E&P Highlights: Jan. 8, 2024

From a large deepwater discovery to a flurry of contracts, below is a compilation of the latest headlines in the E&P space. 

Activity headlines

Layaran-1 Finds 6 Tcf of Gas Offshore Indonesia

Mubadala Energy made a significant gas discovery with its Layaran-1 deepwater exploration well offshore Indonesia, the company announced Dec. 19.

The well was drilled 4,208 m in 1,207 m water depth and encountered a gas column over 230 m thick in an Oligocene sandstone reservoir. A complete data acquisition including wireline, coring, sampling and production test were conducted. The well successfully flowed over 30 MMcf/d of “quality gas,” the company said.

Wood Mackenzie said on Dec. 20 that the discovery of more than 6 Tcf of in-place reserves solidifies the basin's position as one of Asia Pacific's most promising emerging deepwater hotspots.

Given the size of the structure and the single well drilled to date, WoodMac estimates an initial 3.3 Tcf of recoverable resources, or over 580 MMboe, making Layaran the second largest deepwater discovery globally in 2023. 

Andrew Harwood, director of corporate and upstream research at WoodMac, said in a news release that while the resource numbers are globally significant, the road to commerciality remains difficult.

Mubadala said the find de-risks gas resources in the area and provides a foundation for organic growth and additional exploration drilling activities in 2024.

Mubadala operates the South Andaman Gross Split PSC with 80% interest.

Valeura Completes Drilling at Nong Yao

Valeura Energy Inc. wrapped up an infill drilling campaign at its Nong Yao oil field in the Gulf of Thailand, the company announced on Dec. 21. 

The company drilled four wells at the Nong Yao A wellhead processing platform, including three production-oriented development wells and one appraisal well. The development wells encountered targets in line with pre-drill expectations and have been brought online as producers. The appraisal well was designed to outline the extent of certain reservoir intervals in the field that are currently not producing. Results from the appraisal well exceeded expectations, Valeura said. The well confirmed 50 ft of new net oil pay over several intervals. Valeura said it anticipates this will give rise to two to four additional development targets, which will form the basis of a future infill drilling campaign.

“Commercialization of the Nong Yao C accumulation remains on track for infrastructure installation and development drilling starting in Q1 2024,” Valeura President and CEO Sean Guest said in a press release.

The drilling rig mobilized to the Wassana Field to drill three production-oriented development wells. The rig is expected to return to Nong Yao in the first quarter of 2024 to begin the Nong Yao C development.

Valeura operates the Nong Yao Field with 90% interest.

Contracts and company news

Equinor Exiting Azerbaijan 

Equinor is divesting all of its remaining assets in Azerbaijan to State Oil Company of Azerbaijan Republic (SOCAR), Equinor announced Dec. 22.

The assets include:

• 7.27% interest in the BP-operated Azeri Chirag Gunashli (ACG) oil fields in the Azerbaijan sector of the Caspian Sea;
• 8.71% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline that transfers crude oil to the Turkish Mediterranean coast; and
•  50% in the Karabagh field in 180 m water depth. SOCAR already holds a 25% stake in ACG, a 25% stake in BTC via Azerbaijan BTC Ltd. and 50% stake in Karabagh.

“Equinor is in the process of re-shaping its international oil and gas business, and the divestments in Azerbaijan are in line with our strategy to focus our international portfolio,” Philippe Mathieu, Equinor’s executive vice president for international exploration and production, said in a press release.

The transaction is subject to regulatory and contractual approvals.

DOF Scoops Up Multiple Contracts

DOF Group announced winning multiple contracts on Dec. 19, Dec. 21 and Jan. 2.

DOF will handle project management, engineering, logistics and execution of an FPSO cessation project for a North Sea operator. Offshore activities are slated for the third quarter of 2024 using four vessels, including Skandi Hera and Skandi Iceman.

In Australia, DOF will handle decommissioning support, including project management, engineering, procurement and offshore services. That project started in December and is expected to be completed over a five-to-seven-week period using the CSV Skandi Hercules.

Revenue from the North Sea and Australia projects is estimated at $30 million.

The firm was also awarded three subsea service contracts valued at more than $36 million from Australia-based operators. The contracts will use Skandi Hercules to carry out various remediation activities, pre-commissioning and commissioning support and field decommissioning operations.

Prime Energy extended DOF Group’s contract for the MPSV Skandi Hawk through to the end of 2027 in support of the Malampaya gas field operations offshore Philippines.

Valaris Buys Newbuild Drillships

Valaris announced on Dec. 21 taking delivery of newbuild drillships VALARIS DS-13 and DS-14 for an aggregate purchase price of approximately $337 million.

“Following the successful contracting of six of our stacked drillships since mid-2021, the purchase of VALARIS DS-13 and DS-14 increases our operating leverage to the attractive ultra-deepwater floater market,” Valaris’ President and CEO Anton Dibowitz said in a press release.

The two new rigs will move from South Korea to Las Palmas, Spain, where they will be stacked until contracted for work. 

On Jan. 2, Valaris also announced Petrobras awarded the company a 1,064-day contract for drillship VALARIS DS-4 for operations offshore Brazil. The contract, valued at approximately $519 million, is expected to begin in fourth-quarter 2024, following its current contract with Petrobras.

Brage Field Interest Sale Complete

Vår Energi ASA completed the sale of 12.3% interest in the OKEA-operated Brage Field in the North Sea to Petrolia NOCO AS, Vår announced on Dec. 29.

The Brage Field is a late life producing asset, having started production in 1993.

Vår announced the sale in October 2023 as part of an asset optimization process.

OKEA Completes Entry into Statfjord License

Equinor Energy completed its sale of 28% interest in its Statfjord area production license in the North Sea to OKEA, OKEA announced Dec. 29.

Following the, initially announced in March 2023, Equinor will remain operator of PL037 with 54.7% interest, OKEA with 28% and Vår Energi with 21.4% interest.

Petrobras Enters São Tomé and Príncipe Blocks

Petrobras is acquiring interest in exploratory blocks 10, 11 and 13 in São Tomé and Príncipe through a competitive process conducted by Shell, Petrobras announced Dec. 27. 

Shell operates all three blocks with 40% interest. Petrobras holds 45% interest and ANP-STP holds 15% interest in blocks 10 and 13. Petrobras holds 25% interest, Galp holds 20% and ANP-STP holds 15% interest in Block 11.

The transaction is part of the scope of the memorandum of understanding (MOU) Petrobras and Shell signed in March 2023. The objective of the MOU includes identifying business opportunities between the companies. 

DOF Pilots ROV Mission from Land 

DOF announced Dec. 19 it piloted an offshore ROV mission from onshore.

Dag Raymond Rasch, DOF's executive vice president for Atlantic, called it a significant milestone for DOF.

“Going forward, we will mature the technology further and commercialize it to offer bespoke remote solutions to our clients,” Rasch said in a news release.

Woodside Awards Trion Shore Base Contract

Woodside Energy announced on Dec. 20 it awarded a major contract to Mexican company Eseasa Offshore, SA de CV to supply shore base facilities and services for Woodside’s operations for the Trion oil and gas project offshore Mexico. 

Eseasa will provide a range of services out of its shore base location on the Panuco River coastline. The scope of work includes shore base infrastructure, operations planning and management for vessel mooring, load and discharge, freight and material management and dedicated laydown and staging areas.  

First oil from Trion, in 2,500 m water depth, is expected in 2028. Woodside operates the project with 60% interest on behalf of partner Pemex with 40% interest.

Enauta Enters Parque das Conchas, 2 More Fields

Enauta Participações SA has agreed to acquire QatarEnergy Brasil Ltda.’s 23% stake in the Abalone, Ostra and Argonauta fields, which comprise the Parque das Conchas in the Campos Basin, for $150 million.

Shell operates the fields with 50% interest and ONGC holds the remaining 27% interest in the fields, which produce to the FPSO Espírito Santo.

Enauta also announced Dec. 21 a $10 million acquisition of 100% interests in offshore oil and gas fields Uruguá and Tambaú, as well as associated pipeline infrastructure in the Santos Basin offshore Brazil from Petrobras.

The 178-km pipeline connects the production platform to the Mexilhão Field natural gas infrastructure. The fields’ production is processed through the FPSO Cidade de Santos. The fields are 80 km west of Enauta’s FPSO Atlanta location. The deal is subject to closing conditions.

Enauta also announced Dec. 21 it was acquiring the FPSO Cidade de Santos, operated by MODEC, which serves the Uruguá and Tambaú fields, for $48.5 million.

MODEC said Dec. 21 the FPSO has been leased on a charter contract to Petrobras since 2010.

The FPSO can process 25,000 bbl/d of oil and 10 MMcm/d of gas and can store 700,000 bbl of crude. The transaction is subject to closing conditions and approvals.

Petrobras Hires West Auriga, West Polaris

Seadrill Ltd. announced Dec. 22 that Petrobras awarded 1,064-day fixed-term contracts to the West Auriga and the West Polaris drillships. The contracts are expected to begin in fourth-quarter 2024 and represent a total contract value of approximately $1.1 billion, including additional services and mobilization fees. 

Petrobras Starts Drilling in the Equatorial Margin

Petrobras said Dec. 23 it resumed exploration in the Equatorial Margin offshore Brazil with the drilling of the Pitu Oeste well. 

Completion of the well, located in BM-POT-17 concession, is expected to take between three to five months. Petrobras expects to obtain more geological information about the area and to confirm the extent of the 2014 oil discovery made with the Pitu well.

Petrobras also intends to drill the Anhangá well, in the POT-M-762 concession, next to the Pitu Oeste well.

BP Renews Danos Contract 

 Danos announced Jan. 4 that BP renewed its contract for comprehensive drilling logistical services for its Gulf of Mexico (GoM) assets.

Danos will oversee the coordination of materials and personnel to and from multiple BP locations, ensuring streamlined and efficient logistical support.

In 2023, Danos signed a separate contract with BP to perform work across five assets in the GoM.

Danos also announced Dec. 21 that it has completed a project to fabricate and install a vent boom for Shell Pipeline Co. LP. The new vent boom stands 35 ft tall and replaced an existing vent tower on a GoM offshore facility.

Aker BP Upgrades Spill Detection System

Aker BP has contracted Vissim to upgrade oil spill detection solutions at the operator’s fixed and floating installations on the Norwegian Continental Shelf, Vissim announced Jan. 2

Aker BP will equip the Valhall, Ula, Edvard Grieg, Ivar Aasen, Alvheim and Skarv installations with the new and upgraded oil spill detection solution.

The new radar-based oil spill detection system uses upgraded image processing technology to detect even smaller oil spills. It also uses machine learning to classify detected phenomena to limit false alarms.

Mattr Snags More than $77 Million in Orders

Mattr Infratech received purchase orders valued at more than $50 million for pipe coating in Brazil and over $27 million for flexpipe in the Middle East and India.

Mattr will provide thermal insulation coating for a project offshore Brazil, the company said Dec. 22. The work will be done in the company’s Serra, Brazil, facility in the first half of 2026.

On Dec. 28, Mattr said the composite, spoolable pipe is expected to be delivered in the first half of 2024.

Martin Perez, group president of Mattr’s composite technologies segment, said in a news release that the Middle East order “represents one of the most sizeable single orders for flexpipe” in the company’s history. 

BP Extends Subsea7 Frame Agreement

Houston’s Subsea7 SA announced Dec. 19 that BP extended a frame agreement for subsea construction, inspection, repair and maintenance services (IRM) for BP’s North Sea assets.

The original frame agreement began in 1998. Under the terms of this two-year extension to the end of 2025, Subsea7 will provide an IRM, survey and light construction vessel with work-class and observation-class ROVs capable of performing inspection, survey, intervention, subsea construction and emergency response services.

Project management and engineering work will continue to be managed from Subsea7’s office in Aberdeen, Scotland.

Techano Wins Crane Contract

Sefine Shipyard awarded Nekkar’s subsidiary Techano Oceanlift a contract to deliver an offshore crane to a newbuild subsea IMR/survey vessel, Nekkar announced Dec. 28.

Techano will supply a 150-tonne crane capable of performing subsea construction work plus topside lifting operations under the $7.1 million contract. The crane will be delivered to Sefine Shipyard in Turkey in 2025. 

Deepsea Mira Extended

Northern Ocean Ltd. announced Dec. 20 that a TotalEnergies SE subsidiary exercised the first option under the Deepsea Mira contract for work in West Africa. The firm term of the contract has been extended 180 days into fourth-quarter 2024 and provides between $68

million and $75 million of additional revenue backlog, excluding bonuses, reimbursables or other undeclared options.

Malaysia Multiclient 2D Project Pre-Funded

Joint venture (JV) consortium partners PGS, SLB and TGS secured pre-funding to expand multiclient 2D seismic data coverage in the Sabah Basin offshore Malaysia, PGS and TGS announced Jan. 8.

The seventh phase of this multi-year project off the coast of Sabah encompasses more than 5,000 km of new 2D seismic data acquisition; more than 2,600 km of legacy seismic data processing; and 2,800 sq km of 2D-cubed processing as part of a multi-year contract originally awarded by Petronas in 2016.

The Eagle Explorer vessel mobilized in November 2023 and the acquisition is anticipated to close in February 2024. Fast-track results are anticipated to be available for evaluation during the 2024 Malaysia Bid Round.

TGS Updates OBN Work

TGS announced Dec. 21 the placement of ocean bottom node (OBN) surveys offshore Guyana for Exxon Mobil Guyana.

TGS acquired 2,400 sq km of OBN data within 410 days and concluded data acquisition 20 days ahead of schedule. 

On Dec. 20, TGS announced winning a contract for OBN data acquisition in the North Sea from a repeat client. The acquisition is set to begin in second-quarter 2024.

Mariner OBNs Delivered

Geospace Technologies Corp. delivered Mariner shallow water OBN under a $30 million contract, the company announced Jan. 3.

The contract replaces a previous contract announced in June 2023. 

Mariner is a shallow water seabed seismic data acquisition node designed with inductive charging and data download, which makes it a connector-free device. The node continuously records for up to 70 days and has accelerated recharging times, according to the company.