E&P Notes (September 2018)
Authors: Zborowski Matt , Jacobs Trent 
Published: October 2018

E&P Notes

Eni Gets Development Approval for Area 1 Offshore Mexico 

Matt Zborowski, Technology Writer

Italian multinational firm Eni has received approval from Mexico’s National Hydrocarbon Commission for its $1.9-billion development plan covering Area 1 in the shallow waters of the Campeche Bay.

The company expects to make a final investment decision (FID) on the project in this year’s fourth quarter. Consisting of the Amoca, Mizton, and Tecoalli fields, Area 1 is estimated to hold 2.1 billion BOE in place, 90% of which is oil.

The phased development will involve an early production stage utilizing a wellhead platform at the Mizton field. Production will be sent onshore via a 10-in. multiphase pipeline and treated at a Pemex-operated facility. Early production startup is planned for first-half 2019, plateauing at 8,000 B/D of oil.

 

BP To Buy US Shale Assets From BHP for $10.5 Billion

Matt Zborowski, Technology Writer

BP PLC has agreed to acquire almost all of BHP Billiton Ltd.’s US unconventional business for $10.5 billion.

The deal calls for BP American Production Co. to buy 100% of the issued share capital of BHP’s wholly-owned Petrohawk Energy Corp., which owns 470,000 net acres in the liquids-rich regions of the Permian Basin and Eagle Ford Shale of Texas and in the Haynesville Shale of Texas and Louisiana.

Melbourne-based BHP last year stated its intention to sell its US onshore business amid shareholder pressure, spurring interest from a bevy of majors, big US independents, and private equity firms. BHP entered US shale earlier this decade through about $20 billion in deals for Petrohawk and assets from Chesapeake Energy Corp. but took huge impairment charges during the plunge in commodity prices.

 

Equinor Invests in Two Gas-Focused Tech Startups

Trent Jacobs, JPT Digital Editor

The venture arm of the Norwegian-owned oil and gas explorer recently made equity investments in two California-based startups that will bring high-tech technologies into its natural gas operations. One of them flies, the other is destined to live out its days deep in the ground.

SeekOps uses drones as the platform for its methane-sensor technology that measures fugitive emissions with accuracy at distances of up to 100 m. This advanced gas detection system has its roots in NASA’s Jet Propulsion Laboratory (JPL) and its famed Mars rover program.  Upwing is in the midst of developing a novel gas-compression artificial lift system that works inside wellbores at depths ranging up to 12,000 ft. The Cerritos, California-based startup is a spinoff of variable speed drive manufacturer Calnetix Technologies, itself an established supplier to Equinor.

 

Growth in Offshore Activity Could Lead to Recruitment Boom

Adam Wilson, Special Publications Editor

The past years’ negative trend in employment in the oilfield service industry is leveling out. Now, as new offshore projects are approved, the need for offshore workers is expected to grow, which could lead to a large expansion of recruiting efforts, according to the research firm Rystad Energy.

Although the workforce saw a 35% reduction between 2014 and 2016, the overall headcount at the top 50 oilfield service companies remained stable from 2016 to 2017. The lack of change in total is a result of increased hiring by companies working in the North American shale combined with continued, if more modest, cuts for companies working offshore.

 

Norwegian Exploration and Development Pick Up, but More is Needed

Matt Zborowski, Technology Writer

Operators are drilling more exploration wells than in recent years and developing a high number of projects on the Norwegian Continental Shelf (NCS), but even more activity will be needed into the next decade to prevent a drop-off in production.

The Norwegian Petroleum Directorate (NPD) projects 40–50 exploration wells will be drilled this year, an increase from 36 in each of the last 2 years, fueled by higher, more stable oil prices and better knowledge and data relating to the offshore acreage.

Thirty wells are expected to be spudded in the North Sea, with 8–10 in each of the Norwegian and Barents Seas. During this year’s first half, 13 exploration wells yielded six discoveries, of which half came in the North Sea, two in the Norwegian Sea, and one in the Barents Sea.

 

UK’s Latest Licensing Round Aims for Offshore Frontiers

Trent Jacobs, JPT Digital Editor

Regulators in the UK have opened the bid process for more than a thousand oil and gas exploratory blocks that cover immense swaths of the country’s offshore territory.

The Oil and Gas Authority (OGA), which conducts the licensing rounds, said the 1,766 blocks comprise 370,000 square kilometers (142,857 square miles) of open acreage that it considers “under-explored.” Those areas include much of offshore Scotland and sections of the English Channel.

From 2015 to 2016, the UK government spent GBP 40 million on seismic surveys of about 80,000 km (about 49,000 miles) of the total area to be tendered. Those surveys and other datasets, such as digital well logs, were made available to oil and gas companies prior to the opening of the bid round.