"Western Australia's production growth is moving so fast you can stand back and watch it climb."

Feb. 1, 1996
Goodwyn Platform. "Chevron has been in Western Australia forty-plus years. When I arrived here eight years ago, the production level of WA's combined gas and energy equivalent would have been about 130,000 b/d. At the end of 1995, we'll have climbed to 600,000 b/d - an increase by a factor of four. And the potential isn't even foreseeable yet, there is so much opportunity out there."

Chevron Asiatic's offshore projects manager, Gary L. Campbell, accounts for the remarkable growth of the Northwest Shelf in this exclusive interview.

Goodwyn Platform.

"Chevron has been in Western Australia forty-plus years. When I arrived here eight years ago, the production level of WA's combined gas and energy equivalent would have been about 130,000 b/d. At the end of 1995, we'll have climbed to 600,000 b/d - an increase by a factor of four. And the potential isn't even foreseeable yet, there is so much opportunity out there."

Chevron has invested $3million a day, 7 days a week as its share of the A$12 billion invested in the industry over the past eight years. At the end of each of those years, Campbell says, the company had a billion dollars of oil and gas assets. Its background in WA goes back to 1952, when Chevron came to Australia with Texaco and joined with Ampolex and Shell to form the Wapet Group - Western Australia Petroleum. A year later, it had its first successful oil discovery in WA, just 60 km south of Dungra, Rough Range I, but it wasn't commercial. "It was encouraging to hit oil in the first well, no matter the result."

Altogether, Chevron has been involved in over 1,600 wells out of Australia's total of 6,500 wells. "We've learned a lot about the stratigraphy and geology since then," he says, "the potential and the opportunities of oil and gas here."

In the last five to six years, The Woodside Group has drilled about 140 wells in exploration appraisal and development, and the Wapet Group has about 1,300 wells or so. "We drilled about 200 wells onshore until we had our discovery on Barrow Island in 1964. It is a nature preserve off the coast of the northern tip of Australia just offshore the Dungra area about 60 km, where we now have a potential 1 million bbl of oil still in place. Peak production in 1967 was 50,000 b/d but is now 14,000 b/d. Through reservoir management, it still has a long future."

Wapet has been very successful, not only with Barrow, but with the Thevenard Island area fields, Saladin - three offshore platforms in roughly 20 meters of water, that are now at 50,000 b/d, Roller Skate, and Yammaderry, a series of monopods that have proven themselves very well. Their gas and oil are carried to Thevenard Island, where they are processed; the gas is dehydrated, compressed, and sent to shore into the domestic pipeline network.

Greater Gorgon Field

About 10 years ago, Wapet had the Gorgon Field discovery about 100 km off Barrow Island in about 250 meters of water. It's extremely long - 30 or 35 km long, so since then, Campbell says, they moved right down the center of the field with three more appraisal wells, and then found considerable gas when they reached the north end of the field. A third appraisal well is now being drilled on the north end, making it a total of about six wells.

In February 1995, Wapet had a new discovery, the massive Chrysaor Field north of Gorgon in 800 meters of water. Adjacent to it are West Tryal Rocks and a smaller field called Spars. They're all in close proximity, so they are collectively known as Greater Gorgon. There are several possibilities for their development. A potentially profitable joint venture would be the cooperation of the Wapet Group with the Woodside Group as a source of gas to the existing three LNG plants, with space for additional LNG trains. Similarly, there's land available for a complete greenfields new development that could stand on its own.

Campbell says, "The point we're making is the reserves in Greater Gorgon appear to be equal to or greater than the known reserves in both Woodside's North Rankin and Woodwyn Fields. That's very impressive when one looks at that order of magnitude. Our opinion is the economics are attractive on both options. The market exists, and Chevron Corporation is very interested in moving it into development."

Like Chevron, Shell is common to both ventures and has seen the potential of Gorgon. The Wapet Group associated with this gas is the Ampolex, Texaco, Chevron, and Shell, and then over in the Woodside Group, with equal shares, 1/6th each, are Chevron, Shell, BHP, Mimi Group, BP, and Woodside Petroleum.

Shell has been pressing for the development of the Gorgon gases, because, as a world leader in LNG, it certainly sees its energy potential in Far East Asia. Development costs, according to Campbell, would exactly mirror the $3million a day, seven days a week Chevron has spent over the last eight years, if not be a little higher rate per day.

Scott Reef and Brecknock

Even more fascinating that the development of Greater Gorgon is the prospect of bringing on Scott Reef and Brecknock, each of which have reserves that probably equal the sum of Gorgon's and Woodside's. In 1971, the Woodside Group drilled 11 dry holes before it discovered Scott Reef. They did seismic, analysed it, then went out and discovered Brecknock with their next well. "They were basing their drilling entirely on simple 2D seismic," says Campbell, "but it was pure quality data. Right after Brecknock, they found North Rankin, Angel, and Goodwyn. Eleven dry holes and then five straight major gas discoveries in a row; that was pure earth science at its best.

"The drilling technology in those days was quite stupendous. Each of those discoveries were 3000 meters to the top of reservoir, whereas on Barrow Island, it's about 600 meters down. Saladin was 1500 meters down, and so have been the typical reservoirs that we've found. The natural gas was associated with the Triassic Age, way back in the times of the crocodiles, which must have had their origin back then, too. The oils we found are in the Jurassic period, a little younger, but still in that 100-150 million years range. That's an interesting reflection on the depth of the geology of this continent.

"Western Australia's offshore is an amazingly prospective area; its under-explored. We've had about 4,500 exploration appraisal wells. Compared to the North Sea or Gulf of Mexico, that's only about 1% explored. Officially, its 3%."

Another Gulf of Mexico?

Apache's chief executive, Raymond Plank, has said Western Australia's Northwest Shelf could be another Gulf of Mexico. Campbell says that it's not a bad analogy. "After all," he says, "80% of our gas and oil has been found offshore, and not much deeper than 250-800 meters. Gorgon Field and the adjacent Chrysaor Field a major step off the Continental Shelf. One was on top, the other went down to the bottom.

"The first main basins were found in the Bass Strait area at about the same time the Barrow discovery was made in the Northwest - 1964. So, Esso and BHP went on to develop 14 fields in the Bass Straits, and by 1985, they had the country virtually self sufficient in domestic crude oil. Through outstanding reservoir management and appraisal extensions, they still have about 300,000 b/d coming out of the Bass Strait. We have just reached that here in WA this year. That's why this is a very historic moment, when the total energy from WA is 600,000 bbl of oil equivalent - half of that is the liquids, the crude and condensates, half of that in energy equivalent is the natural gas.

"Western Australia's production growth is moving so fast you can stand back and watch it climb. Look what's happened just this year, 1995: February, the Goodwyn Platform came on. Goodwyn is a very rich condensate field. It has a condensate gas ratio that's of the order of 90 bbl per million, compared to Rankin, at roughly 25 bbl per million. So when we turn on a Goodwyn well, half by weight is virtually the liquids.

"Now we're presently producing 75,000 b/d from Goodwyn in condensate, and we're now drilling our eighth well, which is going to be a real world class horizontal well with a five km offset before the start of about an 800-meter horizontal section. And that's at a true vertical depth of about 3000 meters. That's going to be a real well. There'll be about four of them like that to cover the huge aerial extent of the field. The remaining 10 km will have to be developed by either subsea production or another platform down at the far end. "Goodwyn is producing 85,000 b/d; Rankin as putting in about 25-30,000 b/d. The Wapet Group with their Barrow Island and their Thevenard Island operation are putting in 60,000 b/d, and we just started our new Wanaea Cossack FPSO vessel with the first well - as of yesterday, we have five wells on production, and we are close to 95,000 b/d. We'll climb with the next well up to 115,000 bbl a day. That's a beautiful startup. It was almost flawless, instrumentation checks, safety checks just went beautifully, and we're very proud of that technology. It's the first subsea production that Woodside has in their area of operation. And there are opportunities for probably a dozen more such fields or extensions of fields that could be brought onstream with similar subsea production. We're very pleased to have that technology and productivity coming from the subsea end of the business."
The Cossack Pioneer FPSO.

Cossack Pioneer

"It's a historic moment, right on schedule. Predicted six months earlier to achieve an offtake of 650,000 bbl within virtually 12 days of startup is incredible. And we're very proud of how it's all come together. Chevron has two special reasons to be proud of this. One is the conversion of our former Chevron tanker, is the Cossack Pioneer. It's a very heavy duty rugged former VLCC that had the center section chopped and narrowed into a good sturdy 150,000 deadweight ton tanker at a cost of about A$70 million. Both the sides and top are twice the thickness of newbuilds.

"It's one of the largest in size, and the offtake capacity of this facility, 115,000 b/d plus 100 million cf/d of gas at pipeline pressure, is one of the world records of size in an FPSO. There are roughly 34 of these units in the world, but this is one of the few that handles gas in addition to oil. So that's what's making this a record year for WA. The gas, roughly 300,000 b/d of oil equivalent, or 1.8 bcf/d. Roughly 400 million cf/d of that goes to domestic use, onshore in WA, the balance is converted for LNG export. And that's at the rate of about 7.5 million tons a year of LNG compared to Japanese consumption of about 41 million tons a year or the world consumption of about 60. So it's a very significant import to the world LNG market.

"Chevron is also very proud of the four Chevron seconds with the Woodside Group. Two of them handled the planning and execution of the successful six-well subsea completion program that was under budget and ahead of schedule. The other two were engineers. One was associated with the instrumentation of the total topside of the FPSO, the safety systems, and such systems, and the other was responsible for the fabrication of the topside process equipment.

"We see tremendous opportunity in LNG both in the Woodside Group and in the Wapet Group. Our business plan is to continue with an aggressive exploration and appraisal program in both the Woodside Group and Wapet Group. In the Wapet Group, for example, we just ran our North Gorgon 3 well appraisal well right to the TD of 4,200 meters, and those results are being appraised as we plan the next appraisal well. We just completed a series of 3D over other prospects within the Wapet Group, and are continuing with another half dozen appraisal exploration wells within the Wapet Group. "Over in the Woodside Group, we're within a few days of starting our second appraisal well in the Perseus Field, which is exactly between the Rankin and Goodwyn Fields.

"It is in a unique geology compared to the horst blocks of Rankin and Goodwyn. Incidentally, Gorgon as well as Chrysaor are also horst blocks. Here we have Perseus, a river sands literally between the two. An appraisal well just slightly off structure back in the 1970s gave us a hint of gas out there, so we drilled a long deviated well from the Rankin platform about four km offset into another set of sands, now been called Perseus. And the porosity and permeability were such that we have been producing that well for a year and a half at 240 million cf/d, through a seven-inch tubing. The velocities were so great that when the gas reached the wellhead on board Rankin, we had to split the flow and slow it down. Now, we've had very little pressure go out. The wells probably average closer to 200, 220. But that's extremely good news for the opportunity of the aerial extent of that field. That's why, with this second appraisal well, we've stepped out another three km beyond the producer, and a third will go out even farther to get an aerial extent. It has a potential of 3-5 tcf, which could easily handles another new LNG train.

"We have numerous further wells and prospects, and, for the first time, have the value of a complete 3D interpretation of the complete permit area, so we're very much prioritizing our prospects and planning our exploration programs into a balance of oil and gas, the oil to help finance the development of the gas.

"Thus Wanaea will be very much helping our business through its cashflow to finance future expansion. Its gas is even richer in LPGs than Goodwyn's. We'll be capturing about 500-600,000 tons a year of propane and butane from that gas. There are good opportunities for marketing it in all of Far East Asia. It was that gas that justified the project. We're very proud that Woodside's management was able to complete both those significant projects - a billion dollars worth of facilities. The LPG plant was roughly $300 million, the Wanaea Cossack roughly $700 million. Both plants were completed under budget and ahead of schedule.

"One has to evaluate your business profitability when evaluating development alternatives. Scott Reef and Brecknock, for example, are several hundred km from shore and at extremely deep water depths. In addition, they're sitting on top of a nature preserve, a coral reef. So the timing for their development was not as opportune as for Rankin and Goodwyn. The same situation exists with Esso-BHP's huge Scarborough reserves that are even farther offshore Northwest, well beyond Gorgon. There are several Tcfs there that will be an opportunity in the future.

"As we build the infrastructure, the lateral opportunities can come. That appears to be one of the business thrusts of joint ventures today: Justify the base facilities and the lateral opportunities will come. WA has a great future, a great long term future.

"WA's centralization of oil field service companies, support companies, and operators has certainly made working here a pleasure. We now have full 24 hour a day satellite coverage of Australia that gives us instant ability to transmit data from the far East to interpretive hubs here in Perth. The transportation, time zone consideration, the cost of living, the value of living is quite outstanding here. And the Western Australian government, through the Bureau of Development will continue to encourage building that infrastructure. Certainly the money is going to be here, as the production has now this very year reached 600,000 bbl a day. Picture another 2 or 3 LNG trains in the next few years and just keep that going, and you'll see."

Copyright 1996 Offshore. All Rights Reserved.