International Focus

There can be no doubt that the subsea pipelayers of today have accomplished some miraculous traverses of the oceans' floor to bring oil and gas to shore, witness the crossing of the North Sea by such pipelines as Zeepipe and Interconnector, the Magreb-Europe pipeline across the Strait of Gibralter, the Trans-Med pipeline from Tunisia to Italy, and China's pipeline from Hainan Island across the South China Sea to Hong Kong.

Pipe dreams

There can be no doubt that the subsea pipelayers of today have accomplished some miraculous traverses of the oceans' floor to bring oil and gas to shore, witness the crossing of the North Sea by such pipelines as Zeepipe and Interconnector, the Magreb-Europe pipeline across the Strait of Gibralter, the Trans-Med pipeline from Tunisia to Italy, and China's pipeline from Hainan Island across the South China Sea to Hong Kong.

Western Australia has two major pipelines bringing gas from Indian Ocean fields Goodwin and North Rankin, and Thailand has its extensive Gulf of Thailand pipeline network. Brazil's Campos Basin deepwater fields are linked to shore via four pipelines, and the US Gulf of Mexico pipeline network, now reaching out to deepwater fields via the Poseidon pipeline, is a marvelous achievement.

Buoyed by these extraordinary submarine accomplishments, pipeline planners are now envisioning several great leaps forward that embody a magnitude of technological challenges unseen in these previous pipelines - a pipeline connecting the Persian Gulf and India, a Sakhalin Island to Japan pipeline, and a pipeline stretching from the Newfoundland Grand Banks to Nova Scotia and on to New England.

Perhaps these proposed pipeline projects will see fruition, but they face enormous factors that may thwart their completion. The most ambitious of them all is the Oman-to-India pipeline, which has shifted into the on-again off-again category. Faced with water depths of more than two miles, this US$4 billion plus pipeline would actually be two lines 1100 km long, 24 in. in diameter, that would cross the Arabian Sea at depths down to 3,500 meters. Feasibility studies by a renowned consortium of construction and design companies (McDermott, Saipem/Snamprogetti, Bechtel, and Engineers India) concluded it was both possible and financially feasible and that it could ultimately pump 2 bcf/d gas to India from Omani gas fields by 1999, an unlikely target date.

The Sakhalin-to-Japan pipeline, on the other hand, would encounter significant dangers if the currently proposed route is adhered to, traversing the Japan Abyssal Plain. Before reaching the Plain, it would have to cross the relatively shallow Sea of Okhotsk from the Lunskoye and Piltun-Astokhskoye Fields, an area where the danger of scourging by icebergs and frozen seas penetrates the seafloor to depths of more than 20 meters.

The latest of the proposed mega-pipelines is the Grand Banks to Nova Scotia to New England pipeline now being touted by Canadian interests as a means of marketing the considerable gas off Newfoundland. Unfortunately, like the proposed Oman-to-India pipeline, this line would also have to cross some enormous depths, particularly if it traverses the Laurentian Cone between the Jeanne d'Arc Basin gasfields and Nova Scotia's Sable Island, but even if it skirts the Cone, it would have to cross The Gulley canyon, a chasm in the continental shelf. Technology will be tested if it is to become reality.

Who's to do
Amenam-Kpono?

Among the many unsolved dilemmas confronting the lugubrious bureaucracy in control of Nigeria's Department of Natural Resources is the question of which operator should have the bigger split of the now unitized Amenam and Kpono Fields, which lie astride OPL99, held by Elf, and OPL70, held by Mobil.

The Department is to arbitrate the dispute, still being negotiated by the two operators after almost a year of discussions. Yet no decisions have been made. At issue is Elf's demand for the lion's share, since 80-90% of the 650 million bbl structure lies within its concession and that it has been more successful with its series of wells than has been Mobil.

Mobil, however, maintains that the Kpono and Kpono West Fields have proven that they can be tied into the Ekpe Field, nearby, for easier and less expensive development, and that it rather than Elf has the experience and ability to develop the fields, thus should have the larger split as the developer.

Elf has rebutted Mobil's claim, however, by maintaining that only two wells would be needed to develop the fields, rather than the original three that were planned. A further complication has been NNPC's persistent failure to meet its cash call obligations for development and exploration, which has led to delays in work schedules and reduction of company E&P budgets. Both Elf and Mobil have called for a decision by yearend. First phase production will be 100,000 b/d.

Personal compensation

Another US senator is railing at an American major for what he calls "under the table payments" to obtain foreign contracts. Call it what you like: dash, baksheesh, personal gift, or consultant's fee, payment for considerations that accomplish a business purpose is as traditionally accepted a way of doing business throughout most of the world as a handshake, perhaps more so.

Despite the occasional protestations, mostly by American politicians, that this company or that greased the palm of this or that government personality to get a contract, concession, or governmental approval, it happens thousands of times a day throughout the world. It is customary. It is the way business is done.

In effect, the payment of personal fees or the gifting of someone for an important introduction or a pushing through of contracts, papers, or proposals, in the eyes of Africans, Latin Americans, and Asians, as well as many less obvious Europeans and Americans, is simply a way of showing appreciation, of compensating someone for assisting in the business effort. Taking a "holier than thou" attitude accomplishes nothing more than aggrandizing the protestor in the view of his less informed constituents. Worldly businessmen know this is the way of getting things done.

Briefs:

Worldwide:

Hydrocarbons discovered by new field wildcat wells during 1996 were less than in 1995, according to Petro consultants' report "World Petroleum Trends 1997". The estimates show the hot spots for liquids discovered were almost entirely offshore, with deepwater West Africa the hottest. Egypt's Nile Delta offshore was the hottest for gas, and Brazil showed the most growth in E&P opportunities in its deep offshore. Excluding the USA and Canada, some 5.24 billion bbl oil and condensate and 38.7 tcf gas were added to world reserves, replacing 25% of liquids and 64% of gas produced in 1996.

Americas:

Elf's deepwater US Gulf discovery, the Virgo prospect, appears to be a major find. Lying in Viosca Knoll 823-2 in 1,132 ft water depth, the well hit four pay zones with the lowest flowing 1,816 b/d oil and 23 MMcf/d gas. Consider able evaluation will be undertaken this year, but a semi has been contracted for early next year.

Alaska's Warthog prospect, an Arco project just three miles off the Arctic National Wildlife Refuge, is about to see its first drilling, to be carried out by Global Marine's Glomar Beaufort Sea 1, in the Camden Bay Exploration Unit. The state lease was about to expire in August, thus the well will be drilled from a federal lease to the adjacent state lease.

Canada's long awaited launch of its Atlantic oil and gas province with the Hibernia Field is just over the horizon. The enormous platform was put in place and the first well spudded in July. Production is expected by late November.

Canada's Sable Island-Nova Scotia pipe line, some 313 km from the Venture, Thebaud, and Triumph Fields, will be laid by the new Allseas pipelay vessel Solitaire, assisted by the Allseas Trenchsetter. The 26-in. export line in 20-150 meters of water, will stretch 209 km between the fields and shore, while the remaining 104 km of line comprises an 18-in. collector between fields.

Trinidad & Tobago's deepwater Block 25B and 26B have been awarded to Exxon. The PSCs were as a result of Exxon's bid in the Third Round earlier this year. The blocks lie in 2,500-4,300 ft of water.

Europe:

Norway's Block 197 over the Froeya bank off Kristiansund, appears to have had a discovery by Amerada Hess, with the recently drilled 6306/5-1 well, drilled by the Deepsea Trym semi submersible. Amerada holds 70%, Statoil 30%.

Russia has asked Finland's Neste Oy to assist in organizing a licensing round for exploration of the Russian Barents Sea. First presentation is in mid-September in Helsinki. Norway has recently licensed seven blocks in its own Barents aquatory.

The UK's Department of Trade & Industry has extended the deadline for applications for the out-of-round West of Shetland blocks 204/14 and 204/15 to October 3. They lie north of BP's Suilven discovery in 204/19.

Mideast:

Azerbaijan's Guneshli Field is being sought for redevelopment by both Ramco Energy and Conoco. The shallow water Caspian field currently provides 60% of the country's GNP. The field has been in decline for years.

Africa:

The Congo's Djam bala Field, 35 miles offshore, is to be developed by Agip and its partners Hydro Congo and Sasoil. Production is expected to top 4,000 b/d oil upon going onstream in August 1998. Two subsea wells are to be tied back to the nearby Kitina Field.

Gabon has granted Vanco Energy two prized deepwater blocks, the 1.2-million acre Astrid Marin Block, and the 1.6-million acre Anton Marin Block, both adjacent to the Congolese frontier and near some of the region's most prospective structures.

Nigeria has approved PSCs as the basis for its relations with foreign operating companies rather than joint ventures, as a means of rectifying the present situation it is in, with JV contributions far in arrears, reduced budgets, and the cost of exploration rising rapidly.

Senegal and Guinea-Bissau are trying to interest Petroleos de Venezuela (PDVSA) in drilling their offshore joint development area, where heavy oil is known to exist in large quantity at 10 degrees API. Dis cussions are ongoing between Petrosen and PDVSA.

Asia-Pacific:

Another Australia-Indonesia Zone of Cooperation discovery has been made in the Timor Sea. the Hingkip Field was found in Block 91-12, some 6.6 km north of the huge Undan-Bayu unitized field.

A Sakhalin FPSO is being sought by the Sakhalin Energy Investment Corp. for utiliza tion in the development of the Piltun Astokhskoye Field. Leading contenders for the vessel are said to be Bluewater, Single buoy Moorings, and a consortium of Russian firms. Production, as part of the Sakhalin II project, is supposed to begin in summer 1998.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.

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