YPF signs $1.2 billion contracts to add 15 rigs for Vaca Muerta shale

YPF, Argentina’s largest shale oil producer, has signed two contracts for a total of about $1.2 billion to lease 15 drilling rigs to develop the country’s Vaca Muerta shale formation.

The five-year accords adding rigs to the company’s existing 65 were signed with Norwegian Archer Ltd.’s DLS Argentina Ltd. unit, and Helmerich & Payne Inc., the Buenos Aires-based producer said today in an e-mailed statement. Helmerich & Payne, based in Tulsa, Oklahoma, will provide 10 rigs while Hamilton, Bermuda-based Archer will provide the rest. The contracts have an option for a three-year extension, it said.

YPF is pledging to invest $37 billion through 2018 and is seeking partners to develop Vaca Muerta, an area the size of Belgium that contains an estimated 27 Bbbl of shale oil, the world’s fourth-largest deposit. YPF said it has 19 rigs in Vaca Muerta’s Loma Campana area, which it is jointly developing with Chevron.

The first rig is expected to start operating during the fourth quarter of 2014, said Helmerich & Payne, the largest onshore drilling rig contractor in the U.S. The other nine rigs are expected to be deployed sequentially until reaching full capacity by the end of the second quarter of fiscal 2015, the company said.

The Loma Campana area has 130 wells producing 20,000 boed, YPF said.

Argentina is Latin America’s second most active driller, one rig behind Mexico, according to a Baker Hughes report published Feb. 11. Argentina’s count rose by 26 units, or 37.7%, in the report of active rigs for January.

Rigs in the Latin American region, which accounts for 11% of the global total, fell by 16% to 401, the report said.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Rice University lab’s device evaluates fluid movement in fracturing operations

A tabletop device invented at Rice University can tell how efficiently a nanoparticle would travel through a well, and may provide a wealth of information for oil and gas producers. The device gathers data on how tracers - microscopic particles that can be pumped into and recovered from wells - move through deep rock formations that have been opened by hydraulic fracturing.

Drilling companies use fracturing to pump oil and gas from previously unreachable reservoirs. Fluids are pumped into a wellbore under high pressure to fracture rocks, and materials called “proppants,” like sand or ceramic, hold the fractures open. "They' re basically making a crack in the rock and filling it with little beads," said Rice chemist Andrew Barron, whose lab produced the device detailed in the Royal Society of Chemistry journal Environmental Science Processes and Impacts.

But the companies struggle to know which insertion wells - where fluids are pumped in - are connected to the production wells, where oil and gas are pumped out. "They may be pumping down three wells and producing from six, but they have very little idea of which well is connected to which," he said.

Tracer or sensor particles added to fracturing fluids help solve that problem, but there' s plenty of room for optimization, especially in minimizing the volume of nanoparticles used now, he said. "Ideally, we would take a very small amount of a particle that does not interact with proppant, rock or the gunk that' s been pumped downhole, inject it in one well and collect it at the production well. The time it takes to go from one to the other will tell you about the connectivity underground."

Barron explained the proppant itself accounts for most of the surface area the nanoparticles encounter, so it' s important to tune the tracers to the type of proppant used.

He said the industry lacks a uniform method to test and optimize custom-designed nanoparticles for particular formations and fluids. The ultimate goal is to optimize the particles, so they don' t clump together or stick to the rock or proppant, and can be reliably identified when they exit the production well.

The automated device by Barron, Rice alumnus Samuel Maguire-Boyle and their colleagues allows them to run nanotracers through a small model of a geological formation, and quickly analyze what comes out the other side.

The device sends a tiny amount of silver nanoparticle tracers in rapid pulses through a solid column, simulating the much longer path the particles would travel in a well. That gives the researchers an accurate look at both how sticky and how robust the particles are.

"We chose silver nanoparticles for their plasmon resonance,” said Barron. “They' re very easy to see (with a spectroscope) making for high-quality data.” He said silver nanoparticles would be impractical in a real well, but because they' re easy to modify with other useful chemicals, they are good models for custom nanoparticles.

"The process is simple enough that our undergraduates make different nanoparticles and very quickly test them to find out how they behave," Barron said.

The method also shows promise for tracking water from source to destination, which could be valuable for government agencies that want to understand how aquifers are linked or want to trace the flow of elements like pollutants in a water supply, he said.

Barron said the Rice lab won' t oversee production of the test rig, but it doesn' t have to. "We just published the paper, but if companies want to make their own, it includes the instructions. The supplementary material is basically a manual for how to do this," he said.

Co-authors of the paper include Rice undergraduates David Garner, Jessica Heimann and Lucy Gao, and graduate alumnus Alvin Orbaek.

The Robert A. Welch Foundation supported the research.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.

Petrofac rises to 3-month high on $1.2 billion BP deal

Petrofac Ltd. rose to the highest in three months in London trading after the oil-services provider won a $1.2 billion contract from BP Plc in Oman.

Petrofac advanced as much as 4 percent to 1,383 pence, the highest intraday price since Nov 15. It’s up 12 percent in 2014.

BP awarded the engineering, procurement and construction contract for the central processing facility of the Khazzan gas project, London-based Petrofac said today in a statement.

“This contract is very much Petrofac’s bread-and-butter, an onshore gas processing plant in the Middle East,” Investec Bank Plc said in a note.

Separately, Ophir Energy Plc today said it signed a non-binding agreement with Petrofac to help develop a gas project off Equatorial Guinea.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By O'Niel Petroserve Nigeria Ltd, online.