E&P Notes (February 2018)

Abstract

E&P Notes Industry Poised for Stronger Performance in 2018 Joel Parshall, JPT Features Editor The global oil industry appears poised for stronger performance in 2018, having benefitted from the financial discipline and cost-cutting innovation driven by several years of low oil prices and looking ahead to somewhat more stable market conditions. While oil prices have recently risen above $60/bbl, likely reflecting a number of short-term supply disruptions and concerns over Middle East tensions, forecasts generally call for prices to fluctuate sustainably between $40/bbl and $60/bbl and end the year in the higher part of that range. “Higher prices in or above that range will increase supply as countries lessen compliance with production quotas and United States shale production keeps increasing,” said Moody’s Investors Services in its 2018 industry outlook. ‘Supergiant’ Zohr Gas Field Off Egypt Comes On Stream Matt Zborowski, Technology Writer Eni confirmed on 20 December that the Zohr field has started gas production from the Shorouk block offshore Egypt. The launch comes less than 2½ years after the Italian firm discovered the enormous deposit, which is estimated to hold more than 30 Tcf of gas in place. The field is flowing 350 MMcf/D and is slated to produce 1 Bcf/D by the middle of next year, Egypt’s petroleum ministry said. The project’s first phase includes six subsea wells, with gas transported 180 km to an onshore plant at Port Said for processing and use in Egypt’s national grid. The second phase will comprise 14 more wells to be drilled by the end of 2019. The field sits in 1500 m of water. Schlumberger Buys Weatherford’s US Fracturing Assets Weatherford has sold its US pressure pumping and pump-down perforating assets to Schlumberger for $430 million in cash, abruptly ending a planned joint venture that was to begin operations on 1 January. The parties agreed to revised deal terms that reflect an asset sale, abandoning the previously announced OneStim joint venture that had received US Department of Justice approval in November 2017. Schlumberger will take ownership of Weatherford’s US pressure pumping and pump-down perforating related facilities and supplier and customer contracts. Additionally, 100 Weatherford employees associated with the business will transfer to Schlumberger. Oil Discoveries Fall to Lowest Level in 70 Years Unconventional output may be booming, but the low oil prices of the past 3 years have led to the lowest level of oil discoveries in the past 70 years. Oil companies discovered less oil and gas in 2017—7 billion BOE—than any year on record, the Norwegian research firm Rystad Energy said in a December report. “We haven’t seen anything like this since the 1940s,” said Sonia MladÁ Passos, a senior analyst at Rystad. “We have to face the fact that the low discovered volumes on a global level represent a serious threat to the supply levels some 10 years down the road.” Big Discoveries Prompt US Agencies To Lift Recoverable Resource Estimates in Alaska Matt Zborowski, Technology Writer The US Department of the Interior (DOI) has increased its estimate of undiscovered, technically recoverable resources in parts of Alaska’s federal, state, and tribal lands and waters following recent, bigger-than-expected discoveries. The revisions include a large jump in estimated onshore oil resources. The assessment—conducted by DOI agencies the Bureau of Ocean Energy Management (BOEM), Bureau of Land Management, and US Geological Survey (USGS)—shows approximately 17.6 billion bbl of oil and 50 Tcf of gas in the National Petroleum Reserve-Alaska (NPR-A), the Western Beaufort Sea, nearby state and native lands, and state waters.