Future Market Insights shares its overview of the digital oilfield solutions market

The global digital oilfield solutions market is projected to attain a valuation of US$39.63 billion in 2023 and is expected to reach US$65.4 billion by 2033, trailing a CAGR of 5.1% during the forecast period.

The rising need to maximise the production capacity from mature wells and the surging return on investment (RoI) in the oil and gas industry is anticipated to propel sales in this market. In addition, the urgent need to lower the capital and operating expenses subject to the utilisation of smart systems and digitalised solutions is likely to drive the market.

Ongoing advancements in data collection, mobility, and analysis platforms are set to improve the overall performance and management of oil and gas platforms. Further, the rapid shift of countries toward devising a robust economic well recovery process, coupled with the declining production of oil and gas from conventional wells, might also affect the market positively.

Future Market Insights predict a comparison and review study for the dynamics and trends of the digital oilfield solutions market, which is primarily impacted by ongoing developments in data collecting, mobility, and analytic platforms. These are further expected to improve the overall performance and management of oil and gas platforms.

The market might benefit from the change in growth rates that occurs in numerous nations affected by the development of a strong economic growth outlook paired with growth impacted by oil and gas output from conventional wells.

According to Future Market Insights analysis, the change in BPS values observed in the market for digital oilfield solutions for the current estimation for the first half of 2023 as compared to the projected one for the same period is expected to be at a 17-unit increase. In comparison to H1-2022, the market is predicted to rise by 40 basis points in H1-2023 as per the current estimates.

The oil and gas sector had a period of tremendous expansion, notably in the field of deep-sea exploration and production technologies, which is one of the main justifications for this change in growth rate. Furthermore, many oil companies are attempting to boost output and enhance recovery. Further use of cutting-edge technologies like AI, ML, IoT, and automation in the oil and gas sector is anticipated to accelerate growth rates.

There are still significant barriers preventing industry expansion, including lengthy execution times, inefficient workflows, and change management at all levels. Additionally, because of continuous geopolitical concerns, changes in the price of crude oil and a shift toward sustainability are the main market restraints.

Why are companies increasing their investments in digital oilfield solutions?

Digital oilfield solutions can enhance the operational performance and decision-making process, thereby improving the RoI. It can also reduce the Total Cost of Ownership (TCO) and downtime, as well as bolster the productivity of operations. Therefore, the oil and gas industry worldwide is expected to develop novel plans to increase their investments in digital technologies to double their cost savings.

Most of the companies in this industry are likely to look for solutions to reduce non-productive time, aid recovery rates, and cut down the cost-per-barrel for surging returns. In December 2021, for instance, Baker Hughes, CEO Lorenzo Simonelli, stated at the World Petroleum Congress that the oil and gas industry is yet to realise the full potential of digitisation for achieving better efficiency. He also declared that the next generation of productivity is anticipated to come from connected smart equipment featuring digitalisation for reducing non-productive time.

The development of such technologies in the forthcoming years is projected to accelerate growth and open doors to new opportunities for key players.

Country-wise insights

Why is the US digital oilfield solutions market exhibiting exponential growth?

The ongoing upgradation of the existing technological solutions to manage and optimise oil and gas operations is set to spur the market in the United States in the assessment period. As per FMI, North America’s digital oilfield solutions market is expected to account for around 25.6% of the share in 2023. The market in this region is expected to thrive at a CAGR of 5.3% during the forecast period.

The rising domestic production and the increasing number of oilfield discoveries are expected to transform the business landscape in the United States. On the other hand, many companies are refurbishing numerous oil and gas platforms in the offshore sector by integrating machine learning and AI solutions, which might also propel the demand for digital oilfield solutions in this country.

The high demand for energy owing to a paradigm shift toward technologically advanced solutions is estimated to drive the segment. In January 2020, Baker Hughes, one of the world’s largest oil field services companies, for instance, stated that the average rig count in the United States was 804 in December 2019. This number is likely to surge in the upcoming years, thereby bolstering the market.

How is the United Kingdom digital oilfield solutions market faring?

The surging numbers of new field development and exploration activities are projected to create growth opportunities in the United Kingdom over the forecast period. Also, the demand for digital oilfield solutions in the United Kingdom is expected to rise with a CAGR of 4.8% during the forecast period. Western Europe’s digital oilfield solutions market is predicted to account for around 23.2% of the share in 2023, estimates FMI.

According to the United Kingdom government, in 2020, the country’s refineries took receipt of 8.6 million t of crude oil produced from the United Kingdom Continental Shelf (UKCS), which helped in meeting 18% of refinery demand. Hence, the rising production of crude oil in this country is anticipated to drive the demand for digital oilfield solutions in the future.

What is the demand outlook for China’s digital oilfield solutions market?

The ongoing development of smart oil fields to optimise the overall operation and management is likely to propel the market in China. The market in this region is expected to capture a CAGR of 5% during the forecast period. South East Asia (SEA) & Pacific digital oilfield solutions market is projected to generate about 12% of the share in 2023, predicts FMI.

In October 2021, for instance, China National Offshore Oil Corp, one of the largest national oil companies in the country, started operating Qinhuangdao 32-6 smart oilfield. It is going to help to make offshore gas and oil production intelligent and digital through AI, big data, IoT, and cloud computing. At the same time, it could also reduce maintenance costs by 5-10% and raise production efficiency by 30%. Such industry developments by leading players are estimated to push the demand for digital oilfield solutions in China.

Competitive landscape

The market for digital oilfield solutions is characterised by intense competition, as notable industry players are making significant investments to enhance their manufacturing capabilities. The key industry players working in the market are ABB, Emerson Electric Co., Rockwell Automation, Inc., General Electric, Siemens AG, Schneider Electric, Eaton, and Honeywell International, Inc.

Read the article online at: https://www.oilfieldtechnology.com/digital-oilfield/10012024/future-market-insights-shares-its-overview-of-the-digital-oilfield-solutions-market/



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The Middle East is on fire: What you need to know about the Red Sea crisis

On October 7, Hamas fighters launched a bloody attack against Israel, using paragliders, speedboats and underground tunnels to carry out an offensive that killed almost 1,200 people and saw hundreds more taken back to the Gaza Strip as prisoners. 

Almost three months on, Israel’s massive military retaliation is reverberating around the region, with explosions in Lebanon and rebels from Yemen attacking shipping in the Red Sea. Meanwhile, Western countries are pumping military aid into Israel while deploying fleets to protect commercial shipping — risking confrontation with the Iranian navy.

That’s in line with a grim prediction made last year by Iranian Foreign Minister Hossein Amirabdollahian, who said that Israel’s counteroffensive in Gaza meant an “expansion of the scope of the war has become inevitable,” and that further escalation across the Middle East should be expected. 

What’s happening?

The Israel Defense Forces are still fighting fierce battles for control of the Gaza Strip in what officials say is a mission to destroy Hamas. Troops have already occupied much of the north of the 365-square-kilometer territory, home to around 2.3 million Palestinians, and are now fighting fierce battles in the south.

Entire neighborhoods of densely-populated Gaza City have been levelled by intense Israeli shelling, rocket attacks and air strikes, rendering them uninhabitable. Although independent observers have been largely shut out, the Hamas-controlled Health Ministry claims more than 22,300 people have been killed, while the U.N. says 1.9 million people have been displaced.

On a visit to the front lines, Israeli Defence Minister Yoav Gallant warned that his country is in the fight for the long haul. “The feeling that we will stop soon is incorrect. Without a clear victory, we will not be able to live in the Middle East,” he said.

As the Gaza ground war intensifies, Hamas and its allies are increasingly looking to take the conflict to a far broader arena in order to put pressure on Israel.

According to Seth Frantzman, a regional analyst with the Jerusalem Post and adjunct fellow at the Foundation for Defense of Democracies, “Iran is certainly making a play here in terms of trying to isolate Israel [and] the U.S. and weaken U.S. influence, also showing that Israel doesn’t have the deterrence capabilities that it may have had in the past or at least thought it had.”

Northern front

On Tuesday a blast ripped through an office in Dahieh, a southern suburb of the Lebanese capital, Beirut — 130 kilometers from the border with Israel. Hamas confirmed that one of its most senior leaders, Saleh al-Arouri, was killed in the strike. 

Government officials in Jerusalem have refused to confirm Israeli forces were behind the killing, while simultaneously presenting it as a “surgical strike against the Hamas leadership” and insisting it was not an attack against Lebanon itself, despite a warning from Lebanese caretaker Prime Minister Najib Mikati that the incident risked dragging his country into a wider regional war. 

Tensions between Israel and Lebanon have spiked in recent weeks, with fighters loyal to Hezbollah, the Shia Islamist militant group that controls the south of the country, firing hundreds of rockets across the frontier. Along with Hamas, Hezbollah is part of the Iranian-led “Axis of Resistance” that aims to destroy the state of Israel.

In a statement released on Tuesday, Iran’s foreign ministry said the death of al-Arouri, the most senior Hamas official confirmed to have died since October 7, will only embolden resistance against Israel, not only in the Palestinian territories but also in the wider Middle East.

“We’re talking about the death of a senior Hamas leader, not from Hezbollah or the [Iranian] Revolutionary Guards. Is it Iran who’s going to respond? Hezbollah? Hamas with rockets? Or will there be no response, with the various players waiting for the next assassination?” asked Héloïse Fayet, a researcher at the French Institute for International Relations.

In a much-anticipated speech on Wednesday evening, Hezbollah leader Hassan Nasrallah condemned the killing but did not announce a military response.

Red Sea boils over

For months now, sailors navigating the narrow Bab- el-Mandeb Strait that links Europe to Asia have faced a growing threat of drone strikes, missile attacks and even hijackings by Iran-backed Houthi militants operating off the coast of Yemen.

The Houthi movement, a Shia militant group supported by Iran in the Yemeni civil war against Saudi Arabia and its local allies, insists it is only targeting shipping with links to Israel in a bid to pressure it to end the war in Gaza. However, the busy trade route from the Suez Canal through the Red Sea has seen dozens of commercial vessels targeted or delayed, forcing Western nations to intervene.

Over the weekend, the U.S. Navy said it had intercepted two anti-ship missiles and sunk three boats carrying Houthi fighters in what it said was a hijacking attempt against the Maersk Hangzhou, a container ship. Danish shipping giant Maersk said Tuesday that it would “pause all transits through the Red Sea until further notice,” following a number of other cargo liners; energy giant BP is also suspending travel through the region.

On Wednesday the Houthis targeted a CMA CGM Tage container ship bound for Israel, according to the group’s military spokesperson Yahya Sarea. “Any U.S. attack will not pass without a response or punishment,” he added. 

“The sensible decision is one that the vast majority of shippers I think are now coming to, [which] is to transit through round the Cape of Good Hope,” said Marco Forgione, director general at the Institute of Export & International Trade. “But that in itself is not without heavy impact, it’s up to two weeks additional sailing time, adds over £1 million to the journey, and there are risks, particularly in West Africa, of piracy as well.” 

However, John Stawpert, a senior manager at the International Chamber of Shipping, noted that while “there has been disruption” and an “understandable nervousness about transiting these routes … trade is continuing to flow.”

“A major contributory factor to that has been the presence of military assets committed to defending shipping from these attacks,” he said. 

The impacts of the disruption, especially price hikes hitting consumers, will be seen “in the next couple of weeks,” according to Forgione. Oil and gas markets also risk taking a hit — the price of benchmark Brent crude rose by 3 percent to $78.22 a barrel on Wednesday. Almost 10 percent of the world’s oil and 7 percent of its gas flows through the Red Sea.

Western response

On Wednesday evening, the U.S., Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, the Netherlands, New Zealand, and the United Kingdom issued an ultimatum calling the Houthi attacks “illegal, unacceptable, and profoundly destabilizing,” but with only vague threats of action.

“We call for the immediate end of these illegal attacks and release of unlawfully detained vessels and crews. The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways,” the statement said.

Despite the tepid language, the U.S. has already struck back at militants from Iranian-backed groups such as Kataeb Hezbollah in Iraq and Syria after they carried out drone attacks that injured U.S. personnel.

The assumption in London is that airstrikes against the Houthis — if it came to that — would be U.S.-led with the U.K. as a partner. Other nations might also chip in.

Two French officials said Paris is not considering air strikes. The country’s position is to stick to self-defense, and that hasn’t changed, one of them said. French Armed Forces Minister Sébastien Lecornu confirmed that assessment, saying on Tuesday that “we’re continuing to act in self-defense.” 

“Would France, which is so proud of its third way and its position as a balancing power, be prepared to join an American-British coalition?” asked Fayet, the think tank researcher.

Iran looms large

Iran’s efforts to leverage its proxies in a below-the-radar battle against both Israel and the West appear to be well underway, and the conflict has already scuppered a long-awaited security deal between Israel and Saudi Arabia.

“Since 1979, Iran has been conducting asymmetrical proxy terrorism where they try to advance their foreign policy objectives while displacing the consequences, the counterpunches, onto someone else — usually Arabs,” said Bradley Bowman, senior director of Washington’s Center on Military and Political Power. “An increasingly effective regional security architecture, of the kind the U.S. and Saudi Arabia are trying to build, is a nightmare for Iran which, like a bully on the playground, wants to keep all the other kids divided and distracted.”

Despite Iran’s fiery rhetoric, it has stopped short of declaring all-out war on its enemies or inflicting massive casualties on Western forces in the region — which experts say reflects the fact it would be outgunned in a conventional conflict.

“Neither Iran nor the U.S. nor Israel is ready for that big war,” said Alex Vatanka, director of the Middle East Institute’s Iran program. “Israel is a nuclear state, Iran is a nuclear threshold state — and the U.S. speaks for itself on this front.”

Israel might be betting on a long fight in Gaza, but Iran is trying to make the conflict a global one, he added. “Nobody wants a war, so both sides have been gambling on the long term, hoping to kill the other guy through a thousand cuts.”

Emilio Casalicchio contributed reporting.



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How Houthi rebels are threatening global trade nexus on Red Sea

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The U.S. is mustering an international armada to deter Iranian-backed Houthi militias from Yemen from attacking shipping in the Red Sea, one of the world’s most important waterways for global trade, including energy cargos.

The Houthis’ drone and missile attacks are ostensibly a response to the war between Israel and Hamas, but fears are growing that the broader world economy could be disrupted as commercial vessels are forced to reroute.

On Tuesday, U.S. Secretary of Defense Lloyd Austin held a videoconference with 43 countries, the EU and NATO, telling them that “attacks had already impacted the global economy and would continue to threaten commercial shipping if the international community did not come together to address the issue collectively.”

Earlier this week, the U.S. announced an international security effort dubbed Operation Prosperity Guardian that listed the U.K., Bahrain, Canada, France, Italy, the Netherlands, Norway, the Seychelles and Spain as participants. Madrid, however, said it wouldn’t take part. 

The Houthis were quick to respond. 

“Even if America succeeds in mobilizing the entire world, our military operations will not stop unless the genocide crimes in Gaza stop and allow food, medicine, and fuel to enter its besieged population, no matter the sacrifices it costs us,” said Mohammed Al-Bukaiti, a member of the Ansar Allah political bureau, in a post on X

Here’s what you need to know about the Red Sea crisis.

1. Who are the Houthis and why are they attacking ships?

International observers have put the blame for the hijackings, missiles and drone attacks on Houthi rebels in Yemen, who have stepped up their attacks since the Israel-Hamas war started. The Shi’ite Islamist group is part of the so-called “axis of resistance” against Israel and is armed by Tehran. Almost certainly due to Iranian support with ballistics, the Houthis have directly targeted Israel since the beginning of the war, firing missiles and drones up the Red Sea toward the resort of Eilat.

The Houthis have been embroiled in Yemen’s long-running civil war and have been locked in combat with an intervention force in the country led by Sunni Saudi Arabia. The Houthis have claimed several major strikes against high-value energy installations in Saudi Arabia over the past years, but many international observers have identified some of their bigger claims as implausible, seeing the Houthis as a smokescreen for direct Iranian action against its arch enemy Riyadh.

After first firing drones and cruise missiles at Israel, the rebels are now targeting commercial vessels it deems linked to Israel. The Houthis have launched about 100 drone and ballistic missile attacks against 10 commercial vessels, the U.S. Department of Defense said on Tuesday

As a result, some of the world’s largest shipping companies, including Italian-Swiss MSC, Danish giant Maersk and France’s CMA CGM, were forced to reroute to avoid being targeted. BP also paused shipping through the Red Sea. 

2. Why is the Red Sea so important?

The Bab el-Mandeb (Gate of Lamentation) strait between Djibouti and Yemen where the Houthis have been attacking vessels marks the southern entrance to the Red Sea, which connects to the Suez Canal and is a crucial link between Europe and Asia. 

Estimate are that 12 to 15 percent passes of global trade takes this route, representing 30 percent of global container traffic. Some 7 percent to 10 percent of the world’s oil and 8 percent of liquefied natural gas are also shipped through the same waterway. 

Now that the strait is closed, “alternatives require additional cost, additional delay, and don’t sit with the integrated supply chain that already exists,” said Marco Forgione, director general with the Institute of Export and International Trade.

Diverting ships around Africa adds up to two weeks to journey times, creating additional cost and congestion at ports.

3. What is the West doing about it?

Over the weekend, the American destroyer USS Carney and U.K. destroyer HMS Diamond shot down over a dozen drones. Earlier this month, the French FREMM multi-mission frigate Languedoc also intercepted three drones, including with Aster 15 surface-to-air missiles. 

Now, Washington is seeking to lead an international operation to ramp up efforts against the Iran-backed group, under the umbrella of the Combined Maritime Forces and its Task Force 153. 

“It’s a reinsurance operation for commercial ships,” said Héloïse Fayet, a researcher at the French Institute for International Relations (IFRI), adding it’s still unclear whether the operation is about escorting commercial vessels or pooling air defense capabilities to fight against drones and ballistic missiles. 

4. Who is taking part?

On Tuesday, the U.K. announced HMS Diamond would be deployed as part of the U.S.-led operation.

After a video meeting between Austin and Italian Defense Minister Guido Crosetto, Italy also agreed to join and said it would deploy the Virginio Fasan frigate, a 144-meter military vessel equipped with Aster 30 and 15 long-range missiles. The ship was scheduled to begin patrolling the Red Sea as part of the European anti-piracy Atalanta operation by February but is now expected to transit the Suez Canal on December 24.

France didn’t explicitly say whether Paris was in or out, but French Armed Forces Minister Sébastien Lecornu told lawmakers on Tuesday that the U.S. initiative is “interesting” because it allows intelligence sharing.

“France already has a strong presence in the region,” he added, referring to the EU’s Atalanta and Agénor operations.  

However, Spain — despite being listed as a participant by Washington — said it will only take part if NATO or the EU decide to do so, and not “unilaterally,” according to El País, citing the government.

5. Who isn’t?

Lecornu insisted regional powers such as Saudi Arabia should be included in the coalition and said he would address the issue with his Saudi counterpart, Prince Khalid bin Salman Al Saud, in a meeting in Paris on Tuesday evening. 

According to Bradley Bowman, senior director of the Center on Military and Political Power at Washington’s Foundation for Defense of Democracies, a number of Middle Eastern allies appear reluctant to take part.

“Where’s Egypt? Where is Saudi Arabia? Where is the United Arab Emirates?” he asked, warning that via its Houthi allies Iran is seeking to divide the West and its regional allies and worsen tensions around the Israel-Hamas war.

China also has a base in Djibouti where it has warships, although it isn’t in the coalition.

6. What do the Red Sea attacks mean for global trade?

While a fully-fledged economic crisis is not on the horizon yet, what’s happening in the Red Sea could lead to price increases.

“The situation is concerning in every aspect — particularly in terms of energy, oil and gas,” said Fotios Katsoulas, lead tanker analyst at S&P Global Market Intelligence.

“Demand for [maritime] fuel is already expected to increase up to 5 percent,” he said, and “higher fuel prices, higher costs for shipping, higher insurance premiums” ultimately mean higher costs for consumers. “There are even vessels already in the Red Sea that are considering passing back through the Suez Canal to the Mediterranean, even if they’d have to pay half a million dollars to do so.”

John Stawpert, a senior manager at the International Chamber of Shipping, said that while “there will be an impact in terms of the price of commodities at your supermarket checkout” and there may be an impact on oil prices, “there is still shipping that is transiting the Red Sea.” 

This is not “a total disruption” comparable to the days-long blockage of the canal in 2021 by the Ever Given container ship, he argued. 

Forgione, however, said he was “concerned that we may end up with a de facto blockade of the Suez Canal, because the Houthi rebels have a very clear agenda.”

7. Why are drones so hard to fight?

The way the Houthis operate raises challenges for Western naval forces, as they’re fending off cheap drones with ultra-expensive equipment. 

Aster 15 surface-to-air missiles — the ones fired by the French Languedoc frigate — are estimated to cost more than €1 million each while Iran-made Shahed-type drones, likely used by the Houthis, cost barely $20,000. 

“When you kill a Shahed with an Aster, it’s really the Shahed that has killed the Aster,” France’s chief of defense staff, General Thierry Burkhard, said at a conference in Paris earlier this month. 

However, if the Shahed hits a commercial vessel or a warship, the cost would be a lot higher.

“The advantage of forming a coalition is that we can share the threats that could befall boats,” IFRI’s Fayet said. “There’s an awareness now that [the Houthis] are a real threat, and that they’re able to maintain the effort over time.”  

With reporting by Laura Kayali, Antonia Zimmermann, Gabriel Gavin, Tommaso Lecca, Joshua Posaner and Geoffrey Smith.



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Energean and Chariot Limited partner on natural gas project offshore Morocco

Energean plc has announced it has farmed into Chariot Limited’s acreage offshore Morocco, which includes the 18 Bcm (gross) Anchois gas development and significant exploration prospectivity.

Highlights:

  • New country entry in Energean’s core Mediterranean region with acreage underpinned by an attractive gas development.
  • Farm in to 45% of the Lixus licence, with the option to increase to 55% post drilling results, and 37.5% of the Rissana licence and assumes operatorship of both licences.
  • Includes the commercial 18 Bcm (gross) Anchois development, located near to infrastructure for supply of gas to domestic and international markets.
  • Up front cash consideration of US$10 million.
  • Appraisal well planned for 2024, targeting an additional 11 Bcm of gross unrisked prospective resource to be commercialised through the Anchois development.
  • Energean to carry Chariot for its share of pre-FID costs, which are recoverable from Chariot’s future revenues.
  • Significant additional near-field, near-infrastructure prospectivity that is expected to add attractive, balanced-risk growth potential.

Dr Leila Benali, Minister of Energy Transition and Sustainable Development, commented: “This agreement is pivotal for the wider acreage offshore Morocco, on its Atlantic coast, a key energy asset for the Kingdom. We welcome Energean on these licences as the important investments will contribute
greatly to the monetisation of the country’s resources and to our ambitious energy strategy.”

Mrs Amina Benkhadra, General Director of the National Office of Hydrocarbons and Mines, commented: “I would like to congratulate both parties on signing this agreement. The discovery and extensive work to
date has set an excellent foundation on which the project can be developed and this partnership will now be instrumental in financing and taking it through the next phase. We look forward to working alongside Energean and Chariot in bringing the project to first gas.”

Mathios Rigas, Chief Executive Officer of Energean, commented: “This is an exciting step in the next stage of our development, one that can only enhance our position as the pre-eminent independent natural gas producer listed in London. These assets are particularly attractive as we understand the core geological, commercial and political drivers of the region, we have a track record in developing material gas resources prioritised for the domestic market and they are a complementary fit with our broader portfolio, not least the potential for surplus supply to other markets. We look forward to
working with our partners Chariot and ONHYM, and developing an outstanding resource for the benefit of all parties, including Morocco and its people.”

Adonis Pouroulis, Chief Executive Officer of Chariot, commented: “In Energean, we have secured a partner with a proven track record of rapidly building and delivering this kind of offshore development. Energean also shares our view that Anchois and its surrounding acreage offers significant upside potential and we are aligned with our plans moving forward. The new partnership
is a key step in bringing the development of the Anchois field to reality and we are looking forward to continuing the extensive work undertaken so far to reach final investment decision.”

Assets

Energean has agreed to farm into a 45% working interest in the Lixus offshore licence, which contains the Anchois gas development (Chariot 30%, ONHYM 25%), and a 37.5% working interest in the Rissana licence (Chariot 37.5%, ONHYM 25%). Energean will assume operatorship for both licences.

Farm in terms

As consideration for the interests in the licences, Energean has agreed to the following terms:

  • US$10 million cash consideration on closing of the transaction.
  • Energean agrees to carry Chariot for its share of pre-FID costs, up to a gross expenditure cap of US$85 million, covering:
  1. drilling of the appraisal well, and all other pre-FID costs, and up to US$7 million of seismic expenditure on the Rissana licence.
  • US $15 million in cash, which is contingent on FID being taken on the Anchois Development.

Post appraisal well option to increase working interest from 45% to 55%

Following the drilling of the appraisal well, Energean has the option to increase its working interest in the Lixus licence (which includes the Anchois development) by 10%, to 55%. On exercise of this option, the
amount payable would be:

  • Chariot’s choice between either:
  1. 5-year, US$50 million of convertible loan notes with a £20 strike price and 0% coupon; or 3 million Energean plc shares, issued immediately upon exercise of the option but subject to a lock-up period until the earlier of first gas and 3 years post FID.
  • Energean will pay to Chariot a 7% royalty for every dollar achieved on gas prices (post transportation costs) in excess of a base hurdle.
  • An agreement to carry Chariot’s 20% share of development costs for the Anchois development with the following terms:
  1. A net expenditure cap of US$170 million.
  2. The carry available for development costs is reduced by costs carried in the pre-FID phase.
  3. All carried amounts are recoverable from 50% of Chariot’s future revenues with interest charged at SOFR + 7%.

If the option is not exercised, subject to FID, the partners agree to progress the Anchois development with an ownership structure of Energean 45%, Chariot 30%, ONHYM 25%. All amounts carried by Energean on behalf of Chariot would be recoverable from Chariot’s future revenues under the same terms as above.

The completion of the transaction is subject to government approval.

Lixus licence and Anchois Development

The Lixus Offshore licence covers an area of approximately 1794 km2 with water depths ranging from the coastline to 850 m. The area has extensive data coverage with legacy 3D seismic data covering approximately 1425 km2 and five exploration wells have been drilled historically, including the Anchois-1
and Anchois-2 discovery wells.
Chariot’s latest competent persons report covering the Anchois Field has certified gross 2C contingent resources of 18 Bcm in the discovered gas sands and gross unrisked prospective resources of 21 Bcm in undrilled sands.

Energean and Chariot plan to drill an appraisal well in 2024, with the following objectives:

  • To undertake a drill stem test on the main gas-containing sands.
  • To target an additional 5 Bcm of recoverable gas with a 61% geological chance of success through a sidetrack into the O sands in the Anchois Footwall prospect.
  • To target an additional 6 Bcm of recoverable gas with a 49% geological chance of success through a deepening of the well into previously undrilled sands in the Anchois North Flank prospect.

Once drilled, the well is expected to be retained as a future producer for the Anchois development.

It is anticipated that the licence contains significant additional prospectivity that could allow for further balanced-risk, near-field exploration activity.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/08122023/energean-and-chariot-limited-partner-on-natural-gas-project-offshore-morocco/



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NPD urges companies to explore proven gas resources on the Norwegian shelf

There are vast proven gas resources on the Norwegian shelf which are currently without development plans. Much of this gas is located in tight reservoirs – which makes it difficult to produce.

“Despite the significant uncertainty associated with how much gas we’re talking about, the cost level and future gas prices, our calculations show that the values involved are substantial,” says Arne Jacobsen, Assistant Director of Technology, analyses and coexistence.

A tight reservoir is a reservoir with low permeability (flow, in other words, how well a porous material can transport liquid or gas).

These reservoirs normally cannot be produced using conventional wells; profitable production can only be achieved by implementing measures to improve gas flow. So far, various forms of fracturing and multi-branch wells remain the most relevant methods for recovering resources in tight reservoirs.

Slim-hole technology is also relevant is several places, where a large number of slim boreholes in the same well will increase the wells’ contact surface with the reservoir (reservoir exposure) and make it easier for hydrocarbons to flow into the wells.

These methods and technologies have all been previously tested and applied on the Norwegian shelf, but are mainly used to extract additional oil. Elsewhere in the world, such as in the Gulf of Mexico, the UK shelf and on certain onshore fields, the technologies have been used to produce gas.

Time-critical resources

Production from tight reservoirs is frequently only profitable if the development is based on tie-backs to existing infrastructure. Large volumes and relatively low production rates result in a long production horizon, which underlines the importance of not postponing efforts until the field approaches its shut down date.

“These resources must be produced before the end of the infrastructure’s lifetime, which makes them time-critical in many instances. This is why it’s important to implement solutions that make it possible to produce them within the technical lifetime of existing infrastructure,” Jacobsen says.

The NPD’s primary goal is to contribute toward realising the greatest possible values for Norwegian society from the oil and gas industry through efficient and prudent resource management:

“We need to ensure that these values are not lost, and that the companies are doing enough to produce the difficult volumes as well,” Jacobsen says.

Broad cooperation

The NPD wants the companies to “leave no stone unturned” and determine if it is possible to produce remaining resources in a profitable way by utilising existing technology. One tool in this context can be coordination across fields and broad cooperation on the shelf, in general:

“It’s often expensive to implement technology, and profitability can be marginal. We encourage the companies to think outside the box and work across fields – and thereby achieve potential economies of scale,” Jacobsen says.

He believes there could be a potential for saving money by cooperating on, for example, planning, hiring vessels and drilling a certain number of wells in an area. Such campaigns are commonplace within e.g. light well intervention (maintenance on production wells that is normally carried out using vessels).

Tight reservoirs in all ocean areas

The NPD presented estimates for resources in tight reservoirs on the Norwegian continental shelf in its resource reports from 2017 and 2019, and concluded that there are considerable resources in tight reservoirs in all ocean areas on the NCS.

The North Sea

The estimate for mapped volumes in place in tight reservoirs in the southern part of the North Sea is in the order of 750 million m3 of oil and 90 billion m³ of gas. Most of this is located in chalk reservoirs in the Ekofisk, Eldfisk and Valhall area. Producible oil in basement rock has also been proven on the Utsira High. Basement rock consists of hard and tight rocks. However, the basement rock in this area is so fractured and porous that oil has migrated into it.

In the northern part of the North Sea, the mapped volume in place in tight reservoirs is estimated at approximately 360 million m³ of oil and 80 billion m³ of gas. In this area, a considerable percentage of the volumes are located in sandstone reservoirs. However, there are also substantial volumes on Oseberg and Gullfaks in the overlying Shetland Chalk and partly in the Lista Formation.

Test production of oil has been carried out in the Shetland Chalk on Oseberg. Licensees are considering testing the potential of different well stimulation methods. On Gullfaks, production is currently under way from the tight Shetland Chalk. Here they are using water injection and horizontal wells to improve recovery.

The Norwegian Sea

Mapped volumes in place in tight reservoirs in the Norwegian Sea are estimated at approx. 130 million m³ of oil and 420 billion m³ of gas. These volumes are located exclusively in sandstone reservoirs. A large percentage is located in the Tilje and Garn formations, which are deep and have highly variable reservoir properties.

The Lavrans, Linnorm, Noatun and Njord Nordflanken 2 and 3 discoveries all have tight reservoir zones where the licensees are still considering the possibility of development using different technologies to improve profitability. Slim-hole technology has been used in the tight zones in the Garn Formation on Smørbukk Sør. This technology has also been used in several other fields, such as Edvard Grieg, Valhall and Ivar Aasen.

This is an example of testing new technology to increase productivity in tight reservoir zones. Some discoveries are also relinquished because the licensees are unable to ascertain profitability in developing the tight reservoir zones. 6506/6-1 Victoria in the Norwegian Sea is one example of this. This discovery has considerable volumes in place, but has nevertheless been relinquished.

The Barents Sea

Mapped volumes in place in tight reservoirs in the Barents Sea are estimated at approximately 5 million m³ of oil and 270 billion m³ of gas. Since the Barents Sea is more of a frontier area than the North Sea and the Norwegian Sea, the resource base is more uncertain. The tight reservoirs in the Barents Sea are sandstone reservoirs from the Triassic.

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/07122023/npd-urges-companies-to-explore-proven-gas-resources-on-the-norwegian-shelf/



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Climate action or distraction? Sweeping COP pledges won’t touch fossil fuel use

DUBAI, United Arab Emirates — A torrent of pollution-slashing pledges from governments and major oil companies sparked cries of “greenwashing” on Saturday, even before world leaders had boarded their flights home from this year’s global climate conference.  

After leaders wrapped two days of speeches filled with high-flying rhetoric and impassioned pleas for action, the Emirati presidency of the COP28 climate talks unleashed a series of initiatives aimed at cleaning up the world’s energy sector, the largest source of planet-warming greenhouse gas emissions. 

The announcement, made at an hours-long event Saturday afternoon featuring U.S. Vice President Kamala Harris and European Commission President Ursula von der Leyen, contained two main planks — a pledge by oil and gas companies to reduce emissions, and a commitment by 118 countries to triple the world’s renewable energy capacity and double energy savings efforts. 

It was, on its face, an impressive and ambitious reveal. 

COP28 President Sultan al-Jaber, the oil executive helming the talks, crowed that the package “aligns more countries and companies around the North Star of keeping 1.5 degrees Celsius within reach than ever before,” referring to the Paris Agreement target for limiting global warming. 

But many climate-vulnerable countries and non-government groups instantly cast an arched eyebrow toward the whole endeavor.

“The rapid acceleration of clean energy is needed, and we’ve called for the tripling of renewables. But it is only half the solution,” said Tina Stege, climate envoy for the Marshall Islands. “The pledge can’t greenwash countries that are simultaneously expanding fossil fuel production.” 

Carroll Muffett, president of the nonprofit Center for International Environmental Law, said: “The only way to ‘decarbonize’ carbon-based oil and gas is to stop producing it. … Anything short of this is just more industry greenwash.”

The divided reaction illustrates the fine line negotiators are trying to walk. The European Union has campaigned for months to win converts to the pledge on renewables and energy efficiency the U.S. and others signed up to on Saturday, even offering €2.3 billion to help. And the COP28 presidency has been on board. 

But Brussels, in theory, also wants these efforts to go hand in hand with a fossil fuel phaseout — a tough proposition for countries pulling in millions from the sector. The EU rhetoric often goes slightly beyond the U.S., even though the two allies officially support the end of “unabated” fossil fuel use, language that leaves the door open for continued oil and gas use as long as the emissions are captured — though such technology remains largely unproven.

Von der Leyen was seen trying to thread that needle on Saturday. She omitted fossil fuels altogether from her speech to leaders before slipping in a mention in a press release published hours later: “We are united by our common belief that to respect the 1.5°C goal … we need to phase out fossil fuels.” 

Harris on Saturday said the world “cannot afford to be incremental. We need transformative change and exponential impact.” 

But she did not mention phasing out fossil fuels in her speech, either. The U.S., the world’s top oil producer, has not made the goal a central pillar of its COP28 strategy. 

Flurry of pledges  

The EU and the UAE said 118 countries had signed up to the global energy goals.

The new fossil fuels agreement has been branded the “Oil and Gas Decarbonization Charter” and earned the signatures of 50 companies. The COP28 presidency said it had “launched” the deal with Saudi Arabia — the world’s largest oil exporter and one of the main obstacles to progress on international climate action.

Among the signatories was Saudi state energy company, Aramco, the world’s biggest energy firm — and second-biggest company of any sort, by revenue. Other global giants like ExxonMobil, Shell and TotalEnergies also signed.

They have committed to eliminate methane emissions by 2030, to end the routine flaring of gas by the same date, and to achieve net-zero emissions from their production operations by 2050. Adnan Amin, CEO of COP28, singled out the fact that, among the 50 firms, 29 are national oil companies.  

“That in itself is highly significant because you have not seen national oil companies so evident in these discussions before,” he told reporters.

The COP28 presidency could not disguise its glee at the flurry of announcements from the opening weekend of the conference.

“It already feels like an awful lot that we have delivered, but I am proud to say that this is just the beginning,” Majid al-Suwaidi, the COP28 director general, told reporters. 

Fred Krupp, president of the U.S.-based Environmental Defense Fund, predicted: “This will be the single most impactful day I’ve seen at any COP in 30 years in terms of slowing the rate of warming.” 

But other observers said the oil and gas commitments did not go far beyond commitments many companies already make. Research firm Zero Carbon Analytics noted the deal is “voluntary and broadly repeats previous pledges.”

Melanie Robinson, global climate program director at the World Resources Institute, said it was “encouraging that some national oil companies have set methane reduction targets for the first time.” 

But she added: “Most global oil and gas companies already have stringent requirements to cut methane emissions. … This charter is proof that voluntary commitments from the oil and gas industry will never foster the level of ambition necessary to tackle the climate crisis.” 

Some critics theorized that the COP28 presidency had deliberately launched the renewables and energy efficiency targets together with the oil and gas pledge. 

The combination, said David Tong, global industry campaign manager at advocacy group Oil Change International, “appears to be a calculated move to distract from the weakness of this industry pledge.”

The charter, he added, “is a trojan horse for Big Oil and Gas greenwash.” 

Beyond voluntary moves 

A push to speed up the phaseout of coal power garnered less attention — with French President Emmanuel Macron separately unveiling a new initiative and the United States joining a growing alliance of countries pledging to zero out coal emissions.

Macron’s “coal transition accelerator” focuses on ending private financing for coal, helping coal-dependent communities and scaling up clean energy. And Washington’s new commitment confirms its path to end all coal-fired power generation unless the emissions are first captured through technology. U.S. use of coal for power generation has already plummeted in the past decade. 

The U.S. pledge will put pressure on China, the world’s largest consumer and producer of coal, as well as countries like Japan, Turkey and Australia to give up on the high-polluting fuel, said Leo Roberts, program lead on fossil fuel transitions at think tank E3G. 

“It’s symbolic, the world’s biggest economy getting behind the shift away from the dirtiest fossil fuel, coal. And it’s sending a signal to … others who haven’t made the same commitment,” he said. 

The U.S. also unveiled new restrictions on methane emissions for its oil and gas sector on Saturday — a central plank of the Biden administration’s climate plans — and several leaders called for greater efforts to curb the potent greenhouse gas in their speeches. 

Barbados Prime Minister Mia Mottley called for a “global methane agreement” at COP28, warning that voluntary efforts hadn’t worked out. Von der Leyen, meanwhile, urged negotiators to enshrine the renewables and energy efficiency targets in the final summit text. 

Mohamed Adow, director of the think tank Power Shift Africa, warned delegates not to get distracted by nonbinding pledges. 

“We need to remember COP28 is not a trade show and a press conference,” he cautioned. “The talks are why we are here and getting an agreed fossil fuel phaseout date remains the biggest step countries need to take here in Dubai over the remaining days of the summit.”

Sara Schonhardt contributed reporting.



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Kamala Harris at climate summit: World must ‘fight’ those stalling action

DUBAI — The vast, global efforts to arrest rising temperatures are imperiled and must accelerate, U.S. Vice President Kamala Harris told the world climate summit on Saturday. 

“We must do more,” she implored an audience of world leaders at the COP28 climate talks in Dubai. And the headwinds are only growing, she warned.

“Continued progress will not be possible without a fight,” she told the gathering, which has drawn more than 100,000 people to this Gulf oil metropolis. “Around the world, there are those who seek to slow or stop our progress. Leaders who deny climate science, delay climate action and spread misinformation. Corporations that greenwash their climate inaction and lobby for billions of dollars in fossil fuel subsidies.” 

Her remarks — less than a year before an election that could return Donald Trump to the White House — challenged leaders to cooperate and spend more to keep the goal of containing global warming to 1.5 degrees Celsius within reach. So far, the planet has warmed about 1.3 degrees since preindustrial times.

“Our action collectively, or worse, our inaction will impact billions of people for decades to come,” Harris said.

The vice president, who frequently warns about climate change threats in speeches and interviews, is the highest-ranking face of the Biden White House at the Dubai negotiations.

She used her conference platform to push that image, announcing several new U.S. climate initiatives, including a record-setting $3 billion pledge for the so-called Green Climate Fund, which aims to help countries adapt to climate change and reduce emissions. The commitment echoes an identical pledge Barack Obama made in 2014 — of which only $1 billion was delivered. The U.S. Treasury Department later specified that the updated commitment was “subject to the availability of funds.”

Meanwhile, back in D.C., the Biden administration strategically timed the release of new rules to crack down on planet-warming methane emissions from the oil and gas sector — a significant milestone in its plan to prevent climate catastrophe.

The trip allows Harris to bolster her credentials on a policy issue critical to the young voters key to President Joe Biden’s re-election campaign — and potentially to a future Harris White House run. 

“Given her knowledge base with the issue, her passion for the issue, it strikes me as a smart move for her to broaden that message out to the international audience,” said Roger Salazar, a California political strategist and former aide to then-Vice President Al Gore, a lifetime climate campaigner. 

Yet sending Harris also presents political peril. 

Biden has taken flak from critics for not attending the talks himself after representing the United States at the last two U.N. climate summits since taking office. And climate advocates have questioned the Biden administration’s embrace of the summit’s leader, Sultan al-Jaber, given he also runs the United Arab Emirates’ state-owned oil giant. John Kerry, Biden’s climate envoy, has argued the partnership can help bring fossil fuel megaliths to the table.

Harris has been on a climate policy roadshow in recent months, discussing the issue during a series of interviews at universities and other venues packed with young people and environmental advocates. The administration said it views Harris — a former California senator and attorney general — as an effective spokesperson on climate. 

“The vice president’s leadership on climate goes back to when she was the district attorney of San Francisco, as she established one of the first environmental justice units in the nation,” a senior administration official told reporters on a call previewing her trip. 

Joining Harris in Dubai are Kerry, White House climate adviser Ali Zaidi and John Podesta, who’s leading the White House effort to implement Biden’s signature climate law. 

Biden officials are leaning on that climate law — dubbed the Inflation Reduction Act — to prove the U.S. is doing its part to slash global emissions. Yet climate activists remain skeptical, chiding Biden for separately approving a series of fossil fuel projects, including an oil drilling initiative in Alaska and an Appalachian natural gas pipeline.

Similarly, the Biden administration’s opening COP28 pledge of $17.5 million for a new international climate aid fund frustrated advocates for developing nations combating climate threats. The figure lagged well behind other allies, several of whom committed $100 million or more.

Nonetheless, Harris called for aggressive action in her speech, which was followed by a session with other officials on renewable energy. The vice president committed the U.S. to doubling its energy efficiency and tripling its renewable energy capacity by 2030, joining a growing list of countries. The U.S. also said Saturday it was joining a global alliance dedicated to divorcing the world from coal-based energy. 

Like other world leaders, Harris also used her trip to conduct a whirlwind of diplomacy over the war between Israel and Hamas, which has flared back up after a brief truce.

U.S. National Security Council spokesperson John Kirby said Harris would be meeting with “regional leaders” to discuss “our desire to see this pause restored, our desire to see aid getting back in, our desire to see hostages get out.”

The war has intruded into the proceedings at the climate summit, with Israeli President Isaac Herzog and Palestinian Authority leader Mahmoud Abbas both skipping their scheduled speaking slots on Friday. Iran’s delegation also walked out of the summit, objecting to Israel’s presence.

Kirby said Harris will convey “that we believe the Palestinian people need a vote and a voice in their future, and then they need governance in Gaza that will look after their aspirations and their needs.”

Although Biden won’t be going to Dubai, the administration said these climate talks are “especially” vital, given countries will decide how to respond to a U.N. assessment that found the world’s climate efforts are falling short. 

“This is why the president has made climate a keystone of his administration’s foreign policy agenda,” the senior administration official said.

Robin Bravender reported from Washington, D.C. Zia Weise and Charlie Cooper reported from Dubai. 

Sara Schonhardt contributed reporting from Washington, D.C.



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The state of the planet in 10 numbers

This article is part of the Road to COP special report, presented by SQM.

The COP28 climate summit comes at a critical moment for the planet. 

A summer that toppled heat records left a trail of disasters around the globe. The world may be just six years away from breaching the Paris Agreement’s temperature target of 1.5 degrees Celsius, setting the stage for much worse calamities to come. And governments are cutting their greenhouse gas pollution far too slowly to head off the problem — and haven’t coughed up the billions of dollars they promised to help poorer countries cope with the damage.

This year’s summit, which starts on Nov. 30 in Dubai, will conclude the first assessment of what countries have achieved since signing the Paris accord in 2015. 

The forgone conclusion: They’ve made some progress. But not enough. The real question is what they do in response.

To help understand the stakes, here’s a snapshot of the state of the planet — and global climate efforts — in 10 numbers. 

1.3 degrees Celsius

Global warming since the preindustrial era  

Human-caused greenhouse gas emissions have been driving global temperatures skyward since the 19th century, when the industrial revolution and the mass burning of fossil fuels began to affect the Earth’s climate. The world has already warmed by about 1.3 degrees Celsius, or 2.3 degrees Fahrenheit, and most of that warming has occurred since the 1970s. In the last 50 years, research suggests, global temperatures have risen at their fastest rate in at least 2,000 years.  

This past October concluded the Earth’s hottest 12-month span on record, a recent analysis found. And 2023 is virtually certain to be the hottest calendar year ever observed. It’s continuing a string of recent record-breakers — the world’s five hottest years on record have all occurred since 2015. 

Allowing warming to pass 2 degrees Celsius would tip the world into catastrophic changes, scientists have warned, including life-threatening heat extremes, worsening storms and wildfires, crop failures, accelerating sea level rise and existential threats to some coastal communities and small island nations. Eight years ago in Paris, nearly every nation on Earth agreed to strive to keep temperatures well below that threshold, and under a more ambitious 1.5-degree threshold if at all possible. 

But with just fractions of a degree to go, that target is swiftly approaching — and many experts say it’s already all but out of reach.

$4.3 trillion  

Global economic losses from climate disasters since 1970  

Climate-related disasters are worsening as temperatures rise. Heat waves are intensifying, tropical cyclones are strengthening, floods and droughts are growing more severe and wildfires are blazing bigger. Record-setting events struck all over the planet this year, a harbinger of new extremes to come. Scientists say such events will only accelerate as the world warms. 

Nearly 12,000 weather, climate and water-related disasters struck worldwide over the last five decades, the World Meteorological Organization reports. They’ve caused trillions of dollars in damage, and they’ve killed more than 2 million people.  

Ninety percent of these deaths have occurred in developing countries. Compared with wealthier nations, these countries have historically contributed little to the greenhouse gas emissions driving global warming – yet they disproportionately suffer the impacts of climate change.  

4.4 millimeters  

Annual rate of sea level rise

Global sea levels are rapidly rising as the ice sheets melt and the oceans warm and expand. Scientists estimate that they’re now rising by about 4.4 millimeters, or about 0.17 inches, each year – and that rate is accelerating, increasing by about 1 millimeter every decade.

Those sound like small numbers. They’re not.  

The world’s ice sheets and glaciers are losing a whopping 1.2 trillion tons of ice each year. Those losses are also speeding up, accelerating by at least 57 percent since the 1990s. Future sea level rise mainly depends on future ice melt, which depends on future greenhouse gas emissions. With extreme warming, global sea levels will likely rise as much as 3 feet by the end of this century, enough to swamp many coastal communities, threaten freshwater supplies and submerge some small island nations.  

Some places are more vulnerable than others. 

“Low-lying islands in the Pacific are on the frontlines of the fight against sea level rise,” said NASA sea level expert Benjamin Hamlington. “In the U.S., the Southeast and Gulf Coasts are experiencing some of the highest rates of sea level rise in the world and have very high future projections of sea level.”  

But in the long run, he added, “almost every coastline around the world is going to experience sea level rise and will feel impacts.”

Less than 6 years

When the world could breach the 1.5-degree threshold

The world is swiftly running out of time to meet its most ambitious international climate target: keeping global warming below 1.5 degrees Celsius. Humans can emit only another 250 billion metric tons of carbon dioxide and maintain at least even odds of meeting that goal, scientists say. 

That pollution threshold could arrive in as little as six years.

That’s the bottom line from at least two recent studies, one published in June and one in October. Humans are pouring about 40 billion tons of carbon dioxide into the atmosphere each year, with each ton eating into the margin of error.  

The size of that carbon buffer is smaller than previous estimates have suggested, indicating that time is running out even faster than expected.  

“While our research shows it is still physically possible for the world to remain below 1.5C, it’s difficult to see how that will stay the case for long,” said Robin Lamboll, a scientist at Imperial College London and lead author of the most recent study. “Unfortunately, net-zero dates for this target are rapidly approaching, without any sign that we are meeting them.”

43 percent 

How much greenhouse gas emissions must fall by 2030 to hit the temperature target

The world would have to undergo a stark transformation during this decade to have any hope of meeting the Paris Agreement’s ambitious 1.5-degree cap. 

In a nutshell, global greenhouse gas emissions have to fall 43 percent by 2030, and 60 percent by 2035, before reaching net-zero by mid-century, according to a U.N. report published in September on the progress the world has made since signing the Paris Agreement. That would give the world a 50 percent chance of limiting global warming to 1.5 degrees. 

But based on the climate pledges that countries have made to date, greenhouse gas emissions are likely to fall by just 2 percent this decade, according to a U.N. assessment published this month

Governments are “taking baby steps to avert the climate crisis,” U.N. climate chief Simon Stiell said in a statement this month. “This means COP28 must be a clear turning point.” 

$1 trillion a year 

Climate funding needs of developing countries

In many ways, U.N. climate summits are all about finance. Cutting industries’ carbon pollution, protecting communities from extreme weather, rebuilding after climate disasters — it all costs money. And developing countries, in particular, don’t have enough of it. 

As financing needs grow, pressure is mounting on richer nations such as the U.S. that have produced the bulk of planet-warming emissions to help developing countries cut their own pollution and adapt to a warmer world. They also face growing calls to pay for the destruction wrought by climate change, known as loss and damage in U.N.-speak. 

But the flow of money from rich to poor countries has slowed. In October, a pledging conference to replenish the U.N.’s Green Climate Fund raised only $9.3 billion, even less than the $10 billion that countries had promised last time. An overdue promise by developed countries to deliver $100 billion a year by 2020 to help developing countries reduce emissions and adapt to rising temperatures was “likely” met last year, the Organization for Economic Cooperation and Development said this month, while warning that adaptation finance had fallen by 14 percent in 2021. 

As a result, the gap between what developing countries need and how much money is flowing in their direction is growing. The OECD report said developing countries will need around $1 trillion a year for climate investments by 2025, “rising to roughly $2.4 trillion each year between 2026 and 2030.”

$7 trillion 

Worldwide fossil fuel subsidies in 2022

In stark contrast to the trickle of climate finance, fossil fuel subsidies have surged in recent years. In 2022, total spending on subsidies for oil, natural gas and coal reached a record $7 trillion, the International Monetary Fund said in August. That’s $2 trillion more than in 2020. 

Explicit subsidies — direct government support to reduce energy prices — more than doubled since 2020, to $1.3 trillion. But the majority of subsidies are implicit, representing the fact that governments don’t require fossil fuel companies to pay for the health and environmental damage that their products inflict on society. 

At the same time, countries continue pumping public and private money into fossil fuel production. This month, a U.N. report found that governments plan to produce more than twice the amount of fossil fuels in 2030 than would be consistent with the 1.5-degree target. 

66,000 square kilometers

Gross deforestation worldwide in 2022

At the COP26 climate summit two years ago in Glasgow, Scotland, nations committed to halting global deforestation by 2030. A total of 145 countries have signed the Glasgow Forest Declaration, representing more than 90 percent of global forest cover. 

Yet global action is still falling short of that target. The annual Forest Declaration Assessment, produced by a collection of research and civil society organizations, estimated that the world lost 66,000 square kilometers of forest last year, or about 25,000 square miles — a swath of territory slightly larger than West Virginia or Lithuania. Most of that loss came from tropical forests. 

Halting deforestation is a critical component of global climate action. The U.N.’s Intergovernmental Panel on Climate Change warns that collective contributions from agriculture, forestry and land use compose as much as 21 percent of global human-caused carbon emissions. Deforestation releases large volumes of carbon dioxide back into the atmosphere, and recent research suggests that carbon losses from tropical forests may have doubled since the early 2000s.  

Almost 1 billion tons

The annual carbon dioxide removal gap 

Given the world’s slow pace in reducing greenhouse gas pollution, scientists say a second approach is essential for slowing the Earth’s warming — removing carbon dioxide from the atmosphere.

The technology for doing this is largely untested at scale, and won’t be cheap.  

A landmark report on carbon dioxide removals led by the University of Oxford earlier this year found that keeping warming to 2 degrees Celsius or less would require countries to collectively remove an additional 0.96 billion tons of CO2-equivalent a year by 2030.

About 2 billion tons are now removed every year, but that is largely achieved through the natural absorption capacity of forests. 

Removing even more carbon will require countries to massively scale up carbon removal technologies, given the limited capacity of forests to absorb more carbon dioxide. 

Carbon removal technologies are in the spotlight at COP28, though some countries and companies want to use them to meet net-zero while continuing to burn fossil fuels. Scientists have been clear that carbon removal cannot be a substitute for steep emissions cuts. 

1,000 gigawatts 

Annual growth in renewable power capacity needed to keep 1.5 degrees in reach  

The shift from fossil fuels to renewables is underway, but the transition is still far too slow to meet the Paris Agreement targets. 

To keep 1.5 degrees within reach, the International Renewable Energy Agency estimates that the world needs to add 1,000 gigawatts in renewable energy capacity every year through 2030. By comparison, the United States’ entire utility-scale electricity-generation capacity was about 1,160 gigawatts last year, according to the Department of Energy.

Last year, countries added about 300 gigawatts, according to the agency’s latest World Energy Transitions Outlook published in June. 

That shortfall has prompted the EU and the climate summit’s host nation, the United Arab Emirates, to campaign for nations to sign up to a target to triple the world’s renewable capacity by 2030 at COP28, a goal also supported by the U.S. and China.

“The transition to clean energy is happening worldwide and it’s unstoppable,” International Energy Agency boss Fatih Birol said last month. “It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us.”

This article is part of the Road to COP special report, presented by SQM. The article is produced with full editorial independence by POLITICO reporters and editors. Learn more about editorial content presented by outside advertisers.



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CGX and Frontera make discoveries offshore Guyana

CGX Energy Inc. and Frontera Energy Corporation, the majority shareholder of CGX and joint venture partner of CGX in the Petroleum Prospecting License for the Corentyne block offshore Guyana, have announced the discovery of a total of 114 ft (35 m) of net pay at the Wei-1 well on the Corentyne block, approximately 200 km offshore from Georgetown, Guyana.

The joint venture believes that the rock quality discovered in the Maastrichtian horizon in the Wei-1 well is analogous to that reported in the Liza Discovery on Stabroek block.

Results further demonstrate the potential for a standalone shallow oil resource development across the Corentyne block. The Joint Venture has discovered
total net pay of 342 ft (104 m) to date on the Corentyne block.

The joint venture has also announced that Houlihan Lokey, a global investment bank and capital markets expert, is supporting active pursuit of strategic options for the Corentyne block, including a potential farm down, as it seeks to develop this oil investment in one of the most attractive oil and gas destinations in the world today, Guyana. There can be no guarantee that the review of strategic options will result in a transaction.

Gabriel de Alba, Chairman of Frontera’s Board of Directors, and Co-Chairman of CGX’s Board of Directors, commented: “On behalf of the Joint Venture, I am pleased to announce the discovery of 114 ft (35 m) of net pay at the
Wei-1 well. The proven presence of medium sweet crude oil in high-quality Maastrichtian cored reservoir at the Wei-1 well, combined with the previous discovery of 68 feet of hydrocarbon log pay in Maastrichtian blocky
sands in the Kawa-1 well in 2022, confirmed the significant potential of the Corentyne block. With the joint venture’s two-well drilling programme now complete, and as a result of inbound expressions of interest from
various global third parties, the joint venture is working with Houlihan Lokey to support a review of strategic options for the Corentyne block, including a potential farm down, as it progresses its efforts to maximise value
from its potentially transformational investments in Guyana.”

Orlando Cabrales, Chief Executive Officer of Frontera, commented: “The independent lab results from the Wei-1 well are particularly encouraging for the Maastrichtian zone. Results indicate that the rock quality in the Maastrichtian at Wei-1 is analogous to that reported in the Liza discovery on Stabroek block, further demonstrating the potential for a standalone shallow oil resource
development across the entire Corentyne block. In addition, the joint venture believes that, further potential upside exists in the Campanian, in which mobile light oil was proven in downhole analysis of samples and the Santonian, which has log pay and remains a potential target for future developments. As is normal course, following discoveries such as those made by the joint venture at Wei and Kawa, additional appraisal activities will be required to further assess commerciality and as input to optimise subsurface and production system
development planning.”

Professor Suresh Narine, Executive Co-Chairman of CGX’s Board of Directors, commented: “These are exciting times for the joint venture. The Wei-1 well met the joint venture’s expectations with the successful discovery of oil. Wei-1 also delivered a tremendous amount of data, which the joint venture is now
incorporating into its geologic and geophysical models to update its initial evaluation of Kawa, and the potential in the Maastrichtian in particular, as well as its view of the potential of the remaining undrilled prospects including the prospective areas in between the Wei-1 and Kawa-1 wells. Armed with this information, the joint venture is levering Houlihan Lokey’s extensive expertise in the global O&G sector to complete a strategic review of options for the Corentyne block in one of the most exciting exploration basins in the world.”

Wei-1 results

The Wei-1 well, located approximately 14 km northwest of the joint venture’s previous Kawa-1 discovery, was safely drilled by the NobleCorp Discoverer semi-submersible mobile drilling unit in water depth of approximately 1912 f (583 m) to a total depth of 20 450 ft (6233 m). The Wei-1 well targeted Maastrichtian, Campanian and Santonian aged stacked sands within channel and fan complexes in the northern section of the Corentyne block. As reported on 28 June 2023, the joint venture’s data acquisition programme at the Wei-1 well included wireline logging, MDT fluid samples and sidewall coring throughout the various intervals. Based on this data acquisition programme and additional information provided through the independent laboratory analysis process, the joint venture is pleased to report the following:

  • In the Maastrichtian, Wei-1 test results confirm 13 ft (4 m) of net pay in high quality sandstone reservoir with rock quality consistent with that reported in the Liza discovery on Stabroek block. Fluid samples retrieved from the Maastrichtian and log analysis confirm the presence of sweet medium crude oil with a gas-oil ratio (GOR) of approximate 400 ft3/bbl.
  • In the Campanian, petrophysical analysis confirms 61 ft (19 m) of net pay almost completely contained in one contiguous sand body with good porosity and moveable oil. Oil sampled during MDT testing as well as samples analysed downhole confirm the presence of light crude oil.
  • In the Santonian, petrophysical analysis confirms 40 ft (12 m) of net pay in blocky sands with indications of oil in core samples.
  • Current interpretation of the Campanian and Santonian horizons show lower permeability than the high-quality Maastrichtian, the joint venture believes these horizons may offer additional upside potential in the future.

There were no safety or environmental incidents throughout Wei-1 well operations.

Total costs associated for the Wei-1 well are now estimated to be within US$185 – US$190 million following the successful implementation of several initiatives. Following the agreement reached between CGX and Frontera,
the company will transfer up to 4.7% of its participating interest in the Corentyne block in exchange for Frontera’s funding CGX’s unexpected additional costs associated with the Wei-1 well, which amount to
approximately US$16.5 million. If the maximum transfer occurs, the company will retain a 27.3% participating interest, while Frontera will hold a 72.7% participating interest in the Corentyne block. It is anticipated that this
transaction will be completed during December 2023.

Conceptual field development planning completed

Based on results from the Wei-1 and Kawa-1 wells, the joint venture retained SIA, a Subsea 7 – Schlumberger Joint Venture, to complete a conceptual field development plan for the northern portion of the Corentyne block including subsea architecture, development well planning, production and export facilities and other considerations. As is normal course following discoveries such as those made by the Joint Venture at Wei-1 and Kawa-1 wells, additional appraisal activities will be required before commerciality can be determined.

While such additional appraisal activities will be necessary, as a result of the third-party analysis of the Wei-1 well test results, the joint venture believes that a potential development of the Maastrichtian horizon may have lower
associated development costs and be completed on a faster timeline than a broader development of both the shallow and deep zones on the entire Corentyne block.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/13112023/cgx-and-frontera-make-discoveries-offshore-guyana/



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Revolutionising remote assistance within the oil and gas sector with video enhancement technology

Niclas Elvgren, Head of the Professional Solutions Business Unit at Imint, considers how new video enhancement software is poised to unlock the full potential of remote assistance devices used within the oil and gas sector by addressing video quality issues.

Imagine a bustling oil exploration site, where on-site workers are engaged in complex drilling operations, geological surveys, and ensuring top-notch safety protocols. Equipped with advanced body-mounted cameras, headsets, or smart glasses, they seamlessly transmit high-definition live video feeds to remote oil experts, geologists, and drilling engineers. This technology empowers the wearer to make precise decisions, significantly reducing errors and enhancing overall efficiency.

These types of devices are already being deployed across the upstream oil and gas sector, where precision and real-time communication are paramount. Often referred to as remote assistance devices, these modern technological breakthroughs serve as an invaluable link connecting on-site workers with off-site experts, enabling instant communication in demanding and high-stress upstream oil and gas sector environments.

The picture isn’t perfect, yet…

Regardless of the type of camera or headset, two crucial elements of remote assistance devices still need to be perfected in order for the technology to reach widespread adoption in the oil and gas sector: reliable, high-quality video, and intuitive control of the onboard camera.

While remote assistance device manufacturers have made strides in connectivity and camera resolution, they have yet to address the inherent challenge of maintaining stable video feeds from cameras that are constantly in motion, and therefore may deliver blurry or shaky video.

In fast-paced oil and gas exploration and production scenarios, particularly ones involving equipment troubleshooting and complex drilling operations, on-site workers are constantly making head movements unconsciously. This is not a problem for on-site workers – as their eyes can quickly adjust to see exactly what they want to see.

That said, the video quality for remote oil and gas experts viewing the feeds has, to date, been far from a real-life experience. Feeds from body-worn cameras can appear shaky or dark to remote viewers, greatly reducing their effectiveness and even causing viewers to experience motion sickness.

Cutting-edge technology to the rescue

Fortunately, a new era of technology is emerging to confront this challenge head-on. Imint has developed a new suite of software solutions called Vidhance for Remote Assistance that helps organisations eliminate shaky video, greatly improving the value and outcomes of their remote initiatives.

These new technological advancements allow remote viewers to select an object on the live feed to lock onto it as the camera’s focus point, using automatic tracking and zooming to centre the object regardless of how it or the camera wearer moves. The suite also empowers remote viewers to adjust the camera’s exposure settings so they can ensure properly-lit imagery in even the most challenging high contrast conditions.

Hands-free is the way to be

Some organisations and remote assistance solutions have attempted to integrate stabilised hand-held smartphone or tablet cameras as the primary video input device, but they have a major inherent flaw – they require the on-site user to hold the device the entire time, leaving them with only one free hand.

In the upstream oil and gas sector, where workers often need both hands for critical tasks, this limitation is a significant drawback. While video stabilisation is a common feature in smartphones, it cannot safely be mounted for hands-free use in challenging environments, and it is typically limited to the device maker’s camera app, making it unavailable for third-party apps used to stream live video for remote assistance like Teams and Zoom.

Head-worn cameras and smart glass device manufacturers are now beginning to implement video stabilisation that is always active – even in live video scenarios. The tuning differs from that of smartphones, as the primary goal is not artistic video creation, but rather ensuring a clear and steady video stream for remote experts.

Moreover, this technology grants remote experts control over features like zoom, object tracking, and exposure adjustments, crucial tools for effective communication and decision-making in upstream oil and gas operations. Achieving this requires collaboration with solution vendors to enable remote assistance software to effectively manage the headset camera.

The best of both worlds

To fully realise the potential of remote assistance devices in the oil and gas sector, it is vital to converge cutting-edge wearable camera technology with sophisticated software solutions that prioritise video quality for raw videos being streamed. This approach enhances the functionality of these devices, granting greater autonomy to remote participants.

Now, with new video enhancement technologies available to oil and gas sector companies using remote assistance devices, systems can be built that deliver incredible results. Not only will these new software developments enhance the capabilities of any camera they are paired with, but they offer greater control to the remote participant so the on-site wearer does not have to fidget with settings or focus. Recording solutions add even greater value, offering the ability to re-watch live events and use them for training or analysis to improve future responses.

As we witness the growing adoption of remote assistance devices in the oil and gas sector, fostering a collaborative ecosystem becomes increasingly important. By providing access to advanced technologies and embracing flexible subscription models, oil and gas sector organisations can ensure that remote assistance devices stay current and remain equipped with the latest features, driving further improvements in upstream oil and gas exploration efficiency and safety.

Read the article online at: https://www.oilfieldtechnology.com/digital-oilfield/25102023/revolutionising-remote-assistance-within-the-oil-and-gas-sector-with-video-enhancement-technology/



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