The Kurdish Crush

The Kurdistan producers are in a tough spot brought about by COVID-19 and the collapse in oil prices. Earlier this year, the KRG said it would delay payments in respect of October 2019 to February 2020 deliveries as its cash to pay producers was stuck in a Lebanese bank account with the bank itself facing liquidity issues.

The KRG had struck a deal to pay producers for the backlog later in 2020. Payments in respect sales from March 2020 were not affected and continue to be paid. However at the current low oil prices, payments to producers have slumped.

Tawke: Received USD8.5 million for April deliveries split between partners DNO and Genel. This compares to the March payment of USD34.6 million.

Taq Taq: Received USD1.9 million, down from USD4.6 million in March with Genel's net share of the payment being USD1.1 million.

Shaikan: Gulf Keystone had submitted an invoice to the KRG for a nil amount as the realised price was negative with the Shaikan crude/transportation discount being below Brent.

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Oil companies' COVID-19 response testing

OGInsights has connected with over 50 offshore operators since March 2020 to review how operations have adapted to ensure the health and safety of their workforces. As soon as the seriousness of COVID-19 came to light oil, companies on the whole have been massively responsive in prioritising the implementation of COVID-19 measures above all else.

When the outbreak first happened there was definitely a scramble to secure helicopter space to transport people back onshore. However it was not an easy start with many helicopter providers refusing to take any personnel that showed even remote symptoms of COVID-19 - luckily this was quickly resolved by the installation of screens between the pilot and passengers. This was a huge issue at the time as one infection offshore would have quickly spread across an entire platform. During this scramble, some companies even resorted to chartering dedicated private helicopters in order to ensure ability to transport personnel.

Rig rotas have now been revised to minimise the frequency of crew changes - this does mean some staff have been offshore for much longer than original planned. Some rotas now even incorporate an extra week once personnel arrive onshore to enable self-isolation before starting the clock on the normal onshore stint. On the other end of the cycle, majority of companies are now requiring staff to arrive up to a week early before going offshore to allow time for thorough testing and results.

On the whole, the industry has reacted and adapted well in managing COVID-19 with only a handful of instances where entire fields or crews have been infected.

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CNOOC confirms that it will not pre-empt the sale of Tullow’s assets in Uganda to Total

On 23 April 2020, Tullow announced that it had agreed the sale of its assets in Uganda to Total and that CNOOC had rights of pre-emption to acquire 50% of these assets on the same terms and conditions as Total. CNOOC has now informed Tullow and Total that it has elected not to exercise its pre-emption rights. Accordingly, there are no changes to the previously announced transaction or timeline and Tullow continues to expect the transaction to complete in the second half of 2020. 

The transaction remains subject to a number of conditions, including approval by Tullow’s shareholders, customary government and other approvals and the execution of a binding tax agreement with the Government of Uganda and the Uganda Revenue Authority that reflects the agreed tax principles previously announced.  Tullow will now look to progress the tax agreement following CNOOC’s decision not to pre-empt. 

Source: https://www.tullowoil.com/media/press-releases/cnooc-elects-not-pre-empt-sale-assets-uganda/

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Hurricane receives extension from OGA for Lincoln commitment well at Greater Warwick Area

Hurricane Energy, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, has provided an update in relation to planned activities on the Lincoln subarea of Licence P1368, part of the Greater Warwick Area ('GWA').

In light of the COVID-19 pandemic, Hurricane has requested extensions to certain licence commitments pertaining to Lincoln.

The Oil and Gas Authority has responded positively to these requests, extending the deadline for commencement of the GWA joint venture’s commitment well on Lincoln to 30 June 2022 and extending the deadline for plugging and abandoning well 205/26b-14 (Lincoln Crestal) to 30 June 2021.


Dr Robert Trice, Chief Executive of Hurricane, commented:
'We would like to thank the Oil and Gas Authority for their flexibility regarding the timing of activities planned at Lincoln during these challenging times.'

Greater Warwick Area

The Greater Warwick Area comprises licences P2294 (Blocks 204/30b & 205/26d) and P1368 South (Blocks 205/26b, 204/30b & 205/26d) is being appraised/developed through a joint venture between Hurricane energy (50%) and Spirit Energy (50%). The joint venture believes that the Greater Warwick Area (GWA) is a single hydrocarbon accumulation comprising the Lincoln discovery and the yet to be drilled Warwick prospect. The joint venture undertook a three well drilling program on the GWA during 2019 and is currently evaluating the results.

Source: https://www.hurricaneenergy.com/application/files/4915/9052/6429/20200526_-_HUR_RNS_-_Lincoln_Deferments_vF.pdf

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Hurricane Lancaster shuts-in production

On 22^nd May 2020, Hurricane announced that it would be shutting in the 205/21a-7Z well at Lancaster. This follows an attempt to increase production at the well to test the viability of reaching 20,000bopd across both wells on the field.

However this attempt had led to unstable production at 205/21a-7Z caused by interference between the existing two wells. Production will now continue at 205/21a-6 only and current production is at 10,300bopd.

Hurricane will be discarding its production target of 18,000bopd for 2021 and has suspended putting out new guidance.

This is disappointing news for those who had placed bets on the risky fractured basement reservoir proposition of the company and now facing another setback.

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Neptune Energy announces completion of seismic survey offshore Egypt

Neptune Energy has announced the successful completion of an ocean bottom nodes (OBN) multiclient survey in the North West El Amal block, offshore Egypt, delivering promising results for further analysis.

The project, prefunded by Neptune, was carried out by WesternGeco, the seismic and geophysical data solutions division of Schlumberger, under a contract with the Egyptian General Petroleum Corporation (EGPC), sponsored by the Egyptian Ministry for Petroleum and Mineral Resources. WesternGeco acquired the survey using third-party vessels.

The survey employed innovative OBN technology to overcome the challenge of acquiring improved imaging in the complex salt geometries of the Gulf of Suez. It was the first ever OBN seismic survey to be conducted in Egypt and the most detailed survey of the block since the first acquisition in 1988, providing an in-depth data set for processing, image analysis, and planning for potential exploratory wells in the future.

The North West El Amal offshore concession covers 365 km2 and is located in the central part of the Gulf of Suez, approximately 42 km south of Ras Gharib and 105 km north of Hurghada. Neptune was awarded the exploration licence in February last year, including the acquisition of 100 km2 of 3D seismic data.

Egypt Managing Director, Gamal Kassem said: “Egypt is important for Neptune and we are pleased to build on our strong relationships with the Ministry of Petroleum and Egyptian General Petroleum Corporation.

“The safe and successful completion of the seismic acquisition is an important achievement and is testament to the careful planning and professional execution by Neptune, EGPC and WesternGeco.”
The project involved placing large numbers of autonomous sensors on the seabed to acquire seismic data, then retrieving them for analysis. The process acquires more detailed data than standard technologies and is less sensitive to weather conditions which can impact traditional seismic survey vessels.

Neptune’s VP Exploration & Development, Gro Haatvedt added: “It’s very exciting to have been involved in the OBN seismic survey, the first time the technology has been deployed in Egyptian waters. Given the geographically-diverse nature of our global portfolio, Neptune is accustomed to working with innovative digital and subsurface technologies to tackle a variety of geological challenges.

“Obtaining subsalt imaging is particularly tough and the OBN technology was well-suited for this purpose. The next step is to analyse the data which has greatly improved our understanding of the block and will support our future plans including potential exploratory wells.”

Source: https://www.neptuneenergy.com/media/press-releases/year/2020/neptune-energy-completes-seismic-survey-offshore-egypt


About North West El Amal
Operated offshore concession in the central part of the Gulf of Suez

Block 4 - North West El Amal Offshore Concession

Status:
Neptune will acquire 100 km2 of 3D seismic data and drill one exploration well in the first phase, with two further wells planned in phase two.

North West El Amal facts:
Neptune was awarded its first operated concession in Egypt in 2019 and signed the concession agreement in 2020 with Minister of Petroleum Tarek El-Molla
The concession covers 365 km2 and is located in the central part of the Gulf of Suez
The area is 42 km south of Ras Gharib and 105 km north of Hurghada

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