Buyuma Weekly Energy Roundup (Wk 33)

Hello There,

Welcome to this week's Buyuma Ugandan oil and gas weekly update covering the latest energy news that made waves in Uganda.

Abu Dhabi's ADNOC Gas?has signed a five-year deal to supply liquefied natural gas (LNG) to Japan Petroleum Exploration Co (Japex) (1662.T).

The deal follows Japanese Prime Minister Fumio Kishida's visit to the UAE and other Gulf states in July, which focused on securing energy supplies for Japan, which remains highly dependent on oil and gas imports.

Below are?updates that made the headlines in the Oil and Gas industry

Transocean Deploys World's First Subsea 20,000 psi Blowout Preventer

Offshore drilling contractor Transocean said the world’s first subsea 20,000 psi blowout preventer (BOP) had been successfully deployed from its Deepwater Titan drillship.

The 20K BOP stack, supplied by NOV, is designed for use with extremely high-pressure reservoirs and can be used in ultra-deepwater applications

"This cutting-edge technology opens up new opportunities for the industry -- allowing us to reach previously inaccessible reservoirs," Transocean said.

In July, the new eighth-generation drillship Deepwater Titan started its inaugural contract with supermajor Chevron in the U.S. Gulf of Mexico.

Built by Singapore's Sembcorp Marine and delivered in December 2022, Deepwater Titan is the world’s second eighth-generation drillship, after Transocean's Deepwater Atlas.

The dual-derrick ultra-deepwater drillship is the first-ever unit delivered with two 20,000-psi blowout preventers (BOPs), well-control, riser, and piping systems for high-pressure and high-temperature drilling and completion operations.

It is also equipped with a three-million-pound hook-load hoisting capacity and capabilities to drill up to 40,000 feet and operate in water depths of up to 12,000 feet.

Deepwater Titan is now operating on a five-year contract in the U.S. Gulf of Mexico.

According to July 25 data from the U.S. Bureau of Safety and Environmental Enforcement, Chevron was using the Deepwater Titan to drill at the Makalu prospect in the MC 937 block in the U.S. Gulf of Mexico.

Asia's refiners face profit crunch as Kuwait cuts crude exports

Asian refiners are on the hunt for crude oil to replace Kuwaiti supply as the OPEC producer cuts exports by nearly a fifth to feed its huge new refinery, which is driving up prices for other sour crudes and likely to squeeze profit margins.

Lower Kuwaiti exports follow cuts from OPEC kingpin Saudi Arabia that have pushed Brent prices close to $90 a barrel and left little wriggle room for Asia's refiners, reliant on the Middle East for more than two-thirds of crude imports.

Chinese refiners, which have invested heavily in new plants designed to process sour oil, are especially exposed.

Discounted oil from Russia has eased some of the pain, replacing some Kuwaiti supply, largely to China and India.

But most of Kuwait's customers will have to pay up for similar quality oil from other suppliers such as Saudi Arabia, Iraq and the United Arab Emirates or buy more expensive sweet grades from other regions.

"Saudi Arabia and the UAE are the top contenders for filling the supply gap in the Middle East due to their production and export of medium sour barrels," said Janiv Shah, an analyst at consultancy Rystad Energy.

"It is improbable that they will be able to entirely meet the demand."

Sustained output cuts from OPEC producers and their allies and new refining capacity designed to process sour crude could lead to tight supply until the end of 2024, Energy Aspects analyst Sun Jianan said.

BP Installs Massive 19,600-tonne Topsides Unit on Caspian Sea Jacket

Oil major BP has completed the installation of the 19,600-tonne topsides of the $6 billion Azeri Central East (ACE) project platform onto a jacket in the Caspian Sea, offshore Azerbaijan.

Constructed by Azfen in the Bayil fabrication yard, the topsides unit was loaded on a barge and left the yard last week, en route to the BP-operated Azeri-Chirag-Deepwater Gunashli field.

The unit was installed on top of the ACE platform jacket, which has been at its offshore location since March, installed in a water depth of 137 meters.

The platform will be controlled remotely from the Sangachal terminal, according to Gary Jones, bp’s regional president for Azerbaijan, Georgia and Türkiye, "this is the first time in our experience in the Caspian that we will control an offshore platform from onshore."

According to Jones, it would take a few months to complete offshore hook-up and commissioning works to allow BP to start drilling the first platform production well and deliver ACE first oil in early 2024.

The ACE topsides unit consists of oil and gas processing facilities, an integrated drilling rig, a gas compressor, and living quarters.

The ACE development, consisting of a new 48-slot production, drilling, and quarters platform, is located mid-way between the existing Central Azeri and East Azeri platforms in a water depth of approximately 140 meters.?

The project also includes new infield pipelines to transfer oil and gas from the ACE platform to the existing ACG Phase 2 oil and gas export pipelines for transportation to the onshore Sangachal terminal.

In addition, there is a water injection pipeline between the East Azeri and ACE platforms to supply injection water from the Central Azeri compression and water injection platform to the ACE facilities.

The ACE platform and facilities are designed to process up to 100,000 barrels of oil per day. The project is expected to produce up to 300 million barrels over its lifetime.

Norwegian companies to invest further in oil and gas, report says

A survey has revealed that Norwegian oil and gas companies plan to increase oil and gas investments in both 2023 and 2024.

Conducted by Norway’s national statistics office, SSB, the survey found that by the end of 2023, oil companies in Norway will have invested Nkr213bn ($20.1bn), an increase of 7.7% on estimates from a similar survey conducted in Q1 of 2023.

Furthermore, estimates of 2024’s total spending from the same parties surveyed stand at Nkr207bn, an increase of 13.7% on Q1 2023’s estimate and a 53% increase on Q3 2022’s estimate.

The estimated investment increases are attributed towards the companies accelerating investment projects planned for 2024 to this year and next. These include both new oil and gas field infrastructure projects as well as production drilling.

Alongside this, the report cites a weakened Norwegian currency as a further driver of investment.

The Norwegian krone has struggled in 2023, increasing the cost of investment. This has subsequently contributed to a rise in investments when measured by current prices.

Many Norwegian oil and gas developments began in December 2022, the report adds. This means that while they will not have piled on costs to the 2022 tally, the majority of the costs of these investments have been brought about this year.

The report added that the nature of under way infrastructure investments being listed as full losses, should they be stopped, increases the likelihood of completion for the projects that began in December 2022.

This increases the likelihood of the accuracy of the oil and gas companies’ estimations for the end of 2023.

In June, Norway announced it had approved 19 new oil and gas field developments with more than $18bn of investments for the coming years.

US shale oil and gas output to extend fall in September -EIA

Oil and natural gas output from top U.S. shale-producing regions is set to fall in September for the second straight month to the lowest levels since May, Energy Information Administration data showed on Monday.

Shale oil output is expected to fall to 9.41 million barrels per day (bpd) in September, EIA data showed. It had touched 9.45 million bpd in July, its highest on record.

Crude output in the Permian Basin in Texas and New Mexico, the biggest U.S. shale oil basin, is expected to fall by nearly 13,000 bpd to 5.8 million bpd, the lowest since February.

Crude oil production in the South Texas Eagle Ford region is due to fall by 11,000 bpd to 1.11 million bpd, the lowest since December.

However, production in the Bakken region of North Dakota and Montana is due to rise 3,600 bpd to 1.21 million bpd, the highest since November 2020.

Total natural gas output in the big shale basins will also fall for a second month in a row, by about 0.15 billion cubic feet per day (bcfd), to 98.3 bcfd in September, its lowest since May, the EIA projected. That compares with a monthly gas output record of 98.5 bcfd in July.

In the biggest shale gas basin, Appalachia in Pennsylvania, Ohio and West Virginia, output will fall to 35.75 bcfd in September, the lowest since May, the EIA said.

Gas output in the Permian will rise to record high of 23.67 bcfd in September, while that from the Haynesville in Texas, Louisiana and Arkansas will edge down to 16.3 bcfd.

The EIA said it expects new Appalachia gas well production per rig to climb to 23.78 million cubic feet per day (mmcfd) in September, the highest since May. New gas well production per rig in Appalachia hit a record of 33.3 mmcfd in March 2021.

That's it for this week. Until next time, Cheers!