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

Sonadrill Lands Contract for Drillship

Seadrill confirmed a new contract has been secured by Sonadrill Holding, Seadrill’s 50:50 joint venture with an affiliate of Sonangol for the drillship West Gemini. Sonadrill has secured a 10‑well contract with options for up to eight additional wells in Angola for an unknown operator.

Total contract value for the firm portion of the deal is expected to be around $161 million, with further revenue potential from a performance bonus. The rig is expected to begin the work in the fourth quarter of this year with a firm term of about 18 months, in direct continuation of the West Gemini’s existing contract.

The West Gemini is the third drillship to be bareboat chartered into Sonadrill, along with two Sonangol‑owned units, the Sonangol Quenguela and Sonangol Libongos. Seadrill will manage and operate the units on behalf of Sonadrill. Together, the three units position the Seadrill joint venture as an active rig operator in Angola, furthering the goal of building an ultradeepwater franchise in the Golden Triangle and driving efficiencies from rig clustering in the region.

Petrobras Receives TotalEnergies, Shell Payments for Atapu

TotalEnergies and Shell have formalized payments to Petrobras for separate, minority stakes in the pre‑salt Atapu field in the Santos Basin. TotalEnergies paid $4.7 billion reais ($940 million) while Shell paid closer to $1.1 billion.

The Atapu block was acquired by the consortium comprising Petrobras (52.5%), Shell (25%), and TotalEnergies (22.5%) in the Second Bidding Round for the Transfer of Rights auction held 17 December 2021. The payments are compensation for monies spent thus far by Petrobras, which was granted contractual rights to produce 550 million BOE from Atapu in 2010.

The partners will now work together to produce additional volumes from the field. Production at Atapu started in June 2020 via the P-70 FPSO. The unit is in about 2000 m of water and has the capacity to produce 150,000 BOED.

CNOOC Brings New Bohai Sea Discoveries On Stream

CNOOC Limited has kicked off production from its Luda 5‑2 oil field North Phase I project and Kenli 6‑1 oil field 4‑1 Block development project. Luda 5‑2 is in the Liaodong Bay of Bohai Sea, with average water depth of about 32 m and utilizes a thermal recovery wellhead platform and production platform tied into the Suizhong 36‑1 oil field. A total of 28 development wells are planned, including 26 production wells and two water‑source wells. The project is expected to reach its peak production of 8,200 B/D of oil in 2024.

Kenli 6‑1 is in the south of Bohai Sea, with average water depth of about 17 m. The resource is being developed by a wellhead platform in addition to fully utilizing the existing processing facilities of the Bozhong 34‑9 oil field. A total of 12 development wells are planned, including seven production wells and five water‑injection wells. The field is expected to reach its peak production of 4,000 B/D of oil later this year.

CNOOC Limited is operator and sole owner of the Luda 5‑2 oil field North and the Kenli 6‑1 oil field 4‑1 Block.

Stabroek Block Bounty Off Guyana Gets Bigger

The partners in the prolific Stabroek Block have again increased the gross discovered recoverable resource estimate for the area offshore Guyana. The owners now believe they have discovered reserves of at least 11 billion BOE, up from the previous estimate of more than 10 billion BOE. The updated resource estimate includes three new discoveries on the block at Barreleye, Lukanani, and Patwa in addition to the Fangtooth and Lau Lau discoveries announced earlier this year.

The Barreleye‑1 well encountered approximately 70 m of hydrocarbon‑bearing sandstone reservoirs of which 16 m is high‑quality oil‑bearing. The well was drilled in 1170 m of water and is located 32 km southeast of the Liza field.

The Lukanani‑1 well encountered 35 m of hydrocarbon‑bearing sandstone reservoirs of which approximately 23 m is high‑quality oil‑ bearing. The well was drilled in water depth of 1240 m and is in the southeastern part of the block, approximately 3 km west of the Pluma discovery.

The Patwa‑1 well encountered 33 m of hydrocarbon‑bearing sandstone reservoirs.

The well was drilled in 1925 m of water and is located approximately 5 km northwest of the Cataback‑1 discovery.

“These new discoveries further demonstrate the extraordinary resource density of the Stabroek Block and will underpin our queue of future development opportunities,” said John Hess, chief executive of Hess and a partner in Stabroek.

The co‑venturers have sanctioned four developments to date on Stabroek with both Liza and Liza Phase 2 on stream. The third planned development at Payara is ahead of schedule and is now expected to come on line in late 2023; it will utilize the Prosperity FPSO with a production capacity of 220,000 BOPD. The fourth development, Yellowtail, is expected to come on line in 2025, utilizing the ONE GUYANA FPSO with a production capacity of 250,000 BOPD of oil.

At least six FPSOs with a production capacity of more than 1 million gross BOPD are expected to be on line on the Stabroek Block in 2027, with the potential for up to ten FPSOs to develop gross discovered recoverable resources.

The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest; Hess Guyana Exploration holds 30% interest; and CNOOC Petroleum Guyana Limited holds 25%.

ConocoPhillips Gets Ekofisk License Extension

Norway’s Ministry of Petroleum and Energy (MPE) has extended production licenses in the Greater Ekofisk Area from 2028 to 2048 with ConocoPhillips as operator. The company said the license extension provides long‑term operations and resource management aligned with the company’s long‑term perspective on the Norwegian continental shelf.

Fields on the shelf are required to operate with a valid production license where the operator and licensees enter into an agreement with the authorities, including relevant field activities. The authorities may require commitments, leading to increased oil recovery. The existing production licenses 018, 018 B, and 275 in the Greater Ekofisk Area were set to expire on 31 December 2028; however, the MPE approved an extension through 2048. The new terms provide a potential for extending Ekofisk’s lifetime to nearly 80 years.

The license partners are ConocoPhillips (operator, 35.11%), TotalEnergies EP Norge (39.896%), Vår Energi (12.388%), Equinor (7.604%), and Petoro (5%).

BHP’s Wasabi Disappoints in US GOM

Australian operator BHP encountered noncommercial hydrocarbons with its Wasabi‑2 well in the US Gulf of Mexico. BHP said the well in Green Canyon Block 124 was plugged and abandoned following the disappointing results.

“This completes the Wasabi exploration program, with results under evaluation to determine next steps,” the company said.

The well was targeting oil in an early Miocene reservoir. Transocean drillship Deepwater Invictus spudded the well in 764 m of water in November 2021.

The previous Wasabi‑1 well had a mechanical problem and was plugged and abandoned 4 days earlier, prior to reaching its prospective targets.

BHP operates Wasabi with a 75% interest.

Lukoil Says Titonskaya Holds 150 Million BOE

Russia’s Lukoil believes it has discovered around 150 million BOE following analysis of the two wells it drilled at the Titonskaya structure on the Caspian Sea shelf. Work is now underway to refine the seismic models of productive deposits and study deep samples of formation fluids. The results of the assessment will be submitted to the State Reserves Commission of the Russian Federation. The structure is in the central part of the Caspian Sea, not far from the Khazri field.

Lukoil drilled the first well at the Titonskaya structure in 2020 and announced the new discovery in April 2021. According to that assessment, the probable geological resources of the Titonskaya are 130.4 million tons. In 2021, drilling of the second prospecting and appraisal well began to identify oil and gas deposits in the terrigenous‑carbonate deposits of the Jurassic‑ Cretaceous age. The well was drilled using the Neptune jackup drilling rig.

The new find at Titonskaya will likely be tied into Khazri infrastructure.

Petrobras’ Roncador IOR Project Comes On Line

Petrobras has successfully started production from the first two wells of the improved oil recovery (IOR) project at the Roncador field in the Campos Basin offshore Brazil. The two wells are the first of a series of IOR wells to reach production. Startup is almost 5 months ahead of schedule and at half of the planned cost, according to partner Equinor. The wells will add a combined 20,000 BOED to Roncador, bringing daily production to around 150,000 bbl and reducing the carbon intensity (emissions per barrel produced) of the field.

Through this first IOR project, the partnership will drill 18 wells that are expected to provide additional recoverable resources of 160 million bbl. Improvements in well design and the partners’ combined technological experience are the main drivers behind the 50% cost reduction across the first six wells, including the two in production.

Roncador is Brazil’s fifth‑largest producing asset and has been in production since 1999. Petrobras operates the field and holds a 75% stake. In 2018, Equinor entered the project as a strategic partner with the remaining 25% interest.

In addition to the planned 18 IOR wells, the partnership believes it can further improve recovery and aims to increase recoverable resources by a total of 1 billion BOE. The field has more than 10 billion BOE in place under a license lasting until 2052. The strategic alliance agreement also includes an energy‑efficiency and CO2‑emissions‑reduction program for Roncador.

Gazania-1 To Spud Off South Africa

Africa Energy will move ahead with its planned Gazania‑1 wildcat well offshore South Africa after securing partner Eco Atlantic’s $20 million in capital requirements for its portion of the probe. The well will be drilled in Block 2B. Island Drilling semisubmersible Island Innovator has been contracted for the work and is expected to mobilize from its current location in the North Sea for the 45‑day trip to South Africa.

The Block 2B joint venture plans to spud the well by October with drilling expected to last 30 days, including a full set of logs if the well is successful. The block has significant contingent and prospective resources in relatively shallow water and contains the A‑J1 discovery that flowed light sweet crude oil to surface. Gazania‑1 will target two large prospects 7 km updip from A‑J1 in the same region as the recent Venus and Graff discoveries.

Block 2B is located offshore South Africa in the Orange Basin where both TotalEnergies and Shell recently announced significant oil and gas discoveries offshore Namibia. The block covers 3062 km2 approximately 25 km off the west coast of South Africa near the border with Namibia in water depths ranging from 50 m to 200 m.

The Southern Oil Exploration Corp. (Soekor) discovered and tested oil on Block 2B in 1988 with the A‑J1 borehole, which intersected thick reservoir sandstones between 2985 m and 3350 m. The well flowed 191 B/D of 36 °API oil from a 10‑m sandstone interval at around 3250 m.

Africa Energy has a 27.5% interest in Block 2B offshore South Africa. The block is operated by a subsidiary of Eco Atlantic which holds a 50% interest. A subsidiary of Panoro Energy holds a 12.5% stake, and Crown Energy AB indirectly holds the remaining 10%.

Brazil Grants New Exploration Blocks

Brazil’s National Agency of Petroleum, Natural Gas, and Biofuels (ANP) has granted 59 exploratory blocks of oil and natural gas to 13 companies, including Shell, TotalEnergies, and 3R Petroleum. The awards were part of a permanent bid offer round held in Rio de Janiero in April.

The auction totaled 422.4 million reais in signature bonuses with leases granted in six Brazilian states: Rio Grande do Norte, Alagoas, Bahia, Espírito Santo, Santa Catarina, and Paraná. The awards will result in investments of 406.3 million reais in the exploratory phase of the contracts.

Shell Brazil (70%) was granted six blocks in the Santos Basin in a consortium with the Colombian Ecopetrol (30%). The blocks leases were SM‑1599, SM‑1601, SM‑1713, SM‑1817, SM‑1908, and SM‑1910.

TotalEnergies won two areas in the same basin while Brazilian company 3R Petroleum received six areas in the Potiguar Basin. Petro‑Victory was also awarded 19 new blocks in Potiguar, increasing its holdings in Brazil to 38 blocks (37 in Potiguar). The new blocks are nearby Petro‑Victory infrastructure at the Andorinha, Alto Alegre, and Trapia oil fields.

Eni Finds More Oil in Egypt’s Western Desert

Eni struck new oil and gas reserves with a trio of discoveries in the Meleiha concessions of Egypt’s Western Desert. The finds have already been tied into existing infrastructure in the region and have added around 8,500 BOED to overall production from the area.

The operator drilled the Nada E Deep 1X well, which encountered 60 m of net hydrocarbon pay in the Cretaceous‑Jurassic Alam El Bueib and Khatatba formations Meleiha SE Deep 1X well, which found 30 m of net hydrocarbon pay in the Cretaceous‑Jurassic sands of the Matruh Khatatba formations, and the Emry Deep 21 well, which encountered 35 m of net hydrocarbon pay in the massive cretaceous sandstones of Alam El Bueib.

The results, added to the discoveries of 2021 for a total of eight exploration wells, give Eni a 75% success rate in the region. The company added that additional exploration activities in the concession are ongoing with “promising indications.”

With these discoveries, Eni, through AGIBA, a joint venture between Eni and EGPC, continues to pursue its near‑field strategy in the mature basin of the Western Desert, aimed at maximizing production by containing development costs and minimizing time to market. Eni is planning a new high‑resolution 3D seismic survey in the Meleiha concession this year to investigate the gas potential of the area.

Eni is currently the leading producer in Egypt with an equity production of around 360,000 BOED.