Daily Archives: March 22, 2012

Recap: Worldwide Field Development News (Mar 16 – Mar 22, 2012)


This week the SubseaIQ team added 8 new projects and updated 32 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Africa – West
African Petroleum Secures Block Offshore Cote d’Ivoire
Mar 21, 2012 – African Petroleum has entered an agreement with Societe Nationale d’Operations Petrolieres de la Cote d’Ivoire (“PETROCI”) and the Republic of Cote d’Ivoire (the “State of Cote d’Ivoire”) to acquire exploration rights in offshore block CI-509. The permit is situated in the western offshore area of the Cote d’Ivoire, spanning 269,683 acres (1,091.37 square kilometers). African Petroleum will operate the block with a 90 percent stake, while the remaining 10 percent is owned by Petroci. The company expects to commence a 3D seismic program over Blocks CI-513 and CI-509 in mid-April 2012.
Ownership Change in License 20, Block 2714A
Mar 16, 2012 – Chariot Oil & Gas announced changes in equity ownership of its Southern Block 2714A resulting in Petrobras, the license operator, holding 30% interest; BP Exploration (Namibia) Limited acquiring an additional 20% equity making it the majority interest holder with 45%; and Enigma Oil & Gas Exploration (Chariot’s wholly-owned subsidiary) owning the remaining 25% interest in the license. The change in the equity ownership does not affect the current program for License 20, which contains the drill-ready prospect, Nimrod. As announced previously, the partnership plans to drill the exploration well Kabeljou-1 on the high-impact Nimrod prospect later this year.
Tullow to Further Explore Deepwater Tano License
Mar 16, 2012 – Tullow has identified several prospects in the Deepwater Tano license offshore Ghana. Three exploration wells are expected to be drilled on the block before 2013, which include: Wawa-1, Sapele-1 and Tweneboa Deep-1. Tullow said that Wawa-1 will target hydrocarbons which may have moved to a trap up-dip from the TEN oil and gas/condensate fields; Sapele-1, immediately south of the Jubilee field, will test a prospective turbidite lobe and Tweneboa Deep-1, is a material prospect below the TEN fields.
Project Details: Sapele (Ghana)
Tullow Finds Additional Pay in Enyenra Field
Mar 16, 2012 – Tullow Oil has successfully appraised the Enyenra-4A well in the Deepwater Tano License offshore Ghana. The well encountered oil in very good quality sandstone reservoirs. The company said that good evidence of communication with the Owo-1 discovery wells and the Enyenra appraisal wells confirm the extent of the Enyenra light oil field. Enyenra-4A, located 4.5 miles (7 kilometers) south west of Enyenra-2A and almost 13 miles (21 kilometers) south of the Enyenra-3A well, was drilled to define the southern extent of the field. Results of drilling, wireline logs, samples of reservoir fluids and pressure data show that Enyenra-4A has intersected 105 feet (32 meters) of net oil pay. Pressure data from the oil leg has demonstrated that the oil is in static communication with the oil seen in the other wells in the field, indicating a continuous oil column of approximately 1,970 feet (600 meters). The well will be suspended for later use. The Ocean Olympia (UDW drillship) drilled the well to a total depth of 13,695 feet (4,174 meters) in a water depth of 6,160 feet (1,878 meters).
Project Details: The Ten Cluster
Black Sea
Midia Resources Enters Muridava License Offshore Romania
Mar 22, 2012 – Melrose Resources has agreed to farm-out a portion of its equity in the EX-27 Muridava License, offshore Romania. The Romanian National Agency of Mineral Resources has formally approved the transfer of a 40 percent working interest in the block to Midia Resources, a wholly-owned subsidiary of Sterling Resources. Following completion of the transaction, Melrose will retain operatorship and a 40% stake in the concession, with the remaining equity held by Midia (40%) and Petromar Resources (20%).
Asia – SouthEast
Salamander Gears Up for Drilling in B8/38 License
Mar 22, 2012 – Salamander Energy has contracted the ENSCO 53 (350??? ILC) jackup to commence a four-well drilling program for License B8/38 offshore Thailand. The company will initially drill two development wells followed by exploratory drilling in May. The license houses the Bualuang oil field in 197 feet (60 meters) of water.
Project Details: Bualuang
Nido Updates Ops at Galoc Field
Mar 21, 2012 – Nido Petroleum announced that fabrication and installation of the turret mooring and riser system for Phase II of the Galoc field was progressing on schedule with production expected to resume at the end of 1Q 2012. Furthermore, the FEED for Phase II is being performed as planned and remains on track for FID in 2012.
Project Details: Galoc
S. America – Other & Carib.
Borders & Southern Encounter Rig Issues While Drilling Darwin East
Mar 16, 2012 – Borders & Southern reports that although drilling operations on Darwin East are going according to design, technical issues with equipment on the Leiv Eiriksson (UDW semisub) may result in another four to five weeks of activity on well 61/17-1. The operator said rig issues were resolved and drilling is progressing. Further announcements are anticipated once the well reaches total depth and wireline log interpretations are completed.
Project Details: Darwin East
Asia – South
Santos Finds More Gas at Sangu
Mar 16, 2012 – Santos has found a new gas reservoir through well Sangu-11 in the Sangu area with about 66 feet (20 meters) of good-quality gas pay. The well will be completed and tied into the Sangu facilities. The operator is continuing to assess the volumes and flow potential of the reservoir. After completing Sangu-11, the Seadrill jackup Offshore Resolute (350??? ILC) will be demobilized. Sangu-11 was the final well in a three-well drilling campaign in Block 16 PSC that commenced in September 2011. The first well, South Sangu-4, found gas in one target but was unable to add further reserves due to encountering anomalously high formation pressure, and had to be abandoned prior to reaching its primary objective. The second well, NE Sangu-1 drilled in December 2011, failed to encounter commercial hydrocarbons and was also abandoned.
Project Details: Sangu
Europe – North Sea
Premier Halts Fyne Development
Mar 22, 2012 – Premier Oil has decided to not move forward with developing the Greater Fyne area in the North Sea due to disappointing appraisal drilling results earlier this year. The operator said the development does not meet its commercial threshold. Fyne was slated to commence production in 2014.
Project Details: Fyne
Aker Solutions Scores FEED Study for Draupne Field
Mar 22, 2012 – Det norske awarded Aker Solutions a front-end, engineering and design contract for the Draupne field in the Norwegian sector of the North Sea. The study is slated for delivery in 4Q 2012. First production from the development is expected in 2015.
Project Details: Luno, Draupne Project
BP Gets Green Light to Drill North Uist
Mar 22, 2012 – The Department of Energy and Climate Change has granted BP permission to drill the deepwater North Uist oil well, northwest of the Shetland Islands. The well is situated in Block 213/25c in a water depth of 4,232 feet (1,290 meters).
Project Details: North Uist
Catcher Field to Come Online in 2015
Mar 20, 2012 – Nautical Petroleum, a partner in the Catcher field, expects production to commence from the development in 2015. The final field-development plan (FDP) for the discovery will be submitted before the end of this year. Catcher is estimated to hold 135 MMbbl of oil. The Catcher field is located in the Central North Sea Block 28/9 in a water depth of 299 feet (91 meters).
Project Details: Catcher
Valiant Spuds Cladhan South
Mar 20, 2012 – Valiant Petroleum has commenced drilling at the Cladhan South exploratory prospect, located in Block 210/29c in the UK sector of the North Sea. Cladhan South is an Upper Jurassic channelized sand play immediately to the south of the existing Cladhan discovery with gross prospective resources estimated internally by Valiant to be 13 MMboe. The well is being drilled by the Sedco 704 (mid-water semisub) and is anticipated to take 35 to 40 days to complete.
Project Details: Cladhan
EPC Offshore Scores Lancaster Gig
Mar 20, 2012 – EPC Offshore received a contract to select the optimum concept for the development of Hurricane’s Lancaster field in the UK sector of the North Sea. The first phase of the project is expected to run until the end of the year with FEED engineering commencing in 2013. The development is situated on Block 205/21a in 509 feet (155 meters).
Project Details: Lancaster
Valiant Petroleum Enters Norvarg License
Mar 20, 2012 – Rocksource has signed a strategic asset transaction with Valiant Petroleum for a stake in the Norvarg discovery. The transaction includes the sale of a 13-percent stake, leaving a 7 percent stake with Rocksource. The transaction remains subject to certain conditions, including Norwegian government approvals. Rocksource is a partner in the Norvarg license, which Total operates with a 40 percent stake.
Project Details: Norvarg
FMC to Supply Subsea Equipment for Fram H-Nord Development
Mar 20, 2012 – FMC Technologies has signed an agreement with Statoil for the manufacture and supply of subsea production equipment to support the Fram H-Nord development. The scope of work includes one subsea production tree, one manifold and one multiphase meter. Deliveries are expected to occur throughout 2013.
Project Details: Troll Area
Xcite Spuds 9/3b-7 Well on Bentley
Mar 18, 2012 – Xcite Energy announced that jackup Rowan Norway (400′ ILC) has spud the 9/3b-7 development well commencing Phase 1A of the first phase development of the Bentley Field.
Project Details: Bentley
Trap Oil Acquires 15% Interest In Athena
Mar 16, 2012 – Trap Oil will acquire a 15 percent working interest in the Athena oil field from Dyas UK Limited, subject to DECC and Dyas partners’ approvals. The effective date for the transaction is Jan. 1, 2012. Ithaca Energy is the operator and currently holds a 22.5 percent stake in the block. Following completion of the acquisition, the remaining equity holders will be Dyas, the largest equity holder with 32.5%, EWE Energie AG with 20% and Zeus Petroleum with the remaining 10%. The field will be developed via four existing production wells and one water-injection well tied to a stand-alone FPSO, the BW Athena vessel. The vessel is expected to arrive at the Athena location this month and, since the majority of the subsea elements for the field have already been installed, all of the production wells are ready for hook-up.
Project Details: Athena
Noreco Comes Up Dry in Luna
Mar 16, 2012 – Noreco is in the process of completing exploratory well Luna-1X in License 1/11 offshore Denmark. The well did not encounter hydrocarbons.
Project Details: Luna
S. America – Brazil
Petrobras Discovers Oil in Santos Basin
Mar 20, 2012 – Petrobras has made a discovery of a high-quality oil accumulation in Block BM-S-8 in the pre-salt area of the Santos Basin. The discovery was found during the drilling of well 4-SPS-86B (4-BRSA-971-SPS), unofficially known as Carcara, 144 miles (232 kilometers) off the coast of Sao Paulo State. Sampling confirmed the presence of oil at approximately 31 degree API in reservoirs 18,865 feet (5,750 meters) deep. The well continues to be drilled with the aim of determining the lower limit of reservoirs and to identify other possible zones of interest. Carcara is the third well drilled in the area of the Discovery Evaluation Plan of 1-BRSA-532A-SPS (Bem-te-vi prospect), and is 12.43 miles (20 kilometers) from the discovery well at a water depth of 6,650 feet (2,027 meters).
OGX Acquires Additional Stake, Reins of Campos Basin Blocks
Mar 20, 2012 – OGX has acquired an additional 20 percent stake in Blocks BM-C-37 and BM-C-38 in the shallow waters of the Campos Basin, from partner Maersk Oil. OGX will now assume operatorship of these blocks. With this acquisition, OGX plans to use its current operational structure to drill six wells in blocks BM-C-37 and BM-C-38, in order to confirm the extension of discovered accumulations and test the existence of new prospects in the area. OGX will conduct all necessary studies and tests aiming to convert its resources into reserves.
Project Details: Carambola
Cairn Processing 3D Seismic Data Offshore Greenland
Mar 20, 2012 – Cairn Energy said that a number of play types have been identified on the Pitu block, which is geologically separate from other parts of West Greenland. The extensive shallow coring program undertaken by Cairn across the block in 2011 confirms the presence of micro oil seeps above structural closures already identified. All of the exploration evidence acquired to date points to the Baffin Bay Basin being oil generative and having multi-billion barrel potential. The 3D seismic acquired over Pitu in 1H 2011 is currently being processed, with final results expected in May/June 2012. Subject to the final interpretation of those results, exploration wells will be planned for the Pitu prospects.
Woodside’s Pluto LNG Ready for Start Up
Mar 22, 2012 – Woodside’s Pluto LNG project has reached ready for start-up and first gas has entered the processing train. First production of LNG will take place in the coming weeks, followed by deliveries to foundation customers and project participants Kansai Electric and Tokyo Gas. The initial phase of the Pluto LNG project comprises an offshore platform in 279 feet (85 meters) of water, connected to five subsea wells on the Pluto gas field. Gas will be piped through a 112-mile (180-kilometer) trunkline to an onshore facility.
Project Details: Pluto
Woodside Ramps Up Vincent Production with Infill Wells
Mar 21, 2012 – Woodside reported that the Vincent field has produced roughly 27 MMbbl of oil since start-up in 2008, with 2011 production around 8.5 MMbbl. In September 2011, the company boosted Vincent???s overall production rate with two infill wells (VNB-H5 and VNB-H6) coming online. This resulted in the Ngujima-Yin FPSO achieving its highest production rate of almost 53,000 bopd. Woodside will complete a third infill well at Vincent, VNB-H7, and bring it online in 1H 2012.
Project Details: Vincent
Santos Disconnects Mutineer-Exeter’s FPSO to Avoid Tropical Storm
Mar 16, 2012 – Santos has shut-down production at its Mutineer-Exeter oil field due to the approaching Severe Tropical Cyclone Lua. Mutineer-Exeter’s floating production storage and offloading vessel was disconnected March 15 and has been sailing to avoid the cyclone since then, a Santos spokesman said in a statement.
Project Details: Fletcher/Finucane
NZOG to Acquire a Stake in the Kaheru Permit
Mar 16, 2012 – New Zealand Oil & Gas signed a conditional agreement to acquire a 15 percent stake in the Kaheru permit (Petroleum Exploration Permit 52181) off the Taranaki coast. The interest acquired is from AGL Upstream Gas (MOS), a wholly owned subsidiary of AGL Energy Ltd. The other partners in the permit are ROC Oil (50% and Operator), TAG Oil (20%) and L&M Energy (15%). NZOG will pay $3 million for AGL’s stake, conditional on the joint venture making a commitment to drill a well (and on joint venture and Crown approval of the transfer of ownership from AGL to NZOG). The permit, which houses the Kaheru prospect, currently has a drilling commitment deadline of May 18, 2012, with a well scheduled to be drilled by May 18, 2013. The Kaheru prospect lies in 82 feet (25 meters) of water, and is 5 miles (8 kilometers) from shore.
Project Details: Kaheru
INPEX Grabs Prelude Interest
Mar 16, 2012 – INPEX has agreed to acquire a 17.5 percent participating interest in the Prelude FLNG project from Shell. This transaction is pending necessary governmental approval. The Prelude FLNG project is located in WA-44-L, approximately 295 miles (475 kilometers) north-northeast of Broome, off the coast of Western Australia. The project includes the Prelude and Concerto gas fields. These fields will be developed utilizing a FLNG facility and will produce at least 3.6 million tonnes per annum of LNG, along with 0.4 million tonnes per annum of liquefied petroleum gas and approximately 36,000 bopd of condensate at peak.
Project Details: Prelude
Asia – Far East
Roc Oil to Commence Beibu Gulf Proj. Development
Mar 21, 2012 – The Chinese Government’s State Oceanic Administration has approved the Environmental Impact Assessment for the Beibu Gulf project, which compromises the development of the WZ 6-12 and WZ 12-8 west oil fields located in the South China Sea. This approval allows the company to commence offshore development activities on the project. Subject to final approval, onshore fabrication activities are ongoing and offshore pipeline installation is anticipated to commence during March. On completion of platform installation during 1H 2012, drilling activity is expected to start mid-year and will include four exploration/appraisal wells, which will be followed by the development drilling program. The operator anticipates first oil production from the Beibu Gulf project by the end of 2012 with full-field peak production anticipated by 2013.
Project Details: Beibu Gulf Project



South China Sea Spat Threatens Region’s Future

An aerial view shows the Pagasa (Hope) Island, which belongs to the disputed Spratly group of islands, in the South China Sea located off the coast of western Philippines in this file photo taken on July 20, 2011. (Reuters Photo)

Territorial disputes in the South China Sea, rich in oil and natural gas reserves, require a quick and peaceful resolution to boost energy production and meet growing regional demand, a US official said.

“You have this conundrum of a region that needs energy and yet has a lot of territorial disputes or gray areas that inhibit the ability to produce some of it,” Robert Hormats, US undersecretary of state for economic growth, energy and the environment, said today at a briefing in Hanoi. “These are long-term investments, so you really need to start now if you’re going to have the energy five years or 10 years out.”

Vietnam and the Philippines have rejected China’s map of the South China Sea as a basis for joint oil and gas development, leading to clashes in one of the world’s busiest shipping lanes. China claims “indisputable sovereignty” over most of the waters, including blocks off Vietnam that Exxon Mobil Corp. and Russia’s Gazprom OAO are exploring.

Vietnam’s Foreign Ministry said March 15 that Cnooc’s moves to develop the oil- and gas-rich northern areas of the South China Sea violates its sovereignty. China’s biggest offshore oil explorer opened bids to foreign companies last year for 19 blocks near the disputed Paracel Islands, according to its Web site.

The South China Sea may hold 213 billion barrels of oil, equivalent to 80 percent of Saudi Arabia’s reserves, according to Chinese studies cited in 2008 by the US Energy Information Agency.


South China Sea Spat Threatens Region’s Future | The Jakarta Globe.

South Korea: SHI to Build Seventh UDW Drillship for Pacific Drilling


Pacific Drilling S.A. via its wholly-owned subsidiary last week exercised an option to construct its seventh ultra-deepwater drillship with Samsung Heavy Industries.

We are very pleased to announce the order of our seventh ultra-deepwater drillship,” stated Pacific Drilling CEO Chris Beckett. “The current strength we see in the market for ultra-deepwater rigs well into 2014 led us to act on this opportunity to order a rig with very favorable delivery timing.”

The drillship will have a rated water depth of 12,000 feet, be equipped for 40,000 feet drilling depth, have accommodation for 200 personnel and be equipped to support dual gradient drilling. The total cost, excluding capitalized interest, will be approximately $600 million and delivery is scheduled for May 2014.

Financing for the construction of this rig is expected to be provided by a combination of the company’s recent bond offering, cash flows from ongoing operations and long-term debt.


Watching World Energy: Turmoil in the South China Sea


Thursday, March 22, 2012

Even as world attention is mesmerized with the Strait of Hormuz, worrisome problems are now arising in the South China Sea, a region along the all-important energy sea lane of communication out to Asia Pacific.

‘You have this conundrum of a region that needs energy and yet has a lot of territorial disputes or gray areas that inhibit the ability to produce some of it,’ said Robert Hormats, U.S. undersecretary of state for economic growth, energy and the environment.

Hormats’ remarks came after the Philippines said that it has the right to invite foreign companies to explore for oil and gas in waters located between its western coast and the South China Sea – remarks dismissive of China’s own claims.

‘It is illegal for any country, government or company, without the Chinese government‘s permission, to develop oil and natural gas in waters under Chinese jurisdiction,’ said Chinese foreign ministry spokesman Hong Lei.


The dispute arose after the Philippines’ Energy Secretary Jose Almendras announced that his country had invited international oil companies to explore for oil and gas offshore Palawan province in two areas that fall within the country’s 200-mile exclusive economic zone.

Palawan province faces the South China Sea, which is claimed entirely by China. But other nations in the region, including the Philippines, Brunei, Malaysia, Taiwan and Vietnam, have competing claims of their own.

Claims over portions of the sea can have immense bearing on ownership of any oil or gas that lies under the region’s waters, according to the U.S. Energy Information Administration. But no one knows for sure just how much oil and gas is actually there.

According to EIA, one Chinese estimate suggests potential oil resources as high as 213 billion barrels of oil (bbl), but EIA also mentions a 1993/1994 estimate by the U.S. Geological Survey which put reserves at just 28 billion bbl.


EIA notes speculation that the Spratly Islands could be an untapped oil-bearing province, but it said that, ‘There is little evidence outside of Chinese claims to support the view that the region contains substantial oil resources.’

Of course, there is only one way to find out and that is to explore, explore, explore. The problem, though, is that overlapping claims to the region are hindering exploration.

That was certainly true a year ago when two Chinese vessels threatened to ram the Veritas Voyager, a survey ship hired by U.K.-based Forum Energy PLC.

The Philippines government dispatched a surveillance plane, patrol ships and light attack aircraft to the disputed area, known as Reed Bank. By then, though, the Chinese vessels had vanished and Forum decided to suspend its exploration activities.

Now, a year on, Forum Energy apparently is planning to return to Reed Bank, aiming to drill its first well for oil and natural gas, an event that some analysts say could spark a military crisis if China responds more aggressively than it did last year.


Still, that year has seen a significant change in the posture of the U.S. in the region, with President Barack Obama announcing in January that Asia Pacific is now his country’s top priority in terms of global defense.

That view was underlined in early March by Admiral Robert Willard, head of the U.S. Pacific Command, who said that the America’s military must be present in the South China Sea.

China was less confrontational in 2011 in asserting its claims in the South China Sea than it was in 2010, Willard told the Senate Armed Services Committee.

But Willard also noted that China continues to challenge vessels conducting oil and gas exploration within space that it claims as its own. In a word, he said, ‘They remain aggressive.’


Just how aggressive they will remain is yet to be determined, perhaps by U.S. plans for war games in April with the Philippine navy near Reed Bank – war games that one analyst suggests will be viewed by China as provocative.

‘This will be a litmus test of where China stands on the South China Sea issue,’ said Ian Storey, a fellow at the Singapore Institute of Southeast Asian Studies.

According to Storey, the Chinese ‘could adopt the same tactics as they did last year and harass the drilling vessels, or they might even take a stronger line against them and send in warships.’

Contribution by Eric Watkins from Oil Diplomacy
Link to original article


Energy producers frustrated with Obama state visit


Presidential motorcade prepares for President Obama's arrival

By Dan Potter

President Obama staging a photo op at the TransCanada pipe yard outside of Cushing today angers members of the Domestic Energy Producers Alliance.

DEPA’s Mike Cantrell says the President has proven for three years that he is against the fossil fuel industry.

“The irony of it is, he’s been unsuccessful because Congress wouldn’t go along with him. And now, he takes credit for the gains we’ve made in oil and gas production which have nothing to do with him and his policies. They’ve (occurred) in spite of him and his policies,” Cantrell said.

DEPA has cancelled plans to stage a protest in or near Cushing during the President’s visit.

“They’ve changed it from campaign visit to a state visit,” says Cantrell. “It’s not open to the  public.”

The President’s press entourage will be bussed from Oklahoma City to the Cushing event so even they wouldn’t come in contact with any protestors.

When asked what he’d say if he had a few minutes with President Obama, Cantrell says, “I’d say, Mr. President, we’d like to visit with you about domestic oil and gas. And that there’s a difference between U.S. domestic energy producers and royalty owners and the big oil companies that you seem to lash out at. But, in your lashing out at them, you have hit us all with your policies.”


US Energy Production Could Pass Saudi Arabia In 2013

Gus Lubin | Mar. 21, 2012, 3:22 PM

Today’s big report from Citi validates what energy bulls have been saying for years. America is becoming an energy superpower again, and this could be great for the economy. One particular chart from the report will knock your socks off.

US oil and gas production is projected to pass Saudi Arabia and Russia by the end of 2013.

After that US producers will take a big lead. Canadian and Mexican production is soaring too, which is why Citi calls North America the new Middle East.

Citi is even more bullish than Goldman, which projects US production to pass Saudi Arabia in 2017.

Here’s a breakdown of the US liquid supply:

Now check out life on an American oil boomtown >

US Energy Production Could Pass Saudi Arabia In 2013.

Norway: Aker Solutions Secures Draupne FEED Contract


Aker Solutions has won a contract from Det norske oljeselskap to conduct a front-end, engineering and design (FEED) study for the Draupne field on the Norwegian continental shelf.

The study will be carried out by Aker Solutions’ newly established engineering office in London, and delivered to the license partners in Q4 2012. The contract value is undisclosed.

“I am very pleased that Det norske has decided to follow on the pre-FEED contract with the award of the topsides FEED contract for the Draupne development. The Draupne pre-FEED was the first contract awarded to the re-established Aker Solutions engineering entity in London. The new award confirms the successful build-up of our London office,” says Valborg Lundegaard, executive vice president and head of engineering in Aker Solutions.


Aker Solutions in 2011 decided to re-enter the London engineering market. Only a few months after opening the new office in Chiswick Park, the company is once again becoming a significant player in the London market. The engineering office now counts 90 employees, and Aker Solutions expects to be around 200 people by the end of 2012.



The Draupne field is located to the west of Stavanger in the North Sea. The partners in the Draupne field have agreed with the partners in the Luno field on a coordinated development solution for the area. Draupne will be developed using a fixed platform with pre-processing, and the well stream will be transported from the Draupne platform to Luno for final processing and export to the markets.

Det norske is the operator and owner of 35 per cent of the Draupne license, together with Statoil (50 per cent) and Bayerngas Norge (15 per cent).


Alaska champions $40bn pipeline plan


Click to enlarge

By Ed Crooks in London

BP, ExxonMobil and ConocoPhillips are in discussions about a $40bn project to export liquefied natural gas from Alaska to Asia, potentially opening up large but stranded reserves that currently have no route to market.

According to people close to the negotiations, the three companies and state authorities hope to reach agreement next week over a long-running lease dispute at Point Thomson, a large oil and gas field on Alaska’s North Slope.

A settlement would clear the way for the companies to hasten their commercial assessment of a large gas pipeline to Alaska’s southern coast, from where LNG could be shipped to China and other Asian countries. Sean Parnell, Alaska’s governor and a champion of the project, told the Financial Times he was “cautiously optimistic” that the plan would be able to move forward.

The state argues that BP, ExxonMobil, ConocoPhillips and Chevron have been too slow to produce oil and gas at Point Thomson, having agreed to a development plan in 1977, and he wants to take their lease away. John Minge, BP’s president for exploration in Alaska, told reporters in the state last week that talks about the dispute were on track to be resolved by an end of March deadline.

Alaska’s North Slope has proven reserves of 35tn cubic feet of gas – about one-eighth of US total reserves – and undiscovered resources estimated at 236tn cu ft. Without a pipeline, however, the gas is worthless.

Exxon and TransCanada, a pipeline company, have been working on a route to take the gas across Canada to the “lower 48” US states, but industry executives and government officials say the proposal was stymied by weak prices stemming from the shale gas boom.

Mr Parnell said Alaska was frustrated by the slow progress of plans to develop the gas, which could earn the state an estimated $400bn. He has been urging the companies to move forward with a shorter pipeline to the south coast of Alaska, where a new LNG plant could be built for export to Asia. “The gas is there, the market is there, particularly on the Pacific Rim,” he said. “There is no reason why we should not be able to move the gas to the market.”

The companies have warned that they need to assess the commercial case for the project, which would cost an estimated $40bn-$50bn and take at least 10 years to develop.


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