Robin Dupre • Houston
GlobalData: Egypt’s Zohr gas field could boost other east Mediterranean projects
With the giantZohr gas field in Egypt expected to come online by 2018, and President Abdel Fattah Al-Sisi agreeing to remove any political obstacles to Eni commercializing the field, the stage is being set for a wider regional development plan catalyzing other projects in the east Mediterranean, according to research and consulting firm GlobalData.
The company’s latest analysis indicates that Zohr will yield an internal rate of return of 25%, assuming a flat gas price of $5.88 per thousand cubic feet and recoverable reserves of 22 tcf, justifying a fast-track development.
GlobalData’s base case analysis assumes an initial production rate of 50 MMcf/d, consistent with other producing wells in the vicinity, and that approximately eight wells will be brought onstream annually until 2026. Peak production would be achieved in 2026 at 3,052 MMcf/d.
The base case estimate for capex is $7.69 billion, which is in line with the operator’s expectations of $7-10 billion. In comparison, Leviathan gas field in Israel, which has 12.5 tcf of estimated recoverable reserves, is expected to cost $8.9 billion over the full cycle of a standalone project.
“Reduced exploration risk and the potential to share infrastructure could see the easternMediterranean blossom into a key development area for international oil companies,” Matthew Jurecky, GlobalData’s Head of Oil & Gas Research and Consulting, said. “With the resource potential more clearly established, above-ground issues, such as political challenges and collaboration between operators, become key.”
Lydia Pearson, GlobalData’s Upstream Oil & Gas Analyst, says that high-profile political challenges have paralyzed other regional projects, such as West Delta Deep Marine in Egypt and Leviathan in Israel, but there are reasons for other nations in the east Mediterranean to be optimistic going forward.
“In Cyprus, a route to commercialization for the 4 tcf Aphrodite field has yet to be found. A proposed floating LNG facility has struggled with commerciality, but leveraging scale and infrastructure with Zohr would boost returns and mitigate risk at both projects,” Pearson said.
“In Israel, GlobalData estimates Tanin and Karish to have poor project economics, hovering around a full-cycle value of negative $1 billion when considered as standalone projects. However, if a regional gas hub were developed, these projects would yield much more favorable economics.”
Weatherford lands world’s heaviest casing string in the GoM
Weatherford says it has achieved a new world record by landing a 1,180-ton (2,360,700-lb) casing string at a total depth of 26,805 ft (8,170 m). The job was performed on a deepwater rig in theGulf of Mexico this fall.
The operator of the rig in Green Canyon required installation of a heavy, 14-in., 112.6 lb/ft casing string. The total weight of the casing and landing string needed to reach total depth of 1,180 tons (1,070 metric tons).
The operator contracted Weatherford to install the landing-string slips 1250 (LSS 1250), which acts as a spider to safely and efficiently grip tubulars and has a maximum load capacity of 1,250 tons (1,133 metric tons).
The company deployed the LSS 1250 after providing an engineering analysis to verify that the pipe could reach total depth without damaging the tubulars from excess stress. The team then ran the string to total depth with no issues.
Without the increased load capacity provided by the LSS 1250, the operator would have needed to drill a second hole section and run two separate casing strings at an approximate cost of $15 million.
Newly developed LWD service withstands ultra-high temperatures
Weatherford International announced the development of the HeatWave Extreme service for commercial use by Chevron Thailand. The HeatWave Extreme service includes an enhanced logging-while-drilling (LWD) tool string capable of withstanding temperatures of up to 410°F (210°C).
The high-temperature rating enables drillers to log to total depth (TD) in conditions that exceed the current barriers of 347°F (175°C) and avoids the need to pull out of the hole, drill blindly or land the well above the planned TD.
The latest innovation in the Weatherford high-temperature LWD portfolio made its debut in April 2015 in Thailand. The 4 3/4-in. modified tool string is expected to reduce drilling times in deep gas fields.
“Through collaborative efforts with Chevron Thailand, we can provide LWD services in oil and gas plays throughout the world where there are extreme temperature challenges,” said Etienne Roux, Vice President of Drilling Services at Weatherford. “Furthermore, the joint focus on leveraging our technologies to drive efficiency and optimize costs in the current market conditions will help support our customers’ operations.”
The first phase of component development and field testing for the new tool began in May 2014 as a partnered project between Weatherford and Chevron Thailand for offshore gas wells in the Gulf of Thailand. To date, the technology has saved approximately $4 million in rig time and expenses related to temperature mitigation over the course of the 22-well program.
Weatherford’s past experience and successes with high-temperature development allows operators to log while drilling in extreme temperature environments.
The partnership is part of Weatherford’s strategic focus to develop the right technology for the right market through collaboration with key clients globally.
New oil spill response guides launched for UKCS
Four new guides have been added to an information “toolkit” to help offshore oil and gas operators implement their response should there be an oil spill in theNorth Sea.
A UK industry group launched in the wake of theDeepwater Horizon incident in the US Gulf of Mexico, proposed the development of a toolkit containing information on the different methods for countering spillages on the UK continental shelf.
Another group led by Oil & Gas UK has worked on-and added to-the toolkit over the years. It is now complete, following the addition of four new response implementation guides, or RIGs, to the four RIGs already in place.
The new RIGs provide guidance on aerial monitoring of a spill, responding to it from the shoreline, the decanting of oil, as well as managing any waste that might arise from an accidental release.
The RIGs that already existed in the toolkit cover the containment and recovery of a spill at sea and details on the application of dispersant on oil from the air, from a boat and from below the surface of the water.
“The aim of the guides is to provide support to onshore response staff in the event of an oil spill incident. They will also help discussions that would take place between the offshore operator involved and their response contractor on the implementation of their strategy for dealing with any spill,” Mick Borwell, environment director at Oil & Gas UK, said.