Green light to Lundin for Barents Sea wildcat

The Norwegian Petroleum Directorate has granted Lundin Norway a drilling permit for a well in the Barents Sea offshore Norway. 

West Bollsta drilling rig / Image source: Northern Drilling

The well 7221/4-1 will be drilled from Northern Drilling’s West Bollsta semi-submersible drilling rig.

The drilling program for well 7221/4-1 relates to the drilling of a wildcat well in production license 609.

Lundin Norway is the operator with an ownership interest of 40 percent. Other licensees are Idemitsu Petroleum Norge with 30 percent and Wintershall Dea Norge with 30 percent interest.

The area in this license consists of parts of blocks 7220/11, 7220/12, 7220/9, 7221/4 and 7220/6. The well will be drilled 12 kilometers east of the 7220/6-2 discovery.

Production license 609 was awarded on May 13, 2011, in the 21st licensing round on the Norwegian shelf. This is the 13th well to be drilled in the license.

It is worth reminding that Lundin  in February 2019 awarded a ten-well contract to the West Bollsta rig.


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Westwood: More offshore EPC spending in 2020, prices remain a focus

Significant cost reductions have improved E&P cashflows and should drive increased offshore tendering activity in 2020 with pricing expected to remain competitive, according to market research provider Westwood Global Energy Group.

For illustration only. Author: SP Mac

Westwood said on Thursday that contractors would need to remain focussed on profitability and avoid being locked into low-margin purgatory.

The company identified that oil markets were off to a rocky start in 2020 over several unrelated circumstances, namely, heightened tensions in the Middle East, Australian bushfires, and the rise of the COVID-19 (Corona) virus in China.

For the offshore oil & gas sector, however, 2020 should be the second year of growth for an industry still reeling from the most severe downturn in its history.

Westwood Global expects $63 billion of contract awards for new offshore oil and gas production infrastructure in 2020 – a 49 percent increase over 2019 and the highest in seven years.

Floating production systems (FPS) spend is projected to reach $20 billion in 2020 after hitting $13.5 billion last year.

Latin America will dominate activity with major awards such as Mero 3, Itapu, and Sergipe underpinning $7 billion of spend. Africa will also feature with Woodside’s focus FPSO already awarded to MODEC in January and BP’s PAJ, and Shell’s much anticipated Bonga SW projects currently expected to be awarded late in the year. Other major awards anticipated are Western Gas’ Equus in Australia and LLOG’s Shenandoah in the USA.

Subsea tree contract awards underwhelmed in 2019 with only 212 tree orders – significantly lower than the 263 in 2018.


Offshore EPC spending 2013-20 by contract award; Source: Westwood

Much of this can be attributed to delay in award of certain key contracts such as Payara, Mamba, and Sangomar. With these major projects now expected this year – Sangomar was awarded to Subsea Integration Alliance in early January – 2020 looks like a bumper year with 321 of projected tree awards and $10 billion of subsea equipment order value for contractors.

Increasing orders are a welcome reprieve for a beleaguered offshore EPC supply chain still reeling from the worst downturn in its history. The recovery remains fragile, according to Westwood.

With most E&Ps budgets based on $60-$65/bbl, there is very little room for pricing growth, meaning contractors must continue to look within themselves to improve margins and profitability of their operations.

“If oil prices do continue to stick to their current $55-$65/bbl groove, contractors will more than ever need to clearly understand future tender activity and contracting dynamics. This will enable them to prioritize internal resources and stay right-sized and relevant. Overall, 2020 is expected to see a jump in offshore E&P infrastructure tenders, as E&Ps rush to lock in low costs,” the company stated.


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Israel limits natural gas production at Leviathan due to pipeline fault

The Government of Israel has limited the natural gas production from its largest natural gas field – Leviathan – to about 60 percent of its production capacity due to a pipeline fault.

Leviathan platform; Image source: Noble Energy

The operator of the Leviathan field, Noble Energy, was told that full production from the wells would not be possible until an investigation and necessary tests were completed.

Leviathan, located in the Mediterranean Sea, has four wells with a daily production capacity of about 300 million cubic feet each.

According to the Ministry, a fault was discovered in pipeline segments located close to one of the wells.

The fault is described as a vibration detected by an underwater robot. In order to minimize vibration, natural gas production from the wells has been reduced.

The ministry also stated that the fault did not cause any pollution of seawater, nor damage to the rig and engineering facilities.

The field, which started flowing natural gas in December 2019, was discovered in 2010 and contains about 500 billion cubic meters of natural gas.

It is worth reminding that Noble Energy started exporting gas from the Leviathan field to Egypt last month.


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i3 opens data room to entice farm-in partners for UK offshore assets

UK independent i3 Energy has opened its data room to potential partner companies looking to farm into its UK North Sea assets ahead of an upcoming appraisal drilling program.

Borgland Dolphin, rig which drilled the Liberator and Serenity prospects; Source: Dolphin Drilling CEO Bjørnar Iversen

i3 Energy said on Thursday that the farm-out would fund a 2020 appraisal drilling program on its assets in 13/23c Block in the UK North Sea.

According to the company, the data room is now open and companies are actively evaluating the opportunity.

i3’s 13/23c Block holds the Serenity and Liberator oil finds drilled during the 2019 drilling campaign.

The company successfully completed the drilling of the Serenity 13/23c-10 well in late October 2019. Preliminary well results were consistent with i3 Energy’s pre-drill estimate of 197 mmbbls STOIIP for the entire Serenity closure within the company’s license area.

After plugging and abandonment of the Serenity well, the Borgland Dolphin semi-submersible rig mobilized to the Liberator field to drill the final well in the 2019 drilling program. i3 Energy hit oil on the Liberator 13/23c-11 well in late November of the same year.

The company also said on Thursday it was planning to list its shares on a secondary exchange.

i3 added that it was doing it for administrative reasons related to the company’s Loan Notes issued May 31, 2019, and explained that this was not being done in preparation for imminent equity placing as indicated by market rumors.

Offshore Energy Today Staff


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Creditors vote in favor of Premier’s North Sea deal despite objections

UK oil and gas company Premier Oil has gained approval from the majority of its creditors for the schemes of arrangement required for the acquisition of North Sea assets from BP and Dana. The schemes still remain subject to a court approval.

BP’s Andrew platform included in the deal with Premier; Image source: BP

Premier Oil received a court approval to go ahead with a plan to have its creditors vote to extend debt maturities and buy UK North Sea fields from BP and Dana in mid-January and convened the creditor meeting for February 12 despite objections by its largest creditor ARCM.

Premier announced on Wednesday that the scheme meetings of the super senior scheme creditors and senior scheme creditors of Premier and Premier Oil UK Limited were held earlier today.

The scheme meetings were held for the purpose of proposing resolutions to the scheme creditors to approve the schemes of arrangement required to implement the announced UK North Sea acquisitions, related funding arrangements, and extension of Premier’s credit facilities.

According to Premier, the resolutions at each of the scheme meetings were approved by the relevant majorities of the scheme creditors in each class being a majority in number representing at least 75% in value of those present and voting (in person or by proxy).

Namely, of the super senior scheme creditors, 86.81% in value of those voting approved the schemes with 99.30% in value voting, and of the senior scheme creditors, 83.86% of those voting approved the schemes with 96.51% in value voting.

ARCM: Court hearing not a ‘rubber-stamping’ exercise

The schemes remain subject to approval by the Scottish Court of Session with the sanction hearing currently scheduled to start on March 17, 2020.

Earlier on Wednesday, before the vote, Premier’s largest creditor, which has been opposing the acquisition since the start, said it would vote against the scheme proposal “as it believes the proposed acquisitions expose the company and its stakeholders to significant incremental risks.”

ARCM, the creditor, also said that regardless of the result of the vote, the March court hearing “is not a ‘rubber-stamping’ exercise and the Court will consider issues beyond the outcome of the vote at the creditors’ meetings in determining whether or not to sanction the schemes.”

At the sanction hearing, creditors who object to the schemes may raise their opposition, ARCM said.

“Above all, the Court must be satisfied that the statutory requirements have been met, the vote is fairly representative of the creditors concerned, there is no ‘blot’ on the Schemes, and that the Schemes are fair,” ARCM stated.

ARCM reiterated it would vigorously oppose the schemes and would take all necessary steps to do so, including opposing the sanctioning of the schemes.

Offshore Energy Today Staff


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VIDEO: Aker BP explores use of robots in offshore oil & gas industry

Norwegian oil and gas operator Aker BP and software company Cognite have entered into a strategic initiative to explore how robotic systems can be used to make offshore operations safer, more efficient, and more sustainable.


Cognite and Aker BP will do several tests using robots and drones on the Aker BP-operated Skarv installation in the Norwegian Sea during 2020.

Aker BP said on Tuesday that the robotics systems would be tested to gauge their performance in autonomous inspection, high-quality data capture, and automatic report generation.

Tasks may include aerial and underwater inspections, responding to leaks, performing work that takes humans out of harm’s way, and providing onshore operators with telepresence on offshore installations.

Among the robots involved in the initiative is Spot, the quadruped robot developed by Boston Dynamics showcased at Aker BP’s Capital Markets Update on February 11.



Cognite and Aker BP tested Spot’s mobility in simulated oil and gas environments to ensure that it was able to access locations too difficult to access through traditional automation.

Karl Johnny Hersvik, CEO of Aker BP, said: “Digitalization will be one of the differentiators between the oil companies of the world, in order to be able to deliver low cost and low emissions.

“Our vision is to digitalize all our operations from cradle to grave in order to increase productivity, enhance quality, and improve the safety of our employees. Exploring the potential of robotics offshore underpin our digital journey.”

Michael Perry, VP of business development at Boston Dynamics, added: “We’re excited to see innovative partners such as Cognite validating Spot’s ability to reduce risk to humans and provide value for the energy industry.”

Cognite’s main software product, Cognite Data Fusion (CDF), will serve as the data infrastructure for the initiative.

CDF, a cloud-based industrial data operations and intelligence platform, integrates with existing IT and OT applications in the cloud, edge, and on-premise.


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OPEC calls for extending oil production cuts amid coronavirus impact

Organization of Petroleum Exporting Countries (OPEC) has recommended extending oil production cuts until the end of 2020 due to the impact of the coronavirus outbreak on global oil demand.

Illustration; Author: SP Mac

The Minister of Energy of Algeria and President of the OPEC Conference in 2020, Mohamed Arkab, has said that following an extraordinary meeting of the Joint Technical Committee (JTC) held in Vienna, from 4-6 Feburary 2020, the JTC has recommended extending voluntary production adjustments under the ‘Declaration of Cooperation’ process until the end of 2020 and to proceed with an additional adjustment until the end of the second quarter.

The JTC’s recommendations come in response to the fact that the coronavirus epidemic “has had a negative impact on oil demand and oil markets,” the President of the Conference said.

“The coronavirus epidemic is having a negative impact on economic activities, particularly on the transportation, tourism and industry sectors, particularly in China, and also increasingly in the Asian region and gradually in the world,” he added.

In response, the JTC has recommended extending the current production adjustments until the end of 2020.

The Committee also recommended a further adjustment in production until the end of the second quarter of 2020. The Minister stressed that he “supports the conclusions of the JTC.”

Arkab intends “to continue his consultations with OPEC Member Countries and non-OPEC countries participating in the ‘Declaration of Cooperation’ to seek consensual solutions, on the basis of the said proposal of the Technical Committee, to rapidly stabilize the oil market and deal with the current situation.”

The Minister stressed that “the situation is clear; it requires corrective action in the interest of all.”


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January’s worldwide offshore rig count drops sequentially, but up 2 rigs year-over-year

The worldwide offshore rig count in January 2020 has dropped by 14 units sequentially, but rose by two units year-over-year, according to a rig count report by Baker Hughes Company.

lllustration; Author: SP Mac (under permission from the photographer)

BHGE splits its rig counts into international and North America rig counts, which combined make the worldwide rig count.

The international rig count for January 2020 was 1,078, down 26 from the 1,104 counted in December 2019, and up 54 from the 1,024 counted in January 2019.

The international offshore rig count for January 2020 was 245, down 12 from the 257 counted in December 2019, and up 3 from the 242 counted in January 2019.

Looking at separate regions, the Asia Pacific region had the highest number of offshore rigs during January 2020, totaling 91 units. This is down three rigs from 94 in December 2019 and down ten from January 2019 count of 101 rigs.

In the Middle East region, there were 58 rigs during January 2020, down one from December 2019 and down five from January 2019.

Europe took third place in the offshore rig count for the first month for 2020 with 36 active units, down three units from December 2019 and up five rigs from January 2019. Europe was followed by Latin America with 34 and Africa with 26 active units.

The average U.S. rig count for January 2020 was 791, down 13 from the 804 counted in December 2019, and down 274 from the 1,065 counted in January 2019.

The average Canadian rig count for January 2020 was 204, up 69 from the 135 counted in December 2019, and up 28 from the 176 counted in January 2019.

The worldwide rig count for January 2020 was 2,073, up 30 from the 2,043 counted in December 2019, and down 192 from the 2,265 counted in January 2019.

The worldwide offshore rig count for January 2020 was 268, down 14 from 282 in December 2019, and up two rigs from 266 in January 2019.


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