INTERNATIONAL FOCUS

Africa:

Esso and Sonangol have signed the final production sharing agreement for Angola's deepwater Block 25. The block covers 1.2 million acres in water depths between 2,300 ft and 7,200 ft. Agip is the operator of the block with a 40% interest, with partners Sonangol (25%), and Esso (35%). The signing of this agreement gives Esso interests in seven deepwater blocks off Angola.

Angolan state-owned Sonangol is considering expanding its interests outside of Angola by exploring off the small nation of Sao Tome. The company holds a 40% interest in a local Sao Tome company, Empresa Nacional de Combusvels (ENCO), which has been operating solely in the marketing of oil products and the sale of bunker fuel. If approved by other partners including the government of Sao Tome (51% interest holder) and some local constituents, ENCO would begin exploration efforts in the country's waters.

Geco-Prakla has also been busy off Sao Tome by conducting a 62,000-sq-km seismic survey over the country's first 22 offshore blocks. This survey is part of a technical evaluation contract awarded to Mobil by the government. Geco is also reportedly surveying areas outside of Mobil's evaluation area.

Environmental Remediation Holding (ERHC) has signed a contract with TCI of the UK for the development and operation of an offshore oil and gas logistics center located off Sao Tome and Principe. The project will include the development of a teleport, the expansion of the country's air and heliport, the development of a deepwater port with drydocking facilities, the development of entrepot storage and petroleum support facilities, and the associated infrastructure. The development will be on a 1,200-acre site and will cost in excess of $50 million.

Hardman Resources of Australia has been awarded two blocks off Mauritania. The blocks, 2 and 6, lie to the north and south of the company's previously-awarded Blocks 3, 4, and 5. The blocks have been grouped into zones: Zone A (Block 3 and shallow water portions of Blocks 4 and 5), Zone B (deepwater portions of Block 4 and 5), and the new blocks, 2 and 6, comprise Zone C. The company has an agreement with British-Borneo and Woodside Petroleum for a 37.5% interest each in Zone C, a 35% interest in Zone A, and a 70% interest in Zone B.

Americas:

The US Department of the Interior's Minerals Management Service held its 56th lease sale for the Central Gulf of Mexico last month. Sale 172 had 3,807 blocks on offer covering about 20.37 million areas in the Central Outer Continental Shelf of the Gulf of Mexico. The blocks are located 3-200 miles offshore in water depths 4-3,425 meters. Of the blocks that were offered, 2,970 were in the deepwater. This sale was the fourth in which blocks in depth of 200 meters of more were eligible for royalty relief under the Deepwater Royalty Relief Act.

Energy Resource Technology has com pleted its second and third acquisition of mature oil and gas properties in 1999. The company purchased two offshore blocks from Vastar and five from Shell in separate transactions for an undisclosed amount. The areas are located from the High Island to Vermilion areas of the Gulf of Mexico in water depths ranging from 60 to 120 ft. The Vastar properties include two wells on two caisson structures in production and the Shell properties include 13 wells on three platforms and one caisson in production. ERT will take over as operator and well work is planned to increase production.

The MMS has reported that it is considering moving up the date for companies to submit bids for a proposed lease sale in the eastern Gulf of Mexico from March 2002 to December 2001. The sale, known as Sale 181, will include 1,033 blocks covering 5.9 million acres off Alabama and the Florida panhandle. MMS said that the sale might be moved up to coincide with the proposed Sale 181 in the central Gulf of Mexico.

Petrobras production is still rising. The company said its daily oil output, including production from its foreign operations, rose to 1.21 million b/d of oil, an increase of 26.3% from last year. Gas production also rose 15.5% to 33.3 MMcm over the past year. Production from its foreign subsidiary, Braspetro, is currently at 51,539 b/d and production from Brazil is 879,751 b/d of oil.

A four-company consortium operated by Petro-Canada has drilled the Hebron D-94 well in the Jeanne d'Arc Basin off St. John's, Newfoundland and encountered oil in the Ben Nevis Formation. The well was drilled to a TD of 2,105 meters and encountered 86 meters of net pay within a 92-meter interval in the formation. It tested at 3,500 b/d of 21° API oil. This well is the first planned for the Jeanne d'Arc Basin this year. The second well, South Nautilus H-09, is currently drilling seven km northeast of the Hibernia platform and is targeting the Ben Nevis and Avalon formations. In addition, drilling began last month on the White Rose area in the Grand Banks with Husky Oil serving as operator.

Asia-Pacific:

Esso Production Malaysia has begun production from the Tapis E oil platform off Terengganu, Malaysia. The company is developing the field under a production sharing contract entered into by Petronas with Petronas Carigali. Tapis E is the fifth platform to be installed on the field since its discovery in 1969. Tapis E is in 200 ft of water and produces from the western and southern regions of the field. Production is expected to peak at 25,000 b/d of oil.

Operator, Unocal, and 50% partner, Mobil, have confirmed the potential of the West Seno Field offshore East Kalimantan, Indonesia. The latest deepwater appraisal well flowed 19,344 b/d of oil and 18.6 MMcf/d of gas. The companies estimated recoverable reserves at 150 million boe. West Seno will be the first deepwater field the companies plan to develop on the greater Seno structure.

Western Geophysical has signed an exclusive contract with PetroVietnam for the marketing of the offshore Minh Hai non-exclusive seismic data off Vietnam. The data includes over 6,000 km of long-offset 2D seismic covering the South Nam Con Son basin. Also available are gravity and magnetic surveys covering the South Nam Con Son and Mekong Delta basins. Western now has collected over 30,000 km of non-exclusive 2D seismic data offshore Vietnam.

Central Asia:

A consortium of Bouygues Offshore and Saipem have signed a contract with Gazprom for the first phase of the "Blue Stream" gas pipeline project. The project involves constructing a pipeline from Dzhubga, Russia to Samsun, Turkey across the Black Sea. Bouygues will undertake the engineering of the main compression station in Russia as part of the first phase of the contract. Contract activities will begin immediately.

Exxon has acquired a previously un awarded 15% interest in a BP-Amoco-led consortium operating in the Azerbaijan sector of the Caspian Sea. The company signed an exploration and production sharing agreement with state oil company SOCAR for the Araz, Alov, and Sharg blocks. The blocks lie in about 400-900 meters water depth and were previously known as the Abikh Trend. Reserves are estimated at 300 million tons of oil and 400 Bcm of gas. Exxon joins SOCAR who holds 40%, operator BP-Amoco (15%), Statoil (15%), Turkish Petroleum (10%), and Alberta Energy (5%).

Turkmenistan has awarded a $3.1 billion contract to a US consortium to build a 1,250-mile gas export pipeline from the country across the Caspian through Azerbaijan, Georgia, and Turkey. The consortium, known as PSG, includes Bechtel and GE Capital. The pipeline will be able to transport between 10-30 Bcm of gas per year. Estimated construction time is 22 months, which will not begin until the five nations of the Caspian (Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan) agree on the boundaries of the sea. Turkmenistan must also settle a territorial dispute with Azerbaijan before construction begins.

Europe:

Norway's North Sea offshore licensing round attracted a total of 18 companies applying for acreage. The Ministry of Petroleum and Energy reported that it received applications for 20 of the 33 full or part blocks open in the round. Awards are expected this month. Companies submitting bids include Agip, BP-Amoco, Conoco, Dansk Olie og Naturgas, Elf, Enterprise, Esso, Norsk Hydro, Marathon, Mobil, Neste, Phillips, RWE-DEA, Saga, Shell, Statoil, Total, and Ugland.

Norway is trying to raise oil prices. The country's energy minister is considering further production cuts to help raise oil prices. The country began cuts of 100,000 b/d of oil in May of last year and extended it to June in December. The minister said it will make the cuts if it sees compliance by other countries and a willingness to make additional cuts by those nations.

Statoil brought the Siri platform off Denmark onstream a little over three years after discovery. The first well came onstream last month from a jackup platform set on a 314,500 bbl-capacity seabed storage tank. The field is the 14th to come onstream in Denmark's North Sea offshore sector and also marks the first field off Denmark to begin production outside the central Graben area. Drilling of production and injection wells still continues on the field from the Noble George Sauvageau jackup.

The UK Department of Trade and Industry has granted Talisman Energy approval for the development and production of the Orion Field in Block 30/18E in the North Sea. The field will be developed as a satellite of the Clyde platform through a 16-km subsea tie-back. Production is expected to begin in the fourth quarter with peak rates of 8,000 b/d of oil and 15 MMcf/d of gas.

Talisman plans to bring the Ross Field onstream this month. The FPSO Bleo Holm has arrived on location on the field and is undergoing installation. Talisman holds a 51.9% interest in the field with partners Lasmo (16.33%), Kerr-McGee (14.49%), Intrepid Energy (13%), and Nippon Oil (4.19%).

Middle East:

While not offshore, but still of mention, Kuwait is claiming discovery of the second largest oil field in the world. The Kra al-Marow Field in the northwest region of the country reportedly holds massive reserves of sulfur-free oil, estimated to be about 70 billion bbl. Testing is currently underway on the field's production capacity.

Elf and Agip have signed a $1 billion buy-back contract for the redevelopment of the Doroud oilfield offshore Iran. Elf will take a 55% interest in the contract with Agip holding the remaining 45%. The contract is geared at increasing the field's recoverable reserves by 900 million bbl to 1.5 billion though gas reinjection. The companies will be paid in crude oil from the field for a period of 10 years. This is Iran's fourth buy-back contract since its 1995 tender.

Egypt is planning to sign seven new exploration contracts as part of the 2nd 1998 bid round which closed in October. The round included nine blocks on offer: three in the Nile Delta and the shallow North Sinai, and six in the Gulf of Suez. The contracts will be signed with six major international companies and are valued at $1.1 billion. Further licensing rounds are expected to be announced this year.

The first well is underway on the South Pars gas field. The field which is shared by Iran and Qatar is located in the Persian Gulf and is being drilled by a group consisting of Total of France, Gazprom of Russia, and Petronas of Malaysia. The field has reserves of 350 Bcf of gas and measures approximately 1,480 sq miles. South Pars was the first buy-back contract signed with foreign firms. The contract was signed last year for $2 billion.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.