Shell To Exit Upstream Ireland Business With $1.23 Billion Sale

Royal Dutch Shell Plc said it would sell its 45% stake in the Corrib gas venture to a unit of Canada Pension Plan Investment Board (CPPIB) for up to $1.23 billion, marking the oil company's exit from the upstream business in Ireland.

The deal includes an initial consideration of $947 million and additional payments of up to $285 million between 2018 and 2025, subject to gas price and production, Shell said July 12.

The Anglo-Dutch company is on track to sell assets of about $30 billion by 2018 to cut debt following its roughly $70 billion acquisition of BG Group.

Shell has also been working to mitigate climate change risks that have upset some investors.

The development of the Corrib gas field, discovered in 1996, has faced protests since 2005 by residents concerned that the laying of a high-pressure pipeline to bring gas onshore could pollute their water supply.

CPPIB, Canada's biggest public pension fund, and Vermilion Energy Inc. will become the new operator of the gas field off the northwest coast of Ireland.

Pemex Axes $100 Million Contract With Odebrecht

Pemex said in a filing on July 11 that it canceled a $100-million contract with Odebrecht SA, a Brazilian engineering company that has admitted paying bribes in a dozen countries in recent years.

Pemex said it notified Odebrecht in mid-June that it was canceling the 2015 engineering, procurement and construction contract at the Miguel Hidalgo refinery in Tula, Hidalgo state, following an investigation into "administrative irregularities."

Odebrecht has admitted in a settlement with U.S. and Brazilian prosecutors to paying bribes across 12 countries to win contracts. According to the U.S. court ruling between 2001 and 2016 Odebrecht paid about $788 million in bribes in countries including Brazil, Argentina, Colombia, Mexico and Venezuela.

In Mexico, Odebrecht paid $10.5 million to obtain public works contracts between 2010 and 2014, which generated more than $39 million in profits, according to the U.S. ruling.

Since settling in the U.S., Brazil and Switzerland for a record $3.5 billion, Odebrecht has sought to negotiate leniency deals that would allow it to keep operating in other countries across Latin America.

Ophir Energy’s COO Will Step Down

British oil and gas explorer Ophir Energy’s COO William Higgs will step down as the company reduces costs by cutting staff positions at its London headquarters, the company said on July 7.

Energy companies have cut costs over the past few years due to a fall in oil prices. Ophir has faced further challenges in launching its Fortuna project in Equatorial Guinea—Africa’s first deepwater floating liquefaction facility.

“The company has no plans to appoint another chief operating officer or executive director [and] a further announcement will be made shortly,” Ophir said in a brief statement after markets closed July 7.

A spokesperson for the company, which has projects in Africa and East Asia, declined to say when Higgs would leave the company and what other staff cuts were being made.

Higgs was appointed COO in 2014, having previously worked for Chevron Corp.

Baker Hughes Names Phil Mueller As Investor Relations VP

Phil Mueller has been appointed vice president of investor relations for Baker Hughes, a GE company, according to a news release.

He moves to position after having served since 2016 as investor relations leader for GE Oil & Gas, where he also held the position of CFO for drilling from 2014 to 2016.

Mueller has worked for GE for 12 years, the release said. He has served in financial leadership roles for GE’s Industrial business and GE Healthcare.

UTM Consultants Forms With Aim To Build Subsea Talent Network

A new company has launched in the U.K. with a goal of addressing the marine energy sector’s immediate and long-term skills needs.

In a news release, UTM Consultants Ltd. said it will “leverage its extensive network together with its industry experience to source and supply the manpower solutions required to deliver complex ROV, survey, inspection, repair and maintenance projects to the oil and gas, renewable, hydrographic, marine, power and telecommunications sectors.”

The Cornwall, England-headquartered company was launched July 10.

UTM Consultants was founded by Richard Tozer, who serves as managing director, and operations director Alex Meeks. Tozer previously led GOSS Consultants, a marine recruitment services company that was sold in 2013, while Meeks previously led the survey division of an international survey and ROV recruitment firm.

Forum Acquires Multilift, Manufacturer Of Artificial Lift Tools

Forum Energy Technologies Inc. has acquired the stock of Multilift Welltec LLC from Pelican Energy Partners, a Houston-based oilfield services focused private-equity fund, and management.

The financial terms of the transaction weren't disclosed.

Also based in Houston, Multilift manufactures the patented SandGuard and the Cyclone completion tools. These products extend the useful life of an electrical submersible pump by protecting it against falling sand and other solids after shutdown, according to Forum's press release.

Forum is headquartered in Houston with manufacturing and distribution facilities strategically located around the globe, the release said.

Subsea 7 Acquires Emas Chiyoda Assets

Subsea 7 has scooped up businesses from EMAS Chiyoda Subsea (ECS), which filed for bankruptcy earlier this year.

The acquisition, under a U.S. bankruptcy code Chapter 11 Plan of Reorganization, was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas and became effective June 29, Subsea 7 said in a news release. ECS is a joint venture between Ezra Holdings Ltd. and the Chiyoda Corp.

The London-based company said it will pay less than $100 million, including its contribution to the debtor in possession credit facility. The deal includes acquisition of the Ingleside spoolbase and other assets.

“In a challenging business environment our differentiated offering and strong capital discipline has enabled us to pursue this opportunity,” Subsea 7 CEO Jean Cahuzac said. The move expands Subsea 7's presence in the Middle East.

The acquisition also includes:

  • A multiyear bareboat charter for the Lewek Champion pipelay vessel for work in the Middle East and a short-term charter for the Lewek Constellation pipelay vessel for work in other parts of the world;
  • About 850 people based in Houston, Singapore and Saudi Arabia; and
  • About $850 million of order backlog, including five projects located offshore Saudi Arabia, offshore Ghana and in the U.S. Gulf of Mexico, the release said.

Cahuzac added that the company and Chiyoda, one of the plan of reorganization sponsors and a previous shareholder of ECS, are discussing the possibility of collaborating on engineering and technology initiatives.

The financial results of the acquired entities will be consolidated within Subsea 7’s SURF and conventional business unit effective June 29.

Hurricane To Raise $520 Million For North Sea Field Development

Hurricane Energy Plc plans to raise $520 million for test drilling at its Lancaster oil field in the North Sea, a major milestone for the project that could breathe new life into the aging offshore basin.

The plans include placing new shares expected to raise a minimum of $300 million at 32 pence per share, as well as a $220 million convertible bond offering, Hurricane said June 29.

Hurricane has seen its shares rise sharply since 2016 after it revised upward resource estimates for its flagship field in the West Shetlands region, which it thinks could be Britain's largest undeveloped oil find.

The funds will go toward financing an early production system (EPS) to test the Lancaster Field ahead of a full field development decision. The EPS is expected to produce 17,000 bbl/d, Hurricane said. Production from Lancaster is expected to start in the first half of 2019.

In April, Hurricane upgraded its recoverable resource estimate for the Lancaster Field to 593 MMbbl from 200 MMbbl in a 2013 assessment.

Erin, FAR Approve Farm-out Deal Offshore Gambia

Erin Energy Corp. said the government of Gambia has approved the farm-out agreement with FAR Ltd. in which FAR will acquire an 80% interest and operatorship of Erin Energy’s offshore A2 and A5 blocks.

According to a news release, Erin Energy will retain a 20% working interest in the two offshore block, and FAR will fund Erin Energy through the first exploration well.

Erin Energy’s blocks are adjacent and on-trend with FAR’s SNE oil field. Blocks A2 and A5 could contain prospective resources in excess of 1 Bbbl of oil.

Terms of the agreement state FAR will pay Erin $5.18 million and will carry $8 million of the company’s share of costs in a planned exploration well to be drilled in late 2018, the release said.

The A2 and A5 blocks are located in the Mauritania-Senegal-Guinea-Bissau Basin.

Petrobras, UTC At Odds Over Services Contract Cancellation

Brazilian engineering firm UTC Engenharia SA and Petrobras on July 10 gave conflicting reasons for halting a platforms-servicing contract in the Campos Basin in a spat that could hit operations.

Petrobras said in a press release that UTC chose unilaterally to discontinue construction services on the platforms, following “attempts by Petrobras to negotiate a solution that gave priority to workers.”

UTC, however, in an emailed statement, said Petrobras decided against extensions for offshore maintenance contracts, as foreseen by a prior agreement.

“In order to defend the interests and labor rights of its qualified staff, UTC continues to try, with Petrobras, to regularize and extend the contracts,” said the company, which was involved in the biggest corruption scandal to hit Brazil.

Under a long-running scheme, a group of engineering firms including UTC bribed politicians and Petrobas executives in exchange for inflated contracts. UTC on July 10 signed a leniency deal agreeing to pay the government

$176 million for fraud related to 29 contracts with state-owned companies, including Petrobras.

According to UTC, the contracts are related to platforms P-18, P-19, P-20, P-26, P-33, P-35, P-37, P-50, P-52, P-54 and P-62. All of the platforms are located in the Campos Basin near Rio de Janeiro, the main oil production hub in Brazil.

Petrobras said it was taking steps to maintain operations and security, adding that it would take appropriate “administrative and judicial measures” in the case.

Cobalt, Partners Agree To Expand Anchor Unit In GoM

Anchor is located about 225 km (140 miles) off the coast of Louisiana. (Source: Chevron)

Cobalt International Energy has entered an agreement to expand the Anchor unit in the U.S. Gulf of Mexico to include two leases immediately south in Green Canyon blocks 850 and 851, the company said in a news release.

The agreement was made with co-owners of the development.

The transfer of interests in the two leases and the revised Anchor unit are subject to customary regulatory approval. Following approval, Cobalt said it will retain a 20% working interest in the revised unit.

“Expansion of the Anchor unit to include Cobalt’s two blocks to the south is key to optimizing the development plan and increasing oil recovery from Anchor as the reservoir clearly extends onto these blocks,” Cobalt CEO Timothy Cutt said. “This agreement makes Anchor even more attractive of a development going forward, whether for us or for a potential purchaser in our ongoing sales efforts.”

Chevron is the operator of Anchor, holding a 55% interest. Partners include Samson Offshore Anchor, 12.5%; Venari Resources, 12.5%; and Cobalt.

—Staff & Reuters Reports

Offshore