Australia Unconventional Boom – CBM and now Shale

The majors entered Australian unconventional assets, notably, starting 2008. British major BG made the first acquisition in QGC, on the same date exactly 4 years ago when it acquired 9.9% stake in QGC and 20% stake in its CSG assets. This deal was followed by Petronas acquiring 40% interest in Queensland LNG project from Santos for $2.5 billion. Supermajor ConocoPhillips joined the CBM party by acquiring 50% interest in Origin Energy’s CBM assets in Queensland for $8 billion-the largest and the most expensive deal in Australia CBM. Continue reading here..

BG Ups Investment in Australian Shale

Queensland Gas Company (QGC), a subsidiary of UK supergiant BG Group, will acquire a 9.4% stake in Sydney-based Drillsearch Energy after exercising options granted as part of A$130 million (US$138.2 million) joint venture agreement signed last year which will see the pair explore and develop shale gas permit in Australia’s onshore Cooper basin. Continue reading here..

BG and ENI eyeing for stake in ONGC’s KG – DWN - 98/2; Plans to spend around INR 36,000 crore (US$ 7,898 million) along with its partners on developing the block

In 2010, India’s state run Oil & Natural Gas Corporation (ONGC) has made significant finds in the Krishna Godavari (KG) basin, which is right next to the KG-D6 block of RIL in the K-G basin, off the east coast. ONGC is aiming to develop the KG basin assets through four different projects. The G-1 and GS-15 integrated development followed by the S-1 and Vasistha deep-water development, exploitation of discoveries in the KG-DWN-98/2 block and Project Manik, involving the oil finds.

The blocks are divided into two discovery areas - the Northern Discovery Area (NDA) consisting of the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in water depths ranging from 594m to 1,283m and the Southern Discovery Area (SDA) consisting of the UD-1 discovery falls in ultra-deepwater with a depth of 2,841m.

KG-DWN-98/2, which has 10 gas discoveries, was awarded under the New Exploration Licensing Policy, which allows ONGC to farm out a participating interest to foreign firms. In 2010, ONGC had asked foreign firms to submit proposals to buy a stake in the block. Cairn India is already a 10 per cent partner in the block.

“Giving away more will result in losing control and, in turn, our decision-making ability. We want an international partner who can get us the technology for deep-sea exploration. Both BG and ENI have it. These players are experts in deep water and know exactly how to go about the routine of the block,” said, one of the board members, ONGC. He added the discoveries in KG-DWN-98/2 and three in adjacent blocks together hold 6.37 trillion cubic feet (tcf) of in-place reserves. RIL’s KG block holds in place reserves of 11.3 tcf.

In February 2011, BP agreed to buy a 30-percent stake in 23 oil and gas blocks owned by Reliance Industries for $7.2 billion, as part of a long-term deal that involves a total investment of $20 billion. Nearly four months after RIL signed a deal with BP for getting BP’s technology for deep-sea exploration.

To know more about Reliance-BP's $7.2 billion deal, CLICK HERE 

Block 1G was given to ONGC on nomination basis. It cannot sell stake to any firm and can at best involve a foreign firm as a service contractor. ONGC has partnership with BG India in three blocks in KG offshore, two operated by ONGC and one operated by BG. Petrobras and ENI have also partnership in one block each.

For more presentations on "KG Basin", use our oil and gas document library:

Powered by Derrick Petroleum Services

ONGC has entered into a period of exploration for appraisal after completing the exploration MWP commitments in block KG-DWN-98/2. The company plans to start producing 25-30 mscmpd of gas from the block in 2016-17.

Source Documents:

ONGC to sell 30 percent stake in KG block

View more documents from derrick_anitha

UK O&G Majors' Presentations - 2011

BP:
China’s energy future
2011 Statistical 60 Years Review


Shell:
March 2011 Investor Presentation
Goldman Sachs London 2011
Credit Suisse Energy Summit 2011

ExxonMobil:
2011 Analyst Meeting
2011 Business Model & Fundamental Strategies

ConocoPhillips:
Investor Presentation - June 2011
Investor Update - May 2011
2011 Annual Meeting of Stockholders
UBS Energy Conference 2011


TOTAL:
2010 Results and Outlook

Centrica Plc:
Annual General Meeting 2011

BG:
2011 Strategy Presentation

Nexen:
UBS Oil & Gas Conference
Investor Roadshow - May 2011
2011 Annual General Meeting

Chevron:
Tengiz Field Trip 2011
Eurasia Business Unit Overview
2011 Tengiz Field Trip - Europe, Eurasia and Middle East

ENI:
2011-2014 Strategy Presentation

BG plans to invest $500 million in Bolivian Gas fields over the next 5 years

BG in Bolivia:

BG plc demerged from British Gas in 1997 and is in charge of exploration and production and the overseas operations of British Gas. The company entered Bolivia in 1998 and announced the discovery of Margarita field. Currently, BG Group has interests in six exploration and exploitation licenses in Bolivia, including an interest in two gas condensate fields, Margarita and Itau. Gas and liquids are delivered to Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Bolivian State Energy company to supply Brazilian, Argentine and domestic markets.

Source: BG

Bolivia - Exploration and Production:

Bolivia nationalized its oil and gas industry in 2006 and the country is currently planning to increase its O&G production by allowing international partners to meet export commitments with neighboring Argentina and Brazil.

“Over $1.8 billion will be invested in natural gas exploration this year, more than doubling the amount spent last year. Two-thirds of that will come from YPFB, with private companies putting up the rest”, Villegas, President of YPFB said.

Try this free document search tool

Bolivia has been successful in bringing a number of multinational partners on board. While there are concerns over the legal protection afforded to foreign investors, BG Group, Total, Gazprom and a number of firms are comfortable with the risk.

Significant Transactions of BG in the year 2010:

Source: Derrick Petroleum E&P Transactions Database

Major E&P companies showing interest in Bolivia:

"Repsol YPF SA, BG Group Plc and Pan American Energy LLC will jointly invest $1.3 billion in the Margarita and Huacaya fields by 2014", YPFB, said in an e-mailed statement. "YPFB, Repsol, Petrobras and Total will invest $750 million dollars in the San Alberto and San Antonio gas fields", according to a separate statement.

Try this free document search tool

The investments in Margarita and Huacaya will increase the fields’ gas production to 14 million cubic meters in 2014 from a current 2 million. Output at San Alberto and San Antonio will increase by 5 million cubic meters per day, adding to an average 25 million now.

Source Documents:

BG - 2011 Strategy Presentation

View more documents from derrick_anitha

BG’s Q1 2011 E&P Production hit by civil unrest in North Africa, flooding in Australia, and shutdowns in the North Sea; Will BG ramp up to achieve the Group’s long-term rate of 6-8% to 2020?

Natural Gas giant, BG has challenging first quarter for O&G operations. The group’s production for the period was down 5% from 61.3 mmboe to 58.2 mmboe over the same period last year. This is due to unrest in North Africa, flooding in Australia, an increase in UK tax and a shutdown in the North Sea. The North Sea's effect on the company was exacerbated by the temporary shutdown, largely for maintenance, of the Everest and Lomond platforms. This contributed to a 5% fall in production volumes. In Tunisia, the restart of the Hasdrubal plant was delayed, and in Egypt there was significant disruption to normal patterns of gas demand. In addition, production volumes in the quarter were affected by extreme weather conditions and extensive flooding in Queensland, Australia. However, BG pointed to advances in Brazil and the signing of two sales agreements in Japan as reasons to be optimistic.

BG’s Performance in 2010 compared to Peer Groups:




Try this free document search tool

HIGHLIGHTS of the Quarter:

Brazil

Production at the first permanent module on Lula Sul increased to some 25 000 boepd, and construction of the next two FPSO modules advanced to around 50% complete, in line with plans.

In April 2011, conclusion of a Drill Stem Test (DST) on the Guará Norte well (3-SPS-69) in Block BM-S-9 in the Santos Basin was done. The DST confirmed high productivity of some 6 000 bopd of light oil (approx 30° API) with flow rates constrained by test facility capacity.

In March 2011, successful completion of drilling on the Iara Horst well in the BM-S-11 concession in the Santos Basin. The well encountered good quality oil (28° API) in a thick reservoir section. Further evaluation activity continues.

In February 2011, a new discovery of oil (approximately 26° API) in Block BM-S-10 in the Santos Basin. The discovery well, known as Macunaíma, is located in a water depth of 2,134m, approximately 244 kms off the coast of Rio de Janeiro state. Further evaluation of the discovery continues.

USA

BG Group's shale gas operations continued to gather momentum, with 46 wells spudded and 22 drilling rigs operating in the Haynesville shale during the quarter. Seven wells were drilled in the Marcellus shale.

Tanzania

In April 2011, the company announced its third Tanzanian gas discovery. The Chaza-1 well is located in Block 1 approximately 18 kms offshore southern Tanzania in a water depth of around 950m. It is intended that a second drilling campaign will commence in late 2011.

Kenya

In March 2011, the company signed a Heads of Agreement with the Kenyan government to acquire a 40% equity interest in the exploration block L10A and a 45% interest in block L10B, subject to negotiation of Production Sharing Contracts. BG Group would operate both blocks.

India

In April 2011, a consortium led by BG Group (50% and operator), was identified as the qualifying bidder for an exploration block (MB-DWN-2010/1) offshore the west coast of India. The block is approximately 350 kms from the coast, covering an area of 7,963 sq kms and in water depths in excess of 2,000m. The award of the contract will be subject to final confirmation from the government of India and regulatory approvals.

Norway

In the 21st licensing round held in April, the Norwegian government awarded BG Group a 40% interest in and operatorship of licence PL599, located in the Norwegian Sea.

"We now expect modest production growth in 2011. The plans for a ramp-up in production in 2012 and 2013, as well as our 2020 goals, are unaffected and are supported by significant progress with our growth projects in Brazil, the US and Australia, as well as further exploration and appraisal success in Brazil and Tanzania.", Mr. Chapman,  BG Group’s Chief Executive added.

BG's Strategic Acquisitions in 2010 and 2011

Source: Derrick E&P Transactions Database

Haynesville- Beats Barnett in production!! Metrics run high at ~$15,000/acre.

A short note on Haynesville Shale- which beat Barnett in production!!

A recent report by the US Energy Information Administration on US gas production said the Haynesville is now producing at least 5.5 Bcf/d and overtook the Barnett Shale's production of 5.3 Bcf/d. The production from the Haynesville shale increased from 0.4 Bcf in 2007 to 410.9 Bcf in 2009. The production from the play is expected to increase to 2,328.4 Bcf in 2020 at an average annual growth rate of 15.8%. Some industry experts believe the Haynesville shale could ultimately produce as much as 30 to 40 trillion cubic feet of natural gas.

Haynesville Vs Barnett- Haynesville to be the winner??

Haynesville’s rig count has increased 11% over the past year to 168 rigs as against the Barnett’s 31% decline to 53 rigs. The drilling pace in Haynesville is ramping up due to the Barnett having many matured producing wells versus the Haynesville just speeding up the production since 2007 when the first well was hit by Chesapeake. Another reason for continued drilling in the Haynesville Shale in 2011 despite weak natural gas prices is the existence of some independent companies like BG, ExxonMobil and EXCO. These independents, in 2010, gave a new outlook to Haynesville Shale lifting the metrics to ~15,000/acre.

Source: Global Oil and Gas M&A Review

Try our free document search tool: http://www.derrickpetroleum.com/

Haynesville runs @ high metrics of ~15,000/acre
The Haynesville's average 2010 metrics of ~$15,000/acre had increased 67% from the average 2009 metrics of $9,000/acre. The Haynesville metrics is the highest of all the other unconventional gas plays! Observing the growth in Haynesville Shale play, it might become a replica of Barnett.

Here is the snapshot of a Haynesville package up for sale.

Source: Derrick Petroleum E&P Transactions Database

Brazil- World’s next oil bank!! O&G players flocking towards Brazlian pre-salt discoveries. BG to invest $30 billion in Brazil!!

Brazil's quest to remake itself into a global oil superpower is gaining momentum.

BG is to invest $30 billion in Brazil in the next decade, an increase from the $5 billion it has invested since 1994. BG has stakes in some of Brazil’s largest oil discoveries, including the 6.5 billion barrel Lula field, formerly known as Tupi. BG plans to produce 550,000 barrels a day in Brazil by 2020, or a third of the company’s total production by the end of the decade. Brazil is preparing to auction exploration areas in the first half of this year as the country plans to double oil production to 5 million barrels a day by 2020. Brazil also plans to auction exploration areas in the so-called pre-salt region in deep waters of the Atlantic where the Lula field is located.

Portugal's Galp Energia will also invest $4.87 billion through 2015 as it ramps up spending to pay for the company's share of developing massive oil fields including the Lula and Cernambi fields in Brazil's pre-salt region. Galp Energia is considering the sale of a 30% stake in its Brazilian assets to finance the company's investment plans. To know more read here: http://mergersandacquisitionreviewcom.blogspot.com/2011/03/galp-to-sell-42bn-stake-opportunity-for.html

Brazil- World’s next oil bank

A consortium of Petrobras, BG and Petrogal discovered the Tupi field in 2007, which contains substantial reserves that occur in a pre-salt zone 18,000 feet below the ocean surface under a thick layer of salt. Following Tupi, numerous additional pre-salt finds were announced in the Santos Basin, such as Iracema, Carioca, Iara, Libra, Franco and Guara. Additional pre-salt discoveries were also announced in the Campos and Espirito Santo Basins.

These significant discoveries have ignited interests among certain O&G companies, which made Brazil to see many foreigners like Maersk, Sinopec and BP stepping deep into the discoveries in 2010. Also, with the market rumors of Sonangol and certain Chinese companies interested in taking a stake in Galp Energia, this year will again see many more foreigners exploiting the Brazlian reserves.

See the Global E&P Transactions 2010 review: http://www.derrickpetroleum.com/reports1.html

Pre-salt deals of 2010...

In 2009, Brazil’s liquids production surpassed its liquids consumption. In the January 2011Short-Term Energy Outlook, EIA projects that Brazil will continue to be a net exporter through the end of 2012. As pre-salt discoveries boost Brazilian production in the medium and long term, crude oil exports should steadily increase.