(EnergyAsia, July 30 2012, Monday) — A Sinopec subsidiary has agreed to partner Talisman Energy to develop the Canadian firm’s North Sea assets while two other Chinese state-owned companies, CNOOC and CNPC, have signed upstream agreements with Royal Dutch Shell.
Sinopec International Petroleum Exploration and Production Corp will pay US$1.5 billion to acquire a 49% stake in Aberdeen-based Talisman Energy UK Limited (TEUK) which holds interests in 46 fields, and operates 11 offshore installations and an onshore terminal.
The joint venture plans to invest to improve ongoing operations as well as undertake drilling, exploration opportunities and major projects including extending field life and deferring decommissioning.
TEUK will operate the assets while Sinopec will appoint personnel into key positions within the organisation.
John A. Manzoni, Talisman Energy’s President and CEO, said the deal will enable it to undertake the next phase of development of its UK North Sea assets.
“This will provide additional resources and energy on the ground. Collectively, we will invest more in the UK than Talisman would have on its own, leading to a stronger, more sustainable business.
“Talisman has delivered on two key promises for the year. We are reducing our working interest and capital spend in the UK business by approximately half, allowing us to focus on and fund growth areas within our portfolio. This brings our total divestment proceeds to approximately US$2.5 billion so far this year. We plan to utilise approximately US$500 million of the proceeds from this sale to repurchase shares.”
Separately, Shell said it has signed two offshore production sharing contracts (PSCs) with CNOOC, and an amended PSC with CNPC to develop a new phase of the Changbei gas field in China. Shell has also agreed to admit CNOOC as a partner in two of its exploration blocks off the coast of Gabon in West Africa.
The two offshore oil and gas PSCs with CNOOC are for blocks 62/02 and 62/17 in the Yinggehai Basin. Shell, as operator, will apply advanced seismic acquisition and processing technologies to conduct 3D seismic data surveys in the Yinggehai blocks.
Shell said it will cover the costs for the acquisition of seismic data and will use advanced drilling technologies to drill exploration wells during the exploration phase. Shell will hold a 100% working interest during the exploration phase that will be reduced to 49% in any eventual development phase, with CNOOC as majority partner.
For Shell, the onshore tight gas PSC amendment with CNPC represents a new phase to develop the existing Changbei block with 1,692.5 sq km in the Ordos Basin and scope for additional tight gas sands reserves.
Subject to government approval and pending the outcome of the appraisal campaign, this additional project could boost Changbei’s current production plateau of 320 mmscf/d.
CNOOC will acquire from Shell a 25% participating interest in the exploration blocks BC9 and BCD10 off the coast of Gabon.
CNOOC will reimburse Shell for 25% of certain past exploration costs and carry part of the future exploration costs. Shell will remain operator with 75% interest. The agreement is subject to government approval.