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Tuesday, 18 July 2017 00:10

Horizon strengthens PNG footprint

Sydney-based Horizon Oil has increased its interest to about 28% in the total certified resources contained in Papua New Guinea’s (PNG) Western Foreland fields of 2-2.5 Tcf gas and 60-70 MMbbl condensate.

Horizon and Spanish oil company Repsol will now jointly operate all Western Foreland fields and hold a combined 70% of the total resources while partners Osaka Gas, Kina Petroleum, and P3 Global Energy own the remaining 30%.

This comes after Horizon acquired 50% interest in and operatorship of PRL 28, containing the Ubuntu field and bought additional 3.15% interest in PRL 21, which is home to the Elevala, Tingu and Ketu fields, as a result of Mitsubishi Corp. divesting its upstream assets in PNG.

Moreover, Horizon also exchanged 20% interest in PRL 28 for 20% interest in the Puk Puk and Douglas fields in a trade with Kumul Petroleum, PNG’s national oil company.

After completion of these transactions, Horizon’s resource position for the planned mid-scale liquefied natural gas (LNG) development involving Repsol and other joint venture partners, will enhance the company’s capacity to advance the project. To be located on or near Daru Island in PNG, Western LNG’s (WLNG) design capacity is 1.5 MTPA.

Chief executive Brent Emmett said while the foundation gas for WLNG will come mainly from the Elevala, Tingu and Ketu fields, the Puk Puk and Douglas fields will be important contributors to the gas aggregation later in the project life, extending production plateau significantly.

“We now consider that our PNG acreage portfolio, with the recent enhancements, is optimally balanced. Horizon Oil’s 20-30% interests in the discovered fields will give us a meaningful interest in Western LNG - yet remain manageable from a funding perspective, taking into account the US$130 million milestone payment due on project FID and also the funds to be reimbursed by the PNG government should it elect to back-in to the project," he said. 

“The 80-100% interests in the exploration licenses provide scope for Horizon Oil to farm out future exploration work, to reduce exposure to cost and exploration risk. The exploration acreage is located close to, and on trend with existing discoveries and has considerable add-on potential to extend the life of Western LNG.

“As a result of these transactions, the company holds material working interests in all the appraised fields that will comprise the Western LNG gas aggregation project. Horizon Oil and Repsol between them operate all the licenses involved and, in combination will own about 70% of the total gas resources. This should greatly facilitate the planned multi-license development," he added.

Image: Map of Western Foreland fields and Horizon permits / Horizon

Sunday, 16 July 2017 21:40

Lukoil marks milestone in Caspian Sea

Russian oil producer Lukoil has reached another milestone with 3 million tons of oil produced at the Vladimir Filanovsky field in the Caspian Sea.

The Moscow-headquartered company said to date it has completed six wells at Vladimir Filanovsky and is currently drilling the seventh well, which will be used for water injection. 

As part of the field’s Phase 2 development plan, Lukoil has completed installation in the target area of the topside of the fixed ice-resistant platform and the accommodation topside. Phase 2 is expected to be completed by the end of 2017. 

The Vladimir Filanovsky field was put in operation in 2016, and its initial recoverable reserves equal 129 million tons of oil and 30 Bcm of gas. The annual production rate at plateau phase is 6 million tons of oil.

Last month, Lukoil reported that oil production at its Pyakyakhinskoye oil and gas condensate field in the Yamal-Nenets Autonomous District exceeded 1 million tons since the start of commercial production in October 2016. The accumulated production of gas exceeded 1.3 Bcm.

Home to 57 oil and 25 gas wells, Pyakyakhinskoye's daily production currently exceeds 4000 tons of oil and gas condensate and 9 Mcm of gas.This year Lukoil plans to build five oil and three gas well pads on the field, which will be connected to a network of pipelines totaling 30km. In addition, the firm will also put in operation 26 more oil producing wells.

Image: Vladimir Filanovsky field operation in the Caspian Sea / Lukoil

Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has released ConocoPhillips’ offshore project proposal (OPP) to develop the Bonaparte basin’s Barossa field, for public comment.

Located approximately 300km north of Darwin in permit NTRL5, the Barossa area is a joint venture between ConocoPhillips (operator, 37.5%), SK E&S Australia (37.5%) and Santos (25%).

The OPP was submitted by ConocoPhillips on behalf of its partners, proposing to develop hydrocarbon resources in the Timor Sea.

The development concept includes a permanently moored floating production storage and offloading facility, subsea production system, supporting in-field subsea infrastructure in the Barossa field and a subsea gas export pipeline. 

The new pipeline will be connected to the existing Bayu-Undan to Darwin gas export pipeline which feeds the onshore Darwin liquefied natural gas (LNG) facility at Wickham Point. Gas from the Barossa field would replace the existing supply from the Bayu-Undan field following its anticipated depletion in 2022.

The life of the project is expected to be approximately 20 years from first gas, which is targeted for 2023. The expected LNG and condensate production rates are approximately 3.7 MTPA and 1.5 MMbbl per year, respectively. The 2015 appraisal drilling program saw three wells drilled in the NTRL5 permit area. Following a new 3D seismic acquisition program completed in 2016, a further two appraisal wells, Barossa-5 and Barossa-6, were drilled in the permit in 2017. 

NOPSEMA CEO Stuart Smith said providing the public with opportunities for participation and consultation is an integral part of an environmental impact assessment and assists in ensuring responsible offshore petroleum environmental management. He highlighted that interested parties are encouraged to review the OPP and submit comments to NOPSEMA by 6 September.

Introduced in 2014, an OPP is a regulatory document required for all proposed offshore projects in Commonwealth waters. It covers offshore activities including production drilling, the construction, and installation of facilities and infrastructure such as pipelines, the recovery of petroleum and associated operation of facilities, through to decommissioning.

An OPP provides a mechanism for the potential environmental impacts and risks of petroleum activities conducted over the life of a proposed offshore project to be assessed. It is a requirement of the OPP process that the public is provided an opportunity to scrutinize and comment on the OPP.

If NOPSEMA determines a proponent has not evaluated and addressed public comment adequately or the final OPP does not meet all of the requirements of the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 then NOPSEMA cannot approve the OPP.

Image: Map of Barossa development area / NOPSEMA

Sembcorp Marine subsidiary Jurong Shipyard has again extended its standstill agreement with North Atlantic Drilling to delay the delivery of the semisubmersible drilling rig, the West Rigel, for the fifth time.

The Singaporean shipbuilder said the new agreement has been further stretched for another six months to 6 January 2018.

During this time, West Rigel will remain at Jurong Shipyard’s yard in Singapore. North Atlantic Drilling will continue to market the rig for an acceptable drilling contract and Jurong Shipyard will have the right to sell the unit at an acceptable price.

However, in the event that no employment is secured and no alternative transaction is completed when the standstill period concludes, Sembcorp said, both parties will form a joint asset holding company for combined ownership of the rig.

Jurong Shipyard will hold majority shares in the venture with 77% interest while Seadrill’s North Atlantic Drilling owns 23% stake. The duo will continue to market the rig for the joint asset firm.

Jurong Shipyard bagged the US$568 million contract to build West Rigel, a sixth-generation semisubmersible, in April 2012. The design is based on the Moss Maritime CS60 design, an enhancement of the Moss Maritime CS50E MKII harsh environment ultra deepwater semisubmersible rigs West Pegasus and West Leo which were delivered by Jurong Shipyard to Seadrill in March 2011 and January 2012 respectively. 

Image: West Rigel / North Atlantic Drilling