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Offshore Oil Is On The Brink Of Collapse

Offshore Oil Is On The Brink Of Collapse

The COVID-19 pandemic has had…

Oil Market Could See Long Term Contango

Oil Market Could See Long Term Contango

The oil market could stay…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

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Oil Majors Converging Here Could Mean A New Hotspot

Even with oil at $30, the petroleum industry continues to see a few bright spots. Particularly when it comes to offshore activity — such as Shell this week announcing the first natural gas production from its ground-breaking Corrib field off the northwest coast of Ireland.

And this week also saw another unexpected event in the offshore sector — halfway around the world in South America.

That came in Uruguay. Where major European producer Statoil announced a surprise farm-in on one of the world’s up-and-coming exploration areas.

Statoil said Monday that it will acquire a 15 percent interest in block 14, majority-owned by Total in the offshore of Uruguay, just south of Brazil (map below). Related: This Could Be A Big Setback For Iran’s Oil Export Plans

Related: Russia Cries Dyadya (Uncle), Is Saudi Arabia Listening?

Statoil is acquiring a 15 percent interest in block 14, offshore Uruguay (source: Offshore Magazine)

This is an interesting deal, given that most major E&Ps are cutting back spending on new projects right now. Showing that Statoil must see something it finds very attractive here — especially given this is a major stepout from the company’s core operating area of the North Sea.

That something could be results from 3D seismic surveys recently completed by Total over block 14. Which are perhaps showing some sizeable leads on drilling targets here.

The other partner currently involved in the block is ExxonMobil — showing that a range of majors are converging in this part of the world. Related: Iran Looking To Ramp Up More Than Just Oil Production

The prize here could be something similar to recent offshore mega-discoveries in Brazil, given that the Uruguay blocks are located just south of those basins. With Uruguay perhaps being a more attractive way into such plays at the moment, after scandals and corruption have swept over the Brazilian petroleum sector the last few months.

The first drilling at block 14 is expected within a few months, meaning we won’t have to wait long to see what the potential might be here. Watch for results from this emerging district.

Here’s to going down south

By Dave Forest

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