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Page added on March 19, 2016
Major Production Projects Start Up Around The World
Production start-ups have occurred all over the globe within the first few months of this year, with considerable increases in Europe, the Middle East and Africa. Several additional projects across the latter two regions are expected in the near future, and a variety of recent developments in East Asia are expected to ramp-up their outputs by year-end.
In Europe, Total’s UK-operated Laggan-Tormore development in the West of Shetland area, will produce 90,000 barrels of oil equivalent per day (boepd). Despite its status as a “key component” of Total’s future production growth, the Laggan-Tormore project has been delayed numerous times, with output commencement initially expected at the end of 2014. Situated in 1,968 feet of water, the Laggan-Tormore gas and condensate fields feature an 86-mile tie-back of four subsea wells to an onshore Shetland gas plant, which has a capacity of 500 million cubic feet of gas per day (MMcf/d).
Deirdre Michie, the chief executive for Oil & Gas UK, emphasized the benefits the field has brought to the UK hydrocarbon sector in an organization statement in February.
“The confirmation of first gas production from the Laggan-Tormore field is very welcome news at a challenging time for the UK oil and gas industry as a whole,” she said. “Developing the field attracted billions of pounds of investment to the UK, employed thousands of people and required technological innovation over many years. Production from the field will supply a significant proportion of the UK’s gas needs, supporting energy security at a time of sustained dependence on gas as a fuel.”
Another European production start-up got underway in February at the Horse Hill-1 discovery in the UK’s Weald Basin. Oil flowed from the well at an initial rate in excess of 700 barrels of oil per day (bopd), in an approximate mix of 50:50 oil to water, before stabilizing to more than 463 bopd, in an approximate mix of over 99 percent oil and less than 1 percent water. Light, 40-degree API, sweet oil continued to flow naturally to surface at the Horse Hill-1 at a steady rate in excess of 456 bopd, and the first two tankers full with 348 barrels of oil from the site have already been sent to be refined. Brendan D’Souza, an oil and gas analyst at WH Ireland, said the results have been highly impressive and far exceed expectations.
The Horse Hill discovery could lead to one of the most significant oil supplies found onshore UK, according to Schlumberger’s research. In August, the oilfield services firm calculated that 10.993 billion barrels of mean oil in place was imbedded within the 55 square miles of the PEDL137 and PEDL246 Horse Hill licenses. Schlumberger’s latest estimates build on the company’s previous petrophysical evaluation of the Horse Hill-1 well, located in PEDL137 near to London’s Gatwick Airport, which estimated the gross oil-in-place (OIP) for the Jurassic section of the UK’s HH-1 well to be approximately 271 million barrels of oil per square mile. A previous report by U.S. petrophysical analysis firm Nutech estimated that the Horse Hill-1 well contained a total OIP value of 158 million barrels per square mile.
Elsewhere in Europe, RN-Uvatneftegaz, a Rosneft subsidiary, announced in January that commercial oil production had started at the Zapadno-Epasskoye field, which is part of the Uvat project in Russia’s Tyumen Region. Recoverable oil reserves at the field amount to over 121 million barrels, according to a Rosneft statement. First commercial production also occurred at the Sound Energy operated Nervesa gas discovery, located onshore northeast Italy, which is currently ramping up to a planned output rate of 1.8 MMcf/d.
The Middle East And Africa
In the Middle East, two production start-ups stemmed from Iran’s North Azadegan and Yadavaran development projects. Following the completion of expansion work at the two oilfields, which are located west of the Karoun River, North Azadegan and Yadavaran, now have the potential to boost Iran’s production capacity by around 160,000 bopd. The latest development in the country follows Iran’s plans to boost output after sanctions were lifted in January.
Saudi Arabia also saw a significant production development at the start of the year, when state oil giant Saudi Aramco revealed it had started to operate one of the output processing units associated with the Wasit project. Offshore gas production from the Saudi Arabian Wasit venture is expected to begin in the near future. An additional Middle Eastern production start-up was announced in February, in the form of the An Nagyah oil field, after Australia’s Petsec Energy Ltd acquired a 100 percent participating interest in, and operatorship of, the Damis Production License in the Republic of Yemen’s Block S-1. Prior to its suspension in 2014, the An Nagyah oil field had produced 25 million barrels of oil since 2004 from 25 wells, reaching a peak oil rate of 12,716 bopd in March 2006.
Several output commencements have occurred in Africa since the start of 2016, too, with the offshore Angola Mpungi field and the Southern Fields project in Algeria coming online in January and February, respectively. Eni announced Jan. 11 it had brought the offshore Angola Mpungi field on-stream as part of the latest phase of the West Hub Development Project, marking the third WHDP field start-up. This field is expected to ramp-up production from the development to approximately 100,000 bopd within the first quarter.
The Sonatrach, BP and Statoil joint venture, In Salah Gas, said in February it would begin production of the Southern Fields project in Algeria, which comprises the development of the Gour Mahmoud, In Salah, Garet el Befinat and Hassi Moumene dry gas fields. Production from the SF project is planned to ramp up to 500 MMcf/d as wells in the Hassi Moumene and Garet el Befinat fields are brought online.
Other African assets scheduled to begin production include the Aje field, located offshore Nigeria, and the Kiliwani North-1 well, in Tanzania. Aje will produce an estimated 28.5 million barrels of oil from two initial wells, according to Panoro Energy. Two further wells are expected to bring total Cenomanian oil production from the field up to over 50 million barrels. The Kiliwani North 1 well is anticipated to produce at an approximate rate of 30 MMcf/d, equivalent to more than 5,000 bopd, according to Solo Oil.
Asia Production
China’s CNOOC Limited announced in February it has started production at the Weizhou 12-2 oilfield joint development project and the Weizhou 11-4 North oilfield Phase II project, both in the Beibu Gulf Basin of the South China Sea. The Weizhou 12-2 project, which lies in an average water depth of approximately 118 feet, has three oilfields comprising Weizhou 12-2, Weizhou 12-1 West and the north part of Weizhou 11-2. CNOOC indicated that the project’s main output facilities include three wellhead platforms and 18 production wells, currently producing a total of 16,000 bopd.
Weizhou 11-4 North, in average water depths of 131 feet, makes use of two wellhead platforms and 15 producing wells. The state-owned Chinese firm has said only one well is currently in operation, producing around 500 bopd, although peak production of approximately 8,000 bopd is expected from the project this year. CNOOC also brought the Kenli 10-4 oilfield in the South of Bohai online earlier this year. There are currently six producing wells at Kenli 10-4 with an output total of approximately 6,540 bopd. The oilfield is expected to reach peak production of approximately 9,600 bopd in 2016.
In southwest China, China National Petroleum Corp. and Chevron Corp. brought the Chuandongbei Sour Gas Project online. The Chuandongbei project occupies an area of over 309 square miles and consists of several gas fields including Luojiazhai, Tieshanpo, and Dukouhe-Qilibei. The Luojiazhai gas field, which is designed to produce 109.53 billion cubic feet per annum, currently produces 346 MMcf/d.
25 Comments on "Major Production Projects Start Up Around The World"
Anonymous on Sat, 19th Mar 2016 12:42 pm
5,000 boepd counts as a major project these days? That’s about 5 seconds worth of oil.
Apneaman on Sat, 19th Mar 2016 1:10 pm
Projects Start Up every fucking week and always have. Non story.
Apneaman on Sat, 19th Mar 2016 1:14 pm
Non story. Here’s a story.
Jeff Rubin: Oil Sands Are ‘Hemorrhaging Red Ink,’ Doomed to Shutter
Former CIBC chief economist outlines latest predictions at ‘Carbon Talks.’
“The problem, he said, isn’t that the industry “has been targeted by sanctions or by environmental groups. The problem has been that oil imports in the United States have been halved over the last five years.”
The world is awash in oil. The so-called “shale gas revolution,” using fracking technology in the U.S., has brought cheap shale oil to the surface in abundance in North Dakota and Texas. That, plus the actions of Saudi Arabia and its OPEC partners to flood the market with low-cost oil, has crashed benchmark global oil prices from highs above $100 a barrel two years ago, to prices today in the high $30 range.
Worse, the discounted price that Alberta oil producers get — the so-called “western Canadian select” price — is now around $15 per barrel.”
http://thetyee.ca/News/2016/03/18/Jeff-Rubin-Carbon-Talks/
Go Speed Racer on Sat, 19th Mar 2016 1:51 pm
Wow. They found 348 barrels of oil at Horse hill. Problem solved.
rockman on Sat, 19th Mar 2016 2:39 pm
Time lag: if oil stays below $40/bbl for a long time like it did for the 20 years prior to the price surge lets see how many big projects (which typically 4+ years to start up after development begins) kick in about 3 or 4 years from now.
geopressure on Sat, 19th Mar 2016 5:54 pm
Wow, a lot of new gas production being brought online + 348 BBLs of Oil that is already watering-out…
—
President Bush promised Canada that if they would develop the Oil Sands that we would maintain oil prices of +/- $100/BBL; but Obama has not fulfilled that commitment…
Boat on Sat, 19th Mar 2016 6:34 pm
geo,
President Bush promised Canada that if they would develop the Oil Sands that we would maintain oil prices of +/- $100/BBL; but Obama has not fulfilled that commitment…
Show me proof. Presidents don’t set oil prices. Presidents don’t set monitary policy.
makati1 on Sat, 19th Mar 2016 7:49 pm
RIGPORN…
geopressure on Sat, 19th Mar 2016 10:33 pm
Boat:
It was a verbal commitment…
U.S. Presidents have more power over the price of oil than any other individual on the planet… The U.S. Won the Cold War by holding the price of oil down from 1986-2004 when George W Bush, after winning his 2nd term abandoned the 2-decade policy of holding oil prices down… Then, in Mid-2014, after ten years of allowing Supply/Demand to set oil prices (at +/-$100 per BBL), Obama decided the resume the policy of holding oil prices down…
This is can all be seen via this monthly chart: http://finviz.com/futures_charts.ashx?t=CL&p=m1
Presidents don’t ‘set’ oil prices, but they have TREMENDOUS power over which way it prices go… This power is derived from the following:
1) The US Strategic Petroleum Reserve
2) Public Confidence that the EIA is reporting the true numbers (allowing the SPR to be utilized to create oil ‘gluts’)
3) Near total control of the Media
4) The Inverse relationship between the value of the U$D & crude oil price (Though now that Saudi accepts Yuan for payments, the Petrodollar has lost half of it’s effectiveness – or should have though the Media refused to cover the petroyuan’s birth very well)… It would be interesting to saw what would happen if Saudi said “Yuan Only” for their crude oil.
When you look at the linked chart, it is important that you realize that the price decline in 2014 did not happen as a result of real market forces. It occurred because of a reversal in US policy that resulted in a manufactured / artificial oil glut.
shortonoil on Sun, 20th Mar 2016 10:58 am
Prices go up $5, and someone starts talking about Major New Projects. If they had taken a course in Project Management they would know better. Actually, the present price bounce is not sustainable. The factors that drove the present price rout are still very much in place: inventories are high, and continue to grow; demand is weak. These are not likely to change as depletion has reduced oil’s capacity to power the economy. Weak economy, weak demand, and producers are forced to maximize cash flow by maximizing production in the lower price environment.
The petroleum industry is now in a negative feedback loop from which it can not escape; just like the world’s economy is in a deflationary spiral that has no exit. Profits are now abysmal and shrinking. The new adage is return of capital; not return on capital. Few in the petroleum industry will likely see much of their capital returned.
http://www.thehillsgroup.org/
Boat on Sun, 20th Mar 2016 11:13 am
short,
You notice how the chart for demand is going up?
https://www.iea.org/oilmarketreport/omrpublic/
Can you show me a chart showing current demand weakness? I think not.
Apneaman on Sun, 20th Mar 2016 11:26 am
Boat You notice how the only reason we still have industrial civilization is because of massive monetary policy by the worlds central banks?
And all it has done was keep it from crashing – no prosperity except for the already rich.
Central banks are already doing the unthinkable – you just don’t know it
“Having hoovered up $12.3 trillion (£8.5 trillion) in financial assets and carried out 637 interest rate cuts since 2008, central banks have been stunned back into action in the last six weeks.”
http://www.telegraph.co.uk/business/2016/03/17/central-banks-are-already-doing-the-unthinkable—you-just-dont/?utm_content=buffer56f7f&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
That means there is no free market and thus no capitalism.
Highly managed and manipulate markets – Not capitalism.
I guess you have to stop promoting capitalism boat, since it no longer exists.
How about we call it – Consumer Communism?
Corporate Communism.
12.3 Trillion dollars and 637 interest rate cuts – Holy fuck! That’s a lot of manipulation and micro managing for only 8 years. More than the commie party of USSR did in 60 tears.
NOT CAPITALISM ANY MORE!
Central Bankisim?
NOT CAPITALISM
United Banks Of America?
12.3 Trillion dollars and 637 interest rate cuts
NOT CAPITALISM
GregT on Sun, 20th Mar 2016 11:38 am
Boat,
“Can you show me a chart showing current demand weakness? I think not.”
Fuck are you ever dense.
Davy on Sun, 20th Mar 2016 12:43 pm
“deflationary spiral that has no exit. Profits are now abysmal and shrinking. The new adage is return of capital; not return on capital.”
Bloomberg estimates that nearly 30% of the global government bond market is trading on a negative yield; there are even some corporate bonds in the same position.
http://www.economist.com/blogs/economist-explains/2016/02/economist-explains-6
Northwest Resident on Sun, 20th Mar 2016 1:54 pm
Boat — Nice chart. Did you read the fine print below the chart?
“Sharp decelerations in demand growth – particularly in the US and China – pulled global growth down to a one-year low of 1.2 mb/d in 4Q15, compared to the year earlier, dramatically below the near five-year high of 2.3 mb/d in 3Q15. A gain of around 1.2 mb/d is forecast for 2016.”
SHARP DECELERATIONS IN DEMAND GROWTH
And you’re posting it as a counterpoint to shortonoil’s analysis?
And what about all the “missing” barrels of oil that get included in feel-good charts like yours, but either don’t actually exist (fabricated production) or “got lost somewhere”? Count these, and you don’t have ANY growth at all.
“That leaves about 1.2 million barrels which the IEA classifies as miscellaneous to balance. Those barrels are oil that was counted as supply and not consumed as demand, but also isn’t showing up in the separately compiled IEA’s storage data.”
http://fuelfix.com/blog/2015/06/16/ieas-missing-barrels-may-take-a-bite-out-of-crude-supply-glut/#29569101=0
ZH ran this article on the topic:
http://www.zerohedge.com/news/2016-03-09/curious-case-550-million-missing-barrels-crude-oil
WHERE IS THE INCREASING DEMAND coming from, boat? Not China. Not South America. Not Mexico. Not Canada. Not Europe. And please don’t tell me from USA.
Where?
Northwest Resident on Sun, 20th Mar 2016 2:07 pm
Davy — I read that article. Good one. Bloomberg runs a lot of financial/economic oriented articles that from my pov at least are objective and factual and describe from various angles just how accurate your quote is.
It’s amazing how this whole shebang is still holding together!
They have to keep confidence in the system. They have to demonstrate convincingly that they are in control. They have to keep the masses believing! And as resource and debt and oil conflict realities beat the steady drum of DOOM, they are losing their grip.
It is amazing to be an informed witness to this historic time in human history. This is the biggest show on earth! Pass the popcorn…
Boat on Sun, 20th Mar 2016 2:40 pm
Northwest Resident,
Scroll through the last 30 years of demand or production and you see a pretty steady rise. My point being that 1.2 for 2016 is fairly normal.
WHERE IS THE INCREASING DEMAND coming from, boat? Not China. Not South America. Not Mexico. Not Canada. Not Europe. And please don’t tell me from USA.
Why do you doomers feel the need for growth so much. I would feel better with less government borrowing and less growth.
Non growth in GDP does not have to be a loss in quality of life. US cars for example have kept gasoline consumption rather flat with efficiency while miles driven continues to rise. Many cars are lasting over 250 thousand miles now. There you go, less GDP, less pollution and same servic
Boat on Sun, 20th Mar 2016 2:40 pm
Northwest Resident,
Scroll through the last 30 years of demand or production and you see a pretty steady rise. My point being that 1.2 for 2016 is fairly normal.
WHERE IS THE INCREASING DEMAND coming from, boat? Not China. Not South America. Not Mexico. Not Canada. Not Europe. And please don’t tell me from USA.
Why do you doomers feel the need for growth so much. I would feel better with less government borrowing and less growth.
Non growth in GDP does not have to be a loss in quality of life. US cars for example have kept gasoline consumption rather flat with efficiency while miles driven continues to rise. Many cars are lasting over 250 thousand miles now. There you go, less GDP, less pollution and same servic
GregT on Sun, 20th Mar 2016 2:55 pm
Boat,
“Why do you doomers feel the need for growth so much.”
Why do you continually post such complete and utter nonsense here. Do you have no self respect?
shortonoil on Sun, 20th Mar 2016 4:52 pm
“short,
You notice how the chart for demand is going up?”
You will notice that even with a price decline of 70% that consumption went up 1.6% between 2014 and 2015. That is hardly an argument that demand is on the rise. It is an argument that the industry is now having a fire sale on petroleum products, and no is showing up to buy.
http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_15.pdf
At that rate by the time oil hits $9/ barrel the market should balance out. Of course, there won’t be anyone producing oil at $9/ barrel. But, don’t let straight up, verifiable facts get in the way of your latest hallucination. Enjoy your stay on Fantasy Island — before it sinks.
shortonoil on Sun, 20th Mar 2016 5:18 pm
“My point being that 1.2 for 2016 is fairly normal.”
1.2 mb/d is a production growth rate of 1.3%; which is NOT normal. The 55 year average has been 2.53%! This 1.3% is in spite of the fact that every producer in the world is pumping flat out to maximize revenue.
The industry is now in serious trouble, no profit, poorer sales, and no possibilities down the road. Oil is a dying industry, and when it goes so also will the rest of the world. Cherry picking the data, and wishful thinking is not going to change what is actually happening!
geopressure on Sun, 20th Mar 2016 6:26 pm
The Demand Number being argued over are never anywhere close to being accurate… They are always revised multiple times over the course of the following years…
Using their own revision numbers, the IEA has underestimated Global demand by an average of 750K BOPD over the last 15 years. This time, it looks like they are even further off than their average suggest…
So the 1.2 MMBOPD number that is being discussed is actually more like 2.0 MMBOPD…
shortonoil on Sun, 20th Mar 2016 7:32 pm
“Using their own revision numbers, the IEA has underestimated Global demand by an average of 750K BOPD over the last 15 years.”
Between 2005 and 2014 production increased on average by 0.32 mb/d. Now how exactly did they miss by 0.75 mb/d?
https://ycharts.com/indicators/world_crude_oil_production
Some people just won’t give up no matter how ridiculous an argument they have to concoct. It looks like maybe you can’t tell the difference between ethanol, palm oil, bio-diesel and crude oil?
makati1 on Sun, 20th Mar 2016 8:38 pm
If lies were dollars, the US government and economy would be in the black instead of in the red by about $20 Trillion.
Apneaman on Mon, 21st Mar 2016 3:37 pm
Hooray Hooray!! The latest BC carbon cancer project got their environmental approval. I told y’all FF cheerleaders that ya had nothing to fear from pretty boy PM Trudeau – BAU in every country until death do we part. Which should be no more than a decade or so away for most of us.
Woodfibre LNG gets environmental stamp of approval from Ottawa
“Completed, the Woodfibre LNG project would produce roughly 2.1 million tonnes of liquified natural gas per year for 25 years, resulting in up to four new tankers travelling through shipping lanes in Howe Sound per month. Since its inception, the proposal has been hotly-debated due to the risk it may pose to local whale, dolphin, salmon, herring and shellfish populations, which have slowly returned to Howe Sound since the closure of the Woodfibre pulp mill in 2006 and the upgrading of waste water treatment plants at the nearby Port Mellon pulp mill and Britannia Beach mine site.”
http://www.nationalobserver.com/2016/03/18/news/woodfibre-lng-gets-environmental-stamp-approval-ottawa