Asia-Pacific offshore pace to grow

Gene Kliewer - Technology Editor, Subsea & Seismic

The Asia-Pacific area is an offshore growth market. With an estimated capex of over $97 billion through 2009 to 2013, Asia is expected to witness an increase of 77% in terms of capex when compared to the previous five-year period, according to Infield’s second editionRegional Perspectives Asia Pacific Market Update Report 2009/13. Asia is expected to represent the second largest share of the global capex spend.

In Asia, the most prominent risk is the lack of liquidity in the markets, Infield says. This essentially sees operators unable to raise the finance to develop fields, a problem which could be made more acute in Asia where many operators are independents.

Asia’s emergence as a significant deepwater operations arena should not be overlooked, according to Douglas-Westwood’sThe World Deepwater Market Report 2009-2013. Indonesia, Malaysia, and India all have development prospects on screen for the 2009-2013 period and the region should account for nearly 10% of deepwater capex. For the purpose of this report, India will be excluded. Offshore has a report on India scheduled for this coming April. Australia and New Zealand also are discussed in other issues of the magazine.

Exploration

Exploration leads the way for subsequent drilling and production and the region is an active area for geology and geophysics work.

Indonesia may be the most active exploration sector in the Asia-Pacific region. Searcher Seismic and DMNG have begun a 3,882-km (2,412-mi) 2D seismic survey in the South Halmahera basin, offshore Indonesia. The partners will acquire a 15 km x 15 km (9 mi x 9 mi) 2D long-offset seismic grid covering 32,000 sq km (12,355 sq mi). The companies say the survey’s objective is to explore the postulated continental crust wedged between the oceanic Pacific plate to the east and the Molucca Sea to the west. Final data processing is scheduled for completion in May.

Niko Resources has acquired interests in several deepwater blocks offshore Indonesia. According to the company, each block has ocean bed oil/gas seeps, and large structural features.

Niko’s planned seismic program for each block includes:

• 3,000 km (1,864 mi) of 2D seismic data for Bone bay
• 1,200 sq km of 3D seismic data for Cendrawasih
• 1,062 km (660 mi) of 2D and 3,150 sq km (1,216 sq mi) of 3D for Kofiau
• 3,000 km (1,864 mi) of 2D for Kumawa
• 3,500 km (2,174 mi) of 2D for Seram
• 4,400 km (2,734 mi) of 2D for South Matindok
• 284 km (177 mi) of 2D and 2,700 sq km (1,042 sq mi) of 3D for Southeast Ganal
• 371 km (231 mi) of 2D and 702 sq km (271 sq mi) of 3D for West Sageri.

The company has a single-well commitment for each block.

Cairn Lanka has begun a 3D seismic acquisition in the Mannar basin offshore Sri Lanka. CGG Veritas is conducting the 1,450-sq km (560-sq mi) survey using the seismic vesselSR/V Viking II.

The survey is scheduled for completion in the first quarter of this year. Completion of data processing is expected in mid-year.

A partnership of Mitra Energy, KUFPEC, and Singapore Petroleum Corp. have completed a 2D seismic survey offshore Vietnam.

The program, which started mid-June 2009, compiled 3,010 and 1,589 line km of full-fold 2D data over blocks 19 and 20, respectively. Mitra and its partners signed two production-sharing contracts for these blocks with PetroVietnam in August. Both are in the western Nam Con Son basin, in water depths ranging from 50-100 m (164-328 ft).

Coastal Energy Co. has government approval of its Environmental Impact Assessment (EIA) for a 2D seismic acquisition over the Ko Kra and Nakhon basins in blocks G5/43 and G5/50 in the Gulf of Thailand.

The company planned to begin the 4,000-km (2,485-mi) program in 3Q 2009. Processing and interpretation is scheduled for completion in the first quarter of this year. As part of the block G5/50 concession agreement, Coastal Energy must drill one well in the area this year.

The Philippine Department of Energy (DoE) has approved the revised work program and budget for the current exploration sub-phase for Service Contract (SC) 55. The joint venture partners now have until August to complete a combined 2D/3D seismic program, and until August 2011 to drill one deepwater well. In addition, the DoE has approved work program revisions to Service Contracts 50 and 51. The partners will have to drill two wells in SC 50 by March 2011 and one exploration well in SC 51 prior to December of this year.

Fugro Airborne Surveys has concluded the airborne acquisition of aeromagnetic data in the North block concession offshore the Republic of Palau.

The purpose of the aeromagnetic survey is to map basement rock and lithology. The data will be processed, interpreted, and tied into the existing seismic data. In addition, an accurate map of the basement surface as well as the possible sedimentary package over the concession area will be created, the company says.

Drilling

The third appraisal well on the Liwan 3-1 field in block 29/26 in the South China Sea has tested natural gas at an equipment-restricted rate of 52 MMcf/d, according to Husky Energy. The well’s future deliverability could exceed 150 MMcf/d, the company says.

The rigWest Hercules drilled the Liwan 3-1-4 well to TVD of 3,366 m (11,043 ft) below sea level. The well was drilled and tested in a water depth of 1,450 m (4,757 ft).

Husky is proceeding with front-end engineering and design (FEED), integrating data from this third appraisal well. First gas production is targeted for 2013.

The LF 7-1 well on block 16/05 in the Pearl River Mouth basin has tested a single zone at 6,000 b/d of oil (35° API gravity oil), according to Newfield Exploration Co.

The offshore China well, drilled to a TD of about 10,000 ft (3,048 m), encountered more than 75 m (250 ft) of high-quality oil pay in multiple sands, the company reports

Newfield also reports plans to accelerate its Phase II development of the East Belumut oil field offshore Malaysia by six months. The company invested $18 million (net) to drill three development wells late last year from its existing production platform. An additional $18 million will be invested early this year to drill three additional development wells. It is estimated that the six-well drilling campaign will increase 2010 oil production by an additional 1 MMbbl (net).

Exploration well 15-01/05 LDN-1X on the Lac Da Nau prospect off Vietnam has hit pay, according to Phu Quy Petroleum Operating Exploration and Production Co. During tests, the well produced 4,200 b/d of 44° API oil.

The 15-01/05 LDN-1X well is the first discovery on block 15-01/05, offshore Vietnam. Water depth is 45 m (148 ft).

Offshore Thailand, at the end of 2009, Coastal Energy was mobilizing an Atwood-owned rig to drill the Songkhla B exploration prospect in the Gulf of Thailand.

Meanwhile, the Songkhla A-08 development well on block G5/43 in the Gulf of Thailand has struck oil, according to Coastal Energy Co. The well was drilled to a total measured depth of 9,112 ft (2,777 m) and logged approximately 92 ft (28 m) of net pay with 18% porosity in the Lower Oligocene primary reservoir, the company reports.

Development and production

Vietnam recorded a number of development projects in the last several months.

Construction of the jacket for the Chim Sáo wellhead platform off southern Vietnam was 37% complete by mid-2009, according to operator Premier Oil.

Chim Sáo, close to the maritime boundary with Indonesia, is Premier’s first operated project offshore Vietnam. Early last year, the development plan was revised to cut costs by more than $100 million. The new configuration involves drilling 14 wells from a single wellhead structure, with oil exported to an FPSO.

Premier acquired Delek Energy (Vietnam) LLC and its 25% interest in block 12W, which includes Chim Sao. Recently, PetroVietnam confirmed it will exercise its back-in right to acquire a 15% stake in the PSC. This will leave Premier with a 53.125% controlling interest.

Premier Oil has issued the main construction contracts for the Chim Sáo project. EOCP was contracted to convert theLewek Emas into an FPSO vessel with production capability of 50,000 boe/d and oil storage capacity of 680,000 bbl.

The Ministry of Industry and Trade, on behalf of the Vietnamese government, has approved the development plan for the Te Giac Trang (TGT) field in the Cuu Long basin offshore Vietnam, according to operator Hoang Long Joint Operating Co.

Mitsui Oil Exploration Co., its partners, and PetroVietnam have begun design of a $4-billion natural gas project in Vietnam. Mitsui says the production start date is not fixed, but it is expected to be in 2014 at the earliest. Mitsui added that Chevron and its other partners will begin work on the FEED. Chevron serves as the operator of the project, which comprises blocks B, 48/95, and 52/97.

The service contract 54 block A (SC 54A) joint venture partners have approved development of the Tindalo oilfield, offshore Philippines.

The field was discovered by the Tindalo-1 exploration well in October 2008. The well was in 100 m (328 ft) of water and targeted a pinnacle reef structure similar to the nearby, producing Nido and Matinloc oil fields. The well intersected a 124-m to 144-m (407-ft to 472-ft) oil column in Miocene carbonate reservoir.

The field will be developed using a leased, jackup rig, which will re-enter and complete the suspended Tindalo-1 well for production. The field partners will install an electric submersible pump as part of the well completion to maintain production rates throughout the life of the field.

The jackup will remain on location to provide a stable weather-tolerant production platform, the partners say. Crude oil from the well will be processed on the rig and then to a nearby leased FPSO.

First oil is anticipated in the second quarter of this year at an initial rate of around 7,000-15,000 b/d of oil.

ExxonMobil and its co-venture partners will start development of the Papua New Guinea (PNG) liquefied natural gas (LNG) project this year, following the completion of sales and purchase agreements with LNG buyers and finalization of financing arrangements. Esso Highlands is the operator of the project.

The PNG LNG Project is an integrated development including gas production and processing facilities, onshore and offshore pipelines, and liquefaction facilities with capacity of 6.6 million tons/year (5.99 million metric tons/year).

Esso Highlands Ltd. has awarded Saipem a contract for the PNG LNG offshore pipeline project EPC2. The contract covers engineering, transportation, and installation of a 407-km (253-mi) long, 34-in. (86-cm) gas pipeline connecting the Omati River landfall point to the onshore location where a new LNG plant will be built.

Daewoo International has awarded Hyundai Heavy Industries (HHI) a $1.4-billion construction contract for the SHWE gas project offshore Myanmar. SHWE involves development of blocks A-1 and A-3 in the Bay of Bengal, 70 km (43.5 mi) west of Myanmar. A 40,000-ton (36,287-metric ton) platform will produce and process up to 500 MMcf/d of gas from fields in these blocks before transporting it to Ramree Island through a subsea pipeline. The gas will eventually be exported to China via an onshore terminal.

The project is scheduled for completion by March 2013.

PTT Exploration and Production (PTTEP) has awarded CUEL a $110-million contract for the Arthit 1C wellhead platforms development project in the Gulf of Thailand.

Under the agreement, CUEL will provide project management; engineering; procurement; construction; loadout and seafastening; transportation; offshore installation and tie-ins; pre-commissioning; and brownfield modification services of four wellhead platforms and four pipelines.