International Focus

Dec. 1, 1996
Dev George Houston Proven oil reserves at end 1995 (Courtesy BP Statistical Review of World Energy). Proven gas reserves at end 1995 (Courtesy BP Statistical Review of World Energy).
Dev George
Proven oil reserves at end 1995 (Courtesy BP Statistical Review of World Energy).
Proven gas reserves at end 1995 (Courtesy BP Statistical Review of World Energy).

Thailand's gas gulf narrowing

Thailand is rapidly developing into an industrialized nation, with an economic growth rate now exceeding eight percent a year and a populace that has tasted the fruits of development and is demanding the same levels of products and services that their European and American counterparts take for granted. But ever-improving lifestyles and the economy that supports them translate into an ever-increasing demand for energy - last year, to the tune of more than 800,000 BOE/d, which was a jump of 11% over 1994.

Domestic energy production last year - principally natural gas - provided nearly 290,000 BOE/d, up 3% over 1994, but Thai planners realize this is an inadequate increase to meet demand. As a consequence, the government has revised its already very positive petroleum policy to stimulate exploration and production and establish a more active importation program of oil and gas produced either in joint ventures with neighboring countries (mostly in the several joint development zones) and from those countries themselves.

The Thai sector of the Gulf of Thailand provides the vast majority of the kingdom's energy needs, with more than 30% of gas demand met by the huge Total-PTTEP (Petroleum Authority of Thailand Exploration and Production) Bongkot Field, at 9.9 MMcm/d, via the Erewan complex. Unocal's Pailin Complex, coming on line in just over two years, will provide another 15% with startup production of 4.7 mm cm/d, and Pogo's Tantawan gas production is in the wings.

Beyond Thailand's own waters of the Thai Gulf, are significant gas purchases from Myanmar's Yadana Field (some 3.6 mm cm/d), with probable purchases from Yetagun Field as well. And there is the prospect of added gas from the deepwater fields of Thailand's Andaman Sea province, where Unocal, Statoil, and Total have joined forces to exploit these fields now that technology makes it feasible.

From the Malay-Thai Joint Development Area, Thailand expects to reap gas reserves in a JV with Petronas, and, from the Vietnam-Thai and Cambodian-Thai Overlap Areas and perhaps even from Cambodian and Vietnamese aquatories themselves, further gas should be flowing to Bangkok by the end of the decade.

Even Indonesia's massive Natuna Field may ultimately provide additional gas to turn the wheels of Thai industry after the year 2000. Negotiations are on-going.

OPEC and the rising price of oil

Quotas won't change as a result of the November OPEC meeting in Vienna. Rather, key members such as Saudi Arabia and its Arab neighbors in the Gulf will demur, maintaining a tight market through the northern hemisphere's winter, which is predicted to be comparable to last year's and precipitate oil price increases to about $23 a bbl by first quarter 1997 and over $25 a bbl by the second quarter.

The International Energy Agency forecasts that oil supply will outstrip demand by about 600,000 b/d during the winter months, based on a moderate winter and stocks staying at last year's level, about 3.504 billion bbl. If so, OPEC production levels should also remain at the same level, despite temptations to take the higher prices.

Enough oil for 43 years

There are enough proven oil reserves to meet world demand to the year 2040, enough proven gas reserves to last to the year 2062. So much for the doomsayers who are always predicting the end of hydrocarbons as we know them.

British Petroleum's Statistical Review of World Energy, by Peter Davies and his BP team of economists, says there are now more than a trillion bbl of oil in proven reserves around the world, and another 139.7 trillion cubic meters of known gas reserves.

Demand is growing, however, and growing rapidly, as each year an additional 84 million people are added to the earth's population - more than 65% in Latin America and Asia. But hydrocarbons are being discovered and brought into production exponentially, as technology improves the prospect of discovery, decreases dry holes, and reduces the cost of development and production. The future continues to be bright.



Global rig activities in water depths greater than 1,000 ft doubled between 1993 and 1995 and will be expected to do so again in 1996. Presently only 130 drillships and semis can work at these depths, thus demand is about to exceed supply and newbuilds should be expected.


Petrobras has another discovery in Brazil's deepwater Campos Basin Marlim Sul region. It is the country's deepest discovery yet, at 1,709 meters. Estimated production is 5,000 b/d oil and 2 million cm/d gas.

Several fatalities occurred recently in the crash of a crew-change helicopter enroute between Campos, Brazil and their destination, a Petrobras platform in the Marlim Field, Campos Basin.

A strategic alliance has been formed by Pennzoil and Enterprise Oil to explore 102 Pennzoil-operated leases in the US Gulf of Mexico. Enterprise is investing $100 million or more in 59 of the leases through 1998.

A US$1 billion LNG plant is to be built by Trinidad's Atlantic LNG Co. at Point Fortin. The plant is scheduled to provide LNG to US and Spanish markets beginning with 3 million tons/yr in mid-1999.

Amoco and Trinidad's National Gas Co. have agreed that Amoco will increase its amount of gas provided to meet national demand to a total of 1.1 billion cf/d, up some 350 million cf/d. This due to growing demand through 2019.


Sedgwick Field in the UK North Sea will be developed solely by Enterprise with the use of an FPSO, two horizontal wells and a water injector. Its estimated to hold 30 million bbl oil.

Swath's Asgard replacement is likely to be a custom-built combination shuttle tanker, FPSO, drillship now being built for Statoil in South Korea, with a moonpool at its center, so it can be used for well workovers.

Denmark's Faeroe Islands' aquatory is up for licensing in a first-ever exploration round about midyear 1997. The Faeroese Petroleum Administration has announced that 20 companies have indicated their interest.

Shell chairman Cor Herkstroter of Royal/Dutch Shell, said the company made mistakes in weighing public opinion on important issues such as Brent Spar and Nigerian pollution. Saying Shell is opening up to public debate, he admitted the company failed to engage in serious dialogue with environmentalists and consumers.


Azerbaijan's Dan Ulduzu and Ashrafi Fields are to be developed by Amoco, Unocal, and Socar, the Azeri state oil company. Percentages of interest remain to be finalized before the contract is signed.

Egypt's proven oil reserves have doubled over the past 15 years, rising from 4 billion to 8 billion bbl this year. The country has produced over 5 billion bbl oil during the same period.

Egypt to be hub of vast gas grid. Amoco and Italy's ENI (Agip) are planning to develop Egypt's vast gas reserves and those of neighboring countries to create a regional gas transmission system and export center, despite Mideast stability uncertainties.


Benin has awarded Block 2 of its small aquatory to Tarpon Benin, a subsidiary of the Bettis Group, in a two-year E&P contract. Analysis of old seismic, acquisition of new seismic, and an exploratory well are called for.

Nigeria's Block 110, held by Allied Energy, is being farmed-into by Irish independent Tuskar Resources with 40% interest. The block includes not only Obe Field, but several important oil-bearing structures.


Indonesia's Natuna Field now has three partners. Mobil has farmed-in at 26% interest, joining operator Exxon, which holds 50% interest and state oil company Pertamina, with the remaining 24%. The 46 tcf field is now in its pre-development phase.

Indonesia's Wiriagar Deep 3 appraisal well by Arco, in the Berau Block of Bituni Bay, Irian Jaya, has tested 36 million cf/d gas.

China's Lufeng 22-1 Field is set to be the launching point for a worldwide fleet of shuttle tankers/FPSOs. CNOOC and Statoil have contracted a vessel for two years to serve on Lufeng 22-1 before moving on to other fields.

Copyright 1996 Offshore. All Rights Reserved.