E&P Notes (December 2021)
Authors: JPT staff _ 
Published: January 2022

Sinopec Signals Fresh Shale Success With Dongye Deep 2

Sinopec has announced that the Dongye Deep 2 key shale gas well in Dongxi, Chongqing, was drilled to a total depth of 4300 m and tested at 412000 m3/d of high-quality natural gas. The operator said the result shows significant progress in ultradeep shale gas exploration in China and will increase Sinopec’s shale gas production capacity in southeast Sichuan by more than 2 trillion m3.

Following the breakthrough of the Fuling shale gas field in 2012, Sinopec has been expanding its expertise in deep shale gas. In 2018, Sinopec discovered and commercialized the Weirong shale gas field at a depth of 3800 m.

The technical requirements of developing deep marine shale gas reservoirs at depths exceeding 4000 m are high due to challenges faced at ultrahigh depths and complex crustal stress.

Sinopec plans to increase oil and gas exploration by developing unconventional resources such as shale oil and gas while focusing on growing reserves and production of conventional petroleum.

Qatar Energy Farms Into Hampden License off Eastern Canada

Qatar Energy has signed an agreement with ExxonMobil Canada to acquire a 40% ownership of exploration license 1165A off Canada’s east coast, marking the state-owned oil company’s first foray into offshore exploration in Canada. The Block EL 1165A is where operator ExxonMobil plans to drill the deepwater Hampden exploration well sometime in 2022.

In May 2020, Seadrill semisubmersible rig West Aquarius began drilling for ExxonMobil at the Hampden prospect, but operations were suspended after a week, without explanation. ExxonMobil is said to be nearing a deal for a rig to complete the exploration well.

Qatar is the world’s largest supplier of liquefied natural gas, or LNG, and is undertaking a strategy to boost production significantly over the next 5 years to meet the growing market for LNG.

ExxonMobil led the way in developing Newfoundland and Labrador’s offshore, and operates both the Hibernia and Hebron oil fields. The oil major has been broadening its attention to the Flemish Pass Basin, a frontier area where other major discoveries have been made, including Equinor’s Bay du Nord find.

TGS Plans 3D Shoot Offshore Suriname

TGS, in a consortium with CGG and BGP, have signed a multiclient agreement with Staatsolie, the state-owned company leading the development of the energy industry in the Republic of Suriname. The deal allows for the acquisition, promotion, and licensing of multiclient seismic programs, including new 3D acquisition and legacy data reprocessing, in the shallow-water acreage offshore Suriname.

Suriname’s acreage includes three blocks recently awarded, and current open acreage slated to be offered, in a competitive bid round for 2023. The new seismic data from the consortium’s programs can be used to delineate the prospectivity and potential of this underexplored area and is on trend with the recent material discoveries announced on the prolific Block 58.

Plans are in place to start acquiring the new 3D seismic data in the area prior to year-end, with first products to be made available during the first half of 2022. BGP Offshore will deploy its 3D vessel BGP Prospector in phase 1 of the project.

ExxonMobil Increases Stabroek Resource Estimate Again

ExxonMobil has increased the estimated overall resource at its Stabroek Block offshore Guyana to around 10 billion bbl, reflecting the recent exploration success at its Cataback prospect. The Cataback-1 well encountered 243 ft of net pay in high-quality hydrocarbon-bearing sandstone reservoirs. The find is located approximately 3.7 miles east of Turbot-1 and was drilled in 5,928 ft of water by the drillship Noble Tom Madden. Success at Cataback brings the total significant discoveries to more than 20 within the Stabroek Block.

The Stabroek Block spans 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the block. Hess Guyana Exploration holds 30% interest, and CNOOC Petroleum Guyana Limited holds the remaining 25% stake.

Shell To Sign PSA on Trindad’s Manatee Discovery

Royal Dutch Shell expects to sign a production-sharing contract for the 2.7-Tcf Manatee offshore gas field in Trinidad and Tobago. The country’s Energy Minister Stuart Young confirmed the contract has been negotiated and is hoping the operator signs on in the coming weeks. The field is part of the 10-Tcf Loran-Manatee complex that straddles Trinidad and Tobago’s maritime border with Venezuela.

Young said it “is going to be the single largest new gas production contract and gas production in TT [Trinidad and Tobago] for decades.”

Gas volumes could start flowing as early as 2025, but this depends on the speed at which the parties can install infrastructure. Production rates from the field are expected to range from 270 million to 400 MMcf/D.

US sanctions against the regime of Venezuela’s Nicolás Maduro prevented co-development of the complex.

Lundin Increases Stake in Wisting

Lundin Energy has entered into an agreement with OMV to acquire its entire 25% working interest in the Wisting development in the southern Barents Sea for $320 million. The acquisition takes Lundin Energy’s working interest to 35% in the 500-MMBO development.

In addition to the 35% stake in Wisting, Lundin Energy also holds surrounding acreage which is estimated to hold gross unrisked prospective resources of a further 500 MMBO. Wisting will be one of the largest development projects in Norway over the next few years, to become the next Barents Sea production hub, according to Lundin.

Concept selection is anticipated shortly, and the submission of the Plan of Development and Operation is targeted by year-end 2022 to qualify for the temporary tax incentives established by the Norwegian government in June 2020.

With first oil scheduled for 2028, the acquisition provides a material contribution to sustaining the company’s production in the long term. The Wisting development is also planned to have power supplied from shore, which is aligned with the company’s decarbonization strategy and its commitment to becoming carbon neutral by 2023.

The transaction, which has an effective date of 1 January 2021, is subject to the customary Norwegian regulatory approvals, and is expected to complete during Q4 2021.

The other partners in Wisting are Equinor, the development-phase operator, with a 35% working interest, Petoro with a 20% working interest, and Idemitsu with a 10% stake.

Panoro Energy Awarded Stakes Offshore Gabon

Panoro Energy has provisionally been awarded a 25% nonoperated interest in exploration blocks G12-13 and H12-13 offshore shallow-water Gabon following the 12th Offshore Licensing Round. The award remains subject to final agreement of the terms of the production-sharing contracts with the government of Gabon. Partners in the blocks will include BW Energy (37.5% and operator) and VAALCO Energy (37.5%).

Blocks G12-13 and H12-13 cover a surface area of 2989 km2 and 1929 km2, respectively, and are adjacent to the producing Dussafu Marin Permit, in which Panoro holds a 17.5% interest and is partnered with BW Energy. The G12-13 block is also adjacent to the producing Etame Marin license operated by VAALCO Energy.

Panoro expects the contracts over the two blocks will have an exploration period of 8 years with an option to extend by another 2 years. During the exploration period, the partners intend to carry out a work program which may include reprocessing of existing seismic, new seismic acquisition, and exploration drilling.