Maersk Drilling has won a deepwater drilling contract from Aker Energy to provide drilling services at the Pecan-4A appraisal well located offshore Ghana.
Maersk Drilling will employ its ultra-deepwater drillship, Maersk Viking, under the contract.
The scope of the contract includes drilling of one firm well, with options for two additional wells.
Maersk Drilling is a Danish offshore drilling rig operator, while Aker Energy is an offshore operator of oil and gas properties based in Ghana.
Adnoc LNG has awarded an AED3.16bn ($860m) contract to a consortium of Tecnicas Reunidas and Target Engineering Construction Company to provide engineering, procurement and construction services for the next phase of the Integrated Gas Development Expansion project.
The scope of the contract also includes equipment and material supply, testing and commissioning services and other auxiliary services.
Adnoc LNG is a UAE-based subsidiary of Abu Dhabi National Oil Company, while Técnicas Reunidas is a Spanish general contractor. Target Engineering Construction Company is a UAE-based provider of oil and gas engineering, procurement and construction contractor services.
Four subsidiaries of Malaysia-based oil and gas services firm Sapura Energy have received three new offshore contracts along with extension of an existing contract.
The new contracts were awarded to Sapura Offshore, Sapura Fabrication and Normand Sapura, while the extension contract was awarded to Sapura Drilling.
The MYR815m ($197.4m) contracts were secured in Australia, Brunei, Malaysia and Nigeria.
Sapura Offshore was subcontracted by Saidel for the engineering and construction of the 16 in Southern SWAMP Sales Gas Evacuation pipeline located in the Delta Region of Nigeria for Shell Petroleum Development Company of Nigeria.
Sapura Fabrication was awarded a five-year subcontract for providing maintenance, construction and modification services under the Pan Malaysia Integrated Offshore Installation Contract by ExxonMobil Exploration and Production Malaysia.
Normand Sapura was contracted to provide inspection and recovery services for the subsea structures of the East Spar Project located offshore Western Australia for Quadrant Energy.
Sapura Drilling was awarded an extension contract by Brunei Shell Petroleum to extend its services for the Sapura Pelaut semi-submersible tender assisted drilling rig.
Shell plans to divest its 22.5% working interest in the Caesar Tonga oilfield located offshore Mexico to Focus Oil.
The Caesar Tonga project involves the development of three separate discoveries located south of the Green Canyon in the Gulf of Mexico, US.
Shell is a Dutch diversified oil and gas company, while Focus Oil is a US-based oil and gas exploration company.
Jadestone Energy has announced that all the conditions required to acquire the Montara oil project, located offshore Australia, from PTT Exploration and Production (PTTEP) have been met.
The Montara oil project is located in the Timor Sea offshore Australia, approximately 690km west of Darwin, and includes three fields namely Montara, Skua and Swift/Swallow.
Jadestone Energy has entered an agreement to acquire a 100% stake in the Montara field and its associated assets located in the Commonwealth of Australia from PTTEP’s subsidiary, PTTEP Australasia (Ashmore Cartier), in July 2018 for $195m.
Based in Singapore, Jadestone Energy is an oil and gas production and development company, while PTT Exploration and Production is a Thai oil and gas exploration and production company.
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The Permian is in desperate need of pipelines. That much is true. There is so much shale liquids sloshing underneath the Permian formation in Texas and New Mexico, that even though it has already upended global crude market and turned the USA into the world’s largest crude producer, there is still so much of it trapped inland, unable to make the 800km journey to the Gulf Coast that would take them to the big wider world.
The stakes are high. Even though the US is poised to reach some 12 mmb/d of crude oil production next year – more than half of that coming from shale oil formations – it could be producing a lot more. This has already caused the Brent-WTI spread to widen to a constant US$10/b since mid-2018 – when the Permian’s pipeline bottlenecks first became critical – from an average of US$4/b prior to that. It is even more dramatic in the Permian itself, where crude is selling at a US$10-16/b discount to Houston WTI, with trends pointing to the spread going as wide as US$20/b soon. Estimates suggest that a record 3,722 wells were drilled in the Permian this year but never opened because the oil could not be brought to market. This is part of the reason why the US active rig count hasn’t increased as much as would have been expected when crude prices were trending towards US$80/b – there’s no point in drilling if you can’t sell.
Assistance is on the way. Between now and 2020, estimates suggest that some 2.6 mmb/d of pipeline capacity across several projects will come onstream, with an additional 1 mmb/d in the planning stages. Add this to the existing 3.1 mmb/d of takeaway capacity (and 300,000 b/d of local refining) and Permian shale oil output currently dammed away by a wall of fixed capacity could double in size when freed to make it to market.
And more pipelines keep getting announced. In the last two weeks, Jupiter Energy Group announced a 90-day open season seeking binding commitments for a planned 1 mmb/d, 1050km long Jupiter Pipeline – which could connect the Permian to all three of Texas’ deepwater ports, Houston, Corpus Christi and Brownsville. Plains All American is launching its 500,000 b/d Sunrise Pipeline, connecting the Permian to Cushing, Oklahoma. Wolf Midstream has also launched an open season, seeking interest for its 120,000 b/d Red Wolf Crude Connector branch, connecting to its existing terminal and infrastructure in Colorado City.
Current estimates suggest that Permian output numbered around 3.5 mmb/d in October. At maximum capacity, that’s still about 100,000 b/d of shale oil trapped inland. As planned pipelines come online over the next two years, that trickle could turn into a flood. Consider this. Even at the current maxing out of Permian infrastructure, the US is already on the cusp on 12 mmb/d crude production. By 2021, it could go as high as 15 mmb/d – crude prices, permitting, of course.
As recently reported in the WSJ; “For years, the companies behind the U.S. oil-and-gas boom, including Noble Energy Inc. and Whiting Petroleum Corp. have promised shareholders they have thousands of prospective wells they can drill profitably even at $40 a barrel. Some have even said they can generate returns on investment of 30%. But most shale drillers haven’t made much, if any, money at those prices. From 2012 to 2017, the 30 biggest shale producers lost more than $50 billion. Last year, when oil prices averaged about $50 a barrel, the group as a whole was barely in the black, with profits of about $1.7 billion, or roughly 1.3% of revenue, according to FactSet.”
The immense growth experienced in the Permian has consequences for the entire oil supply chain, from refining balances – shale oil is more suitable for lighter ends like gasoline, but the world is heading for a gasoline glut and is more interested in cracking gasoil for the IMO’s strict marine fuels sulphur levels coming up in 2020 – to geopolitics, by diminishing OPEC’s power and particularly Saudi Arabia’s role as a swing producer. For now, the walls keeping a Permian flood in are still standing. In two years, they won’t, with new pipeline infrastructure in place. And so the oil world has two years to prepare for the coming tsunami, but only if crude prices stay on course.
Recent Announced Permian Pipeline Projects
Headline crude prices for the week beginning 3 December 2018 – Brent: US$61/b; WTI: US$52/b
Headlines of the week
The engine oil market has grown up around 10 to 12% in the last three years because of various reasons, mostly because of the rise of automobiles.
According to the Bangladesh Road Transport Authority (BRTA), the number of registered petrol and diesel-powered vehicles is 3,663,189 units.
The number of automotive vehicles has increased by 2.5 times in the last eight years.
The demand for engine oils will rise keeping pace with the increasing automotive vehicles, with an expected 3% yearly growths.
Mostly, for this reason, the annual lubricant consumption raised over 14% growth for the last four years. Now its current demand is around 160 million tonnes.
The overall lubricants demand has increased also for the growth of the power sector, which has created a special market for industrial lubricants oil.
The lubricants oil market size for industries has doubled in the last five years due to the establishment of a number of power plants across the country.
The demand for industrial oil will continue to rise at least for the next 15 years, as the quick rental power plants need a huge quantity of lube oil to run.
The industries account for 30% of the total lubricant consumption; however, it is expected to take over 35% of the overall demand in the next 10 years.
Mobil is the market leader with 27% market share; however, market insiders say that around 70% market shares belong to various brands altogether, which is still undefined.
It is already flooded with many global and local brands.