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

Shell’s Namibia Wildcat Encounters Light Oil

Supermajor Shell has struck light oil with its Graff-1 exploration well offshore Namibia, according to the country’s national oil company, a partner in the probe. The National Petroleum Corporation of Namibia (Namcor) confirmed the discovery. Partners in the Orange Basin well included Shell Namibia Upstream and QatarEnergy. The probe was located about 270 km away from Oranjemund, and was drilled to a total depth of 5376 m in water depths of 2000 m.

The drilling operations on Graff-1 utilizing the Valaris DS-10 drillship began in early December 2021 and were completed in early February.

“While we can learn a great deal from the results of Graff-1, we anticipate that further exploration activity, including a second exploration well, will be required to determine the size and recoverable potential of the identified hydrocarbons,” Namcor said.

TotalEnergies has drilled the Venus-1 well in a neighboring block to the west where results are imminent.

Shell Namibia Upstream operates the Graff find with 45% interest; QatarEnergy also holds a 45% stake; Namcor holds the remaining 10% interest.

Namcor said extensive laboratory analyses will be performed in coming months to gain a better understanding of the reservoir quality and flow rates potentially achievable.

Eni’s First Offshore Exploration Well in Abu Dhabi Strikes Gas

Eni has encountered gas shows in its first exploration well, XF-002, currently drilling in offshore Block 2, northwest of Abu Dhabi, in 115 ft water depth. The interim well results indicate a range of 1.5–2.0 Tcf of raw gas in place in multiple good-quality reservoirs of the Jurassic exploration targets. The drilling operations will continue targeting the deeper exploration targets of the Khuff and Pre-Khuff formations.

Eni has a 70% stake and operates offshore Block 2, which was awarded in January 2019 as a result of the first-ever competitive bid round for exploration blocks launched by ADNOC. PTTEP holds the remaining 30%.

Eni has been present in Abu Dhabi since 2018. The company is the operator of three exploration licenses and has a participation with ADNOC in three offshore development and production concessions: Lower Zakum (5%), Umm Shaif and Nasr (10%), and Ghasha (25%).

W&T Offshore Acquires US GOM Producing Properties

W&T Offshore closed an acquisition of oil-and-gas-producing properties in US GOM from ANKOR E&P and KOA Energy. The operator paid $30.2 million for stakes in the Ship Shoal 230, South Marsh Island 27/Vermilion 191, and South Marsh Island 73 fields. The deal adds (internally estimated) proved reserves of 5.5 million BOE (69% oil) and proved and probable, or 2P, reserves of 7.6 million BOE (75% oil). The deal also adds more than 50 gross producing wells (average working interest of 80%) across the three shallow-water fields.

Myanmar Coup Leads to Operator Exodus

Thailand state oil and gas explorer PTTEP looks set to take over Myanmar’s biggest gas field as TotalEnergies and Chevron confirmed their exits, citing the worsening humanitarian situation following a coup.

A move by PTTEP to become operator of Yadana field, in which it already has a 25.5% stake, would keep vital gas supplies flowing to Thailand and Myanmar.

Both TotalEnergies and Chevron were part of a group operating the Yadana gas project off Myanmar’s southwest coast along with the Moattama Gas Transportation Company that runs a gas pipeline from the field to Myanmar’s border with Thailand. PTTEP would have an 85% stake in Yadana if it took all the interest held by TotalEnergies and Chevron. PTTEP already operates Myanmar’s smaller Zawtika field with an 80% stake; Myanmar’s state energy firm Myanma Oil and Gas Enterprise holds the remaining 20%.

Yadana produced 770 MMcf/D of gas in 2021, of which 570 MMcf/D was supplied to Thailand and the rest used to generate Myanmar’s electricity.

New Malaysian Bid Round Launched

State-owned Petronas is offering 14 exploration blocks, six clusters of discovered resource opportunities (DRO), and one cluster of late-life assets (LLA) in its Malaysia Bid Round 2022 launched in late January.

The 14 exploration blocks on offer are in prolific geological provinces within the Malay, Sabah, and Sarawak basins. Most of these blocks contain existing oil and/or gas discoveries.

The six DRO clusters are Meranti, Ubah, Baram Jr., A, C, and D, mostly in shallow water and near existing production infrastructure. In addition, the single LLA, which includes a cluster of three fields named the Abu Cluster, provides the opportunity for a new operator to sweat the remaining oil in place using existing facilities.

Petronas is also offering technical study arrangements for two exploration areas in southern Malay Basin and northwest Sabah Basin to offer investors a better understanding of the potential of the acreages prior to submitting a bid proposal.

Petronas is hosting a virtual data room which will be accessible from launch until the end of June 2022, allowing potential investors to conduct data review during the bid-round period.

Equinor Secures 26 New Production Licenses

Equinor has been awarded 26 new production licenses by Norway’s Ministry of Petroleum and Energy in the 2020 Award in Predefined Areas. A dozen of the licenses have the company as operator with the remaining 14 as partner. The production licenses are divided as follows: 12 in the North Sea, 10 in the Norwegian Sea, and four in the Barents Sea.

In 2022, Equinor plans to take part in around 25 exploration wells, mainly near existing infrastructure. Most of the wells will be drilled in the North Sea, some in the Norwegian Sea, and a few in the Barents Sea.

Petrobras Details Potiguar Cluster Asset Sale to 3R

Petrobras has signed a deal to sell 100% of its interest in 22 concessions of onshore and offshore production fields, along with its infrastructure situated in the Potiguar basin (together called the Potiguar Cluster) in the Rio Grande do Norte, north of Brazil, to 3R Potiguar, which is a wholly owned subsidiary of 3R Petroleum Óleo e Gás, for $1.38 billion. The transaction also includes the Potiguar Clara Camarao refinery with a processing capacity of 39,600 BOPD.

3R Potiguar will pay Petrobras $1.04 billion at closure and four annual installments of $58.75 million each until March 2024. The agreement will require regulatory approval from Brazil’s National Agency of Petroleum, Natural Gas, and Biofuels (ANP).

The Potiguar Basin comprises three subclusters (Canto do Amaro, Alto do Rodrigues, and Ubarana), having an aggregate of 22 fields across 19 onshore and three offshore concessions, and incorporates access to the infrastructure necessary for processing, refining, logistics, storage, transportation, and export of oil and natural gas. Ubarana subcluster concessions are in shallow waters around 10 km and 22 km off the coast of the municipality of Guamaré-RN, while subclusters Canto do Amaro and Alto do Rodrigues are onshore. The average output from three of these subclusters last year was 20,600 BOPD and 58100 m3/d of natural gas.

Neptune Energy Increases Production From Gjøa Platform

Production from the Neptune Energy-operated Gjøa platform in the Norwegian North Sea increased by 2 million BOE from 2020 to 2021. Gross production over the Gjøa platform ended on 42 million BOE in 2021, compared with 40 million BOE in 2020. Just over three-quarters (76%) of the production was gas, all of which is exported through the FLAGS pipeline to the St. Fergus Gas Terminal in the UK.

The increased production was due mainly to production startup from the Gjøa P1 infill development in February and the Duva field tieback in August. In addition, production from the tieback field Vega, operated by Wintershall Dea, and the Gjøa field itself, has been better than expected. Estimated reserves on the Gjøa field have increased by 38% since the Plan for Development and Production was approved in 2007.

Neptune expects to add a fourth tie-in field to the Gjøa facilities—Wintershall Dea’s Nova field. In addition, the operator plans to drill two exploration wells in the area and will continue to mature other nearby discoveries and exploration opportunities as tie-in candidates.

Kuwait’s KUFPEC Makes First Operated Offshore Discovery in Indonesia

Kuwait Foreign Petroleum Exploration Company (KUFPEC) has confirmed its subsidiary KUFPEC Indonesia has made a commercial discovery of natural gas and condensate in the Anambas Block, offshore Indonesia. The discovery was made via the Anambas-2X well, which was drilled using a jackup rig in 288 ft of water to a total depth of 10,509 ft.

Located in the Natuna Sea near an existing block in which KUFPEC is a partner, the Anambas Block was awarded to KUFPEC Indonesia through a competitive bidding process in 2019. The block is fully operated by KUFPEC Indonesia with 100% interest.

The company conducted two drillstem tests so far, one in the Lower Gabus formation and the other in the Intra Keras formation. These tests resulted in a stabilized combined flow rate of