INEOS Energy to sell its Norwegian oil and gas business to PGNiG for $615m

 INEOS Energy has today announced an agreement to sell its Oil and Gas business in Norway to PGNiG Upstream Norway AS for a consideration of $615 million.  The deal includes all INEOS Oil & Gas interests in production, licenses, fields, facilities and pipelines, on the Norwegian continental shelf.

INEOS E&P Norge AS produces around 33,000 BOE per day from the Norwegian Sea. A 93% gas ratio, from 3 non-operated fields, Ormen Lange (14%), Alve (15%) and Marulk (30%). The business also holds 22 offshore licenses, of which 6 are operated, and has equity in the Nyhamna Terminal (8%).

The deal announced today continues to rebalance our portfolio in terms of oil and gas and moves INEOS Energy towards a more operated position.

The sale, which has an effective date of 1 January 2021, is subject to approval by the Norwegian Ministry of Petroleum and Energy and the Norwegian Ministry of Finance. It is expected to complete later this year.

All 52 employees of INEOS E&P Norge AS will transfer to PGNiG Upstream Norway AS following completion of the deal.

The PGNiG Group is the largest Polish oil and gas company employing 25,000 people worldwide. PGNiG Upstream Norway AS is an integrated exploration and production company established in Norway in 2007 and plays an important role in the supply of gas to Poland.

Brian Gilvary, Executive Chairman of INEOS Energy said, “This represents another positive step in the INEOS Energy journey.  The deal allows us to monetise a non-operated, predominantly gas portfolio at an attractive price compared to our hold value.  This will further balance our portfolio of oil and gas and open up new opportunities to reinvest further into the energy transition.  These assets are a very strong strategic fit for PGNiG and significantly extends their position in Norway."

Today’s deal quickly follows the announcement of the acquisition of the HESS business in Denmark, which consists of operated assets. These deals begin reshaping INEOS Energy as it progresses a strategy to position the businesses strongly in the coming energy transition. 

ExxonMobil to sell U.K. upstream central and northern North Sea assets

ExxonMobil has signed an agreement with HitecVision, through its wholly owned portfolio company NEO Energy, for the sale of most of ExxonMobil’s non-operated upstream assets in the United Kingdom central and northern North Sea. The sale price of more than $1 billion is subject to closing adjustments, and has additional upside of approximately $300 million in contingent payments based on potential for increase in commodity prices.



Sale price of more than $1 billion advances divestment plans, further focusing portfolio on advantaged assets

ExxonMobil retains extensive refining and fuels marketing, lubricants, petrochemicals production and natural gas marketing business in the U.K.

“We continue to high-grade our portfolio by divesting assets that are less strategic and focusing our investments on our advantaged projects that are among the best in the industry,” said Neil Chapman, senior vice president of ExxonMobil. “Our development plans that prioritize Guyana, the U.S. Permian Basin, Brazil and LNG are focused on increasing earnings potential and generating strong cash flow to fund future capital investments, reduce debt and maintain a reliable dividend.”



The agreement includes ownership interests in 14 producing fields operated primarily by Shell, including Penguins, Starling, Fram, the Gannet Cluster and Shearwater; Elgin Franklin fields operated by Total; and interests in the associated infrastructure. ExxonMobil’s share of production from these fields was approximately 38,000 oil-equivalent barrels per day in 2019.



ExxonMobil will retain its non-operated share in upstream assets in the southern North Sea, and its share in the Shell Esso gas and liquids (SEGAL) infrastructure that supplies ethane to the company’s Fife ethylene plant.



The transaction is expected to close by the middle of 2021, subject to regulatory and third-party approvals.



ExxonMobil has operated in the U.K. for more than 135 years and continues natural gas sales, refining and chemical operations, the marketing of lubricants and petrochemicals, and the marketing of fuels through a network of more than 1,300 independently owned Esso-branded retail sites.

https://corporate.exxonmobil.com/News/Newsroom/News-releases/2021/0224_ExxonMobil-to-sell-UK-Upstream-Central-and-Northern-North-Sea-assets

Enbridge Line 3 Replacement Project Receives MPCA Approvals and Remaining DNR Permits

 

Today Minnesota Pollution Control Agency announced approvals for Enbridge's Line 3 project, including the 401 Water Quality Certification. Also, today the Minnesota Department of Natural Resources released the final eight permits for the project. 

 "Clearly this is a big day for Line 3 in Minnesota," said Leo Golden Vice President of Line 3 Execution. "These authorizations and approvals are an important step towards construction for this safety and maintenance focused replacement project which comes at an important time for Minnesota."

 This decision from the Minnesota Pollution Control Agency, including the project's 401 Water Quality Certification clears the way for a determination from the US Army Corps of Engineers regarding federal permits. The Line 3 project has been designed to avoid and minimize impacts to sensitive streams and wetlands.  Enbridge pipelines have coexisted with the nation's most productive wild rice waters for 70 years. 

 The authorizations and permits approved today by the Minnesota DNR range from a license for utility crossing of state land and public water, to water appropriation for dust control, hydrostatic testing and horizontal directional drilling. Enbridge has now received all ten of the DNR permits and authorizations for the safety and maintenance focused Line 3 Replacement Project. 

 The project still needs final permits and authorizations before construction can begin. The thorough, robust, science-based review of the project over the past six years has led to evidence-based approvals. Enbridge recognizes that the permit conditions required by the PCA and DNR are essential for protecting Minnesota's sensitive streams and wild rice waters during construction and planning for post-construction restoration and enhancement. 

 At Enbridge safety is our top priority. Enbridge implemented an effective COVID-19 testing and screening program that has proven effective during our recent Line 3 construction in North Dakota. We will continue to follow the latest guidance provided by local, federal and international public-health and government authorities to protect workers and communities. The project will provide significant economic benefits for counties, small businesses, Native American communities, and union members. Line 3 is a shovel-ready, $2.6-billion private investment that will bring 4,200 family-sustaining construction jobs, millions of dollars in local spending and tax revenues at a time when Northern Minnesota needs it most.

McDermott Earns Next Phase of Russian Ethane Cracker Project from CC7

 McDermott International, Ltd today announced it has secured the next phase of the ethane cracking project from China National Chemical Engineering & Construction Corporation Seven, Ltd (CC7). In 2019, McDermott was awarded a contract for the extended basic engineering on the project. This has now been expanded to include the provision of the engineering and procurement early works package for all schedule critical equipment.

The project is the largest ethylene integration project in the world. Located near Russia's shores at the Gulf of Finland, the natural gas processing chemical plant, owned by Baltic Chemical Plant (BCP), will be comprised of two ethylene cracking trains with an annual capacity of 1.4 million tons each.

"The expansion of this award is a direct result of our execution performance to date and we will continue to drive excellent results to support CC7 and BCP in the development of this world-class project," said Tareq Kawash, Senior Vice President, Europe, Middle East and Africa. "From concept design to commissioning and start-up, McDermott is uniquely positioned to execute fully integrated ethylene projects."

Lummus Technology was previously awarded the Process Design Package Engineering on the project and the license for its olefin production and recovery technology. McDermott and Lummus work jointly on projects through a strategic agreement that leverages their respective strengths for customers.

The early works package will be executed from McDermott's offices in The Hague, the Netherlands and in Brno, Czech Republic.

Odfjell Drilling enters letter of intent for Breidablikk development with Deepsea Aberdeen

 Equinor has today awarded a letter of intent to Odfjell Drilling for the drilling and completion of the Breidablikk project with Deepsea Aberdeen.The letter of intent is subject to finalization of contract.

 

The contract is set to commence during spring 2022 with a scope of fifteen (15) firm wells and an estimated duration of 2.5 years.  In addition, there are nine (9) optional wells. The approximate contract value for the firm scope is USD 290 million (excluding any integrated services, modifications/upgrades and mobilisation/demobilisation fees). In addition, a notable performance incentive rate will apply when wells are delivered ahead of target. The rate for the optional wells will be mutually agreed based on performance and market benchmarks.

 

Simen Lieungh, CEO Odfjell Drilling AS, says: “We are delighted to secure another long term development project with Equinor and build upon our successful relationship by adding the Deepsea Aberdeen to the Equinor fleet.  The Breidablikk development presents a specific set of technical challenges which shall require innovative and creative technologies to overcome.  This award is further recognition of Odfjell Drilling’s continuous drive to meet our clients’ requirements and deliver the most efficient wells in the industry. With the development of cutting edge drilling solutions tailored for the Breidablikk development we are confident that together with Equinor and the wider One Team, the Breidablikk development will be a success. ”

The Breidablikk field ready for development

 Equinor and partners Petoro, Vår Energi and ConocoPhillips Skandinavia have decided to develop the Breidablikk field in the North Sea. Today the partnership will submit the plan for development and operation to the Minister of Petroleum and Energy, in addition to awarding contracts for subsea facilities and upgrading of the Grane platform.

The expected production from the field is about 200 million barrels, investments totalling about NOK 18.6 billion.

“The Breidablikk field is one of the largest undeveloped oil discoveries on the Norwegian continental shelf (NCS). Field development will create substantial value for the Norwegian society and the owners. We are also pleased to award two key contracts today at a total value of NOK 3.3 billion, including options. The contracts will contribute to important activity for the supply industry and secure jobs for many years,” says Geir Tungesvik, Equinor’s acting executive vice president for Technology, Projects and Drilling.

The development concept chosen for the Breidablikk field is subsea development with 23 oil producing wells from four subsea templates that are controlled from Grane. Breidablikk will be tied in to the Grane platform for oil processing prior to being brought ashore at the Sture terminal. The production from Grane will be monitored with advanced digital tools from Equinor's integrated operations centre (IOC) at Sandsli to ensure optimal production and value creation from the wells.

“I am pleased that we together with our partners have matured the Breidablikk field to development. Breidablikk shows how the industry’s combined competencies create high value and returns from a world-class infrastructure on the NCS,” says Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway.

“Breidablikk will contribute significantly to maintaining profitable production in one of our core areas on the NCS,” Nylund adds.

Geir Tungesvik (left), acting executive vice president for Technology, Projects and Drilling, and Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway.

The Breidablikk development will include a control cable system for electricity and communication (DC/FO). This is a relatively new technology that can reduce the costs associated with further development of the field, in addition to facilitating the use of docking stations for subsea drones on the seabed. The phase-in of Breidablikk will reduce the CO2 intensity on the Grane field.

Securing jobs in the supply industry
The contract for subsea production facilities is awarded to Aker Solutions. The contract covers the delivery of four subsea templates and up to 23 subsea trees and associated components. The contract value is estimated at about NOK 2.5 billion, including options. Around 300 man-years in Norway will be associated with the project for the supplier, with project management and engineering at Fornebu and Tranby, fabrication in Egersund and Sandnessjøen and service organisation in Ågotnes. In addition, there will be deliveries from the UK, Malaysia and Brazil.

Wood, the maintenance and modification supplier for Grane, has performed studies for the Breidablikk project, and an option for engineering, procurement, construction and installation (EPCI) will now be exercised for the company. The work scope includes equipment installation on the Grane platform in order to receive oil from the Breidablikk subsea facility. Existing processing equipment and water purification system on the platform will be upgraded. With an estimated value of about NOK 800 million the contract is expected to create over 500 man-years in Norway. The engineering work will be performed in Sandefjord and the fabrication will take place in Stavanger.

Earlier this year TechnipFMC won a contract for pipelaying in the Breidablikk project with options for subsea installation.  The award contributes to sustaining workplaces for TechnipFMC in Norway, including the Orkanger spool base, where the pipelines will be fabricated before they are reeled onto the installation vessel.

All contracts have not been awarded, however about 70% of the value creation in the development phase is expected to go to Norwegian companies. The contracts are subject to government approval of the plan for development and operation.

Oil will be transported through the Grane oil pipeline to the Sture terminal in Øygarden municipality for storage and shipping. The field will be operated from Equinor’s Sandsli facilities in Bergen. Breidablikk is being phased in during a period of declining oil production at Grane and will help maintain the activity level on the platform.

First oil from the field is scheduled for the first half of 2024.

TechnipFMC Awarded a Significant EPCI Contract for the Equinor Breidablikk Pipelay and Subsea Installation

 TechnipFMC has been awarded a significant(1) Engineering, Procurement, Construction and Installation contract by Equinor for the Breidablikk Pipelay, including option for the Subsea Installation scope located in the area close to the Grane Field, North Sea.

The Breidablikk project is a tie-back to the existing Grane platform. TechnipFMC’s scope includes provision of flexible jumpers and rigid pipelines as well as pipeline installation work.

Jonathan Landes, President Subsea at TechnipFMC, commented: “We have collaborated closely with Equinor in order to optimize the solutions and methodology for the pipelay installation. We are honored to once again be selected by Equinor to create value with our products and services offering.”

The Breidablikk development is subject to final approval by the Norwegian authorities.