Exploration & Production

QatarEnergy has expanded its stakes in offshore Namibia blocks. (Image source: QatarEnergy)

QatarEnergy is expanding its international upstream footprint with the acquisition of additional interests in Namibia

QatarEnergy has signed an agreement with TotalEnergies to acquire an additional 5.25% interest in block 2913B (PEL 56) and an additional 4.695% interest in block 2912 (PEL 91), in the Orange Basin, offshore Namibia.

Subject to customary approvals, QatarEnergy’s participating interests in both licenses will increase to 35.25% in block 2913B and 33.025% in block 2912. TotalEnergies (the operator) will hold 45.25% in block 2913B and 42.475% in block 2912. The two blocks are located around 300 km offshore Namibia, in water depths ranging from 2,600 to 3,800 m.

The other partners in the two licenses are Impact Oil & Gas, holding 9.5% in each of the two licenses and the National Petroleum Corporation of Namibia “NAMCOR”, which holds10% in block 2913B and 15% in block 2912.

His Excellency Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the president and CEO of QatarEnergy, said, “We are pleased to expand QatarEnergy’s footprint in Namibia’s upstream sector. This agreement marks another important step in working collaboratively with our partners towards the development of the Venus discovery located on block 2913B.”

The A1-96/3 well is located around 35 km from the Wafa field. (Image source: Adobe Stock)

Eni and BP have resumed their exploration activities in Libya after halting drilling operations in the onshore region in 2014, according to Libya’s National Oil Corporation (NOC)

This follows the formal revocation of force majeure status by Eni and NOC in August 2023 on exploration areas A&B (onshore) and C (offshore), where Eni is operator with 42.5% along with bp (42.5%) and Libya Investment Authority (15%), as a result of a favourable security assessment. Some of these areas are close to the Wafa gas facilities that export production to Italy.

On October 26, Eni began its exploration activities in the Area B (96/3) of Ghadames Basin, where the first exploratory well, A1-96/3 (Hasheem Prospect), was drilled. This well is the first under the contractual obligations for Area B in Ghadames Basin, according to the Fourth Bid Round Contract of 2007. Mellitah Oil & Gas, which has extensive experience in the region, particularly in developing and managing the Wafa field, is overseeing the drilling operations and all related activities for this well.

Several promising geological formations in the A1-96/3 well are set to be tested, which are expected to contain both oil and gas. The well is projected to reach a final depth of approximately 3,147 m.
The A1-96/3 well is located around 35 km from the Wafa field and approximately 650 km from the capital, Tripoli.

Eni is the leading international gas producer in Libya, where it has been operating since 1959, and currently has a large portfolio of assets in exploration, production and development. Production activities are operated through the joint venture company Mellitah Oil and Gas BV (Eni 50%, NOC 50%).

Repsol and OMV are also set to restart operations sin the Murzuq Basin and Sirte Basin respectively, NOC says.

Onshore Middle East is the cheapest source of new production, with an average breakeven price of just US$27 per barrel. (Image source: Adobe Stock)

Onshore Middle East is the cheapest source of new oil production, as the cost of developing new upstream oil projects continues to rise, according to new research from Rystad Energy

According to Rystad Energy, the average breakeven cost of a non-OPEC oil project grew to US$47 per barrel of Brent crude, a 5% increase in the last year alone, thanks to inflationary pressure and supply chain issues. Offshore deepwater and tight oil projects remain the most economical new supply sources, with oil sands still the most expensive.

The report found that onshore Middle East is the cheapest source of new production, with an average breakeven price of just US$27 per barrel. This segment also boasts one of the most significant resource potentials. Offshore shelf is the next cheapest (US$37 per barrel), followed by offshore deepwater (US$43) and North American shale (US$45). Conversely, oil sands production breakevens average US$57 per barrel, but can go as high as around US$75.

Cost pressures

"Rising breakeven prices reflect the increasing cost pressures on the upstream industry. This challenges the economic feasibility of some new projects, but certain segments, including offshore and tight oil, continue to offer competitive costs, ensuring supply can still be brought online to meet future demand. Managing these cost increases will be critical to sustaining long-term production growth,” said Espen Erlingsen, head of Upstream Research at Rystad Energy.

As well as breakevens, average payback for new projects, internal rate of return (IRR) and carbon dioxide (CO2) intensity are vital metrics for evaluating new oil development economics. The tight oil sector’s payback time is just two years, assuming an average oil price of US$70 per barrel, illustrating how quickly operators are recovering their investments. Payback time is closer to 10 years or more for the other supply segments. Tight oil also leads the pack in terms of IRR, with an estimated IRR of around 35% in the same average oil price scenario. Conversely, oil sands, the most expensive supply source, has the lowest IRR of approximately 12%.

Over the last three years, the average CO2 intensity for tight oil has been 14 kilograms per barrel of oil equivalent (kg per boe), while deepwater has a slightly higher average CO2 intensity of 15 kg per boe. The oil sands sector again falls behind the other segments, with the highest future estimated emissions at around 70 kg per boe.

Onshore Block 2 is Petronas Abu Dhabi's third exploration concession. (Image source: Adobe Stock)

PETRONAS Abu Dhabi, subsidiary of Malaysia’s PETRONAS, has been granted a new oil and gas exploration concession in Onshore Block 2, by the Supreme Council for Financial and Economic Affairs (SCFEA)

Under the agreement, PETRONAS Abu Dhabi will hold 100% equity and become operator of the concession.

The Onshore Block 2, located within the Al Dhafra region of Abu Dhabi, covers an area of more than 7,300 sq. km and is PETRONAS Abu Dhabi’s third exploration concession, following the Unconventional Block 5 in 2024 and the Unconventional Block 1 in 2022. it is thought to have both conventional and unconventional potential. 

This concession award comes after the successful completion of Abu Dhabi’s first and second exploration concession bid rounds launched in 2018 and 2019, resulting in the award of 11 blocks to leading international partners in the energy sector.

“We are excited about this new venture and extend our deepest gratitude to SCFEA for their unwavering trust and collaboration. This endeavour broadens PETRONAS Upstream’s portfolio in Abu Dhabi, incorporating both unconventional and conventional resources, offering potential for exploration growth,” said PETRONAS executive vice president and chief executive officer of Upstream, Mohd Jukris Abdul Wahab.