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 15 24

Contents December 2018

Volume 11 Issue 12

03 Comment 23
This feature showcases technologies designed to handle the
05 World news harshest conditions faced by the global oil and gas industry.
Contribution come from:
10 The bigger picture
Oilfield Technology Correspondent, Gordon Cope, reports on Magma Global – Misplaced pride in complexity –Tony Duncan,
the global upstream outlook for 2019. USA, considers smaller, simpler and more cost-effective options
for age old industry problems.

15 Controlling costly contamination ITC Global – Enhancing critical connectivity – Sanjay Singam,
Nicole Mikic, Halliburton, explains how solids control USA, explores the significance of optimising mission critical
and cuttings handling impact on the total cost of well data transfers and enabling digitisation in remote offshore
construction. environments.

19 Getting in the zone 30 A force against nature

Matt Meiners, Enventure Global Technology, USA, explores Lawrence Lai, Trelleborg Offshore, explores new developments
how advancements in expandable liners are helping to to improve the efficiency of drill riser systems in cases of harsh
improve zonal isolations when refracturing. weather conditions.

35 Prioritising surface safety

Roel Hooiveld, NOV, The Netherlands, discusses the importance
of maintaining surface safety valves in producing wells.

38 Taking the plunge

Front cover Chris Velasquez, Apergy, USA, examines key ways to improve
OILFIELD TECHNOLOGY

production in horizontal wells.

Enventure’s Eseal™ 3.0 RF
(Refrac) Expandable Liner EXPLORATION | DRILLING | PRODUCTION DECEMBER 2018

reliably creates a new wellbore 41 Perfecting pipe protection

with permanent isolation Mike Huber and Steve Stefancic, Hardbanding Solutions by
DECEMBER 2018 | EXPLORATION | DRILLING | PRODUCTION

of existing perforations and Postle Industries, and Colin Duff, Hardbanding Solutions Europe,
internal pressure integrity – at explore how drill pipe hardbanding is keeping pace with the
higher pressures and greater drilling industry.
temperatures than before.
45 Easy flowing
This results in a faster payback Antonio Mejia, Edward Bohres and Jennifer Jackson, BASF,
on investment and extended discuss the use of a polyacrylate dispersion to improve flow.
ESeal Solid Expandable
production life of the reservoir. Refrac Liner –
The Ultimate
The ESeal Refrac Liner is “The Diverter
Ultimate Diverter.”
www.oilfieldtechnology.com

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 Comment David Bizley, Editor
December 2018
Contact us
david.bizley@oilfieldtechnology.com Editorial
Managing Editor: James Little
james.little@oilfieldtechnology.com

O
il prices have taken a tumble as of late. For most of the year Brent crude
Editor: David Bizley
had been sitting between US$70 and US$80/bbl, but ever since peaking david.bizley@oilfieldtechnology.com
in the mid US$80s back in October things have gone downhill – for the Editorial Assistant: Aimee Knight
first time in a year, Brent recently fell below US$60/bbl. Once again, the culprit aimee.knight@oilfieldtechnology.com
is a combination of soaring production and weakening demand.
Design
Saudi Arabia has raised its oil output to record levels, pumping
Production: Hayley Hamilton-Stewart
11.3 million bpd; Russia continues to produce at levels just shy of 11 million bpd; and shale output in the hayley.stewart@oilfieldtechnology.com
US continues to grow, making the country the world’s largest oil producer at 11.7 million bpd. In addition
to concerns around oversupply, there are fears over a looming economic slowdown and inevitable Sales
reduced oil demand, partially brought about by the ongoing US-China trade war. Clay Seigel, Managing Advertisement Director: Rod Hardy
rod.hardy@oilfieldtechnology.com
Director of oil at Genscape was quoted as saying, “Oil traders are overwhelmed by bearish news […] The
Advertisement Manager: Ben Macleod
broad selloff in equities has traders concerned about the possibility of an economic slowdown, which ben.macleod@oilfieldtechnology.com
could reduce demand for oil products.”1
In another example of how oil and politics are inextricably linked, traders are reportedly even taking Website
the incidents surrounding journalist Jamal Khashoggi, into account. President Trump’s recent comments Website Manager: Tom Fullerton
tom.fullerton@oilfieldtechnology.com
showed no signs of any likely repercussions for Saudi Arabia: “It could very well be that the Crown Prince
Digital Editorial Assistant: Nicholas Woodroof
had knowledge of this tragic event – maybe he did and maybe he didn’t!”2 When taken into consideration nicholas.woodroof@oilfieldtechnology.com
with the President’s statements that he didn’t want oil prices to rise and that he “wasn’t going to destroy
the economy” over the incident, there seems to be little incentive for the Kingdom to make significant Marketing
Subscriptions: Laura White
production cuts. laura.white@oilfieldtechnology.com
Although major cuts might not be on the horizon, Saudi Arabia’s Energy Minister, Khalid al-Falih, has
Reprints:
stated that the Kingdom will work to stabilise the market, but it won’t do it without the support of OPEC reprints@oilfieldtechnology.com
members and other allies. Al-Falih was quoted by Reuters as saying: “We are going to […] do whatever is
necessary, but only if we act together as a group of 25. As Saudi Arabia we cannot do it alone, we will not
Palladian Publications Ltd,
do it alone. […] Everybody is longing [to] reach a decision that brings stability back to the market […] I
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balance the market is not helping.”3 Website: www.oilfieldtechnology.com

The good news is that there does appear to be a willingness to co-operate from other key players,
such as Russia. Sources familiar with discussions between Russian oil companies and the Russian Ministry
of Energy confirmed that: “The idea at the meeting was that Russia needs to reduce. The key question
is how quickly and by how much”4 There are even rumours of potential cuts circulating in Alberta. With
prices falling as low as US$14/bbl in the region, Alberta Premier Rachel Notley has referred to the current
prices as “ridiculous” and plans to outline a response soon.5
As the year draws to a close, the upstream industry once again finds itself in something of an
uncertain position. There are challenges looming on the horizon, but the upstream sector has learned
a great deal since the downturn of 2014; it is an altogether leaner, more efficient, and more productive
industry than it was four years ago. We at Oilfield Technology look forward to seeing the innovative new
Subscription
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References
year discounted rate £128 UK including postage/£152 overseas
(postage airmail).
1. ‘Oil plummets to 13-month low as crude crash deepens’ – https://edition.cnn.com/2018/11/20/business/oil-prices- Subscription claims: Claims for non receipt of issues must be
made within three months of publication of the issue or they will
plunge/index.html
not be honoured without charge.
2. Ibid. Applicable only to USA & Canada: OILFIELD TECHNOLOGY
3. ‘Saudi Arabia wants united front on oil output; Russia and Nigeria hold out’ – https://uk.reuters.com/article/us-oil- (ISSN No: 1757-2134, USPS No: 025-171) is published monthly
opec-falih/saudi-arabia-wants-united-front-on-oil-output-russia-and-nigeria-hold-out-idUKKCN1NX1K8 by Palladian Publications, GBR and is distributed in the USA
by Asendia USA, 17B S Middlesex Ave, Monroe NJ 08831.
4. ‘US crude rises 2.3%, settling at $51.45, as Russia leans toward output cut’ – https://www.cnbc.com/2018/11/29/ Periodicals postage paid New Brunswick, NJ and additional
oil-markets-g-20-meeting-supply-concerns-in-focus.html mailing offices.
5. ‘Alberta considers cutting oil production, announcement coming in days: Notley’ – https://www.ctvnews.ca/politics/ Postmaster: Send address changes to Oilfield Technology, 701C
alberta-considers-cutting-oil-production-announcement-coming-in-days-notley-1.4196127 Ashland Ave, Folcroft PA 19032.

December 2018 Oilfield Technology | 3

HAPPY HOLIDAYS
www.downholeproducts.com
World news December 2018

BP starts up Clair Ridge production, West of Shetland, In brief

offshore UK
BP, on behalf of co-venturers Shell, Chevron and ConocoPhillips, has announced first oil
production from the giant Clair Ridge project in the West of Shetland region offshore UK. Nigeria
Clair Ridge is the second phase of development of the Clair field, 75 km West of
Shelf Drilling announced that it has
Shetland. The field, which was discovered in 1977, has an estimated 7 billion bbls of
secured a one-year extension on
hydrocarbons.
the Trident XIV jack-up rig in direct
Two new, bridge-linked platforms and oil and gas export pipelines have been
continuation of its current contract for
constructed as part of the Clair Ridge project. The new facilities, which required capital
workover operations offshore Nigeria.
investment in excess of £4.5 billion, are designed for 40 years of production. The project has
The expected availability of the rig
been designed to recover an estimated 640 million bbls of oil with production expected to
is now February 2020. Furthermore, an
ramp up to a peak at plateau level of 120 000 bpd.
option to extend the contract by a year
Bernard Looney, BP Chief Executive Upstream, said: “The start-up of Clair Ridge is a
exists.
culmination of decades of persistence. Clair was the first discovery we made in the West
David Mullen, Chief Executive
of Shetland area in 1977. But trying to access and produce its 7 billion bbls proved very
Officer, Shelf Drilling, said: “We are
difficult. We had to leverage our technology and ingenuity to successfully bring on the first
very pleased to have the opportunity
phase of this development in 2005.
to extend the Trident XIV contract in
“And now more than 40 years after the original discovery, we have first oil from
Nigeria. We see this contract extension
Clair Ridge, one of the largest recent investments in the UK. This is a major milestone for our
as a further strengthening of our
Upstream business and highlights BP’s continued commitment to the North Sea region.”
relationship with a highly valued
customer in a very important market.”

Chevron announces first oil Maersk Drilling gets 4 month Guyana

from Big Foot project
Chevron Corporation has announced that
its Big Foot deepwater project, located in
the US Gulf of Mexico, has started crude
oil and natural gas production. The field is
located approximately 225 miles (360 km)
south of New Orleans, La., in a water depth of
approximately 5200 ft (1584 m). The Big Foot
field was discovered in 2006, and is estimated
to contain total recoverable resources of more
than 200 million boe and has a projected
production life of 35 years. The project uses
a 15-slot drilling and production tension-leg
platform, the deepest of its kind in the world,
and is designed for a capacity of 75 000 bbls of
oil and 25 million ft3 of natural gas per day.
“The Big Foot project strengthens Chevron’s
deepwater portfolio and further demonstrates
that the Gulf of Mexico is an integral part of our
diverse global portfolio and long-term strategy,”
said Jeff Shellebarger, President of Chevron
North America Exploration and Production.
“The project advances our interest in safely
providing reliable, affordable energy to meet a
growing global demand.”
extension for Maersk Intrepid
Equinor has exercised two options of two
months each for jack-up rig Maersk Intrepid.
As a result, the rig is now contracted to
Equinor until the end of February 2020.
Two options of two months each remain
undeclared on the contract.
In the four-month extension period,
Maersk Intrepid is expected to be utilised
for accommodation activities at the
Martin Linge field on the Norwegian
continental shelf.
“We appreciate the continued
opportunity to contribute to the expected
opening of production on Martin Linge in
2020. It’s great to be able to continue our
long-standing cooperation with Equinor
with this renewed commitment,” said CCIO
Morten Kelstrup of Maersk Drilling.
Maersk Intrepid is an ultra-harsh
environment XL Enhanced jack-up rig which
was the world’s largest jack-up when it was
delivered in 2014. It has been deployed in
Norwegian waters ever since, previously
working on the Sleipner and Hanz fields.
Eco (Atlantic) Oil & Gas Ltd has
announced the completion of its
Farm-Out Agreement with Total
Petroleum’s subsidiary Total E&P
Activités Pétrolières on Eco’s Orinduik
block, offshore Guyana. Total has
transferred to Eco the balance of
US$12.5 million for a 25% working
interest in Orinduik. Colin Kinley,
Chief Operating Officer of Eco,
commented:
“We are pleased to confirm that the
Farm-Out to Total is now complete and
this allows us to progress efficiently
to the next stage of exploration.
The company has advanced quickly
through the stages of 2D interpretation
and 3D surveying, processing and
interpretation.
“Now, with Total on board and
being fully funded to drill, we look
forward to moving ahead, finalising
drilling targets and approving the 2019
drilling budget for Orinduik.”

December 2018 Oilfield Technology | 5

 World news December 2018

Diary dates
Azinor Catalyst announces oil discovery
05 - 07 February, 2019
The company has announced an oil discovery at its 9/14a-17B well and associated
Subsea Expo side-track on the Agar-Plantain Prospect. The initial 9/14a-17B well on the
Aberdeen, UK Agar-Plantain Prospect, was drilled safely to its target depth and encountered excellent
E: events@subseauk.com
quality oil and water bearing sands. This wellbore delineated the eastern extent of
www.subseaexpo.com
the hydrocarbon discovery and encouraged the partners to drill the contingent Agar
side-track to further appraise the discovery. The Agar side-track has encountered a
25 - 27 February, 2019 20 m (gross TVT) interval of very high-quality oil-bearing sands, with no identified oil
Operational Excellence in Energy, water contact.
Chemicals & Resources Summit Reservoir oil samples have now been recovered to surface and further analysis will
Houston, USA be required to establish the quality of the oil and assist in further defining recoverable
E: enquire@iqpc.co.uk resources. Based on a preliminary analysis, Catalyst believes the Agar-Plantain
www.opexandriskmanagement.iqpc.com discovery holds recoverable resources of between 15 and 50 million boe, which is
in line with pre-drill estimates. This estimate will be further refined as more data
05 - 07 March, 2019 becomes available.
Working interests in the wells are as follows: Azinor Catalyst (operator, 25%),
SPE/IADC
The Hague, Netherlands Nautical Petroleum, a wholly owned subsidiary of Cairn Energy PLC, (50%), and
E: kdunn@spe.org Faroe Petroleum PLC (25%). The Agar-Plantain well is in the process of being plugged
www.spe.org and abandoned.
Nick Terrell, Managing Director of Azinor Catalyst, commented: “This success
represents a significant step forward for Catalyst and for our Agar-Plantain asset.
13 - 15 March, 2019
Given the proximity to local infrastructure, the shallow reservoir depths and significant
AOG 2019 upside on the block, this is shaping up to be a highly attractive project for us.”
Perth, Australia Henry Morris, Technical Director of Azinor Catalyst, commented: “Our upfront
E: aogvp@divcom.net.au investment in a large high-quality seismic database, integrated with quantitative
www. aogexpo.com.au
geoscience, has proven invaluable. Next year we plan to drill three high quality
prospects – Goose, Boaz and Hinson – all which have been defined and de-risked using
27 - 29 March, 2019 similar forensic geoscientific techniques.”
OMC 2019
Ravenna, Italy Faroe announces commencement of Brasse East well
E: exhibition@omc.it
www.omc2019.it Faroe Petroleum has announced the commencement of the Faroe-operated Brasse East
exploration well 31/7-3 S in the Northern North Sea (Faroe 50% working interest). The
Web news Brasse East well is being drilled immediately east of the Brasse field (discovered by
highlights Faroe in 2016 and appraised in 2017) which in turn is located to the south of the Brage

Ì Aibel wins Gudrun contract.

Ì Texo Group announces new executive
chairman.
Ì McKinsey Energy Insights: oil could
peak before 2025 from accelerated EV
uptake and plastic reduction.
field and to the south east of the Oseberg field. At the end of 2017, the Brasse field
development feasibility study phase was completed, confirming several economically
attractive development solutions and export routes. Concept studies are currently
progressing according to plan. The co-venturer in the Brasse PL 740/PL 740 B/PL 740 C
licences is Point Resources AS (50%).
The total expected vertical depth of the well is approximately 2271 m, in water
depth of 124 m. Drilling operations will be undertaken using the semisubmersible

Ì ESAI Energy: Trump statement not oil

policy.
To read more about these articles
and for more event listings go to:
www.oilfieldtechnology.com
Transocean Arctic rig. The results will be announced on completion of drilling
operations.
Graham Stewart, CEO, commented: “I am pleased to announce the spudding of
the Faroe-operated Brasse East exploration well which is immediately adjacent to the
Faroe-operated Brasse field. Brasse East offers upside potential for the Brasse field
development as well as potential to unlock additional exploration upside to the north
east of the Brasse field.
“Faroe’s active exploration programme is continuing over the coming period, with
the Cassidy well preparing for drilling later this year plus a further two wells committed
for 1H 2019.”

6 | Oilfield Technology December 2018

 Old fractures isolated by ESeal and new
perforations made through the ESeal RF Liner.

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 World news December 2018

Weir Oil & Gas closes contract in Iraq Ampelmann reaches 500 000 safe
personnel transfers
Weir Oil & Gas Dubai has announced it has signed a multi-year contract in Iraq totalling more
than US$4 million with a major international oil company. The contract secures the provision Ampelmann has completed its first transfer
of Weir Oil & Gas workshop services, machine shop services, emergency manufacturing and for BP in Trinidad & Tobago in 2010 and has
engineering support to support the organisation’s Well Operations. since enabled another 17 projects in seven
Positive past and existing contract performance with the international oil company, countries.
Weir Oil & Gas’ capabilities in Iraq, local content, in-house engineering and a comprehensive “Half a million people transfers in eight
international facility near the customer’s sites were deciding factors in the deal. This years is a key milestone for Ampelmann,”
contractual agreement further consolidates Weir’s Rig-to-Grid capabilities in the Middle East. said Gus DeOliveira, Area Sales Lead for the
With this agreement, Weir executes its full stream activity portfolio, from the rig to the Americas. “We thank BP for their continuous
grid or export pipeline. trust and support in jointly making the
In the EMEARC region, Weir Oil & Gas provides an off-the-shelf range of products, as well Oil & Gas industry safer and more efficient.”
as customised wellhead solutions designed to meet unique specifications. The company “The safe delivery of these transfers
provides in-country service and support through ‘Centers of Engineering and Manufacturing is a great achievement,” said a BP Marine
Excellence’, which allow the company to manufacture and distribute wellhead equipment Representative. “The operation continues
faster due to its proximity to operators in the region. to systematically deliver great safety
“We are pleased to support our clients through providing services, repairs and important performance by applying strong operating
upgrades while assisting them with engineer-driven change management protocols and discipline.”
production facility turnarounds,” said Ronan Le Gloahec, Managing Director of EMEA Region, With an impressive track record,
Weir Oil & Gas. “With this additional contract, we will support this organisation’s well Ampelmann has enabled the safe transfer
operations for several years thanks to our state-of-the-art facility and in-country engineering of more than 4.7 million people and over
expertise.” 9 million kg of cargo worldwide.

Chet Morrison Contractors completes EPCIC project on Torchlight Energy completes

landmark development offshore Trinidad and Tobago drilling phase of A11 #2 well
Morrison was awarded the Engineering, Procurement, Construction, Installation and Torchlight Energy has announced the
Commissioning (EPCIC) contract from Trinidad and Tobago’s newest upstream operator, completion in its Orogrande Basin drilling
DeNovo Energy Limited (DeNovo). programme with operator Maverick Operating
Work scope for the Iguana field development included facilities for three and drilling partner Wolfbone Properties.
development wells installed through a Conductor Supported Platform (CSP) and a The A11 #2 was drilled to a vertical
45 km, 14 in. diameter subsea natural gas export pipeline connecting the Iguana CSP depth of 4009 ft and casing was set. Well
to a newly constructed onshore gas processing unit on the Port Lisas Industrial Estate, logs and core samples were taken prior
with commissioning for first gas delivery. to casing the well and are currently being
The Iguana field remained undeveloped for over 34 years until DeNovo became the analysed.
operator in 2016, and is the first gas development campaign in the Gulf of Paria. The Electric logs show excellent hydrocarbon
water depth at the Iguana platform is ~27 m (88.6 ft). Morrison safely managed the potential in multiple intervals with the
unique offshore and shore crossing conditions to complete this development in record presence of both oil and gas. These
time, and successfully installed and commissioned the pipeline and offshore facility in intervals represent potentially economical
October 2018. conventional and unconventional formations
Morrison was able to achieve 80% local content and safely delivered the project with the primary zone targeted being a
with more than 370 000 combined man-hours while achieving zero recordable incidents Wolfcamp unconventional.
(0-TRIR). Morrison worked closely with its joint venture partner, Trinidad Offshore The drilling rig will now move to the
Fabricators Unlimited (TOFCO), in the support of many aspects of this project including company’s next well location, the University
the hook up through mechanical completion. Hueco A39 #1.
Chet Morrison, CEO, commented, “Tailoring the equipment to the specific demands “We are excited to have indications of
of this milestone project, we provided an optimised solution. Our team also applied hydrocarbons on the A11 #2 and are ready
rigorous problem-solving techniques to complete a complex and challenging shore to further our development thesis with
approach. Working with a compressed schedule, our flexibility and adaptability enabled the targets on the Hueco A39 #1,” stated
us to design and secure Trinidad’s first gas-to-market in an accelerated fashion.” John Brda, Torchlight’s CEO.

8 | Oilfield Technology December 2018

Be wise
when you
advertise
Test a publisher’s statement
of circulation. In today’s business
climate you can’t afford not to.

2XU$%&&HUWL¿FDWHSURYLGHV
accurate, independently
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JLYLQJ\RXFRQ¿GHQFHLQ
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RUHPDLOLQIR#DEFRUJXN
 The
bigger
picture
10 |
Oilfield Technology Correspondent,
Gordon Cope, reports on the global
upstream outlook for 2019.
E
xploring and producing oil and gas has been a nightmare since
oil prices plunged in 2014. Gradually, however, companies have
revived, thanks to a stabilisation of prices, discipline in reducing
costs, a focus on high-grading prospects, and positive cash flows.
As a result, metrics are improving across the board. The
International Energy Agency (IEA), noted that global E&P budgets
rose 4% in 2017, to US$450 billion, and another 5% in 2018, to
US$472 billion (although spending is still at two-thirds of 2014
levels). IHS Markit predicts that demand for offshore drilling rigs
is expected to grow 15% between now and 2020, from an annual
average of 453, to 521.
However, not all regions are benefiting. Areas with shorter cycle
plays predominate as companies seek quicker cash-flow. Basins
with big exploration plays are seeing more dollars than those with
more modest targets, and regions with low above-ground risk always
trump dicey jurisdictions.
North America
Unconventionals have proven to be a big bet with explorers. The IEA
reckons that 20% of upstream spend (almost US$100 billion), is being
directed to shale plays. The US Energy Information Administration
(EIA) forecasts that, thanks to unconventionals, crude oil production
| 11
will increase from the 2018 average of 10.8 million bpd to an
average of 11.8 million bpd in 2019. They also expect dry natural gas
production to rise from an average of 81.2 billion ft3/d in 2018 to an
average of 83.8 billion ft3/d in 2019.
The Permian basin, located in Texas, has been leading
the way. Multi-stacked shale plays are being tapped using the
latest well pad configurations, horizontal drilling and hydraulic
fracturing technologies. Since 2010, output has more than
tripled, and now stands at almost 3.3 million bpd, and over
9 billion ft3/d. IHS Markit estimates that over US$300 billion
will be spent in the Permian basin over the next five years,
raising production to 5.4 million bpd, 15 billion ft3/d of gas, and
1.7 million bpd of natural gas liquids (NGLs) by 2023.
The US has several major unconventional gas plays,
including the Barnett shale in Texas, the Haynesville in
east Texas and Louisiana, and the Niobrara in Midwest
states. The Marcellus formation, which occupies about
100 000 square miles of the Appalachian basin beneath
Pennsylvania, Ohio and West Virginia, has been the major
producer. The EIA estimates it holds at least 141 trillion ft3 of
recoverable gas. As of early 2018, production from the Marcellus
and nearby formations surpassed 27 billion ft3/d.
While shallow conventional fields account for the majority
of Canada’s natural gas production, unconventionals are now
making major inroads. The Montney formation in northeast
British Columbia (BC) and northwest Alberta has been the major
unconventional play in Canada. Government and industry
estimate that the play holds approximately 282 trillion ft3 of
gas and 12.8 billion bbls of crude and NGLs. Production has
risen dramatically over the last several years, and now stands
at 5 billion ft3/d, approximately one-third of Canada’s total
production.
Although capital investment in the oilsands of northeast
Alberta has fallen from C$30 billion in 2014 to C$13 billion
in 2017, production is expected to rise over the next several
years, from 2.6 million bpd in early 2018 to as much as
4 million bpd by 2030. The growth will be due, in part, to the
400 000 bpd capacity already nearing completion or under
construction, as well as new construction, including Cenovus’s
Telephone Lake (US$6.3 billion), Imperial Oil’s Kearl Oil Sands
Phase 3 (US$5.9 billion) and Kearl Oil Sands Debottleneck
(US$3.3 billion). Thanks to lower capital and OPEX costs,
Teck Resources recently announced it was pushing for approval
of a C$20 billion, 260 000 bpd Frontier mine that could enter
production by 2026.
The offshore Gulf of Mexico is expected to climb to
1.9 million bpd during 2018. In February 2018, the Stampede
project came onstream. The field, operated by Hess, is 185 km
south of the Louisiana coast. The tension-leg platform is
designed to produce 80 000 bpd of crude and 40 million ft3/d of
gas from the deepwater Pony and Knotty Head fields.
Latin America
Five years ago, Mexico’s president Enrique Pena Nieto opened
up the country’s oil and gas sector to private investment. Since
then, the country’s Comisión Nacional de Hidrocarburos (CNH),
has held several successful auctions, and the former state
monopoly, Pemex, has negotiated significant joint ventures.
Houston-based Talos Energy and partners Sierra Oil &
Gas, of Mexico, and Premier Oil, of London, discovered the
Zama field in the Bay of Campeche, approximately 60 km off
12 | Oilfield Technology December 2018
the coast. The Upper Miocene field holds 1.4 billion bbls of
light, sweet crude and associated gas.
Eni also made an offshore discovery in the Bay of Campeche
at its Mizton prospect. The Italian company, which drilled a
delineation well in 2017, estimates that the field holds around
350 million boe. Their total holdings in the Bay of Campeche’s
Contractual Area 1 now amount to 1.4 billion boe, primarily
light crude. Eni is currently developing its Amoca field, located
near to the Mizton prospect.
Argentina has immense unconventional resources; the
EIA has estimated that the Neuquen basin’s Vaca Muerta
formation alone has over 16 billion bbls of recoverable oil and
300 trillion ft3 of natural gas. In 2017, Argentina’s state-controlled
YPF announced that it would invest US$21.5 billion between 2018
and 2022 in order to drill and develop 1600 new oil and natural
gas wells.
Chevron has been working with YPF over the last five years
in order to develop the Vaca Muerta. They have managed
to bring the cost of a well down from US$16.2 million, to
US$8 million. The partners have added a third drill rig to the
Loma Campana concession and intend to spend US$500 million
in 2018 to further develop the field.
ExxonMobil is also investing heavily in shale plays in
Argentina, having spent US$500 million on initial lease
procurement and pilot wells. It plans to spend several billion
more in order to drill 300 horizontal wells. The country’s Energy
and Mining Ministry expects investments between US$12 billion
and US$15 billion in 2018, and US$20 billion from 2020
onwards.
Brazil holds South America’s second-largest oil reserves,
some 15.6 billion bbls, over 90% of which are located offshore.
The country’s oil production grew to 3.3 million bpd in 2017,
a 10% increase over 2016, largely due to presalt production
exceeding 1 million bpd.
In late 2017, Petrobras announced that it had brought
production onstream at the deepwater Libra field in the presalt
Santos basin. The field, which holds up to 12 billion boe, is
being produced by the 50 000 bpd Pioneiro de Libra floating
production, storage and offloading (FPSO) unit. Petrobras and
its partners Total, Shell and CNOOC are in discussions regarding
the timetable for building a 150 000 bpd FPSO. The partners
expect further FPSOs will be built to realise the field’s full
potential.
Explorers in Guyana are achieving great success. As
of early 2018, ExxonMobil and partners had made seven
significant discoveries in offshore Guyana. The latest Pacora
well encountered 20 m of high-quality, oil-bearing sandstone.
It is located in the 6.6 million-acre Stabroek Block, which is
also the site of the Payara, Liza, Liza Deep, Snoek, Turbot and
Ranger discoveries. The block is held by Esso Guyana (45%),
Hess Guyana (30%) and CNOOC Nexen Guyana (25%). In
2017, Exxon booked 3.2 billion boe from its Guyana venture,
indicating proved reserves of over 7 billion boe in total. A
floating production, storage and offloading (FPSO) vessel is
being refitted in Singapore for the Liza field. The consortium
has also contracted to new-build a second FPSO for the Liza
field, and is contemplating a third vessel for the Payara, which
could give Guyana a combined capacity of 500 000 boe/d.
Venezuela is in freefall. Under the control of former President
Hugo Chavez and his successor Nicolas Maduro, oil production
has plunged from 3.5 million bpd in the early 2000s to below
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1.6 million bpd by early 2018. The country is now US$140 billion
in debt, with little prospects of repayment. Various international
service companies have suspended work and removed rigs.
Mature fields are no longer getting infill drilling; Rystad Energy,
a consultancy, reckons that some field declines could hit 30%
annually, which would reduce output to slightly more than
1 million bpd by 2021. Civilians, hounded into semi-starvation by
hyper-inflation, are fleeing to neighbouring countries.
Middle East
Saudi Arabia has 261 billion bbls in proven reserves and
produces at least 10.5 million bpd (and exports 7.6 million bpd).
In 2017, the Kingdom helped entice OPEC and Russia to reduce
world glut of crude by decreasing production by 1.8 million bpd.
Saudi Arabia is now diversifying its energy mix. The
Kingdom has roughly 298 trillion ft3 of proven gas reserves;
Saudi Aramco (which produces 9 billion ft3/d in associated
gas), is spending US$4 billion to increase supplies to domestic
industrial consumers. It has called for bids to build new gas
booster compressor stations at the Haradh and Hawiyah
gas plants. The two phase project will see gas output rise to
12.5 billion ft3/d. The Kingdom has plans to increase production
to 23 billion ft3/d by the end of next decade.
Saudi Arabia is also embroiled in a proxy war in Yemen,
where its forces battle Houthi rebels backed by Iran. In April,
2018, the rebels hit a Saudi oil tanker with a missile as it
traversed the Red Sea toward the Suez Canal.
Qatar has 25 billion bbls of crude reserves and almost
800 trillion ft3 of gas reserves. It produces 1.5 million bpd of
crude and condensates, and exports over 90% as crude and
refined products. Qatar is also the world’s largest producer of
LNG. According to the International Gas Union, Qatar exported
81 million t of LNG in 2017, equivalent to 27.6% of the global
trade. After a several year hiatus in new LNG construction,
Qatar announced that it would once again boost output by
approximately 30% over the next five to seven years.
In mid-2017, Saudi Arabia, Bahrain, Egypt and the UAE cut
diplomatic ties with Qatar and severed transport links to the
peninsula. The dispute centres around Qatar’s backing of the
Muslim Brotherhood and the operation of its Al Jazeera TV
network. While the group has openly called for regime change
in Qatar, so far, little other than trade has been disrupted, and
there is no suggestion of interrupting hydrocarbon exports.
Iraq contains 143 billion bbls of proven crude reserves
and 100 trillion ft3 of proven gas. The country has suffered
a tumultuous half-century in which oil production has been
derailed by wars against Iran, the US and its allies, and, most
recently, against ISIL. By 2017, however, its output has returned
to above 4.5 million bpd, and the country has plans to reach
5 million bpd in 2018 through the further development of its
Halfaya oilfield in the Maysan province.
As part of its plan to bolster exports, Iraq has been
busy increasing the capacity of its southern offshore export
terminal at Khor al-Amaya. The terminal, which has a capacity
of 600 000 bpd, is undergoing storage and infrastructure
augmentation in order to double capacity to 1.2 million bpd.
Dredging will also allow Suezmax vessels (tankers that can carry
up to 1 million bbls of crude) to dock. Thanks to additional
capacity increases in the Basra offshore terminal, Iraq exceeded
3.5 million bpd in exports in 2017.
Iran has 158 billion bbls of proven crude reserves and
1000 trillion ft3 of gas. In 2010, it produced 4 million bpd.
14 | Oilfield Technology December 2018
Led by the UN, US, and other nations, a series of sanctions were
imposed upon Iran in order to curb its nuclear programme.
By 2015, production had dropped to below 3 million bpd. In
2016, sanctions were eased, allowing production to rise to
approximately 4 million bpd again.
In late June, 2018, the Trump Administration announced the
pullout of the 2015 Iran nuclear deal. The US State Department
subsequently announced that companies would have to totally
phase out the import of Iranian crude oil by November 4. This
puts around 2.7 million bpd of exports at risk; Iran may seek out
deals with China to keep exports flowing.
Other
BP and partners announced the start-up of the Shah Deniz 2 gas
project beneath Azerbaijan’s Caspian Sea waters. The US$28
billion development is the starting point for the Southern
Gas Corridor pipeline network that will deliver Caspian gas to
Europe. Currently, the Shah Deniz field produces 10 billion m3
per year. Phase 2 will add a further 16 billion m3 per year, making
a total output of 26 billion m3 per year, with up to 120 000 bpd of
condensate. The Shah Deniz field holds over 30 trillion ft3 of gas.
Prior to the 2017 deal with OPEC to limit production,
Russia’s output had stood at 11.247 million bpd. Now that global
stockpiles have dwindled, the country is once again increasing
production, and in mid-2018, Russian oil output exceeded
11 million bpd, led by its largest oil producer, Rosneft, with
3.89 million bpd.
Russia’s natural gas production stood at 1.79 billion m3/d
in mid-2018. Starting in 2019, Gazprom is developing the
Kharasaveyskoye gas and condensate field in the Yamal Peninsula
in Arctic Russia. The field holds over 60 trillion ft3 of gas reserves.
Initial production of 32 billion m3/yr is expected in 2023.
In the North Sea, Total announced a major gas discovery
in waters off the Shetland Islands. The Glendronach prospect
holds an estimated 1 trillion ft3 of recoverable gas. The French
company says it can be tied back to existing infrastructure
quickly and economically.
Otherwise, divestment is the order of the day. Total is looking
to fetch US$1.5 billion by selling part of its stake in the Laggan
Tormore gas field as well as holdings acquired as part of its
US$4.95 billion purchase of A.P. Moller-Maersk’s O&G division.
Other North Sea players, including Chevron, BP and ExxonMobil
have been divesting assets to smaller companies capable of
wringing profits from declining fields.
Total is developing its Zinia Phase 2 field in its Block 17
holdings in offshore Angola. They recently contracted with
Technip to cover the EPC of subsea equipment. The field will
produce up to 40 000 bpd through the nearby Pazflor FPSO
vessel. In 2017, Total and partners produced an average of
600 000 bpd from Block 17.
ExxonMobil and partners are moving ahead with the
development of the Rovuma project in Mozambique. The
consortium, which owns the Mamba fields in offshore Area 4 block,
plans to liquefy production with two, 7.6 million tpy LNG trains for
export. Pending a FID in 2019, production would begin in 2024.
Clearly, the prospects for the oil and gas sector are fraught
with challenges, but they are also replete with immense rewards.
Much of what happens in 2019 will depend on the price of oil; if it
is too low, then the sector will experience another bloodbath. If
it skyrockets into the stratosphere, a world recession could loom.
If, however, it remains in its current sweet spot, the industry can
continue to meet the world’s growing thirst for oil.
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