The North Atlantic Faeroe Islands Petroleum Ministry formally approved Amerada Hess' plan to drill its first exploration well in the country's offshore waters. Amerada Hess is the operator for the Faeroese Partnership (Amerada Hess, BG, Denmark's DONG state oil and natural gas corporation, and Atlantic Petroleum), which holds license 001, covering an area to the south of the Faeroe Islands, neighboring proven UK North Sea acreage. Transocean Sedco Forex's semisubmersible Sovereign Explorer will drill the new well, which is expected to take two to three months to test-drill. It will be the last to be drilled on the Faeroe Shelf this year.

Noble Affiliates Inc. announced first oil production from the Hanze Field in the North Sea, offshore the Netherlands. Hanze field production could account for two-thirds of overall oil production in the Dutch North Sea by year's end. The first Hanze crude was offloaded in August via the dedicated shuttle tanker Betty Knutsen. The partners in this project plan to complete another production well and one injection well within the next few months. Peak production of 30,000 b/d of oil should be achieved by the end of the year. The Hanze field is the first offshore oil chalk reservoir ever developed in the Netherlands.

Norway announced in mid-September that North Sea licensing round 2000 will take place early next year. The acreage announced includes a total of 68 blocks or parts of blocks. An added incentive is that the blocks in this round are near existing infrastructure with future spare capacity. The application deadline is December 7, 2001. Norway's Ministry of Petroleum and Energy says new production licenses will be allocated in 1Q 2002.


Oil exploration offshore Nicaragua, which came to a halt in the late 1970s, will resume soon. The offering of exploration licenses will take place in November. The bidding round got its official start in January, when Nicaragua put data packages on the Caribbean shelf and in the Pacific Ocean up for sale. The maximum contract area in this round will be for 988,000 acres. Exploration contracts will last a maximum of six years. Offshore areas totaling 100,000 sq km are being offered for exploration and possible future commercial production. Winning firms are expected to start exploration work in the first half of next year. A 20-year concession will be granted if petroleum is found. The contract does not pay royalties.

Producing in Venezuela could soon become less profitable. Pending legislation could raise extraction royalties paid to the Venezuelan government from 16.6% to 30%. The country's plans to increase royalties charged to foreign companies could deter further investment in current projects. The new rates are expected to become law by mid-November.

BHP Petroleum (Trinidad) Ltd., drilled a third exploration well, Kairi-1, in the Block 2(c) production sharing contract area offshore Trinidad, nearly 22 miles from the northeastern tip of Trinidad's coastline, and approximately 3 miles from BHP Billiton's Aripo-1 gas discovery. Global Marine's jackup, Glomar Labrador 1, drilled the well to more than 7,217 ft in 115 ft water depth. Further appraisal drilling will determine the size of the discovery. The Kairi-1 well is an area where BHP Billiton made earlier hydrocarbon discoveries with exploratory wells Angostura-1 (1999) and Aripo-1 (2000).

Central Asia

Azerbaijan International Operating Co. (AIOC) granted Bouygues Offshore an interim award in 3Q 2001 for the fabrication of offshore structures to be installed on the Azeri field, located 120 km southeast of Baku, Azerbaijan. The structures are to be built at the Baku yard of SPS, a subsidiary of State Oil Company of Azerbaijan Republic (Socar). The project is expected to take more than three years from the date of the contract and will be carried out in Phase 1 of full field development of the Azeri, Chirag, and Gunashli fields. The members of the AIOC Consortium include BP (34.%), TPAO (6.8%), Unocal (10.3%), Devon Energy (5.6%), Socar (10%), Itochu (3.9%), Lukoil (10%), Statoil (8.6%), ExxonMobil (8%), and Delta Hess (2.7%).

ExxonMobil Corp. in late August began drilling its first exploratory well in 142-meter water depth on the Nakhchivan oil field in Azerbaijan's sector of the Caspian Sea. The Caspian Drilling Co. expects to finish drilling the 6,400-meter well by November. ExxonMobil holds a 50% stake in the Nakhchivan field, which is thought to hold 100 million metric tons of oil and 85 bcm of natural gas. Socar holds the other 50% of the joint venture.


CNOOC Ltd. announced that one of the three production platforms, Suizhong 36-1 (Phase II-2) in the southern part of Liaodong Bay of Bohai began initial production. As planned, the production volume of Platform C, the fourth to be brought to production in the Suizhong 3601 (Phase II) project, will be gradually brought to about 9,000 b/d of oil. Platforms D, E, and F began production at the end of last year. Suizhong 36-1 holds CNOOC's largest proved reserves.

BG Pakistan announced plans to drill its first well in the offshore 2366-1 EL concession (Offshore Indus C) in the Indus Delta. A 1,080 sq km 3D seismic survey completed last year indicated the presence of gas reservoirs. BG is committed to drilling one well in the concession and may begin as early as the end of next year. Under a commitment with the federal government of Pakistan, the company must drill at least one well in the concession. The official estimated drilling may start in the last quarter of 2002. BG Pakistan has secured an extension of its exploration license to October 2002.

The Philippines government has broadcast plans to sell the 10% stake that state-owned PNOC Exploration Corp. holds in the Malampaya offshore natural gas project, the first project of its kind in the country. Partners in the project include Shell Philippines Exploration B.V. of the Royal/Dutch Shell group (45%) and Texaco (45%). The Malampaya field, located southwest of Luzon, is estimated to contain 3.5 tcf of natural gas.


Phillips Oil Co. (Nigeria) Ltd. and its partners signed a memorandum of understanding with the government of the Federal Republic of Nigeria to develop a new liquefied natural gas (LNG) facility in Nigeria. The LNG facility, which will be located offshore in the Niger Delta, will be nominally sized at 850 MMcf/d of natural gas. The facility is expected to be onstream by 2007. It will be the first LNG facility to be located offshore in this area. Phillips holds a 20% interest in this joint venture, with partners Nigerian National Petroleum Co. (60%) and operator Nigerian Agip Oil Co. (20%).

In early September, Norsk Hydro signed a production sharing agreement with Angola's state-owned Sonangol for Block 34, located south of Block 17 and covering an area of 5,900 sq km in water depths ranging from 1,500 meters to 2,500 meters. This is the first time Sonangol has been given an operatorship for a deepwater license. Data have already been processed from a seismic survey, and preparations are being made to drill the first well, which is expected to be finished in the first half of 2002. Participants in this venture are operator Sonangol (20%), technical operator Hydro (30%), Phillips (20%), Braspetro (15%), and Shell (15%).

Middle East

GGS ASA has been awarded two 2D contracts offshore Oman and the UAE. The company will use the vessel Odin Explorer to perform the survey, which is scheduled to start late in the third quarter 2001. The contract value is between 1 and 1.5 million USD.

The company also is collecting several 3D contract surveys with the six-streamer Laurentian. The 3D surveys should be completed by the end of the first quarter or beginning of the second quarter 2002.

GGS is expanding its business beyond Iran to become a leading geophysical company in the Middle East region.

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