Thursday, March 17, 2011

Tullow oil reported 2010 annual results; Reported 2010 annual production of 58,100 boepd surpassing initial 2010 guidance of 55-57 kboepd; Plan to invest for exploration led value growth in Mauri-Tano trend , South America and East Africa

Tullow reported 2010 annual production of 58,100 boepd surpassed 2010 guidance. The company achieved 82% exploration and appraisal success rate and three year reserves replacement ratio of 250%. Tullow plan to invest $1,500 million in 2011 and is planning to produce 86-92 kboepd in 2011.


-- 2010 annual production of 58,100 boepd surpassing initial 2010 guidance of 55-57 kboepd

-- 83% Exploration and Appraisal success rate in 2010

Plan to invest $1,500 million in 2011

-- Frontier exploration to open new basins in 2011

BP Rosneft share Swap in problem – Rosneft may look for new Asian partners to develop the Arctic project

Share swap between BP and state-controlled Rosneft under which they agreed to jointly explore for offshore oil and gas in the areas of the Arctic is in problem after TNK BP won an injunction in a London court that froze the deal and is now seeking to be part of it. 
Rosneft and the Russian government have made clear such move was not welcome. On 2 March the TNK-BP management had proposed buying a $7.6 billion stake in BP and joining the offshore partnership with Rosneft. The deal with Rosneft gives BP more clout in Russia and effectively sidelines TNK BP.

Two months after Rosneft-BP strategic alliance announcement, Rosneft  is considering new partners

After 2 months of BP Rosneft deal, Rosneft is considering partnering with Chinese and Indian energy companies to work on Arctic projects.

Arctic Project Overview

For more:

ConocoPhillips slows down gas business and accelerates oilsands investment… Many more including Chesapeake and EOG are transiting from gas to oil!!!

ConocoPhillips’ Canadian president, Joe Marushack said, "ConocoPhillips Canada will go in full-speed ahead on its Alberta in situ oilsands investments this year while choking back spending on its natural gas business and maintaining support for liquids-rich conventional plays. The dramatic drop in gas prices, which at $4/MMBTU are a fraction of their level of several years ago, has forced substantial changes at the US energy giant. Late last year, it closed off the taps on 12% of its Canadian gas output for three months. ConocoPhillips is not the only company transiting from gas focus to oil focus but also other majors like Chesapeake, EOG Resources, etc.,

The company also intends to continue selling some non-strategic assets from its gas-heavy Canadian portfolio, although it's not huge numbers compared to the overall size of its operations. “If you go back to 2008, folks were drilling under the assumption of $8 gas. That’s a very different capital profile than what you’d use when you have $3.50 gas,” Mr. Marushack said.

The company’s primary focus remains on the oil sands, despite selling its 9% stake in Syncrude Canada– a transaction with Sinopec that netted it $4.65-billion. ConocoPhillips is investing heavily in developing new oilsands projects. Its expansion comes both through its 50% partnership with Cenovus Energy on several projects, and its Surmont development, which it owns with Total E&P Canada. Last year, ConocoPhillips began work on the second, 83,000 barrel-per-day phase of Surmont. The company is also spending heavily on new technology in the oilsands, where Mr. Marushack said improving environmental performance has become a key goal. Last month, ConocoPhillips, announced a $13.5-billion US capital budget for 2011, with about $6 billion to be spent on North American exploration and development. The following graph shows the trend of oilsands deals since 2006..

A list of the oilsands deals in 2010 captured by Derrick Petroleum

2010 divestitures of ConocoPhillips...

Norway determined to “crack the code”- Plans to drill about 60 wells on the Norwegian Continental Shelf in 2011 as compared to 40 in 2010!!!

Whilst the number of wells drilled on the NCS decreased last year to 40 wells compared to 65 exploration wells in 2009, 2011 is set to match the record year of 2009. About 60 wells have been scheduled so far.

  • Only one exploration well was drilled in the Barents sea in 2011.
  • The CEO of state-run producer Statoil , Helge Lund, told Bloomberg that the oil industry has been unable to 'crack the code' of the Barents Sea. However, a company spokesperson said earlier in the week that Statoil 'still believes' in the Barents Sea, underscoring its importance to the plans of Norway's upstream players.
  • About 32 wildcat wells were completed by the end of 2010, out of which 16 wells discovered hydrocarbons in them.

  • So far in 2011, six wells have been drilled offshore Norway: two each in the North, Barents and Norwegian seas. All six have failed to yield hydrocarbons. This is the largest number of dusters to start a calendar year in Norway's drilling history since 1966, according to Norwegian government data.
  • Norway estimates the Norwegian Sea holds 455 billion cubic meters in undiscovered gas and the Barents Sea 520 billion cubic meters. Total undiscovered gas resources may be 1.26 trillion cubic meters, the directorate said in January, down from an estimate of 1.82 trillion cubic meters last year. The country had proven gas reserves of 2 trillion cubic meters in 2009.
  • The lack of discoveries is challenging targets to maintain production offshore Norway and imperiling the development of a second gas hub in the Norwegian Sea.
  • Statoil missed production targets last year and has said a goal of keeping output in Norway at current levels until 2020 is “ambitious.”
  • Producers operating off Norway are investing a record amount in exploration and production this year to make bigger discoveries and prolong output from existing fields.
  • Investments are estimated to climb 13 percent to 141.1 billion kroner ($25 billion) driven by an 11 percent increase in spending on exploration.

Planned exploration wells on NCS 2011 sorted by operating company:

Companies which have not planned any wells as operators in 2011:
BP, Chevron, Dana Petroleum, Lotos, VNG, North Energy, Front Exploration, Spring Energy, Hess, Bridge Energy, Talisman Energy, Repsol, Shell and ExxonMobil.

For further information on Derrick Petroleum Exploration Database, please visit:


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