Hardy downgrades PY-3 production forecast

Hardy Oil and Gas expects production from the PY-3 field offshore eastern India to resume in September.

Offshore staff

LONDON-- Hardy Oil and Gas expects production from the PY-3 field offshore eastern India to resume in September.

The field was shut-in early last month due to unscheduled repair and maintenance of the offshore mooring facility. Unfavorable marine conditions then prevented the contractor from assessing and undertaking repairs as quickly as planned. As a result, the field’s forecast gross production for 2009 has been revised down to 2,400 b/d.

In February, Hardy completed re-entry and drilling of the PY3-PD4RL well. The vertical well was re-entered and sidetracked from a measured depth of 2,916 m (9,567 ft) and drilled down to 4,375 m (14,353 ft) MD.

Nitrogen lift boosted the flow rate at 700 /d of oil with 30% water-cut, however, the well could not be reactivated as a self-flowing well. It has since been completed as a producer with a gas-lift valve to allow for future production when gas-lift compression facilities are installed on the floating production unit Tahara. Hardy is updating its geological model to incorporate new data gathered from the well.

The PY-3 management committee is also reviewing an extension to the field’s production facilities contract through July 2010. A new proposal provides for a reduction of around 40% from the previous contracted rate. In light of the PY3-PD4RL results, longer term arrangements will follow once the PY-3 joint venture has agreed to a modified phase III development plan.

PY-3 is 80 km (49.7 mi) south of Pondicherry in water depths of 40-450 m (131-1,476 ft). The field was developed using an FPU, a first offshore India, with oil stored on the 65,000-dwt tanker Endeavor.

Hardy also has a 75% operated interest in block CY-OS/2 in the northern part of the Cauvery basin off Eastern India. Here the joint venture has applied for an extension of the appraisal period to January 2012 in order to establish the commerciality of the Ganesha non-associated gas discovery.

The CY-OS/2 block is immediately offshore from Pondicherry and covers approximately 859 sq km (331 sq mi). The Ganesha (Fan-A1) discovery is in the northern part of the block, while the southern area is adjacent to the PY-3 field. The PY-1 gas field lies within the southern part of the acreage and is expected to begin production by the first quarter of 2010. The PY-3 oil field and PY-1 gas field are both contained within the CY-OS/2 license but have been ring-fenced, each with separate production-sharing contracts.

In the Gujarat-Saurashtra basin offshore Western India, next to the Bombay High oil field, Hardy has a 10% interest in block GS-OSN-2000/1 (GS-01). The joint venture has been pursuing various geological and geophysical studies concerning the Dhirubhai 33 gas discovery.

A decision as to whether to drill an appraisal well to establish the field’s commerciality is expected prior to end-2009. The appraisal area comprises 5,890 sq km (2,274 sq mi) in water depths of 80-150 m (262-492 ft), with a term through to May 2010.

08/20/2009

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