Petrobras CEO: Presalt Oil Extraction Costs $8/bbl

Oil extraction in Brazil’s promising presalt offshore wells costs about $8/bbl, Petrobras CEO Pedro Parente said at an event in Sao Paulo on Aug. 8.

Discovered only 10 years ago, the presalt area has rapidly become the top priority for Petrobras and other oil majors holding exploration rights to some of its large reserves.

Output from presalt wells surpassed the combined volumes from all other fields in the country for the first time in July.

“Presalt, today, has an extraction cost of $8 per barrel. The problem was the delay in exploring presalt,” Parente said.

Maersk Oil Taps Simmon Edeco For Wellhead, Valve Maintenance

Maersk Oil has awarded SIMMONS EDECO, a Canada-based oilfield services provider, a contract to provide wellhead maintenance services for all Maersk Oil offshore wells in the Danish North Sea.

The five-year contract is for scheduled and unscheduled maintenance, according to a news release.

The oilfield services provider will also to refurbish valves and wellhead maintenance equipment in addition to managing major and consignment stock. The contract began June 1 and has three one-year options to renew.

SIMMONS EDECO said it is supporting the contract from operations base in Esbjerg, Denmark.

Borr Drilling Aims To List In Q3, May Buy More Rigs

Norwegian drilling startup Borr Drilling plans to list on the Oslo exchange this quarter and is considering buying more assets to position itself for a market upturn, CFO Rune Magnus Lundetrae said on Aug. 4.

The world’s biggest oilfield service provider Schlumberger took a 20% stake via a private placement in the company managed by former Seadrill executives in March.

“It’s not about raising the capital. We will register the existing shares,” Lundetrae told Reuters.

It plans to list 315 million shares, which on Aug. 4 were valued at about $1.16 billion, he said. The company lined up Norway’s biggest commercial bank DNB to advise on the listing. It was listed on the Norwegian over-the-counter market in December.

The company was also looking to buy more assets after acquiring two jackup rigs from U.S. Hercules Offshore for $130 million and 15 jackup rigs, including five new rigs under construction, from Swiss-based Transocean for $1.35 billion.

“We believe that the jackup market will be the first [drilling] segment to recover when the activity picks up,” Lundetrae said.

Wood Group Takeover Of Amec Could Cripple Competition

Britain’s market regulator said on Aug. 2 a takeover of Amec Foster Wheeler by oilfield services firm Wood Group could hurt competition.

Wood Group agreed to buy smaller rival Amec Foster Wheeler for $2.7 billion in March.

Britain’s Competition and Markets Authority (CMA) said that the merger could lead to competition concerns in the supply of engineering and construction services as well as operation and maintenance services on the U.K. Continental Shelf.

Wood Group has until Aug. 9 to formalize its proposals for addressing concerns about the deal or it will be referred for an in-depth probe, the CMA said.

Wood Group said that when the deal was explained that it had proposed to the CMA a divestment of a majority of Amec Foster Wheeler's upstream oil and gas assets and operations in the U.K.

Wood Group said on Aug. 2 that it would formally submit the proposal to the CMA and both companies believe that this would be sufficient to address CMA's competition concerns and obtain clearance for the merger.

However, the undertakings excluded Amec's Aberdeen-based services unit Qedi. The assets identified in the undertakings generated $55.5 million in core earnings on revenue of about $978.6 million in 2016.

Separately, the U.K.’s Serious Fraud Office said in July it had launched a bribery investigation of Amec.

Jacobs Signs Global Enterprise Framework Agreement With Shell

Jacobs Engineering Group has renewed a global enterprise framework agreement with Shell Oil Co. to provide concept, FEED, procurement, project management, construction management and construction services for Shell’s projects globally, according to a Business Wire news release.

The agreement aligns with Shell’s ongoing efforts to transform the way its projects are delivered by improving capital and financial efficiencies.

“This agreement fosters fresh and innovative project delivery solutions to help meet our joint goal of increased capital efficiency and economic results,” Gary Mandel, petroleum and chemicals president for Jacobs, said in the release.

Pacific Drilling Makes Management Changes, Names New CEO

Pacific Drilling has named Paul T. Reese, executive vice president and CFO, as the company’s new CEO. Reese will move into the position last held by Christian J. Beckett, who stepped down from the position and as a board member effective Aug. 2, to pursue other opportunities, according to a Business Wire news release.

Reese joined Pacific Drilling in October 2008 and has served the company in several senior-level roles, including vice president and controller. He has more than 20 years of experience in the oilfield services and E&P sectors, the release said.

The company also announced other management changes:

  • Johannes (John) P. Boots, the company’s current senior vice president—finance and treasurer, will serve as senior vice president and CFO; and
  • Richard E. Tatum, currently vice president and controller, will serve as senior vice president and chief accounting officer.

Kosmos Seeks New Investors With London Listing

Kosmos Energy said Aug. 2 it will list on the London Stock Exchange by the end of September in a bid to attract more European investors.

The company, which has been listed on the New York Stock Exchange since 2011, expects its London listing to attract more European investors seeking exposure to promising oil and gas exploration.

“There are a number of European investment funds and specialist international oil and gas investors that are currently unable to hold Kosmos’ shares due to their listing outside of a European regulated market,” Kosmos said in a statement.

The process is expected to be completed later in the third quarter, according to Kosmos.

Shell Plans 400 Job Cuts At Dutch Projects, Technology Department

Royal Dutch Shell plans to cut more than 400 jobs in the Netherlands, mainly at its major projects and energy technology operations, as the oil giant shifts its business model in response to lower oil prices, according to an internal document seen by Reuters.

The world’s second-largest oil company by market capitalization said in a statement responding to questions from Reuters that “approximately 400 [staff] are potentially at risk of redundancy during the last quarter of 2017/first half of 2018.” That represents around a quarter of the roles at the department, according to the staff consultation document seen by Reuters. The group employs 92,000 worldwide.

“Shell is transforming into a simpler company,” a spokesman said, adding the final number of job cuts would be subject to consultation with employees. He declined to answer detailed questions about the consultation document.

The proposed restructuring, which will also see dozens of research roles move from the Netherlands to Bangalore, India, highlights how lower oil prices are prompting the Anglo-Dutch oil giant to shift away from the megaprojects, which have been its focus for over 20 years. It also underscores an increasing shift of higher-value roles such as research to lower cost countries.

—Staff & Reuters Reports

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