Since our last issue, attention has turned toward the application of AI in the workplace, particularly in the fun of experimenting with ChatGPT. The potential of AI has set boardrooms ablaze, but debate has also heated up over the potential risks and limitations of the technology. Practically, what are the implications of AI? We speak to industry insiders to find out. 

But in oil and gas, fire is an everyday reality. We take a look at the initiatives aiming to reduce flaring, and the technologies enhancing fire safety. 

Elsewhere, we look at the controversy around Adnoc’s CEO as he hosts COP28, and how efforts to decarbonise aviation mirror events in oil and gas. Also this month, GlobalData provides information on cybersecurity trends. 

Find all this in your edition of Offshore Technology Focus, free, online, now.

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Notably, robotics was one of the most frequently referenced themes in Q1 2023, ranking highest in terms of mentions, ahead of internet of things and cloud, according to GlobalData.

Of the top leading companies in the oil & gas industry, PTT Exploration and Production Public had the greatest increase in references for robotics in Q1 2023, compared with the previous quarter. GlobalData identified 57 robotics-related sentences in the company's filings - 100% of all sentences - and an increase of 1300% in Q1 2023 compared with Q1 2022. TotalEnergies’s mentions of robotics rose by 100% to 1.

GlobalData’s Company Filings Analytics also applies sentiment weight to reference sentences, based on whether the sentences are positive, negative, or neutral. Starting at 100 in 2020, an index over 100 is more positive. The overall index for robotics in Q1 2023 was 110.

To further understand GlobalData's analysis on report Robotics in Oil and Gas – Thematic Intelligence, buy the report here.

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“We are moving one step at a time toward prosperity, economic growth and energy security & affordability,” said Sharif in a tweet. “This is the first ever Russian oil cargo to Pakistan and the beginning of a new relationship between Pakistan and Russian Federation.” 

The oil, which arrived on Sunday, is due for discharge on 12 June. Following the implementation of sanctions by Ukrainian allies, Russia has turned to other countries as potential export markets. 

Pakistan’s Finance Minister Ishaq Dar announced in October last year that the country was considering buying discounted Russian oil, pointing to the fact that India had been buying Russian oil, so Pakistan too, “had a right [to do so]”. 

Pakistan made its first oil order in April under a deal between Islamabad and Moscow. Following the first transaction, imports are expected to reach 100,000 barrels per day (bpd) if the first deal is successful.  

Pakistan Refinery will refine the oil in the first instance, followed by Pak-Arab Refinery and others. 

Pakistan is experiencing a period of economic crisis, worsening an ongoing energy shortage. The country has been forced to shut a number of power plants due to oil and gas shortages. Citizens have also been affected after restaurants and markets were forced to close under the energy conservation plan announced in January. 

Currently, 80% of Pakistan’s oil requirements are met by imports from Gulf and Arab suppliers including the UAE and Saudi Arabia. This equates to 154,000bpd. 

Russia exported more oil in April than in any month since the invasion of Ukraine last year. Nonetheless, Russia’s federal budget revenue for oil and gas fell by 36% in May this year, when compared with the same period last year. Russian ministers have admitted that there is a problem with energy revenue. 

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Acquired for $3.7m plus shares in 2020, the UK-based company will receive $22.5m in exchange for 50% of shares in the vessel’s holding company, Prosperity Petroleum FZE. This means shares in Caspian Sunrise itself are protected from dilution. The buyer is Seychelles-registered company Stepping Stone Investments.

The Caspian Explorer is specialised for operations in the shallow north end of the Caspian Sea, where standard rigs cannot function. Since its purchase, the barge had been carrying out a contract with North Caspian Operating Company to complete safety works on its operations.

Caspian Sunrise stated that in 2022, the vessel generated no revenue at a cost of $850,000. In 2021, the company valued 100% of the barge at $3.6m. In March 2023 however, the Caspian Explorer acquired its first drilling contract. This likely led to the current $22.5m purchase price for 50% of the shares.

The Isatay Operating Company will utilise the vessel for the drilling of a well at a depth of 2,500m, with drilling set to begin in 2024. Isatay is a joint venture between Italy’s ENI and Kazakh state oil and gas company KazMunayGas.

Caspian Sunrise stated at the time it expected to bring in $15m in revenue from the drilling over the expected two-month process. Provisions have been set in the contract for a second identical well to be drilled at the same $15m terms if the first is successful.

Clive Carver, Caspian Sunrise Chairman, stated: “We are naturally pleased that our faith in the Caspian Explorer will result in a significant influx of funding to further develop the Group’s assets without any dilution to shareholders.”

The statement from the company notes issues with the provision of well equipment recently. As a result of sanctions against Russia, Caspian Sunrise has had to procure the equipment from China, necessitating longer delivery times.

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The reactivation of the refinery, which stopped nearly a year ago, is an important step in addressing the current fuel scarcity in the South American nation.

Following a €100m ($107m) agreement with the state-owned Iranian National Company of Petroleum Refining and Distribution (NIORDC), El Palito is undergoing significant renovation and expansion work.

According to plant employees, the fluidised catalytic cracking (FCC) unit of the plant, which has a 146,000 barrel per day (bpd) production capacity, has already started producing 20,000bpd.

Legislator Willian Rodriguez told Reuters that by Monday (12 June), the facility should be fully operational.

Unstable operations and frequent shutdowns of the county’s refining infrastructure have led to fuel shortages over recent years.

Venezuela has been working with Iran to gain access to fuel and diluents, which is refined into export-grade oil.

Since 2020, Tehran has also been supplying parts to repair Venezuela’s 1.3mbpd oil refining system.

Earlier this month, it was reported that Trinidad and Tobago had reached out to the US government to amend the Dragon gas project license.

The PDVSA-owned Dragon project, which is close to the maritime border between Venezuela and Trinidad and Tobago, was supposed to begin production more than ten years ago, but it was delayed by US sanctions and  lack of sufficient funds.

It is estimated that the Dragon field could hold up to 4.2 trillion cubic feet of gas.

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The Indian company plans to double its investment in the free zone and set up a new multifunctional oil refinery.

According to the HFZA, the new unit will have the capacity to produce 10,000 barrels of oil daily and up to 3.6 million barrels per year.

Under the agreement, Infinite will lease 200,000ft^² of land to construct its facilities.

The company anticipates that the expansion will significantly increase its storage capacity to meet the rising demand for its services and products.

HFZA director Saud Salim Al Mazrouei said: “Infinite’s new facility will be a significant addition to the emirate’s burgeoning economic landscape through its production volume, which caters to the demand for energy products and derivatives for both existing and future industrial projects.”

Infinite has been operating in the free trade zone since 2018.

Infinite Mining & Energy FZE managing director Bilal Merchant said: “HFZA’s strategic geographical location aligns perfectly with our company’s specialities in the petrochemical, metallurgy, and energy sectors, enabling us to maintain direct interactions with leading manufacturers both locally and globally.”

The new facility is anticipated to generate over 100 job opportunities for technicians and labourers once it is finished.

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There are 635 active LNG tankers operating worldwide, around 100 of which launched in the past three years, shows data from GlobalData, Energy Monitor’s parent company. Such is the boom in LNG demand that energy companies have planned for a further 524 tankers, which would double the world’s total LNG carrying capacity. 

By 2028, all the world’s planned LNG tankers are set to be in operation. At that point, there would be more LNG tankers in operation than oil VLCCs (very large crude carriers) and ULCCs (ultra-large crude carriers). There are 772 active VLCCs and ULCCs globally, with a further 200 planned and set to be completed by 2028.

Is this near-doubling of LNG tankers in just a few years emblematic of overzealous industry expansion? The available evidence suggests this may be the case. 

Analysts have already argued that the rapid expansion of LNG liquefaction and regasification facilities creates a risk of LNG oversupply. In a recent policy briefing, for example, the Institute for Energy Economics and Financial Analysis (IEEFA) points out that Europe’s LNG terminal import capacity could grow from 270 billion cubic metres (bcm) at the end of 2022 to 400bcm by 2030, based on current plans. Annual European demand for LNG is, however, expected to be between 150bcm (IEEFA) and 190bcm (S&P Global Commodity Insights); in other words, less than half of what Europe's import capacity would be.

“It is dawning on us that there is likely to be too many LNG facilities in development,” Henning Gloystein, director of energy, climate and resources at the Eurasia Group, told Energy Monitor in April. “There is going to be an enormous glut of facilities in Europe, because so many governments want to have their own facilities to ensure they have security of supply.” 

Extreme LNG price volatility in recent years has also lowered the prospect of natural gas being a viable “transition fuel” for emerging markets to move away from coal – particularly when the levelised cost of renewable electricity is often much cheaper by comparison.

“[M]omentum behind natural gas growth in developing economies has slowed, notably in South and South East Asia, putting a dent in the credentials of gas as a transition fuel,” said the International Energy Agency in its most recent World Energy Outlook. Asian markets including Pakistan (-27%), China (-19%), Bangladesh (-16%) and India (-15%) all recorded steep declines in LNG demand in 2022, as cargos were redirected to European nations that were willing to pay a higher price. 

All of these factors create uncertainty around the long-term prospects of major growth in global LNG demand – which raises doubts over whether the world will really need to double its fleet of LNG tankers in just a few years.

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The wells are located in production licence 873, in which Aker BP holds an operatorship stake of 47.7%, Equinor 40% and PGNiG Upstream Norway 12.3%.

Following drilling to a depth of 2,029m, the 25/2-24 S well (Øst Frigg Beta) identified a 12.5m oil column in the Frigg Formation in a sandstone reservoir totalling 117m, with reservoir quality being very good to extremely good.

Terminated in Eocene sandstone layers in the Frigg Formation, the well was not formation-tested. However, data acquisition and sampling have been carried out.

The appraisal well 25/2-24 A (Øst Frigg Beta), which was drilled to a measured depth of 5,156m, showed a continuous oil column up to 20m thick. It indicated an oil/water contact at 1,945m below sea level.

Drilled to a measured depth of 4,078m, the appraisal well 25/2-24 C (Øst Frigg Alfa) validated oil in the Alfa structure. The well’s oil/water contact is anticipated at 1,949m below sea level.

Following the drilling, the appraisal well 25/2-24 B (Epsilon) identified a continuous oil column about 14m thick with overlying gas cap of up to 30m in the Epsilon structure.

NPD said in a statement: “Here too, the Frigg Formation exhibited very good to extremely good reservoir properties. The gas/oil contact was encountered 1,935m below sea level and the oil/water contact was encountered at 1,949m below sea level.”

As per the preliminary estimates, the total volume of the Epsilon and Øst Frigg structures ranges between 8.5 and 14.3 million cubic metres of recoverable oil equivalent.

The licensees plan to assess the deposits as part of the Yggdrasil area development.

The wells have been drilled using the Scarabeo 8 drilling facility. The drilling rig is now planned to drill wildcat well 6405/7-2 S in production licence 1005.

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The 170 hectares have been allocated on a ‘do not deal’ basis for a period of 12 months. This allows the company to progress a ‘concept select’ phase for the proposed liquefied natural gas (LNG) development.

Expected to utilise the low reservoir CO₂ gas from the Beetaloo Basin, the NTLNG project is due to start LNG production by 2030.

At the site, Tamboran plans to build an LNG project with an initial capacity of 6.6 million tonnes per annum, with the potential for future expansion.

This will be conditional on completion of the concept select study, successful Beetaloo appraisal and flow testing, and approvals from the government.

Tamboran Resources managing director and CEO Joel Riddle said: “Securing a strategic site at Middle Arm is a significant milestone for Tamboran and the Beetaloo Basin. The enormous scale of the Basin means that the low reservoir CO₂ natural gas has potential to deliver large and scalable volumes over the long term, not only for Australia’s East Coast gas market but also to international markets.

“Providing affordable natural gas to Australia and our regional partners is anticipated to enable a reduced dependency on coal-fired power generation, while delivering a significant reduction in global greenhouse gas emissions.

Tamboran intends to sanction the proposed LNG development by 2026 if it is deemed commercially viable.

Riddle added: “We are excited to be working closely with the Northern Territory Government in realising their vision for the Middle Arm precinct and transformation of the NT’s economy to reach A$40bn ($27.2bn) by 2030.”

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The company is also reducing its workforce in the UK as the operation is no longer competitive due to high taxes.

In November 2022, UK Prime Minister Rishi Sunak increased the Energy Profits Levy (EPL) from 25% to 35% on oil and gas companies, thus bringing the total taxes on the sector to 75%.

Effective until March 2028, the tax applies to profits made from oil and gas extraction in the UK.

However, last week, the UK Government announced its decision to scale back the windfall tax on oil and gas producers in case global energy prices drop to a certain level.

An Apache spokeswoman was quoted by the news agency as saying in an email: “We are reassessing our investments, as we consider the challenging UK macro environment with its increasingly costly and burdensome tax and regulatory regime.

“Given the business climate for the oil and gas industry in the UK, these assets have become less competitive in comparison to the rest of our portfolio.”

As per the latest windfall tax, suppliers will only pay 40% in tax in case oil prices fall to, or below, £56.91 ($71.40) per barrel for a period of three consecutive months. For gas suppliers, the rate is set at £0.54 per term.

Earlier this year, Reuters reported that UK-based company Harbour Energy plans to cut jobs due to the windfall tax imposed on the oil and gas sector.

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