offshore energy resource management policies substantially.
Natural Resources Committee Chairman Rob Bishop (R-Utah)
and two Texas Democrats, Reps. Henry Cuellar and Vincent
Gonzalez, were cosponsors.
H.R. 4239 contains several provisions similar to a discussion draft that the Natural Resources Committee’s Energy and
Minerals Subcommittee was scheduled to examine in a Nov. 7
But the bill goes further in some respects, such as directing
that 6.25% of qualifying US Outer Continental Shelf revenue
go to the National Park Service and to energy infrastructure
projects in coastal ports. It also aims to extend offshore energy
development opportunities to US territories by applying the
1953 Outer Continental Shelf Lands Act there.
EXPLORATION & DEVELOPMENT QUICK TAKES
Iraq to offer nine blocks in 2018
Iraq’s Oil Ministry invited international companies to compete
for nine blocks on the country’s borders with Iran and Kuwait
and one in southern Iraq’s territorial waters in the Persian Gulf,
which is the country’s first offshore block.
Oil Minister Jabbar Ali Al-Allaibi said amendments have
been made to the terms and conditions of service contracts
from Iraq’s previous rounds to better achieve production objectives and lower capital and operating costs, but it is not yet clear
how the new terms will differ.
Exploration blocks offered include Basra, Mount Sinam, and
Faw fields, which lie on the Iraqi-Kuwaiti border. Two main
blocks also contain Zardatia, Tariq, Nefta Kana fields, and the
Mandali, Habib, Tal Ghazal, Hattab, Nazardak, Saadia, Nabh
Khanh, Aqba, and Naudoman fields, respectively. Iraq’s ministry
stressed that these blocks fall within the country’s land borders.
The blocks fall within several provinces including Basra,
Maysan, Muthanna, Wasit, and Diyala.
Contract qualifications will be announced on May 31, 2018,
at which time the new round will be open to receive bids.
Iraq produces 4. 5 million b/d with 3. 37 million b/d coming from seven large fields, all of which are covered by service contracts with international companies (OGJ Online, Oct.
30, 2017). According to the Arab Petroleum Investments Corp.
(APICORP), the government wants oil production to reach 6
million b/d by 2020, but interest has diminished from international producers.
Iraq’s service contracts provide little control over development
with margins of only $1.15-2/bbl of oil, according to APICORP.
The most recent amendments to Iraq’s service contracts will include improvements for all phases including exploration, development, and production of new discoveries, the ministry said.
UK bid round attracts 96 applications
The UK’s 30th Licensing Round drew 96 applications for 239
blocks in mature areas of the UK Continental Shelf (OGJ Online, June 20, 2017).
The round offered 28,257,280 acres in the southern, central,
and northern North Sea, the West of Shetland area, and the
East Irish Sea.
Bidding involved the Oil and Gas Authority’s new “innovate
The OGA said it will offer licenses to successful applicants
in the second quarter of 2018.
It plans to launch the 31st Licensing Round in mid-2018.
The round will offer “high-impact exploration opportunities in
underexplored areas of the UKCS,” according to the OGA.
Uzbekistan to develop ‘ 25 Years of Independence’ field
A consortium of investors plans to develop Uzbekistan’s “ 25
Years of Independence” gas field in the Surkhandarya region in
the southern part of the country. The first of two stages will begin 2017-18 with the drilling of a confirmation well and developing a feasibility study on expected reserves. The second stage
will include field development, geological exploration, and the
construction of a gas conversion facility and chemical complex
to produce high value-added products.
Andrey Filatov has joined the consortium, which includes
Gas Project Development Central Asia AG, Altmax Holding
Ltd., and Uzneftegazdobycha. Surhan Gas Chemical Operating
Co., established by members of the investment consortium to
operate oil and gas PSA projects, manages the field development. Halliburton, Baker Hughes, Schlumberger, and National
Oilwell Varco have been contacted for execution.
The 25 Years of Independence field will become a raw material base for the gas chemical complex in the Surkhandarya
region, producing polyethylene, polypropylene, and sulfur. Gas
conversion is expected to deepen to produce olefins (ethylene
glycol, rubber, polyethylene terephthalate, and other products).
Currently the reserves of the 25 Years of Independence gas field
and the O’zbekiston Mustaqillik investment block are estimated at more than 100 billion cu m.
Andrey Filatov will participate in the consortium through
Brighttree Holding Ltd., a special-purpose vehicle that has taken
a 50% stake in Altmax Holding Ltd. Therefore, the share of the
new investor in the gas field development project will be 37.5%.
The project has a timeframe of 35 years and will cost an
estimated $2 billion.
The development of the gas field, one of the biggest in Uzbekistan, is stipulated in the production sharing agreement
for the Independence of Uzbekistan (O’zbekiston Mustaqillik)
block, signed on Apr. 5 during the state visit of Uzbekistan
President Shavkat Mirziyoyev to Russia.
In April, the Uzbekistan broke ground on a 5 million-tonne/
year grassroots refinery to be built in the country’s eastern Jiz-zakh region, which will cost an estimated $2.2 billion.
Ineos acquiring more interests off the UK
Ineos UK SNS Ltd. has agreed to farm in to two exploratory
licenses in the West of Shetland area off the UK that include a
large natural gas prospect called Lyon.