E&P Notes (November 2022)
Authors: JPT staff _ 
Published: December 2022

Guyana Prepares for Offshore Licensing Round

The Guyanese government is preparing to launch its first bidding round for offshore exploration and production of hydrocarbon blocks. New fiscal terms and conditions are being finalized which the country hopes will allow it to gain the maximum economic benefits.

The 2022 bidding round, which according to the nation’s Department of Public Information, is expected to be officially launched soon and will be opened for several months to give interested companies sufficient time to prepare their competitive packages and bid to win the available acreages offshore.

With the upcoming bidding round the government expects Guyana’s offshore areas to emerge as a potential super basin with over 11 billion BOE discovered to date.

The process seeks to ensure the country gets a fairer share of revenues from oil and gas resources through improved fiscal arrangements, as well as safeguard the safety of people and the environment by following international best practices in offshore development.

The new round also aims to be competitive with other global energy projects and assure investors of stability, predictability, and security of any investment. The government seeks to balance its developmental agenda with its climate change goals.

Ault Drills Successful Smackover Well in Mississippi

Ault Energy completed drilling the Harry O’Neal 20-9 No. 1 in Holmes County, Mississippi, and logged productive oil results across multiple pay zones in the Smackover formation. Completion work has begun on the well, and it is expected to be on stream soon. Ault was formed by parent BitNile this past summer to make strategic oil and gas acquisitions.

The company obtained participation rights with for the O’Neal No. 1 well and future oil wells when it invested $12 million in Ecoark Holdings in June. Ault Energy exercised its participation right and acquired a 40% working interest in the well, which is the first project in an expected long-term partnership between Ecoark and Ault parent companies White River and BitNile, respectively, with the intention to drill approximately 100 oil wells over 5 years.

White River’s next drilling project is expected to be a 14,000-ft-deep vertical oil well in the Wilcox, Austin Chalk, and Tuscaloosa Marine Shale formations in the Coochie oil field in Concordia Parish, Louisiana. White River also plans to drill three consecutive deep vertical drilling projects at approximately 13,000 ft in the Rodessa and Hosston sand formations on the Pisgah Field Lease in Rankin County, Mississippi.

Hess Brings Another Llano Well On Stream

Hess brought its Llano-6 well in the Gulf of Mexico (GOM) on stream. The new well, like the other Llano wells, is tied back to Shell’s Auger facility. Hess is planning increased activity in the Llano area based on the success of Llano-6, quality of the reservoir, and adjacent high-value prospects.

Hess holds a 50% interest in the long-producing Llano field, located about 150 miles off the Louisiana coast in the Garden Banks area in an estimated 2,600 ft of water. Shell, the operator, holds a 27.5% interest, and ExxonMobil has the remaining 22.5%. The field was discovered in 1997 and achieved first oil in 2004.

Recent seismic reprocessing and analysis confirmed additional development opportunities in the field. Hess expects more high-value opportunities at Llano with wells planned for 2023 and 2024 and is finalizing plans for a year-long drilling campaign starting in early 2023 that will focus on tieback and hub-class opportunities in the GOM.

Mubadala Discovers Gas Field Off Malaysia

Mubadala Energy and its partners have announced a new gas discovery offshore Malaysia via the Cengkih-1 exploration well in Block SK 320. The exploration well was drilled to a total depth of 1680 m and encountered a 110-m gas column in the Miocene Cycle IV/V pinnacle carbonate reservoirs. The Cengkih-1 well is located nearly 220 km off the Bintulu coast in Sarawak.

The discovery is near the Pegaga gas field, also located within Block SK 320. Mubadala Energy and its partners began production from the Pegaga field in March 2022.

The Pegaga field has been developed with an integrated central processing platform built to handle throughput of 550 MMcf/D of gas plus condensate. A new pipeline transports gas from the platform into an existing offshore gas network and subsequently to the onshore Petronas LNG Complex.

Mubadala Energy is the operator of Block SK 320 with a 55% stake. Partners Petronas and Sarawak Shell hold 25% and 20%, respectively.

Petrobras Progresses Sale of Potiguar Basin Assets

Petrobras entered the binding phase of the sale of 40% of its stake in the BM-POT-17 exploratory concessions, in which the Pitu well discovery assessment plan is being developed (Blocks POT-M-853 and POT-M-855), and the POT-M-762_R15 concession (Block POT-M-762), located in deep waters in the Potiguar Basin—Equatorial Margin–off the coast of Rio Grande do Norte. Petrobras currently holds a 100% stake in these concessions and will continue as operator of the partnership after the sale.

Petrobras said the search for partnership in these assets is aligned with its portfolio management strategy and the improvement of the company’s capital allocation, aiming to maximize value.

POT-M-853 and POT-M-855 are exploratory blocks acquired in the 7th Bidding Round of the National Petroleum Agency (ANP) in 2006. Petrobras is conducting the discovery assessment plan for the Pitu well, with a firm commitment to drill an exploratory well (Pitu Oeste) scheduled for 2023.

POT-M-762 is an exploratory block acquired in the 15th ANP Bidding Round in 2018. Petrobras plans to drill the Anhangá well between 2023 and 2024.

TotalEnergies Sews Up PSA on Oman’s Block 11

TotalEnergies, along with its partners, has signed an Exploration and Production Sharing Agreement (EPSA) with the Ministry of Energy and Minerals (MEM) of the Sultanate of Oman for onshore Block 11. The first stage of the EPSA activities will see seismic acquisition in late 2022, with a first exploration well planned to be drilled in 2023.

TotalEnergies will hold a 22.5% interest in the block, OQ 10% and Shell with 67.5% will be the operator. Block 11 contains undeveloped discoveries and exploration potential.

“Our recent activities in Oman are a demonstration of TotalEnergies’ strategy of transformation into a multi-energy company,” said Laurent Vivier, senior vice president Middle East and North Africa, exploration and production, at TotalEnergies. “Today’s entry into the Block 11 gives us the opportunity to unlock additional potential to meet domestic and export gas demand. It strengthens our strategic relationship with the Sultanate of Oman, as illustrated last December by our entry into the neighboring Block 10 gas concession and the start of construction last July of 17-MW peak solar photovoltaic systems providing power to a desalination plant.”

In 2021, TotalEnergies’ production in Oman was 39,000 BOE/D. The operator produces oil in Block 6 (4%), as well as LNG through its participation in the Oman LNG (5.54%)/Qalhat LNG (2.04% via Oman LNG) liquefaction complex with an overall capacity of 10.5 mtpa. In 2021 TotalEnergies signed a concession agreement to develop natural gas resources on the onshore Block 10 (26,55%), with first gas expected in 2023. TotalEnergies also operates exploration Block 12 (80%).

India Lets New Contracts Related to Small Discovered Fields, CBM

The Indian government has signed contracts for 31 discovered small fields under the third round of bidding, and for four coalbed methane (CBM) blocks under the fifth round of bidding with 14 domestic companies. These blocks have been awarded.

Among these blocks, the Oil and Natural Gas Corporation (ONGC) has signed six contracts for discovered small fields, with three each for fields in the Arabian Sea and Bay of Bengal. These include four contract areas as sole bidder and two contract areas in partnership with Indian Oil Corporation Ltd.

The ONGC has also signed two contracts for CBM fields situated in Jharkhand and Madhya Pradesh. Cairn Oil & Gas has signed pacts for eight fields.

The third round for discovered small fields was launched by the government in June 2021 where 75 fields were offered under 31 contract areas. The CBM bidding round was launched in September 2021, which concluded at the end of May 2022 with 15 blocks under offer.