E&P Notes (August 2017)

Abstract

E&P Notes Round Two in Mexico: 10 More Offshore Fields Awarded Trent Jacobs, JPT Digital Editor The first tender of the second round of Mexico’s oil and gas licensing auctions issued 10 awarded areas to more than a dozen different oil and gas companies. In addition to Mexico-headquartered companies, other winning firms hail from Russia, Malaysia, US, and the Netherlands. Five locations received no bids, including some that were understood to be gas-rich and therefore a challenging investment due to the relatively low-cost gas imports coming from the US. Growing Number of Projects Go Forward, but the Global Backlog is Still Building Stephen Rassenfoss, JPT Emerging Technology Senior Editor There are recent signs of life in the exploration sector, with as many delayed projects getting funding during the first half of 2017 as in all of 2016. A report from consultancy Rystad Energy tempers that assertion by describing the jump in the number of delayed projects getting a final investment decision (FID) as “apparent positive momentum.” On the upside, it reported 17 delayed international projects have received an FID since it started tracking the many delayed projects in 2015 in the wake of the oil price plunge. The development cost of those projects is expected to be USD 78 billion. H2O Midstream-Encana Deal Highlights Water Management Role in US Shale Joel Parshall, JPT Features Editor H2O Midstream’s recent acquisition of produced-water infrastructure from Encana Oil & Gas (USA) in the Permian Basin highlights the growing importance of efficient water management in United States shale plays. The acquisition, announced on 14 June, was concurrent with the execution of an acreage-dedication-based midstream water services agreement, under which H2O Midstream will gather, dispose, and deliver for reuse produced water for a substantial portion of Encana’s acreage position in Howard County, Texas. By terms of the acquisition, H2O Midstream will now own and operate Encana’s existing produced-water gathering system that consists of more than 100 miles of interconnected pipeline and five saltwater disposal wells with a total permitted disposal capacity of 80,000 BWPD. First Oil From Kraken: Offshore Project To Increase UK Production by 15% Trent Jacobs, JPT Digital Editor UK-based EnQuest achieved the delivery of first production from the Kraken offshore oil field on Friday, 23 June. Average production from the heavy-oil project is expected to reach 20,000 B/D of oil by year’s end. Located almost 80 miles to the east of the Shetland Islands, the Kraken field holds an estimated 128 million bbl of reserves, according to EnQuest. The independent explorer has so far drilled and completed 13 wells, seven producers and six injectors. US Crude Oil and Petroleum Products Exports Doubled Over Past 6 Years Pam Boschee, Senior Editor Following the loosening in December 2015 of US restrictions on exporting domestically produced crude oil, the US exported an average of 520,000 B/D, reaching 1.1 million B/D in February— the highest monthly level on record. Crude oil and petroleum product gross exports more than doubled over the past 6 years, increasing from 2.4 million B/D in 2010 to 5.2 million B/D in 2016, according to the US Energy Information Administration.