Member Info for Exploration

Well, if TE9 is a failure JP should use the famous words of Sir Richard Mottram. If you are unfamiliar with his outburst check this link. https://www.telegraph.co.uk/news/uknews/1395782/Mottrams-oath-laden-prediction-comes-true.html

2227 Remember the Goldman Sachs guy who predicted 200 dollar oil? https://www.nytimes.com/2008/05/21/business/21oil.html

Wizard Morocco public holiday on Tuesday 1st May All drilling suspended. Circulating bottoms up until Wednesday.

Dulwichman No problem. I�ve followed Georgia since CanArgo and JKX in the Shevardnadze era and have to say Frontera has done the best they can with limited resources. Geologically the Kura Basin has tantalized geologists for decades. There is oil and gas seeping to the surface, but no reservoirs which come close to the paleo-Volga delta quality in Azerbaijan. Even where the Kura Delta enters the Caspian the Miocene reservoirs around Neftechala are clogged with volcanic minerals carried down from the west. As you know Georgia can take gas in kind from the South Caucasus Pipeline so I cannot see BP pumping Azerbaijans gas into Georgia and exploring for difficult gas at the same time. Commercially its is probably less risky and cheaper to supply gas from Shah Deniz where a single well can supply four times Georgias gas demand. Exxon arrived late in Azerbaijan and gave up on their only offshore operated project, but then teamed up with TPAO in the Black Sea. So they will look at Georgia from the west.

Dulwichman Thanks for the post. Apart from the geology of this part of the Caspian there is a parallel story here on D230. If you look where it is located on a map it is in the north east part of Azerbaijan sector of the Caspian Sea. Azerbaijan, Russia and Kazakhstan have bilateral agreements between one another based on what they call Modified Median Lines which actually skirt the subsurface statures when projected up to the sea bed. But Turkmenistan and Iran are still in discussion. Under Azerbaijans guidance BP took on the Alov, Araz,Sharg Contract Area to peg out Azerbaijans claim in the south east of their sector. The idea was that possession was 90 percent of the law, and so it is today. Iran scared off a survey vessel at one point which froze activity until now. D230 is similar, especially endorsed by UKs PM. Russia will not object because there is a bilateral protocol in place between Moscow and Baku. But the agreement with BP is a gesture of jurisdiction by Azerbaijan as well as a business opportunity for BP. If there is tension SOCAR simply needs to invite Rosneft or Lukoil to join the D230 party, just like they involved Iran in Shah Deniz to balance interests.

WT Italian drillers tradition is to celebrate Infepence Day by slipping the drilling line at midnight irrespective of how many ton miles it has run. After that the entire mud system will be changed out for good luck and the rig geologists will scrub the inside of the tanks clean. Meanwhile the divers will be overboard collecting limpets from the hull for a fish stew served with chianti in the evening. It’s all part of summer oil patch madness with Ramadan starting in couple of weeks and then Norwegians shutting down their sector of North Sea until September while they go on holiday. It’s a hard life!

Thanks The Chariot leadership and techies are first class. If you look at their last corporate update you can see a neatly laid out prospect inventory which is type of thing sadly lacking in eastern Morocco - mentioning no names!

WizzardTaffy So you never worked with ENI or Total?

Yes - a holder The only non-hyped Moroccan share in living memory.

Yes But ENI is shut down and they must agree any wording with Onhym and Chariot. For ENI this is just another well.

Independence Day public holiday in Italy tomorrow. All drilling work suspended until Thursday

http://oceancurrents.rsmas.miami.edu/atlantic/canary.html It is the Canary Current. A cold current which also causes upwelling of nutrient and is one reason for the prolific fishing industry in this part of the Atlantic

Oilmajor 123 You are spot on. I am afraid our friends at the UK Oil and Gas Authority (OGA) really are not providing the incentives the industry needs. Norway had a similar problem About 10 years ago and faced a similar problem to the UK � a slowdown in exploration. For a country so reliant on oil and gas revenues, that had implications for its state finances. Norway solved the problem through taxation. Production taxes 78 per cent: but oil companies benefit from a 78 per cent rebate on every dollar spent on exploring in Norwegian waters. The tax refund idea led to a rapid pick-up in exploration drilling which led to more discoveries, such as Johan Sverdrup, Johan Castberg and Havis. Looking at a terminal decline in exploration, and therefore production and tax revenue, Norway turned it around, thanks to innovation and creativity in the fiscal regime The rebate has been very useful for minnows with little access to finance. There�s a limit to how much money they can raise to fund exploration but they can borrow against the refund. The result has been rising investment and discoveries. In contrast, our own OGA is taking a very British, technically led approach. Effectively polishing bricks, but with no uptick in exploration. Unfortunately, although industry may have made suggestions about how to make progress, it seems a combination of OGA and the politicians are unresponsive or busy on other things. I guess UKs petroleum sector is the ultimate PPI and not a cent of government money has been wasted or spent, except perhaps when the Labour gov't set up BNOC/Britoil!

billybigwig Glad you enjoyed it When I was a lad there were scary TV programmes about the world running out of oil. But now there is too much of the stuff and overall there is no shortage of energy in the world. In the oil shortage era of the 1970s BP branched out into coal in Indonesia and tar sands in Canada. There was even a group exploring for coal, whereas there are gazillions of tons already known about. That is how mad the world was in the 1970s. Long term, BP has recognised this for more than 20 years and now we are seeing the company adapt to the new reality. So BP will not enjoy share price fireworks of small cap explorers, but it will pay your rent for the next 30 or 40 years!

billybigwig On analysts predictions. Big oil companies develop projects which are very long term and usually exceed the lifetimes of governments and oil price cycles. So investors must stay with it for the very long term whereas the price of oil goes up and down daily. Analysts have set up their own advisory industry, but do they really help? A couple of years ago Mikail Fridman wrote an article in the FT entitled "Tricks of the mind turned oil into gold". He said that the oil price had remained high because people perceived there was a shortage. He said that we were probably facing a new phase in which people would not fear the end of oil. Today, if you look at BPs 2018 Energy Outlook, that is precisely what is happening. The future is gas, electricity and renewables. Fridman reckoned the post 100 dollar crash of the oil price symbolized to a certain extent the end of the era of economic development based on natural resources. Land, minerals, oil and gas, water and other resources were seen as the main components of national treasure. He advocated this was changing, although, of course, not overnight. So I completely agree with your strategy to sit back and relax for many years. If share price is low take the dividend in scrip. Otherwise, take it in cash. See link below. http://www.letterone.com/insight/tricks-of-the-mind-turned-oil-into-gold

Billybigwig It is pretty depressing, I agree. I think we need to take a wider view on the causes. Oil price has been pretty steady recently, BP is running on all cylinders as Bo Diddly said recently, so some believe it is the overall investment environment is the cause our share price woe. The first trigger for the market sell-offs in February was an employment report in the USA which said that job growth and wages are rising quickly. For Americans without stocks or a job, it was great news and Trump claimed it was all his doing with tax cuts, but Wall Street saw it as a big red flag that the Federal Reserve might soon raise interest rates, which could, in turn, choke off the wider economy. No comment from Trump on the crash! That is just one factor which scared investors around the world. As a commodity investor, I have suffered huge value loss as a result, although dividend returns have shot up because big commodity stocks are so cheap. Also, when politicians make economic changes for purely political reasons like the recent trade war stuff based on the steel and aluminium tariffs, they disrupt conventional analysis of supply and demand and cause big, unpredictable selloffs of commodity stocks, especially oil and gas. Relative to other Big Oil, BP price is down by a similar percentage which represents a buying opportunity in my view, but that is just my own strategy of only buying low. Most of the time it works, but it is not infallible!

wordog If we look back to CNRL origins it was specifically designed to prove UCG could work in UK. It was a brave move which only an entrepreneur like Algy Cluff could pull off. The UCG licences were mainly "offshore" but accessible from the coast with long reach wells so it was designed to avoid the challenges of pure onshore UK work. That is why Haliburton joined forces because UCG requires a good deal their expertise. As the UCG political storm clouds gathered, CNRL diversified into gas exploration in the UKCS as a back up. The Scottish Moratorium was actually aimed at fracking, especially when Ineos made a proposal to tie up the whole Midland Valley in the 14th onshore licensing round. If you recall, this was same time as when Jim Ratcliffe of Ineos had a showdown with Scottish Labour union lefties and threatened to close the Grangemouth plant. There were a few lines on the Scottish moratorium at the end saying , "oh, by the way, this applies to UCG too". So, despite the promise of a new stream of gas and syngas, the Jimmy Cranky Party went for the Green Vote north of the border. This is same lot who objected to closure of coal mines in previous years. It is really sad, because Scotland was the home of the petroleum industry where James Young retorted oil shale to produce kerosene for lighting and his friend Eugene Carless invented a fluid he called "petrol" which powered Daimlers first internal combustion engine in a boat. All this was before cars were invented! The original Haliburton MOU was extended to include conventional SNS projects but these are now "drill ready" so there is really no need to extend it. In other words, it is not mission critical and does not contribute to cash costs etc. So not a big deal if it expires, IMO.

Wordog; similar problem, because the Carboniferous in the 43/11, 43/12, 43/13 trend is Namurian age comprising sheet sands deposited in deeper water. Moving east towards Cygnus younger Westphalian rocks subcrop the Base Permian Unconformity. These reservoirs were deposited in shallower water, fluvial to deltaic conditions with plenty of ancient waves, currents and tides to act as gods great mining pan and sort the sand grains into nice clean reservoirs. Going west there is plenty of gas, such as in Breagh although choice of drilling fluid is vital to avoid damaging the formations and fraccing has been shown to work well.

caught out by spellchecker. in para 3; delay should read develop

Hello wordog As I understand it, the deep, horizontal well was drilled to penetrate a series of potential Carboniferous reservoirs which subgroup the Base Permian Unconformity. It was an important well because if it had found enough gas the production would extend the life of the Ravenspurn platform and pipeline system. The shallower Leman sandstone reservoir, which has kept the Ravenspurn area fields going, is nearly depleted. The challenge was to predict the lithology of the Carboniferous subcrop which is known to have gas from previous wells in the area, but only flowed enough for a barbecue. The same approach was used by Conoco to delay the Murdoch K, Hawksley, McAdam, Watt and Boulton gas fields to the east, although the Carboniferous in that area is Westphalian is younger than at Ravenspurn, shows up clearly on seismic and is much sandier. i.e. better reservoir. Although the result at Ravenspurn was disappointing it will have provided some calibration to the seismic at Ravenspurn and I expect right now someone in Dyce is trying to figure out what to do next.