Efforts to Build Oil,Gas Local Content.

 

The  African Capacity Building Foundation(ACBF) has hailed current government efforts to build  a strong local content legal and policy framework to guide the oil and  gas sector.

Prof  Emmanuel Nnadozie  the Executive Secretary said the local content policies and legislations would ensure the local populace are active in the oil and gas value chain.

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Tanzania Petroleum Development Corporation (TPDC) Awards CGG Airborne Gravity Gradiometer Surveys

CGG announced  that it has been awarded a contract by the Tanzanian Petroleum Development Corporation (TPDC) to acquire high-resolution gravity gradiometry and aeromagnetic data over two onshore areas along the South-Eastern Tanzanian Coastal Basin and the eastern arm of the East African Rift.

Acquisition over a total area of 30,000 sq km will commence in mid August 2015 and is scheduled to last up to two months. Using the industry’s lowest noise Gravity Gradiometry, FALCON^®, CGG will deliver high-resolution data and interpretation to help evaluate the hydrocarbon potential of these basins ahead of future licensing rounds.

Tanzania has already established itself as a highly prospective hydrocarbon province in East Africa with a series of significant discoveries offshore and CGG is excited to be part of this next phase of TPDC’s exploration of the onshore basins. This survey will benefit from the experience gained through the completion of many projects throughout Africa using the most advanced technologies available in the industry.

Greg Paleolog, Senior Vice President, CGG Multi-Physics, said: “CGG is delighted to work with TPDC to improve understanding of the structure of these basins and to assist in the identification of suitable areas for future seismic acquisition. With the selection of our FALCON service, we can ensure that TPDC and potential operators will have the best quality data and interpretation products ahead of the proposed licensing round.”

“We know that there have been significant discoveries in the Kenyan and Ugandan parts of the Rift Valley, and there may well be undiscovered oil or gas reserves on Tanzania’s side,” Dr. Mataragio, the Managing Director of TPDC explains. “The two-month-long basic Airborne Gravity Gradiometer survey is imperative given the significant reserves discovered in similar geological settings in Kenya and Uganda. The promotion of our blocks is part of TPDC’s core business and this exploration effort will add value and attract investors.”

Early this month the Parliament of the United Republic of Tanzania passed a new Petroleum Bill, which will be signed soon. Under the new Petroleum Bill, TPDC is now lawfully recognized as a National Oil Company (NOC). The NOC will participate fully in exploration and production of oil and gas and this campaign in particular signifies the commercial commencement of NOC in E&P activities in Tanzania.

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Oil prices 'could fall further'

Oil prices may have further to fall despite stabilising in recent months - and even beginning to rise modestly - because of a massive oversupply the International Energy Agency (IEA) has said.

The IEA said lower oil prices were likely to last well into 2016.

The agency added the world oil market was unable to absorb the huge volumes of oil now being produced.

It follows the massive drop in prices which started last summer.

The price of Brent crude fell sharply last year from $115 a barrel in June to $45 a barrel in January.

The current price of Brent crude is $59 a barrel.

The fall in prices has led oil firms to cut back investment in exploration, while North Sea oil has come under significant pressure.

All seven major global oil firms have also reported a year-on-year declines as a result of lower oil prices.

'Oversupply'

Only last month the Office for Budget Responsibility (OBR) forecast North Sea oil and gas revenues would fall to below 0.1% of GDP over the coming decades.

It said the tax take from North Sea oil and gas had already fallen by 80% in the last three years.

"The oil market was massively oversupplied in the second quarter of 2015, and remains so today," the IEA said in its monthly report.

"It is equally clear that the market's ability to absorb that oversupply is unlikely to last. Onshore storage space is limited," it said, adding: "Something has to give."

"The bottom of the market may still be ahead."

Core members of the Organisation of Petroleum Exporting Countries (Opec) have continued to produce the same level of oil in the past year despite falling oil prices in an attempt to regain market share.

US oil production has also soared in recent years, as fracking - or the process of extracting oil from shale rock by injecting fluids into the ground - has revolutionised oil production in the country.

Opec's response to the fall in prices was to refuse to cut production. Many Opec nations are able to tolerate a lower oil price despite losing money.

Record

For other nations such as Russia the lower oil price is doing substantial harm to economic growth

Last month, official figures showed the impact of international sanctions over Russia's continued involvement in east Ukraine and the lower oil prices had led to a 4.9% contraction in the Russian economy in the 12 months to May.

The IEA said Opec crude oil production rose 340,000 barrels per day (BPD) in June to 31.7 million barrel as day, a three-year high, led by record output from Iraq, Saudi Arabia and the United Arab Emirates.

It said Saudi Arabian crude oil supply rose 50,000 barrels per day to a record high of 10.35 million BPD in June, while Iraq crude oil output surged 270,000 BPD in June to its highest-ever rate of 4.12 million BPD.

However, increases in production have come just as demand for oil in economies across the world from Europe to China - the world's second-largest consumer of oil - has slowed.

The IEA trimmed its forecast for global oil demand growth this year slightly to 1.39 million BPD and said it expected global demand growth to slow to 1.2 million BPD in 2016.

The agency added non-Opec supply growth was expected to grind to a halt in 2016 as lower oil prices and spending cuts take their toll. It forecast zero growth in non-Opec oil supply in 2016 after an increase of 1 million bpd in 2015.

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New petroleum producers survey policy options in wake of oil price slump

Countries seeking to develop newly-discovered petroleum resources are facing a fall in global oil prices, with competition from the ‘shale gas revolution’ in the United States, as well as renewable energy sources.

At a New Petroleum Producers Discussion Group in Tanzania, organised by Chatham House and co-sponsored by the Commonwealth Secretariat, authorities from more than 20 countries met this week to find solutions to these and other shared challenges.

The four-day forum from 30 June to 2 July, at which a set of Guidelines on Good Governance for Emerging Oil and Gas Producers was released, was attended by government ministries and national oil companies from Belize, Guyana, Kenya, Mauritius, Mozambique, Jamaica, Seychelles, Trinidad and Tobago, Tanzania, and Uganda, among other nations.

“In the midst of the oil crisis there is less capital available for investment,” commented Michael Mwanda, Chairman of the Tanzania Petroleum Development Corporation, which hosted the meeting in Dar es Salaam. “Some projects which were pegged on a high oil price are now becoming uneconomic and difficult to operate.

“We need to learn from each other and share experiences on how to reduce costs, operate efficiently and become more competitive,” Mr Mwanda said.

Addressing the forum, Ekpen Omonbude, Natural Resources Adviser at the Commonwealth Secretariat, remarked: “This price decline has necessitated a critical look at strategies to manage petroleum resources, from development programmes to responsible wealth management, to ensure benefits for future generations.”

Dr Omonbude stressed that while the slump in the price of oil – from over US$100 a barrel in 2014 to around US$60 today – presents immediate challenges, these can be mitigated through the adoption of flexible fiscal regimes, increased economic diversification, the development of good governance regimes and revenue transparency.

“Our mission is clear – to help position our member countries to realise the potential of their resource wealth as a driver of sustainable development and economic prosperity,” the Commonwealth representative said.

The New Petroleum Producers Discussion Group was established in 2012 to help countries think critically about policy options available either during the first steps of exploration and development or when restructuring governance arrangements. Options include setting up regulatory institutions and drafting regulations and laws that encourage investment, while balancing the needs of society and environmental protections.

This week marked the first time the discussion group has met outside London and included a final-day national seminar for representatives of Tanzania’s oil and gas sector. Co-sponsors of the initiative include the Natural Resource Governance Institute and the Africa Governance Initiative.

The Guidelines for Good Governance in Emerging Oil and Gas Producers, a synthesis of proposals put forward at each discussion group, seek to guide national authorities to pursue policies which follow good practices, but which also respond to national contexts.

Dr Valérie Marcel, Associate Fellow at Chatham House, principal author of the guidelines, said: “The emergence of shale oil and new renewable technologies offer opportunities and challenges. How the emerging producer is affected and will respond is what we have been debating. One of the main issues is how to adjust to a low price environment, asking what impact is this going to have on licensing terms and the ambitions of national oil companies.”

She added: “Emerging producers are thirsty to learn from their peers about what has worked elsewhere and what advice to give. More established producers want to know whether they are doing things right and what pitfalls they should avoid. This is a really important learning process.”

During the forum, participants exchanged experiences on how to attract investment while preserving long-term national interests, managing expenditure plans as well as ways to guard against abuses and fraud in contracts and licensing. Training sessions focused on involving local suppliers in supply chains, the design of fiscal systems and new information tools.

Eddy Belle, Chief Executive of PetroSeychelles, the national oil company of Seychelles, said: “[Petroleum] is a very dynamic business – there is new technology coming in and new ways of doing things. What Chatham House is doing with the help of the Commonwealth Secretariat is getting people together so you have the chance to learn from the mistakes as well as the successes of others.”

Bashir Hangi, Communications Officer for Uganda’s Petroleum Exploration and Production Department, commented: “Such a forum helps us a lot as emerging producers. We peer review ourselves, and our people go home with a lot of advice. One piece of advice I would share is that you cannot ignore your stakeholders – civil society, academia and communities where there are operations. They should not be taken for granted; they should be brought on board and be involved in the management of the resource.”

Anthony Paul, Managing Director of the Association of Caribbean Energy Specialists, said: “Oil and gas resources give opportunities to deepen industrialisaton, providing power and access to better lighting, heating and cooking facilities as well as petrochemicals and fertilisers. There are also benefits from developing the services industry. What strikes me most is that all countries want the same thing: they want the resource to benefit their citizens.”

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This is How To Drill Oil and Gas Well

          Now, during this lesson, we will see how to drill them.
1. First of all, let’s see how to describe the subsurface characteristics, in order to plan the design of the future well and to define the phases of the drilling job.
2. Then, we’ll describe the drilling system, and how the driller can manage the drilling process safely.
During the exploration phase a well is needed to confirm the presence of oil or gas in the reservoir.
Some appraisal wells are needed for the delineation process.
Moreover, at the end of the reservoir strategy study, a reservoir model defines how to develop the field, and, more particularly, where to drill the wells and the contribution of each of them to the production plateau.
The role of the driller is to build these wells required for the field development.
A well is an expensive item. It must be carefully studied and planned before being drilled. The well preparation phase involves coordinated work between geoscience engineers and drilling/completion engineers.
How to design a well?
In order to set up the drilling program, the driller needs to know the location of the rig, where the well has to enter the reservoir, the trajectory of the well in the reservoir for a good connection between the well and the reservoir, and the formations to be drilled. Let’s detail the description of the subsurface.
For each formation to be drilled, there are 2 characteristics that need to be known accurately:
1. the pore pressure
2. and the fracture pressure.
The pore pressure is the pressure of the fluid within the grains of the rock. It depends on the depth of the formation and on its nature (sandstone, shale, …).
The fracture pressure corresponds to the minimum pressure to be applied on the rock to generate a fracture.
When the formation is drilled, the well is full of a fluid: the drilling mud, which is directly in contact with the rock, and applies a pressure on it: Pmud.
The mud pressure depends on the depth. One of the roles of the mud is to maintain the interstitial fluid within the rock, in order to avoid a kick.


During the drilling process, the mud is in contact with the rock, which contains a fluid within the grains.
A fluid always flows from high pressure to a lower pressure. If the mud pressure is higher than the pore pressure, the formation fluid cannot enter the well. It remains in the formation and there is no risk of blowout.
During the drilling process, the mud is in contact with the rock, which contains a fluid within the grains.
The mud pressure has to be lower than the frac pressure, in order to avoid the rock being fractured. To conclude, keep in mind that the mud has to be designed so that the mud pressure belongs to the interval between the pore pressure and the frac pressure. This interval is called the mud window.
Both Ppore, in red, and Pfrac, in blue, can be plotted on a (pressure/depth) graph.
The mud pressure has to be in the yellow zone, which is called the mud window. For each lithology to be drilled, the mud has to be well adapted to its characteristics. The well is therefore drilled in different phases, each phase corresponding to a new mud to be used.
At the end of a phase, a casing is installed and cemented to protect the well from the formation already drilled and to finalize the well walls.

The definition of each of these phases is called the well design.
A typical well design is as follows:
1. The first tubular is the conductor pipe installed by the civil engineer before the rig
arrives on site.
2. The next phases are drilled using the rotary drilling technique.
3. The surface casing maintains the unconsolidated surface formations and protects the groundwater.
4. The intermediate casing protects the well from the formations or fluid which could prevent the drilling process from continuing.
5. The last casing is the production casing which allows the reservoir to be isolated.
6. During the last phase the well enters the reservoir.
When a well is an exploration well, designing is much more difficult , due to a lack of measurements and information to describe the subsurface. The mud window is not accurately known. Such uncertainties have to be taken into consideration in the drilling process.
When a well has to be drilled in a new region, there are many uncertainties about the data, including that related to the pore and frac pressure profiles. On the contrary, when a development well is planned, it benefits from data from the surrounding wells already drilled. In this case, the pressure profiles are well known, and the uncertainties are lower.
Let’s mention that the trajectory of a well can be vertical, deviated, or horizontal. The choice of the trajectory depends on the location of the rig, the location of the target of the well when it enters the reservoir, and the trajectory of the drain in the reservoir itself. These two last data are defined and given by the reservoir engineer to the driller.

How a well is drilled in practice? Mechanically, a vertical force applied on the drilling bit (the weight on bit), together with a movement of rotation, generates down to the bit the power necessary to destroy the rock. A hook hangs up the drill string, which is composed of several tubulars screwed together, and, at the bottom, there is a drilling bit.
Both the weight on bit and the rotation per minute, which is given by the rotary table located at the rig floor, are controlled by the driller to maximize the rate of penetration of the bit.
Their optimization depends on several parameters, including the kind of rock to be drilled: the regulation of the hook height controls the part of the total weight of the drillstring applied on the bit, the rotation is often given by a rotary table located at the rig floor.
The mud circuit is combined to the mechanical part of the system.
Firstly, the pump sends the mud at high pressure through the discharge line, the stand pipe, the rotary hose and the top drive, into the pipes.
The mud flows in the drill string down to the bit and catches the small pieces of broken rock, the cuttings, to transport them up to the surface in the space between the drill string and the well walls.

At the surface, the cuttings, the sand and the silt are removed from the mud through shale shakers and other systems.
The mud can be sent to the tanks in order to be re-injected.
In order to control the well in case of blowout, a Blow Out Preventer is installed between the top of the well and the rig floor. This BOP stack is composed of an annular BOP and different rams able to close the well in case of emergency. The size of the BOP is adapted to the maximum pressure that can be encountered during the drilling process.

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