Schlumberger’s full year 2015 revenue decreased 27% year-on-year to $US35.5 billion ($A50 billion) as its customers slashed investment.
Its operations onshore US had been hit particularly hard, so the company announced more sackings, adding to the 34,000 workers left jobless since November 2014, but apparently upstream investments are quarantined from its aggressive cost-cutting.
So now the company is getting set to cosy up to the UK-based Ophir in Fortuna FLNG, the African nation’s first LNG development and Africa’s first deepwater independent LNG project.
Ophir is working on a deal with Schlumberger that could result in the London-listed company being carried to first gas.
The two parties have so far agreed on a non-binding heads of agreement which would see Schlumberger repay 50% of Ophir's past costs to earn a 40% stake in Block R and pay the expected $240 million to develop the project.
Fortuna entered front-end engineering and design in July 2015 and a final investment decision is expected in mid-2016 with the first gas forecast for mid-2019.
The field is expected to produce 2.2 million tonnes per annum.
Ophir has an 80% working interest with the EQ government owning 20%.
Fortuna sits within the Block R licence, in the south-eastern part of the Niger Delta complex.
There have been seven commercial discoveries to date in Block R, five of which were made by Ophir for a total of 3.4 trillion cubic feet.
An FLNG development concept was selected because the gas discovered in Block R is biogenic and as a result is around 99% methane, with no contaminants or heavier hydrocarbons and requires little topside processing.
Fortuna is targeting selling gas into Europe, and its owners believe it will be competitive with cheap US gas at around $US7/MMbtu.
Ophir intends to convert a Golar LNG-owned tanker for its first FLNG facility which will be capable of treating 330 million cubic feet per day over 30 years.
Golar, the project midstream partner, recently signed a memorandum of understanding with Schlumberger to cooperate on developing greenfield, brownfield and stranded gas reserves, of which Fortuna could be the first.
According to the MOU, the two companies agreed to jointly offer LNG production solutions to customers, investors and governments, stands in the company’s statement.
Golar LNG will provide the FLNG technology with Schlumberger providing upstream development knowledge, resources and capital.
Ophir recently signed a heads of agreement for offtake from Fortuna with six counterparties in European and Asian markets.
It says it can sell the full 2.2MMtpa “many times over”, and the potential off-takers are prepared to prepay 30-50% of the early gas.
At the same time Ophir revised down the costs to first gas from $800 million to $600 million based on recent input from the ongoing upstream FEED work.
Elsewhere, Ophir has announced that it is high-grading its portfolio, by relinquishing eight non-core exploration acreage in Africa and Asia, in order to focus on nearer term projects such as its gas project in Tanzania and its new Indonesian production.
It has also agreed terms to enter new licences in Cote D’Ivoire and Malaysia, subject to final approvals.
The company has some $360 million of net cash.