E&P Notes (December 2020)
Authors: JPT staff _ 
Published: January 2021

China Shale-Gas Field Sets Production Record

Sinopec recorded China’s highest daily output of shale gas at 20.62 million cubic meters (Mcm) at its Fuling shale-gas field in Chongqing, China, a key gas source for the Sichuan-East gas pipeline.

The first major commercial shale-gas project in China, Fuling has continuously broken records for the shortest gasfield drilling cycle while significantly increasing the drilling of high-quality reservoirs covering more than 3 million m, according to Sinopec. Gasfield production construction was also expanded to raise production capacity.

The company said the field maintains a daily output of 20 Mcm, producing an estimated 6.7 Bcm per year.

Apache and Total Plan Suriname Appraisals

Apache filed appraisal plans for its Maka and Sapakara oil discoveries in block 58 offshore Suriname. The company said another submission is expected for Kwaskwasi, the largest find in the block, by the end of the year.

Operations continue for Keskesi, the fourth exploration target. There are plans to drill a fifth prospect at Bonboni in the North-Central portion of the concession.

Partner company Total is assuming operatorship of the block ahead of next year’s campaigns.

BP Emerges as Sole Bid for Offshore Canada Parcels

BP was the only operator to place a bid in the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) Call for Bids NL20-CFB01, which offered 17 parcels (4,170,509 hectares) in the eastern Newfoundland region.

The successful bid was for Parcel 9 (covering 264,500 hectares) for $27 million in work commitments from BP Canada Energy Group. Subject to BP satisfying specified requirements and receiving government approval, the exploration license will be issued in January 2021.

No bids were received for the remaining 16 parcels, which may be reposted in a future Call for Bids.

Criteria for selecting a winning bid is the total amount the bidder commits to spend on exploration of the parcel during the first period of a 9-year license, with a minimum acceptable bid of $10 million in work commitments for each parcel.

Beach Energy To Drill Otway Basin Well

Beach Energy plans to drill at its Artisan-1 well about 32 km offshore Victoria, Australia, in the Otway basin, before the end of 2021. The well, located on Block Vic/P43, was to be spudded in 1H 2020 but was delayed due to COVID-19.

The timeframe for drilling was confirmed by the National Offshore Petroleum Safety and Environmental Management Authority, which also said Beach is keeping open the option to suspend the well and develop it, pending reservoir analysis.

Anchors, mooring chains, and surface buoys have already been laid for the well, which is in a water depth of approximately 71 m. The well is expected to take approximately 35–55 days to drill, depending on the final work program and potential operational delays. Diamond Offshore’s semisubmersible Ocean Onyx was contracted for the drilling program.

Artisan is the first of Beach’s planned multiwell campaigns, which also include development wells at the Geographe and Thylacine fields.

Hess Completes Sale of Interest in Gulf of Mexico Field

Hess completed the sale of its 28% working interest in the Shenzi Field in the deepwater Gulf of Mexico (GOM) to BHP, the field’s operator, for $505 million.

Shenzi is a six-lease development structured as a joint ownership: BHP (operator, 44%), Hess (28%), and Repsol (28%).

The acquisition would bring BHP’s working interest to 72%, adding approximately 11,000 BOE/D of production (90% oil).

The sale is expected to close by December 2020.

Hess CEO John Hess said proceeds from the sale will help fund the company’s investment in Guyana.

Greenland Opens New Offshore Areas

Greenland opened three new offshore areas for application of oil and gas exploitation licenses off West Greenland. The areas are Baffin Bay, Disko West, and Davis Strait.

The country also said it is working on an oil strategy to reduce geological uncertainty by offering an investment package to companies that engage in its Open Door Procedures. The procedures are a first-mover advantage to remove national oil company Nunaoil, as a carried partner, reducing turnover and surplus royalties. It is estimated to reduce the government take by 51.3% to 40.6%.

Shell and Impact Oil & Gas Agree to South Africa Farmout

Africa Oil announced Impact Oil & Gas entered into two agreements for exploration areas offshore South Africa. The company has a 31.10% share-holding in Impact, a privately owned exploration company.

Impact entered into an agreement with BG International, a Shell subsidiary, for the farm-out of a 50% working interest and operatorship in the Transkei and Algoa exploration rights. Shell was also granted the option to acquire an additional 5% working interest should the joint venture (JV) elect to move into the third renewal period, expected in 2024.

Algoa is located in the South Outeniqua Basin, east of Block 11B/12B, containing the Brulpadda gas condensate discovery and where Total recently discovered gas condensate. The Transkei block is northeast of Algoa in the Natal Trough Basin where Impact has identified highly material prospectivity associated with several large submarine fan bodies, which the JV will explore with 3D seismic data and then potential exploratory drilling. Impact and Shell plan to acquire over 6,000 km² of 3D seismic data during the first available seismic window following completion of the transaction. This window is expected to be in the Q1 2022.

After the closing of the deal, Shell will hold a 50% interest as the operator and Impact will hold 50%.

Impact also entered into an agreement with Silver Wave Energy for the farm-in of a 90% working interest and operatorship of Area 2, offshore South Africa.

East and adjacent to Impact’s Transkei and Algoa blocks, Area 2 complements Impact’s existing position by extending the entire length of the ultradeepwater part of the Transkei margin. Together, the Transkei and Algoa Blocks and Area 2 cover over 124,000 km2.

Area 2 has been opened by the Brulpadda and Luiperd discoveries in the Outeniqua Basin and will be further tested during 2021 by the well on the giant Venus prospect in ultradeepwater Namibia, where Impact is a partner. Impact believes there is good evidence for this Southern African Aptian play to have a common world-class Lower Cretaceous source rock, similar excellent-quality Apto-Albian reservoir sands, and a geological setting suitable for the formation of large stratigraphic traps.

Following completion of the farm-in, Impact will hold 90% interest and serve as the operator; Silver Wave will hold 10%.

Petronas Awards Sarawak Contract to Seismic Consortium

The seismic consortium comprising PGS, TGS, and WesternGeco was awarded a multiyear contract by Petronas to acquire and process up to 105,000 km2 of multisensor, multiclient 3D data in the Sarawak Basin, offshore Malaysia.

The contract award follows an ongoing campaign by the consortium in the Sabah offshore region, awarded in 2016, in which over 50,000 km2 of high-quality 3D seismic data have been acquired and licensed to the oil and gas industry to support Malaysia license round and exploration activity.

The Sarawak award will allow for a multiphase program to promote exploration efforts in the prolific Sarawak East Natuna Basin (Deepwater North Luconia and West Luconia Province).

The consortium is planning the initial phases and is engaging with the oil and gas industry to secure prefunding ahead of planned acquisition, covering both open blocks and areas of existing farm-in opportunities.

Total Discovers Second Gas Condensate in South Africa

Total made a significant second gas condensate discovery on the Luiperd prospect, located on Block 11B/12B in the Outeniqua Basin, 175 km off the southern coast of South Africa. The discovery follows the adjacent play-opening Brulpadda discovery in 2019.

The Luiperd-1X well was drilled to a total depth of about 3,400 m and encountered 73 m of net gas condensate pay in well-developed, good-quality Lower Cretaceous reservoirs. Following a coring and logging program, the well will be tested to assess the dynamic reservoir characteristics and deliverability.

The Block 11B/12B covers an area of 19,000 km2, with water depths ranging from 200 to 1800 m. It is operated by Total with a 45% working interest, alongside Qatar Petroleum (25%), CNR International (20%), and Main Street, a South African consortium (10%).

The Luiperd prospect is the second to be drilled in a series of five large submarine fan prospects with direct hydrocarbon indicators defined utilizing 2D and 3D seismic data.

BP Gas Field Offshore Egypt Begins Production

BP started gas production from its Qattameya gasfield development ‎offshore Egypt in the North Damietta offshore concession.

Through BP’s joint venture Pharaonic Petroleum Company working with state-owned Egyptian Natural Gas Holding Co., the field, which is ‎expected to produce up to 50 MMcf/D, was developed through a one-well subsea development and tieback to existing infrastructure.‎

Qattameya, whose discovery was announced in 2017, is located approximately 45 km west ‎of the Ha’py platform, in 108 m of water. It is tied back to the Ha’py and Tuart field ‎development via a new 50-km pipeline and connected to existing subsea ‎utilities via a 50-km umbilical.

‎BP holds 100% equity in the North Damietta offshore concession in the East Nile Delta. ‎Gas production from the field is directed to Egypt’s national grid.