www.upstreamonline.com http://www.upstreamonline.com/ www.upstreamonline.com Players cut US Gulf service costs http://www.upstreamonline.com/live/1390320/players-cut-gom-service-costs Lower global crude prices begin to drive down figures in US offshore basin, companies say Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1390320/players-cut-gom-service-costs Fri, 30 Jan 2015 23:28:06 +0000 live While services such as offshore rigs are generally let over a longer term, operators have seen the beginnings of "significant" reduction in those costs.

"We’re going to engage with all of our suppliers, are engaging as we speak, expecting cost reductions across the board from everyone," Greg Hill, chief operating officer at Hess, told investors in a conference call.

"Even though it’s contracted, that doesn’t necessarily mean that we’re locked into those rates."

Subsea specialist Cameron has seen the same trend from the contracting side, with with "every customer asking for some degree of pricing relief," most in a "double-digit context," chief executive Jack Moore told investors on that company's call.

"The majority of our customers are seeking or have already asked for price concessions to help them weather the current environment," Moore told investors.

"Most every prospective project we are tracking has or is going through a recalibration process for both scope and price."

A near-halving of global crude prices since June has forced global operators to rein in capital spending and improve efficiency, a trend that had shown signs of already beginning in 2014 when operators sought to bring down spiraling costs of megaprojects.

Hess particularly sees a silver lining in the case of offshore developments such as the Stampede tension-leg platform, due for first oil in 2018.

The US independent said it had bid out about 50% of the deals for the project as of the end of 2014.

"We're looking at opportunities to reduce the costs in those contracts and we also expect lower costs in those yet to be awarded," chief operating officer Hill added.

"We've got three years of spend here that we can really work the costs hard on before it comes online in 2018.

"This is probably the best time to be in the development phase of an offshore project."

The contraction is still limited on some fronts, particularly in segments where the market is dominated by large integrated players, Murphy chief Roger Jenkins pointed out in the company's conference call.

"I don't see the big pullback in that because they don't have the mom-and-pop competition that you would have...onshore," he said.

Limitations to cost reductions could even inhibit companies from sanctioning developments on their discoveries, Jenkins said.

ConocoPhillips executive vice president of exploration John Fox underscored that the process was still a work in progress.

"We are working with the suppliers," Fox said. "...We’re looking at across the spectrum of things that influence the capital and operating cost, and making judgments everyday on what the most prudent thing to do as in terms of contract duration and commitments against reducing costs that we are seeing."

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ExxonMobil shifts LGBT policy http://www.upstreamonline.com/live/1390316/exxonmobil-shifts-lgbt-policy US supermajor changes code of business conduct to explicitly forbid discrimination of gay, transgender employees Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1390316/exxonmobil-shifts-lgbt-policy Fri, 30 Jan 2015 22:39:22 +0000 live The shift comes following a measure signed by US president Barack Obama who last year stating that companies must plainly include such a non-discrimination clause in order to compete for federal contracts.

"ExxonMobil’s US Equal Employment Opportunity and Harassment in the Workplace policies have been updated to include sexual orientation and gender identity, which is consistent with ExxonMobil’s long-standing practice of listing enumerated protected classes as defined by federal law," a spokesman told Upstream.

"ExxonMobil’s policies prohibit all forms of discrimination in any company workplace, anywhere in the world. ExxonMobil supports a work environment that values diversity and inclusion."

The US supermajor had, to the chagrin of LGBT rights activists, previously insisted that broad anti-discrimination policies were adequate to protect its employees. Multiple shareholder resolutions on the subject were brought up but ultimately rejected.

The Human Rights Campaign, an LGBT rights organisation, has previously ranked ExxonMobil poorly on its Workplace Equality Index.

“This distinction is not just semantics,” said Deena Fidas, director of the group's workplace equality programme.

"Exxon has a long, established history of anti-LGBT stances. To articulate its policy through the lens of legal conformance is not an affirmative changing of course and full adoption of equality, but instead a calibrated response to retain government contracts."

ExxonMobil made another similar concession in 2013 when it granted benefits to same-sex couples in jurisdictions where those unions were recognised.

Competitors BP, Shell and Chevron have been characterised by the group as tolerant of gay and transgender employees and have more quickly included worker protections.

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Oil price dampens Suriname offshore bids http://www.upstreamonline.com/live/1390310/oil-price-dampens-suriname-offshore-bids New managing director says little appetite for offshore exploration blocks Noah.Brenner@nhst.no (Noah Brenner) http://www.upstreamonline.com/live/1390310/oil-price-dampens-suriname-offshore-bids Fri, 30 Jan 2015 19:41:16 +0000 live Rudolf Elias, who is about to take over as managing director of Staatsolie, said low oil prices had reduced interest in frontier acreage in the emerging Atlantic conjugate margin play.

"We have three blocks at this moment on bid but due to oil prices the appetite is not that big," he told the TT Energy Conference in Port of Spain.

Suriname began marketing Blocks 58, 59 and 60 last year. Blocks 59 and 60 each cover about 2.4 million acres and lie in less than 100 metres of water to south of the block held by UK explorer Tullow Oil and Japan’s Inpex.

Block 58 covers about 1.4 lies along the country’s western maritime border to the west of Block 53 where Apache is awaiting a rig to spud their first well.

In addition to the offshore bid round, Staatsolie continues to market a pair of onshore blocks - Commewijne and Nickerie - through direct negotiations.

The Nickerie block is located on the eastern side of the Corantijn River that makes up the western border with neighbouring Guyana. The block has had 15 wells drilled on it with three reporting oil shows.

The Commewijne lies on the opposite side of the country just to the east of the capital Paramaribo. The block has had 36 wells drilled on it with four discovery wells and numerous other oil shows.

Negotiations for those blocks are ongoing.

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Shenandoah dry hole for Anadarko http://www.upstreamonline.com/live/1390312/shenandoah-dry-hole-for-anadarko Appraisal miss raises questions about US independent rig-tender plans for US Gulf drillship Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1390312/shenandoah-dry-hole-for-anadarko Fri, 30 Jan 2015 19:43:30 +0000 live Anadarko partner ConocoPhillips said in its fourth-quarter earnings report that Shenandoah-3, drilled with Diamond Offshore drillship Ocean Black Hawk in Walker Ridge Block 52, was not successful.

"In the Gulf of Mexico, the company expensed a Shenandoah down-dip appraisal well during the quarter," ConocoPhillips said.

It added that appraisals will continue at Shenandoah later this year.

The result is surprising after previous outstanding results at Shenandoah. The discovery well drilled in 2009 found 300 feet of net pay and the first appraisal turned up more than 1000 feet of pay in the Lower Tertiary.

Hopes were high after supermajor Chevron made its own discovery at Coronado nearby, inspiring visions of a massive standalone development in the so-called mini-basin. Operatorship of that prospect was later handed over to Anadarko when Chevron sold down its interest.

In November, ConocoPhillips said it was exiting Coronado after a disappointing appraisal well. It is not clear if appraisals will continue at Coronado.

Anadarko declined to comment on future plans or current activity in the region. It will release its fourth-quarter earnings report early next week.

The bad result at Shenandoah raises questions about Anadarko's tender for a high-spec drillship that is expected to go to work in the US Gulf play in 2018 or 2019.

Upstream reported this week that bids from four Asian shipyards had been submitted to five drilling contractors vying to supply Anadarko with an eighth-generation, 20K psi drillship for a drilling campaign in the deep-water US Gulf.

Any contract could also include an option for a second rig, Upstream understands.

However, the dry appraisal well may cast doubt over the whether the tender process moves forward, according to energy investment bank Tudor Pickering Holt.

"We suspect (the tender) may now get put on hold," analysts at the bank said.

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Designs in for Anadarko newbuild http://www.upstreamonline.com/live/1390314/designs-in-for-anadarko-newbuild Four shipyards submit proposed eighth-generation drillship designs Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1390314/designs-in-for-anadarko-newbuild Fri, 30 Jan 2015 20:40:33 +0000 live Read the full story here or read Friday's issue of Upstream.

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Rig count plummets by 90 http://www.upstreamonline.com/live/1390309/rig-count-plummets-by-90 Baker Hughes tally hits 1543 in biggest weekly drop since 1987 Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1390309/rig-count-plummets-by-90 Fri, 30 Jan 2015 18:48:26 +0000 live Oil rigs made up the entirety of the losses as 94 oil-directed units stopped running for a total of 1223, or 199 fewer than this time last year.

Gas-directed rigs actually increased by three for a total of 319.

The drop this week was the biggest since 1987, when Baker Hughes started issuing its rig count. That was also during a period of downturn for the oil industry.

Commodity prices have spoiled the best laid plans of oil and gas drillers as the industry has been laying down rigs at a rapid clip. A barrel of WTI crude was trading for $45.86 early Friday afternoon, down more than 50% from the price six months ago.

Leading US land driller Helmerich & Payne said this week that it has stacked 51 rigs so far this month alone, and expects to lay off 2000 or more employees in the coming weeks and months.

The Permian basin in West Texas bore the brunt of this week's rig-count decline, losing 27 units for a total of 454. That figure still leads all US oil and gas plays, but is 27 fewer than this time last year.

Texas as a whole lost 58 rigs for a total of 695, down 147 from last year. The Eagle Ford shale and the Barnett shale lost three and six rigs, respectively, for totals of 178 and 19.

The Mississippian basin lost nine rigs for 54.

Oklahoma was the second biggest loser among states, shedding 10 rigs for a total of 183.

North Dakota lost four rigs for 143, while the larger Williston basin shed five rigs for 148.

The Gulf of Mexico lost six rigs for 47.

Canada lost 38 rigs for 394.

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Chevron profit drops, capex down 13% http://www.upstreamonline.com/live/1390277/chevron-profit-drops-capex-down-13-percent Full-year numbers down at US supermajor as fourth-quarter takes large hit to bottom line Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1390277/chevron-profit-drops-capex-down-13-percent Fri, 30 Jan 2015 13:40:12 +0000 live The large drop in oil prices towards the end of the year was too steep to be offset by strong downstream earnings and higher asset sale gains for the US supermajor.

Net profit for the year was $19.2 billion as compared with $21.4 billion in 2013.

Fourth-quarter net earnings were $3.5 billion, well down on $4.9 billion in the comparable period a year ago. This was despite foreign currency gains swelling the 2014 fourth-quarter numbers by $432 million as compared with $202 million at the end of 2013.

Net production in the fourth quarter was unchanged from a year earlier at 2.58 million barrels of oil equivalent per day.

"Production increases from project ramp-ups in the US, Argentina, Brazil, Nigeria and Bangladesh were offset by normal field declines, and the effect of asset sales," Chevron said on Friday.

The average realised per-barrel sale price dropped from $90 in the fourth period of 2013 to just $66 in last year's final quarter.

International upstream earnings were slashed $1.81 billion to $2.24 billion as lower exploration expenses and high gains on asset sales were more than offset by falling oil prices.

US upstream earnings were chopped by $371 million to $432 million in the fourth quarter as lower commodity prices eroded higher asset sale gains and higher crude oil output.

Capital and exploratory expenditure last year was $40.3 billion, down from $41.9 billion in 2013. Upstream spending accounted for 92% of capex in 2014.

Chevron has set aside $35 billion in capex for 2015, 13% lower than last year's. Included in the 2015 programme are $4.0 billion of planned expenditures by affiliates.

Some $31.6 billion will go on upstream, with the majority - $23.4 billion - in its international portfolio, and the remaining $8.2 billion in the US.

Within upstream, approximately $12 billion will go on existing base producing assets, including shale and tight oil plays - which will receive around $3.5 billion.

Roughly $14 billion will go on major capital projects that are already under way: liquefied natural gas getting $8.5 billion and deep-water development $3.5 billion.

Global exploration capex will be around $3 billion.

US downstream will get $2 billion and international downstream just $800 million.

Chief executive John Watson said: "We continue to execute against a consistent set of business strategies which are focused on creating long-term value for our shareholders.

"Although commodity prices have fallen recently, we believe long-term market fundamentals remain attractive.

"We will continue to monitor and be responsive to market conditions, and to actively pursue cost reductions throughout our supply chain in order to lower overall outlays.

"We anticipate growing flexibility in our spend as projects under construction are completed and as supplier contracts are renewed.

"We are testing our short-cycle investments, particularly base business and unconventional assets, at current prices and are selecting only the most attractive opportunities to move forward," Watson continued.

Net income per share of $1.85 in the fourth quarter beat expectations of analysts polled by Thomson Reuters who made a consensus estimate of $1.63 a share, although earnings were way off the $2.57 seen in the year-ago period.

Sales revenues declined from $56.16 billion in the fourth quarter of 2013 to $42 billion in the fourth quarter of 2014 in a drop less steep than predicted by analysts who forecast revenues of $30.65 billion.

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Kara Sea drilling 'on hold' for Rosneft http://www.upstreamonline.com/live/1390275/kara-sea-drilling-on-hold-for-rosneft Further exploration 'unlikely in 2015' after rig exit as sanctions bite on Russian giant: report Steve.Marshall@upstreamonline.com (Steve Marshall), (News Wires) http://www.upstreamonline.com/live/1390275/kara-sea-drilling-on-hold-for-rosneft Fri, 30 Jan 2015 10:56:25 +0000 live "There will be no drilling in 2015. There is no platform and it is too late to get one. The project was initially created for ExxonMobil’s platform,” a Rosneft source told Reuters, referring to the semi-submersible rig West Alpha that drilled the Universitetskaya-1 well in the Arctic play.

The Seadrill-owned rig, which is under contract with the US supermajor until July 2016, has now returned to Norwegian waters after completing the well in mid-October.

The contractor’s latest fleet status report reveals Russian counterparty Karmorneftegaz has a one-year option to use the rig from August next year at a dayrate of $539,000, with Rosneft to take it thereafter on a five-year contract at an undisclosed rate, subject to a cancellation clause.

A second Rosneft source was quoted as saying: “We will definitely resume drilling in 2016 on our own after finding a platform. The Arctic is our priority.”

Rosneft president Igor Sechin vowed last year the company could go it alone on Arctic exploration, though it has yet to disclose its updated plan for development of the prospective region that was due to be released at the end of last year.

However, sanctions have also largely cut off Western credit lines for Rosneft, leaving it with financial challenges to fund further exploration, while it is also being hit by low oil prices.

Joint-venture partner ExxonMobil was forced to pull out of drilling work at the initial wildcat last year due to US and European sanctions on Russia over its alleged military involvement in Ukraine and annexation of Crimea.

Sanctions have barred Western contractors from providing services to Russian companies, including Rosneft, for development of resources in the Arctic, deep-water and shale plays, among other restrictions.

The US giant holds a 33% stake in the Arctic venture with Rosneft covering the East Prinovozemelsky 1 and 2 licences in the Kara Sea whereby it is required to finance all exploration costs before commercial production begins, as well as provide project management.

Rosneft hailed a major oil and gas discovery with the Universitetskaya-1 well in the East Prinovozemelsky 1 block that hit a structure with estimated in-place resources of 730 million barrels of oil and 340 billion cubic metres of gas.

Sechin said an updated resource estimate for the find would be disclosed this year after analysis of drilling data.

Moscow analysts have previously stated Rosneft would need to carry out a flow test of the discovery well this year to better determine the resource potential of the structure.

If Western sanctions remain in place, the company could use a jack-up rig to test the find given it lies in a shallow water depth of about 80 metres, they suggested.

Russia is keen to tap Arctic resources to replace falling output from depleting fields in its traditional main producing region of West Siberia.

The East Prinovozemelsky 1, 2 and 3 blocks are estimated to hold nearly 50 billion barrels of oil and condensate as well as 14.6 trillion cubic metres of gas.

A Rosneft spokesman was quoted as saying: “In 2015, Rosneft will ensure implementation of is licence obligations related to geological exploration in the Kara Sea.”

The company did not disclose the stipulated exploration period for its licences, though the Universitetskaya-1 well was drilled a year earlier than required.

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Norway feels oil price pain http://www.upstreamonline.com/live/1390288/norway-feels-oil-price-pain Analyst predicts big drop in state income from offshore activity as low price takes toll on field investment Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1390288/norway-feels-oil-price-pain Fri, 30 Jan 2015 14:03:34 +0000 live The figure, which compares with nearly Nkr300 billion last year and average annual state income of Nkr345 billion in the period from 2010 to 2013, was presented by analyst Jarand Rystad to Finance Minister Siv Jensen in an Oslo meeting with analysts and economists on Friday to discuss the impact of the dramatic oil price drop.

Rystad, head of research firm Rystad Energy, warned there was “a massive imbalance” in the market that has led to prices falling around 60% last summer to below $50 a barrel for Brent crude.

He explained it was the result of a “supply shock” created by an output boom from US shale and high production from producer group Opec as well as a drop in demand mainly from Europe, leading to a global oversupply of 1.3 million barrels per day.

Furthermore, major Opec producer Saudi Arabia has refused to put the brakes on output to arrest the price drop for economic and political reasons, given it is hitting regional rival Iran and sanctions-hit Russia, while also weakening competition by dampening US shale growth and causing high-cost offshore and oil sands projects to be delayed, as well as stimulating the world economy, according to Rystad.

According to a Reuters survey of 33 analysts and economists, the price of North Sea Brent crude will average $58.30 a barrel this year – the lowest since 2005 - after an expected recovery in the second half as US shale supplies tighten due to lower profitability.

However, many analysts have slashed their price forecasts by $15 a barrel or more, while investment bank Barclays cut its 2015 price outlook for Brent by almost 40% to $44 a barrel and influential bank Goldman Sachs sees a price of $50.40 a barrel, down by more than $33 on its previous estimate.

ANZ analyst Mark Pervan said further near-term fund selling would see Brent trade down to $42 a barrel by the end of the first quarter.

Edison Investment Research has estimated an average oil price of $52.50 this year, while Investec sees a yearly price evolution of $50, $60 and $70 from 2015 to 2017.

Brent has averaged $49.57 so far in January, consolidating over the past two weeks after hitting a near six-year low of $45.19 a barrel on 13 January. It was trading around $48.95 early on Friday.

Rystad predicted prices would rise in 2016 and 2017 but said the uptick would be restrained by extra US shale production capacity that would kick in at $70 to $80 per barrel, with thousands of already drilled shale wells yet to be brought online.

However, he expected a “significantly higher” price in 2018 as Opec and US shale oil output will be unable to make up for the future supply shortfall caused by current field investment cutbacks.

“A price of $100 per barrel will be necessary to stimulate sufficient development,” he said, citing large offshore projects that will be required to provide the necessary output volume.

Investments off Norway are forecast by the analyst to drop by 10% this year, though the giant Johan Sverdrup project would help to arrest the spending slide next year, with investment expected to rise again from 2017 onwards.

This compares with a 14% drop to Nkr 188.6 billion this year that was recently predicted by Statistics Norway, while industry association Norwegian Oil & Gas sees investment falling to Nkr197 billion in 2015, compared with last year’s record level of Nkr221 billion.

Consequently, Rystad warned of a “tough short-term market” for contractors, which have seen work dry up due to oil company cutbacks, leading to wide-scale job losses.

Low oil prices will continue to have a significant impact on Norwegian state coffers, according to Rystad, with income from offshore activity expected to rise to Nkr150 billion next year before hitting a forecast Nkr240 billion in 2017 and recovering to Nkr330 billion in 2018.

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SBM raids Technip for COO http://www.upstreamonline.com/live/1390280/sbm-raids-technip-for-coo Floater player re-instates executive position and poaches French giant’s president and chief operating officer Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1390280/sbm-raids-technip-for-coo Fri, 30 Jan 2015 13:05:46 +0000 live Philippe Barril, currently chief operating officer at Technip, will take on the new role at SBM from 1 March, SBM said.

The company sacked its former chief operating officer, Jean-Philippe Laures, in late 2013. Chief executive Bruno Chabas then assumed the duties on an interim basis.

It was only in January last year that Barril was named president and chief operating officer at Technip. He had held the position of chief operating officer for onshore & offshore at the French giant since 2011, however.

Barril first joined Technip in 2002 as vice president for Africa-Mediterranean offshore & subsea. He re-joined in 2009 as vice president for onshore-offshore product lines & technologies, before moving on to a vice president role for the region encompassing Western Europe, Africa, India and Pakistan.

Before re-joining Technip, Barril held numerous roles at industry players Entrepose and Bouygues Offshore.

“Philippe has over 25 years of experience across the oilfield engineering and construction industry,” SBM wrote on Friday.

“As chief operating officer, Philippe will be responsible for overseeing project execution, business acquisition and fleet operations.

“His extensive experience will be instrumental in carrying out the company's commitment to its clients to deliver safely, on time and budget,” the statement continued.

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Brent dips in early trade http://www.upstreamonline.com/live/1390261/brent-ticks-up-to-usd-49 Benchmark remains on course for record run of seven consecutive losing months Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1390261/brent-ticks-up-to-usd-49 Fri, 30 Jan 2015 15:49:00 +0000 live Benchmark Brent crude prices have kept within a band of $45-$50 a barrel since hitting a six-year low on 13 January, but analysts have not ruled out further declines as global inventories continue to rise.

Supplies from Opec rose in January to 30.37 million barrels per day, a Reuters survey showed, a sign key members are standing firm in refusing to prop up prices by cutting output.

Data this week also showed US crude oil inventories had reached their highest levels since the 1930s.

Brent oil futures were up 24 cents at $49.37 per barrel at 1509 GMT while benchmark US WTI futures were up 66 cents at $45.19 a barrel.

Brent is on track to post a 14 percent fall for January, marking a seventh month of decline since reaching a peak of around $115 in late June and the longest-running monthly drop since Reuters records started in 1988.

A Reuters survey of analysts showed on Friday that oil is likely to continue falling before posting only a mild recovery in the second half of this year, with prices set to average less in 2015 than during the global financial crisis.

The survey of 33 economists and analysts forecast North Sea Brent crude would average $58.30 a barrel in 2015, down $15.70 from last month's poll, in the biggest month-on-month revision since prices last collapsed in 2008-2009.

"The fundamentals remain weak, with seasonal refining maintenance resulting in stock builds on what is an already high base for stocks," said Amrita Sen, chief oil analyst at London-based Energy Aspects.

The International Energy Agency this month said a price rebound could take some time despite increasing signs of the downturn easing, with lower North America shale production and higher demand due to the low prices.

The market found some support in news of renewed violence in oil producer Iraq, where Islamic State militants struck at Kurdish forces southwest of the oil-rich city of Kirkuk.

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Bankers chops capital spending by 30% http://www.upstreamonline.com/live/1390278/bankers-chops-capital-spending-by-30-percent Canadian operator predicts 5% output fall in 2015 as it reins in Albania drilling Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1390278/bankers-chops-capital-spending-by-30-percent Fri, 30 Jan 2015 12:14:59 +0000 live The Calgary-headquartered operator has chopped its budget from $218 million as announced in mid-December to $153 million, a spending level which it said was fully funded at a $50 oil price.

The changes mean production is set to decrease by around 5% compared to 2014 on account of reduced drilling activity and shut-in volumes due to marginal economics, the producer said.

Chief executive David French said the company believes “it is prudent with today's commodity outlook to show capital discipline and preserve our strong balance sheet”. 

He said the reduced budget aimed to achieve capital efficiency while balancing both short term drilling execution and long term flood expansion of its Albanian acreage.

Bankers Petroleum now aims to drill around 60 horizontal wells at Albania’s Patos-Marinza oilfield using two rigs.

Earlier plans envisaged 85 to 90 probes this year using three rigs at the long-producing oilfield onshore south-central Albania.

The London-listed company is also cutting back on its secondary recovery polymer flood and water-flood well conversions, with 20 now planned instead of 25 to 30.

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Players line up for Mexico data http://www.upstreamonline.com/live/1390251/players-line-up-for-mexico-data List of companies given the nod to access data room ahead of inaugural licensing round revealed Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1390251/players-line-up-for-mexico-data Fri, 30 Jan 2015 01:03:39 +0000 live Twenty-three companies have requested access to data rooms ahead of Mexico’s first licensing round, with 15 already authorised to proceed, according to the country’s regulatory body.

The new authorisations were formally approved at a board meeting of Mexico’s National Hydrocarbon Comission (CNH) on Thursday, adding to seven companies already given the green light to enter the data rooms.

The companies passing the authorisation hurdle include names such as ENI, Noble Energy, Cobalt International Energy, Pacific Rubiales, Inpex, Tecpetrol, ONGC Videsh, and Mexican companies Sierra Oil & Gas and Diavaz.

The seven companies that had already authorised were Ecopetrol, Shell, BG Group, Hunt Oil, Chevron, BHP Billiton and Exxon Mobil.

Others in the pipeline to receive access soon are Pluspetrol, Total, Petronas, Lukoil, Korea National Oil Company, Hess, Galp Energia and Statoil.

Visits to the CNH data rooms in Mexico City will begin next week.

The number of companies willing to pay the $360,000 data fee to access the data is seen as a measure of investor interest as Mexico prepares for its inaugural round in a bearish price environment.

“Despite the drop in oil prices, we are seeing great interest in the round,” said CNH head Juan Carlos Zepeda.

The first licensing round, scheduled for bidding on 15 July, consists of 14 shallow water blocks in areas described as prospective for light oil and with a relatively low exploration risk.

Rules restricting companies to participation in a maximum of five permits, will prevent Pemex from dominating proceedings, although the company’s own budget squeeze may also help.

Production costs in the shallow water areas included in Round One are estimated at less than $20 per day, and output from the area has been forecast at between 80,000 to 100,000 barrels per day, according to the CNH.

Companies wishing to pursue their interest have until 16 March to access the data room, moving next to a pre-qualification phase.

CNH is running an interative online feedback process through which the terms of the offering will be refined and finalised by 15 June.

Zepeda said the CNH will be sticking to its plans for licensing new shallow water, deep-water and conventional onshore areas in 2015 but acknowledged that plans for licensing areas for unconventionals would have to be reviewed.

“The drop in prices has a special impact on unconventionals, and we have to look again at what we can do and what we can keep on our schedule for this year,” he said.

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Atlantic in Faroes farewell http://www.upstreamonline.com/live/1390297/atlantic-in-faroes-farewell Minnow shifting office to Bergen in move to cut costs Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1390297/atlantic-in-faroes-farewell Fri, 30 Jan 2015 15:23:29 +0000 live The Oslo-listed independent also said its chief financial officer Mourits Joensen will quit following the decision to close the Torshavn head office and and shift its finance functions to Bergen.

He will be replaced on an interim basis by business development director Nigel Thorpe.

Chief executive Ben Arabo said: “We are responding to the challenging business environment by cutting costs in all areas of operation. The company will become more efficient and robust as a result of the changes.”

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EMGS in Barents data sale http://www.upstreamonline.com/live/1390291/emgs-in-barents-data-sale Survey player in $2.5m licensing deal for use of electromagnetic data in Norway round Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1390291/emgs-in-barents-data-sale Fri, 30 Jan 2015 14:47:53 +0000 live The Oslo-listed survey contractor has struck a licensing agreement with an unnamed oil company for use of the data from its multi-client library, which covers 44,000 square kilometres in the Barents.

A total of 54 blocks in the Arctic region, as well as three in the Norwegian Sea, are on offer in the delayed round that was launched earlier this month.

It includes frontier acreage in the newly opened south-east Barents that was formerly disputed with Russia, marking the first opening of a new area off the country in 20 years.

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Culzean platform bids imminent http://www.upstreamonline.com/live/1390263/culzean-platform-bids-imminent Technical proposals covering major facilities for Maersk Oil’s central North Sea development to be submitted soon Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1390263/culzean-platform-bids-imminent Fri, 30 Jan 2015 08:23:19 +0000 live Read the full story in Friday's issue of Upstream.

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Nighthawk inks $14.3m venture deals http://www.upstreamonline.com/live/1390267/nighthawk-inks-usd-143m-venture-deals US onshore-focused junior teams up with Coloradoan explorer Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1390267/nighthawk-inks-usd-143m-venture-deals Fri, 30 Jan 2015 10:07:19 +0000 live The London-listed explorer is committing $14.3 million to earn in and develop two sets of acreage in northern Lincoln County under a pair of partnership deals known as the Monarch and El Dorado joint ventures.

Nighthawk Energy chairman Rick McCullough said the Monarch joint venture where 3D seismic acquisition is planned “has the potential to add significantly to our inventory of future drilling locations on structures”.

He said both ventures were located "on and around similar structures to what Nighthawk has developed successfully in the Arikaree Creek and Snow King fields and will be collaborating to create value for both companies”.

At Monarch the duo plans to explorer Mississippian and Pennsylvanian structures seen as similar to Arikaree Creek and Snow King that currently generate output of around 2500 barrels per day of oil for Nighthawk Energy.

The explorer will pay for the first six wells at $1.5 million to $2 million each and a seismic carry to earn in to the Monarch joint venture.

Nighthawk will operate Monarch on a 50/50 basis while Cascade Petroleum will operate El Dorado on an 85/15 ownership ratio.

Analyst Jamal Orazbayeva of London-based equity research firm Westhouse Securities said that under the deal Nighthawk Energy “is getting access to potentially prospective acreage for a relatively low cost and some optionality built in”.

He said that Nighthawk Energy’s 18-month capital commitment to the venture was underpinned by $4.3 million cash, a $35 million borrowing base and monthly estimated cash flows of $2.5 million from current production.

Speaking to Upstream last month, McCullough said the explorer’s low-risk, low-cost onshore portfolio could generate a 25% rate of return with WTI at $40.

Shares in Nighthawk Energy were trading up less than 1% at around £0.06 on London's Alternative Investments Market on Friday morning.

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Total eyes Skirne East wildcat http://www.upstreamonline.com/live/1390264/total-eyes-skirne-east-wildcat French explorer lines up probe for drilling off Norway later in first quarter Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1390264/total-eyes-skirne-east-wildcat Fri, 30 Jan 2015 08:10:41 +0000 live The French explorer has lined up Ocean Rig’s semi-submersible Leiv Eiriksson to drill the 25/5-6 probe at the Skirne East prospect under a drilling application submitted to the authorities.

The well is tentatively scheduled for drilling in March in a water depth of 120 metres in Total-operated production licence 627, with a potential sidetrack also in view.

Total aims to test gas resource potential in the Middle Jurassic Hugin formation with a targeted total depth of 2523 metres for the well, which has an estimated duration of 119 days including a sidetrack and testing.

A possible discovery would be a potential candidate for a direct tieback to the Heimdal platform or could flow via the Skirne pipeline for onward transport to Heimdal for processing and export.

Total operates the licence with a 40% stake, with partners Centrica, Det Norske and Faroe Petroleum each on 20%.

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BP 'ditches' Indonesia blocks http://www.upstreamonline.com/live/1390266/bp-ditches-indonesia-blocks UK supermajor relinquishes pair of tracts after survey shows too high risk: report (News Wires) http://www.upstreamonline.com/live/1390266/bp-ditches-indonesia-blocks Fri, 30 Jan 2015 09:35:52 +0000 live Country chief Dharmawan Samsu informed Reuters the UK supermajor had relinquished the West Aru 1 and West Aru 2 blocks earlier in the first quarter after evaluating results of the 3D survey.

"The evaluation suggests that these blocks are both technically very high risk and commercially very challenging," he was quoted as saying.

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Woodside gets nod for Canadian exports http://www.upstreamonline.com/live/1390260/woodside-gets-nod-for-canadian-exports Regulator approves Australian company's application to ship LNG from Canada's west coast Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1390260/woodside-gets-nod-for-canadian-exports Fri, 30 Jan 2015 04:11:57 +0000 live The licence will allow the Australian company to export up to a total 807 billion cubic metres of LNG over the 25-year term from its proposed Grassy Point LNG project, near Prince Rupert in British Columbia.

“We have determined that the quantity of gas proposed to be exported by Woodside Energy is surplus to Canadian needs,” the NEB said in a statement.

“The board is satisfied that the gas resource base in Canada, as well as North America overall, is large and can accommodate reasonably foreseeable Canadian demand, the natural gas exports proposed in this application, and a plausible potential increase in demand.”

The NEB noted that the issuance of the export licence was still subject to the approval of the Governor in Council.

Woodside is proposing to build a facility that will be fed by a third party pipeline and capable of processing up to 20 million tonnes per annum of LNG.

If the project goes ahead, the Australian company plans to build the project in two phases, with the first involving the construction of LNG trains with an initial combined capacity of between 6 million and 15 million tpa.

The first phase would also see the construction of supporting infrastructure such as jetties and a materials offloading facility, power generation, water supply, sanitary waste treatment, access roads and workforce accommodation.

The proposed second phase will see the construction of additional LNG trains to boost the processing capacity of the facility to 20 million tpa.

If Woodside moves ahead with the project, it expects to start construction in 2017 with first production currently slated for 2021.

Woodside has previously stated that any decision to proceed with an LNG development at Grassy Point is subject to a variety of internal and external approvals.

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Origin posts fall in revenue http://www.upstreamonline.com/live/1390259/origin-posts-fall-in-revenue Output down but APLNG project on track to start-up this year Josh.Lewis@upstreamonline.com (Josh Lewis) http://www.upstreamonline.com/live/1390259/origin-posts-fall-in-revenue Fri, 30 Jan 2015 03:24:53 +0000 live This came as output slipped 4%, from 34.9 petajoules equivalent in the September quarter, to 33.4PJe in the December quarter.

Origin blamed the fall in output on lower production from its operations in Australia's Otway basin due to maintenance, a planned maintenance shut down at the BasGas project off south-east Australia, as well as lower seasonal demand at the Kupe field off New Zealand.

Also hitting revenues was a 19% drop in the average crude price, to A$94 per barrel, and a 21% drop in the average condensate price, to A$79 per barrel.

The average price of liquefied petroleum gas also fell 14% in the fourth quarter, to A$664 per tonne, however the average gas price increased 2% compared to the third quarter, averaging A$4.46 per gigajoule.

Origin also revealed in its quarterly report on Friday the Australia Pacific liquefied natural gas (APLNG) project was on track to deliver first LNG by mid-year, with the project 88% complete.

“The upstream component is 90% complete, with 1019 development wells drilled and 666 wells commissioned, while the downstream component is 86% complete and the final Train 2 module has been set on its permanent foundations,” Origin chief executive LNG David Baldwin said.

The APLNG project is being built near Curtis Island in Queensland and will consist of two trains, each capable of handling 4.5 million tonnes per annum of LNG.

Exports from the first train are currently scheduled to start m  id-2015 and will be followed by the start-up of the second train next year.

The facility will be fed by gas from CBM fields being developed by the joint venture in Queensland’s Surat and Bowen basins.

The APLNG joint venture partners include Origin (37.5%), ConocoPhillips (37.5%) and Sinopec (25%).

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Five in race for ONGC's Bassein development http://www.upstreamonline.com/live/1390258/five-in-race-for-ongcs-bassein-development Several players are said to be preparing bids for project that escaped Indian giant’s tender freeze stories@upstreamonline.com (Upstream Staff) http://www.upstreamonline.com/live/1390258/five-in-race-for-ongcs-bassein-development Fri, 30 Jan 2015 02:47:17 +0000 live Find out who is the running in this week's edition of Upstream Newspaper.

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Schlumberger evacuates after bomb threat http://www.upstreamonline.com/live/1390238/schlumberger-evacuates-after-bomb-threat Investigation ongoing at R&D centre south of Houston after mysterious package arrives Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1390238/schlumberger-evacuates-after-bomb-threat Thu, 29 Jan 2015 21:48:23 +0000 live A mysterious package "containing a bomb threat" arrived during the day at Schlumberger's Rosharon Technology Centre in Brazoria County, the company said in a statement.

"All employees have been safely evacuated and local police and bomb squad personnel are onsite investigating," the company said, adding that it will release more information on the "developing situation" as it becomes available.

More than 800 R&D employees from 30 countries work at the Rosharon centre, according to its website.

Local media, which first reported the story, said the Joint Terrorism Task Force is also helping with the investigation.

The Rosharon facility specialises in new product development, sustained engineering for commercial products and reliability testing under simulated downhole conditions. Research and development efforts at the centre focus on optimising well productivity and reserve recovery.

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Murphy farms down in US Gulf http://www.upstreamonline.com/live/1390247/murphy-farms-down-in-us-gulf Independent reduces exposure to deep-water wildcat, looks to sell down stakes in additional prospects Luke.Johnson@upstreamonline.com (Luke Johnson) http://www.upstreamonline.com/live/1390247/murphy-farms-down-in-us-gulf Thu, 29 Jan 2015 23:32:01 +0000 live Murphy said it is now operating the Urca prospect in Mississippi Canyon Block 697 on a 35% interest, down from 50%. It could not be immediately determined who farmed in to Urca. A list of current partners was also not immediately available.

Chief executive Roger Jenkins characterised the buyer as "a partner that we've worked with internationally".

The Arkansas-based company said previously it was trying to sell down its interest in the Urca prospect. Murphy has moved away from drilling wells in the US Gulf with a 100% interest and actively seeks partners to bear at least half the exploration risk.

That strategy has become even more important in a period of low oil prices and tight exploration budgets.

"When wells get over $100 million, I like to be at 35%. I don't mind drilling some a little bit less than that at 50 (percent)," Jenkins said on a fourth-quarter earnings call on Thursday.

Urca, which is being drilled to a target depth of 19,000 with drillship Ensco DS-5, is expected to reach total depth in mid-February. The pre-drill resource estimate is 130 million barrels of oil equivalent. The field is located between the prolific Big Bend and Blind Faith fields in the US Gulf.

Murphy has three additional 50%-owned exploration prospects on the schedule for 2015. Sea Eagle at 110 MMboe is expected to spud in the second quarter while Desperado at 100 MMboe is slated for the early fourth quarter.

Opal, a Miocene-aged "pinch-out" that Jenkins described as a "lookalike of Petronius", may be the big prize, with a pre-drill estimate of 400 MMboe. Anadarko Petroleum owns the other half of that prospect. Spud date is scheduled for later in the fourth quarter of 2015.

Jenkins said the company is meeting with a couple of potential buyers to sell down "a couple" of those prospects, though a sale is far from assured.

"I'm not against taking a couple of those to 35 (percent) and I would, but it's not that easy to sell that today. Not everyone has the balance sheet I have," he said.

Jenkins also said that the company could potentially go the other direction and buy minority stakes in other operators' prospects.

"There could be some opportunity for us to go in instead of going out, so if I'm going to go out someplace, I may want to go in somewhere else."

Murphy posted net income of $375.2 million in the last three months of 2014, up from $75.4 million a year earlier. Full year 2014 net income hit $905.6 million, down from $1.1 billion in 2013.

The company set a new quarterly record for production, averaging 258,868 boepd, which was higher than guidance of 250,000 boepd.

The uptick was primarily due to higher than planned oil production from the US Gulf and offshore Canada, and higher-than-planned gas production from the Montney shale in Canada and Sarawak in Malaysia.

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US Senate approves Keystone bill http://www.upstreamonline.com/live/1390244/us-senate-approves-keystone-bill Newly under Republican control, lawmakers pass bill to speed construction of controversial project Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1390244/us-senate-approves-keystone-bill Thu, 29 Jan 2015 22:41:11 +0000 live The measure, approved with a 62-36 vote with support of nine Democrats, is aimed at forcing President Barack Obama to make a decision on approval of the long-delayed oil pipeline.

The bill is expected to land on the president's desk sometime next week.

Obama, whose base is made up of many environmentalists vehemently opposed to the Keystone XL pipeline, has vowed to veto the legislation.

The pipeline extension, which would open a path for Canadian oil-sands crude to refineries on the US Gulf Coast, has been under review for more than six years by the US State Department.

The vote shows increased pressure from the conservative GOP in Congress, which coasted to retake control of the Senate in midterm elections. The business-minded caucus had made action on Keystone XL a top priority in its first session in control of both the Senate and the US House of Representatives.

Similar measures have passed the Republican-controlled House multiple times but had previously failed to clear the Senate while Democrats held the upper hand.

However, some critics say the project's strategic importance has waned simply given the duration of the wait and a plunge in global crude prices given high per-barrel cost of oil sands production.

Still, industry groups reiterated that a project facilitating access to nearby oil from a neighbour, and creating construction employment, should be a no-brainer for the country.

"We hope the president will seize this opportunity to work collaboratively with Congress to advance sound energy policy while creating thousands of jobs," Jack Gerard, chairman of oil trade group API, said in a statement.

But the project angers environmentalists, who say the pipeline promotes carbon-intensive oil sands instead of renewable energies.

"Congress is not a permitting authority," said Danielle Droitsch, director of the Canada Project at the Natural Resources Defense Council.

"The president should follow up his veto by rejecting the Keystone XL tar sands pipeline, a pipeline that would worsen climate change and threaten US waters, largely to enable the export of oil to other countries."

State department reviews have concluded the project will have minimal carbon impact as Canada is likely simply to export the crude elsewhere.

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Petrobras braces for investment cut http://www.upstreamonline.com/live/1390236/petrobras-braces-for-investment-cut Brazil state oil company intends 'more selective' spending plan for 2015-2019, chief says Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1390236/petrobras-braces-for-investment-cut Thu, 29 Jan 2015 19:44:21 +0000 live Petrobras' new investment plan for 2015-2019 will be "more selective" and will remain focused on controlling debt levels, chief executive Maria das Gracas Foster told investors and reporters during a presentation of the company's third-quarter earnings.

Petrobras published its quarterly unaudited results on Wednesday after a long delay, further disappointing investors as the numbers did not include writedowns for the financial impact of the multibillion-dollar corruption scandal.

Petrobras' shares dropped 4% on Thursday, on top of an 11.2% slump on Wednesday, as Foster said the company is likely to declare dividends for later payment while it sorts out its cash problems.

Petrobras, the world's most indebted and least profitable major oil company, has been unable to raise cash in international capital markets as it struggles to publish financial statements that fully reflect corruption-related writedowns.

Meanwhile, the company plans to raise $3 billion from asset sales in 2015 while reducing its exploration plans to the "minimum necessary" this year, Foster said.

Fitch Ratings said in a note that Petrobras' actions exacerbate the uncertainty surrounding the company's ability to meet investor requirements and avoid default.

Operationally speaking, the matter may affect the delivery of production units or availability of equipment like drilling rigs, the agency said, contractors vital to carrying out the company's future expansion plans.

"The latter risk has been heightened by the company's decision to ban all business groups associated with the scandal from contracting and participating in bids, given that this affects most offshore drilling rig contractors."

"The company's operations will suffer under a prolonged ban that makes it difficult for Petrobras to procure key equipment for its operations."

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Pennsylvania halts state forest leasing http://www.upstreamonline.com/live/1390242/pennsylvania-halts-state-forest-leasing Governor Tom Wolf re-instates moratorium on state lands leases Noah.Brenner@nhst.no (Noah Brenner) http://www.upstreamonline.com/live/1390242/pennsylvania-halts-state-forest-leasing Thu, 29 Jan 2015 22:34:06 +0000 live Tom Wolf signed an executive order halting leasing in state parks and forest land, reversing an order from his predecessor, Republican Tom Corbett, that opened up such parcels to leases with operators seeking to tap the Marcellus Shale.

“Natural gas development is vital to Pennsylvania’s economy, but so is the economic and environmental viability of our parks and forests,” Wolf said at an event in Benjamin Rush State Park. “This is about striking the right balance. Our state parks and forests are unique assets that should be preserved, protected, and utilised by our residents for recreational purposes.”

Wolf made the move after the state Department of Conservation & Natural Resources warned that further leasing could jeopardise its ability to maintain its “gold standard forest certification,” a third-party sustainability programme.

“Our parks host 38 million visitors annually, support over 13,000 jobs, and provide $1.2 billion to the state’s economy,” Governor Wolf continued. “We should be looking for opportunities to grow our recreational and tourism economy through a revitalised parks and forest system that ensures we are preserving our natural resources and protecting our people and the environment.”

 

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Full MWCC system delivered http://www.upstreamonline.com/live/1390222/full-mwcc-system-delivered Last components of expanded system in place to respond to Gulf of Mexico blowout Kathrine.Schmidt@upstreamonline.com (Kathrine Schmidt) http://www.upstreamonline.com/live/1390222/full-mwcc-system-delivered Thu, 29 Jan 2015 18:58:13 +0000 live The full setup, which expands upon an interim system available since 2011, has capacity to manage 100,000 barrels of liquids and up to 200 million cubic feet of natural gas per day.

It includes two modular capture vessels, three capping stacks and Surf equipment including subsea umbilicals, risers and flowlines.

MWCC chief executive Don Armijo called the development a "significant milestone".

"Arrival of the full system underscores MWCC’s commitment to meet members’ needs and to provide industry-leading well containment equipment and services," Armijo said.

MWCC and its counterpart from contractor Helix grew out of the deadly 2010 Macondo blowout when BP and subsea contractors struggled mightily to cap and contain the runaway well in deep water.

Today operators are required to engage services from one of the containment providers before drilling in the Gulf of Mexico.

MWCC equipment is stored at two shorebases in Theodore, Alabama and Ingleside, Texas.

The system boasts different equipment that can be brought to bear depending on the nature of the accident, with one subsea containment assembly, one single-ram capping stack of 15,000 psi and a dual-ram stack of 10,000 psi.

The containment vessels, the Eagle Texas, MCV A and the Eagle Louisiana, MCV B, are modified Aframax tankers with processing capacities of 50,000 barrels per day.

Each has 700,000 barrels of storage capacity that can be offloaded to shuttle tankers.

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Shell seeks to beat price panic http://www.upstreamonline.com/live/1390186/shell-seeks-to-beat-price-panic Anglo-Dutch supermajor defends outlook amid Brent's plunge Bill.Lehane@upstreamonline.com (Bill Lehane) http://www.upstreamonline.com/live/1390186/shell-seeks-to-beat-price-panic Thu, 29 Jan 2015 15:26:04 +0000 live Speaking to journalists and analysts in London following the publication of the company's latest results, chief executive Ben Van Beurden stressed that it was important not to overreact to short term fluctuations in oil prices as under-investment increased the risk of price spikes as well as under-supply in the future.

“It’s very important that we do not get into a slash and burn mentality, we have to take a measured approach. Many of the things you do out of excessive prudence may in fact reduce your competitiveness,” he said.

Van Beurden said that Shell is maintaining its long-term price outlook bands of $70, $90 and $110 Brent rates, but has been forced to “retire or postpone” 40 projects worth $15 billion in investment that did not met economic criteria as prices sit below the base level.

Additionally, the company is also looking at mitigating spending by a further $15 billion over the next three years by deferring, slowing down or cancelling various final investment decisions on new projects.

He said that North American shale plays are one of the targets of Shell’s cutbacks because they are “clearly looking less attractive with current WTI prices”.

“Resource plays are an area where we continue to dial down our spending. We expect frankly to exit from several positions. It will be a multi-year process to get this play into profitability simply because of its maturity,” Van Beurden said.

The Shell executive admitted that globally many of the operator’s cash-flow generating older producing assets were also under pressure because of falling oil prices and said that the company may have to take some more tough choices in the future.

At the same time the company said that the completion of its multi-billion asset sale programme last year before prices fell left it well-positioned into the market downturn.

Van Beurden said that the low price environment also offered some positives, in that it gave Shell the opportunity to lower its supply chain costs as well as “make some healthy choices” regarding careful advance planning on which projects to take into development.

Chief financial officer Simon Henry joked that it was “good we started ten years ago” with a focus on profitability over volumes given the recent sharp falls in oil prices.

He pointed out that while divestments had shrunk output by 6% in 2014 and would lead to another 3% fall in output this year, cash flows from operations per barrel on a like for like price basis rose 25% in 2014 thanks to improved margins.

Henry said that 2014 was a “substantial step-up” for Shell in exploration with one of its most successful track records in several years with 10 discoveries in frontier and core plays.

Henry said that Shell was assessing the potential of its most recent two discoveries in the US deep-water Gulf of Mexico at Gettysburg and Power Nap, following Kaikas and Rydberg earlier in the year.

Other finds were made in Malaysia, Gabon, Australia and Brazil.

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Seaway finishes Pemex jobs http://www.upstreamonline.com/live/1390195/seaway-finishes-pemex-jobs Dutch contractor completes installation of four topsides and a jacket for state player and Protexa Eoin.Ocinneide@upstreamonline.com (Eoin O'Cinneide) http://www.upstreamonline.com/live/1390195/seaway-finishes-pemex-jobs Thu, 29 Jan 2015 15:46:13 +0000 live The Dutch contractor’s crane vessel Oleg Strashnov installed the last of four topsides for Pemex and Mexican construction outfit Protexa early on Wednesday in the Bay of Campeche.

The 2033-tonne Tsimin topsides installation came two days after Seaway installed the 2800-tonne KU-8 topsides. On 21 January the 3130-tonne Ayatsi-D topsides was installed, while 3 December saw the installation of the 1800-tonne Kab-C topsides.

Seaway also installed the 1430-tonned Kuil-B jacket on 29 December.

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Premier postpones Vette plan http://www.upstreamonline.com/live/1390164/premier-postpones-vette-plan Submission of PDO pushed back to push down costs on former Bream scheme off Norway Steve.Marshall@upstreamonline.com (Steve Marshall) http://www.upstreamonline.com/live/1390164/premier-postpones-vette-plan Thu, 29 Jan 2015 13:49:54 +0000 live Chief executive Tony Durrant said in a recent statement the UK operator would submit the PDO to the Norwegian authorities by the end of January but a spokesperson confirmed to Upstream this date has now been pushed back, probably by another 12 months.

“We have agreed with the Petroleum & Energy Ministry to delay submission of the plan in order to capture cost advantages in the supply chain,” the spokesperson said.

“Obviously, it does not make sense to commit to a project when costs are still falling and this postponement will enable us to go back to the supply base at a later date, so that we do not lock in costs now.

"We want to sanction the project once the cost base has been brought into line with the oil price."

The spokesperson confirmed Premier now aims to make a final investment decision by year-end on Vette after engaging with contractors to bring costs down on the $1.5 billion project as falling oil prices result in less market activity, triggering increased price competition among suppliers.

Low oil prices – currently languishing below $50 a barrel - have also led to more challenging economics for the project, which is estimated by Oslo-based Rystad Energy to have a break-even price of $75 to $80 per barrel.

Durrant was recently quoted by the Financial Times as saying the company “would not sanction either Sea Lion [off the Falklands] or Bream at oil prices below $50 a barrel”.

Upstream reported last week the London-listed operator had decided to delay an investment decision to the third quarter, with contract awards now expected to be made by year-end.

Premier is looking to develop the field using a Sevan Marine-designed cylindrical floating production, storage and offloading vessel, with front-end engineering and design work already completed on the hull and topsides by Norwegian players Sevan and Aibel, respectively.

Aibel is said by sources to be in contention for the coveted fabrication award along with US-based McDermott International, and Singapore pair Jurong Shipyard and Keppel Offshore & Marine.

Sevan’s majority owner Teekay Petrojarl is understood to be in talks with Premier to provide a leased FPSO with 650,000 barrels of storage capacity, with Sevan likely to supply its technology under a licensing agreement.

Sources said Teekay is likely to prefer a single EPC player – either an engineering contractor or a yard – to take overall responsibility for the hull and topsides.

Teekay is believed to have scoped out yard prices, with China’s Cosco and Dalian understood to be among possible candidates for hull construction work.

Premier intends to develop Vette in its operated production licence 407 with an FPSO hooked up to subsea production and water injection wells, with the satellite Mackerel discovery to be tapped as a subsea tieback.

It aims to exploit proven and probable reserves of 54 million barrels of oil equivalent at Vette, with a further 20 million boe located in the Mackerel find and additional Herring prospect in nearby PL406.

Premier operates both licences with a 50% stake, with partners Kufpec and Tullow Oil on 30% and 20% respectively.

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