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UPSTREAM NEWS

Total discovers oil in deep water offshore Ivory Coast

The Total-operated Saphir-1XB exploration well on Block CI-514 has proved the presence of liquid hydrocarbons in the deep offshore west of the Ivory Coast.

"Drilled in an abrupt margin play, this first well is the first discovery in the San Pedro Basin, a frontier exploration area in Ivory Coast," commented Marc Blaizot, senior vice president of exploration at Total. "Having confirmed the presence of a petroleum system containing light oil, we will next evaluate this very promising find and focus on its extension to the north and east."

Lying in 2,300 meters (7,546 feet) of water, Saphir-1XB is the first well in Block CI-514. It was drilled to a total depth of 4,655 meters (15,272 feet), encountering 40 meters (131 feet) of net pay containing light 34° API oil, in a series of 350 meters (1,148 feet) of reservoirs.

The data acquired during drilling are being analyzed and will be used to determine the area's potential and design the delineation program. Total is pursuing its intensive exploration program in the area, with plans to drill two wells in blocks CI-515 and CI-516 by year-end.

Total E&P Côte d'Ivoire operates Block CI-514 with a 54% interest, alongside CNR International (36%) and PETROCI Holding (10%).

Total also has interests in three other ultra-deep offshore exploration licenses in Ivory Coast (CI-100, CI-515 and CI-516). The Group is continuing to analyze the oil discovery made in Total-operated Block CI-100 in 2013, which confirmed the extension of an already proved active petroleum system in the Tano Basin.

Shell lifts first crude oil from the Majnoon oilfield

Shell announced today that the Majnoon oilfield it operates in partnership with South Oil Company (SOC), Petronas and Missan Oil in Southern Iraq has successfully exported its first shipment of crude oil to Shell trading, a significant milestone for the oilfield.

The achievement comes as production at the Majnoon oilfield has reached a current average of 210,000 barrels of oil per day, well in excess of the 175,000 barrels per day (bpd) First Commercial Production target which initiates the commencement of cost recovery and was achieved after extensive rehabilitation works at the oilfield.

"This is a historic event for Iraq's energy industry. The lifting of Shell's first oil shipment from Majnoon has great significance to us and our partners in the Government as it is a testimony to our shared progress and signals the start of Majnoon's long-term journey toward generating further revenue for Iraq's economy, and as an investment in Iraq's future" said Hans Nijkamp, Vice President and Chairman of Shell in Iraq. Mr. Nijkamp added that progress on the Majnoon field would not have been possible without the support of the South Oil Company and our partners Petronas and Missan Oil Company.

Shell and its partners successfully recommenced production from Majnoon in September 2013 following the completion of major overhaul works, including 28 square kilometres of mine clearance, extensive refurbishment of brownfield facilities to meet safety standards, and the construction of a new greenfield central processing facility – the largest to be built in Iraq in the last decade – to allow for increased production capacity. To date, 18 new wells have been drilled, while the project has created more than 2,850 jobs for Iraqi's from the neighbouring communities.

Texas Upstream Petroleum Economy Sustains Record Run

The upstream oil and gas economy in Texas ventured further into uncharted territory in February, as rapidly increasing production, higher wellhead prices, and revised statewide employment numbers boosted the Texas Petro Index (TPI) to a record 300.6, the Texas Alliance of Energy Producers reported.

"Texas producers increased oil output by more than 22% in February compared to February 2103, and natural gas production was up about 1.0%," said economist Karr Ingham who created the TPI. "Combined with higher wellhead prices for both commodities, the value of oil and gas produced in Texas during February increased by more than $2.85 billion in the past year to about $10.63 billion."

Ingham noted that Texas producers recovered about 2.75 million bbls per day of crude oil during February, "the most since 1980."

Ingham said revised statewide employment estimates by the Texas Workforce Commission (TWC) indicated the oil and gas industry continues to hire new workers at an impressive pace, faster than even the stout growth in prior years.

"In 2012, workforce commissioners revised total upstream payroll employment upward by about 3,200 jobs to more than 270,000 jobs, which reflected a growth rate of 10.2% at yearend compared to yearend 2011," Ingham said. "In 2013, another 10,000 jobs were added to upstream oil & gas company payrolls, and that job growth has escalated in early 2014.

"At year-end 2013, the year-over-year rate of industry employment growth was about 3.7%; in February, the year-over-year rate of industry employment growth was nearly 5%, with about 13,400 jobs added over the last 12 months," he said. "Since the industry downturn in 2009, about 103,000 jobs have been added to upstream oil and gas company payrolls."

A composite index based upon a comprehensive group of upstream economic indicators, the Texas Petro Index in February moved above 300 for the first time to a record 300.6, up 7.6 % compared to Feb. ‘13. Before the current economic expansion, the TPI's previous all-time high of 287.6 occurred in September and October ‘08, after which the TPI declined to 188.5 in December ‘09 before embarking upon the current growth cycle.

Among leading TPI indicators during February:

  • Crude oil production in Texas totaled an estimated 77.2 million barrels, about 14.1 million barrels (22.4%) more than in February 2013. The value of TX-produced crude oil totaled about $7.48 billion, 29.2% more than in Feb. ‘13.
  • Estimated Texas natural gas output was more than 625.2 bcf, a year-over-year monthly increase of about 1.1%. With natural gas prices in February averaging 5.04/Mcf--an increase of about 55.6% compared to the average wellhead price of $3.24/Mcf in Feb. ‘13--the value of Texas-produced gas increased 57.3% to about $3.15 billion.
  • The Baker Hughes count of active drilling rigs in Texas averaged 844, compared to 833 in Feb. ‘13. Drilling activity in Texas peaked in Sept. ‘08 at a monthly average of 946 rigs before falling to a trough of 329 in June ‘09. In the current growth cycle, the statewide rig count peaked 932 in May and June ‘12.
  • The number of Texans on oil and gas industry payrolls averaged a record 285,000, according to statistical methods based upon TWC estimates, about 4.9% more than in Feb. ‘13. Record-setting estimated oil and gas industry employment in February replaced the record estimate of 282,700, set in Aug ‘13. The most recent low ebb in industry employment, 179,200, occurred in Oct ‘09. During the previous growth cycle, industry employment peaked at 223,200 in Nov. ‘08.

Shell reports Malaysia deepwater gas discovery

Shell has announced an exploration discovery offshore Malaysia. The successful Rosmari-1 well is located 135 kilometers offshore in Block SK318, and was drilled to a total depth of 2,123 meters.

The well encountered more than 450 meters of gas column. With further exploration planned, the finding is a positive indicator of the gas potential in an area of strategic interest for Shell.

"Rosmari-1 is a testament to our ability to successfully drill and build understanding of new geology within our existing exploration heartlands, adding value to our existing assets in Malaysia," said Andy Brown, director of Shell Upstream International.

Block SK318 is Shell operated with an 85% interest, with the remaining 15% held by PETRONAS Carigali Sdn Bhd.

Petrobras hits production record in Santos, Campos basins

Petroleo Brasileiro SA (Petrobras) reached an oil production record of 428,000 b/d in company-operated fields in the Santos and Campos basins.

The record was aided by increased output from the mid-March launch of operations from the P-58 platform in the Parque das Baleias area of northern Campos, the company noted.

The platform has been producing 50,000 b/d through three presalt wells where Petrobras holds 100% interest. Fifteen of twenty-four production wells drilled overall are in the Campos. Nine are in the Santos. Production from Campos has reached 222,000 b/d, while the Santos has reached 206,000 b/d. Eleven more Santos wells and four more in the Campos are expected to to start by year-end.


BRIEFS


EIA: Tight oil to account for most Crude production

Crude oil production is expected to rise from 6.5MMbbl/d in 2012 to 9.6 MMbbl/d before 2020, a production level not seen since 1970, the US Energy Information Administration noted in the Annual Energy outlook 2014.

Tight oil production growth accounts for 81% of this increase, and sees its share of national crude oil production grow from 35% in 2012 to 50% in 2019. In the High Oil and Gas case, US crude oil production reaches 11.3 MMbbl/d in 2019 and reaches 13.3 MMbbl/d in the mid-2030s.

year-end natgas reserves near 330tcf

US natural gas producers added more than 35 tcf of reserves in 2013, the American Gas Association said in its latest annual preliminary estimate.

AGA said it expects total US reserves at year-end 2013 may have landed around 330 tcf, slightly below the 334 tcf identified by EIA at year-end 2011.

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