Pandemic, Falling Oil Prices Threaten Global Licensing Rounds
An estimated 54% of the world’s planned licensing rounds may be cancelled this year due to the oil price drop, job cuts and work disruptions due to COVID-19, a nearly 20% global cut in investments, unattractive fiscal regimes, and poor interest among potential companies, according to Rystad Energy.
At the start of the year, 45 countries launched at least 52 lease rounds, with some 60% in offshore areas, compared with 69 lease rounds in 2019 when several countries offered multiple rounds.
Now, new licensed offshore acreage may fall by about 60% and onshore acreage by 30%. Global awarded acreage is likely to fall below 2015 levels this year, while staying above the level seen in 2016.
TGS Surveys in Russian Sea and West Africa
TGS, with the support of TGS’ Russian partner DMNG, has completed its second phase of processing in the Russian Sea of Okhotsk. The regional 2D seismic survey encompasses 21631 km2 offshore Sakhalin Island.
This reprocessing project is the second phase of a mission to provide greater offshore coverage of the region, following TGS’ original 2D Phase 1 Clari-Fi broadband reprocessing of 18970 km2 in 2019.
Following completion of the project, first data have been sent out to pre- funding customers and are now available to all industry customers.
Lebanon Comes Up Empty in Offshore Exploration
No gas or commercial reservoirs have been found in the first-ever exploration well off Lebanon’s coast, according to Energy Minister Raymond Ghajar and the Total exploration firm.
While initial drilling results showed the presence of gas at different depths in the geological layers, after 2 months only traces of gas were detected.
The failure quashed the country’s hopes of a major hydrocarbon discovery that might have redressed the debt-burdened economy. Lebanon is one of the most indebted countries in the world, with a burden equivalent to 170% of its gross domestic product.
Petrobras Hits Second Oil, in Campos Basin
Brazil’s Petrobras has found oil in an exploratory well located in the Sudoeste de Tartaruga Verde block, in the Campos Basin.
The well, informally called Natator, is located 130 km from the city of Macaé in the Brazilian state of Rio de Janeiro, in water depths of 1080 m.
The oil was discovered in carbonate reservoirs in the post-salt section.
Natural Gas Rig Count Plunges to Lowest Level in 4 Years
The number of active natural gas rigs in the US fell further to 80 on 8 May. The number had dipped to 85 on 21 April, the lowest number since August 2016, according to the Baker Hughes rig count. As of 8 May, there were 103 (54%) fewer natural gas rigs than last year at the same time.
Natural-gas-directed rigs remained concentrated in the Marcellus Basin in Ohio, Pennsylvania, and West Virginia, and in the Haynesville Basin in Louisiana and Texas. These two basins accounted for 50% of the decrease in natural-gas-directed rigs over the past year; 78% of remaining US natural-gas-directed rigs still operate in these basins.
PTTEP Makes Two Discoveries Offshore Mexico
Thai energy company PTT Exploration and Production announced two deep-water oil discoveries in the Salina Basin, offshore Mexico.
The two wells, Polok-1 and Chinwol-1, are around 88 km from the Mexican coastline of Tabasco and have approximately 200 m and 150 m of net oil pay, respectively.
The Mexican subsidiary of PTTEP, Thailand’s largest oil and gas producer, has partnered with the Mexican subsidiary of Spain’s Repsol SA to assess commercial potential of the two exploration wells in block 29.
ExxonMobil, Chevron Slash Permian Spending
US oil producers ExxonMobil and Chevron announced they are tightening output, for combined global shut-ins of 800,000 B/D, in response to plunging crude prices and shrinking fuel demand.
Both companies are making deep cuts in the Permian, each with global shut-ins of up to 400,000 B/D this quarter.
With the decline in oil demand, more than half of the US rig fleet has gone quiet; the Permian Basin of west Texas and New Mexico account for 56% of the shutdown, according to Baker Hughes Co. data.
US Fracturing To Face Worst Declines Ever
The oil market is likely facing the largest monthly drop in fracturing activity ever recorded in the US, according to Rystad Energy analysis.
Assuming no new horizontal wells are put in production from April 2020 onward, total light tight-oil production will decline by 2 million B/D by July and by 3 million B/D by October to November; the Permian Basin will account for more than half of the nationwide base decline.
Started fracturing jobs in three major US basins declined by 30% in March to fall below 300 wells in April; there were close to 200 wells started in the Permian and less than 50 each in the Bakken and Eagle Ford basins.