Offshore Guyana-Suriname might have one of the largest untapped oil and gas reserves in South America, as roughly a dozen companies hope to repeat Exxon Mobil Corp.’s recent drilling success there.
The U.S. company prior to the auction. Exxon Mobil has vastly expanded its presence in Brazil by winning 10 blocks in the country’s 14th round of bidding for oil exploration and production rights. Previously the company was among the few oil majors without a presence in the exploration of the recently discovered large offshore fields in Brazil. Exxon Mobil took six blocks in consortia with state-controlled oil giant Petrobras in the promising offshore Campos basin. The auction was Brazil’s 14th round for blocks outside of the coveted pre-salt area and should gauge appetite for the country’s second and third pre-salt rounds.
The Trump administration is beginning work on a new five-year offshore oil and gas leasing plan – the federal blueprint for future offshore development – in the Atlantic and Pacific Oceans, the Eastern Gulf of Mexico and the Arctic. This is a redo of the Obama administration’s programme for 2017-2022 and seeks public input before officials begin drafting proposals. Currently, 94 percent of federal offshore acreage is off limits to development, with natural gas and oil production being hindered by a lack of access to areas controlled by Washington.
Royal Dutch Shell, Statoil and Eni are moving into multi-billion-dollar offshore wind farms in the North Sea and beyond. The oil companies have many reasons to move into the industry. They’ve spent decades building oil projects offshore, and that business is winding down in some areas where older fields have drained. Returns from wind farms are predictable and underpinned by government-regulated electricity prices. Current projects entering operation are delivering power at about half the price of farms finished in 2012 helping the technology start to compete with traditional forms of energy.
For every dollar invested this year in North American shale plays another dollar will be allocated for planned projects offshore racking up spending of $70 billion in each sector, analysts at Rystad Energy said: “Offshore projects that were uncommercial at $110 per barrel in 2013 are now commercial at an oil price of $50 per barrel.” However, Rigzone Data Services said offshore investment declined 30-35% in 2016 and offshore capital expenditure is expected to decline for the current year. According to Diamond Offshore, it’s difficult for deepwater operators to compete with the unconventional space.
Mexico and Brazil want a slice from a shrinking pie as international drillers limit their investments during a time of depressed oil prices. Mexico will hold its first-ever deepwater auction December 5th, offering up 10 areas in the Perdido area, near its maritime border with the U.S.; in the southern gulf’s Cuenca Salina; and a separate bid for the joint-venture with Pemex in Trion field. Brazil’s tender, set for 2017, will include “unitized” blocks that extend from already discovered pre-salt areas previously awarded to concession holders.
OEF REVIEW:Total has started up production at the offshore Vega Pleyade gas and condensate field in the Tierra del Fuego region of Argentina. Operated by Total, the project will have a production capacity of 10 million cubic meters of gas per day (70,000 barrels of oil equivalent per day).
OEF REVIEW:The Company’s net production target for 2016 is in the range of 470-485 million barrels of oil equivalent (BOE), of which approximately 66% and 34% are produced in China and overseas respectively. The net production targets set for 2017 and 2018 are around 484 and 502 million BOE respectively. The estimated net production for 2015 was approximately 495 million BOE.
“Drillers will increasingly contend with diminished backlogs,rig values,fleet sizes, and margins if oil prices do not bounce back to the $70-80/bbl range, which we believe could support an increase in shallow-water, deepwater, and ultra-deepwater drilling”, says Moody’s in an industry report.
