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Renergen’s Gas Well Fails at a Prime Position

A gas well being drilled by South African independent, Renergen, has collapsed at the very position the company considers most efficient and cost effective.

The well had been on a horizontal course, but Renergen had moved the trajectory on inclined drilling through the sandstone sequence to intersect the underlying faults in the underlying volcanic rock.

But the base assembly was lost before breaking through the base of the Karoo sedimentary rock and the company decided it best to abandon the well. Renergen has thus, again, revised the drilling programme and has also secured a directional drilling rig.

The dual listed Renergen (JSE, ASX) is the only active South African independent in exploration and production of hydrocarbon. Its Virginia Gas Project covers 187,000 hectares of gas fields across Welkom, Virginia and Theunissen, in the country’s Free State.

The asset holds both natural gas and helium. Renergen currently sells compressed natural gas (CNG) from the hub, but following a plant expansion planned for completion in 2021, Renergen will instead produce liquified natural gas (LNG).

Earlier in the course of the drilling, the company reported “strong gas flows with high (up to 12%) helium”, and announced that technical issues had necessitated significant changes from the original horizontal well design. It also said that the sections penetrated by several side-tracks had provided valuable encouraging data for future development drilling. The company noted, then, that the key learnings from the drilling were as follows:

  • The gas is migrating up through two major fault structures, named 2089 and 2057, which have a combined known strike length of approximately 31 kilometres
  • The gas emanating from the faults contains helium of up to 12%, and not the anticipated lower concentration (~3%). It was previously postulated that high helium (11%) in an earlier well at this site was a result of helium dissociation in the overlying sandstone reservoir
  • The sandstone is stratified with siltstone, and some coal, such that the zones of high porosity and permeability cannot be accessed efficiently with horizontal drilling.

It was the inclined trajectory chosen after these “key learnings” that has now been compromised by the failure of the rig.

“It is unfortunate that the drilling rod broke”, commented Renergen ‘s CEO Stefano Morani, “but unfortunately accidents happen beyond anyone’s control. The silver lining is that it resulted in us gaining access to a fit-for-purpose directional drilling rig, which means we will be able to drill with far greater confidence and speed.”

“Where we were drilling one before, now we have multiple targets being drilled concurrently, and in some highly prospective areas where indications of gas are strong, and no exploration drilling has been undertaken to date,” he explained.

 


PGS to Release Seismic Data for Namibe Basin in November 2020

PGS’ seismic acquisition vessel, Ramform Sovereign, has completed a large acquisition project offshore Angola using multisensor GeoStreamer technology. Operational and geological objectives were achieved successfully and safely, despite the COVID-19 restrictions.

The 2020 PGS Namibe Basin survey connects the three dimensional (3D) seismic coverage of southern Angola with PGS seismic data library coverage in Namibia, completing a large MultiClient footprint of high-quality broadband seismic data that spans the Namibe Basin.

Predicted reservoir presence and distribution maps indicate that this area contains a variety of leads and prospects”, PGS claimsin a release. “Full depth-imaging incorporating FWI velocity model building will improve knowledge of the subsurface petroleum system and reduce the risk for frontier exploration”.

The fast-track data for Angola Namibe Basin will be available in late fourth quarter, likely around November. 2020.

 

 


Sonatrach’s 50% Budget Slash, Cuts Out Sixty Planned Wells in Algeria

Algerian state hydrocarbon company Sonatrach is spending half of its originally planned budget for 2020.

Africa’s largest NOC was ordered to reduce its budget for 2020 from $14 Billion to $7 Billion(or from €12.4Billion to €6.2Billion).

The group, which contributes nearly 60% of the state budget and more than 95% of the country’s foreign exchange earnings, has significantly reduced its drilling and field optimization activities and suspended plans for newfield developments, no matter how close to existing facility. Africa Oil+Gas Report sources say that over 60 planned new wells will be affected.

There were 50 active rigs in Algeria in 2018, but they dropped to 42 in 2019. They would have dropped to 32, with COVID-19 challenges, but now they are likely to slip to 29, Africa Oil+Gas Report research suggests.

Hydrocarbon revenues into Algeria crashed by nearly 30% in the first quarter 2020, compared to last year.

Unlike most other hydrocarbon-led economies in Africa (Nigeria Angola, Libya, etc), most of the work programme in Algeria is performed by Sonatrach, as a result of historic production agreements that always insisted that Sonatrach operate the acreages.

So, unlike its peer countries, the state cannot spread the burden of financing oil and gas field operations in this time of pandemic, in a way that international companies have a good share of the risk.

Algeria, last year approved laws to encourage increased equity stakes and participation in acreages and projects by E&P companies, but the lingering antigovernment protests have discouraged implementation.

This article was originally published in the June 2020 edition of the Africa Oil+Gas Report


TOTAL Spuds the Second Well in the Cape of Storms

French major TOTAL has spud the Luiperd-1X well, the second exploration well on Block 11B/12B offshore South Africa following the Brulpadda discovery in February 2019.

The Luiperd-1X well will test the eastern area of the Paddavissie Fairway on Block 11B/12B to follow-up on the Brulpadda discovery of gas condensate and light oil. In the success case, TOTAL and the joint venture plan to flow test the Luiperd-1X borehole by performing a drill stem test. They look forward to drilling results in the fourth quarter of 2020.

Block 11B/12B is located in the Outeniqua Basin, covers an area of approximately 19,000 square kilometers with water depths ranging from 200 to 1,800 meters. The Paddavissie Fairway is in the southwest area of the block and includes the Brulpadda discovery, which confirmed the petroleum system. The Luiperd Prospect is the second to be drilled in a series of five large submarine fan prospects with direct hydrocarbon indicators defined utilizing both 2D and 3D seismic data.

The Luiperd-1X exploration well is being drilled in 1,795 meters of water by the Odfjell Deepsea Stavanger semi-submersible rig to a total depth of 3,550 meters subsea. The well will test the oil and gas potential in a mid-Cretaceous aged deep marine sequence where fan sandstone systems are developed within combined stratigraphic/structural closure. Drilling and evaluation of the well is expected to be completed in the fourth quarter of 2020.

TOTAL operates Block 11B/12B with 45% participating interest in, while Qatar Petroleum International Upstream LLC and CNR International have 25% and 20% participating interests, respectively, in the acreage. Africa Energy holds 49% of the shares in Main Street 1549 (Proprietary) Limited, which has a 10% participating interest in the Block.

 


Namibian Minister Delegitimises Kudu Field as A Discovery

By Akpelu Paul Kelechi

Tom Alweendo, the Namibian Minister of Mines and Energy, does not consider the Kudu gas field offshore the country as an asset.

When asked about his country’s contribution to conversations around global crude oil and gas demand and supply, he offered that “Namibia is a relatively new comer to this”. Then he said, surprisingly: “We don’t have a discovery, we have never had a discovery before and over the last couple of years, there have been some Majors doing prospecting in our sectors”.

The statement came in the course of a recent Webinar on Namibian Energy plans. The conversation was organized by African Energy Chamber.

The question that stood un-asked, after the minister claimed Namibia had never had a hydrocarbon discovery was: So, what should the Kudu Gas Field be called if it’s not called a discovery?

The Kudu field, discovered in 1974 by Chevron, is a deep-water field in 600 metres of water. The gas is stored in reservoirs at a depth of 4,400 metres (17,000 feet) and deeper, and they are interbedded with volcanic rock.

A huge challenge is that an estimated 1,3Trillion cubic feet of gas accumulation is not big enough for an LNG project, which is why the development concept has been around gas to power.  There’s considerable geologic risk around Kudu, but that’ not to say it’s not sitting there.

There has been a line of investors (including Shell, Tullow), going back the last 30 years who have taken a look at the Kudu field. Till date, the field is undeveloped. But its very presence suggests that Namibia is a hydrocarbon player. Mr Alweendo, instead, prefers to delegitimize the asset. He told the webinar: “I think the prospect of us becoming a player in the upstream is really growing by the day to the extent that now, we have a couple of the major oil companies doing exploration. Therefore, when that time comes when we actually do find something, hopefully we will not just continue to be a consumer but also a producer. But even as a consumer, as small as we are, of consumers have a role to play as well”.

This story was originally published in the June 2020 edition of the monthly, Africa Oil+Gas Report

 


TOTAL Will Now Drill Follow Ups in South Africa, From September 2020

TOTAL will return to drill in the rough waters offshore South Africa’s Cape Agulhas in September.

The French major will be commencing a multi-well drilling programme, beginning with the spud of the Luiperd Prospect, in the first follow -up to the Brulpadda oil and gas discovery it encountered in February 2019.

Luiperd-1, reputed to be the largest prospect in the Paddavissie Fairway (on which the Brulpadda itself is hosted), will be the first to be drilled by the semisubmersible rig Deepsea Stavanger, operated by Odfjell Drilling.  Two other wells are expected to follow in short order.

That the rig is currently mobilizing from Norway to South Africa, indicates the end of the idle period in the agreement between TOTAL South Africa and Odfjell Drilling. The programme was to have commenced in first quarter 2020, but restrictions effected by COVID-19 complications compelled the two parties to agree  that “Deepsea Stavanger will remain idle in Norway for a period prior to the mobilisation of the rig” and that “Odfjell Drilling will be compensated by TOTAL during this idle time”. The agreement also indicated that “once the idle period is complete, the rig will mobilise to South Africa to commence its charter as planned”.

Africa Energy, a minority partner in the licence holding and operations, declares its excitement “to begin the next phase of exploration drilling on Block 11B/12B offshore South Africa. in order to spud well by September”. The Canadian minnow explains that the prospect, Luiperd ’has been de-risked by the nearby Brulpadda discovery and subsequent 3D seismic work.”

Block 11B/12B is located in the Outeniqua Basin 175 kilometres off the southern coast of South Africa. The block covers an area of approximately 19,000 square kilometers with water depths ranging from 200 to 1,800 meters. The Paddavissie Fairway in the southwest corner of the block includes several large submarine fan prospects.

TOTAL is operator with a 45% participating interest in Block 11B/12B, while Qatar Petroleum and Canada Natural Resources have 25% and 20% participating interests, respectively.

 


Low Price, Lockdown, Ideal for Oil data G&G Evaluation

The low oil price and restricted movement is the ideal time to expand the home office environment to allow for creative evaluation of all data in a company’s possession to resolve identified challenges in exploration Geoscience

This is the opinion of Ebi Omatsola. Africa’s top exploration thinker.

“That’s when its best to share knowledge with appropriate colleagues and prepare for the good days ahead when and if they come”, says the former Chief Geologist at Shell Nigeria and former MD of Conoil Producing.

“Petroleum is still the anchor for global energy”, Omatsola argues, and even if it’s very low priced at the moment, “Prices will still rise sufficiently to encourage low hanging Near Facility Exploration (NFEP)”, he explains.

Contending that natural gas is becoming the most important transition energy resource, Omatsola advises G&G (Geology and Geophysics) staff to pull out Prospect inventory and work them up, “as long as those prospects are in the NFEP category”.


Nigerian Government Takes Ownership of Ororo-1 Fire

The state is paying for extinguishing the flames and has ordered the drill a relief well

Nigeria’s Department of Petroleum Resources (DPR) says it had novated the contract to the Drilling Contractor working on the re-entry of Ororo-1, a full month before the fire erupted on the rig on May 15, 2020.

The novation was made at the time of revocation order on the award of the Ororo marginal field on April 6, 2020.

Effectively, the Nigerian government is paying the contractor, bearing the cost of extinguishing the rampaging fire and in this particular instance, it has ordered that if need be, a relief well should  be drilled.

A relief well, targeted at above or at the producing problem formation, is one of the most efficient ways to control a blowout.

Sarki Auwalu, director of DPR, specifically instructed that the contractor engage Boots & Coots Services, a Halliburton owned firm of well control specialists, to put out the fire.

Grace-1 HWU, a Hydraulic workover rig reportedly owned by Joeny Holdings, was contracted for the job of re-entry and completion by the Nigerian minnow Guarantee Petroleum.

The operations on Ororo-1, a highly pressured well located in Oil Mining Lease (OML) 95, in shallow water offshore Western Niger Delta, experienced a sudden rush of hydrocarbon fluids speeding up from over pressured reservoirs at depths deeper than 8,500 feet to the surface and forcing a blowout. The Blow Out Preventer (BOP) for the main well bore and the BOP for the annulus (the space between the pipe and the skin of the well), both failed. The reservoir pressure was 8,000 pounds per square inch (psi) and above, surface pressure was about 4,600psi as of the time of incident, according to field data.

The regulatory agency dismisses the claims of Guarantee Petroleum, that it engaged with DPR personnel before it took a Hydraulic workover rig to the conduct a re-entry and completion of a highly pressured well.

“If the rig was there, our people must know. You cannot mobilize any rig without informing the DPR Zonal office. You cannot even spud the well or start to drill without informing the DPR Zonal Office. You cannot have a workover without having your oil spill contingency activation documents with DPR so that in case anything happens, we will activate it. They all don’t have that”.

Novation is the process by which the original contract is extinguished and replaced with another, under which a third party takes up rights and obligations duplicating those of one of the parties to the original contract.

The DPR says it did not see the need to consult with either Guarantee Petroleum or its partner Owena Oil & Gas over the novation, as technically, they were no longer rightsholders to the well.

The Ororo field was awarded to both parties as a marginal field in 2003. The government revoked the award because the grantees had “failed to develop the field and bring it to full production before the expiration of the granted extension period which elapsed on April 30, 2019”, says the revocation letter.

Guarantee Petroleum has claimed that the rig was moved to site in October 2019 with the permission of the DPR  and that the revocation order, made with immediate effect right in the middle of a well re-entry process, encouraged a sense of pandemonium which resulted in the fire incident on the Grace-1 HWU.

“Service providers became jittery when the announcement came”, the company lamented to Africa Oil+Gas Report.

The DPR disagrees. It contends that when it was conducting due diligence to determine the revocation, in March, the rig had not been moved to site. “By the time we implemented the revocation, the rig was onsite. And when that rig was onsite, we realized that technically that rig, and just to tell you that if they engaged us, we have to access the rig, the BOP and all that but they didn’t do that”, the agency says. “We know that that rig could not do what they wanted to do because of the history of that place”.

The DPR says that extant technical information on the well indicates that the hydraulic workover rig could not perform the service it was called up to do. “That was why they refused to contact DPR because they know that we would say no to that. We cannot allow that and so they refused to inform us. They are ware that revocation or no revocation, if they go with that rig, there is a potential that the well would collapse. There is that potential”.

In a letter it purportedly wrote to DPR on May 15, Guarantee Petroleum sought the regulator’s approval to use dispersants “and other needed materials “around the well and environs “to avoid loss of lives and further pollution of the communities affected”. Such a letter would suggest that Guarantee Petroleum was sure it was still in charge of operations.

The Regulatory agency denies receiving any such correspondence. “We have only two ways of receiving correspondences in DPR. It is either you bring it physically which we would stamp and give you a received copy, or you send it through DRP@DPR.GOV.NG which also carries date and time. And as soon as you email it through dpr@drp.gov.ng do you know what will happen? it will enter into our ERP and it will capture the subject and we will see it immediately”.

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Hydraulic Workover Rig Catches Fire on Ororo Well

By Toyin Akinosho

A Hydraulic workover rig Grace-1 HWU, working for the Nigerian independent Guarantee Petroleum, burst into flames over the weekend in the course of re-entry operations on the Ororo-1 well in shallow water Oil Mining Lease (OML) 95.

The incident was the culmination of a well control situation that had been shaping up since mid -April.

Field data indicate that, in late April, technicians had put the well under control after it had released fluid to surface through malfunctioned Blow Out Preventer (BOP) on the rig, owned by Joeny Holdings Limited. “Well is stable and gas leak at the same level as at when BOP was closed-in.  No increase in gas flow”, the report indicated as of April 22, 2020.

But by May 15, the wellhead had caught fire.

“All the personnel had been successfully evacuated off the 300 Series SEWOP (Self Elevating Work-Over Platform)”, reported Guarantee Petroleum, operator of the Ororo field. But the Platform itself had not been moved from the site.

The company had written the Department of Petroleum Resources (DPR), the industry regulatory agency, since April 23rd, requesting for approval to carry out the needed containment of the flow of gas and fluid droplets from the wellhead. Guarantee claims that the regulator did not dignify it with a response.

DPR spokespersons dd not have any comments on the matter.

Guarantee’s licence to Ororo field had been revoked by the Nigerian government, through the DPR, on April 7, 2020, but the company was deep in the middle of the re-entry operations when the letter came.

DPR’s refusal to respond, in the last month, to Guarantee Petroleum’s correspondences, may have to do with the regulator’s consideration that the company no longer had a right to the field. But that itself throws up a question: How can you revoke a licence right in the middle of operations you have yourself approved? See related story.

On May 15, after the fire incident started, Guarantee Petroleum sought DPR’s approval to use dispersants “and other needed materials “around the well and environs “to avoid loss of lives and further pollution of the communities affected”.

It also said it contacted Chevron Nigeria and Halliburton (the American oil service provider) for help. Chevron, an E&P major, is the operator of OML 95, the acreage from which Ororo field was ringfenced.

Esimaje Brikinn, Chevron’s General Manager, Public Affairs  explained to Africa Oil+Gas Report that  “the affected facility is a third-party facility and it is not operated by Chevron Nigeria Limited (CNL) or any of its affiliates”. He added that the company was “prepared to provide necessary emergency response assistance in accordance with petroleum industry emergency response protocol, to help address the situation, if required. CNL remains committed to safety of the people and the environment. CNL will continue working with relevant regulatory agencies and other stakeholders on protection of the environment”.

Grace-1 HWU had been on the well since October 2019.

 


ExxonMobil Heralds Reduction of Nigerian Rig Count

With its widely publicized notification of early termination of the contracts for the jackups Gerd and Groa offshore Nigeria, ExxonMobil has effectively inaugurated the widely anticipated reduction of the Nigerian rig activity.

Gerd and Groa, owned by Borr Drilling, were on locations in Asasa and Oyot fields in Oil Mining Leases (OMLs) 67 and 70 respectively, as of early April 2020.

Now other announcements of terminations of rig contracts by other companies are expected to follow, as market conditions worsen.

The two Borr rigs were under contracts originally committed until April 2021 and May 2021. The contracts for both rigs require 180-day notice for early termination.

Borr, a New York Stok Exchange listed company, says it is in discussions with ExxonMobil with regards to planning the discontinuity of operations.

Nigerian rig activity was at a three year high in January 2020, with 32 rigs in various stages of operations on as many locations.

But the combination of COVID-19 and a price war has, since then, has gutted the hydrocarbon industry worldwide, with cargoes of crude oil sloshing around looking for buyers.

 

 

 

 

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