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Ticking upwards in the Middle East Montney shale play from Kelt Exploration for
An increase in commercial activity in the Mid- around $375mn, plus the assumption of roughly
dle East this week provided further evidence $30mn worth of financing obligations for associ-
that the sector is on its way towards recovery. ated infrastructure. (See: ConocoPhillips expands
In the UAE, China’s CNOOC joined Abu Dha- in Montney, page 9) The acquisition, in the liq-
bi’s Lower Zakum consortium just as signs uids-rich Inga-Fireweed asset directly adjacent
were emerging that ADNOC would resume to ConocoPhillips’ existing Montney position,
offshore contracting activity. The growing role comprises roughly 140,000 net acres (567 square
of Chinese companies in the Emirati oil and km). The deal will bring ConocoPhillips’ total
gas sector has been emphasised by CNOOC’s Montney footprint to 295,000 net acres (1,194
entry to the Lower Zakum, Umm Shaif and Nasr square km).
concessions. The Montney is primarily known as a gas
Meanwhile, Chevron agreed to buy Noble play, and though this acquisition consists of
Energy for $5bn in stock in the first major deal both gas and liquids, it may indicate gas coming
of the current oil downturn, providing the major back into favour with producers – as Chevron’s
with a foothold in Israel. Buyers may be attracted forthcoming merger with Noble also does. This
by bargain prices, but appetite has been muted in is more of a longer-term trend, however.
recent months. In the short term, meanwhile, the US saw
In another sign of stability, Iraq took steps its first increase in the active oil rig count since
towards resuming crude oil exports to Jordan, mid-March. But the increase was a marginal one,
starting with trucked cargoes ahead of longer- with Baker Hughes’ data showing the number of
term and broader pipeline plans. As cross-bor- oil-focused rigs had risen by one in the week up
der trade edges towards normality, optimism is to July 24 and, given a drop of three in the gas rig
growing that contracting and M&A activity will count over the same week, there was still a slight
begin to ramp up again. net decline. (See: Oil rig count inches up instead
If you’d like to read more about the key events shaping of another fall, page 11) At the basin level, both
the Middle East’s oil and gas sector then please click the Permian Basin, Eagle Ford and Granite Wash
here for NewsBase’s MEOG Monitor. regions saw slight increases in the oil rig count.
And while these were cancelled out by declines
Not all bad news in North America in the number of gas rigs, they are being held up
Last week’s news that Chevron was buying as a reason to be cautiously optimistic about the
Noble Energy for $5bn was followed by other start of a gradual recovery.
positive developments in North America. First, At the same time, though, second-quarter
another acquisition – solely involving acreage results announcements are looming, and prom-
and smaller than Chevron’s deal, but still sizea- ise to be largely negative. Indeed, oilfield ser-
ble nonetheless – was announced. Then the latest vices leader Schlumberger reported a net loss of
Baker Hughes oil rig count edged up for the first $3.4bn on July 24, and eyes are now turning to the
time since March. upstream players as they prepare for their own
ConocoPhillips said on July 22 that it was second-quarter earnings releases. (See: Schlum-
buying additional acreage in Western Canada’s berger posts weakest sales in 14 years, page 16)™

The US has seen a first
increase in its active rig
count since mid-March.

P8 www. NEWSBASE .com Week 30 30•July•2020