E&P Notes (April 2022)
Authors: JPT staff _ 
Published: June 2022

Eni Starts Area 1 Production off Mexico via MODEC FPSO

MODEC said first oil has flowed through FPSO MIAMTE MV34 operating in the Offshore Area 1 block in the Bay of Campeche off Mexico. The contractor was appointed by Eni Mexico for the supply, charter, and operation of the FPSO in the Eni-operated Offshore Area 1 block in 2018. The charter contract will run for an initial 15 years, with options for extension every year thereafter up to 5 additional years.

Moored in a water depth of approximately 32 m some 10 km off Mexico’s coast, the FPSO is capable of handling 90,000 B/D of oil, 75 MMcf/D of gas, and 120,000 B/D of water injection with a storage capacity of 700,000 bbl of oil.

The FPSO boasts a disconnectable tower yoke mooring system, a first-of-its-kind design in the industry. The system was developed to moor the FPSO in shallow water, while also allowing the unit to disconnect its mooring and depart the area to avoid winter storms and hurricanes in the Gulf of Mexico. The mooring system was developed by MODEC subsidiary SOFEC Inc. The mooring jacket was fabricated in Altamira, Mexico.

Eni Starts Production from Ndungu EP Development

Italy’s Eni has started production from the Ndungu Early Production (EP) development in Block 15/06 of the Angolan deep offshore, via the Ngoma FPSO. With an expected production rate in the range of 20,000 B/D, the project will sustain the plateau of the Ngoma, a 100,000-B/D, zero-discharge, and zero-process-flaring FPSO, upgraded in 2021 to minimize emissions.

A further exploration and delineation campaign will be performed in Q2 2022 to assess the full potential of the overall assets of Ndungu.

Ndungu EP is the third startup achieved by Eni Angola in Block 15/06 in the past 7 months, after Cuica Early Production and the Cabaca North Development Project.

Block 15/06 is operated by Eni Angola with a 36.84% share. Sonangol Pesquisa e Produção (36.84%) and SSI Fifteen Ltd. (26.32%) comprise the rest of the joint venture.

Aramco Discovers Natural Gas in Four Regions

Saudi Aramco has discovered natural gas fields in four regions of the kingdom, the Saudi Press Agency (SPA) reported, citing Energy Minister Prince Abdulaziz bin Salman. The fields were found in the Empty Quarter desert located in the central area of the kingdom, near its northern border and in the eastern region, he said, according to SPA.

Saudi Arabia wants to increase gas production and boost the share of natural gas in its energy mix to meet growing electricity consumption and to make more crude available for export.

The minister said an unspecified number of fields were discovered and he mentioned five by name: Shadoon, in the central region; Shehab and Shurfa, in the Empty Quarter in the southeastern region; Umm Khansar, near the northern border with Iraq; and Samna in the eastern region. Two of the gas fields, Samna and Umm Khansar, were said to be “nonconventional” and possibly shale finds.

Lukoil Completes Area 4 Deal in Mexico

Russian producer Lukoil has completed a deal to become a lead stakeholder in an Area 4 shallow-water asset adjacent to Tabasco and Campeche in Mexico. Under the deal, Lukoil has acquired a 50% stake in the asset from US independent Fieldwood Energy, which filed for US bankruptcy protection in August 2020, for $685 million. The original deal was priced at $435 million; the additional $250 million is related to expenditures Fieldwood incurred since 1 January 2021.

Fieldwood committed to invest $477 million to increase oil production from the Ichalkil and Pokoch fields from the current level of 25,000 B/D to a plateau level of 115,000 B/D.

Situated in water depths between 35 and 45 m, the fields’ recoverable hydrocarbon reserves amount to 564 million BOE, more than 80% of which is crude oil. Production started in Q4 2021; current average oil production has exceeded 25,000 B/D.

The approved work program includes drilling three development wells (two on Ichalkil and one on Pokoch), upgrading three production platforms, and performing seismic reprocessing and petrophysical studies.

The remaining 50% stake in Area 4 is held by operator PetroBal, a subsidiary of Mexico’s GrupoBal.

Petrobras Sells Polo Norte Capixaba Field Cluster

In line with its strategy to concentrate resources on deepwater and ultradeepwater assets, Brazil’s Petrobras has sold 100% of its interest in Norte Capixaba cluster to Seacrest Exploração e Produção de Petróleo Ltda for $544 million, including a $66-million contingent payment. The cluster comprises four producing fields—Cancã, Fazenda Alegre, Fazenda São Rafael, and Fazenda Santa Luzia—and produced 6,470 BOE/D in 2021. The deal also includes the Norte Capixaba Terminal (TNC) and all production facilities.

NewMed Targets Morocco Market Entry

Israel-based NewMed Energy, formerly Delek Drilling, has identified Morocco as “a country with enormous geological and commercial potential,” in particular the Moroccan coastal areas in the Mediterranean and North Atlantic.

The announcement comes a day after the Moroccan Minister of Industry and Trade, Ryad Mezzour, and his Israeli counterpart, Orna Barbivai, signed an MOU aimed at promoting investments and exchanges between the two countries in the digital design, food, automotive, aviation, textile, water technologies and renewable energies, medical equipment, and the pharmaceutical industries.

In September 2021, the Israeli oil and gas exploration company obtained from the Moroccan ministry the exploration and study rights of the Dakhla Atlantic Block, which has an area of about 109000 km2.

ExxonMobil Sells Nigerian Assets to Seplat

ExxonMobil has agreed to sell its shallow-water assets in Nigeria to Seplat Energy for $1.28 billion plus a contingent consideration of $300 million. Seplat said it is acquiring a 40% operating stake in four oil leases to nearly triple its annual net production to 146,000 BOE/D.

The deal also includes the Qua Iboe export terminal and a 51% interest in the Bonny River Terminal and natural gas liquids recovery plants at EAP and Oso. It does not include any of ExxonMobil’s deepwater fields in Nigeria.

TotalEnergies Discovers Large Oil Field off Namibia

TotalEnergies has made a significant discovery of light oil with associated gas on the Venus prospect, located in block 2913B in the Orange Basin, offshore southern Namibia. The Venus 1-X well encountered approximately 84 m of net oil pay in a good-quality Lower Cretaceous reservoir. The find’s potential reserves are estimated at 2 billion bbl of oil.

“This discovery offshore Namibia and the very promising initial results prove the potential of this play in the Orange Basin, on which TotalEnergies owns an important position both in Namibia and South Africa,” said Kevin McLachlan, senior vice president exploration at TotalEnergies. “A comprehensive coring and logging program has been completed. This will enable the preparation of appraisal operations designed to assess the commerciality of this discovery.”

Block 2913B covers approximately 8215 km2 in deep offshore Namibia.

TotalEnergies is the operator with a 40% working interest, alongside QatarEnergy (30%), Impact Oil and Gas (20%), and NAMCOR (10%).

CNPC Scoops Ishpingo Drilling Contract

The first drilling contract at the Ishpingo oil field near Ecuador’s Yasuni National Park has been awarded to China National Petroleum Corp. (CNPC), Energy Minister Juan Carlos Bermeo told Reuters. Following the approval of a new hydrocarbon law and legislation, Ecuador plans to move forward with auctions and competitive processes for securing foreign and domestic capital for oil and gas exploration, production, transportation, and refining projects.

The first drilling campaign to start after an environmental license was granted for the sensitive area will involve 40 wells over the next 18 months. It will focus on the field’s allowed zone without touching an area protected by a court ruling that has prevented extending drilling.

Ishpingo is the latest part of the ITT-43 oil field in Ecuador’s Amazonia region to start drilling after Tambococha and Tiputini. It is expected to produce heavy oil to be added to the nation’s output of flagship Napo crude, Bermeo said.

BP Brings Hershel Expansion Project On Line in US GOM

BP has successfully started production from the Herschel Expansion project in the Gulf of Mexico—the first of four major projects scheduled to be delivered globally in 2022. Phase 1 comprises development of a new subsea production system and the first of up to three wells tied to the Na Kika platform in the Mississippi Canyon area. At its peak, this first well is expected to increase platform annual gross production by an estimated 10,600 BOE/D.

The BP-operated well was drilled to a depth of approximately 19,000 ft and is located southeast of the Na Kika platform, approximately 140 miles off the coast of New Orleans. The project provides infrastructure for future well tie-in opportunities.

BP and Shell each hold a 50% working interest in the development.

Petrobras Kicks off Gulf of Mexico Asset Sales

Petrobras has begun an asset sale program in the Gulf of Mexico, in line with the company’s strategy of debt reduction and pivot toward Brazilian deepwater production.

The package for sale includes the company’s 20% stake in MP Gulf of Mexico (MPGoM) which holds ownership stakes in 15 fields in partnership with Murphy Oil. In addition to partnership-operated fields, MPGoM owns nonoperated interests in Occidental’s Lucius, Kosmos’ Kodiak, Shell’s Habanero, and Chevron’s St. Malo fields. During the first half of 2021, Petrobras’ share of production was 11,300 BOE/D.

ExxonMobil Liza Phase 2 Underway off Guyana

ExxonMobil started production of Liza Phase 2, Guyana’s second offshore oil development on the Stabroek Block; total production capacity is now more than 340,000 B/D in the 7 years since the country’s first discovery. Production at the Liza Unity FPSO is expected to reach its target of 220,000 bbl of oil later this year. The Stabroek Block’s recoverable resource base is estimated at more than 10 billion BOE.

The current resource has the potential to support up to 10 projects. ExxonMobil anticipates that four FPSOs with a capacity of more than 800,000 B/D will be in operation on the block by year-end 2025. Payara, the third project in the block, is expected to produce approximately 220,000 BOPD using the Prosperity FPSO vessel, currently under construction. The field development plan and application for environmental authorization for the Yellowtail project, the fourth project in the block, have been submitted for government and regulatory approvals.

The Liza Unity arrived in Guyana in October 2021. It is moored in water depth of about 1650 m and will store around 2 million bbl of crude.

ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. is the operator and holds 45% interest. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Ltd. holds 25%.

Dragon Finds Oil in Gulf of Suez

UAE’s Dragon Oil has discovered oil in the Gulf of Suez, according to a statement from the Egyptian Minister of Petroleum and Mineral Resources. The field contains potential reserves of around 100 million bbl inside the northeastern region of Ramadan. That estimate makes it one of the largest oil finds in the region over the past 2 decades. Development plans were not reported but reserve numbers could expand, the ministry said.

The oil field is the first discovery by Dragon Oil since it acquired 100% of BP’s Gulf of Suez Petroleum assets in 2019.

Dragon Oil, wholly owned by Emirates National Oil Co., holds 100% interest in East Zeit Bay off the southern Gulf of Suez region. The 93-km2 block lies in shallow waters of 10 to 40 m.