Welligence Energy Analytics

Norway exploration success! Operator Vår Energi with partner Equinor, announced that the Zagato exploration well in the Barents Sea was successful with estimated recoverable resources of 15 - 43 MMboe. Zagato is located approximately 10km north of Goliat and is one of several discoveries drilled around the Goliat area since 2022, including Countach and Lupa. If successful, this could utilise existing infrastructure at Goliat and act as a tie-in point for the Countach discovery. In 2025, Vår Energi, Equinor and Aker BP ASA are targeting near-field exploration opportunities in the Barents Sea, seeking to increase volumes around existing infrastructure. Goliat Nord and Johan Castberg South prospects are next on the agenda this year and given their proximity to infrastructure, success will likely lead to a fast-track development. 

India Bid Round Alert! India recently launched the Open Acreage Licensing Policy Bid Round-X, offering 25 blocks across 13 basins. This round marks the largest offering in terms of area, covering 191,986 km² total. Around 91% of the area is offshore across 19 blocks. The remaining six are onshore. The Andaman-Nicobar Basin's blocks are worth noting. These blocks sit ~200 km northwest of Indonesia’s Timpan gas discovery (Harbour Energy, bp, and Mubadala Energy) and ~130 km west of Myanmar’s Yetagun gas field. Given the water depth and associated costs, any future drilling will need to target large prospects to have a chance of commerciality. The Krishna-Godavari Basin blocks are also of interest, adjacent to Reliance Industries Limited’s KG-D6, India’s largest gas reserves.

Venezuela Alert! The U.S. has revoked OFAC General License No. 41 (GL41), which allowed Chevron to operate in Venezuela despite sanctions since 2019. This is the first license revoked by the Trump administration. Per U.S. Secretary of State Marco Rubio, licenses granted to companies like Shell, bp, Eni, Repsol, and Maurel & Prom will also be revoked soon. This move targets Venezuela’s rising oil production, which has been recovering since these licenses were granted. While only Chevron's license is officially revoked, other companies may suspend operations to avoid penalties. Chevron is expected to have six months to safely wind down its operations, but, as of this post’s publishing, OFAC has yet to deliver official guidance. Venezuela’s production will take a toll in the short-term, even if the termination of licenses is reversed or new ones are granted. Trinidad & Tobago, seeking to extend its Dragon Field OFAC license expiring in October 2025, will also be affected, as the island expected to monetize its production.

Southeast Asia Update! PETRONAS and Eni have announced an MoU to progress discussions on establishing a JV, to oversee selected Indonesian and Malaysian upstream assets. The JV is intended to become a large LNG player in Southeast Asia, with, in the medium term, 0.5 MMboe/d of production. PETRONAS operates several Malaysian LNG projects and holds 15% in Indonesia’s INPEX Corporation-operated Abadi LNG development, which is targeting a 2027 FID. Eni’s extensive Indonesian portfolio encompasses the Kutei Basin, where, in 2023, it drilled the giant deepwater Geng North gas-condensate discovery. Geng North is expected to reach FID this year and eventually supply the majority-PT Pertamina (Persero)-owned Bontang LNG plant. Furthermore, PETRONAS and Eni are experienced FLNG operators, with producing projects in Malaysia and Sub-Saharan Africa, respectively.

Iraq development alert! bp has signed a final agreement with Iraq’s North Oil Company - Iraq for the re-development of several of the countries’ fields; the giant Kirkuk alongside Bai Hassan, Jambur and Khabbaz. The deal is set to see output from the fields rise by 150,000 bbl/d, up to 450,000 bbl/d, in the coming years. The move is aligned with bp’s new strategy and is another positive move for Iraq’s upstream sector. This deal follows TotalEnergies and QatarEnergy's announcement in 2023 to invest in Basra’s Ratawi oil field and the Gas Growth Integrated Project (GGIP). 

Back to Petroleum! bp today confirmed what everyone expected - a significant pivot back to oil & gas. Describing the move as "a reset bp", the company is reducing investment and allocating capital towards oil & gas. Annual capex dedicated to oil & gas is set to average US$10 billion over the next 3 years (an 18% increase), while investment in its "Transition businesses" over the same period is to be slashed by 80% to US$1.5-2B per year. The focus on capital discipline and returns is being renewed. The company has been under growing pressure, culminating with the news that activist investor Elliott had built a 5% stake - change had become inevitable. This reset brings bp's strategy more in line with its peers. Shell had already made major structural changes to its strategy, while the US pairing of ExxonMobil and Chevron, both of whom have outperformed, had never waivered from oil & gas as their core business.

Venezuela and T&T Development Alert! T&T and Shell are seeking an extension from the US government for their Dragon project’s two-year OFAC Specific Licence, set to expire in October 2025. This is one of the 2 key short-term issues that must be overcome if development is to move forward. - The first is for Shell and The National Gas Company of Trinidad and Tobago Limited (NGC) to complete the “preliminary activities” on schedule, essential if FID is to be taken in 2025/early-2026 and first gas achieved in 2027 (an ambitious timeline). - The second is securing the OFAC license extension. We think this has a high likelihood of being granted but it needs to be of sufficient length if FID is to be taken. Also, obtaining a multi-year extension would the best scenario to remove some of the short-term uncertainty from the project, thus facilitating rapid capital deployment. Venezuela gas is crucial to the future of Trinidad’s gas sector. These factors, along with key elements such as strategic implications, challenges, and risk mitigation strategy are analyzed in detail in our upcoming piece “Unlocking the Dragon Field: A Crucial Step in Reversing Trinidad & Tobago’s Declining Gas Production”.

US GoM M&A Alert! Shell is to acquire ConocoPhillips’ US Gulf of Mexico portfolio for US$735 million. The transaction includes non-operated interests in the Ursa/Princess and Europa fields, along with stakes in the Ursa TLP and the associated pipeline. Additionally, the deal includes an overriding royalty interest. The acquisition will contribute approximately 8,500 boe/d to Shell’s production, and consolidate its interest in assets it already operates, including the core Ursa project. For ConocoPhillips, this divestment represents a complete exit from the US GoM, a region that was becoming increasingly peripheral within its global portfolio. The company has been marketing its position since 2022.

US Alaska M&A Alert! Hilcorp is in the process of acquiring the gas-producing North Fork Unit and the associated North Fork Pipeline on the southern Kenai Peninsula from Anchor Point Energy (pipeline owner) and Vision Resources, both subsidiaries of Gardes Holdings. This deal will further cement Hilcorp’s position as the dominant player in the Cook Inlet, with the company accounting for >70% of the area’s reserves. Located in the Cook Inlet, gas was discovered at North Fork in 1965 by Chevron, but the field remained undeveloped until the 2010s when Armstrong acquired it. Gardes Holdings purchased North Fork in 2020, with Vision Operating serving as the operator. Plans have been submitted to drill infill wells within the unit.

Trinidad and Tobago M&A Alert! Predator Oil and Gas PLC is to acquire Challenger Energy Group Plc's (CEG) Trinidad portfolio in deal that could be worth up to US$8MM. It comprises a cash payment of US$1.75MM and the assumption of US$4.25MM in liabilities. A production-linked contingent payment of US$2MM could be made at end-2027. The portfolio comprises 3 producing fields, Goudron, Innis Trinity, and Icacos, which currently average 272 boe/d.   This transaction marks the exit from T&T for CEG, allowing it to fully focus on its frontier exploration work offshore Uruguay (it also holds acreage offshore Bahamas, but this is secondary). The acquisition complements Predator's portfolio by expanding its operations in the country, building on the recent majority acquisition of Caribbean Rex and its Bonasse field.