From the North Sea to South America, oil and gas exploration companies are having success with new wells. Which is also good news for their associated suppliers. Eugene McCarthy reports.
Lundin Petroleum has announced that following the drilling of appraisal well 16/2-10 located in the Norwegian North Sea the operator of PL265, Statoil ASA, has made a material increase to the resource estimates for the Aldous Major South discovery. The Aldous Major South and Avaldsnes discoveries located in PL501 are one large connected discovery.
Following analysis of the data from the appraisal well, the gross contingent recoverable resources of the Aldous Major South discovery located in PL265 have increased from a range of 400-800million barrels of oil to 900-1.5billion barrels of oil. The gross oil column in the appraisal well is approximately 60metres with high net to gross and with excellent reservoir characteristics.
Lundin has previously announced a range of gross recoverable contingent resources for the Avladsnes discovery located in PL501 of between 800 and 1800million barrels of oil. The Avaldsnes/Aldous Major South discovery is therefore now estimated to contain gross recoverable contingent resources of 1.7-3.3billion barrels which is one of the largest discoveries on the Norwegian continental shelf.
Lundin is a partner with a 10 per cent interest in PL265. Statoil ASA is the operator with 40 per cent, Petoro has 30 per cent and Det Norske Oljeselskap has 20 per cent interest. Lundin is the operator of PL501 with a 40 per cent interest. Partners are Statoil Petroleum with a 40 per cent interest and Maersk Oil Norway with 20 per cent interest.
Lundin has also announced through its wholly owned subsidiary Lundin Norway the approval from the Norwegian Ministry of Petroleum and Energy of the plan for development and operation (PDO) for the Brynhild field in PL148, located in the Norwegian North Sea. First production from the Brynhild field is expected in late 2013.
The Brynhild field is located adjacent to the Norway-UK border, 210km from the Norwegian mainland. The development of Brynhild will be a three well subsea tie-back to the Pierce FPSO located in the UK, 38km south of the field.[Page Break]
The estimated gross reserves are approximately 20million barrels of oil equivalents (MMboe) with net peak production of approximately 6000barrels of oil equivalents per day (boepd). The hydrocarbons will be processed at the Pierce FPSO before being offloaded for further transportation.
Lundin has a 50 per cent working interest in the Brynhild field and is operator. Partners are Talisman with 30 per cent and Noreco with 20 per cent.
In a related development, Aker Solutions has signed a contract with Lundin for the engineering, procurement and construction of a subsea production system for the Brynhild project. The contract value is approximately NOK 700million (£77.6million).
The scope of work includes one template-manifold structure, one riser base, three subsea trees, three wellhead systems, control system, a tie-in system, 38km of umbilicals, HP riser and rental tooling. The contract contains several options for additional equipment, including other field developments.
"We are very pleased to be awarded this first subsea production system contract with Lundin. This contract allows us to utilise the total strength of our subsea offering and work closely with this important customer," says Alan Brunnen, EVP subsea within Aker Solutions.
Management, engineering and procurement of the subsea production system will be primarily performed at Aker Solutions' hq in Oslo, Norway. Fabrication of the subsea trees will be completed at Aker Solutions' manufacturing centre in Tranby, Norway, and production of the template-manifolds will be carried out at the company's fabrication yard in Egersund, Norway.
The umbilical will be manufactured in Moss, Norway and the control and wellhead systems will be delivered out of Aberdeen, UK. Installation and commissioning will be handled by Aker Solution's service base in Aagotnes, Norway. Final deliveries will be made in Q2 2013.[Page Break]
Discovery in Brazil
BP has announced that a notification of discovery for the Itaipu-2 pre-salt appraisal well, located in block BM-C-32 in the deepwater sector of the Campos Basin, has been lodged with the Brazilian National Petroleum Agency (ANP).
The well, approximately 130km offshore Brazil, was drilled to a total depth of 4877metres in 1420metres water depth. Itaipu-2 delineates the discovery made in 2009-10 in Itaipu-1, 7km to the northwest.
Itaipu-2 encountered strong shows on drilling including elevated gas, gas wetness and fluorescence within the cuttings. Well logging indicates a fluid contact within the target Upper Sag reservoir comprising a 19 metre gross petroleum-bearing interval overlying good quality porous water-bearing carbonates.
Neil Piggott, BP vice president for exploration Brazil, said: "Further logging operations are on-going and will need to be integrated into the overall interpretation. The next piece of critical appraisal work at Itaipu will focus on retrieving a high quality fluid sample, plus evaluating the producibility of the reservoir."
BP is the operator of BM-C-32 with a 40 per cent equity. Other equity holders are Anadarko Petroleum Corporation (33.3 per cent) and Maersk Energia (26.7 per cent).
BP has also announced that it has reached agreement with Anadarko Petroleum Company to settle all claims between the companies related to the Deepwater Horizon accident. Anadarko - which had a 25 per cent interest in the MC252 (Macondo) prospect - and BP have concluded that entering into a settlement is in the best interest of the parties to resolve pending disputes. The agreement is not an admission of liability by any party regarding the accident (Fig.1).
Under the settlement agreement, Anadarko will pay BP US$4 billion in a single cash payment. BP will apply the payment to the US$20 billion trust it established that is available to meet individual, business and government claims, as well as the cost of the natural resource damages. Anadarko will also transfer all of its 25 per cent interest in the MC252 lease to BP.
In addition, Anadarko will no longer pursue its allegations of gross negligence with respect to BP. Anadarko and BP have agreed to work cooperatively with respect to indemnified claims, and Anadarko has the opportunity for a 12.5 per cent participation in future recoveries from third parties or insurance proceeds cumulatively exceeding US$1.5 billion, up to a total cap of US$1 billion.
Teekay Corporation has entered into an agreement with Sevan Marine and holders of more than two-thirds of each of Sevan's bond loans for Teekay to acquire three floating production storage and offloading (FPSO) units from Sevan and make an equity investment in a recapitalised Sevan.
Under the terms of the agreement, Teekay will: acquire from Sevan three FPSO units, the Sevan Piranema (Piranema), the Sevan Hummingbird (Hummingbird), and Sevan Voyageur (Voyageur), along with their existing charter contracts, for an aggregate purchase price of US$668 million plus the remaining cost required to complete the upgrade of the Voyageur, which is estimated to be US$110-130million; invest US$25 million in a new issuance of Sevan equity, which is expected to provide Teekay with a 40 per cent ownership interest in a recapitalised Sevan; and enter into a cooperation agreement whereby Teekay will have the right to acquire future FPSO projects developed by Sevan.
