www.upstreamonline.com http://www.upstreamonline.com/ www.upstreamonline.com Eni cheers 'significant' Ecuador oil find http://www.upstreamonline.com/live/1377096/Eni-cheers-significant-Ecuador-oil-find Italian player says early eatimates indicate hundreds of millions of barrels in place Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1377096/Eni-cheers-significant-Ecuador-oil-find Thu, 18 Sep 2014 09:06:31 +0000 live The state-controlled major made the find at the Oglan-2 exploration well on Block 10 in Ecuador, it said on Thursday.

The well was drilled to 6450 feet and struck a 236-foot net column of crude oil of 16 degrees API.

The well has flowed at 1100 barrels per day with indications that it could be brought on line at up to 2000 bpd.

Early estimates indicate there may be as much as 300 million barrels of oil in place at the well, which is situated 260 kilometres south-east of the capital, Quito.

"Eni will immediately begin the studies for the commercial exploitation of the Oglan discovery, located just 7 kilometers from the processing facilities of the Villano field, also inside Block 10, which currently produces approximately 12,500 barrels per day, entirely Eni equity," the company said.

Eni has, through its affiliate Agip Oil Ecuador, operated Block 10 since early 2000.

"The Oglan discovery is the outcome of Eni’s new exploration campaign, which the company is undertaking as part of its strategy to develop Block 10 under the new service contract signed with the Ecuadorian government in 2010," Eni continued.

The latest discovery comes just a day after Eni revealed another significant find off Angola.

Early estimates are that the deep-water Ochigufu discovery in Block 15/06 off Angola could hold 300 million barrels of oil in place.

Ochigufu 1 NFW was drilled around 150 kilometres off the coast of Angola with the drillship Ocean Rig Poseidon in water depths of 1337 metres to a total depth of 4470 metres.

The directionally-drilled well found 47 metres of net oil pay in the Lower Miocene and Oligocene sandstones, indicating a production capacity equal to more than 5000 barrels of oil per day, Eni said.

Scottish Yes would create challenges: WoodMac http://www.upstreamonline.com/live/1377099/Scottish-Yes-would-create-challenges-WoodMac Analysts highlight North Sea's fiscal, boundary and regulatory uncertainty Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1377099/Scottish-Yes-would-create-challenges-WoodMac Thu, 18 Sep 2014 10:18:08 +0000 live Edinburgh- and London-based energy advisors Wood Mackenzie said that the North Sea oil and gas industry was already grappling with “the under-performance of exploration and production” and that Scottish independence may only add to the challenge.

An independent Scotland would gain an estimated 84% of UK oil and gas reserves and control the “vast majority of production as well as the most prospective acreage,” Wood Mackenzie estimated. 

However, talks on where to draw the border between Scottish and British waters would create uncertainty and negatively impact investment if negotiations prove prolonged, the report warned.

The announced but not yet created industry regulator, the Oil and Gas Authority (OGA), was already due to be based in Aberdeen but London’s regulatory and stewardship responsibilities of the upstream industry would need to be transferred to the Scottish government under a Yes vote.

“Companies will want consistency and a seamless transition to ensure that delays, and an additional administrative burden, do not creep into the approvals process for upcoming projects and existing developments,” Wood Mackenzie warned.

Outside the issue of independence, the industry is already faced with a high cost environment, poor exploration results and production decline, the energy advisors said.

The analysts pointed out that just 19 exploration wells have been spudded so far this year, continuing a disappointing trend in which only 330 million boe of reserves have been discovered since 2011 in a period when 2.54 billion boe was produced.

“The consequence of this low level of discovered reserves combined with the cost challenges facing operators mean that, notwithstanding the total level of reserves that can be produced over the life of the North Sea, future Scottish production is under pressure,” Wood Mackenzie said.

The report said record levels of investment in field developments were set to temporarily arrest the decline in North Sea production to mark a slight rise to 1.46 million barrels of oil equivalent per day in 2018 compared to this year’s output of 1.43 million boe.

However it warned that unscheduled maintenance, project delays and poorer than expected recovery had all caused a greater than expected production drop so far this year and “if these issues persist, even the temporary recovery forecast to 2018 could be at risk”.

After 2018, the decline is forecast to resume to send output below 1 million boepd by 2023, or less than a quarter of the play’s 1999 peak.

Lukoil eyes Barents wildcat http://www.upstreamonline.com/live/1377091/Lukoil-eyes-Barents-wildcat Russian explorer to drill first well off Norway in frontier Arctic play despite Western sanctions Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1377091/Lukoil-eyes-Barents-wildcat Thu, 18 Sep 2014 08:26:51 +0000 live The company, which was last week added by the US to a list of Russian energy players facing Western sanctions, will make its exploration debut off Norway with the probe at the Ornen (Eagle) prospect due to be drilled in the first quarter by operator Lundin Petroleum.

The Swedish explorer is looking to open up a new frontier play with the wildcat that is targeting gross mean unrisked resource potential of 316 million barrels of oil equivalent at the prospect in its operated production licence 708, according to partner North Energy.

It will reportedly be one of the easternmost wells drilled to date in the Barents, with only Statoil’s Guovca dry well in 2005 having been drilled farther east.

The drillbit will be probing hydrocarbon potential within an Upper Permian reservoir at a depth of about 1600 metres in the Seiland East/Ornen North formation, with oil as the primary target.

Lundin has not yet identified a rig to be used for the well, although it has semi-submersible Island Innovator on a long-term charter for its drilling work off Norway.

Lukoil will be participating with a 20% stake in the licence, awarded last year under Norway’s 22nd licensing round where the Russian player was bidding for the first time.

Lundin holds a 40% operating stake in the licence, with partners Lukoil and Edison International each on 20%, and North Energy and Lime Petroleum on 10% apiece.

It was one of two Barents licence awards in the round for Lukoil, which also holds a 30% interest in Centrica-operated PL719 located to the west of OMV’s Wisting Central and Hanssen discoveries made in PL537 in the Hoop area.

Recent drilling work in the same area by Statoil has been the target of protests by environmental group Greenpeace over the potential risk of an oil spill reaching the Arctic ice edge and Bear Island nature reserve to the north-west.

Statoil is currently drilling a wildcat at the Pingvin prospect in nearby PL713 in which Russian state-owned giant Rosneft - another sanctioned company – is participating through its local subsidiary RN Nordic Oil.

Greenpeace earlier sought to block the well due to the perceived spill risk, citing Rosneft’s environmental track record in Russia.

While Norway has given its support for earlier European Union sanctions banning exports of oil and gas technology to Russia, its parliament has yet to approve the latest measures imposed by the bloc that have been backed by the US.

Scotland heads to the polls http://www.upstreamonline.com/live/1377079/Scotland-heads-to-the-polls Latest survey show the no vote has a slight edge as Scots vote on independence from the United Kingdom Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1377079/Scotland-heads-to-the-polls Thu, 18 Sep 2014 06:33:28 +0000 live More than 4.2 million people – an unprecedented 97% of the electorate – have registered to vote and a large turnout is expected. Polling stations will be open until 10pm on Thursday.

Opinion polls in the weeks before Thursday's vote have shown the result may to be too close to call, however, the latest on Wednesday gave a slight edge to the pro-union No camp.

A YouGov poll for the Times and Sun newspapers showed 52% in favour of remaining in the union against 48% in favour of independence. This excluded 6% of the 3237 people surveyed who remained undecided on the eve of the official poll.

A Survation poll also found the No vote leading 53% to 47% on Wednesday, not including the 9% of those surveyed who were still undecided.

On Tuesday, surveys from ICM, Opinium, Panelbase and Survation showed support for independence was lagging behind the No vote at 48% to 52%, however they also found that between 8% and 14% of Scottish voters were still undecided.

The result is likely to have ramifications for the oil and gas industry, which has become a key battleground in the campaign.

Nearly all of the UK's North Sea oilfields and half of its natural gas fields lie within Scottish waters and are a key driver of both the Scottish and UK economies.

Alex Salmond's Scottish National Party has claimed 24 billion barrels of oil equivalent remain to be recovered from the North Sea.

Others, however, believe the figure is far less. Former Wood Group chairman Ian Wood, who produced a report earlier this year for the UK government examining how to improve the fortunes of the sector, has said the figure is closer to between 15 billion and 16.5 billion boe.

Research group Wood Mackenzie this week added weight to arguments that an independent Scotland might not benefit from North Sea oil reserves for as long as pro-independence Yes campaigners hope.

The Edinburgh-based consultancy stated on Wednesday it expected the UK's long-term production decline to be arrested temporarily in 2018, increasing to about 1.46 million barrels of oil equivalent per day.

However, it added that the decline was forecast to set in once more post-2018, with output dipping below 1 million boepd by 2023.

It also noted that since 2011 only 330 million boe of reserves had been discovered, as opposed to roughly 2.5 billion boe which have been produced over the same period.

Wood Mackenzie said that regardless of which government was in charge, oil and gas companies are set to seek fiscal stability and simplicity, as well as tax incentives for harder to produce reserves.

It said: "We estimate that by 2030 nearly $9 billion of tax relief will be claimed in respect of decommissioning spend on Scottish fields."

Scotland's chief counting officer Mary Pitcaithly is expected to announce the result at about 7am on Friday.

Eni find 'shows huge conventional potential' http://www.upstreamonline.com/live/1377094/Eni-find-shows-huge-conventional-potential Ochigufu discovery illustrates west Africa resource prize, says Eni Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1377094/Eni-find-shows-huge-conventional-potential Thu, 18 Sep 2014 08:47:22 +0000 live The Block 15/06 find, with estimated resources of 300 million barrels of oil equivalent, is the third this year for the company off west Africa.

Last month the Milan-headquartered explorer made a gas and condensate discovery estimated at 500 million boe off Gabon with the Nyonie Deep pre-salt wildcat.

In February it made a further shallow-water discovery off Congo-Brazzaville at Nene Marine that took the field’s resources to an estimated 1.2 billion barrels of oil and 30 billion cubic meters of gas in place.

Including the nearby Litchendjili Marine field the area’s pre-salt reserves total an estimated 2.5 billion boe.

The company has been investing heavily in recent years in efforts to leverage its drilling experience in Africa into new major projects, with a $2.5 billion outlay planned for 2013 to 2016.

A spokesman for Eni told Upstream that “discoveries in Angola and Congo have been made in areas already explored but abandoned by our peers, since they didn’t find any potential in them”.

He said this year’s finds continued a trend of discovery successes for the explorer, which booked around 9.5 billion barrels of new resources between 2008 and 2013.

“In the last decade, Eni made new discoveries worth in excess of €25 billion, according to a Goldman Sachs valuation,” he said.

The finds represent more than two and half times’ Eni’s production over the same timeframe, compared to peer group averages of replacing about 30% of their production through exploration, according to Eni.

Cutler leaves Nopsema http://www.upstreamonline.com/live/1377090/Cutler-leaves-Nopsema Founding chief executive is replaced as head of Australian offshore safety regulator Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1377090/Cutler-leaves-Nopsema Thu, 18 Sep 2014 07:32:51 +0000 live Australia's Minister for Industry Ian Macfarlane revealed on Thursday that Stuart Smith would be replacing Cutler has the head of the National Offshore Petroleum Safety & Environmental Management Authority (Nopsema).

“Mr Smith has substantial safety, environmental and regulatory experience at Commonwealth and state levels and a deep understanding of both the unique operating environment of the Australian oil and gas industry, as well as global conditions,” Macfarlane said.

Smith previously served as the Director General of the West Australian Department of Fisheries and has also previously held the role of Deputy Director General of the WA Department of Industry & Resources.

He replaces Cutler who was the founding chief executive of Nopsema which on 1 January 2012 replaced the National Offshore Petroleum Authority (Nopsa), which she headed since 2009.

Macfarlane thanked Cutler for her contribution to improving occupational health and safety and environmental outcomes.

“Ms Cutler’s strategic leadership skills have been invaluable during this term, particularly in the transition from Nopsa to Nopsema, as well as during the implementation of the one-stop shop approvals process,” he said.

AWE shores up Perth numbers http://www.upstreamonline.com/live/1377074/AWE-shores-up-Perth-numbers Previously announced gas discovery could be biggest ever onshore Australia bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1377074/AWE-shores-up-Perth-numbers Thu, 18 Sep 2014 00:31:01 +0000 live The newly discovered Waitsia gas field could pay off in spades for the Australian joint venture in the Perth basin.

Analysis of the Senecio-3 found the Kingia/High Cliff sandstones could hold contingent resources of between 65 billion cubic feet to 1.17 trillion cubic feet of gas. Best estimate resources have been flagged at 200 Bcf of gas.

Strong gas shows, petrophysical analysis and pressure data have indicated the potential for a large quantity of moveable hydrocarbons.

AWE said it would be carrying out more tests to define the size of the accumulation.

AWE managing director Bruce Clement told Upstream that this discovery was not even on the company’s map, with the elevated gas readings during drilling a nice surprise for the company.

“We came across a discovery that, in essence, we hadn’t mapped yet,” he told Upstream. “So that’s why it has taken a little bit of time to get to the volume.”

He confirmed that there were a few wells on the horizon to shore up the discovery and upside in the area.

Whilst he could not confirm the definite timing of the well because any drilling is subject to joint venture approval, he speculated that there was potential for another well to be drilled early next year.

“We are also getting equipment ready for a production test of Senecio-3. We believe this has the potential for a conventional development.”

He also said there was future potential for unconventional development in the deeper shales.

The company is now evaluating the gas-bearing intervals of the Irwin River coal measures and the Carynigina shale, which could provide some unconventional potential.

These targets have been estimated to hold between 114 Bcf and 1.49 Tcf of gas.

Clement confirmed that this project was going to remain soley in the hands of AWE and Origin, stating the companies could manage a project of this size comfortably.

“Origin is an A$20 billion ($17.91 billion) company, we’re a billion dollar company and our balance sheet is very strong,” he said.

The Senecio-3 well has now been cased and suspended to prepare for conventional flow testing of a number of multiple reservoirs.

AWE is the operator of the L1/L2 and holds a 50% interest, while Origin holds the other 50% interest.

Shares in AWE have jumped 13.24% on the news, up from A$1.68 at close of trade on Wednesday to A$1.90 during early morning trade on Thursday.

Caza announces flows http://www.upstreamonline.com/live/1377088/Caza-announces-flows New Mexico well flows to improve over the coming week bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1377088/Caza-announces-flows Thu, 18 Sep 2014 06:59:26 +0000 live The Broadcaster-29 well in Lea County has produced at a 24 hour rate of 2621 barrels of oil equivalent after being fracture stimulated over 40 stages.

Caza said this was a strong rate, but expected better numbers of out the well over the coming week.

“The company anticipates a higher peak rate to be achieved in the coming days,” the company said.

Facilities are already on site to allow for the sale of oil and natural gas from the well.

Caza chief executive Michael Ford said the flows were “exceptional” for the company.

“As stated previously, frac technologies continue to improve in the Bone Spring Play without a material increase in cost,” he said.

“When using these technologies to tailor fracs for specific reservoir characteristics, as in this case, the results can be impressive.”

APPEA supports barrier removal http://www.upstreamonline.com/live/1377086/APPEA-supports-barrier-removal Industry players call on reduction in barriers while union wants gas reservation bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1377086/APPEA-supports-barrier-removal Thu, 18 Sep 2014 06:26:45 +0000 live The Australian Petroleum Production and Exploration Association (APPEA) has supported these moves.

Speaking at the Energy Market Outlook conference in Sydney APPEA chief executive David Byers said increasing gas supply was the only way to stop gas prices increasing on the east coast.

“A rapid and efficient supply response to meet domestic needs depends largely on clear market signals and efficient government regulation,” he said.

“The Eastern Australian Gas Market study released in January this year highlighted that the market’s continued capacity to deliver depends on industry’s ability to explore for and develop Australia’s vast gas resources.

“It is not a lack of natural gas but onerous regulatory restrictions in some jurisdictions that is impeding gas supply.”

He added the economy was undergoing a significant structural change.

“Structural change is good for the overall economy as it reflects a continued shift of resources from sectors with lower ratios of the value of outputs to inputs to those with higher value-add for the economy, such as oil and gas.”

The support for increased production comes as the Australian Workers Union announced a campaign for the reservation of domestic gas.

According to the Australian Financial Review, the union is set to argue in favor or reserving gas for domestic users, much to the disdain of those in the industry.

Brent drops on stocks http://www.upstreamonline.com/live/1377083/Brent-drops-on-stocks Fears of interest rates and supply gut keep prices low bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1377083/Brent-drops-on-stocks Thu, 18 Sep 2014 05:25:15 +0000 live Poor demand and abundant supplies have pushed down the oil benchmark to a 26-month low earlier this week, and have kept it below $100 for more than a week.

Brent crude for November delivery was down $0.50 lower at $98.37 per barrel by Thursday morning. The October US crude contract fell $0.63 cents to $93.79.

"There's nothing to push it higher. The dollar is getting stronger and the overall market is weak with high inventories," Mitsubishi oil risk manager Tony Nunan told Reuters.

The dollar climbed to its highest in more than four years against a basket of currencies amid indications that an increase in US interest rates might happen faster than expected when the Federal Reserve starts tightening monetary policy.

A stronger dollar makes dollar-priced commodities such as oil more expensive for buyers using other currencies.

US crude stocks rose 3.7 million barrels last week, defying analysts' forecasts for a drop of 1.6 million barrels, due to climbing imports and lower refinery run rates, data from the Energy Information Administration data showed on Wednesday.

But Nunan said oil prices may be approaching their bottom, having fallen steeply from June and with markets looking forward to a potential output cut by the Organisation of the Petroleum Exporting Countries (OPEC).

Brent has lost around 15% since hitting a nine-month peak of $115.71 in June.

"We've come down so far that now with talks of OPEC cutting supply, I think we are pretty close to the bottom and the market could be moving sideways from here," Nunan said.

OPEC Secretary General Abdullah al-Badri said on Tuesday that a 500,000-barrel per day cut in OPEC's oil supply to 29.5 million bpd in 2015 was possible, although that was downplayed by other delegates who expected stronger winter demand to boost prices.

Prince Abdulaziz Bin Salman Bin Abdulazi, deputy oil minister of Saudi Arabia, OPEC's swing producer, said that short-term price moves have "little meaning" for the kingdom, who views long-term oil market fundamentals as "robust".

Potential supply risks have helped provide a floor to oil prices.

Libya's oil production fell by about 200,000 bpd due to an outage at the El Sharara field, while Nigerian oil unions continued a strike which could affect exports.

Neptune wins Ichthys work http://www.upstreamonline.com/live/1377078/Neptune-wins-Ichthys-work Australian company awarded two contracts on Inpex-operated LNG project Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1377078/Neptune-wins-Ichthys-work Thu, 18 Sep 2014 04:12:22 +0000 live The contracts were handed to Neptune's subsea stabilisation division, with the initial contract covering the design and fabrication of specialist scour protection systems.

Neptune said the secondary contract covered the grouting of the riser support structure and grouting of the scour protection systems.

The company's engineering team in Perth, Western Australia, is providing the engineering design of the scour protection systems, while fabrication will be managed at its facilities in Asia.

The scour protection system is expected to be delivered during the current quarter, with third-party installation of the offshore structures to begin next quarter.

Neptune added that it would carry out the associated grouting once the systems were fully installed in accordance with McDermott's installation schedule. McDermott is the main contractor for the subsea, umbilicals, risers and flowlines engineering, procurement, construction and installation portion of the Icthys project.

Output from Ichthys is currently scheduled to start up by the end of 2016 with expected peak production of 8.4 million tonnes per annum of LNG, 1.6 million tpa of liquid petroleum gas and up to 100,000 barrels per day of condensate.

The Inpex-operated project is being fed by the Ichthys gas and condensate field which lies in the Browse basin, off the coast of Western Australia.

Gas from the field will be exported via an 889 kilometre subsea pipeline to the onshore processing facilities near Darwin in the Northern Territory while condensate from the field will be pumped to a floating production, storage and offloading vessel and then transferred to tankers for delivery.


Triyards to raise funds http://www.upstreamonline.com/live/1377075/Triyards-to-raise-funds Placement will see shipbuilder raise more than S$20.6 million if fully subscribed Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1377075/Triyards-to-raise-funds Thu, 18 Sep 2014 00:56:36 +0000 live Triyards revealed it had entered into a placement agreement which will see it allot and issue up to 29.5 million new ordinary shares at a placement price of S$0.70 per share.

The price represents an 8.33% discount to the volume weighted average price of S$0.76 per share for trades on the 15 September, the last full trading day prior to the company entering a trading halt ahead of the announcement of the placement.

Triyards said it would use up to 90% of the cash raised from the placement to fund business expansion, with the balance to be used for general corporate purposes and working capital.

Assuming the placement is fully subscribed, the company estimates net proceeds from the placement, less expenses, to total just under S$20 million.


Oilex wraps up intervention http://www.upstreamonline.com/live/1377073/Oilex-wraps-up-intervention Oz player looks to sell more gas onto local Indian market bianca.bartucciotto@upstreamonline.com (Bianca Bartucciotto) http://www.upstreamonline.com/live/1377073/Oilex-wraps-up-intervention Thu, 18 Sep 2014 00:08:25 +0000 live The Cambay-77H is continuing to flow oil, gas and water at a better rate than before the chemical intervention work.

Oilex said the programme was completed successfully in accordance with the plan developed by the Cambay joint venture.

The company has removed the frac tree in the well and is replacing it with a standard production tree as it moves towards a formal production test.

Oilex has also demobilised equipment and personnel given the well performance.

These two measures are designed to cut the cost of the well during the flowback and clean-up of the well.

Initial data from the well found the Cambay-77H and the Cambay-73 have very similar compositions.

Oilex will now look for approvals to sell gas into the local gas market.

Managing director Ron Miller said the company was focused on water recovery so it could move onto the testing phase of the well.

“Having similar gas composition as Cambay-73 provides a great opportunity to increase near term production into a market where gas is in very short supply,” he said.

“Selling gas during clean-up and testing will be a welcome revenue stream in addition to the sale of crude oil produced from Cambay-77H.”

Mega FPSOs seen for Brazil pre-salt http://www.upstreamonline.com/live/1377048/Mega-FPSOs-seen-for-pre-salt Petrobras may include supersize floating production units in new phase of development Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1377048/Mega-FPSOs-seen-for-pre-salt Wed, 17 Sep 2014 22:12:16 +0000 live Executive manager for pre-salt assets Carlos Tadeu Fraga outlined some of the advances made in the ultra-deepwater pre-salt province, including a halving of drilling and completion time to 92 and 96 days, respectively, on two recent wells.

Fraga told a topical lunch audience at Rio Oil & Gas that deployment of four buoyancy supported riser (BSR) systems by Subsea 7 was a sign of progress that has opened the door to more improvements.

The installation time for the BSRs serving the Cidade de Sao Paulo FPSO and the Cidade de Paraty FPSO fell from 174 days to just 40 days on the last buoy, Fraga said.

This project has also hosted some of the biggest well flows, which are now averaging 25,000 barrels per day in the wider pre-salt, Fraga said.

These prolific flows are already prompting Petrobras to modify its plans for fields such as Libra, where the company is now carrying out design studies looking at much bigger floating production units.

“This is still in the conceptual phase, but we are looking at units that would be at least as big as any seen in the world so far,” Fraga said.

The biggest FPSOs on order at present are destined for Nigeria, with capacities to offload up to 240,000 bpd and with storage for 2.3 million barrels.

“Naturally this has to be aligned with the capacity of the yards to build these units,” Fraga added.

Integrated project management, multiplex intelligent drilling, qualification of flexible risers in ultra-deep waters, ocean bottom sensors, real-time monitoring, and advanced CO2 membranes were all highlighted as technological advances in the pre-salt, where output has climbed to more than 500,000 barrels per day in the eight years since the first discovery.

Petrobras is also keen on working with the best new technologies for stripping out CO2 and starting to look at the potential for subsea separation of these corrosive gases to lighten topside loads.

Petrobras is taking a fairly conservative approach to its technological advances in the medium term, but more futuristic projects such as high pressure separation for bulk CO2 gas removal, the use of nanotechnologies and laser drilling remain on the R&D portfolio, Fraga said.

Mermaid wins Middle East contracts http://www.upstreamonline.com/live/1377071/Mermaid-wins-Middle-East-contracts Thai player to provide saturation diving services on two contracts Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1377071/Mermaid-wins-Middle-East-contracts Wed, 17 Sep 2014 23:59:31 +0000 live Mermaid said it had been awarded two contracts which will both run for a total of about six to eight months.

It did not name the clients but did say it would be using the recently chartered Bourbon Evolution multi-purpose support vessel to carry out the work.

Mermaid has chartered the vessel from French vessel owner Bourbon Offshore for eight months, with an option to extend the charter by a further eight months.

Along with the Bourbon Evolution, Mermaid said it would deploy specialised diving equipment, remotely operated vehicles, specialised divers and other project crew to carry out the contracts.

Mermaid said work on the first contract had already started, with the second to start back-to-back upon completion of the first.

New rules for risers, wells on the way http://www.upstreamonline.com/live/1377066/New-rules-for-risers-wells-on-the-way ANP plans to offer fresh measures by year's end Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1377066/New-rules-for-risers-wells-on-the-way Wed, 17 Sep 2014 23:15:11 +0000 live The regulations will flesh out the legal framework by introducing management systems for both categories.

The ANP has issued regulations at fairly regular intervals in recent years.

Regulations on operational safety were introduced in 2007, and were followed up by comprehensive management systems for offshore fields and pipelines in 2010 and 2011.

These regulations have spawned 297 audits since 2010, leading to 1076 non-conformity reports, 23 cautionary measures requiring an operational halt, and $72 million in fines.

The agency recently issued new regulations covering hydraulic fracturing in conventional reservoirs.

“The new regulations are being submitted for a period of industry consultation,” according to Hugo Affonso, the ANP’s deputy manager for safety and environmental regulations.

In 2012 the ANP decided to link up the work of its environmental and operational safety divisions.

Petrobras has been at the receiving end of these measures on a number of occasions.

Most recently, the ANP slapped another R$35 million ($15 million) fine on the company for non-compliance with operational regulations concerning measurement instrumentation and procedures on the semi-submersible production platform P-40, located in the Marlim Sul field, in the Campos basin.

Continental ups 2014 capex http://www.upstreamonline.com/live/1377068/Continental-ups-2014-capex Increase based on success of enhanced by costly well-completion techniques; Springer shale booms Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1377068/Continental-ups-2014-capex Wed, 17 Sep 2014 23:09:36 +0000 live The Bakken shale giant now plans to spend $4.55 billion this year, up from a previous estimate of $4.05 billion. The company expects to spend $5.2 billion in 2015.

Well costs in the range of $10 million apiece will account for much of the additional spending. That is an increase of between $2 million and $2.5 million a well compared to the company's standard completion design cost from year-end 2013. A majority of Bakken wells will be completed with the enhanced technique, Continental said.

Money will also be spent accelerating development of the newly discovered Springer shale play in Oklahoma, where Continental plans to run an average of eight rigs for the rest of the year. It was running just one rig in the Springer earlier this year.

"With the success of the enhanced completion testing programme in the Bakken and the exceptional returns achieved in the new Springer shale oil discovery, the company is accelerating drilling and completion capital expenditures in the second half of 2014," Continental said.

The company noted that the acceleration "will have limited impact on overall 2014 production results, given only a quarter of the year is remaining and the lag between capital expenditure and resulting production".

Continental estimates exiting 2014 with net production of around 200,000 barrels of oil equivalent per day, and expects to grow production by between 26% and 32% in 2015 compared to this year.

The company is holding its analyst day on Thursday.

Brazil Round 13 'defined by December' http://www.upstreamonline.com/live/1377059/Brazil-Round-13-defined-by-December National energy policy committee to firm up what blocks will be included in 2015 event Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1377059/Brazil-Round-13-defined-by-December Wed, 17 Sep 2014 22:48:39 +0000 live The round is expected to build on growing interest in Brazil’s eastern Atlantic margin, such as the Potiguar and Sergipe-Alagoas basins, but is also likely to capitalise on the buzz that Uruguay’s licensing rounds have generated around the Pelotas basin, close to Brazil’s southern border.

Onshore blocks, new frontiers and mature areas have also been promised in the offering, which will be in the form of exploration and production concessions.

The Brazilian government has decided to resist industry pressure for a more fixed licensing schedule, however.

Marco Antonio Almeida, the oil and gas secretary at the Mines & Energy Ministry, rejected calls for the creation of a licensing calendar.

The Brazilian Petroleum Institute (IBP) has led calls for a more predictable licensing schedule to help oil companies to plan their portfolios, arguing that Brazil will attract more investments as a result.

Almeida said the government prefers to stick to a flexible approach in order to adapt the licensing schedule to capacity in the Brazilian shipyards and supply chain.

Cenovus starts up Foster Creek phase F http://www.upstreamonline.com/live/1377051/Cenovus-starts-up-Foster-Creek-phase-F Expansion will add 30,000 bpd capacity to SAGD oil sands project Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1377051/Cenovus-starts-up-Foster-Creek-phase-F Wed, 17 Sep 2014 22:12:46 +0000 live The expansion of the Foster Creek project was completed earlier this month and is expected to add 30,000 barrels per day of capacity, with production ramping up over the next 12 to 18 months.

By the end of the year, Cenovus expects production to hit around 5000 bpd.

Phases G and H are under construction and are each expected to add another 30,000 bpd of capacity, with first production anticipated in late 2015 and 2016, respectively.

Once complete, the entire Foster Creek project will be able to produce gross volumes of 210,000 bpd. Subsequent optimisation work could add another 15,000 to 35,000 bpd of capacity.

Capital costs of the expansion and optimisation are expected to come in between $35,000 and $38,000 per incremental barrel, which Cenovus said is "better than industry average".

"In July, we indicated that capital costs for the F, G and H expansion were trending higher," said chief executive Brian Ferguson. "One of the key drivers of the cost increases is the impact of changes we made to the phases that we believe will result in better long-term plant reliability and production efficiency."

Changes to the F, G and H expansion include improvements to the oil and water plant, safety systems, completion designs and the incorporation of recent regulatory changes.

In July, production at Foster Creek averaged 102,000 bpd and were affected by scheduled maintenance on Cenovus' co-generation facility. The plant produced an average of 119,000 bpd in August.

The plant is located on the Cold Lake Air Weapons Range, about 330 kilometres north-east of Edmonton.

Foster Creek is operated by Cenovus and 50% owned by ConocoPhillips.

Petrobras PLSVs due by year's end http://www.upstreamonline.com/live/1377038/Petrobras-awaits-arrival-of-PLSVs Brazilian oil giant expected to receive trio of newbuild flexible pipelaying support vessels in fourth quarter Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1377038/Petrobras-awaits-arrival-of-PLSVs Wed, 17 Sep 2014 21:37:08 +0000 live One source told Upstream that the Sapura Topazio PLSV has left the IHC Merwede shipyard in the Netherlands, and is currently en route to Brazil to start operations for Petrobras in early October.

The 550-tonne vessel, owned by Sapura Navegacao, is the second of five PLSVs the company is building for Petrobras. The first PLSV – Sapura Diamante – started operations on 2 July under a five-year charter.

Two other PLSVs are being supplied by a consortium comprising Technip and Odebrecht Oil & Gas.

The twin 550-tonne TOP Coral do Atlantico and TOP Estrela do Mar vessels are expected to arrive in Brazilian waters in October and December, respectively.

Meanwhile, Petrobras remains in talks with contractors to charter a new batch of PLSVs to start operations from 2015.

It is said that only five vessels are still in the race, comprising two from Cecon – Cecon Pride and Cecon Excellence – and three from Technip – Deep Constructor, Skandi Niteroi and Skandi Vitoria.

Petrobras is expected to award the contracts by the end of the year.

Continental names new COO http://www.upstreamonline.com/live/1377047/Continental-names-new-COO Company veteran to take over for Rick Bott after abrupt resignation last week Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1377047/Continental-names-new-COO Wed, 17 Sep 2014 21:49:41 +0000 live Continental said on Wednesday that Jack Stark would take over the positions previously held by Bott.

Stark, 59, joined Continental in 1992 and has served as the company's senior vice president of exploration since 1998.

Chief executive Harold Hamm called Stark "a great team leader whose geological contributions have been a key component of Continental's success over the past 22 years".

"He is highly regarded as a pioneer in unlocking unconventional resources in the Rockies, the Bakken, and most recently the Scoop play in Oklahoma... This new role will expand his operational leadership, positioning him to continue playing a critical role in leading Continental."

Bott, whose resignation took many by surprise, was thought to be next in line to helm Continental, one of the biggest producers in the Bakken tight-oil play in North Dakota.

GE lands $300m Petrobras contract http://www.upstreamonline.com/live/1377034/GE-lands-300m-Petrobras-contract Company presents new chief executive for Latin America as it divulges subsea manifold deal Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1377034/GE-lands-300m-Petrobras-contract Wed, 17 Sep 2014 21:07:02 +0000 live The company announced the deal with the state-led Brazilian player at the Rio Oil & Gas trade show as it presented its new chief executive for Latin America, Patricia Vega.

The equipment will be manufactured in Brazil and will "allow water-alternated gas injection for up to four wells, and system integration with subsea controls," GE said. The equipment will be used in depths up to 6500 feet.

"GE Oil & Gas has an enduring partnership with Petrobras to support the development technologies and solutions to support offshore operations in Brazil, especially pre-salt," Vega said in a statement.

"We work to strengthen the relationship and support Petrobras’ challenges."

In 2012 GE was awarded a $1.1 billion contract to supply hundreds of subsea wellhead systems, some of which were destined for the pre-salt.

Vega will oversee subsea projects as part of her new duties, part of GE's goal to strengthen market share in the region, maintain strong relationships with partners and continue developing new technologies.

Vega is a 20-year veteran of the oil industry who has held a range of leadership positions in the US, Mexico, Colombia and Brazil.

She replaces Joao Geraldo Ferreira.

Ensco newbuild drillship delayed http://www.upstreamonline.com/live/1377028/Ensco-newbuild-drillship-delayed Delivery of DS-9 pushed back a quarter as DS-2 set to be stacked after current contract Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1377028/Ensco-newbuild-drillship-delayed Wed, 17 Sep 2014 18:40:13 +0000 live Ensco said drillship DS-9, currently at Samsung Heavy Industries' shipyard in South Korea, would now start working for US independent ConocoPhillips in the US Gulf of Mexico in the fourth quarter of 2015. It had previously been slated for delivery in the third quarter of 2015. The dayrate will be in the low $550,000 range.

Analysts said it will likely not be the last delay for rigs currently under construction, including Ensco's final newbuild in the current programme, drillship DS-10, which remains without a contract.

"Even with the long lead-time to delivery, equipment bottlenecks from third-party providers continue to plague the industry. We do not expect the delay on the DS-9 to be the last of equipment-related delays, and expect to continue to see continued industry-wide, equipment-related delays as we push in 2015 and 2016," Cowen & Company wrote in a research note.

"Additionally, we expect there could be a number of market-related delays, as contractors may decide to leave uncontracted rigs in the shipyard until the market improves and contracts are secured."

Ensco also said in its latest fleet status report that it will be stacking drillship DS-2 in Spain after its current contract with Total expires in October. Total is operating the rig off Angola.

It was one of the negative data points that prompted Iberia Capital Partners analyst Robert MacKenzie to lower his earnings estimate for Ensco for the year, though he said the stacking comes as little surprise given the current difficulties of the deep-water market.

"Tendering for deep-water rigs has been anemic of late, with little signs of a near-term recovery," he wrote in a note.

Dayrates and utilisations have slipped industry-wide, as operators reign in spending and a glut of available and newbuild rigs depress the market.

Ensco also disclosed that three aging jack-ups in the US Gulf - Ensco 86, Ensco 90, and Ensco 99 - are now idle. MacKenzie noted that these units, rated at 250 feet water depth, "are among the least competitive independent leg rigs in the market" and that Iberia does not expect them to go back to work until after the Atlantic hurricane season ends in November.

In more positive news for Ensco, semi-submersible Ensco 8501 won a one-well contract extension at $350,000 per day with Noble Energy in the US Gulf, while semisub Ensco 8503 got a three-well deal at the same rate with Llog Exploration.

In the North Sea, harsh environment jack-up Ensco 122 was delivered for acceptance testing. The rig is expected to start working for Dutch player Nederlandse Aardolie Maatschappij (Nam) in the Ducth and UK sectors of the North Sea in the fourth quarter for two years at around $230,000 a day.

Ensco's New York-listed shares were trading down more than 1% at $45.47 on Wednesday afternoon.

Ensco signs short-term US Gulf contracts http://www.upstreamonline.com/live/1377029/Ensco-signs-short-term-US-Gulf-contracts Analysts say deals are indicative of changing market dynamics in region Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1377029/Ensco-signs-short-term-US-Gulf-contracts Wed, 17 Sep 2014 19:16:32 +0000 live Ensco said in its latest fleet status report that semi-submersible Ensco 8501 won a one-well contract extension at $350,000 per day with Noble Energy in the US Gulf, while semisub Ensco 8503 got a three-well deal at the same rate with Llog Exploration.

They were two positive disclosures in an otherwise dreary monthly report for Ensco.

Ensco 8501 will now be on contract until January 2015 at a consistent rate. Ensco 8503 will be working for Llog through early February 2015 at a rate slightly below its previous price in the mid $370,000-per-day range.

Llog had just released the rig and picked it back up after a one-month gap.

"This is indicative of the current market situation in the (Gulf of Mexico), and (we) expect non-newbuild floaters will continue to operate on a well-by-well basis before leaving the region entirely," Cowen & Company wrote in a research note.

"Additionally, demand for the 8500 series in the (US Gulf) remains confined to smaller independents like Llog and Talos, as larger operators have largely switched preference to larger, newer drillships."

Ensco also said delivery of its newbuild drillship DS-9 would be delayed by a quarter. The rig is now scheduled to start working for ConocoPhillips in the US Gulf in the fourth quarterof 2015.

Mature fields 'play key role' http://www.upstreamonline.com/live/1377030/Mature-fields-play-key-role Programmes to improve efficiency key element in Petrobras business plan Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1377030/Mature-fields-play-key-role Wed, 17 Sep 2014 20:32:45 +0000 live This year alone the Proef efficiency programme launched in 2012 has boosted production in Brazil's Campos basin by an average of 55,000 barrels per day, according to Eberaldo de Almeida Neto, general manager of Petrobras E&P operations unit.

"The cash flow comes from mature fields," Neto said during a panel on mature fields at the Rio Oil & Gas trade show, also detailing efficiency efforts in the Santos and Espirito Santo basin.

"There is no miracle with this. It's planning."

Petrobras has spent $1.6 billion on the Proef programme since its inception in May 2012 to reverse production declines at ageing fields eating away at broader output figures.

But the improvements have come at a cost as repairs represent a temporary hit to overall output. And an audience member questioned why Petrobras' efforts at mature fields were chiefly focused on offshore areas while historic production areas lie onshore as well

Panelists including Michael Bittar, Halliburton's senior director of global technology centres, and Jarle Boe, vice-president of production technology at Statoil, discussed efforts from the Saudi Arabia and the North Sea to push recovery rates above the global industry-wide average of 35%.

Neto after the panel spoke to journalists about its pilot mature-field projects at fields such as Marlim, Marlin Leste and Albacora Leste.

Neto declined to provide a specific goal for recovery achievement in Brazil, but indicated that optimising results is a priority.

"Petrobras is working to surpass the world average," he added.

Petrobras gets floater licences http://www.upstreamonline.com/live/1377004/Petrobras-gets-floater-licences Environmental regulator hands Brazil player preliminary OK for pair of Santos basin units Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1377004/Petrobras-gets-floater-licences Wed, 17 Sep 2014 15:24:30 +0000 live The first two FPSOs – the Cidade de Ilhabela and Cidade de Mangaratiba – are due to start production in the fourth quarter at the Sapinhoa North and Iracema South pre-salt fields.

The other 11 floaters include units to be deployed in the giant Lula and Buzios pre-salt fields by 2017, comprising investments of about 120 billion reais ($52 billion) that will add more than 740,000 barrels per day of oil and 31 million cubic metres per day of natural gas to the company’s net production.

The licence also authorises Petrobras to carry out seven tests using an early production system, as well as six extended wells tests in the pre-salt.

The projects will feature the use of advanced technologies such as separation and re-injection of carbon dioxide back to the reservoir in an effort to reduce greenhouse gas emissions.

Maersk sells Venezuela barge business http://www.upstreamonline.com/live/1377021/Maersk-sells-Venezuela-barge-business Panama-based Barrystar Holding takes control of 10 cantilevered units working for PDVSA Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1377021/Maersk-sells-Venezuela-barge-business Wed, 17 Sep 2014 16:57:06 +0000 live Maersk said on Wednesday that it had sold its Maritime Contractors Venezuela unit to Panama-based investment company Barrystar Holding for an undisclosed price.

The business unit owns and operates 10 cantilevered offshore drilling barges working on Lake Maracaibo in Venezuela, all of which were included in the sale. All of the barges are currently on contract to state-owned PDVSA.

A Maersk spokeswoman said the sales price was "confidential" and that the deal closed on Tuesday.

The company said in a statement that the accounting gain "is positive for Maersk Drilling, but insignificant for the Maersk Group", adding that revenue for Maritime Contractors Venezuela amounted to $195 million in 2013.

Maersk said last year that it planned no further investments in its Venezuelan barge business and was considering a sale of the unit. Maersk has been active in the South American Opec member since 1992.

"The divestment of Maersk Drilling's drilling barge activities in Venezuela is in line with our strategy of focusing on developing and growing our core activities within the ultra-deepwater and ultra harsh environment segments," said Maersk Drilling chief executive Claus Hemmingsen.

"We concluded that Maersk Drilling was no longer the best owner" of the Venezuelan business, he added. Maritime Contractors Venezuela employs 900 people.

"We are proud to hand over a well-functioning company with further potential to Barrystar, which is committed long term to Venezuela and to the further development and expansion of the company," Hemmingsen said.

Deal reached on Argentina shale framework http://www.upstreamonline.com/live/1376992/Deal-reached-for-Argentina-shale-framework President Kirchner says 'broad consensus' reached between provinces, federal officials on oil law changes Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1376992/Deal-reached-for-Argentina-shale-framework Wed, 17 Sep 2014 14:51:43 +0000 live The OFEPHI coalition of governors and federal officials have been at loggerheads for months over changes to the country's 1967 oil law, clashing over how best to manage the country's emerging bounty from the Vaca Muerta shale play.

Reports of the deal sent stock of state oil company YPF up more than 5% Tuesday night before retreating 2.6% Wednesday morning.

The goal is to "advance energy self-sufficiency, reduce imports, generate an important source of foreign exchange and attract greater investments to increase production and generate more jobs," a statement from the presidential administration said.

"The bill aims to update the law to take advantage of new opportunities the country is presented with, such as unconventionals, offshore and tertiary recovery."

OFEPHI confirmed meetings between the provincial governors and with Kirchner, but indicated "some differences remain."

YPF did not comment and officials of Neuquen province, the epicentre of the key play, did not immediately respond to a request for comment Tuesday night.

Argentina's provinces have enjoyed wide leeway in administering their hydrocarbon resources since a 2008 law de-centralised their management, while provincial oil companies have grown into deal-making players in their own right.

But YPF had sought to consolidate control over leasing and reserves, given that the lack of a clear regime for shale investment is viewed as a major obstacle for growth of the emerging sector.

The Energy Information Administration estimates that Argentina has the world's second-largest supply of shale gas and fourth-largest supply of shale oil.

Chiefly the bill includes a major incentive that will allow any company that commits to invest $250 million the chance to export some oil and keep some of its revenue outside the country.

Under these agreements provinces would get 2.5% of the contract value and federal grants to support infrastructure needs.

According to the Casa Rosada, the bill will allow provinces to continue to grant licenses and concessions, extensions, approve investments, supervise and exercise control, but federal officials would control offshore areas.

The question of bid rounds - currently done on a province-by-province basis - is left unsettled, but a new model is to be presented within six months to tackle the issue.

The measure would also establish shale concession periods at 35 years, offshore concessions at 30 years and shorten the timeline for exploration to hasten investment.

Provinces will be able to offer extensions of 10 years and increase royalties by 3% for each extension up to 18%.

"The nation and provinces will adopt mechanisms to standardise taxation laws in hydrocarbon activities and will promote a uniform environmental law to apply best environmental practices in the industry," the statement added.

Statoil suspends COSL rig deal http://www.upstreamonline.com/live/1376976/Statoil-suspends-COSL-rig-deal State-owned operator to lay up COSL Pioneer in fresh blow for Chinese-owned contractor Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1376976/Statoil-suspends-COSL-rig-deal Wed, 17 Sep 2014 11:06:04 +0000 live The rig will be laid up in the fourth quarter after completion of drilling work at the Visund field off Norway that is scheduled at the end of this month, the state-owned operator said in a statement.

“After a careful review of our drilling plan, we find it necessary to suspend COSL Pioneer for the time being,” Statoil’s rig procurement manager Tore Aarreberg said.

The rig is currently contracted by Statoil until 2016 for drilling and completion of production wells off Norway at a reported dayrate of around $420,000.

Statoil is “in close dialogue with the contractor concerning how the suspension of the rig will be implemented in practice”, according to Aarreberg.

While the rig contract remains in place, the three-month suspension is likely to result in a significantly reduced dayrate for the 2010-built harsh-environment semisub.

The company underlined the rig lay-up would have no impact on its production targets or planned exploration activity, and it would be maintaining its target of 20 to 25 exploration wells this year off Norway.

The operator also has two other rigs – COSL Promoter and COS Innovator – on charter from the contractor, which is struggling to find employment for a fourth newbuild, COSL Prospector, that is due for delivery in the fourth quarter.

Earlier this year, Statoil reached a settlement with COSL Offshore Management in a legal dispute over payment of stand-by fees for the latter pair of rigs.

COSL Pioneer is the latest rig to be idled by Statoil as it seeks to cut back on drilling costs, having earlier this summer suspended use of the Saipem-owned semisub Scarabeo 5 that will be taken out of operation at the end of September for the rest of the year.

Statoil also recently cancelled its charter of semisub Ocean Vanguard, triggering a legal spat with rig owner Diamond Offshore, and has decided not to exercise an option for Odfjell Drilling’s Deepsea Atlantic after the current contract expires next year.

A Diamond spokesman was reported as saying by Offshore.no the contractor intended to shut its Norway office due to the contract cancellation for its sole operating rig in the country.

3Legs sinks on Polish shale departure http://www.upstreamonline.com/live/1376990/3Legs-sinks-on-Polish-shale-departure UK junior exiting Baltic venture with ConocoPhillips over poor results Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1376990/3Legs-sinks-on-Polish-shale-departure Wed, 17 Sep 2014 14:21:37 +0000 live The AIM-listed shale explorer said it would exercise a one-time option to hand back its share in three western Baltic basin concessions to the US major, after an outlay of $19 million which has now been reached, at no further cost to the company.

The move represents a significant reversal for the junior which was an early mover in and regular defender of the prospects of Polish shale, having drilled five verticals and three horizontal Baltic basin wells over the past four years.

3Legs Resources said it viewed the latest results of the licence trio’s Lublewo LEP1-ST1H well to be sub-commercial and that months of further testing of what had been seen as the most highly graded target on the acreage was not justified “when the prospects of a more successful outcome appear remote”.

The explorer said it did not believe the licences’ Sasino formation could yield any better average flow rates than those achieved by the Lublewo lateral, which produced an average of 396,000 standard cubic feet per day of natural gas and 157 barrels per day of light oil between 8 August and 17 September.

The company said the decision to quit the acreage meant it would not be required to fund any further work on the licences or pay to decommission the six wells drilled to date.

The explorer, which has around £17 million ($27.73 million) cash but no active operational assets, said it will now be “actively considering its options to maximise cash returns to shareholders in the most efficient, timely and cost-effective manner”.

The company still retains 100% interests in three eastern Baltic basin concessions that ConocoPhillips previously declined to take up an option on.

3Legs Resources said it would reveal more about its plans on 30 September when it publishes its interim results.

Reacting to the news, fellow Polish shale explorer San Leon Energy - whose own shares were trading down 20% on London's AIM - admitted “it is disappointing that commerciality has still to be proven in a Polish horizontal shale well”.

At the same time the company said that 3Legs Resources’ liquid to gas ratio at Lublewo was encouraging and said it continued to believe in the potential of its own Gdansk W concession, where the Lewino 1G2 also found gas and liquid hydrocarbons on test earlier this year.

Eni hits oil at Angola's Ochigufu http://www.upstreamonline.com/live/1376966/Eni-hits-oil-at-Angolas-Ochigufu Deep-water probe at Bock 15/06 uncovers 47 metres of oil pay Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1376966/Eni-hits-oil-at-Angolas-Ochigufu Wed, 17 Sep 2014 09:49:18 +0000 live The Milan-headquartered explorer said that Ochigufu 1 NFW was drilled around 150 kilometres off the coast of Angola with the drillship Ocean Rig Poseidon in water depths of 1337 metres to a total depth of 4470 metres.

The directionally-drilled well found 47 metres of net oil pay in the Lower Miocene and Oligocene sandstones, indicating a production capacity equal to more than 5,000 barrels of oil per day, Eni said.

The explorer said the find would boost the resource base for its West Hub project on the block and said the discovery well lay only 9.8 kilometres from the hub’s Ngoma floating production, storage and offloading vessel.

Chief executive Claudio Descalzi said could enter production in “record time” through an early tie-in to the Ngoma FPSO to add “even more value” to the block.

 “Like the recent discoveries in Congo and Gabon, this new find exemplifies the results we can achieve by applying leading edge technologies to exploration, and substantiates the decision to refocus Eni on key oil and gas competences,” he said.

Studies are already underway to evaluate tying in the find to the 100,000-barrel capacity floater, the company said.

The discovery is the tenth on the oil-rich block that is also home to the East Hub development.

Eni operates block 15/06 on a 35% stake along with state company Sonangol on 30%, SSI Fifteen (25% stake), Falcon Oil Holding Angola (5%) and Statoil (5%).