Majors and NOCs to dominate E&P activity throughout the Mediterranean

Oct. 1, 2009
Offshore expenditure is set to rise steeply across the Mediterranean and Black Sea over the next few years. According to Scottish Enterprise’s latest global activity overview, Spends and Trends 2009, offshore investments across the region could total over $41 billion during 2009-13, up 45% on the $28.7 billion estimate for 2004-08.

Offshore expenditure is set to rise steeply across the Mediterranean and Black Sea over the next few years. According to Scottish Enterprise’s latest global activity overview,Spends and Trends 2009, offshore investments across the region could total over $41 billion during 2009-13, up 45% on the $28.7 billion estimate for 2004-08.

The survey foresees Egypt and Libya together attracting around 60% of Mediterranean offshore investments, and this data was compiled before the recent deepwater wells in Libya’s Sirte basin. Nor does the survey take into account Noble’s exploration successes this year in the deepwater Israeli Levantine basin, or Aegean Energy’s development drilling campaign in the North Aegean Sea off Greece.

The report provides an overview of recent and planned E&P offshore programs for each country. Most activity in the Egyptian sector of the Mediterranean, it claims, is focussed on supplying gas to the Damietta LNG plant, operated by Segas, and the Idku plant operated by BG. There are plans to add further trains at both facilities.

West Delta Deep Marine (WDDM), a concession operated by the Burullus Group consortium of BG, EGPC, and Petronas, is the most prolific area for offshore gas discoveries, with the nine finds to date reportedly containing a total of 14 tcf recoverable. WDDM has been developed in four phases, the latest two encompassing Sapphire, and the Saffron, Scarab and Simian fields. Others should be brought on stream as production from the developed fields’ declines.

BP and its partners have achieved large finds on the North Alexandria A and North El Burg concessions, headed by Raven (reportedly up to 7 tcf recoverable), Giza, and Satis. Some of these will likely be developed in the run-up to 2012, the report says. There could be further activity in the area including the Abu Sir fields, where Hess and various partners apparently offered a large signature bonus for exploitation rights.

In April, Repsol announced a new oil and discovery in shallow water in the Sirte basin, 15 km (9.3 mi) from the Libyan coast, which may go forward for development. Currently the country has only three offshore fields in production – Bouri, Al-Jurf, and Bahr Essalam. Late in 2007, Eni invited bids to replace the long-servingSlough FSO on Bouri with a new unit. The report says Eni also invited tenders for three new pipelines and associated subsea equipment to link the DP3, DP4, and Sabratha platforms. Additionally, the company has been looking to boost capacity of its Greenstream trunkline exporting Libyan gas north across the Mediterranean Sea to Italy.

Tunisia’s offshore production comes from a few gas fields headed by the BG-operated Miskar and Hasdrubal, the latter coming on stream this summer; and small oil fields such as Ashtart and Didon. At Ashtart, the report says, Total has plans to refurbish all five existing platforms. Calgary-based Storm Ventures International has been looking to develop the Cosmos oil field via an FPSO, which Scottish Enterprise claims could later transfer to other discoveries on the SVI block, such as Yasmin and the decommissioned Tazerka.

Offshore Italy, Scottish Enterprise has identified around 20 small fields in production in the Adriatic Sea and off the southern coast and close to Sicily. The newest is the Eni/Inagip Annamaria, platform-based gas field development on the maritime boundary with Croatia.

Mediterranean Oil and Gas harbors ambitions to develop the Guendalina gas field off the east coast, and Elf’s 1987 oil discovery Ombrina Mare, where a newly drilled appraisal well suggests proven to probable reserves of 5-20 MMbbl. London-based Northern Petroleum has been working for some time on plans to develop the Giove, Medusa, and Rovesti discoveries, possibly with an FPSO. This year the company announced a farm-out deal with Shell, which has led to major seismic acquisition surveys over the company’s southern offshore acreage.

State-owned company Ina and Agip/Eni have boosted Croatia’s offshore gas output via the recent Ida, Ika, Katerina, and Marica developments. Another joint venture between Ina and Italy’s Edison has been developing the Izabela gas field, based on a two-platform scheme.

This summer, Repsol discovered two new oil accumulations 45 km (28 mi) offshore Tarragona in eastern Spain with the Montanazo D-5 and Lubina-1 wells, in water depths of 736 and 663 m (2,414 and 2,175 ft). The company plans tiebacks to boost production through the Casablanca platform. Elsewhere in the Spanish sector, Enagas has been linking the Balearic Islands to mainland Spain’s gas distribution network via newly laid subsea pipelines. A project is also under way to re-develop the defunct Amposta field via a new platform serving as an offshore gas storage complex.

Elsewhere, the report notes, Switzerland’s EGL and StatoilHydro have conducted a feasibility study for a Trans Adriatic Pipeline taking gas supplies between Albania and Italy, some of which could originate from the Shah Deniz field off Azerbaijan. Depas of Greece and Edison have plans for a new Greece-Italy gas connector pipeline, again via the Adriatic Sea. And Sonatrach is leading the proposed 830-km (516-mi) overland/subsea Galsi pipeline project which would export further Algerian gas supplies to reception points in western Italy.

Scottish Enterprise predicts that development wells will account for 20% of capital expenditure in offshore Mediterranean projects during 2009-13, and 7% of overall investments. It estimates that spending on platforms and modules throughout the regions peaked last year at $735 million and will likely fall to $435 million in 2013.

Subsea system expenditure is predicted to reach a high this year of $435 million, gradually falling back to $275 million in 2013, although Noble’s deepwater Israeli discoveries could alter this picture. The same applies to pipeline expenditure, forecast to dip from $1.1 billion this year to $530 million in 2013.

The report claims that exploration drilling will remain relatively low key, predicting 25-35 wells annually during 2009-13, incurring average expenditure of $515 million/yr.

Hitherto there have been few decommissioning programs around the Mediterranean, but this could change in the coming years, in particular offshore Italy as some older installations are removed. The report predicts a steady rise in decommissioning spending from $40 million this year to $160 million in 2013.

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