E&P Notes (April 2018)

Abstract

E&P Notes Alternatives No Threat to Oil, Aramco CEO Says John Donnelly, JPT Editor Alternative energy options and worries about climate change are not a threat to the oil and gas industry, which will need increased investment just to keep up with future demand, said the chief executive officer of Saudi Aramco. The idea that alternatives to hydrocarbons such as electric vehicles will displace oil and gas in the global fuel mix any time soon is a gross oversimplification, Amin Nasser, the head of Saudi Aramco, said during the annual CERAWeek conference by IHS Markit, which took place last month in Houston. “I am not losing any sleep over the idea of peak oil demand or stranded resources,” he said. IEA Sees No End to US Shale Output Surge Matt Zborowski, Technology Writer US crude production is projected to surge to 12.1 million B/D by 2023 amid “a second wave” of shale output increases, making the country the world’s largest oil producer, according to the International Energy Agency’s latest 5-year market forecast. The new wave is underpinned by higher oil prices following the pact between OPEC producers and a group of non-OPEC countries to collectively curb out-put through this year. “Everyone has benefited” from the deal, and newfound optimism has spread through the industry, said OPEC Secretary General Mohammed Barkindo during the CERAWeek conference by IHS Markit in Houston. ExxonMobil Exits Russian Ventures, Continues Success off Guyana Matt Zborowski, Technology Writer ExxonMobil marked a continued companywide transition for the world’s largest public oil and gas firm, headlined by its withdrawal from once-promising Russian joint ventures (JVs) and its announcement of a seventh oil discovery off Guyana. According to a filing with the US Securities and Exchange Commission, ExxonMobil is pulling out of its JVs with Rosneft, established earlier this decade, that involved exploration and development of Arctic, Black Sea, and shale resources. ExxonMobil’s role in those partner-ships was quashed when the US government levied sanctions on Russia in 2014 following its annexation of Crimea and expanded those measures in late 2017. ExxonMobil sued the US Department of the Treasury last year in response to a $2-million fine for violating the 2014 sanctions. BP: Robust Adoption of Electric Vehicles Would Not Stop Oil Consumption Growth Joel Parshall, JPT Features Editor Even a robust adoption of electric vehicles (EVs) over the next 2 decades would not eliminate the growth of either global oil consumption or carbon emissions, BP Chief Economist Spencer Dale said in February as the company introduced its 2018 Energy Outlook. And to meet the goals of the Paris Climate Accord, Dale said, the outlook concludes that a system of global carbon emission pricing and increased regulation to spur energy efficiency and fuel switching would probably be needed in addition to EV adoption. Projecting the future impact of EVs on oil consumption and emissions involves more than counting the number of them and their percentage share in the global vehicle fleet, he said. Another Big Gas Field Starts Production Offshore Egypt Matt Zborowski, Technology Writer The Atoll Phase One project in the East Nile Delta is flowing 350 MMcf/D of gas and 10,000 B/D of condensate to shore after starting up “7 months ahead of schedule and 33% below the initial cost estimate,” operator BP reported. The $1-billion project in the North Damietta concession provides another heavy stream of gas for domestic use in Egypt following the 2017 production launches of the Eni-operated supergiant Zohr field and the BP-operated Taurus and Libra fields of the West Nile Delta development. BP has a 10% stake in the Shorouk concession containing Zohr, which is expected to flow 1 Bcf/D by mid-year. The British supermajor operates the West Nile Delta project with an 82.75% interest in the project partnership.