Statoil discovers oil in the Miocene Yeti prospect, GoM production increases expected through 2019

Statoil reported an oil discovery in the Miocene Yeti prospect at approximately 220 miles from New Orleans. Drilling was conducted with the semi-submersible Maersk Developer drilling rig. Yeti is operated by Statoil (50%) and its partners are Anadarko (37.5%) and Samson (12.5%).

Credit: Darryl Peroni

Norway-based oil company Statoil announced on April 9 the discovery of oil in the Walker Ridge (WR) block 160, located roughly 7 miles (11 km) from the Cascade field and 9 miles (15 km) south of the Big Foot field, at a water depth of approximately 5,294 ft (1,805 m). Statoil is one of the largest lease holders in the GoM, where the company is partner to fields such as Julia (50%), Vito (30%), Jack (25%), Big Foot (25%), Stampede (25%) and St. Malo (21%). Statoil handles a daily production of 30,000 bbls of oil equivalent in the GoM.

EIA’s Annual Energy Outlook expects GoM production increases through 2019
The new EIA’s Annual Energy Outlook has been released on April 14. According to the report, Brent is expected to reach $79 per barrel and WTI at $73 per barrel by 2020 and respectively $91 per barrel and $85 per barrel by 2025. For what concerns the GoM, crude oil production is assessed to increase through 2019, given the long development cycles of ongoing offshore deepwater projects. However, production is expected to decline through 2025 “as a result of the timing of large, discrete discoveries that are brought into production”.

Cobalt abandons well due to riser failure
A seal failure in the riser connection system lead the Houston-headquartered oil company Cobalt to plug and permanently abandon its North Platte #2 appraisal well in the deepwater GoM. The issue was discovered when the well, drilled with the Rowan Reliance drillship, reached the depth of approximately of 20,701ft (6,309 m). As operator, Cobalt holds a 60% working interest in North Platte. Formed in 2005 and headquartered in Houston, Cobalt is an exploration and production company with assets in the deepwater regions of offshore West Africa and the GoM. Regarding the latter, the company holds lease interests in approximately 270 deepwater blocks situated in the Inboard Lower Tertiary and Miocene plays.

Hess hosts congressional delegation in the GoM
Independent energy company Hess Corporation hosted on April 9 a visit of a bipartisan congressional delegation to Tubular Bells, the company’s oil and gas deepwater development situated at a water depth of approximately 4,326 ft (1,318 m) in the GoM’s Mississippi Canyon area, at approximately 135 miles (217 km) from New Orleans. The delegation was led by Rep. Steve Scalise, House Majority Whip. Hess is the operator of the Tubular Bells field, where it holds a 57.14 % interest. Chevron has the remaining 42.86 % interest. Discovered in 2003, the project construction at Tubular Bells started in October 2011, while the beginning of production was announced in November 2014. According to Hess, Tubular Bells is expected to produce between 30,000 and 35,000 barrels of oil equivalent per day from four producing wells.

IFR announces initiative in Mexico
Canada-based International Frontier Resources Corporation (IFR) stated on April 13 the formation of a Mexican subsidiary, Petro Frontera S.A.P.I de CV, that will allow the company to study and bid on assets in this country. Mexico’s energy reform is expected to attract significant foreign investments. Round One tender will include 109 exploration blocks and 60 production blocks, hence totalling 169 blocks, as well as 14 blocks under joint ventures with Pemex.

US Interior Department releases ‘proposed well control regulations’
On April 13, US Secretary of the Interior Sally Jewell announced proposed regulations “to better protect human lives and the environment from oil spills.” The proposed rule aims to enhance equipment reliability, especially for what concerns blowout preventers (BOP) and blowout prevention technologies, as well as “reforms in well design, well control, casing, cementing, real-time well monitoring and subsea containment.” In particular, the document released by the US Interior Department deals with issues such as minimum baseline requirements for the design, manufacture, repair and maintenance of BOP and controls over the maintenance and repair of BOP.

US rig count keeps on falling, but not offshore
According to oilfield service company Baker Hughes’ Rotary Rig Count, the number of oil rigs in the US continues to decline. On April 10, the US total was of 988 rigs, with a drop of 40 compared to the previous week, when the total amounted to 1,028, while in the previous year it totalled 1,831. However, GoM offshore rigs actually increased by 2 units, from 29 to 31, but still against the 52 of the previous year. The relative resilience of GoM oil rigs is due to the long-term outlook of offshore projects, while the shale industry seems more sensitive to current price volatility.