International Focus

Unocal or Unoburm

The former Union Oil of California no longer has operations in California, and may very well soon have no operations in the US, if it pulls out in order to maintain its connection to the military junta ruling Myanmar (Burma). A California federal district judge ruled in March that the company could be tried in a US court for human rights violations in Myanmar. In April, Washington imposed sanctions against Myanmar that prohibit any further investment there by US-based companies.

Unocal has a US$340 million investment (28%) in a joint venture with Total, the Petroleum Authority of Thailand, and the Myanmar Oil & Gas Enterprise, a state-owned company. The JV is developing a major gas field in the Andaman Sea and a connecting 254-mile pipeline to Thailand.

US companies such as Motorola, Philips Electronics, and PepsiCo have withdrawn from Myanmar, bowing to both pressure from human rights organizations and the federal sanctions, and the other two US oil companies with Myanmar holdings, Arco and Texaco, are both in the process of selling off their interests in the country - Texaco, its 49.2% share in the 1.1 tcf Yetagun gasfield, and Arco, its Blocks M7 and M9, both highly gas prospective.

Unocal, unbending despite both protests and sanctions, is refusing to withdraw. At the company's annual meeting, CEO Roger C. Beach announced that the company had no plans to divest itself of its interests in Myanmar, saying, "We intend to stay."

Although 62% of the company's revenues come from the US, mostly from Gulf of Mexico and Alaska production, more than two-thirds of its $1.34 billion capital expenditures go to Central and Southeast Asia. "Our major focus area for the future is Asia," said Beach.

This spring, Unocal began its measured relocation with establishment of what it called "twin corporate headquarters" in Kuala Lumpur, Malaysia, where senior executives, including corporate president John F. Imle, Jr. sit. Beach remains in California for the time being. Company literature reportedly stated that Unocal "no longer considers itself as a

US company" but rather, "a global energy company".

The deepwater derby

The depwater derby. [6,733 bytes] The race is on, and they're neck and neck around the curve: Shell Offshore is momentarily ahead by a nose, but Petrobras isn't far behind. Shell's Mensa Field in the US Gulf of Mexico has slipped under the wire to become the world recordholder for production at the greatest water depth, at 1,676 meters (5,499 ft) due to bad weather in the South Atlantic preventing the hook-up of Petrobras's FPSO-2 on the Marlim Sul a few weeks ago.

Mensa had very little time in the winner's circle, however. The Marlim Sul (MLS-3) has now gone onstream to rapidly regain the world's deepest production record at 1,710 meters (5,610 ft). It was a two-horse race to this finish line with Petrobras and Shell tackling and conquering a host of deepwater challenges for ultradeep completion and production such as equipment and techniques for trees, risers, bundles, cables, pipe laying, and so on.

The "Race to the Depths" really only began in 1989 when Conoco's Jolliet (536 meters) bested Petrobras's Marimba, but Petrobras came back in 1992 with the first of several Marlim Field record-holders, Marlim MRL-9 (781 meters), then Shell's Auger (872 meters). Petrobras recouped the ribbon in 1994 with the Marlim MRL-4 (1,027 meters, surpassing a kilometer in water depth. Now, however, other operators are entering the deepwater derby - Amoco, Amerada, Elf, Exxon, Chevron, and Statoil.

There are fewer than 1,000 wells in the world's 240 deepwater basins. Many have already plunged to water depths of over 7,000 ft, and will soon be reaching an incredible 10,000 ft, although the production record now belongs to the Petrobras Marlim Sul-3. Elf's Girassol in deepwater Angola will likely take the third-place record at 1,345 meters (4,625 ft) and its Moho Field, offshore Congo, will probably be number four at 4,265 ft.

In the wings, however, Petrobras's Roncador RJS-436 at 1,853 meters (6,022 ft) and Shell's Baha, at 2,325 meters (7,626 ft) in the ultradeep Gulf of Mexico.

Australia's Hot Zone

Austrailian waters between the Northwest Cape and Darwin rank among the world's most prospective areas. [171,992 bytes] So much is happening in Western Australia - discoveries, innovative field developments, new fields onstream, exciting seismic surveys - that it's becoming easy to be blas? about the "boom down under." The latest awards - the 1996 work program round - is a clear indication of the enormous interest in being a part of the Northwest Shelf phenomena.

Shell led a consortium that included Chevron and Cultus Petroleum that sought and won the most coveted tracks in the round and became the talk of St. George's Terrace, Perth headquarters for most of the region's petroleum industry.

The tracks, W96-4 and W96-5 in the Browse Basin adjacent to the Cornea discovery in WA241-P, received a whopping bid of 38 exploration wells and 1,050 sq km 3D survey - an unprecedented bid - for the first and eight wells and 550 sq km 3D for the second.

Other tracks were awarded: five in the Carnarvon Basin and one in the Perth Basin. Of those in Carnarvon Basin, W96-11 was awarded to Mobil and Texaco, W96-13 to Hardy Petroleum, W96-14 to Wapet, and W96-20 and W96-21 to Woodside. In the Perth Basin, West Oil was awarded W96-22.

Analysts are now maintaining that Australian waters between the Northwest Cape and Darwin rank among the world's most prospective areas. In addition to the recent Cornea discovery (between 617 million and 2.7 billion bbl oil), several billion bbl of oil have also been tapped in the area, including Woodside's Laminaria-Corallina, the BHP Phillips Unden-Bayu Complex, Petroz's Elang and Kakatua Fields, and Tal Oil's Agincourt and Woolybutt. And, the region is equally blessed with gas reserves to rival those of the Mideast and Southeast Asia. Watch the migration to Perth this year and next.

Briefs:

Americas:

Venezuela's Maracaibo offerings. [34,742 bytes]Venezuela's Maracaibo region has several offshore blocks both in Lake Maracaibo and the Caribbean that will be offered in the Third Operating Agreement Round (Western Venezuela), due this month. Eight blocks, including the large Ambrosio Block near the outlet to the Gulf of Venezuela and the Cretacico Sur Block in the center of the Lake, are offered in Maracaibo, while one large block, La Vela Costa Afuera, is offered off the state of Falcon.

Brazil's Petrobras has more than 150 suiters. The proposals for partnerships in major deepwater plays around the world have come as a result of Petrobras's call for private enterprises to join it in such international undertakings. Most proposals were focused on the US Gulf of Mexico, however.

The Hibernia platform. [7,939 bytes]
Newfoundland's wonder platform, Hibernia, has been successfully towed to its site on the Grand Banks and positioned on the field to within 1.5 meters of the target touch-down point. Over the next 30 days, ballasting of the Gravity Base Structure (GBS) with more than 400,000 tons of iron ore will take place. Hibernia holds 3 billion bbl oil in place, with more than 615 bbl recoverable.

A deepwater Gulf of Mexico discovery has been made by Elf Exploration on its Virgo Prospect in 1,132 ft water. The Viosca Knoll 823 well encountered 376 ft of hydrocarbon bearing sands below 12,000 ft, and tested 22.7 MMcf/d gas and 1,816 b/d oil. Elf now holds 41 deepwater Gulf blocks.

Europe:

Norway's deepest well to date, the Nykhogda wildcat in the Voring Basin of the Norwegian Sea, has reached a depth of 3,900 meters below sea level and encountered gas. The field lies in 1,274 meters of water, and the reservoir lies at 3,000 meters below sea level.

Barents Sea licenses have been awarded by Norway's Petroleum Directorate. Statoil and Saga Petroleum gathered in the greatest number. Saga is to operate Area D of Loparyggen East and Area C of Bjornoya Southeast, while Statoil will operate Area G of Finnmark East. Norsk Hydro is to be operator of the Area A of Troms I, Agip will be operator of Area E of Finnmark West and Mobil will operate Area F. Area B of Bjornoya South is to be operated by Elf. Some 1.5 billion bbl oil and 585 billion cubic meters gas are predicted for the region.

Mideast:

Azerbaijan's Kapaz Field adjacent to Turkmenistan's frontier is being sought by Russian operator Lukoil to be developed in partnership with Rosneft. The Azeri state oil company Socar has only recently awarded Lukoil the Yalam Field to the north near the Dagestan border. Lukoil has an extensive exploration program in Danestani waters.

Egypt's US$1.2 billion LNG project for the Nile Delta is rapidly coming together. Citibank has been selected as the financial advisor for the Amoco-EGPC developers, and a site has been selected west of Port Said. A single train plant will be first, according to Amoco, which will provide 4 billion cm/yr to Turkey's Botas. First delivery is set for 2001. Gas reserves are as high as 20 tcf.

Iran's massive South Pars Field devel opment project has been granted to Total. The $3.5 billion deal will begin the Iranian exploitation of the approximately 25.5 tcf gas in South Pars, a continuation of Qatar's giant North Field.

Africa:

The West African Gas Project has attracted both Chevron Nigeria and Shell Nigeria. The companies have applied to Nigeria's Ministry of Petroleum Resources to take equity shares in the pipeline project that will provide Nigerian gas to Ghana, Togo, and Benin.

Gabon's Ofoubou Block, some 40 km west of the giant Rabi-Kounga Field, has been awarded in a PSC to Energy Africa (60%), the operator, and its partners for exploration. The area covers some 328 sq km and saw the drilling of a single well by Occidental in 1992 - which intersected a 70 meter oil column.

Gabon's first ultra-deepwater block has been awarded to Vanco energy. the 1.2 million acre block ranges from 8,200 to 9,900 ft in water depth. Seismic is scheduled for later this year, and drilling will commence as soon as a suitable drillship can be contracted.

South Africa's state oil company Soekor has begun production from the Oribi Field and has delivered the first commercial oil production, some 700,000 bbl, from the country to Caltex. Producing at 24,000 b/d, it is contributing roughly 6% of South Africa's oil requirements.

Asia/Pacific:

Malaysia's Nippon's Helang Field in SK10 [21,529 bytes]Malaysia's SK10 is to see the development of the former Shell Beryl Field, now the Helang Field, which has passed over to Nippon Oil Exploration (Malaysia). The gasfield's platform is scheduled for fabri cation next year, and pipe lines are to be con structed at that time to tie the field into the Malay gas system.

Western Australia's East Spar gas and condensate field, Harriet oil and gas field, and the undeveloped Macedon gas field are likely to be dumped by Mobil, after their being acquired when it took over Ampolex. Some 35% of East Spar is expected to be sold, 25% of Harriet, and 28.6% of Macedon, for a total divestiture of A$400 million.

Vietnam's 2 tcf Lan Tay and Lan Do gasfields are being linked to the mainland via a 400 km pipeline and offshore production facilities project that operator British Petroleum has awarded to Brown & Root and JP Kenny. The Nam Con Son Pipeline will provide power for Ho Chi Minh City.