Atwood receives contract extension for Achiever drillship from Kosmos Energy
Atwood Oceanics has agreed to a one-year extension and rate adjustment to its existing contract with Kosmos Energy Ventures for the Atwood Achiever.
The ultra-deepwater drillship commenced its three-year drilling services contract with Kosmos on 12 November 2014 for operations offshore northwest Africa. The agreement adjusts the operating dayrate to approximately $495,500, net of taxes, and extends the contract end date to 12 November 2018. As part of the agreement, Kosmos has an option that may be exercised at any time through 1 October 2016 to revert the contract to the original operating dayrate and original end date. Exercising this option will result in a payment that includes the difference in dayrates, taxes and an administrative fee covering the time periods for which the reduced day rate was invoiced.
“Following our recent basin-opening discovery offshore Mauritania, the extension of the Atwood Achiever contract will enable us to continue executing our active exploration and appraisal program in the Atlantic Margin. We enjoy an excellent relationship with Atwood Oceanics, and the Achiever continues to deliver safe and reliable drilling performance for Kosmos Energy,” Andrew G. Inglis, Chairman and CEO of Kosmos Energy, said.
Genie Energy confirms discovery in northern Israel
US-based Genie Energy issued a statement in October announcing that preliminary evidence from exploratory wells drilled by its Afek subsidiary in northern Israel confirms the existence of significant quantities of oil and gas within its exploratory license area.
The company does not yet have sufficient evidence to determine whether this or any part of the resource can be technically or economically produced. The resource does not constitute proved, probable or possible reserves.
The resource is present at multiple strata and, in some of the explored portion of the license area, is up to 350-m thick – a finding consistent with the company’s geological model. The thickness of the resource is one of many factors considered in making a determination of the commercial potential of any resource.
“We remain optimistic given the results to date,” said Howard Jonas, Chairman and CEO of Genie Energy. “In terms of quantity, our log results indicate that this could be a significant find if analogous conditions are present over a significant portion of the license area. We are now working diligently to determine the production costs and total quantity of the resource.”
The company has completed drilling two exploratory wells within its license area and begun drilling a third pursuant to a 10-well exploratory program.
Esso starts production on Nigeria’s deepwater Erha North Phase 2 project
Esso Exploration and Production Nigeria, an ExxonMobil subsidiary, has started oil production ahead of schedule on the Erha North Phase 2 project offshore Nigeria.
The Erha North Phase 2 project is a deepwater subsea development located 60 miles offshore Nigeria in 3,300 ft of water and four miles north of the Erha field, which has been producing since 2006. The Erha North Phase 2 project includes seven wells from three drill centers tied back to the existing Erha North floating production, storage and offloading vessel, reducing additional infrastructure requirements.
The project is estimated to develop an additional 165 million bbl from the currently producing Erha North field. Peak production from the expansion is currently estimated at 65,000 BPD and will increase total Erha North field production to approximately 90,000 BPD.
ExxonMobil expects to increase its global production volumes this year by 2% to 4.1 million BOED, driven by a 7% growth in liquids production.
The Erha North field was discovered in 2004. Esso, the operator, holds 56.25% interest in Erha North Phase 2, while Shell Nigeria Exploration and Production holds the remaining 43.75%.
Eni wins PSC for three fields in Mexico’s Campeche Bay
Eni has won a 100% share production-sharing contract (PSC) following an international auction held in Mexico City. The contract will allow Eni to appraise, develop and exploit the oil fields of Amoca, Miztón and Teocalli, located in the Area 1 in the Campeche Bay offshore Mexico.
The Amoca, Miztón and Teocalli fields are located in shallow waters from 20 to 40 m deep. According to estimates by the Comisión Nacional de Hidrocarburos, the combined oil volumes in place for the three fields are approximately 800 million bbl of oil and 480 billion cu ft of associated gas.
Eni will now move on with the appraisal campaign of the fields.
The award is subject to the approval of local authorities. Area 1 will be operated by a new company, Eni Mexico.
New contract award puts Maersk Resilient jackup back to work in North Sea
Maersk Drilling has been awarded a new contract for the Maersk Resilient jackup with Maersk Oil. The firm contract, which commenced in October 2015, is for three years, with an estimated contract value of $110 million. The Maersk Resilient will conduct operations on various fields in the Danish sector of the North Sea.
The rig had been stacked at Invergordon in Scotland since May 2015, where the rig has undergone various maintenance work.
“Maersk Drilling has to continue its excellent performance and continue to build our already strong backlog in order to navigate the low visibility in the market. Therefore, it is also very rewarding that a rig that has been stacked since May 2015 can now return to where she belongs and bring value to our client,” said Claus V. Hemmingsen, CEO of Maersk Drilling.
The rig is fully equipped for high-pressure, high temperature drilling and is designed for year-round operation in the North Sea, in water depths up to 107 m (350 ft).
Shell halts Alaskan exploration plans
Shell has announced it will cease further exploration offshore Alaska for the foreseeable future. The announcement came after the operator found indications of oil and gas in the Burger J exploration well, located in the Chukchi Sea, but not in sufficient volumes to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with US regulations, the company announced.
“The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program,” said Marvin Odum, Director of Shell Upstream Americas. “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US. However, this is a clearly disappointing exploration outcome for this part of the basin.”
Shell’s decision to cease exploration in the area reflects the Burger J well result, the high costs associated with the project, as well the challenging and unpredictable federal regulatory environment in offshore Alaska.
The company expects to take financial charges as a result of this announcement. The balance sheet carrying value of Shell’s Alaska position is approximately $3 billion, with approximately a further $1.1 billion of future contractual commitments.
Shell holds a 100% working interest in 275 Outer Continental Shelf blocks in the Chukchi Sea.
Operations will continue to safely demobilize people and equipment from the Chukchi Sea.
The Burger J well is located approximately 150 miles from Barrow, Alaska, in about 150 ft of water. Shell safely drilled the well to a total depth of 6,800 ft this summer in a basin that demonstrates many of the key attributes of a major petroleum basin. For an area equivalent to half the size of the Gulf of Mexico, this basin remains substantially underexplored.
Judge issues injunction on BLM hydraulic fracturing rules on federal lands
On 30 September, US District Judge Scott Skavdahl ruled in favor of a motion for a preliminary injunction delaying the implementation of the rules by the Bureau of Land Management (BLM) to govern hydraulic fracturing on federal and Indian lands. The judge’s decision prohibits the BLM from implementing new rules proposed in March while litigation over the rule’s legality is pending.
BakerHostetler filed the initial motion for a preliminary injunction in May on behalf of the Independent Petroleum Association of America (IPAA) and Western Energy Alliance. On 23 June, Judge Skavdahl decided that BLM could not implement the rules on 24 June as originally planned. The court postponed the final rule’s effective date at least until after the Department of Justice filed the administrative record in the lawsuit. The administrative record was originally to be filed on 24 July, but the government was granted an extension until 28 August.
IPAA and the alliance, along with four states (Wyoming, North Dakota, Colorado, and Utah) and the Ute Indian Tribe, argued that the implementation of the final hydraulic fracturing rule was likely to cause the states and industry members irreparable harm and requested the court enter an order preventing BLM from implementing the rule until the court resolved the merits of the underlying lawsuit. The district court agreed, finding that petitioners had presented credible evidence that the imposition of the rule would result in irreparable harm to oil and gas operators on federal lands and that existing federal and state rules were sufficient to protect against environmental harm during the time the court considered the preliminary injunction motion.
BG Group acquires positions offshore Newfoundland
BG Group has acquired three non-operated positions offshore Newfoundland from Repsol. This provides the company with access to early-stage exploration in a proven prospective basin ahead of the first well being drilled later this year.
The blocks are located in the Atlantic Ocean, approximately 125 miles (200 km) from St. John’s, Newfoundland. The company’s equity stakes range from 10% to 25%.