Russian independent natural gas producer Pao Novatek (Novatek) said it signed a preliminary deal with Saudi Aramco for LNG supplies and gas projects.
Under the agreement, Novatek will collaborate with Saudi Aramco on natural gas projects, development of LNG markets, gas exploration and production projects as well as research and technology development, the Moscow and London-listed company said.
"We see a wide array of exciting and mutually beneficial energy opportunities to cooperate with Saudi Arabia,” said Leonid Mikhelson, NOVATEK’s chairman of management board. “Our company owns one of the world’s largest high-quality, low-cost conventional gas reserve base and has gained unique and valuable experience of developing LNG-projects in the Russian Arctic area.”
He said the company’s strategy involves rapidly growing its LNG production and attracting international partners. “We welcome the interest of such a globally important company as Saudi Aramco to jointly collaborate with us in gas markets,” he added.
Novatek’s upstream activities are concentrated mainly in the prolific Yamal-Nenets Autonomous Region, which accounts for approximately 80 per cent of Russia’s natural gas production and approximately 16 per cent of the world’s gas production.
Abu Dhabi National Oil Company (ADNOC) said Sunday it signed a 40-year concession deal with Spain’s Cepsa worth AED 5.5 billion ($1.5 billion) for a 20 per cent stake in its offshore SARB and Umm Lulu concessions.
Capsa’s participation payment also takes into account previous ADNOC investments in the concession area made up of two main fields, in which ADNOC retains a majority 60 per cent stake. The remaining 20 per cent stake in the concession is yet to be announced.
Umm Lulu and SARB is one part of the ADMA offshore concession expiring in March, which was recently split into three new concessions to maximise commercial value, broaden ADNOC’s partner base, expand technical expertise, and enable greater market access. The other two are Lower Zakum and Umm Saif & Nasr.
ADNOC last week awarded a 10 per cent stake in Lower Zakum to an Indian consortium, led by ONGC Videsh.
Cepsa, a Spanish integrated oil and gas company is wholly-owned by Abu Dhabi’s Mubadala Investment Company and operates across the entire oil and gas value chain. The deal underpins ADNOC’s strategy to maximise returns from its resources, expand its downstream business, and retain value for the UAE.
The agreement, which has an effective date of March 9, 2018, was signed by Dr Sultan Ahmed Al Jaber, ADNOC Group chief executive officer, and Pedro Miró, vice chairman and CEO of Cepsa.
H.E. Dr Al Jaber said: “This long-term agreement is a milestone in the development of Abu Dhabi’s integrated oil and gas sector and in the delivery of ADNOC’s 2030 smart growth strategy. This partnership ensures we continue to maximise value from our hydrocarbon resources, in line with the leadership’s directives, by capturing that value and financial return here in the UAE.
“The agreement also reflects ADNOC’s new partnership approach, as we expand and diversify our partner base across ADNOC’s integrated value chain. Reflecting our strategic approach, we are also working with Cepsa to explore expansion opportunities in our downstream business, in the UAE and overseas, that will deliver competitive returns and long term growth opportunities for both parties, and for the UAE.”
Cepsa, which has been operating in the energy sector since 1929, has businesses in over 20 countries across five continents. Its operations span exploration, production, refining, distribution and marketing, chemicals, gas and power, trading, bunkering and renewable energy sources. It is the world’s largest producer of Linear Alkyl Benzene (LAB) and also the leading producer of cumene and the second in phenol and acetone, thanks to its seven chemical plants, in Europe, Asia and the Americas. In 2016 it produced 35.4 million barrels of oil, distilled 158.7 million barrels of crude oil and sold 28.3 million tons of petroleum products.
Miro said: “This concession agreement marks an important moment for Cepsa and our close relationship with ADNOC, with whom we are working with on a number of projects in the upstream, downstream and petrochemical sectors. It will add substantial reserves, in a concession with relatively low production cost, to our portfolio, and will enable us to make considerable strides towards achieving our objectives, as set out in our 2030 Strategic Plan”.
In November 2017, ADNOC and Cepsa signed a framework agreement to evaluate a new world-scale Linear Alkyl Benzene complex in Ruwais, Abu Dhabi. LAB is the most common raw material in the manufacture of biodegradable household and industrial detergents. It is also used in house cleaners, fabric softeners, and soap bars.
Italian oil and gas contractor Saipem said Thursday it was awarded a US$750 million engineering contract in Oman by Duqm Refinery and Petrochemical Industries Company.
The contract involves engineering, procurement, construction and commissioning under Package 3 offsite facilities in the framework of the Duqm refinery development near Oman’s north east coast, the company said in a statement.
The 230,000 barrels-per-day Duqm Refinery and Petrochemical Industries Company is a joint venture between the Oman Oil Company (OOC), the national oil company, and Kuwait Petroleum International (KPI).
“We welcome with particular satisfaction the awarding of this new contract which signals the relaunch of our activities in Oman, a country in which Saipem has operated successfully in the past,” said Stefano Cao, CEO of Saipem.
In a separate statement on Kuwait News Agency website, KPI said three contracts were awarded for the Duqm Refinery development and construction, without elaborating what these contracts were for and which companies were involved.
Petroleum Development Oman (PDO) and GlassPoint Solar inaugurated the Miraah solar plant on Feb 13, located at Oman’s Amal oilfield, which will be among the world’s largest solar projects when completed.
Four blocks of the plant have now been constructed safely, on time and on budget with steam production integrated with the Amal network,” GlassPoint said in a statement.
The event also marked the official opening of the Miraah Visitor Centre with more than 200 guests in attendance, including representatives from both the public and private sectors.
“Today marks an important milestone for Oman as it further cements its position as the regional leader in energy convergence, uniting renewable and conventional energy industries. Deploying solar on Oman’s oilfields to reduce the industry’s natural gas consumption has a significant and lasting economic benefit for the Sultanate,” said Salim bin Nasser Al Aufi, Undersecretary of the Ministry of Oil and Gas.
Miraah will generate real In-Country Value (ICV) and create job opportunities for Omanis, largely from future supply chain development and gas savings directed to other industries. H.E. added, “The project, which stands to be among the largest solar projects in the world, has contributed to developing local Omani talent in the renewable energy field and created job opportunities for local companies. We look forward to exporting our knowledge and expertise to the rest of the world as other progressive oil and gas producers follow in PDO’s footsteps.”
Miraah’s construction has progressed on schedule with 1.9 million safe man-hours completed without a Lost Time Incident since the project started in 2015, GlassPoint said. The first four blocks were commissioned successfully and the facility is now in daily operation delivering steam to the Amal oilfield. The four blocks have a total capacity of over 100 MWt and will deliver 660 tonnes of steam per day, providing significant gas savings.
Once complete, the one gigawatt installation will consist of 36 blocks built in a sequence, which allows PDO to benefit from solar steam now and gradually ramp-up production over time to meet the Amal oilfield’s steam demand. The project is on track to deliver an additional eight blocks in early 2019.
“This is a very proud day for PDO and our partners GlassPoint Solar. Miraah provides a simple yet innovative solution that allows us to develop our heavy oil, while at the same time reducing energy consumption and costs,” said PDO managing director Raoul Restucci.
“For PDO, Miraah represents an important step in our journey to become a fully-fledged energy company, as well as placing the Sultanate firmly on the global renewable energy map with this pioneering project,” he added.
GlassPoint’s solar technology was specifically designed to harness the sun’s energy to generate the steam required for thermal enhanced oil recovery (EOR), seamlessly integrating into existing oilfield operations. The natural gas saved by using GlassPoint’s technology can be exported or directed toward higher-value applications such as power generation or industrial development, helping to diversify the economy.
“Today, alongside our partner PDO, we are ushering in a new era for renewables here in the Sultanate and for the broader oil and gas industry,” said Ben Bierman, Chief Operating Officer and Acting CEO of GlassPoint. “The current climate of low oil prices and the transition to cleaner energy sources, validates the important work we have achieved together with Miraah. Oman is becoming an epicenter of excellence for using solar energy to power oilfield operations and overcome today’s energy challenges.”
Unlike solar panels that generate electricity, GlassPoint’s solution uses large mirrors to concentrate sunlight and boil oilfield water directly into steam. The steam is used for the extraction of viscous or heavy oil as an alternative to steam generated from natural gas. GlassPoint’s innovation was to bring the mirrors and other system components indoors, using a greenhouse structure to protect from wind and sand, which is common in remote oilfields like Amal. The greenhouse enables major cost and performance advantages compared to exposed solar designs, from reducing overall material usage to automated washing operations.
GlassPoint’s partnership with PDO began over seven years ago when they built the first solar EOR project in the Middle East. The 7 MWt pilot project proved the effectiveness and cost efficiency of GlassPoint’s technology and led to significant learnings and design improvements. No other technology has been proven successfully for oil and gas operations. GlassPoint’s track record in Oman has led to the company’s expansion in new markets, including the recently announced project with oil and gas producer Aera Energy to build the largest solar plant in California, USA.
Algeria's Sonatrach said it has agreed to a settlement with Italian oil firm Saipem on Wednesday, which ends their legal dispute over gas projects.
The agreement covers dispute on the construction of a gas liquefaction plant at Arzew (the LNG3Z train), three LPG trains, an oil separation unit (LDHP) with condensate production facilities in Hassi Messaoud, the LPG LZ2 pipeline in Hassi R'Mel and the contract to build a gas and oil production unit on the Menzel Ledjmet field, Sonatrach said in a statement.
Sonatrach's CEO Abdelmoumen Ould Kaddour said Saipem would pay between $150 million and $200 million to solve the disputes and said the settlements would open the way for a new joint offshore project, according to a report by Reuters.
Kaddour, who was appointed last year, has made it a priority to resolve disputes with oil majors which have dented their appetite to invest in the North African country.
UK’s Genel Energy said it has revised its Taq Taq, Bina Bawi and Miran oil reserves after a new report on the Kurdistan oilfields.
The oil and gas exploration and production company said at Taq Taq, McDaniel’s competent person’s report (CPR) resulted in a 12 per cent reserves replacement for 2P and 40 per cent reserves replacement at the higher confidence 1P level as a result of stabilising production and the integration of well TT-29w.
Taq Taq gross 2P reserves at the end of December were estimated by McDaniel to be 54.7 million barrels, compared to 59.1 million barrels end of February 2017, despite production in the period which was partly offset by a small upward technical revision.
“The replacement reflects the stability in cash-generative production that we have seen from the field in the second half of 2017,” Murat Özgül, chief executive of Genel said in a statement.
Genel’s Bina Bawi gross 2C light oil resources estimate by RPS Energy Consultants rose at the end of Dec. to at 37.1 million barrels, compared to 13 million barrels at the of July 2013. The increase reflects higher recovery factors than initially estimated due to integrating learnings from analogue carbonate fields of similar oil quality.
“The significant increase in high-value Bina Bawi 2C oil resources offers a tangible opportunity for near-term value creation,” Özgül said.
Because the high-quality Bina Bawi oil is in close proximity to export infrastructure, the field represents a potentially attractive near-term development candidate for the company.
Meanwhile, the Miran oil resources were decreased in the estimate by RPS to 23.7 million barrels from 52 million barrels in April 2013. The volumes were reduced as the view on the oil water contract uncertainty range as well as reservoir properties including data from MW-5 drilled in July 2013.
“Because of field experience at Taq Taq, Genel management has taken the view that it is unlikely that any matrix will contribute to primary depletion at Miran and, as such, has taken a more conservative view and will only record 18.5 MMbbls of viable 2C contingent resources at the field,” the company said.
Kuwait Energy has discovered oil in Egypt’s eastern desert after reassessing seismic data that identified drilling opportunities, just after it sold part of its interest in Iraq’s Block 9.
The oil and gas exploration and production company, which has ten oil and gas assets across Egypt, Iraq, Yemen and Oman, spud the South Kheir-1X (SK-1X) well in the Area A of the concession in December, Kuwait Energy said in a statement.
It tested on Jan. 28 an initial oil flow rate of 2,452 barrels of oil per day (bopd) from the Hamman Faraun MBR/Belayim formation at 128/64-inch choke size. On 6 February 2018 the well stabilised at an oil rate of 1,900 bopd on 64/64-inch choke size.
The oil discovery is a direct result of the technical team reprocessing old 2D/3D seismic and identifying drillable exploration opportunities, Abby Badwi, chief executive officer of Kuwait Energy said. “The Area A concession has been producing since the 1960s and this discovery demonstrates Kuwait Energy’s ability to continue to find hydrocarbons in mature fields.”
He said the company has a track record of around 50 per cent exploration success rate in Egypt.
Kuwait Energy holds a 70 per cent revenue interest and is the operator of the Area A concession under a service agreement with Egypt’s General Petroleum Company GPC while Petrogas holds 30 per cent.
Earlier in the week, Kuwait Energy signed a farm-out deal with Dragon Oil for 15 per cent of its participating interest in Iraq’s onshore Block 9.
An 8.57 per cent of the interest was exchanged for US$100 million, while a 6.43 per cent interest in the block was used to as settlement of a dispute with Dragon Oil in relation to a non-controlling interest in the block, Kuwait Energy said in a statement.
Pending government approvals, Kuwait Energy will remain the operator with a reduction in participating interest from 60 per cent to 45 per cent, Dragon Oil participating interest will increase from 30 per cent to 45 per cent with the remaining 10 per cent participating interest being held by Egyptian General Petroleum Company.
“Both companies can work as equal equity partners on the concession allowing us to best utilise our joint technical expertise in delivering the submission of the Block 9 full field development plan to the Iraqi government,” Badwi said.
“The reduction in future Block 9 capital expenditure exposure coupled with the material cash injection strengthens Kuwait Energy liquidity position going forward.”
Honeywell launched its first Middle East industrial cyber security centre of excellence (COE) at its Dubai office to test and demonstrate threats, vulnerabilities and to train customers.
This investment comes in support of regional government initiatives such as the Dubai Cyber Security Strategy, to strengthen cyber security defences in a growing digital transformation across industries. The new centre will support a rapidly developing Middle East cyber security market, which has been seeing increasingly sophisticated cyber-attacks, Honeywell said.
“Honeywell saw this as one the most important areas for cyber security research as well as to train customers - we were being asked by customers to leverage our experience gathered globally,” said Jeff Zindel, vice president and general manager, Honeywell Industrial Cyber Security.
Zindel said Honeywell is differentiated among competitors by its industry experience.
“We have a decade’s worth of unique experience in industrial cyber security technology, the process control systems and networks and we couple that with a detailed understanding of operations and finally of people. We have a unique perspective and understanding that we translate into our own methodology, software and solutions,” he said.
Zindel said the centre is also a critical part of Honeywell’s network of global Cyber Security COEs dedicated to improving industrial cyber security for critical infrastructure, information technology and operational technology (IT/OT) convergence and digital transformation.
The new COE technology centre provides a safe off-process environment to test and demonstrate process control network vulnerabilities and threats, train customers with real-time attack simulations and provide advanced customer consultations.
The centre contains distributed control systems, a physical plant process and the latest industrial cyber security software and solutions. It includes data analytics and networking equipment capable of supporting unique training sessions, demonstrations, workshops, and cyber-attack simulations. The facility is led by a full-time operations team with deep industrial cyber security expertise and operational technology knowledge fundamental to help customers stay ahead of cyber threats.
“As threats to industrial control environments become more sophisticated, it will be crucial to train the workforce of the industry for effective cyber security implementation,” said Safdar Akhtar, business development director of Industrial Cyber Security for Europe, Middle East and Africa at Honeywell Process Solutions. “At the centre, we are able to demonstrate cyber security solutions and controls in attack scenarios to show which of them are most effective at combatting various attacks.”
The centre was inaugurated by Jeff Zindel during a launch event that showcased the solutions within the COE, followed by a demonstration of real-time cyber-attack scenarios and the effectiveness of advanced cyber security controls.
The COE provides a hub in the region to collect customer feedback and collaborate with global research and development teams to help develop solutions for the region and global markets.
Abu Dhabi National Oil Company (ADNOC) said it has launched the implementation phase of its new In-Country Value (ICV) strategy which will support economic growth as well as employment for UAE nationals.
Under ADNOC’s ICV, the group is pushing greater collaboration within the private sector that will improve knowledge transfer, sourcing goods and services locally to benefit UAE businesses and employment and development for UAE nationals.
All business partnerships with ADNOC now include an ICV assessment as part of the tender evaluation and award process. ADNOC’s recent contract awards have also taken the ICV criteria into consideration.
It reinforces the company’s commitment to supporting local businesses and their role in driving economic diversification and GDP growth.
ADNOC said its AED 400 billion capital spend across its entire value chain, over the next five years, will create multiple opportunities for local companies to grow alongside ADNOC, as international companies work more closely with local SMEs to maximise the use of local products, manufacturing and assembly facilities, services and infrastructure.
His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said: “In line with the directives of the country’s leadership, ADNOC is committed to engaging with and supporting the local private sector. As one of the backbones of the UAE and Abu Dhabi economies, ADNOC provides the stimulus for economic growth, supports GDP diversification and drives employment.
“Our ICV strategy will further strengthen our partnerships with the local private sector and drive even more opportunities for local businesses to benefit and grow alongside us, as well as employment opportunities for Emiratis. It is a win-win situation for the nation, the economy, our suppliers and for ADNOC.”
The criteria which will be utilised to assess suppliers’ ICV contribution include goods and services sourced locally, employment and development opportunities for Emiratis, in country spend of subcontractors, supplier’s investment in the UAE, and expat contribution in the UAE.
ADNOC’s ICV strategy is an extension of its 2030 growth strategy to create a more profitable upstream and more valuable downstream business, as well as ensure an economic and sustainable supply of gas.
BP said it started gas production from the Atoll phase one project, offshore Egypt, delivered ahead of schedule and below cost.
The project is now producing 350 million cubic feet of gas a day (mmscfd) and 10,000 barrels a day (bpd) of condensate, BP said in a statement. Gas production from the field is directed to Egypt’s national grid.
Atoll is the first new project to come into production for BP in 2018, adding to the series of higher-margin projects successfully brought online over the past few years.
The project, in the North Damietta concession in the East Nile Delta, was delivered seven months ahead of schedule and 33 per cent below the initial cost estimate.
The 13 projects that started-up through 2016 and 2017 provided more than 500,000 barrels of oil equivalent a day (boed) of new net production capacity and total net production from BP’s new projects is now expected to be 900,000 boed by 2021.
“The longstanding partnerships we have in Egypt allowed us to fast-track Atoll’s development and deliver first gas only 33 months after discovery,” said Bob Dudley, BP group chief executive.
“This is a further demonstration of our commitment to help realise Egypt’s oil and gas potential and meet the increasing demand from its growing population.”
BP announced the Atoll discovery in March 2015. The main reservoir in the field contains an estimated 1.5 trillion cubic feet (tcf) of gas and 31 million barrels of condensates and further segments are under evaluation.
The Atoll phase one project is an early production scheme involving almost $1 billion investment, BP said. The project involved recompletion of the original exploration well as a producing well and the drilling of two additional production wells, completed August 2015 to February 2017.
Production is exported to the existing onshore West Harbor gas processing plant. Installation of the necessary subsea infrastructure and upgrading of onshore facilities was completed ahead of schedule.
Hesham Mekawi, regional president, BP North Africa said: “Atoll is our first major project in Egypt to be delivered in 2018, following the West Nile Delta Taurus and Libra project and then Zohr last year. We are extremely proud of Atoll’s efficient execution through our joint venture, the Pharaonic Petroleum Company. Delivering this project at such an unprecedented pace, less than two years after sanction, and with an impeccable safety record is a tremendous achievement.”
BP started operations in Egypt 55 years ago, with total investments so far of approximately $30 billion, making BP one of the largest foreign investors in the country, it said.
Germany’s DEA said it will invest US$500 million in Egypt in the next three years as it looks to boost oil and gas production from its oilfields.
“Egypt continues to be an important factor in DEA’s global E&P portfolio. With targeted investment in our key assets, we plan to double our production in the country within the next two years,” Maria Moraeus Hanssen, CEO of DEA Deutsche Erdoel AG, said in a statement.
The company made the same announcement to journalists in Cairo ahead of the second edition of the Egypt Petroleum Show (EGYPS).
“We see an upside potential in the mature oil fields in the Gulf of Suez that we aim to lift. Our Disouq gas development project will be re-developed. The development of the next three fields at West Nile Delta is making good progress too. In total, DEA plans to invest another half billion US-Dollars in the coming three years into these key assets,” she added in a company statement.
DEA has interest in oil fields in the Gulf of Suez and the Disouq gas fields in the Onshore Nile Delta. The next phase of the West Nile Delta (WND) development is intended to contribute to the company's target.
DEA has been active in Egypt since 1974 and has produced more than 650 million barrels of crude oil in the Gulf of Suez during the last three decades, it said.
The production is operated by the Suez Oil Company (SUCO), DEA's joint venture with the Egyptian General Petroleum Corporation (EGPC). DEA and EGPC recently agreed on the concession extension of the the fields Ras Budran and Zeit Bay. The onshore gas development project Disouq comprises seven gas fields and is in production since 2013.
Production from the offshore WND gas fields started in March 2017 from the first two fields, Taurus and Libra. The three fields Giza, Fayoum and Raven are currently under construction. DEA has a 17.25 per cent working interest in West Nile Delta (North Alexandria and West Mediterranean Deep Water concessions), with BP being the operator and owner of the remaining share.
Egypt’s minister of petroleum and mineral resources Tareq Al-Mulla said during the opening ceremony of the Egypt Petroleum Show (EGYPS) yesterday that Egypt was accelerating opening up the country’s oil and gas sector.
“We have big projects coming on stream in the country. The petroleum sector in Egypt is embarking on new strategies. Our strategy is to make Egypt the regional energy hub,” said Al-Mulla
“We see Egyps as a great platform to launch our modernisation programme. Egyps is great way to promote Egypt’s oil and gas industry.
Al-Mulla is very proud of were Egypt has come over the last few years.
“That is why EGYPS is so important as we have a success story to tell and it is only at this show I can be here with the two CEOs of our two main partners, BP and Eni.”
He stated: “Our ambitious plan to bridge the gap between production and consumption continues. By the year end we hope to be self-sufficient.”
The petroleum minister announced a raft of new initiatives during his opening speech, including new upstream investment and downstream products.
“Eni and BP bet on Egypt and we bet on these two major IOCs. EGYPS is a way for us to tell our story to the world and the wider industry. Now is the time to bet on Egypt,” he said.
Al-Mulla explained that Egypt has embarked on an ambitious modernisation programme that will get it ready to become a regional gas hub.
Eni CEO, Claudio Descalzi shared a panel session with Tareq Al-Mulla and BP’s CEO.
“Egypt is a crucial market for us. It is geographically located so close to us in Italy. We think Egypt has a big future. Egypt has a lot of infrastructure in place and it can play a big role in the regional global LNG market. “
He added: Zohr is a game changer for us. It has set a new standard in the industry. We were able to get to production after 27 months which is a new record.”
BP’s CEO Bob Dudley said during the panel that “We believe in Egypt. We have a lot of activity across the Nile delta and Egypt is on its way to becoming an exporter of gas. We invested more money in Egypt last year than any other country.”
He added: “We have brought the Western Delta project onstream and under budget. We are very positive about the future of Egypt and we can see the oil and gas developments leading to further industrial development within the country. “
OPEC’s secretary general, Mohammed Barkindo said that the oil market was on course to re-balance during his keynote speech at the opening ceremony of the 2nd Egypt Petroleum Show (EGYPS) in Cairo.
The OPEC secretary general was one of many top industry players talking during the first day of Egyps’s strategic conference.
He said that Egypt is becoming a key regional energy hub, especially in terms of natural gas.
“The big gas finds at Zohr and Northern Alexandria will help position Egypt as a global player in the gas sector.”
He stated that the market is responding to the actions taken by OPEC and non-OPEC countries to help balance the oil sector.
“We are on course to balance market. The re-balancing has been driven by the cooperative effort of all participating countries,” said Barkindo.
He added: “The report card for 2017 had surpassed our expectations. Conformity by all participating countries was over 107 per cent on average last year. This January it promises to break another record. It shows a determined joint effort to balance the market. What we are achieving now is going beyond what was first envisioned.”
Barkindo stressed that the historic declaration of cooperation between OPEC and on-OPEC countries was working and they were already looking at ways they can can institutionalise beyond just re-balancing.
“So we can ensure we minimise uncertainty and instability.”
The OPEC boss went on to say that market fundamentals have not been this strong in a long time
“Oil demand is growing. Global oil demand surpassed the 100 million bpd threshold much earlier than we expected. We predict oil demand to grown by 1.6 million bpd in 2018. What we are seeing is an increased energy demand across all sectors.”
The message from Barkindo was clear. Global economic growth is improving and OPEC predicts it will grow by 2.8 per cent.
He ended his keynote by saying: “The world will need more energy in the future that will require ugh investments. Looking ahead the future of our industry will be built on greater cooperation.”
Sound Energy, the Morocco focussed upstream gas company, said it was awarded a petroleum contract with 75 per cent interest over eight years for an expanded Sidi Moktar area in central Morocco.
The contract with Sound Energy was given by L'Office National des Hydrocarbures et des Mines (ONHYM), the Moroccan state regulator for petroleum operations, and will come into force on approval of the Moroccan Energy and Finance Ministries, the oil and gas company said in a statement.
"Sidi Moktar represents an exciting second leg to our Moroccan portfolio, following on from Sound Energy's success at Tendrara,” said Sound Energy's CEO James Parsons. “The company is actively pursuing and remains committed to the development and expansion of its Moroccan portfolio."
The Sidi Moktar petroleum agreement covers a large area extending across and beyond the permits in the Essaouira Basin that were formerly known as the Sidi Moktar Nord, Sud and Ouest Permits. The new Sidi Moktar petroleum agreement covers some 4,499 square kilometres and will be named 'Sidi Moktar Onshore' including sub-areas termed 'Sidi Moktar I', 'Sidi Moktar II' and 'Sidi Moktar III'.
The contract, once ratified, will give Sound Energy operatorship along with a 75 per cent interest, while ONHYM will hold the remaining 25 per cent.
As with all Moroccan licences, the agreement will be divided into 3 phases, each with pre-agreed work commitments.
Under the agreement, Sound Energy will have to, in the first two and half years, acquire and process 500 kilometres of 2D seismic, a short well test of the Koba-1 well and abandonment of Koba-1 and Kamar-1, if required. The Koba-1 well was re-entered and tested by Sound Energy in 2017.
In the first three years of the agreement, it will have the option to drill one exploration well with a minimum Liassic objective and acquire and process 150 square kilometres of 3D seismic.
In November, Sound Energy said its initial volume estimates of the exploration potential of Sidi Moktar, in the best case was 8.9 Tcf with a high of 11.2 Tcf and a low case of 6.7 Tcf, unrisked gas originally in place (gross). Additionally, Sidi Moktar contains an existing gas discovery in the Lower Liassic (Kechoula).
ADNOC’s unit Al Dhafra Petroleum awarded an oil production infrastructure contract to bring online the Haliba field that lies along the south-east border of Abu Dhabi.
The engineering, procurement and construction (EPC) contract was awarded to Larsen & Toubro Hydrocarbon Engineering by Haliba operator Al Dhafra Petroleum, ADNOC said in a statement.
Phase one of the EPC work is said to include 32 wells and construction of a 65km pipeline to carry crude oil from Haliba field wells to ADNOC Onshore’s Asab Central Degassing Station for processing.
Stabilised crude oil will then be transported via ADNOC Onshore’s existing main oil lines to the marine export terminals.
The contract is part of ADNOC’s strategy to boost capacity and optimise performance, as it unlocks profits from its upstream business.
Al Dhafra Petroleum is the first joint venture between ADNOC and Korea National Oil Corporation (KNOC) and GS Energy, represented by the Korean Abu Dhabi Oil Consortium (KADOC).
“This is a major milestone for Al Dhafra Petroleum, leading to the delivery of first oil in 2019,”
Abdulmunim Al Kindy, ADNOC’s director of upstream said. “The infrastructure investment will increase our group-wide production capacity and optimise our assets by utilisng our existing onshore facilities, allowing ADNOC to develop previously untapped oil reserves in an efficient way. It is an important step towards enhancing the profitability of ADNOC’s upstream business as we deliver on our 2030 Strategy.”
Phase one of the Haliba development project will be completed in 2020 with phase two delivering future expansion of Al Dhafra Petroleum’s production capacity by tapping into surrounding marginal fields and prospects, potentially increasing production capacity to beyond 40,000 barrels per day by early 2022, ADNOC said.
“L&T Hydrocarbon Engineering has been selected to deliver this project after a competitive tendering process, ensuring that as shareholders, ADNOC and KADOC, maximise value from the investment in Haliba, and we partner with an organisation that can deploy advanced engineering and technology to support our Group-wide drive for greater efficiencies, increased productivity and reduced costs,” Al Kindy added.
Algeria’s state-owned energy company Sonatrach is looking to invest US$56 billion in projects in the next five years, its CEO said after launching a new gas pipeline.
“We will give more details very soon,” Abdelmoumen Ould Kaddour told reporters during a visit to the Hassi Rmel gas field, Reuters reported.
He spoke after launching a new gas pipeline pumping from southwestern fields including Reggane North, Touat and Timimoun with capacity of 8.8 billion cubic metres a year and which cost 88 billion Algerian dinars ($774 million).
“We are so proud of this project because it has been constructed 100 percent by Algerian firms,” Reuters quoted Kaddour as saying.
Separately, Algeria’s Premier Ahmed Ouyahia announced that the country would soon start supplying natural gas to neighbouring Tunisia.
“Algerian gas could supply four Tunisian border regions including Sakiet Sidi Youcef and this could take place towards the end of 2018,” said Ouyahia said according to the country’s news agency Algeria Press Service.
Iraq’s oil ministry said it signed a deal with a local company to build a 70,000-barrels-per-day oil refinery near Kirkuk.
The agreement was signed with Ranya International Company, a company based in the semi-autonomous Kurdistan region, north and east of Kirkuk, which would be an investor in the refinery, Iraq’s oil ministry said in a statement.
The plant would produce high octane gasoline for cars and other petroleum products, it said, without giving details about the cost.
The minister said the refinery is the first step to boost refined oil production to meet local demand. Meanwhile, it will look at plans to export surplus production after further investments in refineries.
Recently-captured areas of Kirkuk fall under Iraq’s redevelopment plans after a prolonged hold by the Islamic State affected facilities and production capacity.
The refinery contract comes alongside plans to execute several development projects, rehabilitation of the oil fields, facilities and infrastructure and extend the oil pipelines, the ministry said.
Total said it led a group in signing two exploration and production contracts covering offshore Lebanon blocks, but it will explore outside of a disputed area.
The group was awarded rights for Block 4 and 9 in eastern Mediterranean Sea, in which Total holds 40 per cent interest and operatorship, while partners Eni and Novatek hold 40 and 20 per cent respectively. The companies will drill at least one well per block in the first three years, Total said in a statement.
The Lebanese government awarded the contract to the group in January in its first offshore licensing round, sparking anger from Israeli authorities, who said the blocks cover an area within its waters – a claim disputed by Lebanon.
Total said the group is fully aware of the Israeli-Lebanese border dispute in the southern part of Block 9, which covers only very limited area (less than 8 per cent of the block’s surface) and that the main prospects are located more than 25km from the disputed area.
“The consortium confirms that the exploration well on Block 9 will have no interference at all with any fields or prospects located south of the border area,” Total said.
The consortium's priority will be to drill a first exploration well on Block 4 in 2019.
“An established player in Lebanon’s marketing sector, Total is delighted to expand its presence in the country to the exploration & production segment. These agreements are part of the group’s exploration strategy in the Mediterranean region,” said Stéphane Michel, senior vice president Middle East and North Africa for exploration and production at Total.
Abu Dhabi National Oil Co’s (ADNOC) awarded the first stake in its 40-year offshore oil concession to a consortium led by India’s Oil and Natural Gas Corp (ONGC), boosting its energy ties with the world’s third-biggest consumer.
ADNOC signed an agreement on Saturday with the ONGC Videsh-led consortium giving the group a 10 percent stake in the new Lower Zakum offshore concession, for a participation fee of 2.2 billion dirhams (US$600 million), ADNOC said in a statement.
ONGC Videsh is the foreign investment arm of ONGC. Other members of the consortium are Indian Oil Corp and Bharat Petro Resources Ltd, an upstream arm of refiner Bharat Petroleum Corp. ADNOC Offshore, the group’s unit will operate the concession on behalf of the concession partners.
Effective March 9, the agreement has a term of 40 years, ADNOC said.
The contract signing in Abu Dhabi was attended by Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed al-Nahyan and Indian Prime Minister Narendra Modi. It is the first time for Indian oil companies to take part in an Abu Dhabi oil and gas concession.
“The mutually beneficial partnership will help India meet its growing demand for energy and refined products, create opportunities for ADNOC to increase its market share in a key growth market, and build a solid foundation as ADNOC explores potential international investments, particularly focused on downstream opportunities,” ADNOC’s chief executive Dr Sultan al-Jaber said in the statement.
In August, ADNOC said it would split its ADMA-OPCO offshore concession into three areas - Lower Zakum, Umm Shaif and Nasr, and Sateh Al Razboot and Umm Lulu - with new terms to unlock greater value and increase opportunities for partnerships.
The existing ADMA-OPCO concession, in which ADNOC has a 60 percent stake that it will retain, produces around 700,000 barrels per day (bpd) of oil and is projected to have a capacity of about 1.0 million bpd by 2021. Existing shareholders in ADMA-OPCO are BP plc with 14.67 percent, Total SA with 13.33 percent and Japan Oil Development Co with 12 percent.
ADNOC said it was still finalising opportunities, with potential partners, for the remaining 30 percent of the available 40 percent stake in the Lower Zakum offshore concession available for foreign oil and gas companies.
“I am happy to note that we have progressed from a buyer-seller relationship to an era of mutual investments in the oil and gas sector,” Prime Minister Modi said.
On Saturday, ADNOC and the Indian Strategic Petroleum Reserves agreed to implement the strategic crude oil storage facility, following a deal ADNOC signed last year to store about 6 million barrels of oil at India’s Mangalore storage site, taking up about half of its capacity.
DNO ASA, the Norwegian oil and gas operator, said it would hike spending this year in the Kurdistan region of Iraq by 50 per cent to US$250 million on back of a stronger financial performance in 2017 and regular export payments.
Annual revenues for last year stood at $347 million, up 72 per cent year-on-year with quarterly revenues rising to their highest in three years to $116 million, the company said in a statement. DNO swung to a net profit for 2017 of $495 million compared to a net loss of 35.3 million in the previous year. Its fourth quarter net profit was $30.6 million, also swinging from a loss in the prior-year period.
The company fast tracked the development of the Peshkabir field with two wells currently producing a total of 16,000 barrels of oil per day (bopd) and commingled for export with another 97,000 bopd from the other DNO-operated field, Tawke, on the same license.
"We made the Peshkabir Cretaceous discovery early in 2017, initiated early production in June, tripled output by year's end and already have exported two million barrels with an estimated value of US$ 100 million - more than twice the investment to date," said DNO's executive chairman Bijan Mossavar-Rahmani. "And we have only started to appraise and develop this field which continues to surprise to the upside," he added.
DNO said a total of six Peshkabir wells will be drilled this year with field production expected to reach 30,000 bopd by summer and it will continue to ramp up in the second half of the year.
At the Tawke field, plans are being finalised with partner Genel Energy plc to drill four wells in 2018, in addition to the currently drilling Tawke-48 well slated for completion by end-February.
Elsewhere in Kurdistan, DNO has re-entered and sidetracked the Hawler-1 well to appraise the Benenan heavy oil field in the Erbil license, achieving a technical milestone with the first ever multilateral well and the first ever dual completion in Kurdistan. Testing will commence shortly, and if successful, will be followed by additional wells.
The company received 12 monthly Kurdistan export payments during 2017 totalling $380 million net to DNO. The landmark August 2017 receivables settlement agreement, which increased DNO's stake in the Tawke and Peshkabir fields from 55 percent to 75 percent plus three percent of gross license revenues over five years, contributed to higher export payments.
Operational cash flow more than tripled to $339 million in 2017 and DNO exited the year with a net cash position of $30 million versus net debt of $139 million at end-2016.