Manup Industry Roundup - W0723: NEWSL -01
Good morning!
The global oil and gas exploration sector had its strongest year in 2022 in more than a decade. In its work to improve portfolios by adding lower-carbon, lower-cost advantaged hydrocarbons, the sector created at least $US33 billion of value and achieved full-cycle returns of 22%.
Namibia, Brazil, and Algeria scored major discoveries in 2022 as the industry drilled fewer exploration wells but found better and larger prospects.
Below are the oil and gas stories and news that made headlines this week carefully curated by?Manup.
Summary of the news
2022 Oil and Gas Discoveries Create Highest Value in a Decade
Despite a global drop in exploration drilling in 2022, the oil and gas exploration sector saw its best year in over a decade with discoveries up along with greater quality prospects, creating $33 billion in value and full cycle returns of 22% based on $60/bbl Brent prices, according to Wood Mackenzie.
In its report, Oil and Gas Exploration: 2022 in Review, the international consultancy noted that while the industry drilled fewer exploration wells than it had before the start of the pandemic, the 20 billion BOE discovered in 2022 matched average annual results over the years 2013 to 2019.
Calling 2022 “a standout year for exploration,” Julie Wilson, director of global exploration research at Wood Mackenzie, said in a news release that “explorers were able to drive very high value through strategic selection and focus on the best and largest prospects.”
Deepwater discoveries in Namibia and in the pre-salt exploration areas offshore Guyana and Brazil have contributed the highest value to last year’s new finds, along with onshore discoveries in the Algerian desert. “The average discovery last year was over 150 million BOE, more than double the average of the previous decade
The report noted that liquids made up 60% of new resources discovered, a phenomenon that has occurred only three times in the past 20 years.
By 2030, fast-tracked development of these new discoveries could deliver 1 million B/D in oil and 0.5 million BOE/D of gas production, generating $15 billion in free cash flowid.
TotalEnergies, QatarEnergy, and Petrobras lead in net-new discovered resources in 2022 with almost three quarters of new resources discovered by either a national oil company (NOC) or a global major.
The study also pointed out that appraisal well drilling in 2022 was largely flat from 2021 in terms of numbers, and that inflation had driven drilling costs per well higher.
World’s Largest Carbon Capture Plant To Restart
Owners of the world’s largest carbon capture facility plan to restore operations at the $1 billion plant three years after it shut down, providing a test case for a nascent industry that experts believe is essential in achieving climate goals
JX Nippon aims to restart the Petra Nova facility in Texas after NRG Energy Inc. finishes repairs on the coal-fired power unit to which it is connected.
NRG said it’s scheduled to complete the work in June.
The resumption would mark a significant step forward for U.S. carbon capture, providing a new lease of life for a project that critics saw as one of the industry’s highest-profile failures. The Biden administration’s Inflation Reduction Act provides major tax incentives to boost development of the technology that would scrub emissions from burning fossil fuels.
Petra Nova, which cost $1 billion to build, including $195 million from the U.S. government, shipped carbon it captured from burning coal to an oil field operated by Hilcorp Energy Co. There, the carbon was used to extract crude through a process called enhanced oil recovery. In that process, the carbon dioxide acts like soap to squeeze out oil and is then stored in reservoirs deep underground.
During its three years of operation, it was the world’s largest post-combustion carbon capture plant by tonnes captured annually, according to NRG.
But the system faltered in 2020 after plunging oil prices and crude production “made the project economics challenging,” NRG said in a statement. NRG sold its 50% stake in Petra Nova to JX Nippon for $3.6 million at the end of last year, making the Japanese company its sole owner.
Advocates claim Petra Nova was a technical success. The plant, located in greater Houston, captured 92.4% of the carbon dioxide from gas processed from the coal unit and demonstrated that a commercial-scale project can be built, former owner NRG said in a report sponsored by the Department of Energy.
However, the report also revealed that the amount of carbon captured in the first two years of operation “fell well below expectations” due to extensive downtime of various system parts.
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Petrogas Picks Umbilicals Provider For North Sea Gas Fields
JDR, part of TFKable Group, has secured a contract from Petrogas E&P Netherlands for the supply of two umbilicals for offshore conventional gas fields in the Netherlands.
The A15 and B10 fields are located in quads A and B, in a shallow water depth of 115 feet, and are expected to recover 17.25 Mmboe, comprised of 103.5 bcf of natural gas reserves.
JDR will engineer, design and manufacture two subsea umbilicals, that range from 10-13 kilometers in length, to provide power to two new platforms located at the A/B shallow gas field.
The umbilicals incorporate hydraulic hoses, chemical injection hoses, electrical cables and fiber optic cables that enable communication between the platform facilities.
JDR will also deliver topside umbilical termination unit pull-in heads, hang-off bodies and umbilical termination assemblies for the project.
The umbilical, topside terminations, and additional subsea equipment will be manufactured at the company’s Hartlepool facility, with the hydraulic hoses and LV cables being manufactured at the Littleport facility.
When complete, the umbilicals will be attached to 9.2-meter delivery reels in Hartlepool and loaded onto an installation vessel to be taken offshore.
The full scope of work is expected to be delivered by the beginning of July.
To remind, Petrogas awarded a front-end engineering and design (FEED) contract for the development of the A15 and B10 gas fields to Enersea back in August 2021.
In April 2022, the Dutch company selected HSM Offshore Energy to construct two platforms for the project.
Maersk Drilling’s Maersk Resolute jack-up rig is in charge of drilling three wells at the A15 field and two wells at the B10 field.
Offshore Workers' Strike Could Affect Over 30 Platforms in UK
Around 300 construction members of Stork Technical Services UK will be balloted on strike action over rotas and pay on more than 30 offshore installations in the UK Continental Shelf (UKCS), UK’s Unite the union has reported.
The offshore dispute is centered on working rotas and Stork rates of pay failing to keep pace with the broader cost of living which stands at 13.4 per cent (RPI) and Unite the union is demanding that the contentious three on/three off rotas are abolished.
The ballot runs for four weeks, starting on 17 February and closing on 17 March.
Unite the union recently held a consultative ballot of its Stork membership which revealed support for strike action standing at 96 per cent on a 94 per cent ballot return.
According to the union, a number of operators will be hit by any successful ballot for industrial action including EnQuest, Repsol, Shell and Total, and the strike is set to lead to a “serious backlog” in maintenance work potentially leading to installation shutdowns if any are safety critical which would result in a loss of production.
This offshore dispute comes as record profits were announced by oil and gas operators. Unite blasted the UK Government’s inaction on taxing oil firms as BP posted the biggest profits in its history, doubling to ￡23 billion in 2022, and Shell reported earnings of ￡32 billion, bringing the combined total profits of the top two energy companies in Britain to a record ￡55 billion.
Unite the union also announced that nearly 100 Odfjell offshore drillers working on BP’s two platforms in the UK sector of the North Sea have backed strike action to secure paid leave away from the current three on/three off working rota, as well as that more than 700 offshore members at Bilfinger UK are set to be balloted on strike action in a dispute over pay.
Other stories we are following…