Industry News

The signing of a landmark sea boundary treaty between Australia and Timor-Leste is set to revive stalled discussions over the lucrative Sunrise gas project, but operator Woodside Petroleum immediately signalled that the tough work on agreeing how to develop the resource is still to come.

Woodside said it is "disappointing" the conciliation process over boundaries and Sunrise failed to strike a deal on the development design after the treaty apparently ruled out its favoured option of a floating LNG plant.

The treaty, signed in New York on Wednesday Australian time by senior ministers of the two nations, represents a major shake-up in the administration of oil and gas fields in the Timor Sea.

It will do away with the long-standing Joint Petroleum Development Area, a region jointly administered between the two nations, shifting resources in that area wholly into Timor-Leste territory.

But most significantly for Woodside, the terms of the deal only cover two onshore options – either Timor-Leste or Darwin – for processing the 5.13 trillion cubic feet of gas from the large Sunrise field. The venture, in which Shell and ConocoPhillips are major partners, also involves about 226 million barrels of oil-like condensates.

The idea of offshore processing through a circa $US13 billion ($16.6 billion) floating LNG plant, the concept most recently favoured by Woodside, is not covered in the treaty nor in the Permanent Court of Arbitration's conciliation agreement. The treaty was agreed after a long-running dispute on sea boundaries between the two nations which forced the Sunrise partners to put their project on the back burner several years ago.

Read more here.

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Royal Dutch Shell Chief Executive Ben van Beurden said Wednesday that climate change is the biggest issue facing the energy sector, encouraging the European oil major to invest more in cleaner-burning gas and renewable energy.

Shell aims to cut its carbon footprint in half by 2050 while shifting its roughly 50-50 oil and gas balance to a portfolio that's closer to 70 percent gas, van Beurden said at the CERAWeek by IHS Markit conference in Houston. Shell already is the world's leader in liquefied natural gas.

"There's no other issue with the potential to disrupt our industry on such a deep and fundamental level," van Beurden said of climate change and the need to help meet the Paris climate accord goals, even though the United States plans to split from the agreement under the Trump administration.

The emphasis goes beyond making Shell's own operations cleaner and more efficient because most of the emissions come from Shell's products after they are sold. So Shell intends to invest more in offshore wind farms, biofuels, carbon capture projects and the planting of trees and forests.

Read more here

View NAB Trade video interview with Kevin Gallagher here.

PCNT members held a special resolution meeting lat night prior to the February Industry dinner. Member unanimously agreed for an organisation name change to Energy Club NT to reflect the change in industry trends and language and also open the Club's remit to include alternative energy generation, transmission and supply.

An exciting change for the new year with more details to be announced once the administration of changes has been approved.

A SUBSEA well intervention at Northern Oil & Gas Australia’s Laminaria field is on track to be carried out in April or May this year, with contractor AGR close to completing a year’s worth of planning.

The project in the Timor Sea will employ Stena Drilling's Stena Clyde semi-submersible rig over an estimated 30-day period. 

NOGA operates the Laminaria and Corallina oil fields and associated infrastructure, including the Northern Endeavour floating production and storage unit. 

AGR is providing full well management services for the intervention, including engineering and design, preparation of the operations management plan and other regulatory documents, and supervision and execution. 

The contract is one of a number of subsea maintenance campaigns it has managed for NOGA. 

AGR Asia-Pacific business development manager Andy Perchard said the company was glad to be continuing the working relationship. 

"We're also looking forward to working with Stena again, having used the Clyde for a number of exploration and abandonment campaigns in Australia in recent years," Perchard said, adding that AGR was confident the well intervention would be a huge success. 

Australia accounts for 50 of the 530 wells AGR has drilled globally.

Source: EnergyNewsBulletin.net

East Timor and Australia have reached an agreement for a treaty on their disputed maritime border and on a "pathway" to develop the giant Greater Sunrise offshore gas fields, the Permanent Court of Arbitration in The Hague says.

Under the agreement, the share of revenue from the offshore gas field will differ depending on downstream benefits that arise from "different development concepts", the statement released following talks in Kuala Lumpur said.

The agreement would establish a maritime boundary in the Timor Sea for the first time.

Australia had sought a boundary aligned with its continental shelf, but East Timor argued the border should lie half way between it and Australia — placing much of the Greater Sunrise fields under its control.

The long-running dispute had led the owners of Greater Sunrise — Woodside Petroleum, ConocoPhillips, Royal Dutch Shell and Japan's Osaka Gas — to shelve the project.

The fields are estimated to hold 144 billion cubic metres of gas and 226 million barrels of condensates, which analysts have previously estimated could be worth up to $50 billion.

However, development could be at least a decade away, with Woodside looking at the latter half of the next decade.

Read more on ABC website here.

Oil and gas will account for over half of the world’s energy by 2040, according to BP plc’s latest Energy Outlook.

The outlook’s ‘evolving transition’ scenario highlights that demand for oil will grow over much of the period to 2040 before plateauing in later years. All the demand growth is said to come from emerging economies, with the growth in supply driven by US tight oil in the early part of the outlook. OPEC is said to take over from the late 2020s as Middle East producers adopt a strategy of growing market share.

The transport sector will continue to dominate global oil demand, according to BP, accounting for more than half of the overall growth. Most of the growth in energy demand from transport, which flattens off towards the end of the outlook, comes from non-road (largely air, marine, and rail) and trucks, with small increases from cars and motorbikes. After 2030, the main source of growth in the demand for oil is from non-combusted uses, particularly as a feedstock for petrochemicals.

Natural gas demand is anticipated to grow strongly over the period, according to the scenario, overtaking coal as the second largest source of energy. By 2040, the US is said to account for almost one quarter of global gas production, with global LNG supplies more than doubling.

“Under most scenarios we look at oil demand continues to grow over the next 15-20 years, the underlying story there is fast growth in developing economies,” BP Group Chief Economist Spencer Dale said in a BBC Radio4 interview on Wednesday.

BP Group Chief Executive Bob Dudley said BP’s strategy has to be resilient and adaptable to significant changes in the energy industry.

“This outlook considers the possible implications of some of these changes and helps inform our long-term planning. We cannot predict where these changes will take us, but we can use this knowledge to get fit and ready to play our role in meeting the energy needs of tomorrow,” Dudley said in a company statement.

See RigZone article here.

THE onshore gas industry could begin investing $1.35 billion a year within the next five years creating nearly 1500 local jobs, a new report shows.

The Pangaea Beetaloo Basin Development Model for Public Benefit has been derived from Pangaea’s 2015 work program and US shale gas industry well and logistics volume data.

Pangaea’s report was sent to the Gunner Labor Government and the Scientific Inquiry into Hydraulic Fracturing last night.

The model has been built around a concept of development units. Under this model there is an exploration unit, an appraisal unit and a production unit.

The report details the number of jobs, the expenditure and the education qualifications required to fill the positions.

It leverages some of its work off already completed work by Deloittes who completed a report in 2015 and an ACIL Allen report prepared for the Scientific Inquiry in to Hydraulic Fracturing last year.

The inquiry will deliver its final report to government in March. 

Important caveats in Pangaea’s report include the lifting of the fracking ban in April and the creation of a Centre for Excellence to help drive increased capability.

Pangaea Resources executive director Tim Radburn addressed a group of 50 business and industry people in Katherine on Friday where he went through the report and detailed public benefit to the Territory.

“We’ve invested over $100 million in exploration programs to date and are excited about the prospects of the future,” he said.

“This should be viewed not only as Territory building, but a true nation building project with numerous public benefits, not least of which is supporting lower cost of living outcomes and higher standards of living for all Australians for many generations to come.”

Jemena managing director Paul Adams has endorsed the report. Jemena is building the 622km Northern Gas Pipeline.

“An onshore gas industry in the Territory would allow Jemena to progress plans to expand and extend the pipeline to the east coast,” he said.

“This project would quadruple the size of our NGP workforce to around 4000 across Northern Australia and mean more investment in local contractors and local communities for the longer term.”

Source: Ashley Manicaros, NT News

To register, or for more information, head to aogexpo.com.au

Petroleum Club NT is proud to be a supporting partner of AOG in 2018.

‘The oil and gas industry has gone through a rapid transformation in recent year, and as a result, so has AOG’, says AOG Event Director Bill Hare when asked about the changes the major industry event has seen over recent years. 

‘Of course many elements haven’t changed. We are still the largest industry event in the oil and gas space, providing attendees with the best annual opportunity to network with their peers and see the latest technology and innovations up close, but now the show is so much more, truly representing where the industry is at right now’. 

With now only 10 weeks remaining until Australasian Oil & Gas Exhibition & Conference (AOG) 2018 comes to Perth, anticipation is certainly building for this annual industry meeting place. 

The long running AOG Conference is now a free to attend event with over 100 of the industry’s leading minds speaking in three Forum theatres on the exhibition floor over three days. This year the content is spearheaded by Woodside Energy, government backed National Energy Resources Australia (NERA), Deloitte, Shell, Chevron, the WA Government and over a dozen of the industry’s leading associations, with a focus on delivering cutting edge material during a period of dramatic evolution for the oil and gas sector. 

New in 2018, AOG is collaborating with NERA to deliver two free-to-attend industry initiatives right on the Expo floor. The Nera Technology and Skills Hub will be a platform for 40 innovative businesses to demonstrate and exhibit their technologies in the fields of data and digitisation, automation and robotics, and artificial intelligence and machine learning and will run across the full three days of AOG 2018. 

In addition, AOG will work with NERA on delivering the SME ConnectER program which will connect established SMEs that have innovative products or services and a genuine value proposition to champions from LNG operators and contractors. 

‘New initiatives like this really show how invested the industry is in fostering innovative technologies and concepts. We are pleased to see that AOG participants will have the opportunity to be involved in these new programs from 2018’, said Mr Hare. 

The Exhibition floor, always a key space for networking between industry leaders, will once again feature leading organisations, with nearly 200 exhibitors set to be a part of this year’s event. This year the show floor will feature Woodside Energy, BAE Systems, Dril-Quip, Honeywell and Powerflo, amongst many others.

 Registration to attend AOG is now open, with the free registration including access to the exhibition and conference for the full three day event. 

APPEA Media Release:

The draft final report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory has found that any risks associated with onshore gas development and fracking can be managed by effective regulation.

APPEA Director South Australia / Northern Territory Matthew Doman said it was critical the 12-month inquiry be completed to bring certainty to investors, local businesses, Traditional Owners, landholders and all Territorians.

“Importantly, the draft report confirms that shale gas development would have significant economic and employment benefits for the NT,” Mr Doman said.

“The report, released today, has also debunked many of the myths spread by activists opposed to onshore gas development.

“Justice Pepper’s draft report echoes the conclusion reached by numerous other scientific inquiries and reviews that any risks associated with hydraulic fracturing can be minimised or eliminated with proper regulation.

“The report includes 120 recommendations which will need to be considered in detail.

"Any regulatory reforms must be evidence based, workable and cost-effective.

“The industry supports robust, effective and efficient regulation, and will consider whether the report’s recommendations are appropriate to achieve this.

“In the meantime, it is crucial the report be finalised as quickly as possible so that the Territory Government can make decisions about the industry’s future. Uncertainty will remain until a new regulatory regime is confirmed.”

“Gas companies stand ready to invest billions of dollars in new projects in the Territory if the industry is allowed to resume exploration activity.

“There is no reason the Territory cannot manage the safe, sustainable development of its considerable natural gas resources.”

APPEA Media contact: Kieran Murphy – 0408 151 922 – kmurphy@appea.com.au