March 1, 2000
Analyst James K. Dodson released his annual ranking of companies by wells drilled in the US Gulf of Mexico federal OCS and state.

Chevron top driller in 1999 Gulf statistics

Analyst James K. Dodson released his annual ranking of companies by wells drilled in the US Gulf of Mexico federal OCS and state. Chevron ranked number one in 1999, drilling 109 wells. In 1997 and 1998, Chevron was also first, with 132 and 112 wells respectively. Chevron's 1999 well count is more than twice the 44 wells drilled by number two Shell Oil.

Shell Oil was also number two in 1997 and 1998, with 106 and 85 wells respectively. The rest of the 1999 top 10 are Vastar Resources, 34; Coastal Oil, 27; Texaco, 27; Exxon, 27; Unocal, 26; LLOG Exploration, 20; Apache, 18; and Sonat, 17. Seventy-five offshore operators drilled 687 wells in the US Gulf in 1999. In 1998, 90 companies drilled 1,057 wells in the Gulf; in 1997, 97 companies drilled 1,253 wells; and in 1996, 97 companies drilled 1,158 wells.

Shell, Chevron team up to cut drilling costs

Chevron and Shell said they will share drilling rigs and jointly drill two exploration wells this year in the deepwater Gulf of Mexico. Chevron and Shell will drill two exploratory wells using Shell-contracted rigs, and Chevron will use a Shell-contracted rig to drill a third well in a joint venture with Texaco. Chevron also will provide Shell one future rig slot on Transocean's Discoverer Deep Seas drillship. Shell and Chevron hope to use this joint effort to set new benchmarks for low-cost deepwater drilling.

Shell will use the Transocean Marianas semisubmersible to drill the first well on Chevron's Hurricane prospect, located in 2,000 ft of water on Ewing Bank 1010. Spudding will probably occur in July. Partners in that prospect are Shell and Agip Petroleum Exploration. Shell will also use the Noble Jim Thompson semisubmersible to spud the first well on Chevron's Roy prospect at Mississippi Canyon 988 in 4,800 ft water depth, probably by the end of April. In May, Chevron will drill an exploratory well with Texaco on the Poseidon prospect on Mississippi Canyon 772 in 4,900 ft water depth, using the Transocean Marianas, which is contracted to Shell.

Marathon: Petronius scheduled for 3Q

Marathon Group's worldwide exploration budget for 2000 has been set at $248 million; 75% of this is dedicated to North American new ventures and prospects. Exploration spending in 1999 was $257 million. Marathon plans to complete Petronius development, located on Viosca Knoll 786, this year. Production should begin in third quarter 2000.

Previously, Petronius was expected to come onstream in mid-1999. Unfortunately, mechanical failure caused the platform's 3,800-ton deck module to fall to the seafloor in 1,800 ft of water in December of 1998. Operator Texaco told the US Minerals Management Service the module could not be retrieved but posed no danger. In May of 1999, Texaco let a contract to Gulf Island Fabrication to rebuild the module. Texaco operates the 80-100 MMboe Petronius field with 50%, and Marathon owns the remaining 50%.

Mini-TLP planned for Typhoon prospect

Delmar Systems and Shell Deepwater claimed another world record for mooring depth in January by mooring the Transocean Marianas in more than 7,500 ft of water on Shell's Coulomb prospect on Mississippi Canyon 657. The mooring system consists of eight 12-ft diameter, 60-ft-long suction anchors embedded in the seafloor and attached to 10,000 ft of 3 3/4-in. wire rope. The deepest anchor was set at 7,738 ft.
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BHP said the Typhoon project, located in 600 meters water depth in Green Canyon 236/237, will be developed by subsea completion and tieback of four existing appraisal wells to a mini-tension leg platform. This TLP will be used as a local host facility. Production is expected to begin in the third quarter of 2001 (less than four years from discovery). Export of oil and gas will be via pipeline. Throughput is expected to reach 40,000 b/d of oil and 60 MMcf/d. Field life is expected to last between five and eight years. Chevron operates Typhoon with 50% and BHP holds 50%.

Gas supply from Gulf to remain steady

Arthur Andersen and Cambridge Energy Research Associates released a joint report stating that more than 80% of planned power generation capacity will be gas fired, compared to only 15% at the present time. This new power generation demand for gas is likely to increase the generation demand by as much as 4-6 tcf over the next 10 years, compared to growth of about 1 tcf during the 1990s.

The report, North American Natural Gas Trends 2000, calls the next decade a new era for the gas industry. The era will mark a tremendous period of growth potential, but transform the marketplace and the structure of the industry almost beyond recognition. There are other factors:

  • Ongoing wave of consolidation in industry, particularly in energy distribution
  • Revolution in information technology and e-commerce, which will both alter the way energy is used and ensure reliability.

The authors call the target of 30 Tcf of gas demand by 2010 more a possibility than a probability, mainly because the market is cyclical and is unlikely to develop smoothly. The report also notes sources of gas supply will be altered. More gas is coming from the deepwater Gulf of Mexico, but because of declines in shelf production, Gulf production has been essentially flat.

While growth in deeper water will continue, slowing or reversing the declines on the shelf is essential to growing US supply capability. New sources include Atlantic Canadian gas; Northwest Territory gas; greater use and/or reactivation of LNG import facilities; and longer term, possible use of Arctic gas, according to the report.

Mad Dog well finds similar zones

Unocal Spirit Energy 76 said an appraisal well on the Mad Dog prospect found 250 ft of oil pay in zones appearing to correspond with the discovery well. Mad Dog is located in 5,000-7,000 ft water depth in Green Canyon 825, 826, and 782. The appraisal well was drilled to a measured depth of 20,268 ft, about 2 miles north of the discovery well. A sidetrack was drilled to 21,560 ft. Results are under evaluation.

The block partners plan to drill more wells to appraise the field, after which they will make a development plan. BHP said it holds interests in adjacent blocks into which Mad Dog appears to extend. BP Amoco operates Mad Dog with 63.56% interest; Unocal holds 25%; and BHP holds the remainder. Spirit Energy said its leases in the region seem to contain geological characteristics similar to Mad Dog; it plans to drill in the area using the Discoverer Spirit drillship, now under construction in Corpus Christi, Texas.