E&P Highlights: Aug. 8, 2022

Below is a compilation of the latest headlines in the E&P space within the past week including Petrobras wrapping up the sale of its Peroá Cluster assets and Transocean winning multiyear contracts totaling $1.2 billion plus Keppel was awarded a refurb contract for an FPU to be used by LLOG Exploration Offshore in the deepwater Gulf of Mexico.

Activity headlines

2nd Frade Revitalization well goes online

Petro Rio announced the 7-FR-55H -RJS well offshore Brazil has begun production at an initial rate of 3,500 bbl/d. The well is the second in Petro Rio’s Frade Revitalization Plan. It cost $22 million and was completed in 40 days. It uses the subsea structure and part of a nearby well that is not producing.

The NORBE VI rig has already started drilling the first injection well of the plan.

Contracts and Company Briefs

Saipem wins pipelay, umbilicals contract

Eni SpA subsidiary Enimed awarded Saipem a contract to transport and install the Argo and Cassiopea gas pipelines offshore Italy.

Saipem’s Castorone and Castoro 10 will lay the 60-km, 14-inch gas pipeline in water depths to 660 m. The Saipem 3000 vessel will install umbilicals connecting Cassiopea wells to the Prezioso platform.

The contract is valued at 300 million Euro.

Exmar sells Tango FLNG to Eni

Eni reported it has acquired from Exmar Group the company Export LNG Ltd., which owns the Tango FLNG floating liquefaction facility. Eni will use the facility in the Republic of Congo as part of the natural gas development project in the Marine XII block.

Exmar put the value of the transaction for the sale of Tango FLNG in a range of $572 million and $694 million, depending on the actual performance of the Tango FLNG during the first six months on site. Tango FLNG will be made available to Eni at the closing date of the transaction, which is expected in the second half of August.

The Tango FLNG, built in 2017, has a treatment capacity of approximately 3 million cubic meters per day and an LNG production capacity of about 1 Bcm per year. Eni said Tango FLNG will accelerate production start-up time.

Tango FLNG will begin its activity in Congo in the second half of 2023, following the completion of mooring and connection to tie with the Marine XII network and infrastructure. LNG production from Marine XII is expected to begin in 2023. When fully operational, it will provide volumes exceeding 4.5 Bcm per year.

Eni and Exmar also agreed to a 10-year charter for a floating storage unit (FSU) which will be based on the conversion of an LNG carrier. Furthermore, Exmar will provide operations and maintenance services for both Tango FLNG and the FSU and engineering services for the project, which will be the object of separate contracts.  

Transocean drillships win $1.2 billion in work

Transocean reported winning multiyear contracts totaling $1.2 billion for its Deepwater Conqueror and Petrobras 10000 drillships.

A national oil company awarded the ultradeepwater drillship Petrobras 10000 a 5.8-year contract valued at $915 million for operations expected to begin in October 2023 and end in August 2029. According to Transocean, the estimated backlog excludes income associated with the customer’s anticipated use of the company’s patented dual-activity technology on the Petrobras 10000.

A major operator awarded the ultradeepwater drillship, Deepwater Conqueror a two-year contract valued at $312 million for operations in the U.S. Gulf of Mexico at $440,000 per day with up to an incremental $39,000 per day for additional products and services. This contract begins in December 2022, directly after the current contract.

Keppel wins refurb contracts for FPUs

Keppel Offshore & Marine Ltd. subsidiaries have won contracts worth S$75 million (US$54 million) to refurbish two FPUs, destined for operations in the Gulf of Mexico and offshore Senegal.

Salamanca FPS Infra LLC contracted with Keppel AmFELS Inc. to refurbish an FPU to be used by LLOG Exploration Offshore LLC in the deepwater Gulf of Mexico for the Leon and Castile fields.

The scope includes demolition, hull modifications, and upgrades to key systems. Expected to be completed in second-quarter 2024, the Salamanca FPU will have a capacity of 60,000 bbl/d of oil and 40 MMcf/d of natural gas. 

MODEC Offshore Production Systems (Singapore) Pte Ltd. contracted with Keppel Shipyard Ltd. to support the completion of a FPSO for Woodside Energy (Senegal) B.V., which operates the Sangomar Field Development Phase 1.

When complete, the FPSO will be moored in 780 m water depth offshore Senegal and able to process 100,000 bbl/d.

Keppel Shipyard will complete the topsides integration work and support the pre-commissioning and commissioning activities for the FPSO. The vessel is expected to arrive at its Singapore yard in fourth-quarter 2022. 

Petrobras wraps up sale of Peroá Cluster assets

Petrobras has finalized the sale of all its stakes in the producing fields of Peroá and Cangoá, and in the BM-ES-21 concession (Malombe Discovery Evaluation Plan). Jointly called Peroá Cluster and located in the Espírito Santo Basin, Petrobras has sold its stake to 3R Petroleum Offshore SA, previously called OP Energia Ltda. To date, Petrobras has received $13 million for the stake, and expects to receive up to $42.5 million in contingent payments, depending on future Brent prices and asset development.

Petrobras had held 100% stakes in the Peroá and Cangoá fields, located in shallow waters. Average production from January to June 2022 was about 572 million cubic meters per day of non-associated gas. Petrobras also held 100% in the deepwater BM-ES-21 exploratory block, where the Malombe discovery is located.

Neptune awards vessel contract for Cygnus Field

Neptune Energy awarded Sentinel Marine a £10 million three-year vessel services contract for provide offshore support for Neptune’s operated Cygnus gas field in the U.K. southern North Sea.

Sentinel Marine will deploy its multi-role, emergency response and rescue (MRERR) vessel, Cygnus Sentinel, on the gas field. The vessel will also support an upcoming drilling campaign on the Cygnus Field.

The contract includes two one-year extensions.

Neptune operates Cygnus with 38.75% energy on behalf of partner Spirit Energy with 61.25%.

MODEC, Toyo team up for EPCI services for FPSOs

MODEC and Toyo Engineering Corp. have created a joint venture company to be called Offshore Frontier Solutions Pte. Ltd. to provide engineering, procurement, construction and installation (EPCI) services for FPSO vessels. 

For 15 years, MODEC and Toyo have collaborated on the topside EPC scopes for FPSO projects. Through the establishment of the joint venture company, to be based in Singapore, MODEC and Toyo will further deepen the collaboration and strengthen the engineering and project management capabilities necessary to carry out large-scale FPSO projects

Aramco, Sinopec ink MOU for collaboration

Saudi Aramco signed a memorandum of understanding (MOU) with Sinopec that outlines pathways for strategic cooperation between Aramco and Sinopec and supports the long-term relationship between the two companies and their existing joint ventures in China and in Saudi Arabia.

Areas of potential cooperation include: assessing refining and petrochemical integration opportunities; engineering, procurement and construction; oilfield services, upstream and downstream technologies as well as collaboration across carbon capture and hydrogen processes.

The companies will also discuss the opportunities for the establishment of a local manufacturing hub in King Salman Energy Park.

This latest collaboration builds on existing joint ventures between the two companies, including Fujian Refining and Petrochemical Co. (FREP) and Sinopec Senmei (Fujian) Petroleum Co. (SSPC) in China, and Yanbu Aramco Sinopec Refining Co. (YASREF) in Saudi Arabia.

Tetra signs produced water recycling deal

TETRA Technologies Inc. announced it has entered into exclusive technology licensing agreements with KMX Technologies LLC and Hyrec Holdings Co. W.L.L. for the recycling of produced water. 

Citing Rystad Energy Research figures, TETRA CEO Brady Murphy said the U.S. will produce close to 23 billion barrels of water from producing oil and gas wells in 2022 with nearly 13 billion barrels being disposed of in saltwater disposal (SWD) wells. 
"With increasing water volumes required for unconventional completions and increased seismicity events in key subsurface disposal locations, advanced water recycling solutions for beneficial reuse are a critical industry need,” he said. "Last year we recycled over a billion gallons of produced water for frac reuse while in parallel investing heavily in R&D efforts, including third party technologies, to develop economically viable alternatives to disposal.” 

New wellhead plug screens out debris

CORTEC launched its new Wellhead Plug Catcher, which is installed directly between the wellhead and the production choke. The compact Wellhead Plug Catcher uses an internal screen to filter out debris that prevent it from clogging or damaging a choke. 

CORTEC vice president Stephen Corte said the Wellhead Plug Catcher was developed to improve choke service life and minimize downtime for servicing.

“Operators fighting substantial well debris using this product will gain increased choke trim life while experiencing less handling and downtime fighting debris,” he said. “We have now installed hundreds of these units in the field.”

The screen design was designed through consultation with field operators, the company said.

Regulatory Updates

US 2023-2028 proposed leasing plan up for comment

The US Bureau of Ocean Energy Management (BOEM) is accepting comments and testimony on the proposed 2023-2028 offshore leasing plan and the draft environmental impact statement. 

In early July, the Biden administration unveiled its Proposed Program for the 2023-2028 National Outer Continental Shelf Oil and Gas Leasing Program, which could include anywhere from zero to 11 lease sales, along with the draft programmatic environmental impact statement (Draft PEIS) for the 2023-2028 Program.

BOEM is holding four live, virtual open house meetings to accept comment:

• Aug 23, 4-7 p.m. EDT
• Aug 25, 5-8 p.m. EDT
• Aug 29, 7-10 p.m. EDT
• Aug 31, 8-11 p.m. EDT

Additionally, BOEM has scheduled a virtual opportunity for people to submit oral testimony. Up to three minutes of oral comment per person will be captured by a court reporter for the public record on Sept. 12, 5-8 p.m. EDT.

Registration is recommended for those who wish to provide oral testimony. Official comments can also be provided via Regulations.gov. Comments will be accepted for 90 days following the July 8 filing in the Federal Register.