Exploration

PGS considers a split

Petroleum Geo-Services ASA (PGS) has decided to refinance most of its debt by raising a US $1 billion facility, comprised of an $850 million loan and a $150 million revolving credit facility. The company also is exploring the possibility of separating into two independently listed companies, Geophysical and Production.

Fugro to get new vessel

Fugro has signed a long-term charter agreement with E. Forland Shipowners for a new-build 3-D seismic vessel, the GeoCeltic, which will be ready for work by mid-2007. The deck design of the vessel is developed to meet Fugro's specification to accommodate new seismic equipment that incorporates technology suitable for time-lapse surveys.

TGS begins survey

TGS-Nopec Geophysical Co. has begun acquisition of a multiclient 2-D survey offshore Ireland. The survey is located in the Saint George's Channel Basin and is designed to better resolve the Pegasus and Dragon structural trends in the area. Acquisition is being conducted in partnership with Fugro-Geoteam.

New viz platform launched

Finetooth Inc. has formed to offer the oil and gas industry 3-D visualization software designed specifically for viewing and interacting with prestack data. Finetooth is the first commercially available solution in the industry to make use of graphical processing units (GPUs) on graphics cards for raw processing power. By using the GPUs on a cluster of PC nodes, the company is able to visualize large amounts of data and can apply geophysical algorithms

Contracts and awards

• Ikon Science has been awarded a follow-on US $4 million contract by Oilexco Inc. Under the 2-year contract, Ikon will provide support for geoscience modeling and reservoir characterization for Oilexco's program of exploration, appraisal and development drilling in the UK North Sea.
• TNK-BP has selected Petrel workflow tools as its primary application for subsurface reservoir characterization to equip its newly created multifunctional teams with a PC-based, complete seismic-to-simulation software workflow. The decision came at the end of a long-term technical evaluation in which Petrel and other commercially available systems were used in everyday work on TNK-BP projects.
• Fakespace Systems Inc., a subsidiary of Mechdyne Corp., has been awarded a multimillion-dollar contract from Sandia National Laboratories. Fakespace will custom-design, build and integrate visualization systems for Sandia's Microsystems and Engineering Sciences Applications (Mesa) MicroLab facility, which consists of the Education Center, Design Center and Design Review Conference Room.

Statoil/Chevron head north

Statoil and Chevron's Norwegian subsidiary have signed a long-term cooperation agreement for exploration in an area of mutual interest in the Barents Sea. Chevron will contribute global exploration experience and techniques, while Statoil will lend its experience in the Barents Sea and familiarity with the territory. Both also are experienced in liquefied natural gas planning. The duo's first activity was an application for territory in Norway's 19th licensing round.

Norway receives bids

Norway's 19th licensing round drew 24 companies interested in exploration in the country's Norwegian and Barents seas. The nation has been concentrating on its northern properties in recent licensing rounds, combining authorization to explore with tight rules on drilling practices. It plans to announce award winners late in the first quarter of 2006. For comparison, the 18th round drew bids from18 companies and the 17th round drew interest from 13 companies.

New Zealand offers blocks

Crown Minerals, the New Zealand regulatory agency, will open a bidding round in February for 40 new exploration blocks in the Great South Basin off the southern coast of the South Island. According to Crown Minerals, major international companies have made repeated requests for blocks in the area. Bidding opened Feb. 1, and bids must be submitted by Aug. 31, 2006. Each block will measure 50 miles by 70 miles (80 km by 113 km) or about 3,757 sq miles (9,000 sq km).

Pertamina seeks bidders

Pertamina, the Indonesian state oil company, plans to open bids for exploration rights on 10 new oil and gas blocks and development rights on 40 existing or abandoned fields. The state oil company and the government have been walking a tightrope to try to raise production back to the nation's Opec quota of 1.08 million b/d of oil. So far, talks with ExxonMobil over the Cepu oil field on Java have been deadlocked. Leasing of older fields is one attempt to try to get back to the quota mark.

Madagascar opens up

Madagascar will open a new licensing round featuring some 70 small exploratory blocks in the Morondava Basin on the nation's central west coast. The Office des Mines Nationales et des Industries Stratiques said bidding companies will be able to combine as many as three of the smaller blocks into a single contract area, according to Ogilvie's E&P Daily. Each block takes up approximately 772 sq miles (2,000 sq km). The nation will start the round with roadshows in March in Houston and London and will close bidding in September.

Drilling


Transocean, Tesco sign

Offshore drilling contractor Transocean signed an agreement with casing drive pioneer Tesco to use the Tesco Casing Drive System on Transocean rigs. Both companies will market the technology globally, and the companies will mutually decide which rigs will get the new setup. Both companies also will provide people.

Akita rigs up

Canadian drilling contractor Akita Drilling will build three new rigs designed for working conditions in western Canada. The company will spend US $26.4 million. Two of the new rigs will be designed for the heavy oil fields and will include self-moving systems, allowing them to move for short distances for drilling in oil sands. The company also will build a new style of shallow rig targeting coalbed methane operations. The first shallow rig should be completed this year, while the first heavy oil rig will come online in 2007.

Rowan adds jackups

Rowan Companies has budgeted approximately US $165 million each for two new jackup rigs. The LeTourneau 240C rigs will follow a new design with enhanced drilling

and environmental capabilities. They will be able to operate in 400 ft (122 m) of water and can handle high-
pressure/high-temperature drilling conditions. They will have more deck space, more cantilever reach, room for more people and a 2-million-pound hook load capacity.

Pride adds to venture

Pride International, Inc. has acquired from Sonangol, the national oil company of Angola, an additional 40% interest in the joint-venture companies that own the two ultradeepwater drillships Pride Africa and Pride Angola, the 300-ft (91.5-m) independent-leg cantilever jackup Pride Cabinda, and hold management agreements for the deepwater platform rigs Kizomba A and Kizomba B. The acquisition increases Pride's interest in the joint-venture companies from 51% to 91%, with Sonangol continuing to hold a 9% interest. The cash purchase price was approximately US $175 million.

Production

ONGC budgets $11 billion

India's Oil & Natural Gas Corp. (ONGC) will spend US $11 billion upgrading existing offshore platforms and pipelines and will replace some company vessels. Approximately $273 million is earmarked for the fiscal year that ends April 1. Some 65% of the spending will go into improvement of exploration and production activities. In one move, ONGC awarded a turnkey contract to India-based Larsen & Toubro Ltd. to build four well platforms with connecting pipelines in the Mumbai High North and Bassein fields. Three platforms, with six wells each, will use tripod designs. The fourth will host nine sour-gas wells in Bassein field.

Funds go to Africa

Exxon Mobil Corp. plans to inject big money into Africa to increase production from the continent by 50% or 1.3 million boe/d by 2010 with eight new projects. The company's major operations are offshore Nigeria and Angola, but it also has properties offshore Madagascar. The company already has production from Xikomba and Kizomba A and B on Block 15 offshore Angola and plans to bring on Kizomba C and D. Erha, on OPL 209 offshore Nigeria is due onstream in 2007 with Bosi in the same tract coming on later.

General

UK tax hits hard

Oil and gas industry executives offshore the United Kingdom are fighting mad over that nation's decision to raise a supplementary tax on North Sea oil and gas production by 20% instead of 10% as planned earlier. UK Chancellor Gordon Brown expects to collect some US $3.7 billion over the next 2 years from the new fees as tax rates climb to 50% for new fields and to 75% on fields developed before 1993. The government increased corporate taxes by a third in 2002 and later made adjustments designed to draw new operators, primarily independents, into the area. It also increased the tax bite in 2005. Peter Newman, global leader for the Deloitte & Touche oil and gas practice, speaking at the company's 2005 Oil & Gas Conference in Houston, said the new tax would wipe out $15 billion in net present value for UK projects. Kerr-McGee executives must be patting each other on the back. That company just completed the sale of all of its North Sea assets to Maersk for $2.95 billion. The UK news comes in the wake of other news. The Department of Trade & Industry earlier reported 12 new-entry companies into the North Sea will spend some $158 million on exploration on the nation's "promote" licenses.

Border dispute settled

Australia and East Timor finally settled on a border between the two countries and, with it, settled the split of oil and gas revenues from fields in the Timor Sea. Officials said the deal was good for both countries. Under the agreement, East Timor will get a larger share of the giant Greater Sunrise oil and gas complex than Australia wanted to give up. On the other hand, Woodside Petroleum said it could not develop the field for commercial operations until it knew which country would regulate and tax the operations.

E&P cash needs climb

World energy demand will climb 50% in the next 25 years, and that means a sure increase in prices if the energy industry cannot keep up with the rising demand, according to the International Energy Agency's 2005 World Energy Outlook. The price of meeting that demand will be about US $20 trillion in new investments. The reserves are there, the agency said, and mostly focused in the Middle East and North and West Africa. The industry just needs to raise some $56 billion a year and apply it to production and infrastructure as it's needed.

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