E&P Highlights: Oct. 7, 2024

From operational updates from Equinor to a major pipeline contract in Qatar, below is a compilation of the latest headlines in the E&P space.

Activity headlines

BP Abandons Goal to Cut Oil Output

Reuters reported Oct. 7 that BP has scaled back its energy transition strategy, abandoning targets to cut oil and gas output by 2030 in order to regain investor confidence.

Unveiled in 2020, BP’s strategy was among the industry’s most ambitious, with a pledge to cut output by 40% while rapidly growing renewables by 2030. BP scaled back the target in February last year to a 25% reduction, which would leave it producing 2 MMbbl/d at the end of the decade as investors focused on near-term returns rather than the energy transition.

BP is now targeting several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output, sources said.

The company continues to target net zero emissions by 2050.

CEO Murray Auchincloss will present his updated strategy, including the removal of the 2030 production target, at an investor day in February 2025. It is unclear if BP will provide new production guidance.

Equinor Updates Norwegian Development Projects

On Oct. 7, Equinor released a report on 19 projects currently under development in Norway with a total investment framework of 198 billion NOK (US$18.5 billion), from commencement to commissioning.

Highlights include the Johan Castberg, Oseberg gas Phase 2 (OGP) and power from shore and Snøhvit Future projects.

The projects have seen increased costs of 6.5 billion 2024-NOK over the past year, or about 3%. The overall increase since the plans for development and operation (PDOs) is 32.9 billion 2024-NOK. Currency fluctuations account for 12.4 billion NOK of the increase.

If the Johan Castberg project and currency effects are omitted, the cost increase for the reported projects is around 3% since PDOs.

The Johan Castberg production ship is now anchored at the field and Johan Castberg is on track for start-up towards the end of the year.

Phase 2 of the OGP project is composed of partial electrification of the Oseberg Field Centre and Oseberg sør, as well as installation of a new compressor module at the field center. As a result of a 2023 fire at Hitachi’s factory, costs have increased about 2.5 billion NOK (US$234,000) since PDO. Commissioning has been postponed from 2026 to late 2027.

The Snøhvit Future encompasses onshore compression and electrification of Hammerfest LNG on Melkøya.

Contracts and company news

Velesto Signs MOU with SLB to Boost Drilling Rig Performance

Malaysia-based Velesto Energy has entered into a memorandum of understanding with SLB aimed at enhancing the capabilities of its drilling rigs, the company said Oct. 4. 

The three-year partnership will see the deployment of SLB’s DrillOps Intelligent Well Delivery and Insights Solutions, as well as its Drilling Emissions Management Solutions, on selected Velesto rigs.

Velesto has a fleet of six jack-up drilling rigs and two hydraulic workover units. Besides Malaysia, the company has a presence in Indonesia, Vietnam, the Philippines and Thailand.

Bapco Upstream Awards Jereh $288MM Contract

Bapco Upstream has awarded a $288 million engineering, procurement, construction and commissioning (EPCC) contract to Chinese oilfield services provider Jereh Oil & Gas.

The EPCC contract for gas compressor stations includes the design, procurement, construction and commissioning of stations and a central compression facility. The contract was announced Oct. 4.

Bapco Upstream’s strategic projects, including the EPCC contract, aim to upgrade energy infrastructure and ensure a stable energy supply. The completion of the project is expected to boost Bahrain’s natural gas development and utilization.

Bapco Upstream is 100% owned by Bapco Energies, the state-owned oil and gas company of Bahrain.

McDermott Secures QatarEnergy EPCI Contract

McDermott International has been awarded an engineering, procurement, construction and installation (EPCI) contract by QatarEnergy LNG for the North Field South (NFS) Offshore Pipelines and Cables Project, the company said Oct. 3.

The scope of the contract comprises the EPCI of 250 km of offshore and onshore gas pipelines. The pipelines will connect five new offshore wellhead platforms with two new onshore LNG trains in addition to subsea composite power and control cables.

The NFS infrastructure is part of the North Field Expansion Project (NFXP), which will help increase Qatar’s total LNG production to 142 million tonnes per annum (mtpa) from the current 77 mtpa.

This new contract is in addition to the awards received by McDermott for the NFS Pipelines FEED, the NFS Jackets EPCI and the NFXP topsides and pipelines which included the NFS Topsides.