ASIA/PACIFIC

Robert J. Delmar
Jakarta

New blocks on offer for 1999 in China's offshore area - Map 1 [6,543 bytes]

Map 2 [4,687 bytes]

Esso struggling to bring Bass Strait gas back onstream

Esso is still trying to put its Longford gas processing plant back into operation. Following an explosion last year, the plant was shut down and flow from Esso and BHP's production platforms in the Bass Strait was shut-in. Repair work was underway and on-schedule when an acidic water spray disrupted operations. Five hundred workers reportedly refused to enter the area due to safety concerns. The Australian Workers Union and Australian Industrial Relations Commission were called in.

Following a meeting, a new safety procedure was put in place and the workers returned to the job. Esso needs the repairs completed and the plant in operation by next month in order to meet Victoria province's peak winter gas demand. Some parts of the facility were put back in operation at the beginning of the year and gas is again flowing from the offshore fields.

In order to compensate for the prospective shortage of gas, the company's partners in the Kipper gas field in the Bass Strait have been urging Esso and joint venture partner BHP to speed up development of the field. The companies began a seismic survey over the field in March as part of a commitment the joint venture made to the federal and Victorian governments when they renewed the lease on the field. Esso-BHP joint venture holds 50% of the interest in the field with partners Shell (20%), Woodside (10%, who recently acquired the interest from Australian Worldwide Exploration), News Corp (10%), Crusader (7.5%), and Petroz (2.5%).

CNOOC opens bidding round for six blocks

The China National Offshore Oil Corp (CNOOC) has opened a new bidding round with 13,450 sq km of acreage on offer in four basins. The acreage has been divided into six offshore blocks within the Donghai, Pearl River Mouth, Beibu Bay, and Yinggehai basins. The blocks on offer include:

Block 22/12 - 608 sq km
Block 33/20 - 3,400 sq km
Block 36/31 - 3,880 sq km
Block 40/03 - 1,828 sq km
Block 62/01 -1,767 sq km
Block 62/05 - 1,900 sq km

CNOOC has said that considering low oil prices, the blocks on offer are those with the greatest exploration potential. CNOOC said it has put forth new exploration activities in the blocks and adjacent areas in recent years, which included seismic evaluation. The company also said the blocks contain proven enrichment of oil generation sags, and that some blocks contain discoveries and have proven reserves, especially Block 22/12. The company also indicated that Block 62/01, which is located in the Yinggehai Basin, has had a discovery in the shallower portion of the block, and has great potential in the unexplored deeper portion.

The company has already sent out 33 public notices of the bidding round to foreign firms, and nine companies have responded requesting bid documentation. The closing date for obtaining bid documentation and applications in the end of next month with bids closing on September 30.

Japan wants to trade oil for silk

Japan is trying to enhance its own economy by investing in the economy of others, specifically those countries bordering the Caspian Sea. Japanese companies have long been involved in oil and gas efforts in the Caspian Sea, but now Japan has a new diplomatic agenda in establishing "strategic relations". The country wants to boost its presence in the Caspian region by increasing political talks with Caspian countries, and increasing economic assistance. Japanese National Oil Company recently signed on with the state oil company of Kazakhstan for the financing of oil and gas exploration in the region.

Now, however, Japanese officials are having talks with the government of Georgia for Japanese participation in oil pipelines linking the Caspian fields off Azerbaijan and in the Black Sea to Georgia. In return for economic assistance, Japan is trying to get Georgian support in opening the ancient Silk Road. The Silk Road connects Europe and Asia via Georgia. A project for its revitalization would be used to promote tourism and transporting oil and gas resources, as well as greatly strengthening the ties between Japan and the Central Asian countries. Japan plans to open talks with Georgia and the other countries in the CIS regarding regional security and cooperation in coming months.

Buffalo FPSO mooring contract let

SOFEC has been awarded a contract by MODEC for the single point mooring system on the FPSO destined for BHP's Buffalo Field in permit WA-260-P in the Timor Sea off northwest Australia. Under the contract, SOFEC will provide the engineering, procurement, and fabrication for the external single-point turret mooring system.

MODEC was contracted to provide the 103,000 DWT M/T Spirit tanker to be converted to an FPSO for the bareboat lease. Other contracts relating to the FPSO are: Clough Offshore of Perth will provide flowlines and umbilicals; Schlumberger will perform the engineering, procurement, and fabrication of process modules; FRAMO Engineering of Norway will provide the swivel stack.

BHP plans to develop the field using three wells connected to a five slot unmanned wellhead platform and the FPSO. The wellhead platform will be located on top of a shallow bank in about 30 meters of water and will produce unstabilized crude from the three wells to the FPSO located about 2 km away in 250 meters of water. Peak production rates from the field are expected to be about 40,000 b/d of oil and the FPSO will be de-bottlenecked to 60,000 b/d upon further discoveries or tie-ins. Buffalo has proven and probable reserves of about 22 million bbl of oil. Installation of the wellhead platform and the start of the drilling campaign are expected to begin next quarter with first oil anticipated by year-end.

BHP holds a 50% interest in the field with partner Canadian Petroleum holding the other 50%.

Petronas Carigali relinquishes Dai Hung

Petronas Carigali has decided to pull its 72.85% interest out of the Dai Hung oil field off Vietnam. The company said it no longer considers the field to be commercially viable. The field was brought onstream in late 1994 and never exceeded 12,000 b/d of oil production despite considerable exploration investment by Petronas.

Petronas partner PetroVietnam, who holds the remaining 27.15%, will take over as operator and assume the entire interest in the field. Dai Hung is located off southern Vietnam in the South China Sea. Petronas Carigali is the second company in recent months to pull out of Vietnam acreage. Arabian Oil also decided to call it quits after drilling six wells in Block 05-3 off Vietnam without a commercial discovery.