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In October, global upstream activity was robust with new oil and gas exploration and new project developments: two noteworthy oil and gas discoveries made in China, and an oil discovery in Egypt; projects with first production were announced for offshore Norway, onshore Nigeria and Australia; and four other projects located offshore Brazil, US Gulf of Mexico, North Sea, onshore Australia also made notable progress. Lastly, five A&D transactions involving operating assets round out the month’s operating asset headlines. New oil and gas discoveries could unveil an estimated resource of around 7.5 Trillion cubic feet of natural gas and 200 million barrels of oil in place. The value of these A&D transactions is estimated at as much as US $2 billion. Notably, offshore Brazil, the pre-salt fields are lifting oil production from 2.5 million barrels per day in 2016 to recent approximately 3 million barrels per day, up about 20% from three years ago.
Development projects of significance during this month include the Shenandoah in ultra-deep water Gulf of Mexico; the Gato do Mato in ultra-deep water Brazil; the Johan Sverdrup Phase 1, and Martin Linge in Norwegian North Sea; the Obiafu-41 onshore Nigeria; and the Kingia, Atlas projects onshore Australia. The Johan Sverdrup Phase 1, Atlas and Obiafu-41 projects started first production which altogether are going to produce up to 440,000 b/d of oil and 170 MMcf/d of natural gas at plateau to global hydrocarbon supply. The Martin Linge project delayed its first production, but will bring 100,000 b/d of oil capacity onstream in the 2020; The Shenandoah project is currently in the front-end engineering and design stage (FEED), and is targeting final investment decision (FID) in first half of 2020. LLOG Exploration, the operator is aiming first output at about 100,000 b/d of oil and 80 MMcf/d of natural gas capacity in 2023.
Stratas continues to monitor the upstream scene. Key projects on our screen include the results of Brazil’s sixth pre-salt round on November 7th, and the biggest pre-salt blocks ‘transfer of rights’ (ToR) auction on November 6th; Moreover, in Brazil’s Santos Basin, the Atapu pre-salt field is waiting for its FPSO arriving by early 2020 to start-up first production; In addition, on the Stabroek Block offshore Guyana, the Liza phase 1 project will start up first production via the Liza Destiny FPSO in December. The project will produce 120,000 barrels per day of oil at peak, the second phase will output 220,000 barrels per day of oil in mid-2022, and the third phase is set to start-up by 2023.
Picture 1: Location Map of Global Upstream Projects Developments Updates in October 2019
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