Africa
Amerada Hess Corporation recently completed the initial appraisal of its Oveng oil prospect in Block G offshore Equatorial Guinea, confirming a significant discovery. The Oveng-2 appraisal well was drilled a mile southeast of the Oveng-1 discovery, which was announced in June. Okume appraisal continues with the drilling of Okume-4 one-half mile west-northwest of the original discovery well.
The Oveng Field is four miles east of the Okume Field, where two successful appraisal wells were recently drilled. Oveng is also 12 miles northeast of the Ceiba Field, which began production in 3Q 2000.
Operator Amerada Hess has an 85% working interest in the well, with partner Energy Africa Ltd. of South Africa.
Shell Petroleum Development Company (SPDC) in Nigeria recently awarded a contract of the Forcados Yokri offshore development in the Niger Delta to Stolt Offshore S.A.
The project includes expanding and refurbishing existing shallow-water oil and gas production and processing facilities and fabricating and installing a new production platform with a 250-ton jacket and 1,300-ton topsides. Stolt Offshore will carry out all of the engineering, procurement, and fabrication work.
A new pipeline will take gas from the Forcados Yokri development area to the Offshore Gas Gathering System being installed next year.
The production platform and some jacket-mounted clusters, bridges, and decks will be fabricated at the Stolt Offshore Globestar yard at Warri.
Americas
In January, Venezuelan President Hugo Chavez announced a new oil law that came into effect early in the year. This new law gives the state increased control over the petroleum industry. Chavez is optimistic about the law, which imposes a royalty rate of 30%, the highest in the world, and includes a requirement that Petroleos de Venezuela SA (PDVSA) hold a minimum 51% stake in future joint ventures involving exploration and exploitation.
Business leaders in the nation have complained that the new law will significantly deter foreign investment. The new law could indeed squelch interest at a time when PDVSA is desperately trying to attract foreign companies with new technologies that can help to exploit some of its tremendous reserves. Though the law allows private companies to own downstream operations for the first time, the high royalty rate will likely discourage foreign investment.
The $1.8 billion Terra Nova oil project off Newfoundland missed its year-end target for first oil, but was rescheduled to reach that milestone in January.
The Terra Nova Field is the second largest offshore the Maritime Provinces, with reserves of at least 370 million barrels. The field may hold an additional 100 million barrels of reserves if data from the far east segment of the field is accurate. Hydrocarbons will be processed via a purpose built floating production, storage, and offloading vessel, designed to handle 150,000 b/d. The field is to reach peak output of 125,000 b/d in a few months.
Terra Nova Field partners are Petro-Canada (34%), Exxon Mobil Corp. (22%), Husky Energy Inc. (12.5%), Norsk Hydro (15%), Murphy Oil Corp. (12%), Mosbacher Operating Co. (3.5%), and ChevronTexaco Corp. (1%).
Asia/Pacific
Indonesia has plans to tender 17 areas for oil exploration, including 14 new blocks. Offshore blocks on offer include six blocks in the Arafura Sea, two in the Seram Sea, two off the northern part of East Kalimantan, one in the Natuna Sea, and three blocks offshore the Makassar Strait, two of which will be re-tendered while the third is being relinquished by Unocal Corp. Bid documents were available for pick-up early this month.
Indonesia awarded six oil blocks in 2001 to six companies, including BP, Conoco, and TotalFinaElf. The companies signed the contracts in early December with state oil company Pertamina.
ONGC announced an offshore oil and gas discovery near Bombay at a depth of 1,775 meters near the Bombay High offshore field, which accounts for two-thirds of India's annual output. Preliminary estimates put recoverable reserves at about 35 million tons of oil. A 3D seismic survey is planned for early 2002. This new discovery could intensify foreign interest in the third round of India's New Exploration Licensing Policy, which will take place in March.
In December, ExxonMobil Exploration and Production Malaysia Inc. announced first oil and gas production from the first of five small, remotely operated platforms recently installed in its fields offshore eastern Malaysia. These small platforms comprise the Satellite Fields Development Project. ExxonMobil said about 90 million barrels from six fields would be produced over a 15-year period at a total development cost of about $236.8 million.
The peak production from the five small platforms is expected to be 40,000 b/d of oil and 50 MMcf/d of gas.
Central Asia
Late in December, Bouygues Offshore signed a contract worth $163 million to supply offshore structures for the Azeri field, 120 km southeast of Baku.
This award, Phase I of the Azeri, Chirag, and Gunashli field development project, covers fabrication and loading of two jackets and associated piles to be built at the Baku yard of SPS, a subsidiary of the State Oil Company of the Azerbaijan Republic (SOCAR).
McDermott International Inc. subsidiary McDermott Caspian Contractors Inc. (MCCI) has signed contracts to fabricate platform topsides and install offshore pipelines in Phase I. MCCI is responsible for offshore installation of a 115-mile, 30-in. pipeline, two 7-mile, 24-in. pipelines, and a 7-mile, 18-in. pipeline for the compressor and water injection platform.
Europe
Repsol YPF SA expects to get the government go-ahead soon to explore for oil offshore the Canary Islands. Traces of oil were discovered in the area, and Repsol YPF applied for permission to explore the waters a year ago. The hold-up seems to be uncertainty about ownership. Spain believes it owns the area, but the Moroccan government is disputing Spain's claim to two blocks, which interestingly lie offshore Western Sahara, occupied by Morocco since the 1970s.
Originally scheduled to take place in December, the West Greenland offshore licensing round is expected to be announced in April 2001.
Impediments to opening the round are being resolved, with the government of Greenland reducing company tax from 35% to 30% in November, and the Danish Joint Committee on Mineral Resources in Greenland meeting this month to suggest terms for the licensing round. Once terms are approved, a letter of invitation will officially announce the bidding round, followed by opening meetings in Copenhagen and Houston.
Middle East
Iran began, in late December, to exploit phases two and three of the Persian Gulf's South Pars Gas field, which Iran shares with Qatar. These two phases are being managed by a consortium led by TotalFinaElf (TFE), which includes Petronas and Gazprom.
The project could add 57 MMcm/d to Iran's natural gas grid by the end of the year. Iranian officials claim that when work is completed, the South Pars Field will produce 12 bcf/d of dry gas, 6.3 million tons/yr of ethane, 6 million tons of liquefied petroleum gas (LPG), and 20 million tons/yr of condensates.
TFE signed the South Pars development agreement four years ago. It is the only company granted a waiver from America's Iran Libya Sanctions Act, which threatens reprisals against any company that invests over $20 million in Iran and Libya's oil and gas sector.
