Shell announces sale of Eagle Ford acreage, South Texas
21 May 2014
Royal Dutch Shell plc (“Shell”) announced today it has agreed to sell its 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Texas to Sanchez Energy Corporation for approximately $0.639 billion, subject to closing.
The sale includes approximately 176 operated producing wells and associated field facilities and infrastructure. Net production in Q1 2014 was approximately 24,000 barrels of oil equivalent per day, with approximately 60 percent crude and natural gas liquids.
The agreement is effective January 1, 2014 and is expected to close at the end of the second quarter of this year.
This transaction is part of Shell’s restructuring of its North Americas resources plays (shale oil and gas) portfolio, to focus on acreage positions that can reach the scale required by Shell. In addition to this sale, Shell previously divested its acreage position in the Mississippi Lime in Kansas, its Utica shale position in Ohio and a portion of its acreage in the Sandwash Niobrara basins in Colorado as part of this strategy.
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Kashagan oilfield may not restart until 2016
Extracts from a Reuters article by Mariya Gordeyeva published 21 May 2014 under the headline: Kashagan oilfield may not restart until 2016, Kazakh minister says
May 21 (Reuters) – Oil output at Kazakhstan’s giant Kashagan field may not resume until early 2016, Kazakh Oil and Gas Minister Uzakbai Karabalin said on Wednesday, urging foreign partners to start replacing leaky pipelines at the deposit. Production at Kashagan, the world’s biggest oil find in 35 years, started last September but halted in early October after the discovery of gas leaks in the $50 billion project’s pipeline network. The North Caspian Operating Company (NCOC), which develops the offshore field in the Caspian Sea, said last month that it did not expect to produce oil this year due to the leaks. “It (production) may restart by the end of 2015 if all goes well,” Karabalin told Reuters on the sidelines of the Astana Economic Forum. “Otherwise, it may turn out to be early 2016. NCOC includes Eni, Exxon Mobil, Royal Dutch Shell, Total, China’s CNPC, Japan’s Inpex and Kazakh state-run company KazMunaiGas.
Comment received from an old EP hand
On Kashagan, I would like to know who signed off on the design of the pipelines that apparently were of the wrong specs and unable to handle H2S?
I guarantee you that there will be a document (detailed design) that is signed off by everyone and on the basis of which the piping has been ordered.
It is not important to know the individual who did so, but to which company did he (or she) belong? That company is presumably keeping a very low profile now.
And perhaps they were clever enough to have all the partners sign off on the design and purchase orders. I wonder who will pay the bill for this cock-up?
And this actually was a simple one to avoid. The composition of the fluids was known so there is no excuse to come up with the wrong specs for the pipework.
If I were a director I would be very nervous on the quality control of all the welding that was done. And will all the valves be replaced too or will there be a solution by injection corrosion inhibitors?
In that case you save on Capex but saddle the operator with higher Opex and with a high chance (read certainty) this corrosion inhibition will go wrong one or more times. Can anyone make a suggestion?
Woodside Scraps $2.6 Billion Israeli Gas Deal as Talks Fail
Extract from a BloombergBusinessweek article by James Paton published 20 May 2014
Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, scrapped an agreement to buy a quarter of Israel’s largest natural gas field for as much as $2.6 billion after talks to complete the deal collapsed.
Royal Dutch Shell Saudi relationship in serious danger?
The Washington Post has reported today that the Dutch foreign minister Frans Timmermans is considering flying to Saudi Arabia in an attempt to defuse the situation, which includes threats of looming sanctions against Dutch interests, including Royal Dutch Shell.
By John Donovan
Royal Dutch Shell Group has had a long relationship with the Saudi regime.
In the USA, Motiva Enterprises is a joint project of Shell and Saudi Aramco. The company owns three refineries and 35 refined product terminals.
Extract from the Motiva website
Motiva markets Shell gasoline in 49 states and the District of Columbia together with Shell Oil Products US. Together we lead the industry in national retail volume and market share in one of the world’s best known gasoline brands. We also refine and market gasoline and other petroleum products under the Shell brand across the eastern and southern parts of the US, providing product to over 8,200 Shell-branded retail outlets.
Shell has many other connections with Saudi Arabia.
Its former Chairman, Sir Mark Moody-Stuart, is a member of the board of Saudi Aramco.
The actions of a controversial Dutch politician, Geert Wilders, seems to have put the Shell/Saudi relationship in serious jeopardy by allegedly defiling the devout Muslim message on the Saudi flag.
The Washington Post has reported today that the Dutch foreign minister Frans Timmermans is considering flying to Saudi Arabia in an attempt to defuse the situation, which includes threats of looming sanctions against Dutch interests, including Royal Dutch Shell.
The opening salvo from the Saudi regime seems to have sent shock waves through the Dutch government.
Extract from the relevant Washington Post article:
Saqb, an online news site with ties to Saudi Arabia’s government and security agencies, reported Tuesday night that planned sanctions would include barring Royal Dutch Shell, Unilever and other companies based in Saudi Arabia from winning new work, restricting the work visas of Dutch business people, and canceling trade delegations between the countries.
By John Donovan
Royal Dutch Shell Group has had a long relationship with the Saudi regime.
In the USA, Motiva Enterprises is a joint project of Shell and Saudi Aramco. The company owns three refineries and 35 refined product terminals.
Extract from the Motiva website
Motiva markets Shell gasoline in 49 states and the District of Columbia together with Shell Oil Products US. Together we lead the industry in national retail volume and market share in one of the world’s best known gasoline brands. We also refine and market gasoline and other petroleum products under the Shell brand across the eastern and southern parts of the US, providing product to over 8,200 Shell-branded retail outlets.
Shell has many other connections with Saudi Arabia.
Its former Chairman, Sir Mark Moody-Stuart, is a member of the board of Saudi Aramco.
The actions of a controversial Dutch politician, Geert Wilders, seems to have put the Shell/Saudi relationship in serious jeopardy by allegedly defiling the devout Muslim message on the Saudi flag.
The Washington Post has reported today that the Dutch foreign minister Frans Timmermans is considering flying to Saudi Arabia in an attempt to defuse the situation, which includes threats of looming sanctions against Dutch interests, including Royal Dutch Shell.
The opening salvo from the Saudi regime seems to have sent shock waves through the Dutch government.
Extract from the relevant Washington Post article:
Saqb, an online news site with ties to Saudi Arabia’s government and security agencies, reported Tuesday night that planned sanctions would include barring Royal Dutch Shell, Unilever and other companies based in Saudi Arabia from winning new work, restricting the work visas of Dutch business people, and canceling trade delegations between the countries.
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Kashagan ‘Cash All Gone’ Pipeline Debacle
Shell has been a key participant in the Kashagan project consortium which includes Eni and ExxonMobil. Given its notorious track record of over-promise and under delivery, having Shell involved is a bad omen for any elephant project.
By John Donovan
The latest news from the “Cash All Gone” project (as it is widely known) is that due to the need to replace fatally flawed leaking pipelines, the oilfield may not restart until 2016.
The project is already years behind schedule and countless billions over budget.
I have received some related comment and questions from a retired Royal Dutch Shell EP expert that deserve to be put into the public domain.
Shell has been a key participant in the Kashagan project consortium which includes Eni and ExxonMobil. Given its notorious track record of over-promise and under delivery, having Shell involved is a bad omen for any elephant project.
By John Donovan
The latest news from the “Cash All Gone” project (as it is widely known) is that due to the need to replace fatally flawed leaking pipelines, the oilfield may not restart until 2016.
The project is already years behind schedule and countless billions over budget.
I have received some related comment and questions from a retired Royal Dutch Shell EP expert that deserve to be put into the public domain.
Shell has been a key participant in the Kashagan project consortium which includes Eni and ExxonMobil. Given its notorious track record of over-promise and under delivery, having Shell involved is a bad omen for any elephant project.
Comment received from an old EP hand
On Kashagan, I would like to know who signed off on the design of the pipelines that apparently were of the wrong specs and unable to handle H2S?
I guarantee you that there will be a document (detailed design) that is signed off by everyone and on the basis of which the piping has been ordered.
It is not important to know the individual who did so, but to which company did he (or she) belong? That company is presumably keeping a very low profile now.
And perhaps they were clever enough to have all the partners sign off on the design and purchase orders. I wonder who will pay the bill for this cock-up?
And this actually was a simple one to avoid. The composition of the fluids was known so there is no excuse to come up with the wrong specs for the pipework.
If I were a director I would be very nervous on the quality control of all the welding that was done. And will all the valves be replaced too or will there be a solution by injection corrosion inhibitors?
In that case you save on Capex but saddle the operator with higher Opex and with a high chance (read certainty) this corrosion inhibition will go wrong one or more times. Can anyone make a suggestion?
On Kashagan, I would like to know who signed off on the design of the pipelines that apparently were of the wrong specs and unable to handle H2S?
I guarantee you that there will be a document (detailed design) that is signed off by everyone and on the basis of which the piping has been ordered.
It is not important to know the individual who did so, but to which company did he (or she) belong? That company is presumably keeping a very low profile now.
And perhaps they were clever enough to have all the partners sign off on the design and purchase orders. I wonder who will pay the bill for this cock-up?
And this actually was a simple one to avoid. The composition of the fluids was known so there is no excuse to come up with the wrong specs for the pipework.
If I were a director I would be very nervous on the quality control of all the welding that was done. And will all the valves be replaced too or will there be a solution by injection corrosion inhibitors?
In that case you save on Capex but saddle the operator with higher Opex and with a high chance (read certainty) this corrosion inhibition will go wrong one or more times. Can anyone make a suggestion?
RELATED COMMENT FROM “RELIEVED” POSTED ON SHELL BLOG 22 MAY 2014
To Old EP Hand: Having had to deal with sour service issues when I worked for Shell on the ‘P’ side of the business I am as appalled as you are at the level of incompetence displayed on the Kashagan project, and by all parties. You are correct, someone signed off on all of this, and I suspect that some technical ‘expert’ at Shell signed-off as well. Probably a 2 year engineer who got saddled with processing incoming paperwork from the operator. If Shell management was as competent as LondonLad appears to have been in his time at Shell it is no wonder that the obvious was overlooked and ignored. Probably for ‘political’ reasons. Who would want to create a stink by claiming the Italians didn’t know their own rear ends from a hole in the ground ??? Maybe the Shell staff assigned to the project had the same problem.
To Old EP Hand: Having had to deal with sour service issues when I worked for Shell on the ‘P’ side of the business I am as appalled as you are at the level of incompetence displayed on the Kashagan project, and by all parties. You are correct, someone signed off on all of this, and I suspect that some technical ‘expert’ at Shell signed-off as well. Probably a 2 year engineer who got saddled with processing incoming paperwork from the operator. If Shell management was as competent as LondonLad appears to have been in his time at Shell it is no wonder that the obvious was overlooked and ignored. Probably for ‘political’ reasons. Who would want to create a stink by claiming the Italians didn’t know their own rear ends from a hole in the ground ??? Maybe the Shell staff assigned to the project had the same problem.
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Total oil debts to Iran exceeds $ 4 bln
Extracts from a Trend article by Umid Niayesh published 20 May 2014
Royal Dutch Shell also has not settled its debts without unveiling further details. Previously Iranian media outlets reported that the country’s oil minister Bijan Namdar Zanganeh has tasked a working group with collecting $2.3 billion debt from Royal Dutch Shell. Shell lost money trading Iranian crude in 2012 shortly before a European Union embargo and still owes $2.3 billion to Tehran for oil purchases.
Shell Says It’s Considering Climate Change Risks And Trying To Reduce Flaring In Nigeria
Extracts from a International Business Times article by Meagan Clark published 20 May 2014
Netherlands-based oil giant Royal Dutch Shell told investors in the Hague on Tuesday that the company considers climate change in its decisions and that its efforts to reduce natural gas flaring in Nigeria, a main cause of pollution in West Africa, are being hindered by a lack of government funding. “We’ve sold assets for $1.8 billion in the last few years, and we have further licenses for sale,” van Beurden said. “This is not an exit from Nigeria. We are still making selected growth investment onshore, and the pace of these projects will be largely determined by continued government funding.”
Shell’s new pay structure criticised
Peter Voser
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