Over 230 E&A wells drilled across region
Mark McCafferty, Lead Analyst, Southeast Asia, Wood Mackenzie
Wood Mackenzie has reviewed the key elements of exploration activity in Southeast Asia in 2005. The countries/sectors analyzed comprise Brunei, Cambodia, China, Indonesia, Malaysia, the Malaysia-Thailand Joint Development Area, Myanmar, Philippines, Thailand, and Vietnam.
The region enjoyed an upturn in exploration and appraisal drilling during 2005. The recovery has been aided, in part, by the high oil price environment, in which cash-rich oil companies are evermore actively seeking to replace reserves.
Given the high level of license awards in 2005, we expect the momentum in drilling activity to be maintained in 2006, providing operators can secure access to the requisite number of drilling rigs.
Over 230 exploration and appraisal (E&A) wells were drilled across the region in 2005 - a healthy increase on 2004. Year-on-year drilling levels rose sharply in Malaysia and Myanmar, while other countries largely maintained the well numbers achieved in 2004. Regionally, the level of E&A drilling continues to recover steadily toward the high levels seen in the late 1990s and in 2001.
The same data is represented in Table 1 and in the figure. The table allows comparison of the specific number of wells in each country, and the figure provides a visual for quick assessment of trends.
Licensing increases over 2004
Forty-seven new exploration licenses were awarded across the region during 2005. This number is a healthy increase from 2004 and maintains the upturn in regional licensing which began in 2003.
Activity was driven by an increase in awards in offshore China, Malaysia, and the Philippines, while activity in most other countries remained similar to that in 2004.
Awards of deepwater blocks in Malaysia continue to be made on the back of recent exploration success, while in China awards were dominated by those in the Pearl River Mouth basin.
Licensing activity also increased in Vietnam, including the award of the country’s first deepwater blocks in the Phu Khanh basin.
The only country to experience a significant drop in license awards was Indonesia.
Key discoveries
A number of encouraging discoveries were confirmed in the region through the year, with Indonesia and Malaysia accounting for over half of these. We estimate that up to 40 discoveries were made, adding a potential 900 MMbbl of oil and 7 tcf of gas to the region’s reserves base.
Offshore Sabah maintained its position as the region’s exploration hotspot with another ‘big cat’ discovery on the Ubah field, which is estimated to contain at least 500 MMbbl of oil reserves.
Table 2 shows a breakdown of reserves added by country in 2005 on a barrel of oil equivalent basis. Myanmar and Malaysia lead the way, largely as a result of the significant Shwe Phyu and Ubah discoveries.
Deepwater remains the volume play
During 2005, we estimate that over 20 wells were completed in water depths greater than 300 m.
The majority of oil reserves have been added through deepwater exploration, despite the drilling of relatively few deepwater wells.
Unsurprisingly, given recent success, Sabah was the most active deepwater area with Shell and Murphy completing 11 wells.
If deepwater exploration rates are to be maintained in the longer term, particularly offshore Malaysia, some of the region’s outstanding border issues will need to be resolved.•
McCafferty may be reached via e-mail at [email protected]. For more information about the company, visit www.woodmac.com.
Project update: Basker-Manta ships first oil
Gurdip Singh, Special Correspondent
Australia’s Beach Petroleum Ltd. and Anzon Australia Ltd. sold the first shipment of 300,000 b/d in January from the Basker-Manta oil fields in the offshore Gippsland area.
At press time, the second shipment of light sweet crude oil of around 42°API gravity was planned for delivery to an Australian refinery in early March.
Diamond’s semisubmersible drilling rigOcean Patriot has moved onto the Basker field to drill three more wells-Basker 3, 4 and 5-through to April-May.
In January,Ocean Patriot had begun drilling of the Manta-2 development well, signaling the beginning of full field development (FFD).
Drilling was completed by mid-February.
Once FFD is completed, peak production rates of 35,000 b/d are expected from all completed wells.
The Basker-2 well, which starting flowing in late 2005, will continue to produce until 2Q 2006 at approximately 10,000 b/d as part of the extended production test (EPT).
Downhole pressure information is being collected during the EPT to confirm the preliminary evidence indicating that the well is benefiting from an efficient water drive mechanism.
Production is being exported from Crystal Production’s DP FPSOCrystal Ocean to Teekay Shipping’s DP shuttle tanker Basker Spirit, which in January completed the first ship-to-ship transfer of Basker oil.
The sale of oil was the last element of the overall development. The entire system has been operationally tested, and all phases have performed within expectations, say partners Anzon and Beach Petroleum.
