Home' Trinidad and Tobago Guardian : November 3rd 2016 Contents NOVEMBER 3 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
BP plans to ship one million barrels of US crude
to Thailand and Australia for the first time, three
trade sources said, as the company steps up American
oil exports to meet demand in the Asia-Pacific region.
The cargo will add to at least four shipments of
US crude by BP to Asia earlier this year after the
United States government lifted a decades-old ban
on crude exports in late 2015.
Traders are keen to ship more US oil to Asia, but
falling shale oil output and a narrow price spread
between West Texas Intermediate (WTI) and Brent
have kept the arbitrage window closed for most of
BP is expected to load one million barrels of crude
from the US Gulf Coast onboard a Suezmax tanker
which will arrive in Asia in December, the sources
The company has sold 300,000 barrels of crude
to Thailand's PTT PCL and the remaining 700,000
barrels will head to Australia to be processed at BP's
refinery, they said.
Part of the cargo consists of US WTI Midland
crude with an API gravity of 40 degrees, the sources
Thailand and Australia have not imported US
crude before, data from the US Energy Information
Administration (EIA) showed. China, Japan and South
Korea imported US crude this year, according to EIA.
A BP spokeswoman declined to comment on com-
mercial matters. A PTT official said the company is
open to buying crude from new sources which can
be compatible with PTT's refineries, but declined
to comment on the deal. Reuters
Global offshore oil produc-
tion (including lease con-
densate and hydrocarbon
gas liquids) from deepwa-
ter projects reached 9.3
million barrels per day
(b/d) in 2015. Deepwater production, or pro-
duction in water of depths greater than 125
metres, has increased 25 per cent from nearly
seven million b/d a decade ago.
Shallow water has been relatively less
expensive and less technically challenging
for operators to explore and drill, but chang-
ing economics and the exhaustion of some
shallow offshore resources has helped to
push producers to deepwater or, in some
areas, ultra deepwater (at depths of 1,500
meters or more) resources. The share of
offshore production from shallow water in
2015 was 64 per cent, the lowest on record.
Globally, offshore oil production account-
ed for about 30 per cent of total oil pro-
duction over the past decade.
In 2015, offshore production was 29 per
cent of total global production, a moderate
decrease from 32 per cent in 2005.
Advancements in drilling technology,
dynamic positioning equipment, and float-
ing production and drilling units have made
prospects viable that were previously
Although technological advancements
have made new areas accessible, deepwater
projects require more investment and time
compared to shallow waters or onshore
developments. As a result, most nations
with offshore assets operate only in shallow
In areas with deepwater operations, pro-
duction has grown significantly, and in
many cases overtaken shallow-water pro-
duction. The majority of deepwater or ultra
deepwater production occurs in four coun-
tries: Brazil, the United States, Angola, and
Each of these countries has realised an
increasing share of crude oil production
from deepwater or ultra deepwater projects
over the previous decade.
The United States and Brazil together
account for more than 90 per cent of global
ultra deepwater production, with ultra deep-
water production expected to increase in
2016 and 2017 in both countries.
Brazil leads the world in the development
of deepwater and ultra deepwater projects.
Brazil has increased deep and or ultra
deepwater production from 1.3 million b/d
in 2005 to 2.2 million b/d in 2015.
An increasing amount of Brazil's pro-
duction comes from presalt resources found
under thick layers of salt at extreme depths.
The coast of Angola shares similar geo-
logic features with the coast of Brazil
because of the separation of the African
and South American tectonic plates during
the Early Cretaceous period, around 150
million years ago.
These geological similarities have led pro-
ducers in Angola to target several major
basins for presalt exploration.
Brazil's state-controlled oil company
Petróleo Brasileiro SA and partners will
install the first of four commercial production
systems in the giant Libra offshore oil area
in 2020, adding one a year through 2023.
Each of the floating, production, storage
and offloading (FPSO) vessels will have the
capacity to produce 180,000 barrels of oil
a day, Petrobras, as the company is known,
said in a statement on Thursday.
Production is expected to be between
120,000 barrels of oil per day to 180,000
bpd with all the natural gas not used to
power the production system likely to be
re-injected. Reinjection currently seems to
be the most economic solution, the state-
ment said. The gas also contains 45 per cent
carbon dioxide, which by law must be
returned to the reservoir.
The Libra area holds an estimated eight
billion to 12 billion barrels of oil and equiv-
alent natural gas, according to Brazil's oil
industry watchdog ANP. It is Brazil's first-
ever lease under a production-sharing system
with the government.
Petrobras, Libra's operator, owns 40 per
cent of the area. Royal Dutch Shell Plc and
France's Total SA each own 20 per cent.
China's CNOOC and China National Petro-
leum Corp each own 10 per cent.
Petrobras and partners estimate that 25
per cent of Libra's total resources could be
The first Libra pilot production system
will produce oil from 17 wells, eight pro-
duction wells and nine to reinject water,
natural gas and carbon dioxide into the
reservoir, the Petrobras statement said.
Petrobras and its partners are working to
cut costs to $35 a barrel. Total said earlier
this week that capital and operating costs
in the area will be about US$20 a barrel.
The first long-term production test will
start in Libra's north-east section in the
middle of 2017 in the same north-east area
where the commercial systems will be
The test is designed to better understand
and calibrate the production systems that
will start operating in 2020, Petrobras said.
ExxonMobil Corp's Owowo-3 well has encountered
a 460-ft column of oil-bearing sandstone offshore
Nigeria. Combined with the operator's Owowo-2
discovery, which encountered 515 ft of reservoir, the
field could contain 500 million bbl to one billion bbl
of oil, ExxonMobil said.
ExxonMobil affiliate Esso Exploration & Production
Nigeria Ltd spudded the Owowo-3 on September 23
and drilled to 10,410 ft in 1,890 ft of water. Owowo
field spans portions of the contract areas of oil
prospecting license 223 (OPL 223) and oil mining
license 139 (OML 139).
ExxonMobil holds 27 per cent interest and is oper-
ator for OPL 223 and OML 139. Joint venture partners
include Chevron Nigeria Deepwater Ltd 27 per cent,
Total E&P Nigeria Ltd 18 per cent, Nexen Petroleum
Deepwater Nigeria Ltd 18 per cent, and Nigeria Petro-
leum Development Co Ltd. 10 per cent.
Production in deepwater
and ultra deepwater rising
Petrobras sets 2020 for start
of 'giant' oil production system
ExxonMobil makes oil
discovery offshore Nigeria
BP sells US crude oil
to Thailand, Australia
for first time
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