Europe’s Offshore Exploration Hotspots 2014

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The offshore oil and gas industry in Europe is largely concentrated on the mature basins of northwest Europe. But as the industry seeks to replace its reserves in the North Sea and Norwegian Sea, the focus of offshore exploration has begun to shift to new frontiers in other parts of the Europe.

RUSSIAN AND NORWEGIAN ARCTIC

The Arctic region of northern Europe has been receiving plenty of attention from international oil and gas companies in recent years and 2014 is set to see an increase in exploration activity in the region.

In the Russian Arctic region, state oil company Rosneft has signed a number of deals to explore for hydrocarbons with major international oil and gas companies Exxon Mobil Corp., Eni S.p.A and Statoil ASA. Meanwhile, in October it was reported that even Indian state-owned oil firm Oil and Natural Gas Corp. (ONGC) is interested in offshore exploration for oil and gas in Russia’s Arctic.

However, although the Eni-Rosneft joint venture in the Russian Barents Sea has already seen the acquisition of 2D seismic data, exploration drilling connected to these deals is not expected for some years yet with first oil unlikely to occur during this decade. For example, Statoil’s deal with Rosneft – concerning four offshore license areas in the Barents Sea and the Sea of Okhotsk – will not see exploration drilling until 2016 at the earliest.

Yet Russia already produces oil from the Arctic’s Prirazlomnoye field. Located in the Pechora Sea off Russia’s northern coast, this is the country’s first ever oil-producing offshore field in the Arctic. And 2014 is set to see Gazprom drill an exploration well in the nearby Dolginskoye field before a field development plan is drawn up.

The Norwegian zone of the Barents Sea is likely to see more activity in 2014 despite the disappointment of Repsol’s long-awaited Darwin well – which was judged to be dry in April this year.

In spite of the Darwin well turning out dry, one of the partners in the drill – Faroe Petroleum plc – noted that gas shows were recorded in the well’s Paleocene interval and saw it as proof of the existence of a working hydrocarbon system in the license area. Indeed, Faroe is undaunted and hopes for greater success from the Barents Sea’s Dazzler prospect (in which it has a stake along with Eni) when the prospect is drilled in 2015.

Eni, having had plenty of success in the Barents Sea so far, is currently drilling production wells on its Barents Sea-located Goliat field, which it expects to start up during the third quarter of 2014.

Statoil, which very recently made an oil discovery of up to 50 million recoverable barrels at the Barents Sea’s Skavl prospect, will be focusing on the Hoop frontier area next year. Here it has two prospects set to be drilled in 2014: Apollo and Atlantis.

Meanwhile, Norway’s largest oil company will also lead a 17-company strong joint venture to acquire 3D seismic data over several blocks in the southeastern Barents Sea during 2014. This seismic data acquisition is scheduled to begin in April.

BLACK SEA

Romania has a long history of oil and gas production that stretches back more than 150 years. Indeed, the country’s main oil-producing city, Ploiești, was not only home to the world’s first oil refinery (which opened in 1857) but it was so important to the Axis powers’ war effort during World War II that the Royal Air Force and the United States Army Air Force targeted its refineries for bombing from 1942.

Although on the decline, the Romania’s largely onshore-focused oil and gas industry still produces around 100,000 barrels of oil per day – down from 140,000 barrels of oil per day (bopd) in 2002 (source: U.S. Energy Information Administration). But although looking to develop a shale gas industry, the country sees offshore exploration in the Black Sea as a way to boost its reserves.

For some years, Romania has had a fleet of jackups that have drilled for hydrocarbons in shallow waters in the Black Sea but recent attention has been focused on deepwater zones.

Austria’s OMV already scored a major success in the Black Sea with the Domino deepwater gas discovery in 2012. The Domino-1 well was the first deepwater exploration well offshore Romania, and is estimated by OMV to hold between 1.5 and 3 trillion cubic feet of gas.

This year will see OMV continue to appraise its Domino asset, which is expected to produce its first gas by the end of the decade. The Domino-2 well is scheduled to spud in mid-2014.

Meanwhile, after OMV and ExxonMobil successfully completed the acquisition of the largest-ever 3D seismic survey in the Black Sea in June 2013, the companies plan to drill a high-impact well during the second half of next year.

OMV also signed a deal with France’s Total S.A. and Spain’s Repsol in 2012 to explore the Black Sea together. And the three companies have recently been stepping up their activities offshore Bulgaria – where 3D seismic data acquisition started in June 2013 on the Han Asparuh block and two exploration wells are planned.

OFFSHORE IRELAND

Offshore Ireland has begun to take off as a hydrocarbon region in recent years, largely as a result of Providence Resources plc’s billion-barrel Barryroe find off the south coast of Ireland in the Celtic Sea in February 2012.

Since then, Providence, along with some new friends it has managed to acquire since the Barryroe success, has seen the completion of drilling of the Dunquin North well in the South Porcupine Basin to the west of Ireland. Although the well was found to be water bearing, Providence noted that it demonstrated that all of the key components of a working petroleum system exist in the basin.

Providence has made an application to extend the South Porcupine Basin license until November 2014 so that more exploration work can be carried out here.

At Spanish Point in the Main Porcupine Basin, UK independent explorer Cairn Energy plc has lined up the rig Blackford Dolphin (DW semisub) for appraisal drilling that is due to take place in April 2014.

Meanwhile, Providence reported at the end of September that the Dragon gas discovery in St. George’s Channel (located between South Wales and Southern Ireland) will see appraisal/development drilling from the summer of 2014. Two other offshore Ireland oil prospects – Polaris and Kish Bank – are also planned for late 2014 or early 2015.

MEDITERRANEAN SEA

Undoubtedly the hottest part of the Mediterranean Sea is the Levant Basin, where the greatest success so far has been scored offshore Israel. In 2010, Noble Energy Inc. discovered 17 trillion cubic feet of gas in Israel’s Leviathan field and 2013 saw first gas flow from the Tamar gas field, which is also located in Israeli waters.

The Levant is also where the offshore zones of Lebanon and Cyprus are located. Cyprus saw Noble score another success with its discovery in December 2011 of the Aphrodite gas field, located off the island’s southern coast.

Noble is planning further exploration drilling offshore Cyprus in 2014, but not before October. This may include appraisal drilling to better determine the size of Aphrodite, which has so far been estimated to contain between 4 and 9 trillion feet of gas.

Also offshore Cyprus, France’s Total expects in 2014 to drill for oil and gas in two blocks adjacent to the block where Aphrodite was found.

Meanwhile over in Lebanese waters, exploration is still at the preliminary stage. Seismic surveys have been conducted but a political stalemate in Lebanon has meant that a planned auction of offshore exploration rights to international oil and gas companies has been delayed.

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