There was more good news for the UK sector with a sidetrack on the West of Shetland Tornado discovery encountering oil and gas; news of substantial projects ahead from the Pilot Share Fair in
Aberdeen – including a replacement for the BP Schiehallion FPSO – and big deals were done in Iraq by European majors Shell and Eni.

 
CONFERENCES/EXHIBITIONS

NCS Operators Conference.
18. and 19. November, Stavanger.
More information: www.offshore.no/noc

EXPLORATION

Tornado sidetrack proves up
Drilling of a sidetrack well on the West of Shetland Tornado discovery has proved up the field by encountering the same reservoir at the same depth.
Austria's OMV operated the original 204/13-1 discovery well which hit oil and gas in a Tertiary reservoir sand with up to 90 ft (27.43 metres) of thickness and with porosity of 28.5%
British-based drilling partner Dana Petroleum said the 2094/13-1Z sidetrack has now been drilled and encountered 120 ft (36.58 metres) of reservoir sandstone, with higher average porosity of 29%.

Greenland gets organised
Greenland has a new energy association which has been formed to support future exploration and development in the country.
The Greenland Oil Industry Association (GOIA) has been formed with DONG Energy's Arne Rosenkrands as chairman supported by vice chairman Ian Watt of Cairn Energy and the organisation says it will work to ensure safe exploration and production in Greenland “...with the highest standards of environmental stewardship.”

Significant gas says Ascent
East European explorer Ascent Resources has signalled the potential for a substantial gas discovery in Eastern Hungary after the second of two appraisal wells.
London-listed Ascent said its PEN 104AA sidetrack well drilled by Hungarian subsidiary PetroHungaria into a Miocene reservoir hit 65 metres (213 ft) of reservoir formation, equalling a vertical thickness of 34 metres (111 ft).
Statoil drills dry well
Statoil has drilled a dry well in Norwegian Sea about ten kilometres east of the Norne field.
The purpose of the well  on production licence 437 was to prove petroleum in reservoir rocks from the Lower Jurassic Åre formation.

South African search for Shell
Shell landed a deepwater exploration deal offshore South Africa for frontier acreage about the size of The Netherlands.
South Africa's Petroleum Authority accepted Shell as the successful bidder for the licence to the deepwater  Orange Basin area off South Africa which encompasses 37,000 sq. km with water depths between 500 and 4,000 m (1,640 – 13,120 ft) which it says has seen little exploration so far.
Orange Basin is off South Africa's west coast and marks Shell's first exploration venture in the country.

FIELD DEVELOPMENT

Schiehallion change date
BP has given a tentative date in 2015 for the replacement of the Schiehallion Floating Production Storage and Offloading Vessel operating in the UK West of Shetlands region.
Various options to change the FPSO have been under discussion within BP for the last couple of years but the operator has now given a firm signal that it is looking to replace the ageing production ship – the UK's second to be installed in deepwater – by 2015.
The news came in Aberdeen as procurement specialists within BP's North Sea Strategic Performance Unit outlined plans for future projects in the UK North Sea at the Pilot Share Fair. Delegates saw a presentation on what those future plans could mean for offshore suppliers, as the operator discussed what it calls its Quad 204 project – the offshore quadrant in which the Schiehallion field is located and the FPSO is installed.

Golden Eagle to gear up in 2010
Procurement for Nexen's new North Sea Golden Eagle Area Development – dubbed GEDA - will start in earnest next year oil and gas vendors have been told at an industry seminar in Aberdeen.
“We do expect to sanction it by the end of next year,” Donald Shaw, one of the project managers within Nexen UK's major projects team told the Pilot Share Fair in Aberdeen today.
“We are going to start concept selection towards the end of this year and into the middle of 2010 when we anticipate FEED with a view to sanction at the end of next year when we will be planning long lead commitments for this project,” delegates heard at the event.

West Don production forecast dips
Stratic  Energy has scaled back its production prediction for the UK West Don field this year because of poor performance from injection facilities.
“Stratic now considers that 2009 gross production from the field will be approximately 1.75 million barrels of oil (mmbbls),” the company declared.  Stratic's share of output from the field is 0.33 m bbl., based on its equity share of the field which is operated by Petrofac.
“The reduction reflects continuing gas lift ad water injection performance below expectation,” Stratic declared, updating project progress.

PSN: Major projects still to come
Offshore contractor PSN is hoping for major project activity to pick up again in the UK North Sea in the second quarter of 2011 at the earliest after a lean few years for the sector.
Speaking at the Pilot Share Fair 11in Aberdeen  procurement specialists at PSN indicated that much of operators major expenditure has been outside the North Sea in the last few years, but PSN remains hopeful that the lean spell will soon be over.
“In the UK we have not seen any major capex for a while,” admitted Cameron Marshall, global materials procurement manager for PSN, when asked about major projects in the UK sector of the North Sea in the foreseeable future.
Spending has been higher in other countries of late, including Australia, Marshall said. He suggested new major projects might be seen in the UK by the second quarter 2011.
“We do believe major operators have kept things back in the last couple of years,” added PSN's Graham Fyfe, also speaking at the Pilot Share Fair in Aberdeen. “We are hopeful – as everyone else in this room is - that things will pick up again soon,” he said.

Shell and ExxonMobil bag Iraq deal
Shell and ExxonMobil have reportedly won a deal to redevelop another of Iraq's huge oil fields in a new announcement from Baghdad's oil ministry.
“The consortium led by Exxon Mobil, which includes Shell, won the contract to develop West Qurna Phase One oilfield,” Oil Ministry spokesman Asim Jihad declared, according to Reuters.

Zubair deal in the bag says Eni
Eni was reported to be on the brink of finalising a deal to take over Iraq's Zubair oil field chief executive Paolo Scaroni indicated. The Italian oil boss was quoted as saying the deal could be done “in the next few days,” Reuters reported from Rome.
Scaroni was said to be speaking on the sidelines of  a meeting, Reuters in Rome reported.

Loss for ATP and Cheviot savings
Independent ATP which now derives half of its revenue from the North Sea reported third quarter results with a net loss of US $9.1 m but saved on the construction costs for its Cheviot development.
“This is the ninth consecutive quarter that oil revenues have accounted for more than half of ATP’s revenues,” the Houston-based company said.
“In the North Sea, the partial sale of producing properties coupled with the deliberate curtailment of production due to lower than anticipated gas prices led to lower volumes in 2009 compared with the previous periods.
Oil and gas revenue for the third quarter was down to $75 m from $118.3 m this time last year.
For the nine months to September, ATP reported a net loss on income of $11.851 m, compared with a $71.548 m net profit last year.
During the nine months to September ATP reported capex of $559.6 m, which were for the Gomez and Canyon Express production hubs in the US Gulf of Mexico, and for its North Sea Cheviot development.

Taqa indicates future North Sea spend
New North Sea operator Taqa Bratani has signalled plans for a £400 million spend on its UK assets next year to keep oil flowing from its recently acquired fields.
To continue production from its Northern North Sea assets, which comprise the Cormorant North and South fields, plus Tern and Eider, Taqa says it will need to keep investing to ensure it can continue production from those assets, which it acquired from Shell and ExxonMobil towards the end of last year.
“Cost effective delivery is important. Unless we keep drilling and investing, we will shut them down and move into decommissioning,” explained Ian Rattray, supply chain manager for Taqa Bratani UK.

WEATHERFORECAST

Week 46
The first days of the week a high is building up over Scandinavia from east.  This provides mostly dry weather and breeze from around south. Perhaps periods of somewhat stronger winds in the western areas of the northern North Sea and Norwegian Sea on Tuesday when a low pressure moves northwards in the western parts of the Norwegian See. The wind increases for a time in the North Sea on Thursday and Friday while a front is passing. During the weekend an intense low is moving in over the North Sea from southeast and winds can reach storm force and Hs 6-8m in the central parts of the North Sea and north to the Norwegian Sea.

COMPANY NEWS

Oil price affects Statoil's result
A decrease of 31 per cent in oil prices and a 32 per cent decrease in the average price of natural gas contributed to lowering Statoil's third quarter result to 6,6 billion kroner.
The net operating income was 28.3 billion Norwegian kroner in the third quarter of 2009 , compared to 47.0 billion in the third quarter of 2008.
Adjusted earnings in the third quarter 2009 were 31.2 billion kroner.
Net income in the third quarter of 2009 was 6.6 billion kroner and was mostly influenced by lower crude oil and gas prices and a gain on financial item, according to Statoil.

Best quarter for Prosafe
Offshore rig provider Prosafe was upbeat today after record third quarter results and expectations of long term demand for accommodation units with growth in the North Sea and deepwater regions.
Prosafe reported a 26% surge in operating profit to $77.1 m, “..which is by far the best quarterly result ever for Prosafe” the company stated today, compared with $61.2 m in the same period last year.
Net profit was hit 66.3 million up from $59.4 m last year, while rig utilisation was at 96%..

Seadrill surges ahead
Rig owner Seadrill surged ahead in the third quarter this year to report record earnings at US $497 m and net income of $345 m for the period.
An improvement in average rig utilisation rates and in deepwater rig earnings was noted by the Norwegian offshore service group.
Revenue was up to £863 m from $816 m in the second quarter this year and net income was $81 m for the period, down from $98 m last year – due to significantly higher interest expenses, the Norwegian group said.

Shutdowns hit CNR
Canadian Natural Resources paid the price for production shutdowns from its North Sea assets with lower output levels in the region in the third quarter this year and it signalled a bigger budget for 2010 with some of the cash earmarked for platform drilling in the UK.
Output from its operations fell in the third quarter to an average of 574,755 boe/d, down from 590,984 boe/d in the second quarter this year.
“As expected, production was lower in Q3/09 compared to Q2/09 and Q3/08 due to planned maintenance shutdowns at all three of the Ninian platforms and at Tiffany,” CNR reported. “During the quarter, the company continued to focus on lowering costs, high grading inventory and identifying infill drilling opportunities.”

Bad quarter for Sevan
Sevan Marine reports of a net loss of us $27.9 million in the third quarter, due to financial expenses.
Operating revenues ended at $45.2 million dollars in the third quarter, up from $24.3 in the third quarter of 2008.
The revenues increased due to new operations and increased dayrates, Sevan reports.

Egdon pays for price fall
Onshore UK oil explorer and producer Egdon Resources saw its revenue dip to £880,127 for the year to July from £1.121 m last year after being hit by the oil price fall.
“In what has been a challenging year of reduced oil prices and regulatory delays which have affected production, we are pleased to report that our target of 500 barrels per day production should be reached by the end of 2009 or in early 2010,” declared Egdon chairman Philip Stephens.

Downtime hits Endeavour
Endeavour International reported a net loss in the third quarter this yeqar4 of US $6.4 m  and a net loss of $27.5 m for the first nine months this year.
“Our third quarter operating results were challenged by planned and unplanned downtime in the North Sea, especially on Goldeneye. We expect the fourth quarter to return to more normal levels,” declared Endeavour chairman, chief executive and president William Transier.

Subsea UK signs Russian agreement
Subsea UK doesn't want to be left out of the Russian market, and has signed a memorandum of understanding with Murmanshelf in a bid to push UK companies into the Russian market.
The agreement is designed to help develop relationships for UK participation in the region and ensure that companies are on contractors’ sub-vendor lists, Barents Observer.

CONTRACTS

ROV booked for IRM
Aberdeen-based subsea service specialist DOF Subsea UK secured an inspection repair and maintenance contract from Indonesia's Petronas to inspect two wells offshore West Africa. A Triton XL 14 ROV is being deployed for the work from DOF UK's own vessel, Geograph, for the assignment, on two wells offshore Mauritania working for a local subsidiary of Petronas, PC Mauritania Pty Limited.

A first for DOF Subsea in Oz
DOF's subsidiary, DOF Subsea, has secured multiple contract awards in Australia at a combined value of US $ 22 million .
The multi-role support vessel Geobay will join the Geosea and undertake construction support work on Australia's North West Shelf until mid December. It will then be modified with the installation of a drilling rig to undertake a significant geotechnical drilling program.

LICENSING

Put your bids in says energy minister
Norway's Ministry of Petroleum and Energy has issues an invitation to oil companies to nominate the acreage they would like to see included in the country's 21st offshore licensing round.
Petroleum and Energy Minister Terje-Riis-Johansen issued the invite for companies to indicate which blocks they would like to see included in the new round which will primarily feature frontier areas.
“With the 21st licensing round I seek to give the oil industry access to attractive areas which are less explored. It is important to provide the industry access to frontier areas through predictable licensing rounds,”  Riis-Johansen declared.

POLITICS

Italian expansion in Kazakhstan
Italy's Eni has inked a new deal expanding energy ties with Kazakhstan which includes further exploration in the the Caspian Sea and industrial facilities.
In Rome, Eni chief executive Paolo Scaroni signed the new co-operation agreement with Kairgeldy Kabyldin, president of KazMunayGas.
Following on from a memorandum of understanding signed back in June, the new agreement covers exploration of the Isatay and Shagala areas in the Kazakhstan sector of the Caspian Sea, and optimisation of gas usage, plus other industrial projects including a gas sweetening plant, a gas power plant and the upgrading of a refinery at Pavlodar.

FINANCIAL

Leeds goes for more cash
London-listed Gulf of Mexico explorer Leeds Petroleum has signalled plans to raise up to £20 million through a new share placing to fund further drilling.
Leeds has conditionally placed 400 million new shares at 5 per share, to raise up to £20 m before expenses for a future development drilling programme on its Gulf of Mexico assets and to pay down existing debt.

RIG NEWS

West Atlas may be a write-off
Jackup West Atlas could be written off as a total loss after being engulfed in a wellhead platform fire while working offshore Australia, owner Seadrill has signalled.
West Atlas was working for PTTEP Australasia when it was engulfed in a fire at the Montara platform after a leak on an adjacent well which resulted in the evacuation of all personnel.