Using their decades of experience in the oil and gas sector, three majors are moving forward with a project which will enable the transport of carbon dioxide captured from industrial sites in Norway and its storage in a reservoir below the seabed in the North Sea.
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Danish offshore drilling contractor Maersk Drilling has received notices of early termination for convenience of two drilling rig contracts.
The first one was from Shell, terminating the contract for the semi-submersible Maersk Developer with immediate effect.
The original end of contract was expected to be in August 2020.
The second one was from Aker BP, terminating the contract for the jack-up rig Maersk Reacher, which was hired for accommodation services on the Valhall field, with effect from end-April 2020.
The original end of contract was expected to be in October 2020.
The low oil price and the coronavirus pandemic have ravaged global energy markets over the last two months and Maersk Drilling is not the only driller to suffer the consequences of current market situation.
Borr Drilling has also seen some of its drilling contracts terminated and Noble Corporation has seen its contracts shortened, rigs stacked and put on standby, and day rates slashed.
Energy intelligence firm Rystad Energy has recently estimated that drillers will see up to 10% of their contract volumes cancelled in 2020 and 2021, representing a combined loss of revenue of about $3 billion.
Offshore accommodation specialist Prosafe and oil major Shell have agreed on a contract extension for one of Prosafe’s units for operations in the UK North Sea.
Prosafe said on Monday that it had agreed with Shell to amend the original June 1, 2020, start date of the Safe Zephyrus at the Shearwater platform to May 2, 2020, by extending the contract by 30 days.
Safe Zephyrus completed its contract for BP at Clair Ridge in the West of Shetland on October 15, 2019, and it has been in lay-up ever since.
The flotel was supposed to mobilize for the 80-day Shell Shearwater contract in 2Q 2020. However, Shell has decided to exercise its 30-day option in the contract and the timing for the rig’s contract start date has now changed.
Safe Zephyrus is a DP3 semi-submersible accommodation rig. With beds for 450 persons, in single man cabins, the vessel is designed for worldwide operations in the harshest offshore environments.
Safe Zephyrus, a sister ship to the Safe Boreas, was built at Jurong Shipyard, Singapore, to the GVA 3000E design and is equipped with a DP3 system and 12-point wire mooring arrangement providing maximum cost efficiency and flexibility. It was delivered in 2016.
The unit was granted the Acknowledgement of Compliance (AoC) from the Norwegian Petroleum Safety Authority (PSA) on July 19, 2016.
The activists scaled the rig with an intention to stay up there for as long as possible to stop the rig leaving the harbor, and to halt the rig’s operations in the North Sea.
However, the environmental group said later on Monday that the activists had left the rig due to deteriorating weather conditions.
These activists had one chance, and they took it. In the end, it was too dangerous to carry on. Others don’t get to choose what danger they are in. The climate crisis, driven by fossil fuel emissions, is putting millions, potentially billions in grave danger.
According to BBC, the three female protesters that climbed the rig on Monday came down five hours later. The news agency also said that a total of seven people had been arrested.
BBC also reported that seven people had been charged in connection with an “occupation” at a drilling rig at the Port of Dundee. Three women, aged 25, 27, and 35, and four men aged 21, 23, 24, and 31 are expected to appear at Dundee Sheriff Court later, BBC said.
Despite the quick closure of the rig protest and the subsequent arrests, Extinction Rebellion said that this was just the beginning.
This is just the beginning of Rig Rebellion 2.0, Extinction Rebellion Scotland’s series of actions focussing on the fossil fuel industry and its driving role in the climate crisis. Actions are planned across Scotland for the next fortnight.
After 25 years of operations, Shell, Reliance, and ONGC JV will transfer the Panna-Mukta fields, located offshore India, back to ONGC.
Shell said on Thursday that, after 25 years of operating the Panna-Mukta oil and gas fields, the Panna-Mukta and Tapti (PMT) Joint Venture partners would be handing over the Panna-Mukta oil and gas fields back to the Government of India’s nominee i.e. ONGC on December 21, 2019.
The PMT JV constituents include Oil & Natural Gas Corporation Limited (ONGC), Reliance Industries Limited (RIL), and BG Exploration & Production India Ltd (BGEPIL), each holding 40%, 30%, and 30% participating interest, respectively.
The Production Sharing Contracts (PSC) for the Panna-Mukta and Tapti fields, which were executed by the PMT JV with the Government of India in 1994, will expire on December 21, 2019.
The Tapti fields had ceased production earlier in 2016 and the Tapti process platform facilities were handed over to ONGC in 2016. Decommissioning and site restoration of residual Tapti facilities, including five unmanned platforms and in-field pipelines, are currently being carried out by the PMT JV under India’s first offshore Decommissioning & Site Restoration project. The Tapti Decommissioning and other commercial activities would continue in BGEPIL even after Panna-Mukta handover.
The PMT fields were the first fields in India to be operated under a Joint Operatorship model. The Panna-Mukta fields, off the Mumbai coast, have produced 211 MMBBLs of Oil and 1.25 TCF of natural Gas since December 1994.
In 2019, the average monthly production from the fields was ~10,000 bbls/day of crude oil and 140 mmscf/day of natural gas.
Trivikram Arun, Managing Director, BGEPIL said: “The PMT JV is a great example of a successful partnership between India’s largest National Oil Company (ONGC), India’s largest private company (Reliance) and an International Oil Company (Shell). Shell is proud to have been part of this journey and privileged to have partnered with Reliance, ONGC and the Government of India. Our teams have worked relentlessly to ensure a safe handover of the producing fields from the PMT JV to ONGC at the end of the term.”
B Ganguly, President – E&P, Reliance Industries said: “At their peak, Panna-Mukta have contributed to nearly 6% of India’s Oil production and almost 7% of India’s Gas production in the year 2007-08. Reliance has been a part of this journey and contributed, by providing energy, to the growth and development of India’s oil and gas sector.”
Over the last four years oil and gas production in the West of Shetlands has risen and with that, a growing relevance for the biggest players still active in the UK continental shelf (UKCS), says GlobalData, a data and analytics company.
The company’s latest research reveals that the West of Shetland (WoS) area retains the attention of major Exploration and Production (E&P) players in the region; however infrastructure restraints could hinder future growth potential in the basin.
Despite the US-based E&P majors, such as Chevron and ConocoPhillips largely divesting out of the UK’s E&P sector of late, their European peers have not followed suit, according to GlobalData.
Of the highly successful 30th UK Offshore Licensing Round held in 2017, approximately 75% of the licensed WoS blocks had European major participation. Moreover, European majors have stakes in 80% of the planned and announced projects in the area compared to approximately 40% in the North Sea.
Daniel Rogers, Upstream Oil and Gas Analyst at GlobalData, commented: “In 2018, Royal Dutch Shell (Shell) and BP Plc (BP)’s hydrocarbon production combined accounted for over half of the WoS total volume. Over recent years both companies have seen North Sea production volumes lose dominance in relation to their UK portfolios. As a result, the WoS is set to overtake the North Sea as Shell’s major producing basin in the UK by 2020, whereas this occurred for BP in 2018”.
The majority of upcoming field developments in the area are oil focused as oil processing capacity at the Sullom Voe terminal is currently around half utilized with expected excess capacity available over the near term. However, the Shetland Gas Plant (SGP), where the areas gas is collected, processed and exported, is currently running at less than 25% spare capacity and newly discovered gas volumes in the basin could push the infrastructure to its limits.
Rogers continued: “Total’s recently discovered Glendronach gas-condensate field is expected to add over 200 million cubic feet per day (mmcfd) of gas supply to the SGP at its peak and could commence production as early as 2021. This, in addition to gas volumes coming from the Cambo and Rosebank oil field developments could further strain the existing infrastructure.
“Operators looking to develop new gas fields in the WoS through the mid-2020s could be challenged by the areas capacity restraints. The investments required for facility expansions may impact project returns and force operators away from marginal gas developments.”
Oil major Shell has revealed plans to market its current onshore upstream assets in Egypt’s Western Desert to fully concentrate on growing its Egyptian offshore exploration and integrated gas business. According to Wood Mackenzie, this plan is Shell’s attempt to high-grade its portfolio.
Shell revealed its plans for Egyptian business on Sunday, October 20, 2019.
Khaled Kacem, Shell Egypt Country Chair, said: “Shell companies are progressing with new offshore activities, including our West Delta Deep Marine (WDDM) Phase 9B project, which involves eight new development wells, and exploration in WDDM, for which a 2nd offshore rig has been recently mobilized, that will be followed up with exploration in Rosetta as well as the recently awarded Blocks 4 and 6.”
“We are looking for a capable buyer that will bring new investment and growth into the Western Desert and build on our successful partnership with the Egyptian General Petroleum Corporation. Any sale is contingent on finding an appropriate buyer, commercial negotiations and required approvals. We anticipate the start of active engagement with potential buyers in Q4 2019. During the divestment process we remain committed to ensure continued safe and reliable operations, and will keep our stakeholders regularly informed.”
Commenting after Shell announced it is putting its Western Desert assets up for sale, Toushar Chakrabarty, a research analyst on Wood Mackenzie’s North Africa upstream team, said: “We value the assets for sale at $775 million (NVP 10, January 2020), mainly amongst the Badr El Din and North Alam El Shawish developments.
“Shell’s portfolio in the Western Desert is centred around five key areas, with an average production of about 110,000 barrels of oil equivalent per day in 2019. A drilling campaign is underway, but is only expected to mitigate decline on mature fields.
“However, the assets retain upside and have good access to infrastructure, which could interest companies with brownfield expertise.”
He added: “Shell is trying to high-grade its portfolio by focusing on exploration opportunities, and its flagship offshore assets.”
Malaysia’s SapuraOMV, and Shell’s Malaysian subsidiary have reached agreements with Petronas for the sale of gas to be produced from the SK408 development offshore Malaysia.
SapuraOMV, formed through a recent deal between Malaysia’s Sapura Upstream and Austria’s OMV, said on Friday it had, together with partners PETRONAS Carigali Sdn Bhd and Sarawak Shell Berhad have signed the full-term Upstream Gas Sales Agreement (UGSA) with Petroliam Nasional Berhad (PETRONAS) for the Gorek, Larak and Bakong fields under the first development phase of the SK408 Production Sharing Contract (PSC).
Under the agreement signed, gas produced from the Gorek, Larak and Bakong fields will be supplied to the PETRONAS Liquefied Natural Gas (LNG) Complex in Bintulu.
“The UGSA further strengthens SapuraOMV’s position as a significant supplier of natural gas in Malaysia and is another significant step in unlocking the value of our gas assets,” said SapuraOMV Chairman Shahril Shamsuddin.
According to SapuraOMV, the SK408 development project is expected to deliver first gas in the fourth quarter of 2019. The timeline to first gas has been shortened, as the previous reports suggested the project would start producing in 2020.
Commenting further on Friday, the company’s chairman said: “The added volume from Gorek, Larak and Bakong is part of our growth strategy to realize our vision of becoming one of the largest independent oil and gas companies in the region.”
The Gorek, Larak, and Bakong fields are part of the discoveries made by SapuraOMV during its 2014 drilling campaign and are being developed as three separate wellhead platforms for onward sales to the PETRONAS LNG Complex.
SapuraOMV is the operator for the Larak and Bakong fields while Sarawak Shell Berhad is the operator for the Gorek field. The SK408 gas fields will be SapuraOMV’s second major upstream gas development project in East Malaysia. The company also holds participating interest in four production blocks in Peninsular Malaysia.
SapuraOMV is currently producing 10 kboe/d with an increase to 30 kboe/d in 2020. The company’s ambition is to reach a production of 100 kboe/d by Exploration and M&A within the next six to seven years.
Equinor has, on behalf of the partners of the Northern Lights project, signed memoranda of understanding with seven European companies to develop value chains in carbon capture and storage.
Equinor, in cooperation with its partners Shell and Total, is studying the possibilities for developing a CO₂ storage on the Norwegian continental shelf (NCS), the Norwegian company said on Thursday.
The Northern Lights project includes transport, reception, and permanent storage of CO₂ in a reservoir in the northern part of the North Sea. The storage project is part of the Norwegian State’s demonstration project “Full-scale CO₂ handling chain in Norway.”
Memoranda of understanding have been signed with Air Liquide, Arcelor Mittal, Ervia, Fortum Oyj, HeidelbergCement AG, Preem, and Stockholm Exergi. According to the agreements, the parties will cooperate on possible CO₂ handling at relevant third-party’s premises and on transport to the Northern Lights project.
The memoranda of understanding imply that the parties will evaluate solutions for CO₂ deliveries and transport; develop a timeline for possible final investment decision and start of operations, and cooperate on the CCS dialogue with national authorities and the EU.
“Carbon capture and storage will be vital to reach the global climate goals of the Paris Agreement. Sustainable carbon capture and storage projects can only be developed in cooperation between governments and companies. We are therefore very pleased that the Northern Lights partners and leading European companies are taking the first steps to realize a European CO₂ transport and storage system,” said Eldar Sætre, president and CEO of Equinor.
Equinor said that the final binding commercial agreements will depend on positive investment decisions for the Northern Lights project, the Norwegian State’s full-scale carbon capture and storage project and for third-party projects.
The partners are currently reducing costs and further developing the Northern Lights project aiming for an investment decision in 2020.
“We are also cooperating with the authorities to establish a commercial framework enabling us to pursue the project,” said Sverre Overå, project director for the Northern Lights project.
More than 150 people from Equinor, Total, and Shell are currently involved in the Northern Lights project. At the end of 2019, the partnership plans to drill a confirmation well for CO₂ storage in the Johansen formation covered by the Aurora license (EL001) to study the reservoir’s suitability and capacity for CO₂ storage. Earlier this year the authorities decided to help fund the work on this well.
Two offshore workers have reportedly been killed in an incident aboard Shell’s Auger platform in the U.S. Gulf of Mexico.
According to Reuters, the incident happened on Sunday morning during a test related to “a lifeboat launch and retrieval capabilities” at the Auger deepwater platform. One other person sustained a non-life-threatening injury.
Offshore Energy Today has reached out to Shell and the Bureau of Safety and Environmental Enforcement, seeking confirmation of the report, and more information.
The BSEE referred us the U.S. Coast Guard as the lead federal agency. The U.S. Coast Guard has yet to respond to Offshore Energy Today’s request for comment.
We will update the article once we have more information.
As for the Auger platform, in 1994, it was the world’s first tension leg platform, operating in the US Gulf of Mexico, moored to the sea floor 830 meters (2,720 feet) below. The platform’s life was extended when it in 2014 began producing energy from a nearby Cardamom field.