Europe
Statoil Færøyene AS was awarded operatorship in late 2000 for two exploration licenses on the Faroese continental shelf. The company moved into new offices in Torshavn, the capital. Preparations for this summer's drilling of two exploration wells are already underway.
The first well will be drilled by the Transocean rig Sovereign Explorer in license 003 in June in about 3,300 ft water depth, approximately 180 km south of Torshavn. Partners in the license are Statoil (35%), Phillips (30%), Enterprise (20%) and Veba Oil & Gas (15%).
This is the first time drilling will take place outside the chain of islands.
Operating companies on the Faroese continental shelf (Statoil, BP, Amerada Hess and Agip) have selected ASB/Faroe Ship (a group made up of several Faroese industrial firms and a shipping company, Faroe Ship) to provide base services from Runavik. The base is about an hour's drive north of Torshavn and will provide transit storage for drilling equipment, well chemicals, and other drilling rig supplies. The contract began March 1 and will continue through 2003.
Central Asia
ENI SPA subsidiary Agip Caspian Sea BV was named operator of the North Caspian Sea project production sharing agreement by North Caspian Sea project partners the Royal Dutch/Shell Group, BG PLC, ExxonMobil Corp., Phillips Petroleum Co., and Inpex Masela Ltd. The project includes the giant Kashagan oil field off Kazakhstan. The contract area covers more than 5,500 km, in water depths with a range of 2-10 meters.
A second exploration well is being drilled on the Kashagan structure, which ENI CEO Vittorio Mincato said was "one of the most promising oil discoveries in recent years." Determining the size of the Kashagan discovery has been difficult, but reserves estimates are 25-60 billion bbl of oil. Appraisal of second exploration well spudded last October should take place early this summer.
Expecting to become field operator, TotalFinaElf SA earlier announced an agreement in principal to buy Statoil AS's 4.76% share in the development. Once finalized, this deal would yield TotalFinaElf a 28.6% stake in OKIOC, making it the single largest shareholder.
Asia/Pacific
BP Amoco PLC says that its $1.3 billion Nam Con Son, a dedicated gas-to-power project offshore Vietnam is going ahead and will be Vietnam's largest single foreign direct investment. The project involves developing 2 Tcf of offshore gas that will be brought onshore by pipeline to three generating plants that will supplying electricity to the Ho Chi Minh City area.
At full capacity, the three plants, Phu My-1, -2 and -3, will ultimately generate around 30 billion kwH/year, more than 40% of current Viet-namese electricity demand. BP, with 26.67% equity, is operator of the Lan Tay and Lan Do gas fields in the Nam Con Son basin. Other stakeholders are Norway's Statoil AS (13.33%), India's National Oil and Natural Gas Corp (45%), and PetroVietnam (15%).
Africa
King Resources, Inc. reached an agreement with Nescor Energy Company, Ltd. (a Bermuda Corporation) and Nescor Energy Salsich Gabon, Ltd. (a Gabon Corporation), holder of the 300,000-acre Salsich Permit in Gabon, West Africa, to merge their interests in West Africa. King will acquire a 100% interest in Nescor Energy Salsich Gabon, Ltd., operator of the Production Sharing Contract.
Potential reserves on the permit total over 1 billion bbl of oil. The two structures to be developed first have been drilled and tested yielding potential reserves of over 80 million bbl. Development drilling on the first field will begin by mid-year.
Americas
Noble Affiliates, Inc. announced the firm's first operated deepwater discovery in the Gulf of Mexico on the "Lost Ark" prospect in East Breaks Block 421. The OCS-G-17255 #1 well was drilled in 2,700 ft water depth to a total depth of 7,770 ft measured depth/true vertical depth, and encountered a gross gas pay section from 6,695 ft to 6,805 ft, with high porosity and permeability. Operations are underway on a second well to an adjoining reservoir in East Breaks Block 464.
A similar prospect exists in adjoining Block 465. Plans are in place to develop the discovery using a subsea completion, which would be tied back to an existing host platform. Noble Affiliates has a 48.4% working interest and is the operator, Forest Oil (NYSE: FST) has a 50% working interest, and Noble Drilling Exploration Company has a 1.6% working interest.
Middle East
The board of directors for Tracer Petroleum Corporation said the company was invited by a major "bonyad," or "foundation," in Iran to participate in the potential development of a large offshore oil field appraisal and development project. A confidentiality agreement prevents Tracer from releasing the name of the field.
Tracer decided to pursue the appraisal and development of the field, which it says is potentially a very significant project, with minimum estimated recoverable reserves of 400 million bbl of oil and production potential of over 100,000 bbl/d. Tracer has opened discussions with a number of potential partners to join in the project.
The government of the State of Qatar, the state oil company, Qatar Petroleum, and Mærsk Oil Qatar AS (a subsidiary of Mærsk Olie og Gas AS in Denmark) have begun implementing a plan for significant further development of the Al Shaheen Field in Block 5, offshore Qatar.
The Al Shaheen Field Development Plan 2001 is broad. It includes drilling 40 new production wells, 20 new water injection wells, and converting 14 existing wells to water injection. The plan also includes construction and installation of new production platforms interconnected with pipelines, facilities for gas compression, and a gas export pipeline to Qatar Petroleum's North Field Alpha platform, offshore Qatar.
Oil production is 112,000 bbl/d, but is expected to peak at 200,000 bbl/day in 2004. Additional drilling rigs will be mobilized this year, and some production could begin ahead of permanent facility placement in 2003.
