E&P Notes: February 2024

Updates about global exploration and production activities and developments.

The Deepwater Gunashli platform in the Caspian Sea.
The Deepwater Gunashli platform in the Caspian Sea.
Source: BP.

ExxonMobil Exits Iraq

ExxonMobil handed over operations at the West Qurna 1 oil field in southern Iraq to PetroChina, effectively removing the supermajor’s presence in Iraq’s energy sector. West Qurna 1 produces 550,000 BPD and is one of the world’s largest oil fields with recoverable reserves estimated at more than 20 billion bbl.

PetroChina holds 32.7% interest with Basra Oil Company (22.7%), Itochu (19.6%), Pertamina (20%), and Oil Exploration Company (5%).

Contracts Awarded to Two Seadrill Vessels

Petrobras awarded a 1,064-day fixed firm contract to Seadrill Ltd.’s West Auriga and West Polaris for work offshore Brazil. The announcement comes after a competitive bidding process which resulted in the Brazil-based company securing contracts valued at $1.1 billion. The contract is anticipated to begin in Q4 2024.

Perseverance Heads to Southeast Asia

Shelf Drilling Ltd. and Shelf Drilling (North Sea) Ltd. announced a contract award for Shelf Drilling’s Perseverance jackup rig with PetroVietnam Domestic Exploration Production Operating Company Ltd. The vessel will head to Southeast Asia where it plans to begin operations with PetroVietnam in Q3 2024. The 16-month contract value is $73 million.

Shelf Drilling’s Perseverance rig in the UK North Sea.
Shelf Drilling’s Perseverance rig in the UK North Sea.
Source: Shelf Drilling.

Petronas Partners With PTTEP in Malaysia

Petronas Carigali signed a memorandum of understanding (MoU) and two technical assistance agreements (TAA) with PTT Exploration and Production (PTTEP) related to the development of PTTEP-operated Blocks SK405B and SK410B located off the coast of Sarawak, offshore Malaysia. The MoU covers the scope of potential production from Block SK405B through D35/D21/J4 production-sharing contract (PSC) facilities, Post 1976 Balingian PSC facilities, and the Bintulu Crude Oil Terminal operated by Petronas Carigali.

The TAAs will cover the study and design works for Block SK405B fields and assistance of engineering design for the potential construction, tie-in works, pipeline, and cable crossings of Block SK410B. PTTEP currently operates eight PSCs in Sarawak with a production volume of approximately 15 KBOPD and about 200 MMscf/D of crude and gas, respectively, according to the company.

PTTEP holds 49.5% participating interest in Block SK405B with MOECO Oil (Sarawak) Sdn. Bhd. (25.5%), and Petronas Carigali (25%). PTTEP holds 42.5% participating interest in Block SK410B with Kuwait Foreign Petroleum Exploration Company (42.5%), and Petronas Carigali (15%).

Mero-2 Begins Production

CNOOC Ltd. announced that the Mero-2 project began production. Mero, Brazil’s third-largest oil field, is in the Santos Basin pre-salt southeastern offshore Brazil. The project’s development plan includes four production units: Mero-1, Mero-2, Mero-3, and Mero-4.

Mero-2 is in a water depth of between 1800 and 2100 m, and 180 km away from Rio de Janeiro. The project includes 16 development wells: eight production wells and eight injectors. The production capacity of the project is 180,000 B/D of crude oil.

Petrobras is the operator and has 38.6% interest with TotalEnergies (19.3%), Shell Brazil (19.3%), CNPC (9.65%), CNOOC Petroleum Brazil Ltda. (9.65%), and Pré-Sal Petróleo S.A.–PPSA (3.5%).

Equinor Divests Azerbaijan Assets

Equinor and State Oil Company of Azerbaijan Republic (SOCAR) signed an agreement for Equinor to divest all its remaining assets in Azerbaijan, where the company has been present since 1992, to SOCAR. The assets include a 7.27% nonoperated interest in the Azeri Chirag Gunashli (ACG) oil fields in the Azerbaijan sector of the Caspian Sea, 8.71% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline, and 50% in the Karabagh field.

SOCAR already holds a 25.0% stake in ACG, a 25.0% stake in BTC via Azerbaijan BTC Ltd., and 50% in Karabagh.

The Deepwater Gunashli platform in the Caspian Sea.
The Deepwater Gunashli platform in the Caspian Sea.
Source: BP.

Petrobras Explores the Equatorial Margin

Petrobras began drilling the Pitu Oeste well marking the company’s continued efforts to explore oil and gas on the “Equatorial Margin” which extends along the Brazilian coast from the state of Rio Grande do Norte to Amapa. Drilling is expected to last from 3 to 5 months and is located 33 miles off the coast of Rio Grande do Norte in the BM-POT-17 concession. Petrobras will also drill the Anhangá well, in the POT-M-762 concession, next to Pitu Oeste.

The company’s strategic plan includes a $3.1 billion investment for oil and gas exploration in the Equatorial Margin with plans to drill 16 wells during this period, according to the company.

Sepetiba Officially On Hire

SBM Offshore announced FPSO Sepetiba is formally on hire. The announcement comes after the vessel achieved its first oil and the completion of a 72‑hour continuous production test leading to final acceptance. Owned and operated by SBM Offshore (64.5%) and its partners (35.5%), Sepetiba will operate under a 22.5-year charter and operation services contract with Petrobras. The vessel is installed at the Mero unitized field located in the Santos Basin offshore Rio de Janeiro.

West African Site To Be Revisited

The Sèmè Field in Benin, West Africa, will soon be explored as Rex International Holding Ltd.’s joint venture company, Akrake Petroleum S.A., signed a production-sharing contract for operatorship and 76% working interest in Block 1. The government of Benin holds (15%) along with Octogone Trading (9%). Offshore Block 1 covers 551 km2 and is in shallow-water depth of 20 to 30 m and includes the Sèmè Field discovered by Union Oil in 1969. The site was developed by Saga Petroleum before ceasing production in 1998 due to low oil prices.