Up until 1990, its production had been dominated by a few reservoirs. Burgan Al Kabeer Field (Greater Burgan) had the biggest share of the total production reaching 70-80 percent.

At that time, all its production was natural flow, water free and average oil rate per well was significantly high. Reserve to production ratio was exceptionally high. In addition, Capital Investment and Operating Cost during that time were relatively low considering the high incremental production which reached almost 4 million barrels of oil per day (bopd) at one time.

However, such luxury and blessing can't continue forever. Over the past 20 years, and following the Iraqi invasion, Kuwait Petroleum Corporation (KPC) has exerted much effort to re-shape the oil sector to get ready for the future.

As the era of easy oil is drawing to a close, Kuwait seems to be ready for the next phase and have already started to plan for tapping the development of difficult reservoirs as well unconventional resources in the country.

"Talking about the contribution of easy oil is decreasing, and tougher to find and difficult oil is increasing," said Sami Al Rushaid, chairman and managing director, Kuwait Oil Company (KOC).

Kuwait is currently the fourth-largest oil exporter in the world, with its population of 5 million consuming only 10 percent of its oil domestically, and is now pushing at the limit of its production capacity. By 2020, Kuwait hopes to have production capacity of 4 million bopd, and has already announced a series of ambitious projects to make this happen.

"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 [manageable] transition to the more difficult oil structure," he added.

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Rig Released for Nervesa Drill

Italy-focused Sound Oil confirmed Friday that the land rig it will use to drill the first appraisal well on its onshore Nervesa asset is on its way to the drill site.

Sound said that LP Drilling, the operator of the contracted TB2100S drilling rig, informed it that drilling operations in the Netherlands are now complete and that the rig has been released from the site in Holland.

Earlier in May, Sound said that it expected to spud the Nervesa appraisal well by the end of the month.

Nervesa is a gas discovery estimated at some 21 billion cubic feet. It was discovered by ENI in 1985. Sound CEO James Parsons said in March that the successful drilling of the asset will be “the first step in unlocking the significant value inherent in the Sound Oil portfolio”.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Apache Shareholders Don't Approve Executive Compensation

Apache Corp. shareholders didn't approve the energy company's executive compensation plan for 2012 at its annual meeting Thursday, making their displeasure with the company's performance known.

Fewer than half of the voting shareholders, 49.8%, voted for the compensation plan for named executives. The vote Thursday is advisory and the board has no legal obligation to make changes to the 2012 pay package.

Apache spokesman John Roper said the company sees the vote as a comment on share performance. Apache shares are down 7.3% from a year ago. Shares fell 1.2% to $80.89 Thursday.

"We want to see our performance improve as well and to do so we need to hit 3% to 5% percent growth and execute our plan. We believe we have the right plan in place to do that," Mr. Roper said.

Apache has said it plans to sell $4 billion in assets this year to focus on North American onshore production, which it thinks will provide the best return, and to rid itself of land that hasn't been as profitable as it hoped. It will use the proceeds to pay down debt and buy back shares.

Chief Executive Steven Farris said during the meeting that he believes the company's share price has lagged because it has fallen short of production expectations and because of anxiety over its position in Egypt.

"We've got a great company, we do a great job, but in the last four or five quarters, we haven't done what we said we were going to do," he said. "We have missed estimates, and we cannot make commitments to shareholders we don't meet."

Praveen Kumar, executive director of UH Global Energy Management Institute at the University of Houston's C.T. Bauer College of Business, said the board doesn't have to do anything in response to Thursday's vote, but it might want to, as such a vote can indicate that shareholders are united in their dissatisfaction. Last year over 95% of shareholders voted to approve the company's executive compensation for 2011.

"It is probably a kid of firing across the bow, indicating to the board that there is shareholder resistance," Mr. Kumar said.

Also at Thursday's meeting, shareholders elected three directors to Apache's board.

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

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Petroceltic to Farm Out More of Isarene

North Africa and Mediterranean-focused Petroceltic International reported Friday that it is close farming out a further 18.375-percent interest in its Isarene Permit, onshore Algeria. The Isarene Pemit contains the Ain Tsila gas and condensate field.

Petroceltic said the farm-out process is "substantially complete", but is still subject to partner and regulatory approvals that could take several months. The firm also said that it would be seeking to complete the farm-out prior to it transferring its shares to the official lists of the UK Listing Authority and the Irish Stock Exchange in order to make the farm-out process smoother.

Petroceltic Chief Executive Brian O'Cathain commented in a statement:

"The second Ain Tsila farm-out is a major commercial milestone for Petroceltic. The company's decision to give it priority over the listing at this time is a prudent measure to help ensure the farm-out moves forward smoothly in the months ahead. We are still fully committed to the listing."

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