In July, the U.K. launched its 31st licensing round, offering a total of 1,766 blocks on frontier areas and underexplored regions in the U.K. continental shelf. This is the second offshore licensing round solely focused on the frontier regions and comes two years after the Oil & Gas Authority’s 29th Offshore Licensing Round. Companies who bid successfully in the round will benefit from new seismic data and long-term data transparency from the National Data Repository.

In addition, a number of new oil and gas discoveries were announced in July, the significance of which are discussed in the following regional highlights. Lastly, 32 major companies were involved in operating asset transaction during the month. Total deals now top $1.2 billion in combined value.

Key projects on Stratas’ radar include field developments at the Fogelberg project in the Norwegian Sea, Europe; the Calub, Hilala, Kaombo and Sankofa-Gye Nyame projects in Africa; the Ichthys, Bungka Pakma, Cluster 2A, and Cluster 2B projects in Asia-Pacific; the Rakuschechnoye, Absheron EPS and Shah Deniz Phase 2 projects in the Russia/CIS region; and the Mt Providence and Bay du Nord projects in the Americas.


Two significant oil and gas discoveries in Latin America were posted in July. Ecopetrol made a dry gas and light oil discovery with the Bufalo-1 well onshore Colombia at the depth 3,783 ft. The first test flowed about 3.3 MMcf/d, which indicated significant gas potential could be added from the center of the country in the future.

Elsewhere, Equinor announced another oil discovery in the Guanxuma prospect, a prospect nearby the pre-salt Carcara field which is estimated to contain 2 Bboe in recoverable reserves in the BM-S-8 block in Santos basin offshore Brazil. The Guanxuma prospect is estimated to hold around 700 MMboe to 1.3 Bboe in recoverable reserves. Stratas expects the project to be completed as a tie-back to Carcara development facility if commercial.

In U.S. Gulf of Mexico, Talos Energy started first production at Mt. Providence on Mississippi Canyon Block 28 in water depth of 1,850 ft. Current gross production is 3,850 boe/d, of which 88% is API 33° gravity oil. In Canada, Equinor outlined plans to develop the Bay du Nord oil discovery offshore Newfoundland via subsea tie back to a newbuild FPSO. First oil is anticipated in 2025. This development could ultimately produce about 300 MMbbl of crude supply.


Woodside Petroleum made two significant gas discoveries in Asia-Pacific. The Ferrand-1, a deepwater exploration well drilled on the WA-404-P permit offshore Western Australia. The well was deemed a gas discovery and commerciality is currently being assessed. This prospect potentially contains multi-trillion cubic feet of resources. Woodside also announced a discovery at its deep-water Aung Siddhi-1 well located in the Rakhine basin offshore Myanmar. The gas column was confirmed, but the assessment of the well is ongoing. Additional wells are being considered for 2019 and 2020.

In July, a number of projects commenced production. Inpex started production at its Ichthys LNG project in the Browse Basin offshore Australia. The project is expected to produce around 1 Bcf/d of gas and 100,000 bbl/d of condensate. The gas will be sent through subsea pipeline to an onshore LNG plant to produce roughly 8.4 million tons of LNG per year shipped to Asian supply market.

Elsewhere in Asia, production in the Malaysia Vietnam Commercial Arrangement Area began on phase 6 with gas flowing in the PM3 CAA field. Notable delays in July include first production from the Cluster 2A oil project and Cluster 2B gas project. These assets are now projected to begin producing in December 2019 and 2022, respectively. New tax rules and local content standards implemented by the Indian government are factors in the delay. Stratas will continue monitoring regulatory and taxation developments and assess potential impacts on projects in the region.


The U.K. launched its 31st offshore licensing round in the high-impact frontier regions. A total of 1,766 blocks covering 370,000 sq km are open for bidding. The blocks offered include numerous frontier areas with little or non-existent drilling history, located off the west of Scotland, in the East Shetland and the Mid North Sea High areas, parts of the English Channels and South West Approaches. As such, authorities appear interested in encouraging further exploration activity in frontier areas, a likely response to stanch concerns over low levels of offshore exploration. Stratas’ country level production forecast also shows that crude production in the U.K. North Sea is expected to decline beginning in the early 2020’s. While getting a good early bead on buyer sentiment is difficult at best, it is safe to say that prospective buyers will likely view the frontier areas as less attractive when compared to mature regions due to perceptions of asset and investment risk and uncertainty in the long-term.

Middle East

Abu Dhabi National Oil Company (ADNOC) awarded China National Petroleum Corporation (CNPC) a $1.6 billion contract to conduct the world’s largest continuous 3-D onshore and offshore seismic survey covering up to 53,000 sq km for both onshore and offshore areas. The survey is scheduled to be completed by 2024 and fits with the UAE’s 2030 “smart growth strategy”.

Russia and CIS

The Caspian and CIS region were both busy with upstream project developments. Lukoil took final investment decision (FID) on its Rakuschechnoye project in the Russian Caspian Sea. The project will be developed as a subsea tie-back to the Vladimir Filanovsky platform. In Azerbaijan, BP started gas production from Shah Deniz Phase-2 project in the South Caspian. In addition, Total awarded Absheron EPS a subsea installation contract to Saipem in Caspian Sea offshore Azerbaijan with first gas targeted for early 2020.


Eni made oil discoveries on Faghur basin with SWM B1-X well in Egypt at the depth of 14,839 ft. High exploration and production potential from deep geological sequences is anticipated. In addition, Savannah Petroleum made a third consecutive oil discovery at its Agadem Rift basin prospect. Further development plans will depend on production test results. Stratas anticipates additional drilling announcements soon.

Featured project developments in Africa include new discoveries at Alho, Cominhos and Cominhos East fields in the Kaombo. These projects are set to be developed as tie-backs to the Kaombo North FPSO, which is due to come online soon. Stratas forecasts the Total operated Kaombo project could produce about 660 MMbbl of oil from multiple fields in Block 32 offshore Angola.

Eni also made several important developments in Africa as well. Eni started gas production from the Bahr Essalam Phase 2 project offshore Libya, which is projected to increase production by about 400 million cubic feet per day to 1.1 billion cubic feet at Bahr Essalam. Eni also started gas production in the Sankofa-Gye Nyame field recently via the John Agyekum Kufuor FPSO. Gas production followed after first oil production on this location by more than a year.

Xiangyu Mu is senior analyst, upstream at Stratas Advisors. She can be reached at