Statoil ASA, Norway’s largest oil and natural gas company, agreed to sell a 40 percent stake in the Brazilian offshore Peregrino field to China’s Sinochem Group for $3.07 billion in cash.

The companies also agreed to jointly seek more opportunities in Brazil and elsewhere, Statoil Chief Executive Officer Helge Lund said today. “Both companies see many opportunities for value creation through increased recovery and exploration for additional resources in the decades to come.”

The Norwegian company said last year it was considering cutting its stake in Peregrino to reduce risk and raise funds to develop other projects. Chinese state-owned companies, including PetroChina Co., last year spent a record $32 billion on energy and mining acquisitions to meet rising resources demand in the world’s fastest-growing major economy.

Cnooc Ltd., China’s biggest offshore energy explorer, was also in the bidding process for the stake estimated to cost as much as $3 billion, people with knowledge of the process said on April 15. Sinochem, China’s biggest chemicals trader, last year agreed to buy Emerald Energy Plc to boost revenue from oil and gas operations by tapping wells in Syria and Colombia.

“This transaction will significantly increase Sinochem’s interests in the exploration and production business and consolidate our position as one of the leading global players in the oil and chemicals business,” Han Gensheng, president of Sinochem Corp., said in a statement. The company made its first oil and gas investment in 2003 and operates 12 such projects in the Middle East, Latin American and Asia, according to the statement.

‘Profited Well’

“Statoil has profited well,” said Trond Omdal, an analyst at Arctic Securities with a “buy” rating on the shares. The price works out to about $15.4 a barrel, compared with the $7.2 a barrel Statoil paid when it took full control in 2008, he said.

Statoil’s shares gained 0.9 kroner, or 0.7 percent, to close at 127.3 kroner on the Oslo exchange after earlier falling as much as3.5 percent.

The Stavanger-based company, which has operations in 40 countries, took control of the field in March 2008 after buying the remaining 50 percent from Anadarko Petroleum Corp. The field, 85 kilometers (53 miles) offshore Rio de Janeiro, has an estimated 460 million barrels of recoverable oil, spokeswoman Mari Dotterud said on Oct. 20.

‘Better Than Fair’

“The price looks very strong actually, it’s better than fair,” Oswald Clint, an analyst at Sanford C. Bernstein who has a “market perform” rating on Statoil shares, said by phone from London. “This was signaled for some time.”

Statoil will keep 60 percent ownership and remain the operator of the field, which is set to start production in early 2011. Brazil will continue to form a “key part” of the company’s international strategy, and Statoil will explore further opportunities in the region, it said.

This stake sale will reduce Statoil’s equity production guiding for 2012 by 40,000 barrels of oil equivalent a day to 2.06 million to 2.16 million, the company said. Equity output was 1.962 million barrels of oil equivalent a day in 2009, while booked reserves of oil and gas totaled 5.4 billion barrels.

The transaction is subject to government approvals in Brazil and China.

–With assistance by William Bi in Beijing, Editors: Jonas Bergman, Raj Rajendran

Source

LONDON (AP) — BP PLC said Wednesday that it had made a “giant” oil discovery in the Gulf of Mexico but had not yet determined the size and commercial potential of the find.

The well, in Keathley Canyon block 102 about 250 miles (400 kms) southeast of Houston, is in 4,132 feet (1,259 meters) of water, the company said.

The Tiber well was drilled to a total depth of 35,055 feet (10,685 meters), making it one of the deepest wells ever drilled by the oil and gas industry, BP said.

BP has a 62 percent interest in Tiber, while Petrobras holds 20 percent and ConocoPhillips has 18 percent.

BP shares were up 1.9 percent at 529.5 pence on the London Stock Exchange.

Latin America’s oil and gas market has remained relatively strong over the past year, despite the impact of ongoing financial problems worldwide. Demand for drillships and semisubmersibles has led to fleet utilization rates of around 100 percent, and Petrobras has busied itself with a number of offshore field development projects.

However, while the discovery of vast reserves in the pre-salt area of Brazil has helped drive activity for state company Petrobras, the company has had its share of problems, as has Venezuelan state oil company PDVSA.

Troubled Waters

Petrobras recently had to contend with a five-day strike by oil workers union Federação Única dos Petroleiros (FUP). FUP began the strike, which affected refineries and exploration and production units, after becoming unhappy with a profit-sharing scheme proposed by Petrobras, along with grievances that the company had not guaranteed protection against layoffs or adequately addressed concerns over safety issues. The workers previously went on strike in June 2008, demanding payment for time spent commuting to oil platforms.

The latest strike ended March 27 after Petrobras agreed to a substantial increase in the base level for its profit sharing, overtime payment for May Day, new meetings on employee safety and an assertion that job and benefit cuts were not planned. Petrobras also agreed not to harshly penalize workers who participated in the strike.

During the strike, Petrobras’ contingency teams took over operation of its platforms, and the company asserted that there was no interruption in oil and gas production.

Due to low oil prices, Venezuelan state oil company PDVSA has had trouble making payments to drilling contractors and oilfield services companies since pushing out foreign operators and nationalizing its oil and gas industry. PDVSA has ordered gradual payment of all outstanding debts dating back to 2008, and started to renegotiate terms and conditions with rig owners and companies providing well services.

In one of the more dramatic moments related to payment problems, PDVSA subsidiary Petrosucre took over operations of Ensco International jackup ENSCO 69 in January. Ensco had suspended drilling operations due to a lack of payment in the region of US$35 million. Petrosucre employees resumed drilling operations under observation by Ensco supervisory rig personnel, claiming that Ensco had violated contract provisions giving it 30 days to resolve such issues. PDVSA and Ensco are now working on resolving payment issues while drilling continues.

PDVSA President Rafael Ramirez said that the company would be “breaking away from structures that provide goods and services through monopolies, in many sectors of the oil industry” and create new companies, organizations and production units that “contribute effectively to the construction of socialism is the beginning of a new stage in the revolutionary process.”

Discoveries
In September 2008, Anadarko Petroleum made a pre-salt discovery at the Wahoo prospect offshore Brazil in the Campos Basin. The 1-APL-1-ESS well is on Block BM-C-30 in around 4,650 feet (1,417.3 m) of water, southeast from Petrobras’ pre-salt discoveries at the Jubarte field. Results at Wahoo indicate 195 feet (59.3 m) of net pay with similar characteristics to the Jubarte 1-ESS-103A well, Brazil’s first producing pre-salt field, which achieved rates of 18,000 b/d of light oil. Anadarko plans to run a multi-zone drill stem test toward the middle of 2009 at Wahoo and anticipates drilling more wells on the block later in 2009.

In late January of this year, Petrobras found  traces of natural gas in Blocks BM-ES-5 and BCAM-40. BM-ES-5 is in the Espirito Santo Basin in around 196.8 feet (60 m) of water. Scorpion Offshore jackup Offshore Defender is drilling on the block. BCAM-40 is in the Camamu-Almada Basin in around 967.8 feet (295 m) of water.

ExxonMobil has notified Brazilian regulatory agency Agencia Nacional de Petroleo, Gas Natural e Biocombustiveis (ANP) of two hydrocarbon discoveries in block BM-S-22, a pre-salt block known as Azulao. The discoveries were made in 7,293 feet (2,223 m) of water using Seadrill drillship West Polaris.

Rig Demand
South America continues to dominate Latin American drilling activity, with the majority of the rigs in the region working offshore Brazil or Venezuela. There are currently 128 rigs of various types in South America, and at least four rigs that are planned or on order will be headed to the region as well.

Of the existing rigs, 91 are under contract. The majority of the rigs with no contract are cold stacked or out of service drill barges and tender barges in Venezuela.

Other rigs are en route to South America. Noble semisubmersible Noble Dave Beard, Transocean semisubmersible Sedco 706 and Seadrill semisubmersible West Eminence will all begin contracts with Petrobras before the end of the year. Ensco International jackup ENSCO 68 is heading to Venezuelan waters to begin a three-well contract with Chevron.

Demand in both regions is expected to grow, with the majority of the growth coming from the semisubmersible market, according to ODS-Petrodata’s World Rig Forecast Short Term Trends report. In South America, an increase in demand to 52 semisubmersibles is predicted, but some requirements are likely to remain unfilled. At present, 40 semisubmersibles are in South America, all in Brazil, and all mainly operated by Brazilian state energy company Petrobras. Aside from Aban Offshore semisubmersible Aban Pearl, which will begin a contract with Venezuela’s PDVSA towards the end of the month, the rest of the arriving semisubmersibles will be working offshore Brazil for Petrobras or OGX Petroleo.

Of the seven rigs in Central America and the Caribbean Sea, all are in Trinidad and Tobago, with three jackups, one semisubmersible and one platform rig working, one platform rig warm stacked and one jackup cold stacked. One of the working rigs, Maersk-managed semisubmersible Kan Tan IV, has been drilling for Canadian Superior, Challenger Energy and BG Group on the Intrepid block, but will soon be leaving the region for Australia.

Field Development
Petrobras has been busy installing new FPSOs and production platforms offshore Brazil, and on Feb. 25 managed to set a new daily oil production record of 2,012,654 barrels with the help of the new facilities.

In the last quarter of 2008, floating platform P-53 became the first production unit installed in the Marlim Leste field in the Campos Basin. The P-53 is capable of producing up to 180,000 barrels of heavy oil, 20 degrees API, and of compressing up to 211.88 MMcf/d. The platform’s oil production is offloaded by shuttle tankers with the assistance of autonomous repumping platform PRA-1 and floating storage and offloading vessel Cidade de Macaé. The P-53 is in waters of 3,543 feet (1,080 m).

In January 2009, semisubmersible platform P-51 began producing from Well MLS-99 in the Marlim Sul field in the Campos Basin. Installed 93 miles (150 km) offshore in 4,117 feet (1,255 m) of water, the platform is capable of producing up to 180,000 b/d of oil. P-51 is capable of compressing 211.8 MMcf of gas and has a water injection capacity of 282,000 b/d. P-51 is 410 feet (125 m) in length, 360.8 feet (110 m) wide, and weighs 48,000 tons.

Petrobras brought FPSO Cidade de Niterói online in February, also in the Marlim Leste field. Chartered to Modec, the FPSO is 75 miles (120 km) off the coast in 4,495 feet (1,370 m) of water. The FPSO is capable of producing 100,000 b/d of light, 28-degree API oil and 123.6 MMcf/d of gas.

Following these projects, Petrobras expects to bring FPSO Cidade de São Mateus and FPSO BW Peace online within the next six months. Chevron’s Frade FPSO should also begin producing from the Campos Basin by mid-2009.

A number of field development projects have been taking place offshore Trinidad & Tobago. A consortium between Fluor Corp. and J. Ray McDermott recently installed the Poinsettia production platform for BG Trinidad and Tobago. Gas is now flowing from the platform.

The platform, located in 530 feet (161 m) of water off the northwest shore of Trinidad, can produce as much as 350 MMcf/d of gas, which is transported via a 20-inch diameter pipeline to the existing BG Trinidad and Tobago Hibiscus platform before final pipeline transmission to shore.

In March, Trinidad Offshore Fabricators Unlimited (TOFCO) delivered the EOG Toucan Deck to EOG Resources. The deck, a conventional deck module with a structure designed to support a drill rig, gas processing system and manned operations, will be part of the EOG Toucan platform in 433 feet (132 m) of water, 43 miles (69 km) east of Trinidad.

Source: Energy Current