Exploration

Wavefield gets LoFS contract
Wavefield Inseis has been awarded a contract for the provision of a source vessel to integrate into a “Life of Field Seismic” project over BP’s Clair field west of the Shetland Islands. This project uses a permanent array of four-component seismic sensors that were buried into the seafloor above the reservoir in 2006 so that high-
quality 4-D datasets can be efficiently acquired during the production lifeof the field.

TGS-Nopec launches Gulf of Mexico survey

TGS recently commenced a multiclient 3-D survey in the Gulf of Mexico. The survey, known as “Orion 3-D,” is predominantly located within the “181 South” area, an area that has been off-limits to exploration until the most recent five-year leasing plan announced by the US Minerals Management Service. The March 2009 Outer Continental Shelf (OCS) lease sale will be the first opportunity for oil companies to lease tracts in the area in more than 20 years. The survey will cover about 175 OCS blocks in the Lloyd Ridge OCS area. The acreage encompassed is located close to Independence Hub. TGS is acquiring the survey using with the Fugro GeoBarents seismic vessel.

EMGS awarded Ghana contract

EMGS has been awarded a contract by Hess Corporation to provide scanning and further delineations services to aid in the assessment of the hydrocarbon potential in Hess’ acreage offshore Ghana. The contract is worth about US $10 million.

Pre-acquisition work has been ongoing, and the survey is expected to start immediately with follow-on processing and interpretation services?carried out in close operation?with the client by EMGS in Houston.

The company has also been awarded a contract extension by a super-major in Libya. The extension is worth more than $7 million, more than the value of the initial contract.
The work is to determine the hydrocarbon content of potential reservoir structures offshore Libya using advanced EM imaging technology.

Drilling

First rig build underway

Kencana HL Sdn Bhd, a joint venture between Kencana Petroleum and Mermaid Maritime, has begun work on Maylasia’s first drilling rig in the country’s Lumut shipyard, according to local media reports. The Kencana Mermaid 1 (KM-1) is expected to be completed by October 2009. Estimated cost of the rig is approximately US $136 million. The KM-1 will be the first tender-assisted drilling rig built in Malaysia to be operated by a Malaysian company.
Rig sale OK’d

Federal antitrust regulators have cleared Hercules Offshore Inc.’s US $320 million purchase of three Gulf of Mexico rigs. The company agreed to purchase the rigs from Transocean Inc. last month. The transaction received an “early termination” status from the Federal Trade Commission’s antitrust reviews. The term applies to the completion of a review by the FTC before the end of a 30-day period required under law.

Drilling system built

Union Drilling Inc. awarded Houston-based IDM Group a construction contract to provide a 1600 hp AC QuickSilver drilling system. Deliveryis expected in June 2008. The system will be used to target the Marcellus shale in Pennsylvania.

New tools launched

MCS, a subsea engineering company, launched a new range of onboard riser management tools at the International Association of Drilling Contractors (IADC) conference in Rio de Janeiro in mid-March. The software platform assists operators and drilling contractors in monitoring drilling operations or when working with completion/workover risers. The riser analysis system helps in dealing with challenges of drilling in deep water, high currents and other environments that pose significant risks to offshore operations.

Production

Rig build secured

Sevan Marine will borrow US $280 million to build its FPSO Sevan 300 No. 4 to serve in the North Sea. The vessel is undergoing fabrication at the Hantong Shipyard in China and has been contracted to Venture Production for use on Pilot field. The contract is set for a period of five or 10 years with possible terms for an extension.

Support contract awarded

StatoilHydro awarded the main operations support contract for the North Sea’s Gjoa platform to IKM Gruppen. The deal calls for 55 contractors to be hired for the operator, Gaz de France, in Stavager. The contract has a five-year term with an option for a two-year extension. With the option included, the contract is worth US $81 million.

Nigeria spends big

Nigeria plans to invest US $20 billion a year for exploration and production activities, according to the country’s junior oil minister, Odein Ajumogobia. The country’s oil reserves are currently around 35 billion bbl, which puts the West African country in position to play a critical role in global crude supplies.

FSO deal bagged

Malaysia’s M3energy landed a US $298 million contract to provide a leased FSO (floating storage and offloading) vessel to Carigali-PTTEP Operating Company (CPOC) for its development in the Gulf of Thailand in Block 17. The lease period is 16 years with an optional 20-year extension. CPOC also has the option to buy the FSO within the first 10 years of the contract. The FSO will be a modified double hull Panamax tanker with a storage capacity of about 550,000 bbl of oil, and it will operate in 197 ft (60 m) of water approximately 161 miles (260 km) offshore the east coast of Malaysia.

Topsides contract won

Total has awarded KBR a contract for key topsides engineering work for the FPSO Pazflor field development in Block 17 offshore Angola. The FPSO is currently undergoing fabrication by Daewoo Shipbuilding & Marine Engineering in South Korea. The vessel will have a processing capacity of 200,000 b/d of oil and 150 MMcf/d of gas, with a storage capacity of 1.9 million bbl. First production is expected by 2011.

General

Chukchi gets record bids

The most successful lease sale in Alaska closed with US $2.6 billion in high bids and almost $3.4 billion in total bids from tracts in the Chukchi Sea off northwestern Alaska. The sale covered tracts as far as 200 miles (322 km) into the sea, but territory within 50 miles (16 km) was off-limits. The US Minerals Management Service said the Chukchi Sea Sale 193 attracted 667 bids on 488 blocks, Shell led the pack with $2.1 billion in high bids on 275 blocks. Shell previously discovered large volumes of natural gas in a wildcat well in the area. Also in the sweepstakes, ConocoPhillips submitted $14.45 million for 104 blocks and was high bidder on 98; Eni came away with 18 high bids and Statoil with 16. Environmental groups oppose development of the area, arguing that it could endanger polar bears.

Uganda opens doors

After passing national oil and gas laws, Uganda lifted its restrictions and again offered new exploration licenses in the country. According to a Dow Jones report, Kalisa Kabagambe, permanent secretary of the Ministry of Energy, said competitive bidding for attractive blocks would begin immediately. Commercial oil and gas discoveries in the Lake Albert area drew attention to the country two years ago. At that point, the country offered licenses for the asking to qualified companies. As interest in the area grew, the government decided it needed laws to govern an oil and gas industry. It shut down activity last September while those laws were developed.

Norway offers blocks

Norway’s cabinet offered 52 new blocks to successful applicants in the 2007 oil and gas block awards in predefined areas. Among them, seven blocks were in the Barents Sea, 21 in the Norwegian Sea and the remainder in the North Sea. The blocks attracted 113 applications for exploration. The predefined area sale caters largely to companies who want to try to develop new discoveries in the neighborhood of existing infrastructure. That usually means smaller pockets of oil and gas.

Deepwater Mexico calls

Reform measures taking shape in Mexico could allow state oil company Pemex to form joint ventures for deepwater development. Mexican Energy Minister Giorgina Kessel said, “We’re looking for Pemex to have the flexibility to form associations like all the companies in the world, to be able to explore and produce in highly difficult areas such as deep water.”

According to a Dow Jones article, the nation has evidence of shared reserves between the United States and Mexico. Several ultra-deepwater wells have been drilled near the Mexican border in the US Alaminos Canyon area. Unocal’s (now Chevron’s) Trident discovery reportedly is on a structure that also lies under Mexican waters. Shell’s coming Perdido hub development in the area does not include production from Trident. She said she expected a reform bill to be drafted by the end of March and passed during the 2008 legislative session.

SPE hits member record

Membership in the Society of Petroleum Engineers (SPE) climbed 8% last year to reach a record 79,300 members worldwide. Total membership in the organization has increased 23% since 2004. Increased membership came from nearly every region of the world, with the largest percentage gains in the Middle East region, which includes India. India posted a 15% year-on-year increase. Another strong showing came from the Northern Asia Pacific region, which includes China. Membership in that region grew by 10% last year over 2006. Encouraging results also came from the growth in younger members and student members. Student membership rose 11% last year, from 16,800 in 2006 to 18,700 in 2007. The average age of SPE members decreased between 2006 and 2007. In 2007, 21% of the members were younger than 35 years of age compared to 20% a year earlier and 14% in 2000. The average age of SPE members dropped from 47 in 2006 to 46 in 2007.