E&P Highlights: Jan. 9, 2023

From a field activity to new contracts, below is a compilation of the latest headlines in the E&P space within the past week. 

Activity headlines

WO-16 starts producing to Sagar Samrat 

ONGC’s “lucky mascot” Sagar Samrat drilling started production as a Mobile Offshore Production Unit (MOPU) in late December, accepting first oil from the WO-16 cluster in the Arabian Sea.

The Sagar Samrat MOPU can handle up to 20,000 bbl/d of crude oil and has a maximum export gas capacity of 2.36 MMcm/d. It is expected to add 6,000 bbl/d of oil to ONGC’s production. 

WO-16 is a cluster of four marginal fields in the Arabian Sea in about 75 m water depth about 40 km from the Mumbai High. Because no nearby facility was available to accept production from the fields, ONGC installed the MOPU for production, processing and transportation of oil and gas from the WO-16 cluster.

In 2011, a consortium of Mercator Oil & Gas Ltd., Mercator Offshore (P) Ltd. and Gulf Piping Co. (GPC) won a contract to convert the Sagar Samrat jackup into a MOPU. The project was stalled by various legal challenges and COVID-19, with ONGC calling it one of the most complex projects the company had undertaken. It was successfully installed near the WO-16 wellhead platform in April 2022.

The Sagar Samrat jackup was built in 1973, and ONGC said it has been a lucky mascot for the company. It was instrumental in discovering Mumbai High, the biggest oil field in India, in 1974. It has drilled more than 125 wells and been involved in 14 key offshore oil and gas finds. Once it has produced the WO-16 cluster, ONGC intends to shift it to monetize other stranded assets.

Hydrocarbons found at North Sea’s Isabella

Ithaca Energy announced the TotalEnergies-operated Isabella appraisal well in the central North Sea found 146 ft of hydrocarbons in Upper Jurassic and Triassic sandstone reservoirs.

The company acquired logging while drilling and wireline logs to establish reservoir quality for the well on the U.K. Continental Shelf. The operator was planning to plug and abandon the well and evaluate the drilling results to establish commerciality of the reservoir. 

Isabella lies about 25 miles south of TotalEnergies’ operated Elgin Franklin Field. TotalEnergies holds 30% interest in Isabella in Block 30/12d-12 and operates it on behalf of partners Neptune E&P UK Ltd. with 50% interest, Ithaca Energy UK Ltd. with 10% and Energean Exploration Ltd. with 10%.

Uruguay awards two blocks 

Uruguay’s ANCAP has awarded bids in its most recent open Uruguay round. 

YPF S.A. submitted bids for OFF-4 and OFF-5, while a consortium of APA Exploration LDC and BG International Ltd. (a Shell group company) also bid for OFF-4.

The APA-Shell consortium won the OFF-4 bid and has committed to an exploratory program that includes evaluation of petroleum geology and prospective resources; gravity and magnetic data 3D inversion and modeling; acquisition, processing and interpretation of 2,500 sq km of 3D seismic; and data licensing.

YPF won the OFF-5 bid and has committed to an exploratory program that includes evaluation of petroleum geology and prospective resources, along with gravity and magnetic data 3D inversion and modeling.

Egypt blocks up for grabs 

The Egyptian Natural Gas Holding Co. (EGAS) is offering a dozen production sharing agreements for exploration in the Mediterranean Sea and Nile Delta. 

According to Egypt Upstream Gateway (EUG), which is providing information on the bid round, the Mediterranean Basin offers both frontier and brownfield opportunities. The onshore Nile Delta Basin has only 20% coverage by active concessions. 

Bids are due April 30. 

Conrad signs Indonesia PSCs 

Conrad Asia announced it had signed two new production sharing contracts for acreage offshore Aceh, Indonesia.

The blocks hold known shallow water gas discoveries made in the 1970s and flow tested but not developed. Conrad has identified several deepwater structures with potential as well.

Even though the production-sharing contract (PSC)s hold discoveries, they are classified as frontier areas and as such the fiscal terms are “attractive,” the company said.

Conrad holds 100% interest in the Offshore North West Aceh (Meulaboh) and Offshore South West Aceh (Singkil) PSCs, which were offered under the Indonesia’s 2022 petroleum bidding round.

The total committed work program for each PSC is US$15 million and includes geological studies in 2023, the acquisition of 500 sq km of 3D seismic in 2024 and drilling a well in 2025. 

Contracts and company news

ADNOC investing $15 billion in decarbonization

ADNOC has earmarked $15 billion for decarbonization projects by 2030 as part of its ambition to reach net zero by 2050.

Funds will go for projects in carbon capture and storage (CCS), electrification of operations and new CO₂ absorption technology, and ADNOC anticipates investments in hydrogen and renewables.

The company said it intends to announce projects and initiatives, including a first-of-its-kind CCS project, throughout 2023. 

Aker Solutions for Petrojarl Knarr FPSO upgrade 

Aker Solutions will upgrade the Petrojarl Knarr FPSO to be redeployed at Equinor’s Rosebank field development offshore U.K. 

Under the engineering, procurement and construction (EPC) contract from Altera Infrastructure, which owns the FPSO, Aker Solutions will carry out the work in a joint venture with Drydocks World-Dubai, with the upgrade taking place at the yard in Dubai. 

The upgrade includes a combination of work with new build, demolition and life extension that are required for the FPSO to be kept on the field for 25 years without drydocking. 

Aker Solutions will carry out detail design in Norway in collaboration with Citec Norway AS, ABB Norway AS and OneSubsea Processing AS. Engineering, procurement and construction work is planned to start up during the first half of 2023 and is scheduled to be completed at the end of 2025. The Petrojarl Knarr FPSO was transported to Aker Solutions yard at Stord in August 2022 and will be stored there until the planned tow to Dubai during the second half of 2023. 

Aker Solutions expects to book an order intake of around NKr 2.5 billion related to this contract in the first quarter of 2023, pending final investment decision and regulatory approvals.

Equinor’s development concept for the Rosebank Field includes redeployment and reuse of the existing Petrojarl Knarr FPSO.

Deepsea Yantai wins work from PGNiG

PGNiG Upstream Norway AS has signed a contract for the Deepsea Yantai, Odfjell Drilling Ltd. announced on behalf of CIMC OFFSHORE AS.

Under the contract, Deepsea Yantai will drill one firm well, Tomcat, in PL 1055 in the Norwegian Sea, which is expected to take 55 days and begin in second- or third-quarter 2024. The contract includes the option for two additional wells in 2024. 

CGG starts Foz do Amazonas reimaging project 

CGG announced the start of a new Foz do Amazonas 3D seismic reimaging project, aimed at supporting Brazil’s Permanent Offer initiative in the equatorial margin. The project, supported by industry funding, is expected to complete by the end of 2023, with fast-track products available by June.

The reimaging project will merge over 7,700 sq km of existing public 3D seismic data in the Foz do Amazonas Basin. The area has a rich network of turbiditic fans and channels made attractive by its geologic proximity to Guyana and Suriname and the recent success stories along the South Atlantic conjugate margins of West Africa.  

In early January, CGG announced plans for the second phase of the Foz do Amazonas 3D multi-client survey, which extends coverage in the Brazil Equatorial Margin and will cover 11,425 sq km.

ONGC contracts Shelf’s Trident II jackup

Shelf Drilling Ltd. announced Oil and Natural Gas Corp. (ONGC) had awarded it a three-year contract for a jackup to work in Mumbai High, offshore India.

The Trident II jackup will continue operations in direct continuation of its current contract following an out of service period in preparation for the new three-year award, Shelf said.

Dana Petroleum exercises drilling option 

Island Drilling Co. announced Dana Petroleum (E&P) Ltd. has exercised an option for the Island Innovator drilling unit.

In December, the drilling contractor announced it had signed a $30 million contract slated to start in April 2023 for the Island Innovator and associated services to work in the U.K. That contract was for three firm wells estimated at 80 days and included an option for an additional well at 30 days. In January, Dana exercised the option for the final well, bringing the total estimated work days to 110.

TGS wins Bangladesh 2D program

TGS announced a new regional multi-client 2D seismic program offshore Bangladesh in partnership with SLB and Petrobangla.

The initial phase will include about 11,000 line-km of newly acquired high-resolution broadband 2D seismic data on a regional scale to enhance the geological understanding of the prospective Bengal Fan. In addition, the data will help with acreage evaluation, supporting future license rounds under the soon-to-be-revised fiscal terms widely anticipated by the industry, according to TGS.

The overall program plans for 32,000 line-km of multi-client seismic data covering most of offshore Bangladesh. The new data will be acquired using long offset and long record lengths to image the deeper sections and will be processed through modern high-end broadband pre-stack time and depth migrated (PSTM/PSDM) workflows.

Acquisition is slated to begin in early January 2023 and final processing deliverables are anticipated in the first-quarter 2024. Fast-track results will be available for early acreage evaluation.

Tenancious jackup extended for Angola work

Shelf Drilling Ltd. announced its Shelf Drilling Tenacious jackup rig won a one-year extension for continuing drilling operations offshore Angola. With the extension, the rig is committed through November 2024. 

According to the drilling contractor’s November 2022 fleet status report, the rig, capable of operating in maximum depths of 375 ft, had been under a one-year contract with multiple options with Chevron’s Angola affiliate, Cabinda Gulf Oil Co. Ltd. (CABGOC) since January 2022.

Transocean adds $488 million in backlog

Transocean announced contract awards or extensions for five of its drilling rigs, which together represent $488 million of firm backlog.

In Norway, certain previously disclosed options under the Transocean Norge contract with Wintershall DEA and OMV have now been added to backlog. The incremental term is expected to last 773 days and contribute an estimated $331 million to backlog.

Harbour Energy exercised the third option on its U.K. North Sea contract with Paul B. Loyd Jr., a harsh environment semi-submersible, for eight P&A wells, adding an estimated $48 million in backlog. The additional term is expected to last 275 days and extends the contract to third-quarter 2024.

An independent operator awarded ultra-deepwater drillship Deepwater Invictus a new three-well contract with an estimated 100-day duration in the U.S. Gulf of Mexico. The $43 million contract is expected to begin in direct continuation of the rig’s current program.

A major operator awarded the Transocean Barents, a harsh environment semisubmersible, a new one-well contract with an estimated 110-day duration in the U.K. North Sea valued at $34 million. That contract is expected to begin in first-quarter 2023.

TotalEnergies exercised a one-well option on its contract with the Development Driller III ultra-deepwater semisubmersible, working in Suriname. The incremental well is expected to last 90 days and contribute $32 million in backlog.

Milestone opens slurry injection field

Milestone Environmental Services opened its first slurry injection oilfield waste facility outside Texas. The New Mexico facility is the first of its kind to be permitted in the state. 

The Battle Axe facility is permitted by the New Mexico Oil Conservation Division to inject

liquid oilfield waste and manage associated solid waste.

Battle Axe is the company’s ninth operational facility overall and its seventh in the Permian Basin. Open 24 hours a day, seven days a week, the facility accepts used drilling fluids, flowback, produced saltwater, tank bottoms and other RCRA-exempt liquid E&P waste streams. 

From a field activity to new contracts, below is a compilation of the latest headlines in the E&P space within the past week. 

Regulatory updates

BOEM releases EIS for GoM lease sales

The U.S. Bureau of Ocean Energy Management (BOEM) has issued its final supplemental environmental impact statement (EIS) for two upcoming Gulf of Mexico Outer Continental Shelf oil and gas lease sales.

The BOEM issued its draft supplemental EIS in early October 2022 and received nearly 76,000 comments during the 45-day comment period. The final supplemental EIS includes an expanded analysis on greenhouse-gas emissions and the monetized impacts from these estimated GHG emissions. 

Under the Inflation Reduction Act of 2022, BOEM must hold Lease Sale 259 by March 31, 2023, and Lease Sale 261 by Sept. 30, 2023.