Oil majors’ West of Shetland assets to overtake North Sea as major producing basin in UK

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.

Clair Ridge platforms; Source: BP

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.”


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Shell to sell Egyptian onshore assets to focus on offshore

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. 

Illustration. Source: Max Pixel

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.”

Offshore Energy Today Staff


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SapuraOMV, Shell to sell offshore gas from SK408 block to Petronas

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. 

From Left to Right: • Encik Shahriman Johan Noor, Head – Legal, Malaysia Petroleum Management, PETRONAS (witness) • Mr. Simon Durkin, Vice President, Shell Malaysia Upstream (signatory) • Encik Mohamed Firouz Asnan, Senior Vice President, Malaysia Petroleum Management, PETRONAS (signatory) • Tan Sri Dato’ Seri Shahril Shamsuddin, Chairman, SapuraOMV (signatory) • Tuan Haji Bacho Pilong, Chief Executive Officer, PETRONAS Carigali (signatory)

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.

Offshore Energy Today Staff


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Oil majors in further push for carbon capture and storage solutions

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.


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Report: Two workers killed aboard Shell’s Auger platform in Gulf of Mexico

Two offshore workers have reportedly been killed in an incident aboard Shell’s Auger platform in the U.S. Gulf of Mexico.

For Illustration only; Shell's Auger platform - Image source: Shell
For Illustration only; Shell’s Auger platform – Image source: Shell

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.

More to follow…


Offshore Energy Today Staff

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Shell’s Brent Bravo topside arrives at UK port to be scrapped

Shell’s Brent Bravo platform topside has arrived at Able UK’s Able Seaton Port following its removal from the UK North Sea with the giant Pioneering Spirit vessel earlier this week. 

Brent Bravo; Source: Able UK

The Allseas-owned Pioneering Spirit vessel removed the 25,000 t Brent Bravo topsides last Tuesday. Watch the video of the removal operation here.

The operation took approximately four hours, from positioning the vessel around the platform to the moment of the lift. The actual “fast lift” of the topsides took only nine seconds.

UK’s decommissioning expert, Able UK, announced the arrival of the topsides to its port on Thursday, June 20 in preparation for its dismantling and recycling.

The Brent Bravo, which stands 410ft tall and 230ft wide, is the second platform from the Shell Brent field to be decommissioned at Able Seaton Port—the first, the Brent Delta, arrived in May 2017. Both were transported from north-east of Shetland by the Pioneering Spirit, one of the largest vessels ever built.

After arriving off the North East coast, the Brent Bravo was transferred to a 200-meter long barge, the Iron Lady, for the final part of the journey to Able Seaton Port where it is currently moored on Quay 6.

Next week, the final manoeuvre will see the platform ‘skidded’ on to the multi-million-pound demolition pad which forms part of what is probably the strongest quay in Europe, Able UK said.

Peter Stephenson, founder and Executive Chairman of Able UK, said: “As with the Brent Delta, this operation has involved one of the heaviest lifts ever undertaken and is a success for everyone involved, especially our partners Shell and Allseas.

“Once again the Brent Bravo will provide a spectacular addition to the Teesside skyline for some time as we undertake the decommissioning program with the aim of recycling over 98 percent of the structure.”

Able invested £28 million in constructing this new facility to meet the requirements for handling the Brent platforms.

During 2020, Able Seaton Port will welcome a number of other new large-scale projects including the next element of the Shell project – the Brent Alpha – as well a series of platforms and structures from the ExxonMobil operated Sable Offshore Energy Project (SOEP) off the coast of Nova Scotia, Canada.

Furthermore, from September 2020, Able Seaton Port will be the installation base for the 90 turbines that will comprise the Triton Knoll offshore wind farm.

Stephenson commented: “We have invested very significantly over the last few years and we are now seeing the results. There is a certain synergy in being engaged with the end of life process for parts of the oil and gas sector whilst also being heavily involved with the development of offshore wind farms as the new focus for power generation..”


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Rystad: Oil production in U.S. Gulf of Mexico set for record year

Oil production in the U.S. Gulf of Mexico is set to make new records in the imminent future, according to Norwegian oil and gas intelligence firm Rystad Energy.

Shell’s Appomattox platform. Image source: Crowley

Rystad said on Friday that GoM oil production was a mere 1.28 million bpd in 2013, whereas in 2018 production averaged a record high of 1.79 million bpd.

The intelligence company forecasted that 2019 production would average 1.95 million bpd, with some months potentially touching the 2 million bpd ceiling.

Joachim Milling Gregersen, analyst on Rystad Energy’s upstream team, said: “With earlier than planned production, Appomattox will be a key growth contributor to help push U.S. Gulf of Mexico oil production toward a new record high before year-end.”



To remind, Shell started production from its Appomattox floating production platform in the U.S. Gulf of Mexico earlier this month.

Production from the platform kicked off several months ahead of its expected startup in the third quarter of 2019.

Appomattox, Shell’s largest floating production system in the Gulf of Mexico, will host the adjacent Appomattox and Vicksburg hydrocarbon accumulations.

According to Rystad, plateau production at the development will be around 140,000 boe per day while Shell claims that the expected production will peak at 175,000 boe per day.

Shell is the operator of the project with a 79 percent stake, while China’s CNOOC owns 21 percent. Oil produced from the Appomattox will be moved by the Mattox Pipeline to the Proteus pipeline system and then onshore.

“The torch has been carried by large deepwater fields, of which Appomattox is the latest contribution,” Gregersen added.


Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email. Offshore Energy Today, established in 2010, is read by more than 10.000 industry professionals daily.

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New pipeline transports first oil from Shell’s Appomattox

AppomattoxAppomattox; Source: Shell

Shell Midstream Partners has informed that the systems owned by Proteus Oil Pipeline Company and Endymion Oil Pipeline Company increased volumes of crude oil from the startup of the Shell-operated Appomattox floating production system in the Gulf of Mexico via the newly commissioned Mattox Pipeline.

The Mattox Pipeline is majority owned and operated by Shell Pipeline Company (SPLC). Shell Midstream Partners owns a 10% interest in each of Proteus and Endymion.

“The Gulf of Mexico remains an important part of the US production story – as evidenced by these new volumes,” said Kevin Nichols, CEO, Shell Midstream Partners.

“Over the last three years, most of the 19 sanctioned projects across the Gulf of Mexico flow through our systems, giving us the ideal position to capture growth. Our offshore corridor strategy is working – and we are pleased with the resilience and growth that the Gulf of Mexico provides.”

Appomattox, which currently has an expected production of 175,000 boe/d, achieved first oil on May 23, 2019. According to Shell, Appomattox has realized cost reductions of more than 40% since taking the final investment decision in 2015. Shell is the operator of the project with a 79 percent stake, while China’s CNOOC owns 21 percent.

The Mattox Pipeline is transporting oil from Appomattox into the Proteus and Endymion systems, which ultimately connect to onshore markets via the Clovelly, LA storage hub.


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Offshore Energy Today, established in 2010, is read by over 10,000 industry professionals daily. We had nearly 9 million page views in 2018, with 2.4 million new users. This makes us one of the world’s most attractive online platforms in the space of offshore oil and gas and allows our partners to get maximum exposure for their online campaigns. 

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OKEA takes operatorship of license near Draugen field

Norwegian oil and gas company OKEA has taken over Shell’s 50% working interest and operatorship of production license (PL) 958 in the Norwegian Sea.

Draugen; Source: Wiki Commons – Author: Sven Mandel – under the CC BY-SA 4.0 license

OKEA said on Thursday that the acreage was in the exploration phase and that data coverage was limited.

The license is located on the Trøndelag Platform, ten kilometers east of the Draugen Field, where OKEA is the operator and east of PL 1001 where OKEA is a partner.

The other license partners are Neptune and Petoro which hold 30 and 20 percent stakes respectively. The same companies are OKEA’s partners on the Draugen field.

Andrew McCann, SVP of subsurface in OKEA, said: “This position in PL958 strengthens our presence in the Draugen Area. We believe that the large license can contain a continuation of the Draugen geological trend and that there are interesting opportunities which could significantly expand the resource base for Draugen in the future.”

To remind, Shell’s Norwegian entity, A/S Norske Shell, reached an agreement with OKEA to sell its entire 44.56% interest in the Draugen field and a 12% interest in Gjøa for NOK 4.5 billion ($525M) in June last year.

OKEA completed the acquisition and took over operatorship of Draugen in late November 2018.

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Dutch prosecutor preparing criminal charges against Shell over Nigerian license deal

Shell Logo / Image source: Shell/Flickr – Shared under CC BY-NC-ND 2.0 license

Dutch Public Prosecutor’s Office is preparing to bring criminal charges against Anglo-Dutch oil major Shell over the company’s involvement in oil block OPL 245 located offshore Nigeria.

The case is related to Shell and Eni’s acquisition of an offshore block in Nigeria in 2011.

Shell said on Friday it had been informed by the Dutch Public Prosecutor’s Office that they were nearing the conclusion of their investigation and were preparing to prosecute Royal Dutch Shell plc for criminal charges directly or indirectly related to the 2011 settlement of disputes over Oil Prospecting License 245 (OPL 245) in Nigeria.

“As appropriate, we will provide updates as this matter progresses,” Shell added in the brief statement on Friday.

Shell is already facing charges for bribery at a Milan court related to the same deal together with Italian oil major Eni.

Eni and Shell jointly bought the block in question in 2011 for more than one billion U.S. dollars. In 2014, the Milan Prosecutor’s office launched an investigation to see where the payment went and whether Eni and Shell knew, as it has been alleged, that the money didn’t end up in the state coffers but was passed on further to the former oil minister Dan Etete.

The OPL 245 license had been owned by Malabu oil company, allegedly secretly owned by Etete. The allegations are that the Nigerian government gave the license to Shell and Eni for more than a billion dollars, and then passed the cash further to Malabu, that is, Etete.

Both Eni and Shell have been denying any wrongdoing since the start of the investigation.

Offshore Energy Today Staff

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