From Petrobras awarding SLB a pair of contracts to Touchstone Exploration acquiring operations from Shell Trinidad Central Block Ltd., below is a compilation of the latest headlines in the E&P space.
Activity
Tethys Oil Suspends Kunooz-1 Well in Oman
Swedish E&P Tethys Oil announced Dec. 12 it has suspended its Kunooz-1 exploration well in Block 58, onshore Sultanate of Oman.
The decision comes after flow testing failed to confirm the presence of commercially-viable hydrocarbons, Tethys said in a press release. The company conducted open hole testing of the Ara/Birba and Buah formations.
During drilling, oil shows were present in the Amin formation and testing confirmed the existence of “high-quality” reservoir rock, Tethys said. The reservoir is able to “maintain high productivity with water flows to surface,” Tethys said. Additionally, source rock and a petroleum system were found in the region.
Tethys Oil said the test gave a better understanding of the prospectivity of the play. The company will now focus on further evaluation efforts of the collected data.
Kunooz-1 is Tethys first exploration well on Block 58, drilled to a total depth of approximately 3,900 m. Drilling operations, which commenced Aug. 19, are expected to be ongoing for about 45 days, according to the company’s site.
Tethys also divested its entire direct and indirect holding of interests in Lithuania, the company said in a separate Dec. 13 release.
As a result of the sale, Tethys Oil has no remaining interests in Lithuania. No financial effect is expected from the divestment.
Kolibri CEO Expects Tishomingo Well Pad to be 'More Economic'
Kolibri Global Energy Inc., an operator in the Tishomingo Field in Oklahoma, reported strong performance at its Alicia Renee well pad, according to a Dec. 5 press release.
The initial 30-day average production rate for the Alicia Renee 2-11-3H was 1,062 boe/d (711 bbl/d of oil); the Alicia Renee 2-11-4H averaged 883 boe/d (593 bbl/d); and the Alicia Renee 2-11-5H well averaged 706 boe/d (474 bbl/d), California-based Kolibri said in the release.
Wolf Regener, Kolibri president and CEO, said he expects the wells to be more economic than the company forecasted. The company reported an estimated average cost for the facilities and drilling and completion of these wells at under $6.3 million per well.
"The expected all-in costs of less than US$6.3 million per well, combined with the great production results so far, indicate the wells to likely be more economic than we had forecast,” Regener said.
The wells’ current production is approximately 1,080 boe/d for the Alicia Renee 2-11-3H; 980 boe/d for the Alicia Renee 2-11-4H; and 800 boe/d at the Alicia Renee 2-11-5H well.
Kolibri owns a 100% working interest in the wells, which were drilled at a six-well per section spacing pattern with a lateral length of 1.5 miles.
“Assuming the wells continue to perform as we anticipate, it should lead to demonstrating the higher rates of return and efficiencies that we were hoping for,” Regener said. “Even with the expected natural declines from the wells, adding these three wells to our existing production, which was 3,032 [boe/d] in the quarter ended September 30, 2024, we expect our cash flow to be significantly increased in the fourth quarter and into 2025.”
Contracts and company news
Partnership to Deploy Clean Frac Fleets Across Permian Basin
Diamondback Energy, Halliburton Energy Services and VoltaGrid have agreed to deploy four advanced electric simul-frac fleets across the Permian Basin, according to a Dec. 13 press release.
The companies aim to enhance clean and efficient energy solutions in the region, the release said.
VoltaGrid will provide approximately 200 megawatts of electric power to support Diamondback's field operations.
The fleets will integrate Halliburton's 6,000-horsepower all-electric fracturing technology ZEUS with VoltaGrid's advanced power generation systems.
The ZEUS platform includes electric pumping units, Octiv Auto Frac service and Sensori fracture monitoring service.
VoltaGrid will also deploy its high-capacity simul-frac generators and expand its compressed natural gas infrastructure at Diamondback’s microgrid facility, located northeast of Midland, Texas.
VoltaGrid said this will ensure a reliable natural gas feedstock supply, particularly when pipeline gas is unavailable.
“This collaboration reinforces our commitment to driving efficiency and sustainability in oil and gas operations,” said Danny Wesson, executive vice president and COO at Diamondback Energy. “The integration of Halliburton’s innovative electric fracturing technology and VoltaGrid’s cutting-edge power systems allows us to achieve superior performance while significantly reducing our environmental impact.”
Touchstone Acquires Trinidad Operations for $23MM
Touchstone Exploration has acquired Shell Trinidad Central Block Ltd., which holds a 65% operating working interest in the Central Block E&P license and gas processing plant in Trinidad and Tobago, the island nation off the coast of Venezuela.
Touchstone’s subsidiary in Trinidad will pay $23 million to BG Overseas Holdings Ltd. The acquisition is effective Jan. 1, 2025, and is expected to close in second-quarter 2025.
The block produces about 18 MMcf/d of natural gas and 200 bbl/d of NGLs. The midstream assets in the purchase include an 80-MMcf/d gas processing plant and a gas export pipeline to both the domestic market and the Atlantic LNG facility.
“The asset is a strategic fit with Touchstone's current land base and provides us access to world LNG prices for natural gas,” said Touchstone CEO Paul Baay. “During 2025 we will consider pursuing an infill development drilling program at Central block and look to boost production and LNG sales."
The Central block assets include four wells in the Carapal Ridge, Baraka, and Baraka East liquids-rich natural gas pools.
The acquired company also holds three gas marketing contracts: one accessing the Trinidad domestic market and two contracts accessing the Atlantic LNG facility in Trinidad.
AIQ, Partners to Boost Drilling Performance with AI ROP Project
The AI Rate of Penetration Optimization project will use artificial intelligence (AI)-enabled solutions to provide real-time recommendations for drilling parameters.
Abu Dhabi-based AI company AIQ, in collaboration with ADNOC, Baker Hughes and CORVA, launched the AI Rate of Penetration (ROP) Optimization initiative on Dec. 5. The initiative aims to use AI to enhance drilling performance across ADNOC fields.
The project will use AI-enabled solutions at targeted onshore and offshore fields, providing real-time recommendations for drilling parameters, AIQ said in the announcement’s release.
By training advanced AI on specialized reservoir and drilling datasets and leveraging historical drilling performance data, this collaboration plans to provide real-time input to the drilling engineer for optimizing weight on bit, rotations per minute and other critical parameters, the release said.
“This project marks a significant development in AIQ’s mission to collaborate with industry innovators to drive technological innovation in the energy sector. By working with ADNOC, Baker Hughes, and CORVA, we are bringing together the best minds in the industry to make drilling activities faster, safer, and more cost-effective,” said Magzhan Kenesbai, acting managing director of AIQ.
Chevron Upgrades Refinery to Expand Light Crude Processing Capacity
Chevron Corp. has completed a retrofit to its Pasadena Refinery. The retrofit is part of the company's Light Tight Oil Project and increases product flexibility and processing capacity of lighter crudes at the facility to 125,000 bbl/d, the company announced Dec. 10.
Subsidiary Chevron U.S.A. Inc. acquired the refinery in Pasadena, Texas, in 2019 with the intent to expand its Gulf Coast refining system to process more equity crude from the Permian Basin.
“This refinery now firmly integrates our upstream and downstream businesses as we aim to optimize the value chain,” said Chevron Manufacturing President Chris Cavote in the press release.
Phased start-up of the asset is expected to last through first-quarter 2025 as products are developed to specification.
Upon start up, the refinery will also begin producing jet fuel and exporting gas oil.
CNOOC Sells US Assets to Britain’s INEOS
(Reuters) China's CNOOC Ltd. has sold its U.S. subsidiary, together with its upstream oil and gas assets in the Gulf of Mexico, to British chemicals group INEOS, according to a CNOOC statement issued on Dec. 14.
The Chinese oil and gas major said CNOOC Energy Holdings U.S.A. entered into a sales agreement with a subsidiary of INEOS relating to CNOOC's upstream oil and gas assets in the U.S. part of the Gulf of Mexico.
The deal primarily includes non-operator interests in oil and gas projects such as the Appomattox and Stampede fields.
INEOS paid just under $2 billion for the assets, according to a person with direct knowledge of the matter who was not authorized to speak to media.
CNOOC said the transaction price was in line with market conditions but did not provide a figure, while INEOS declined to comment on the price.
The Chinese firm aims to optimize its global asset portfolio and will work with INEOS towards a smooth transition, CNOOC International Chairman Liu Yongjie said in the statement.
CNOOC has been sounding out potential buyers of its interests in U.S. oil and gas fields since 2022.
Reuters had reported earlier CNOOC was considering an exit from operations in Britain, Canada and the United States over concerns those assets could become subject to Western sanctions because China had not condemned Russia's invasion of Ukraine.
SLB to Manage Construction of Deepwater Wells for Petrobras
Petrobras has chosen SLB to handle integrated services at its offshore fields in Brazil, SLB said on Dec. 11.
The energy technology company will oversee the construction of more than 100 deepwater wells on up to nine ultra-deepwater rigs.
"This investment of approximately $800 million will allow us to intensify our activities in several basins,” said Wllisses Menezes Afonso, executive manager of wells at the Brazilian national oil company. The three-year contract with SLB begins in April 2025.
The services will primarily be provided in the Campos, Santos and Espírito Santo basins. Operations in the Equatorial Margin are possible.
“This contract builds on our existing work with Petrobras across its offshore basins and introduces new technologies that enhance both operational and environmental efficiency,” said Wallace Pescarini, president of the Offshore Atlantic basin at SLB.
SLB said it plans to use its Ora intelligent wireline formation testing platform and SpectraSphere fluid mapping-while-drilling service as it fulfills the contract.
Petrobras Awards SLB Another Contract Offshore Brazil
Petrobras has awarded SLB and its partners two subsea raw seawater injection (RWI) systems to increase recovery from the prolific Búzios Field offshore Brazil, SLB said Dec. 12.
The award comes a day after Petrobras selected SLB to handle integrated services at its offshore fields.
Joint venture (JV) SLB OneSubsea will provide subsea RWI systems to increase the production of FPSOs currently bottlenecked in their water injection capacities. Once operational, the RWI systems will reduce greenhouse-gas emissions per barrel of oil as they are a more efficient means of reservoir pressurization to increase recovery when compared with the conventional alternative of topside injection systems, SLB said. OneSubsea is a JV among SLB, Aker Solutions and Subsea7.
“As deepwater basins mature, we see more and more secondary recovery opportunities emerging,” said Mads Hjelmeland, CEO of SLB OneSubsea. “Subsea raw seawater injection is a well-proven application with a strong business case that we think should become mainstream. By placing the system directly on the seabed, we free up space and reduce fuel needs for the FPSOs as well as lessen the power needs for the injection systems. It’s a win-win for Petrobras, and one that we are very excited about. This contract will consolidate our solid local content presence in the country, contributed by the largest manufacturing plants and state-of-the-art subsea service facilities in Brazil.”
Under the contract, SLB OneSubsea will provide two complete subsea RWI systems to support Petrobras’ FPSOs P-74 and P-75. Each will consist of a subsea seawater injection pump, an umbilical system and topside variable speed drive.
Hart Energy Staff and Reuters contributed to this report.