A US$2.5 billion joint venture alliance between Devon Energy and Sinopec has been announced. Sinopec will acquire a 33.33% interest in Devon's acreage across five new venture plays. The alliance includes an estimated 1.2 million acres in the Tuscaloosa Marine Shale, Niobrara, Oklahoma Mississippian play, Ohio Utica shale, and the Michigan Basin. The Niobrara, Mississippian and Utica shale acreage is liquids weighted. The Michigan and Tuscaloosa acreage includes both oil and gas. The distribution of total acreage contributed to the alliance by play is shown below.
Nexen Petroleum announced on 30 November 2011 that it has farmed out a 20% interest in three deepwater exploration prospects to CNOOC with possibly three others to follow with working interests ranging from 10% to 25%. Two of the prospects, Kakuna and Angel Fire, are located west and northwest of the Knotty Head discovery on Green Canyon Blocks 504 and 327, respectively. The third prospect is Cypress. Earlier this year Statoil farmed into a 27.5% interest in Kakuna.
The transaction reflects continuing pressures on independent producers to seek out partners in North America as well as a spreading NOC strategic effort to broaden their access to future growth asset opportunities.
Marathon has again farmed down its interest in over 2 million acres across 10 blocks in the Polish shale gas play. Following Nexen's entry into the acreage for a 40% interest in April, Mitsui has now taken a 9% interest. With this latest transaction, Marathon remains the operator but its net acreage in the 10 blocks is now 51%.
A five year evaluation period is anticipated that will include both seismic and drilling. At the time of the Nexen deal it was announced that Marathon plans "one or two wells in the fourth quarter of 2011 and potentially drilling seven to eight wells in 2012."
Mitsui also holds 100,000 net acres in the Marcellus shale gas play in the United States through a JV alliance with Anadarko announced in February 2010.
After nearly a year since Chevron and Rosneft announced plans to jointly explore in the Russian sector of the Black Sea, it has been reported that Chevron will exit the venture. Under the original terms of the agreement Chevron would acquire a 33.3% interest in exchange for funding US$1 billion in spending during the exploratory phase and payment of a cash bonus to Rosneft in the event that reserves were discovered.
From the start the venture agreement was conditional on receiving "fiscal relief" from the Russian government. The desired relief was to be in addition to the already agreed exemption from the mineral extraction tax of the first 20 million tonnes of oil produced.
February 23, 2011
ExxonMobil Expands Black Sea Deepwater
ExxonMobil and Rosneft have entered an agreement to explore for oil and gas in the Tuapse Trough in the Russian portion of the Black Sea. The area of interest covers 11,200 sq km.
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BP Expanding International New Business Development Programs
BP will acquire a 30% share in 23 Reliance PSCs (20 million net acres) in India's deepwater. The majority of these are contiguous blocks along India's east coast.
The acquisition cost includes US$7.2 billion up front and another US$1.8 billion to be paid on a contingent basis depending on exploration results yielding development projects. BP and Reliance will also form a 50/50 JV to source and market natural gas in India.
The primary producing asset in the transaction is the KG-D6 gas field with an interest in the much smaller MA-1 producing oil field.