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First oil at Aje Field

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May 7, 2016

Panoro Energy ASA (“the Company” or “Panoro” with OSE ticker: “PEN”), the independent E&P company with assets in Nigeria and Gabon, notes the recent announcement made by its partner, the Operator of OML 113 Yinka Folawiyo Petroleum Company Limited, and is pleased to announce that the first oil production from the Aje field, offshore Lagos, commenced yesterday 3 May 2016.

Subsea installation activities had been underway at Aje since January and were completed in early March ready for the hook-up of the Front Puffin FPSO, which arrived in Nigeria on the 16th of March.

Oil produced from the Aje field will be stored on the Front Puffin which has production capacity of 40,000 barrels of oil per day and storage capacity of 750,000 barrels.

Flow rates will be provided in Panoro’s next operations update, following a period of commissioning and well stabilisation.

Panoro’s Chief Executive Officer, John Hamilton, said: “We are extremely pleased to announce the start of first oil production at Aje. This is a transformational milestone for Panoro and represents a great achievement by the Aje project teams. It is also a key building block in our strategy to become a full cycle E&P company focused on West Africa. The commencement of production at Aje is also significant for Nigeria as it is the first commercial production for the country in the emerging Dahomey Basin.”

Aje is an offshore field located in OML 113 in the western part of Nigeria in the Dahomey Basin. The field is situated in water depths ranging from 100 to 1,000 metres about 24 km from the coast. The Aje Field contains hydrocarbon resources in sandstone reservoirs in three main levels – a Turonian gas condensate reservoir, a Cenomanian oil reservoir and an Albian gas condensate reservoir. As previously disclosed, AGR TRACS International calculated the gross Cenomanian oil Proved plus Probable Reserves estimate associated the Aje-4 and Aje-5 wells, and the gross Contingent Resources estimate associated with the future drilling of Aje-6 and Aje-7 wells. At that time AGR TRACS International calculated these as 23.4MMbbl and 15.7MMbbl respectively (on a gross basis), indicating a mid-case expected ultimate recovery of 39.1MMbbl from the Cenomanian Oil Reservoir once all four wells have been drilled. AGR TRACS International also calculated the Turonian gas and condensate/oil best estimate gross contingent resource as 163 MMboe.

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Oil Down 2nd Straight Day, Rising Output Reignites Glut Worry

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May 7, 2016

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Oil Down 2nd Straight Day, Rising Output Reignites Glut Worry

Oil prices fell for a second day on Tuesday, retreating further from the year’s highs hit last week, as rising output renewed worries about the global glut of crude, the U.S. dollar rebounded and equity markets weakened.

Output from the biggest oil producers in the Middle East jumped last month or could surge in the near term, data showed this week, ahead of a U.S. government report on Wednesday likely to cite record high crude stockpiles.

Brent crude futures settled down 86 cents, or 1.9 percent, at $44.97 a barrel.

U.S. crude’s West Texas Intermediate (WTI) futures fell $1.13, or 2.5 percent, to $43.65.

The two crude benchmarks gave back some losses in post-settlement trade after industry group American Petroleum Institute (API) reported a smaller U.S. crude stockpile build of 1.3 million barrels last week, compared with analysts’ forecasts of a 1.7 million-barrel rise.

The U.S. government’s Energy Information Administration (EIA) will issue official inventory data on Wednesday.

Brent and WTI both lost about 3 percent each in Monday’s trade as production from the Organization of the Petroleum Exporting Countries neared all-time peaks and record speculative buying in global benchmark Brent sparked profit-taking on last month’s over 21 percent rally to 2016 highs at $48.50.

April’s oil rally had also narrowed the discount, or “contango,” in WTI’s front-month versus second-month <CLc1-CLc2> to October lows, before the gap widened again on Tuesday.

“There are enough supply stories out there to slow or temper any gains,” Energy Aspects analyst Richard Mallinson said.

Iraq said this week its oil shipments from southern fields averaged 3.4 million barrels per day (bpd) in April, up from 3.3 million bpd in March.

Production from top exporter Saudi Arabia could soon return to a near-record level of 10.5 million bpd, sources said.

Iran has nearly doubled exports to almost 2 million bpd since the start of the year.

In Tuesday’s session, the dollar index rose for the first time since April 22, making dollar-denominated oil less attractive to holders of the euro and other currencies.

Global equities fell, stoked by dismal data on Chinese factory activity, British manufacturing and euro zone growth.

In crude volumes, the 606 million barrels transacted by WTI, as per Reuters data, was barely changed from last week’s levels, although Brent’s was lower. “It’s a sign there are enough people who want a correction in this overbought market,” said Phil Flynn, analyst at the Price Futures Group in Chicago.

Technical pressure is also weighing on crude after its retreat from recent highs. Fawad Razaqzada, analyst at London’s City Index, says Brent’s support could erode to $44.50, then $42.50 and finally $41 before what could be “the end of the current bullish trend”

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Brazil Oil Industry Sees Reforms Advancing If Government Changes

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May 7, 2016

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Brazil Oil Industry Sees Reforms Advancing If Government Changes

Brazil is more likely to reform its struggling oil industry to attract investments if there is a change in government, some of the country’s top oil executives said at an industry gathering in Houston. Brazil is expected to ease Buy in Brazil restrictions and auction exploration acreage more regularly if a new government takes over, Jorge Camargo, the head of a lobby group known as the Brazilian Petroleum Institute, said Monday at the Offshore Technology Conference in Houston. Such a move would increase competition in an industry dominated by state-controlled Petroleo Brasileiro SA. Royal Dutch Shell Plc, Total SA, and Barra Energia Petroleo e Gas hope to see reforms accelerate under new leadership, senior executives said at the event. “We don’t know who will be the next energy minister; there is a lot of uncertainty, but there is a positive expectation that the country has a chance to have a new start,” Camargo told a panel on Monday. “Brazil will soon overcome this crisis.” Brazilian stocks and bonds have rallied this year on expectations that President Dilma Rousseff will be replaced by her more market-friendly vice president, Michel Temer, who is expected to take steps to stimulate an economy that is in its worst two-year recession on record. Rousseff may have to step down temporarily as early as next week if the Senate votes to begin impeachment proceedings. Temer’s office didn’t respond to an e-mail requesting comment on his plans for the oil industry. Producers may enjoy a more investor-friendly environment under Temer, said Joao Carlos de Luca, Barra Energia’s chairman who expects the impeachment to go forward. Brazil needs to set rules for how to develop oil fields that span more than one single operating concession to accelerate investments, said Andre Araujo, the head of Royal Dutch Plc’s Brazil unit. Oil companies often discover deposits that extend beyond their licensed areas, and need to negotiate with neighboring operators to set a development plan. Brazil has 8 billion to 10 billion barrels of oil that companies are are unable to develop because there are no regulations on how to share the output from such fields, Camargo said. “We expect in the short term these topics will be addressed if Brazil wants to keep competitive,” Araujo told a panel at the conference Monday. It’s “in the hands of the government.” Total’s exploration and production general manager for in Brazil, Maxime Rabilloud, said Brazil needs to make local content rules more flexible. Brazil’s so-called pre-salt region has very high productivity and the company expects to continue expanding in the country, he said. Brazil’s Congress also needs to take steps to attract oil investments and help Brazil pull out of recession, Camargo said. In February, Senators approved legislation eliminating the requirement that Petrobras operates all pre-salt fields with a minimum 30 percent stake, and the bill is now in the lower house. There will be a surge in demand for pre-salt acreage if the bill is passed, helping to revive the industry, Camargo said. Brazil put Petrobras in charge of developing the pre-salt, which holds the biggest group of offshore discoveries this century, as part of a package of nationalistic oil policies Rousseff implemented during the commodities boom in an effort to double Petrobras’s output and expand the domestic supply chain. Fuel subsidies, unprofitable investments in refining and the oil price crash have prevented Petrobras from meeting growth targets in recent years. Foreign oil companies would be more eager to join projects where they could manage day to day operations, Camargo said. “Only this change would already help Brazil get out of recession,” Camargo said.

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OTC 2016 Slideshow Features An Offering for Everyone

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May 7, 2016

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OTC 2016 Slideshow Features An Offering for Everyone

Day Two of the international gathering of the world’s most serious offshore drilling players did not disappoint as the hall of the NRG Center was filled to the brim with enthusiasts. In keeping with the theme of OTC 2016: Endless Innovation, the Bureau of Safety and Environmental Enforcement presented their annual report to a group of reporters and others interested in offshore safety. Cooperation between industry and the federal government has long been a challenge, but most agree it is important to the continuation of the success of the fossil fuel industry. Despite the downturn felt across the world, industry leaders from the likes of Mexico, Brazil, Egypt, Ireland and Canada are converging in Houston. Conference show attendees who ventured down to the center of the NRG showroom were rewarded with items from the obscure, such as a light-up USB port, to the more practical, such as Rigzone’s trademark color bright blue and yellow socks.

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Oil Price Increase Appears Stable

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May 6, 2016

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An increase in oil prices is looking “increasingly certain” says Colin Welsh, head of international energy investment banking at Simmons & Company International, assuming we avoid another global recession or an implosion in the Chinese economy.

Recent US Energy Information Administration data shows that production declines in the onshore oil fields in the United States are accelerating, with Welsh predicting that “we could well see year on year production down by 1 million barrels per day by the end of 2016”.

“It’s also reasonable to expect decline rates from conventional oil production globally to be higher than normal because all oilfields naturally decline,” said Welsh.

“If they’re starved of investment they decline much faster. In the meantime, demand for oil is continuing to grow by 1.2 million barrels per day, particularly in the US, China and India,” he continued.

Although production has been shown to be decreasing in certain areas of the oil and gas sector, Welsh doesn’t expect the industry to level out until next year.

“Irrespective of what happens in Iran the market should fall into balance in the first half of 2017,” said Welsh.

“Markets always move in anticipation of changes in fundamentals. That’s why the record short crude positions have come off already and prices are already lifting. By the end of this year many analysts expect $60 crude. In the interim, expect prices to be volatile as the market weighs the extent to which shale production in the US comes back as prices lift, and the pace at which Iran can lift its production,” he added.

Welsh also believes the industry hasn’t seen the last of high oil prices, such as those experienced in 2014, due to diminishing reserves.

“The collapse in oil prices has demolished investment in new projects, the results of which will be felt in terms of diminished reserves and lower production in two or three years’ time. At that point the market could become very tight in which case a spike in oil prices to previous highs is not out of the question.”

BP’s Upstream Chief Executive Bernard Looney echoed Welsh’s sentiments Monday at the OTC conference in Houston, Texas, telling attendees during a presentation that the oil price will not be lower forever and will bounce back eventually.

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Five Jobs Set to Grow in Oil, Gas: Cybersecurity

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May 6, 2016

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Five Jobs Set to Grow in Oil, Gas: Cybersecurity

After our first article on new job opportunities to come from the use of the Internet of Things and Big Data in oil and gas, here we look at how the oil and gas industry is set to employ further cybersecurity professionals as cyberattacks targeting the sector increase.

The increasing use of the Internet of Things and Big Data in oil and gas is bound to lead to further concerns about cybersecurity among companies that operate in the sector. Indeed, it is a problem that already plagues the industry. Several organizations focused on cybersecurity see the energy industry as being especially susceptible to cyberattacks.

The U.S. Department of Homeland Security (DHS) frequently highlights the energy sector as being the target of cybersecurity incidents. In 2015, DHS reported that of the 245 incidents reported to it by asset owners and industrial organizations during the previous year, 79 of these, about 32 percent, were reported by the energy sector. Another report, “Trend Micro’s Report on Cybersecurity and Critical Infrastructure in the Americas,” which was based on a survey conducted in 2015 of companies and government bodies in the Americas, found that 47 percent of energy organizations had experienced cyberattacks that attempted to delete or destroy their information.

DHS identifies the cyber threat coming from what it calls “sophisticated actors” (code for state-sponsored hacking) as well as hacktivists, insiders and criminals.

The oil and gas industry itself appears to be concerned about the threat. Ernst & Young stated in 2015 that 61 percent of oil and gas organizations surveyed believed they would be unlikely to be able to detect a sophisticated cyberattack. Only 13 percent thought that their information security function met their organizational needs.

PwC Inc. found that the number of security incidents detected by oil and gas firms consulted as part of its “Global State of Information Security Survey 2016” increased by 93 percent last year. The business consultancy also said that oil and gas respondents planned to increase their information security budgets by 10 percent in 2015. While oil and gas firms are currently concerned about the theft of “hard” intellectual property like exploration data, drilling technologies and refinery processes, they are also mindful that the development of the Internet of Things will likely expand cybersecurity risks.

Job Opportunities: Cybersecurity Specialists, Security Engineers

In this new world of huge numbers of connected machines and devices in the oil patch, the oil and gas industry is looking for cybersecurity professionals whose experience goes beyond traditional IT security. They must also be able to work with operational technology such as SCADA (Supervisory Control and Data Acquisition) and other industrial control systems. These workers to understand that any node in a network can be an opportunity for a cyber-miscreant, which is why many cybersecurity professionals sought by the oil and gas industry have a military, law enforcement or intelligence background.

Oil and gas companies want cybersecurity professionals with experience working in an industrial environment. Jobs advertised mention antivirus solutions experience on platforms such as McAfee and Symantec database administration, network/device configuration and firewall administration. But companies also need people who can work with SCADA protocols and who have knowledge of field area network architectures for transmission and distribution and automation.

Typically, candidates will have at least a bachelor’s degree in computer science, computer information systems or electronic engineering.

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Investigators – Fatal Helicopter Crash off Norway Due Technical Error

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May 6, 2016

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Investigators – Fatal Helicopter Crash off Norway Due Technical Error

A helicopter crash that killed 11 oil workers and two crew on Friday off the Norwegian coast was due to a technical fault, not human error, Norway’s Accident Investigation Board said on Tuesday. An Airbus H225 Super Puma helicopter ferrying passengers from a Norwegian oil platform crashed in the North Sea on Friday, killing all 13 people on board. “We are as certain as we can be that a technical error caused the accident.

We don’t think it was due to human misinterpretations,” the director of the board’s aviation department, Kaare Halvorsen, told reporters.

He also confirmed statements by the helicopter operator, CHC, that the two pilots did not have time to send an emergency mayday message before the crash.

Separately, aviation sources said the European Aviation Safety Agency, which regulates the airworthiness of helicopters, was discussing with Airbus whether to issue a directive ordering checks on the Super Puma.

Airbus, which had initially urged a halt to all Super Puma flights, said on Monday commercial operations could resume outside UK and Norway, saying initial evidence did not suggest a link between the accidents and two North Sea ditching in 2012.

The Super Puma is the workhorse of the oil industry, ferrying workers to and from offshore installations. Helicopter operators said they had been able to maintain service despite the flight bans by using Sikorsky helicopters.

“We have other aircrafts in our fleet so we’re using those,” said a spokeswoman for operator Bristow Group, adding it was too early to say whether it would have to replace its Super Pumas in the long-term.

In total there are 179 H225 helicopters in service worldwide, including 40 operating in the North Sea.

“We’re continuing to work with our customers to prioritize the availability of alternative resources and will provide as much capacity as possible using those resources,” a CHC spokesman said.

Separately, oil firm Shell said on Monday it was suspending all flights in Norway with CHC but would continue using the firm in other countries.

“As a precaution, it is decided to temporarily suspend all CHC … passenger flights for Shell in Norway,” said a company spokeswoman.

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OTC 2016: Digital Twin Provides Greater Access to Oil, Gas Data

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May 6, 2016

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OTC 2016: Digital Twin Provides Greater Access to Oil, Gas Data

The use of Digital Twins – in which a digital model of an oil and gas asset is used to monitor and address issues such as structural integrity, analytics on oil and gas consumption, and corrosion – is a trend that is being talked about more in the oil and gas industry. Phil Christensen, vice president of analytical modelling with software firm Bentley Systems Inc., said adoption of this practice was initially slow for several reasons. Lack of understanding of what using a Digital Twin can do is one; another is the contractual issue of who owns digital data. Data is added throughout a project process by construction and by commissioning. But Christensen told Rigzone that Bentley is seeing interest in the Digital Twin concept taking off. Using a digital model to review construction and operations can help provide information to workers in the field. The digital model is particularly useful for assets that are located far from operational centers. In Western Australia, oil and gas operational centers are located in Perth, far from oil and gas operations offshore Australia. In the North Sea alone, it’s been estimated that offshore workers only actually do work 40 percent of the time, Dr. Neil Rothwell, director of business development for Bentley’s AssetWise Analytics, said to Rigzone. The rest of the time, workers are looking for the data they need to do their job. The drop in oil prices means that oil and gas companies are now focused on boosting actual work time. Founded in 1984 and based in Exton, Penn., Bentley is involved in advancing infrastructure in a number of industries, but is particularly active in onshore and offshore upstream oil and gas. The company’s software tools bring together data from the project management design side and the operational side of assets.

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OTC 2016 Slideshow: Check Out Day One

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May 6, 2016

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OTC 2016: Endless Innovation kicked off Monday, May 2 in Houston with a variety of offshore companies showcasing the latest in their technology. Many executives have recognized that innovation and doing more with less will be a key to the industry’s recovery. On the floor, 2,600 exhibitors offered their visitors from around the world interactive opportunities, hands-on experiences and simulators for attendees to engage in the operations of offshore drilling – all the while surrounded by large machinery. Despite the downturn, the conference rooms were often overflowing, even during the more informal gatherings. Overwhelmingly, people were positive about the industry, acknowledging the down side of the cycle, but optimistic about the future. Taking a forward-looking approach, many of the booths highlighted projects that emphasized a brighter future. In an interview with ABC Channel 13, Rigzone Editor-In-Chief Jon Mainwaring said there are lots of job opportunities that can use the skills from other industries in the oilfield.

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NSRI Workshop to Discuss Future of Subsea Storage

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May 6, 2016

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NSRI Workshop to Discuss Future of Subsea Storage

The National Subsea Research Initiative (NSRI) is launching a drive to develop technology that could make underwater factories and storage more viable, helping to increase the recovery of hydrocarbons and prolong the life of the North Sea.

The industry-led, technology organisation is hosting an event on April 21 to break down the barriers to subsea processing and storage. The workshop aims to stimulate investment in and encourage the development of emerging technologies which will speed up the shift from costly surface platforms to subsea plants which will be more cost-effective and enable recovery from smaller, harder to reach fields.

Technology developers and the wider industry will come together to address the challenges in commercialising new subsea storage technology and discover ways to progress concepts through to infield implementation.

Industry professionals from across the country will share their knowledge and experience during a series of presentations on subsea storage issues, flow assurance, and the transportation of fluids.

NSRI will lead the debate to determine the technology gaps and to identify the viable routes to market for these emerging ideas, including overcoming the fabrication, construction and installation challenges.

The outcomes will help NSRI develop a technology roadmap, setting out the steps required to get new technology off the ground and ready for market.

Gordon Drummond, project director of NSRI said: “The lower for longer oil price has forced the industry to explore and accelerate the development of new technology.

“We must concentrate our efforts on technology which is aligned with the current market environment and delivers real value, as well as cost-reduction and efficiencies. We need solutions that will make more fields viable, boost profitability and sustain the competitiveness of the UK supply chain and the North Sea.

“Subsea storage will play an important part in the future of the industry, when there will be less need for surface platforms and ‘subsea factories’ are likely to become a more common solution. This will allow us to recover resources from smaller oil and gas fields and access hard to reach fields.

“It is vital that we focus on the technologies which will offer safe, cost effective methods to exploit the opportunities in smaller fields and tough sea conditions and move us towards a more complete subsea development solution.”

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