Shell's plans to develop the Na Kika project got the go-ahead. All that is needed for the project is sanction from co-owner BP. Under the plan, the Na Kika project will produce from the Ariel, East Anstey, Fourier, Herschel, and Kepler fields with a semisubmersible. A sixth field, Coulomb, will be tied back to the facility as capacity becomes available in the estimated $1.3 billion project. The facility will be located in the Mississippi Canyon area, and the fields are located in water depths ranging from 5,800 ft to 7,600 ft. The project is expected to recover at least 300 MMboe.
FPSOs on the horizon?
The MMS is slated to release a final version of the environmental impact study (EIS) in January and make a final decision on allowing FPSOs at least 30 days after the release of the study. Paul Hays, representing the DeepStar consortium, said the group supports allowing FPSOs in the Gulf. "We believe this technology is proven for harsh and benign environments," he said. "There are (areas) that wouldn't be developed without this tool."
Indeed, without allowing FPSOs, it would be difficult to develop most of the Gulf.
Robert Siddall, the Texas General Land Office's (GLO) Compliance Coordinator in the oil spill division, noted the tremendous potential for development in the deep areas of the Gulf but also restated a caveat on safety issues. With 800 oil spills alone reported last year within 10 miles of Texas' coastline, over which the GLO has domain, he said, it was important to remember that about 70% of those spills came from vessels. Siddall said the GLO supports allowing FPSOs in the Gulf, but "we're asking that we do it calmly, slowly, and cautiously." Most of all, he said, the GLO would like to be included in the process. "It could be a boon for the environment, and it could be a bust, either way," he said. "If we don't do it right, it could be a problem."
Aker move on Boomvang
J. Ray McDermott and subsidiar, Mentor Subsea Technology Services received contracts valued at around $65 million for work on the Boomvang project. McDermott will fabricate the production facility topside and conduct offshore installation of the spar platform, including moorings, hull, production risers, and topside. Mentor Subsea, working with Aker Maritime, is to provide production risers for the project. Aker Maritime will be responsible for providing the complete hull and moorings. The Boomvang development is located in East Breaks 642/643/ 688/732 in 3,450 ft water depths. Operator Kerr-McGee holds 30%; Enterprise Oil holds 50%; Ocean Energy Inc. holds 20%.
FPSO possible actions
Following the release of the final EIS for Proposed Use of FPSOs in the Gulf of Mexico in January, the MMS can choose one of these three options:
- Allow FPSOs in the GOM based on the study.
- Allow FPSOs in the GOM, but with certain restrictions, based on the study.
- Decline to allow FPSOs in the GoM based on the study.
- Devon Energy Corp. said initial production began from the Eugene Island 156 No. A-1 and No. A-2 wells. The two are producing at a combined rate of around 51.1 MMcf/d of natural gas and 1,600 b/d of condensate. Eugene Island 156 is located in about 82 ft water depth. Operator Devon has 100% working interest.
- McMoRan Exploration and Noble Affiliates said their Vermilion 196 No. 2 exploratory well encountered 70 ft of net pay. The plan is to save the well, drilled to 14,798 ft by Marine 15, for future production. McMoRan operates Vermilion 196 with 47.5% interest, and Noble Affiliates subsidiary, Samedan, holds 25%.
- The Princess deepwater discovery was confirmed, Shell said. The find has potential reserves over 200 million boe. Shell, with 45%, operates Princess, located in Mississippi Canyon 765 in 3,600 ft water depth. BP holds 23%, Conoco holds 16%, and ExxonMobil holds 16%.
- The High Island A-441 No. 1 discovery well tested at 9 MMcf/d of gas and 126 b/d of condensate. Production from this well is scheduled to begin in the early first quarter of 2001 following flowline installation. High Island A-441, 73 miles offshore Texas, is in 168 ft water depth. Operator Remington has 75% working interest, and Magnum Hunter Resources owns the remaining 25% working interest.
- Samedan Oil and McMoRan Exploration joined up for an exploration alliance. Samedan will have a 25% working interest in prospects in Vermilion 195/196/207, Eugene Island 96/97/ 109, Vermilion 144/145, West Delta 1/12/13, Grand Isle 2, Louisiana state lease 340, and Garden Banks 272.
- Magnum Hunter entered a 50/50 joint venture exploration, development, and recompletion project with El Paso Production Co. on South Timbalier 264/265/266. The project includes one producing gas well and three existing wells scheduled for completion, including a recent discovery on South Timbalier 265 and a 1999 discovery on South Timbalier 264. An additional six to eight exploration, development, and recompletion wells were identified. Under the JV, each company has 50% in the blocks, except in the South Timbalier 265 No. A-4 well, where El Paso holds 60% and Magnum Hunter holds 40%.