Welligence Energy Analytics

Brazil Development Alert! Shell has taken FID at its pre-salt Gato do Mato project in the Santos Basin. The development will comprise subsea wells tied back to a leased 120,000 bbl/d FPSO. In April 2024, MODEC secured the FEED contract for the facility. First production is set for 2029 and the project partners are Ecopetrol and TotalEnergies. Shell reports the field holds 370 MMbbl of recoverable condensate resource, along with material gas volumes. Development may occur in phases, initially focusing on condensate extraction while the gas monetization strategy is developed. This announcement is significant, especially after several recent Santos pre-salt discoveries were deemed non-commercial. The last Santos pre-salt field to reach FID was Equinor's Bacalhau in June 2021.

Today, Equinor presented its updated energy transition plan, validating our expectations of Equinor as one of the most GHG-efficient operators. The challenging economics of many new energy projects and shareholder pressure to deliver satisfactory economic results are prompting all Majors (Shell, BP, ENI, Equinor, TotalEnergies, Chevron, and ExxonMobil) to revisit their strategies, with bp making the most aggressive changes. In our latest note, Markus Mowatt-Larssen provides analysis and insights on this peer group strategies heading into 2025. A common theme is that upstream investments are making a strong comeback. https://lnkd.in/g_rZqMq6

Corporate Update! Criterium Energy has reported a 160% 2P reserves replacement ratio at end-2024. Following the acquisition of Mont D'Or Petroleum in 2024, which provided it with a 100% interest in the Tungkal and West Salawati PSCs, Criterium conducted a successful workover program on the Mengoepeh field in the Tungkal PSC. The operator plans to sustain the field’s output through 8-12 workover wells in 2025, and potentially further infill drilling. In addition, Criterium is also planning to develop its gas assets, starting with the Southeast Mengoepeh field. Criterium entered Southeast Asia in 2022, by acquiring Mitsui’s stake in the Bulu PSC in Indonesia. It focuses on entering markets with growing energy demand, acquiring neglected/undercapitalised assets and delivering short-cycle return and high-margin projects.

Norway development update! Operator Equinor has commenced production from the Halten ?st development in the Norwegian Sea, with partners V?r Energi and Petoro. HitecVision-backed Sval Energi, prior to the recently announced acquisition by DNO ASA, sold its 11.8% stake in the project to Equinor in November 2024. The development, with a total investment of c. US$900 million, is being executed in two phases. Phase 1 comprises the development of five discoveries and the drilling of six wells tied back to ?sgard B. The second phase includes one further development well which combined with Phase 1 will recover total reserves of 100 MMboe. As part of Phase 2, three prospects are also planned to be drilled.

US Alaska Exploration Alert! An Armstrong Energy-led consortium (inc. Santos Ltd, Apache Corporation) has reported the first success of its 2024/2025 exploration program. Its Sockeye-2 well encountered oil in the Brookian Topsets, along with additional hydrocarbon-bearing intervals in the shallower Stained Tongue formation. Testing is planned. This is the second successful exploration well on the partnership's 325,000-acre leasehold. Last year, the group’s King-Street 1 identified two oil-bearing reservoirs in the Brookian. The hopes are that success on the scale of Repsol/Armstrong’s 2013 Pikka discovery can be replicated. Further drilling is on the radar, with three additional exploration wells planned – the Killian-1, Killian-2, and Montucky-1.

CCUS Malaysia Alert! The Malaysian Parliament’s Lower House has passed the CCUS Bill, proposing the establishment of the Malaysia CCUS Agency. This Agency will regulate, develop, monitor and manage CCUS activities. PETRONAS has ambitious carbon reduction targets, aiming for a 25% reduction in scope 1 and 2 emissions by 2030 and achieving net zero by 2050. CCS is expected to support these goals through the 100% PETRONAS-owned Kasawari gas development, which includes CCS, and 3 Malaysian CCS hubs. The hubs are aiming for an initial combined injection capacity of up to 15 MMtpa of CO2. ? In addition, PTTEP has recently completed FEED studies on Malaysia’s Lang Lebah sour gas field development, which is also planning to incorporate CCS.

Turkiye Unconventionals Alert!?Continental Resources has announced an agreement with TransAtlantic Petroleum, LLC and Türkiye Petrolleri A.O. (Türkiye’s NOC, TPAO) to develop unconventional oil and gas resources in the country's Diyarbakir and Thrace basins. TPAO’s analysis suggests recoverable resource could reach 6 bnbbl oil and 12-20 tcf of gas in Diyarbakir, and 20-45 tcf in Thrace. Continental is one of the most established names in the US shale sector, producing 427,000 boe/d in 2024 - this marks its first move abroad. Transatlantic has already been applying horizontal drilling and fracking techniques, and now Continental will bring its deep expertise to a country that has ambitious energy plans. Does this move also reflect the maturity of US shale, a fall in high quality drilling inventory? Could we start to see more US shale players looking international?

Ecuador licensing follow-up! Plans to award Block 60 (Sacha), the country's most productive oil field, have stalled. President Noboa unexpectedly advanced the deadline for the required US$1.5B entry bonus to March 11 at 9 PM, which the Sinopetrol consortium (Sinopec International Petroleum Service Corporation 60%, New Stratus Energy 40%) did not meet. This missed payment effectively halts the proposed 20-year PSC, leaving the government's next steps unclear, especially amid the ongoing campaigning for the presidential election, scheduled for April 13, 2025. ? This development adds uncertainty to Ecuador’s investment outlook, particularly for the oil and gas sector, which urgently needs fresh capital. The government will now explore alternative options, but further clarity on the sector’s direction is unlikely until after the election.