Crude Oil Price by

Oil and Gas Energy News Update

Monday, May 30, 2011

ONGC, GAIL, Petronet May Invest INR155B in Russia Gas Project - Report

- ONGC, GAIL, Petronet May Invest INR155B in Russia Gas Project - Report

Monday, May 30, 2011
Dow Jones Newswires

Oil & Natural Gas Corp. (ONGC), GAIL and Petronet LNG may form a consortium to invest INR155 billion for a 15% stake in a liquefied natural gas project in Russia, the Hindustan Times reported Friday.

The consortium may buy a stake in the $30 billion LNG project of Russia's biggest independent natural gas producer, OAO Novatek (NVTK.RS), in the Yamal peninsula, the report said, citing an unidentified executive at one of the Indian companies.

A non-binding indicative bid is underway and the stake would be split between ONGC Videsh Ltd., GAIL and Petronet as 7.5%, 5% and 2.5%, respectively, the report said.

ONGC Videsh is the overseas investment arm of state-run explorer Oil & Natural Gas.

"We are not aware of any such bid," Petronet Chief Executive A.K. Balyan told Dow Jones Newswires. ONGC Chairman A.K. Hazarika declined to comment while GAIL's chairman wasn't immediately reachable for comment.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too

Kulczyk Oil Commences Drilling at Ukraine Well

- Kulczyk Oil Commences Drilling at Ukraine Well

Monday, May 30, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil announced that the O-14 well in the Olgovskoye Field commenced drilling.

O-14 Exploration Well

The O-14 well is located approximately 4 kilometers to the southeast of the O-8 well. The O-14 well will be drilled to a depth of 2,800 metres and is designed to test gas-bearing reservoirs in the Muscovian and Lower Bashkirian and to further develop the gas production capability of the Olgovskoye Field. The drilling of the O-14 well is expected to take approximately 35 days.

The well, which will target a previously untested fault block identified after interpretation of 2D seismic data by the KOV/KUB-Gas technical team, is on trend with the main Olgovskoye producing area. A successful well in this fault block has the potential to substantially increase the current reserves base of the Company in Ukraine. RPS, the Company's independent engineering consulting firm, has assigned Contingent Resources to the 70% effective interest of KOV of 3.2 billion cubic feet ("Bcf") (Low Estimate), 12.3 Bcf (Best Estimate) and 29.1 Bcf (High Estimate) of natural gas to the untested fault block.

The O-14 well is the third new well drilled in the Olgovskoye field since the Company acquired its interest in KUB-Gas in June 2010. It is part of a larger development programon the KUB-Gas assets through 2011 and 2012.

Oil & Gas Post

Promote Your Page Too

Crown Point Logs Potential Zone at Argentina Well

- Crown Point Logs Potential Zone at Argentina Well

Monday, May 30, 2011
Crown Point Ventures Ltd.

Crown Point has logged the EV-25 well bore and has cased it as a potential multiple zone oil well. This well is the second of a six well drilling program at El Valle in the San Jorge Basin in Argentina. Logs and samples taken while drilling indicate the presence of four principal zones in the Canadon Seco and Caleta Olivia formations with a combined potential pay thickness of 16.5 meters having an average porosity of 22%.

El Valle has three distinct productive sedimentary formations, which, in order of surface to deepest, are the Canadon Seco, Caleta Olivia and Mina el Carmen. Each of these formations may contain multiple discrete hydrocarbon bearing zones. Typically, the Canadon Seco formation produces medium grade oil (API gravity that ranges from 16-22 degrees), while the Caleta Olivia and Mina el Carmen produce light oil (API gravity of approx. 30 degrees).

The drilling rig is now moving to the location of the third well EV-29 - this well has principal geological targets located in the Caleta Olivia, with secondary targets in the Canadon Seco.

This drilling program is part of a larger 20-25 well program to be conducted at El Valle over the next 24 months, the Company plans to drill 2-5 wells 100% interest wells on the Canadon Ramirez exploitation concession in the Province of Chubut over the next 12 months and one 50% interest well at Laguna de Piedra in the first quarter of 2012. At Cerro Los Leones we anticipate receiving the required environmental permits in the near term and expect to commence the shooting of the 3-D and 2-D seismic programs shortly after receiving the environmental permit.

Oil & Gas Post

Promote Your Page Too

Canacol to Farm-In to Putumayo Basin

- Canacol to Farm-In to Putumayo Basin

Monday, May 30, 2011
Canacol Energy Ltd.

Canacol has entered into a binding term sheet, subject to the finalization of definitive Farm-in and Joint Operating Agreements, with C&C Energia Ltd. for the farm-in to a portion of the Operators working interest in the Andaquies and Coati Exploration and Production contracts located in the Putumayo basin in Colombia. The Coati and Andaquies E&P contracts are royalty contracts governed under the terms of the Agencia Nacional de Hidrocarboros. C&C Energia Ltd. will continue to function as the Operator of both blocks.

Charle Gamba, President and CEO of Canacol, commented, "We are pleased to be partnering with C&C Energia on these two contracts, which add three light oil exploration wells to our four well exploration drilling program in Colombia this year."

Upon the Corporation meeting its obligation to pay 72% of the cost associated with acquiring seismic and drilling one exploration well it will earn 36% of the Operators 90% working interest in the Andaquies E&P contract. Upon the Corporation meeting its obligation to pay 80% of the cost associated with acquiring seismic and drilling one exploration well it will earn 40% of the Operators 100% working interest in the Coati contract.

The Operator plans to drill three exploration wells targeting light oil prospects in the second half of 2011, two on the Andaquies contract and one on the Coati contract, pending the receipt of all necessary permits and approvals.

Oil & Gas Post

Promote Your Page Too

Husky Mulls Secondary Listing on HSKE

- Husky Mulls Secondary Listing on HSKE

Monday, May 30, 2011
Husky Energy Inc.

Husky is exploring a potential secondary listing of its shares on The Stock Exchange of Hong Kong Limited ("HKSE"). The Company will maintain its primary listing on the Toronto Stock Exchange.

"The Potential Secondary Listing of Husky's shares on the HKSE is under consideration as we believe it could potentially enhance investors' awareness of the Company and its growth opportunities in one of the fastest growing financial markets in the world," said Husky CEO Asim Ghosh. "The South East Asia region has been identified as a pillar of growth for the Company and we are advancing several multi-billion dollar projects as part of our strategic plan. A Hong Kong listing could provide investors in this important capital market with easier access to participate in our business strategy."

There is no certainty or assurance that approval from the HKSE and relevant authorities will be granted for the Potential Secondary Listing. No final decision has been made by the Company's board of directors and the Company may or may not proceed with the Potential Secondary Listing. Husky will make further announcements in relation to the Potential Secondary Listing at the appropriate time.

Oil & Gas Post

Promote Your Page Too

C&C Energia Updates Ops in Colombia

- C&C Energia Updates Ops in Colombia

Monday, May 30, 2011
C&C Energia Ltd.

C&C Energia provided an operations update on its current activities in Colombia.

Llanos Basin

The Corporation in the past 60 days has completed drilling of five wells in the Llanos Basin, two development wells and three exploration wells. The Corporation currently produces 9,500 barrels of oil per day ("bopd") on two of its Llanos Basin blocks (Cravoviejo and Cachicamo).

On the Cravoviejo Block (100% working interest), the Corporation has recently completed the drilling and testing of the Carrizales-15 development well and the Cucaracha-1 and Heredia-1 exploration wells. The Carrizales-15 well was drilled to a measured depth of approximately 8,600 feet and encountered oil bearing sands in the Gacheta and Ubaque formations. The Carrizales-15 well is currently being tested in the Gacheta at 8,139 feet with the Ubaque sands to be tested at a later date. Pending successful testing and tie-in, the Corporation expects that the well will be brought on production within two weeks. The Cucaracha-1 exploration well was drilled to a measured depth of 8,929 feet. The well tested oil in the Ubaque formation at 8,632 feet and the well is currently undergoing a remedial cement work-over due to inadequate cement over the oil bearing interval and the underlying water bearing sandstone. The Corporation anticipates the well will be retested over the next two weeks to establish accurate production rates. The Heredia-1 exploration well, located in the northwest portion of the Cravoviejo Block, recently reached a total measured depth of 9,811 feet and was tested in several reservoirs utilizing a modular formation tester (MDT). Fluids and pressures were collected from the Ubaque, Gacheta, and Carbonera Formations in eight separate tests. Oil was recovered from two tests in the upper (8,370 feet) and middle (8,504 feet) C-5 sandstone reservoirs while the remaining tests recovered formation waters. The well is being cased and the Corporation anticipates that it will be completed in the two oil bearing C-5 sandstones over the next few weeks.

The Hoatzin-4 development well on the Cachicamo Block (100% working interest) was drilled to a measured depth of 6,634 feet and encountered two oil bearing reservoirs in the C7 (Carbonera Formation). The uppermost sand at 5,896 feet was completed and recently placed on production at 175 bopd of 26 degree API oil.

On the Pajaro Pinto Block (100% working interest), the Corporation's first exploration well, Asmodeo-1 was drilled to a measured depth of 10,529 feet and encountered good reservoir development with oil shows in the Mirador, Gacheta and Ubaque formations. However, it was determined that none of the intervals contained sufficient commercial quantities of oil and the well was plugged and abandoned. The Corporation has four remaining prospects on the Pajaro Pinto Block and plans to drill at least two of these prospects in early 2012.

Putumayo Basin

The Corporation has entered into a binding term sheet, subject to the finalization of definitive Farm-out Agreement and Joint Operating Agreements, for the farm-out of a portion of its working interest in the Coati and Andaquies blocks in the Putumayo basin in Colombia to Canacol Energy Ltd. (the "Farmee"). The Corporation has agreed to farm-out a portion of its working interest in the Andaquies Block in return for the Farmee paying the defined cost of acquiring additional 2D and/or 3D seismic and drilling one well on the block. Upon the Farmee meeting its obligations to pay 72% of the cost associated with acquiring seismic and drilling one exploration well it will earn a 36% working interest in the Andaquies Block and the Corporation's working interest will be reduced from 90% to 54%. The Corporation has also agreed to farm-out a portion of its working interest in the Coati Block in return for the Farmee paying the defined cost of acquiring additional 2D and/or 3D seismic and drilling one well on the block. Upon the Farmee meeting its obligations to pay 80% of the cost associated with acquiring seismic and drilling one exploration well it will earn a 40% working interest in the Coati Block and the Corporation's working interest will be reduced from 100% to 60%. C&C Energia will be the Operator on both blocks. Pending receipt of drilling permits and necessary regulatory approvals, C&C Energia intends to drill the initial test wells on these blocks in the fourth quarter of 2011.

Oil & Gas Post

Promote Your Page Too

Holistic View to Rig Design, Construction Needed to Minimize Software Risk

- Holistic View to Rig Design, Construction Needed to Minimize Software Risk

Monday, May 30, 2011
Rigzone Staff
by Karen Boman

The growing use of software to run drilling rigs, coupled with the regulatory and operational challenges of the post-Macondo world, means that drilling rig contractors should take a more holistic view to reducing control systems software and hardware integrated-related non-productive time (NPT) and schedule delays.

According to Athens Group's third annual International Benchmarking Survey, this holistic approach include designing, building and testing a drilling rig as an integrated system, rather than testing individual systems before they are put together. Athens Vice President of engineering Bill O'Grady said this would allow for software risks to be addressed earlier in a rig's lifecycle.

The fact that most drilling equipment used today is software-driven presents challenges, and delays in rig delivery and problems integrating software systems mean lost revenue and additional costs for drilling contractors. "Typically, we see a collection of equipment built and tested separately and put together late in the process," said O'Grady. The task of integrating software systems also is spread among employees, rather than one person assigned the job. "Unless these systems integrated, you won't get the benefits of the software programs."

The study focuses on the cost and causes of control systems software and hardware integration-related NPT and safety incidents, and seeks to identify opportunities and barriers to reducing NPT and was as initiatives planned for 2010 and 2011. While progress has been made in reducing software and hardware-related NPT, the study found that the rate of control system and hardware integration NPT is 67 to 86 percent higher than the acceptable rate, depending on the age of the asset.

The top causes of NPT, with the exception of lack of shipyard experience, which is now last on the list, remain the same from last year's survey. The top causes include overextended equipment vendors, lack of software-experienced engineers, and late delivery and testing of software.

Many engineers lack software experience since oil and gas industry traditionally has been a hardware intensive company with mechanical control systems on board drilling rigs. In the past decade or so, the benefits of introducing software programs to control functions on board rigs began to take hold in the industry, but engineers more familiar with hardware are still adapting to using software.

Athens CMO Christine Lowry also attributes the lack of software experience to the 1980s energy industry bust, when many workers were laid off. This bust likely scared off potential recruits who would have entered the industry in the 1990s, many of whom would be familiar with computer software.

While software systems became prevalent on drillships and semisubmersibles in 1998, so few rigs are typically delivered each year, with the exception of last year, that experience installing integrated software systems is still lagging in comparison to other industries. The year 2010 was an exception, and equipment vendors were stretched thin due to 48 high-specification rigs delivered, the largest number of deliveries ever.

Two trends O'Grady sees among rigs is that older platforms with electromechnical systems need to be completely refurbished with a software system, and rigs built in 2000 through 2004 coming in for refurbishments also require software upgrades. Rigs such as the ENSCO 8500 series are the same in theory, but because software versions change, there is not a lot of duplication.

The survey found that adoption of simulation testing for topsides, improved rig crew training, and implementation of alarm management software are the top three opportunities for reducing NPT.

Thirty-seven percent of respondents in the survey indicated they would implement improved rig crew training this year, with training needed specifically targeted at the operation of complex integrated software control systems, and the maintenance and configuration of complex integrated software control systems. Survey respondents also included the adoption of simulation testing for topsides and implementation of alarm management software in their top three NPT reduction initiatives planned for this year.

O'Grady noted that simulation can be a valuable tool to test software, but choosing the right simulation and at the right time in the product lifecycle is critical for success. "The simulator also needs to be independently verified to ensure it is testing appropriately," he noted.

Implementing alarm systems on rigs requires a different approach with high temperature, high pressure wells offshore. More alarms are needed, but alarms must be placed where they matter most. "If too many are in place, people will likely ignore them or turn them off," O'Grady said.

One recommendation made in the report is drilling contractor's use of a concept of operations document, a well-known practice in automation and manufacturing process, for the design of newbuild rigs and refurbishment of existing rigs, said O'Grady. The concept of operations document, in which the end user describes what tasks they want an asset to perform, is missing in a lot of highly integrated assets such as drilling rigs.

O'Grady also noted that rig owners are now taking more control of the commissioning phase of rigs. This approach is a shift from the original owner-furnished equipment in which a rig owner specified to a shipyard what particular pieces would go on a rig. However, the implementation of software on rigs began to cause delays with rig deliveries. Shipyards began suggesting that, while shipyards could standardize some equipment parts for rigs, more specialized pieces with software-dependent parts should be put in place by the owner.

Oil & Gas Post

Promote Your Page Too

Cooper Spuds Turton Well

- Cooper Spuds Turton Well

Monday, May 30, 2011
Cooper Energy

Cooper announced that the Turton-1 exploration well in PEL92 spudded at 17:00 hours on Saturday May 28, 2011. The surface hole has been drilled to 638 meters and the current operation is running the surface casing.

The well's primary objective is the Namur Sandstone with secondary objectives in the Birkhead and Poolowanna Formations. Turton-1 is located 11 km to the southwest of the Butlers-1 and 14.1 km to the west of the Brighton-1 wells. The well will be drilled to a total depth of about 1,745 meters and is expected to take 8 days to drill and evaluate.

The Namur Sandstone primary target, which is the oil reservoir in the Butlers oil field, is estimated to contain 4.661 million barrels of Prospective Resources (P50). The deeper formations would be expected to add to this estimate if they result in discovery.

Oil & Gas Post

Promote Your Page Too

Total Takes CNOOC Stake Offshore Qatar

- Total Takes CNOOC Stake Offshore Qatar

Monday, May 30, 2011
Total S.A.

Total announced that it has signed an agreement with CNOOC Middle East (Qatar) Limited, a wholly-owned subsidiary of CNOOC International Limited, to acquire a 25% interest in Qatar's Block BC (pre-Khuff) exploration license. CNOOC Middle East (Qatar) Limited will continue to be the operator with a 75% interest.

Located 130 kilometers east of the Qatari coast, the offshore block covers an area of 5,649 square kilometers, with water depths ranging from 15 to 35 meters.

The Block BC Exploration and Production Sharing Agreement (EPSA), entered into with the Government of the State of Qatar, stipulates that 2D and 3D seismic surveys will be conducted and that at least three exploration wells will be drilled by 2014.

Commenting on Total's participation in the Block BC EPSA, His Excellency Dr. Mohammed Bin Saleh AI-Sada, Qatar's Minister of Energy and Industry said, "We would like to welcome our long time partner, Total, into the Block BC EPSA, and we wish them and CNOOC all success with the exploration activities, which we believe are always enhanced when quality companies such as Total and CNOOC join efforts."

"CNOOC thanks QP for its professional support during the execution since EPSA endorsement. Block BC is as one of its most important projects with QP, in addition to other cooperation," said Xiang Hua, Country Manager to Qatar. "We also welcome Total to join CNOOC in exploring Block BC in Pre-Khuff formation. We believe the partnership is combining strengths from both and will eventually lead to win-win operation towards commercial discovery."

"The farm-in transaction is another step forward in the partnerships forged with Qatar Petroleum and CNOOC, and reflects Total’s commitment to expanding its exploration and production operations in promising geological basins," stated Christophe de Margerie, Chairman and Chief Executive Officer of Total.

Oil & Gas Post

Promote Your Page Too

Aker Solutions Wins Rig Pair

- Aker Solutions Wins Rig Pair

Monday, May 30, 2011
Aker Solutions

Aker Solutions has won two contracts to supply complete drilling equipment packages for two new deepwater drilling units that are being built by Cosco, the Chinese shipbuilding company.

The combined value of the contracts is about $195 million, and includes options for a further two units.

"These contracts underline our attractive offering in the deepwater drilling market. Current tender activity is high, and we are pleased to see that our position in the deepwater market is competitive," said Thor Arne Håverstad, executive vice president and head of Aker Solutions' drilling technologies business.

The equipment will be delivered to both units during 2012 and 2013.

Oil & Gas Post

Promote Your Page Too

TSC to Proceed with Construction at Shell's FLNG Facility

- TSC to Proceed with Construction at Shell's FLNG Facility

Monday, May 30, 2011

Shell has given notice to a Technip Samsung Consortium (TSC) to proceed with the construction of the first floating liquefied natural gas (FLNG) facility in the world. TSC will provide engineering, procurement, construction and installation for the FLNG facility Shell will deploy at its Prelude gas field off the northwest coast of Australia.

Moored far out at sea, some 200 kilometers from the nearest land, the Prelude FLNG facility will produce gas from offshore fields and liquefy it onboard by cooling. Detailed design of the innovative facility will be undertaken by TSC at Technip’s operating centers in Paris, France, and Kuala Lumpur, Malaysia, and it will be built at the Samsung Heavy Industries (SHI) shipyard in Geoje, Korea, where the Notice to Proceed signing ceremony took place.

Mr. Thierry Pilenko, Chairman and CEO of Technip, commented, "Once again Technip is a key partner of a visionary customer pushing back together the limits of technology. This great project is a real breakthrough for the energy industry and a true revolution for offshore natural gas developments. Technip is extremely pleased and proud to bring all the expertise, know-how and skills of its three business segments -Subsea, Offshore and Onshore- all of which will be instrumental in the success of Prelude FLNG. Within our long term relationship with Shell and Samsung Heavy Industries, we hope that this project will be the first of many."

Mr. In-sik Roh, CEO, President and Director at Samsung Heavy Industries, said, "We are very excited to participate in the Prelude FLNG project, which will be the world's first floating LNG production facility. Samsung believes in the strength of the partnership with Shell and Technip, which will allow us to complete this project successfully. We are confident that this project will help us solidify our position as a clear leader in FLNG construction and development."

Dr. Matthias Bichsel, Projects and Technology director of Shell, added, "We are tremendously pleased to move ahead with the Prelude Floating LNG project. In the development of the FLNG concept, Shell’s FLNG team has drawn on five decades of expertise in the areas of LNG technology, LNG shipping and engineering of offshore floating oil and gas installations. Our innovative mindset, integrated approach to technology development and mega project delivery expertise allowed us to distil these decades of experience into the development of what will be the largest offshore floating facility on earth."

"The Technip Samsung Consortium is essential to the success of the Prelude FLNG project," Matthias Bichsel continued. "We have longstanding relationships with Technip and SHI, with both companies providing expertise to numerous projects world-wide. The Technip Samsung Consortium combines the strengths of each company to enable the delivery of an integrated FLNG facility."

The Shell Prelude FLNG facility will be the largest floating offshore facility in the world, with 488 meters from bow to stern - longer than four soccer fields laid end to end. When fully loaded, it will weigh around 600,000 tonnes – roughly six times as much as the largest aircraft carrier. Some 260,000 tonnes of that weight will consist of steel – around five times the amount of steel used to build the Sydney Harbour Bridge. Floating LNG is a revolutionary innovation that will allow the production, liquefaction, storage and transfer of LNG at sea, helping to open up new offshore natural gas fields that are currently too costly or difficult to develop.

Oil & Gas Post

Promote Your Page Too

Beach Discovers Additional Oil Pay in Cooper Basin

- Beach Discovers Additional Oil Pay in Cooper Basin

Monday, May 30, 2011
Beach Energy Ltd.

Beach announced a new field oil discovery has been made at Hanson-1, the first well in a five well exploration drilling campaign in PEL 91.

A gross oil column of seven meters, with five meters of net pay, was encountered in the Namur Sandstone section of the well. Preliminary volumetric assessment suggests up to one million barrels of recoverable oil (gross), with oil shows also encountered over a twenty four meter interval in the Birkhead Formation. These shows are currently being evaluated on wireline logs.

Hanson-1 is expected to be on-line in the third quarter of 2011, with transportation of oil from PEL 91 to be undertaken by truck in the short to medium term.

Following the completion of the evaluation program, the Ensign#18 rig will be moved to the Snellings-1 exploration well which is located about 1.5 kilometers to the north of Hanson-1.

Participants in PEL 91 are:
  • Beach (Operator) 40%
  • Drillsearch Energy Ltd 60%

Oil & Gas Post

Promote Your Page Too