Repsol Signs Exploration Deal with Guyana Gov’t
Spanish oil company Repsol has signed an exploration and production agreement with the Government of Guyana.
The four-year agreement, signed yesterday, will allow Repsol to search for hydrocarbons in the Kanuku block, approximately 161 km offshore Guyana, the only South American nation in which English is the official language.
According to GINA, Guyana’s Government Information Agency, Repsol will first conduct 2D and 3D marine seismic surveys, which will be followed by an exploration well in the second phase of the licence.
The company was last year involved in drilling the Jaguar-1, a high pressure, high temperature (HPHT) well, offshore Guyana. The well encountered some hydrocarbons but the partners in the prospect decided to plug the well on safety criteria after reaching a point in the well where the pressure design limits for safe operations prevented further drilling to the main objective.
Oil and gas exploration opens off North coast
The sea off Northland‘s entire west coast has been opened up for oil and gas exploration, something the Government says could pour up to $2 billion a year into the economy and create thousands of jobs in the region.
Energy and Resources Minister and Whangarei MP Phil Heatley yesterday welcomed the Government’s starting the process for awarding oil and gas exploration permits in seven onshore and three offshore blocks around the country. The offshore areas include the Northland/Reinga Basins, which stretch from the entrance to the Manukau Harbour, up Northland’s west coast to above Cape Reinga in the Tasman Sea.
A survey by Crown Research Institute GNS Science found the Reinga Basin could hold the most promising oil and gas fields in New Zealand.
Mr Heatley said the potential benefits could be game changers for Northland: “Down in Taranaki oil and gas industry provides over 5000 jobs and puts $2billion a year into the economy. Taranaki provides a great model of how safe and responsible oil and gas exploration can happily work side by side with primary industry and tourism.
“Oil and gas finds in Northland could be worth even more, and provide just as many jobs as those in the Taranaki because the Reinga Basin has been tagged as one of the most promising fields in New Zealand. But Northlanders will never know for sure until experienced companies are allowed to explore. If they find something, locals can then have an informed debate about whether we allow them to go after it.”
The Ministry of Business, Innovation and Employment had started consulting iwi and councils, and he encouraged iwi and councils to participate. “Their feedback ensures that areas of sensitivity are carefully considered before the areas to be tendered are finalised,” Mr Heatley said. No schedule-four conservation or World Heritage sites would be included in the areas for exploration.
But Te Runanga o Te Rarawa chairman Haami Piripi said his iwi was not happy with the proposal and felt any consultation would be a “facade”.
“There’s nothing from the exploration regime that will benefit iwi, other than possibly some jobs in the extraction process. The Government is going ahead without first dealing with the big issue, the customary interest iwi have in this resource,” he said.
“We have a legal opinion saying iwi do have a customary interests in oil and petroleum resources. The Waitangi Tribunal issued a report that recognised that Taranaki iwi have an interest in their petroleum resource, but that has been rejected by the Government.
“So we say we legally have a customary interest there, but the Government is trampling on those interests by ignoring them. It will be a facade consultation.”
He said regardless of what iwi thought, the Government would ignore their concerns if they interfered with its plans. “But we will raise our objections.”
Northland Chamber of Commerce head Tony Collins welcomed the move, saying the region needed the jobs and opportunities exploration could provide. “If you look at Taranaki it’s been a positive thing there and it should be positive for Northland.
“There’s always a balance between risk and reward, but if they use best practice for extraction the chances of anything going wrong are very, very minor,” Mr Collins said.
“This could actually create a lot of opportunities for iwi. They could become involved and use it to help lift the aspirations of their people.”
- Iwi says oil drilling is exploitation (radionz.co.nz)
- Two more Canadian oil explorers in Hawke’s Bay (nzherald.co.nz)
- PR push for oil and gas exploration (nzherald.co.nz)
- Taranaki pushes to attract skilled workers (radionz.co.nz)
- BHP to focus on Kimberley oil and gas exploration (abc.net.au)
Apache Inks Suriname PSC
Apache Corporation today signed a production sharing contract (PSC) with Suriname’s oil company Staatsolie for offshore block 53. located in the territorial waters of the South American country.
The contract, divided into exploration, development and production phases, is valid for approximately 30 years. The parties have agreed to a minimum working program for the exploration phase, which includes geological surveys and exploration drilling. Apache will take full responsibility for all costs during the exploration phase.
If a commercial find has been made and brought into production, Apache will receive reimbursement for such costs. The contract offers Staatsolie the opportunity for a stake in the development phase of up to 20 percent.
Block 53 is located at approximately 130 kilometers off the northwest coast of Paramaribo. The exploration period under the contract is divided into two phases with a combined investment of approximately US$230 million. The duration of the first phase is scheduled for three years with an optional second phase of two and a half years. In addition to a large 3D seismic survey, two wells will be drilled in the first phase with a third well to be drilled in the optional second phase. The production sharing contract explicitly deals with inspection, safety and the environment. There are also special provisions for employment of local cadre, training, social programs and the dismantling of facilities at the end of operations.
Total Selects AGR’s RMR for Exploration Offshore Australia
TOTAL E&P Australia (Total) has signed up to use AGR’s Riserless Mud Recovery (RMR®) system. The contract is for two exploration wells to be drilled over the next year in the Browse Basin off North West Australia.
Bernt Eikemo, AGR’s Vice President of the Enhanced Drilling Solutions (EDS) division (Asia Pacific), said: “AGR is delighted to be part of Total’s drilling team during the forthcoming exploration campaign. We hope that this is the start of a long, successful relationship with Total E&P Australia.”
He added: “Our previous experiences with several operators in the Browse Basin and the North West Shelf have shown that unconsolidated sand formations become much more benign when drilled with RMR® using a proper mud system.”
RMR® has been used by Total on several other projects internationally but this is the first time that the operator has used the system in Australia.
The main reason for using RMR® on these wells is to be able to drill through the unconsolidated sands of the Grebe Formation. It is renowned for stuck-pipe problems when drilling riserless using seawater and sweeps.
RMR® (system example attached) enables the use of weighted, engineered mud in the top-hole section. All mud and cuttings are returned to the rig with no discharge to the seabed. The top-hole section can be drilled more safely, quickly and with less impact on the environment.
RMR®, together with its sister technology the Cutting Transportation System (CTS™), has been deployed on more than 500 wells worldwide to date.
- USA: AGR Signs Two Agreements with Chevron (mb50.wordpress.com)
- Better Days Ahead for Drilling Companies (businessinsider.com)
Tokyo Is Planning To Piss Off China By Buying These Disputed Islands In The East China Sea
TOKYO (AP) — Tokyo‘s outspoken governor says the city has decided to buy a group of disputed islands in the East China Sea to bolster Japanese claims to the territory, a move that could elevate tensions with China.
Gov. Shintaro Ishihara said the city is close to reaching an agreement with the private Japanese owner of three of the four islands in the group known as Senkaku in Japanese and Diaoyu in Chinese.
The islands, surrounded by rich fishing grounds, are also claimed by China and Taiwan. They have been a frequent flash point in diplomatic relations between Japan and China.
A collision between a Chinese fishing boat and Japanese coast guard vessels in 2010 near the islands set off a serious diplomatic spat, with Beijing temporarily freezing trade and ministerial talks.
“Tokyo has decided to buy the Senkaku islands. Tokyo will protect the Senkakus,” Ishihara said in a speech Monday at the Heritage Foundation, a conservative think tank in Washington. “The Japanese are acquiring the islands to protect our own territory. Would anyone have a problem with that?”
Ishihara, a strong nationalist, said the idea is to block China from taking the islands from Japanese control, as the central government is reluctant to upset China.
He did not indicate how much the city would pay, but said the deal would be finalized while he is visiting the United States.
In Beijing, Liu Weimin, a spokesman for China’s Ministry of Foreign Affairs, reacted harshly to Ishihara’s comment and reiterated China’s claim over the islands.
“Any unilateral measure taken by Japan is illegal and invalid, and will not change the fact that those islands belong to China,” he said in a statement.
Tokyo city official Tatsuo Fujii said details of the deal could not be released immediately and further discussions would be held with Okinawa prefecture, which has jurisdiction over the islands, and other related authorities.
The government currently pays rent to the owners of the four islands in the Senkaku group so they won’t be sold to any questionable buyer. It pays 24.5 million yen ($304,000) a year to the owner of the three islands, which are unused. The fourth island is used by the U.S. military for drills.
Chief Cabinet Secretary Osamu Fujimura reiterated on Tuesday that Japan has sovereignty over the Senkaku islands and said the central government might purchase them.
Japan and China also have disputes over undersea gas deposits in the East China Sea and Japan’s wartime history.
Ishihara previously helped to erect a lighthouse on one of the Senkaku islands, which a group of nationalists later replaced with a larger one recorded on navigation charts.
Ishihara’s comments about the disputed islands are also seen as politically motivated to discredit Prime Minister Yoshihiko Noda‘s government, which is struggling to gain public support.
- UPDATE2: Tokyo gov’t in talks with owners to buy Senkaku Islands: Ishihara (english.kyodonews.jp)
- UPDATE4: Tokyo gov’t in talks with owners to buy Senkaku Islands: Ishihara (english.kyodonews.jp)
- UPDATE3: Tokyo gov’t in talks with owners to buy Senkaku Islands: Ishihara (english.kyodonews.jp)
- Tokyo governor says city will buy disputed islands (newsinfo.inquirer.net)
- UPDATE1: Japan protests China’s possible East China Sea gas drilling (english.kyodonews.jp)
- Japan names 39 unihabited islands to cement economic zone (english.kyodonews.jp)
Namibia: BP Joins Serica in Exploration Offshore Namibia
Serica Energy plc announces that, subject to the consent of the Ministry of Mines and Energy in Namibia, BP will be joining Serica in the exploration of Licence 0047 offshore Namibia by farming-in to Serica’s interest.
The Licence, comprising Blocks 2512A, 2513A, 2513B and 2612A (part), was recently awarded to Serica Energy Namibia B.V. (a wholly owned subsidiary of Serica) and covers an area of approximately 17,400 square kilometres in the deep water central Luderitz Basin. Serica currently has an 85% interest in the blocks. Its partners are the National Petroleum Corporation of Namibia (Pty) Limited (“NAMCOR”) (10%) and Indigenous Energy (Pty) Limited (“IEPL”) (5%). Both NAMCOR’s and IEPL’s interests are carried by Serica for prescribed work programmes.
Under the transaction, BP will pay to Serica a sum covering Serica’s past costs and earn a 30% interest in the Licence by meeting the full cost of an extensive 3D seismic survey. As a result of the farm-out, Serica’s interest in the Licence following completion of the seismic survey will be 55%. Serica has also announced today that it has signed a contract with Polarcus Seismic Limited to acquire up to 4,150 square kilometres of 3D seismic across the Licence .
The deep water geological basins offshore Namibia, including the Luderitz Basin, are at the early frontier stage of exploration. Although the presence of very large structures have been shown to exist from seismic surveys, very few wells have been drilled in the deeper water Namibian basins to date and the full hydrocarbon potential of the area has not yet been fully tested. Water depths in Serica’s Luderitz Basin blocks range from 300 to 3,000 metres. Drilling in these depths of water, whilst becoming more commonplace in the industry, requires sophisticated drilling techniques and equipment and is very costly.
Serica has therefore granted an option for BP to increase its interest in the Licence by meeting the full cost of drilling and testing an exploration well to the Barremian level before the end of the first four year exploration period. In the event that this option is exercised, Serica’s interest in the Licence will be 17.5% carried through the first well, which will have very considerable value if the exploration drilling is successful.
Serica will continue to be the operator of the Licence during the initial seismic period with BP taking over as operator if it exercises its option to drill and test a well.
Tony Craven Walker, Serica’s Chairman and Interim Chief Executive said:
“Serica’s licence interests in the emerging Atlantic margin basins offshore Ireland, Morocco and Namibia are attracting growing industry interest. In Namibia we recognise the benefits of having a partner who brings technical and development expertise to the group to complement Serica’s early stage exploration capability.
We are therefore very pleased that BP has decided to join Serica and its partners in the exploration of the Luderitz Basin blocks. The blocks, located in the centre of the largely unexplored Luderitz Basin, cover a very large area and contain multiple play types with considerable potential. We were awarded the blocks only two months ago and, with BP now participating in the exploration effort, we are able to make a very fast start to what is likely to be a considerable and potentially very rewarding exploration programme.”
- French Guiana: Shell to Begin Guyane Drilling in Mid 2012 (mb50.wordpress.com)
- ANCAP Reveals Ronda Uruguay II Winners (mb50.wordpress.com)
- BP Acquires New Offshore Acreage in Brazil (mb50.wordpress.com)
Domino-1: Romania’s First Deepwater Exploration Well
ExxonMobil’s Romanian subsidiary together with Petrom has started exploration drilling on Domino-1, the first deepwater exploration well in the Romanian sector of the Black Sea.
The Domino-1 well is located in the Neptun Block, 170 kilometers offshore in water about 1,000 meters deep and will be drilled using state-of-the-art industry technology. The well is being drilled by the world-class, sixth generation drillship, Deepwater Champion, which recently transited to Romanian waters after completing its drilling program offshore Turkey. Drilling operations are expected to take about 90 days.
The drillship is owned by the world’s largest drilling contractor, Transocean.
“We are very pleased to collaborate with Petrom in this project – a collaboration built upon ExxonMobil’s experience as a leader in deepwater exploration and Petrom’s vast experience in Romania. We highly value the efforts of the Romanian authorities for supporting the progress of the deepwater Black Sea exploration program,” said Ian A. Fischer, Managing Director of EEPRL.
Exploration drilling, especially in such frontier, unexplored areas as the deepwater Black Sea, may or may not result in a discovery. If commercial discoveries are made, the development of the Neptun Block would yield significant positive industrial, social and economic benefits for Romania.
“Together with our partner ExxonMobil, we are developing a unique project for Romania. Deepwater exploration carries high investment risks and requires investments of several hundred million U.S. dollars, yet a potential success would fundamentally change the perspective of the Romanian energy sector,” said Johann Pleininger, Petrom’s Executive Board Member responsible for Exploration & Production.
Offshore Energy Today Staff, January 10, 2012; Image: Transocean
- Lukoil Wins Tender For Exploration And Development Of Two Offshore Blocks In Romania
- Lukoil, Vanco Sign Agreements for Exploration and Development of 2 Blocks Offshore Romania
- Sterling and Romania Officially Resolve Dispute
- Melrose Wins Two Exploration Licences Offshore Romania
- Sterling Files Notice of Dispute with Romania
BOEM: Conditional Approval for Shell’s Chukchi Sea Exploration Plan (USA)
The Bureau of Ocean Energy Management (BOEM) on Friday, October 16, issued conditional approval of Shell Gulf of Mexico, Inc.’s revised Exploration Plan under leases in the Chukchi Sea Planning Area. In its Exploration Plan, Shell proposes drilling up to six exploration wells in Alaska’s Chukchi Sea beginning in the 2012 drilling season.
This decision follows the bureau’s completion of a site-specific Environmental Assessment that examined the potential environmental effects of the plan. The conditions of approval require Shell to comply with a range of important safety and environmental protection measures.
BOEM’s conditional approval does not authorize Shell to commence exploratory drilling in the Chukchi Sea. Shell must satisfy the conditions of BOEM’s approval, as well as obtain approvals from the Bureau of Safety and Environmental Enforcement (BSEE) regarding its Oil Spill Response Plan and well-specific applications for permit to drill.
“Our scientists and subject matter experts have carefully scrutinized Shell’s proposed activities,” said BOEM Director Tommy P. Beaudreau. “We will continue to work closely with agencies across the federal government to ensure that Shell complies with the conditions we have imposed on its Exploration Plan and all other applicable safety, environmental protection and emergency response standards.”
Shell acquired its leases in the Chukchi Sea in 2008 under Lease Sale 193, which BOEM recently reaffirmed after completing a Supplemental Environmental Impact Statement. All of these leases are subject to a series of stipulated requirements to mitigate operational and environmental risks, and the conditions for approval of Shell’s Exploration Plan build on and expand those requirements.
Among the conditions of approval is a measure designed to mitigate the risk of an end-of-season oil spill by requiring Shell to leave sufficient time to implement cap and containment operations as well as significant clean-up before the onset of sea ice, in the event of a loss of well control. Given current technology and weather forecasting capabilities, Shell must cease drilling into zones capable of flowing liquid hydrocarbons 38 days before the first-date of ice encroachment over the drill site. Based on a 5-year analysis of historic weather patterns, BOEM anticipates November 1 as the earliest anticipated date of ice encroachment. The 38-day period would also provide a window for the drilling of a relief well, should one be required.
Shell must also obtain necessary permits from other agencies — the Environmental Protection Agency, the U.S. Fish & Wildlife Service, and the National Marine Fisheries Service.
- Shell clears hurdle in bid to drill in Alaska (marketwatch.com)
- Conditional OK for Shell’s Alaska offshore oil plan (reuters.com)
- Shell Gets Nod to Drill in Arctic (mercurynews.com)