Conoco and R&B Falcon's new drillship, Deepwater Frontier, will begin drilling soon off New Zealand. The Dan Ulduzu Field in the Azeri Caspian Sea disappointed the NAOC with poor results. Both NAOC and CIPCO have decided to call it quits in the Caspian. [19,446 bytes]


Shell is planning to invest $8.5 billion in Nigeria. The company will invest the money primarily in Nigeria LNG in which a third liquefication train for the Finima refinery is planned. The facility will process associated gas and help boost production by 600,000 b/d of oil by the year 2005 from five offshore and seven onshore fields. Shell will also invest the money in its deepwater Bonga Field, set to begin production in 2002, and the EA field where drilling will begin next year on the H and K licenses.

Statoil has decided to remain in Nigeria following an oil and gas discovery. The company made a discovery with the Nnwa-1 well in Block 218 using the R&B Falcon MG Hulme Jr. semisubmersible in 1,300 meters of water. Preliminary data indicates that the reservoir could hold up to several hundred million bbl of recoverable oil. Texaco is a partner in the block with a 46.15% interest. This is Statoil's seventh well offshore Nigeria. The company currently operates Block 217 and 218 and recently sold its interest in Block 210 to Allied Energy.

Gabon is trying to compensate for lost oil revenues. The country, where oil activities provide about 60% of government revenue, has said that it is going to increase mineral mining activities. The country recently awarded only three out of 13 offshore licenses on offer in its eighth licensing round. The other ten licenses remain open and the government expects them to be picked up when oil price rises.

Western Geophysical has begun the second phase of its acquisition of 35,000 sq km offshore Angola. The company has begun a new survey over both licensed and open acreage in the deepwater blocks. This new phase covers 19,000 sq km and is expected to be completed by year-end. Western has already shot about 16,000 sq km in the area. The company is using the M/V Western Legend, M/V Western Regent, and M/V Western Patriot 3D seismic vessels for the program.


Canada's Minister for Indian Affairs and Northern Development has invited industry to select exploration acreage over 407,000 sq miles in the Mackenzie Delta, Beaufort Sea, and western Arctic Islands of North America. A call for bids on the selected acreage is tentatively planned for this month. The area on offer already has a strong record with 53 discoveries and several major oil and gas fields.

Noble Affiliates subsidiary EDC Ecuador Limited has decided to commence with development of the Amistad gas field in the Gulf of Guayaquil off Ecuador. The company plans to award a fabrication contract for a combined drilling and production platform capable of 100 MMcf/d of gas in July and install the platform in early 2000. The platform will tie into a 40-mile pipeline to the El Oro province in southern Ecuador. The company will also begin drilling the first of four directional wells. The field has reserves estimated to be about 345 Bcf.

Blue Dolphin Energy has completed the acquisition of the 75-mile offshore Black Marlin pipeline in the Gulf of Mexico from Enron. The pipeline is a major gas and condensate gathering line with related shore facilities servicing the High Island area. The line has a transportation capacity of 160 MMcf/d of gas and 1,500 b/d of condensate. The acquisition was made jointly with MCNIC Pipeline & Processing and MDU Resources Group.

PennzEnergy and Petrobras have signed an agreement for the joint exploration of Block Bseal4 in the Sergipe-Alagoas Basin off Brazil. The agreement requires a seismic program and the drilling of one exploratory well within the next two and a half years. PennzEnergy will serve as operator with a 30% interest, while Petrobras will retain the remaining 70%.

Vastar Resources' Mississippi Canyon 941 No. 1 exploratory well testing the Mirage prospect in 3,927 ft of water found 300 ft of net oil pay in five intervals. The first well was drilled to MD of 16,600 ft and then sidetracked as planned to a depth of 22,435 ft. Operator Vastar said initial drilling indicates more than 100 MMboe in the discovery. The well was temporarily abandoned but should be used later as a producer. Vastar holds 75% in the discovery, and Spirit Energy 76 holds 25%.

McMoRan Exploration has completed the testing of its West Cameron Block 616 discovery in the US Gulf of Mexico. The three wells tested at a combined rate of 76.5 MMcf/d of gas. The discovery lies in 300 ft of water.


Santa Fe Energy Resources has signed a Petroleum Concession Agreement with the Thailand Ministry of Industry for Block B7/38 in the Gulf of Thailand. The 2.3 million acre block is located about 200 miles south-southwest of Bangkok in water depths ranging from the coastline to a water depth of 150 ft. Santa Fe will operate the block with 100% interest and has committed to an initial three-year work program totaling $9 million. The program includes the reprocessing of existing seismic data, the acquisition of a 3D seismic program, and the drilling of one well.

Arabian Oil has decided to discontinue operations off the coast of Vietnam. The company has drilled six wells in the 05-3 Block without a commercial discovery. The company has been in operation in the area since 1992 and has a 30% interest in the block.

Chevron has decided to commit $60 million to China upstream operations over the next two years. The company has announced plans for the drilling of six wells this year. The include three wells in the Bohai Sea, one in Zhanhuadong off the Shengli Field, one in Yacheng, and one in the Huizhou Field.

Conoco is making the final preparations for drilling off New Zealand by opening an operations base in New Plymouth. The company plans to begin drilling the Wakanui-1 on the Petroleum Exploration Permit 38602 off Kaipara Harbor this month. The well will be drilled in 4,921 ft of water using the new Conoco-R&B Falcon Deepwater Frontier ultra-deepwater drillship. The company's partners in the project include Inpex Northland and Todd Petroleum Mining.

Central Asia:

The nine-member international consortium, Offshore Kazakhstan International Operating Company (OKIOC), plans to begin exploration efforts on the Kashagan structure in the Caspian either late this month or next month. The group's first well was set to be drilled last year, but construction on the barge the group planned to use for the drilling was not completed. The barge now is set to leave the shipyard in Astrakhan on the Volga River mid to late this month. Once the barge is on location, it will drill for three months, and a further month upon a discovery and then moved to a second site. The Kashagan structure is thought to be the offshore extension of the massive Tengiz Field.

State-owned Kazakhoil has signed an agreement with Japanese National Oil Company for joint exploration efforts in Kazakhstan. The partners will spend $15 million of a geophysical survey of Mangistausky region and in the northeastern region of the coastal Caspian shelf. Next year, an additional $10 million will be put toward researching Kazakhstan's sector of the Aral Sea. Kazakhoil will serve as the operator of the project.

The North Absheron Operating Company (NAOC), the BP-Amoco-led international consortium operating in the Caspian off Azerbaijan, has decided to call it quits. The group announced that test results from a third test well on the Dan Ulduzu Field did not reveal commercial quantities of hydrocarbons. The group had planned over $2 billion in investments in the project if successful. This is the second international consortium to pull out of the Azeri Caspian this year, following Pennzoil-led Caspian International Petroleum (CIPCO).


Britain has brought its 200th offshore oil and gas field into production. The Brown Field in the southern North Sea marks the 200th field to come onstream since the first offshore field on the UK Continental Shelf entered pro duction 31 years ago. The Brown Field is a small field located off England's east coast and is being produced in conjunction with the Davy Field. The event also marks the fastest time after discovery for a field to come onstream (two months). BP-Amoco is the operator with partners British Gas and Amerada Hess.

Operator Phillips, and partners Agip and BG, have made a discovery in Block 30/7a in the UK sector of the North Sea. The well was drilled in 250 ft of water by the Santa Fe 135 jackup. Test showed a production rate of 4,000 b/d of oil and 42 MMcf/d of gas. The well is located 4.5 miles from the Judy platform and is expected to be developed using the nearby existing infrastructure.

Kværner has been awarded the topsides fabrication contract for the Huldra gas and condensate platform in the North Sea. Kværner joins Aker Maritime on the project. Last fall, Aker Maritime was awarded the contract for the platform's steel jacket. Statoil recently obtained governmental approval for development of the field.

Statoil, Enterprise, and Saga have announced plans to drill two exploration wells west of Ireland this year. An appraisal well is planned for this month on the Corrib discovery in the Slyne Trough in 350 meters of water, and an exploration well is planned on the neighboring Shannon structure in the same license later this year. The appraisal well on Corrib will be the third drilled on the field, which the companies hope will confirm the field's gas producing potential. The companies also expect the well on Shannon will mark the Slyne-Erris area as a gas province.

Statoil has planned a hazardous waste reduction plan that will save over $320,000 per well at the Asgard Field. The hazardous waste program will lower the oil content in oily slop water and eliminate the need for it to be sent to shore for treatment. The plan will allow up to $19.3 million in cost savings after the 60 planned wells are completed by 2003.

Middle East:

Turkey and Egypt are considering a different route for a pipeline to carry Egyptian gas to Turkey. Last June, the countries agreed upon a pipeline that would be routed through the Mediterranean Sea. Now, the countries have decided that a route overland across Jordan and Syria would be possible. A feasibility study is underway on the overland route. The Mediterranean line would carry 175 Bcf of gas per year to Turkey.

Following the signature of the Doroud Field contract with Elf and ENI's Agip Petroleum of Italy, Iran reportedly is discussing further projects with ENI. Iran's President Mohammad Khatami recently visited Italy to hold talks on oil and technical cooperation between the two countries. Consequently, the National Iranian Oil Company and ENI have set up a yet unnamed joint company that is being registered in the Netherlands. The new joint company will be able to enter into oil projects with both Iran and Italy.

Nigerian election observations

Fred Akanni, Offshore's contributing editor who offices in Lagos, Nigeria, provided some personal observations on political conditions in Nigeria, the election, and the resulting impact on the country's oil industry:

  • General Obsanjo has always been my candidate. The main reason is that he'd find a way to stop the military from taking over, having a military psyche himself.
  • It will take an enormous amount of work to clean up the oil industry in Nigeria. In 1978, Obsanjo kick-started the government takeover of the oil industry by nationalizing BP's assets. But he always disappointed less-than-honest friends by setting up scrupulous rules. His greatest asset is he knows how to navigate.
  • The positive thing about the elections is that the senate, which is usually more powerful in Nigeria, is filled with high quality people. Two people very important to the petroleum industry that were elected to the senate are: Udo Udo-Udoma, an oil lawyer whose wife is General Counsel for Chevron Nigeria; and Victor Oyofo, who, until the elections, was the General Manager of Joint Ventures for Mobil Producing Nigeria. Oyofo is a geologist by training. Also elected as the Governor of Lagos State, the financial capital of Nigeria, was an accountant with Mobil. He is reported to have taken a leave of absence to run for office.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.

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