Pam Boschee • Houston
Americas
Brazil’s federal energy company Petrobras is preparing to bid for natural gas exploration blocks in Egypt.
At press time, the company will make a written offer for offshore blocks by the end of March.
This planned bid is part of Petrobras’ larger international expansion scheme. The company has been expanding exploration operations abroad for some time now, including in Africa. It recently won exploration rights in Turkey.
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The Supreme Court of Newfoundland has begun hearings into Calgary-based Polaris Resources Ltd.’s intention to retain exploration licenses for three areas near the Laurentian basin, offshore southern NL.
The Laurentian basin is located in the southern part of the Grand Banks basin.
Polaris obtained the licenses in 2000, committing to spend $5.6 million in drilling and exploration activities over the next five years.
These activities were not carried out, and Polaris applied to the Canada-Newfoundland and Labrador Offshore Petroleum Board for an extension. The request was denied.
However, Polaris contends that the NL provincial government is responsible for the delay in exploration activities.
The company is arguing that the lack of a provincial royalty regime for natural gas projects is impeding its drilling.
The NL government is working on an energy plan that may include installing a royalty regime for natural gas offshore developments.
There are no natural gas projects offshore NL.
Hibernia, Terra Nova, and White Rose - also in the Grand Banks basin -- all produce crude oil.
Europe
Statoil is buying BP’s 25% interest in license 218 covering blocks 6706/10 and 6706/12 in the Norwegian Sea. Statoil will have a 75% interest in the license following this transaction. The other licensees are ExxonMobil (15%) and ConocoPhillips (10%).
BP recommends Statoil as new operator of the license.
The acquisition includes the Luva gas find, where plans call for a new exploration well to be drilled in 2007/2008. Several finds have been drilled in this area, including a substantial discovery in 1997.
The Luva field is located about 240 km west of Bodø.
Statoil plans to capture CO2 from an 860-MW gas-fired plant to be built at the company�s Tjeldbergodden methanol complex in Norway. The CO2 would then be piped to Shell�s Draugen oil field off Norway, and later to Statoil�s Heidrun field, for subsea injection.
The water depth in the area is around 1,300 m, and the reservoir is 2,800 m beneath the seabed. Recoverable reserves in the field are put at some 38 bcm of gas.
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Shell and Statoil have agreed to work toward development of the world’s largest project using carbon dioxide (CO2) for enhanced oil recovery (EOR) offshore. The concept involves capturing CO2 from power generation and using it to enhance oil recovery, resulting in increased energy production with lower CO2 emissions.
Statoil plans to capture CO2 from an 860-MW gas-fired plant to be built at the company’s Tjeldbergodden methanol complex in Norway.
The CO2 would then be piped to Shell’s Draugen oil field off Norway, and later to Statoil’s Heidrun field, and injected into subsea reservoirs.
The project’s estimated cost is $1.2 to $1.5 billion. The companies plan to complete a feasibility study by the end of 2006 and make a final decision to invest by the end of 2008.
Start-up of the power plant and electrification of Draugen is projected in 2010-2011, followed by first CO2 supply to Draugen for EOR in 2011-2012.
The project could potentially store approximately 2 to 2.5 million tons of CO2 annually. Establishing this CO2 value chain is technologically and commercially challenging, say the companies. Support would be needed from the Norwegian government and onshore and offshore companies.
Statoil is already involved in CO2 storage through Sleipner in the North Sea, Snøhvit in the Barents Sea, and In Salah in Algeria.
Africa
Anadarko Petroleum Corp. has won E&P rights to Offshore Area 1 in Mozambique’s second licensing round in the Rovuma Basin.
The 2.64 million-acre block, positioned in northeast Mozambique, includes approximately 90,000 onshore acres and stretches eastward 35 mi (56 km) offshore, where water depths extend down to 6,000 ft (1,800 m).
The block’s boundary borders Tanzania to the north and extends southward about 100 mi (160 km).
Anadarko has been actively working seismic, well, and other geologic data from the Rovuma Delta for the past three years and has concluded that the basin is similar in nature to the proven petroleum systems of the Niger Delta, Mahakam Delta, and the Gulf of Mexico, says Bob Daniels, Anadarko senior VP of E&P.
Anadarko’s bid included a four-year initial exploration term with options to extend that phase another four years, and a 30-year production term following any commercial discoveries.
The company was awarded the block on the basis of a work commitment to acquire new 2D and 3D seismic and drill seven wells during the initial exploration term.
It will operate the block, initially with a 100% working interest.
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Chevron Corp.’s subsidiary Cabinda Gulf Oil Co. Ltd. (CABGOC) and its partners say their recent successful offshore exploration results for five wells drilled in Angola’s block 0 have expanded and delineated the existing areas of operation in the block.
The Sanha SN-BW06 well was drilled in May 2005 and encountered 170 ft of net pay in the Upper Pinda. The well was subsequently completed and flowed at an initial rate of 3,000 b/d of oil. The SN-BW06 well extended the limits of the field by discovering recoverable reserves in an adjacent fault block.
Two successful appraisal wells were drilled to establish production in a field originally discovered in 1971. Livuite field well 132-7X was drilled in April 2005 and encountered 359 ft of net pay in the Pinda. The well began production with an initial flow rate of 4,486 b/d.
Well 132-8X was drilled in July 2005 and encountered 94 ft of net pay in the Pinda. Another well is planned to be drilled in the Livuite field this year to further appraise the commercial potential of the field.
The 70-5X exploration well was drilled in December 2005 and encountered 296 ft of net pay in three zones in the Upper Pinda and Lower Vermelha. The well flowed at a combined rate of more than 2,000 b/d from these three zones. The well also confirmed additional pay in an Upper Vermelha reservoir previously discovered. Additional wells are being planned to fully appraise this discovery.
The 74-10X delineation well was drilled in December 2005 to test three shallow reservoirs in a producing fault block on a trend from the Malongo South field. The well encountered 506 ft of net pay in the Lago, Mesa, and Nova reservoirs. A horizontal sidetrack is currently being completed in the Nova reservoir.
In Angola block 0, CABGOC operates and has a 39.2% interest in areas A and B, comprising 36 fields that produced 119,000 b/d in 2005.
The 2,155-sq-mi concession lies off the coast of Cabinda province.
In 2004, the concession was extended by the Angolan government and Sonangal to 2030.
Middle East
Iran has invited foreign companies to develop its offshore South Pars gas field. The Iranian National Oil Co. has placed four international tenders for the development of phases 19 to 22 of South Pars, one of the largest offshore fields in the world.
Iran has divided the gas field, located on the Iran-Qatar border in the Persian Gulf and shared by the two countries, into 25 phases.
The phases will supply 100 MMcm/d of natural gas for domestic consumption.
They are also expected to supply a minimum of 2 million tons of ethane gas a year for Iranian petrochemical use, 2.1 million tons of LPG per year, and 160,000 b/d of gas condensate for export.
The contracts will be conducted on a buy-back basis. Investment for each phase has been estimated at between $1.2 and $1.5 billion.
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ExxonMobil and its subsidiaries have signed agreements with Abu Dhabi National Oil Co. (Adnoc) for a piece of the Upper Zakum oil field.
ExxonMobil Abu Dhabi Offshore Petroleum Co. Ltd. (EMAD) will receive a 28% undivided interest out of Adnoc’s 88% interest in the field.
The deal leaves Adnoc with a 60% stake in the field, with Japan Oil Development Co. Ltd. (Jodco) holding the remaining 12%.
ExxonMobil, Adnoc, and Jodco will jointly provide support to the operating company, Zakum Development Co. (Zadco), in pursuing the objective of increasing production to 750,000 b/d, representing a 50% increase from current levels.
ExxonMobil plans to establish a technology center in Abu Dhabi that will supply technology in the areas of reservoir management, well management, and production operations.
Additional support for training and personnel development will come from ExxonMobil’s Upstream Training and Technology Center in Houston, Texas.
ExxonMobil has also agreed to help establish an R&D facility at a technical university in Abu Dhabi, the Petroleum Institute.
Asia-Pacific
Pakistan’s Ministry of Petroleum and Natural Resources granted a petroleum exploration license to Petronas Carigali Sdn. Bhd.
The new block is located in the southern Sindh province covering an area of 1,838 sq km.
The company will invest about $10 million in the initial period of three years.
Petronas is presently the operator of two exploration blocks in Pakistan and is producing 32 MMcf/d of gas and 109 b/d of condensate.
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SOCO’s TGT-2X appraisal well on the Te Giac Trang (TGT) structure on block 16-1 offshore Vietnam, an updip follow-up well to last year’s TGT-1X discovery well, has begun testing operations. A minimum of three separate drillstem tests are being conducted.
The first drillstem test has been completed over the Oligocene C interval, which failed to flow in the discovery well. This well tested water-free at a stabilized rate of 3,300 b/d of oil of 37.5° API gravity and approximately 0.88 MMcf/d of gas with a 52/64-in. choke.
The test was conducted between 2,944 m and 2,972 m. The calculated net pay was approximately 12 m over the tested interval. An additional 14 m of pay lower in the section was not tested, but is confirmed to be oil-bearing and productive by wireline formation test.
Additional tests will be conducted from two Miocene intervals, one which was not tested in the discovery well and the other that flowed at 9,342 boe/d.
SOCO holds its interests in Vietnam, all in the Cuu Long basin offshore, through its 80%-owned subsidiary SOCO Vietnam Ltd. SOCO Vietnam holds a 25% working interest in block 9-2, which is operated by the Hoan Vu Joint Operating Co. and a 28.5% working interest in block 16-1, which is operated by the Hoang Long Joint Operating Co.
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Papua New Guinea (PNG) will offer 15 offshore blocks most likely during 4Q 2006, says a senior official of the country’s Department of Petroleum and Energy. This will be its first oil and gas bidding round in over six years.
Seismic data for the blocks to be offered is being prepared and should be ready by mid-2006.
The nation’s oil output peaked at close to 120,000 b/d in 1997 and now stands at around 65,000 b/d. PNG’s proven and probable reserves stand at 500 MMbbl of oil and 13 tcf of gas.•
Consortium launches Energy City Qatar
Energy City Qatar was officially launched in March. Sheikh Abdullah Bin Khalifa Al Thani, the prime minister of The State of Qatar, presided over the event, attended by government officials and global business and energy leaders.
Energy City Qatar will be the Middle East’s first full-service energy business center catering to the commercial, technical, and human resource needs of the oil and gas industry operating in the region.
It will also be home to a dedicated energy trading platform, the International Mercantile Exchange (IMEX), which will be regulated by the Qatar Financial Centre Regulatory Authority.
Gulf Energy, the consortium of international energy experts behind Energy City Qatar, recently signed a memorandum of understanding with Microsoft providing for the development and implementation of the next generation of advanced enterprise-level solutions to form the necessary technology infrastructure for Energy City Qatar.
Energy City Qatar recently announced the appointment of its International Advisory Body, comprising eminent experts from the business world, particularly from the energy and energy-related sectors. The board includes Henri Philippe Reichstul from Brazil, Simon Tay from Singapore, Bernard De Combret from France, Harald Norvik from Norway, and Richard H. Matzke from the US.
Esam Janahi, chairman of Gulf Energy and chairman of Energy City Qatar, said, “The Middle East accounts for over 60% of the world’s proven oil reserves and over 40% of the world’s natural gas reserves. But, the region doesn’t have a dedicated energy business center. Energy City Qatar was conceived to bridge this gap and positively contribute to the economic development of Qatar and the region.”
Vahan Zanoyan, president and CEO of PFC Energy and board member of Gulf Energy, said, “Qatar is the ideal location for the Middle East’s energy business center. Participants in Energy City Qatar will be able to gain significant efficiencies due to the benefits of clustering: ease of interaction and communication, economies of scale, and easier access to opportunities and decision-makers at all levels.”
Gulf of Guinea is key world oil province, OPEC president tells OWA conference
The Gulf of Guinea offshore West Africa is one of the most prolific hydrocarbon provinces in the world, with oil and gas discoveries of more than 10 Bbbl and tremendous potential beyond that level, said Dr. Edmund Daukoru, president of OPEC and Nigeria’s Minister of State for Petroleum Resources.
Daukoru spoke at PennWell’s 10th annual Offshore West Africa Conference & Exhibition held in Abuja, Nigeria, March 14 -16. The conference, known for its high level of economic, technological, and geopolitical content, attracted more than 1,200 participants from throughout the world.
“The choice of Nigeria as host for this annual event is to my mind entirely fitting, as Nigeria exercises jurisdiction over more than 60% of proven reserves in the region, with enormous potential for growth that is yet to be fully established,” Daukoru told the conference in his keynote address.
“I therefore look forward to intensified efforts throughout the region in proportion to the rewards that are available to be unlocked. True, the region is still developing its human capacities and infrastructure, but even in these essential requirements, Nigeria has a lead which I hope should draw investment to the region as a whole,” he added.
Speakers for the opening session also included Eldon Ball, Petroleum Conferences Director, PennWell; Funsho Kupolokun, Group Managing Director of NNPC; D. Atanasio-Ela Ntugu, Minister of Mines, Industry & Energy, Equatorial Guinea; Chima Ibeneche, Managing Director, Shell Nigeria E&P Co., and Philippe de Hemptinne, Managing Director, Saipem Services.
Daukoru said that he found the theme for OWA 2006, “Leading the World in Deepwater E&P,” most appropriate at this important period in deep offshore development, when global demand for oil and gas has topped all expectations, driven by the unprecedented growth in the major economies of Asia.
“This tremendous growth in demand for oil (and gas) - projected to reach 113 million barrels per day (MMb/d) by 2030 - forces exploration toward more technically challenging environments, of which the deep water appears for now the most hopeful for conventional oil,” Daukoru said.
Nigeria, Daukoru told the conference, is at the forefront in contributing its share to meeting this surge in global demand by opening up new frontiers in its deepwater acreage. He expressed the Nigerian government’s support for the OWA conference and its efforts to “realize optimal development of the Gulf of Guinea.”
Daukoru also serves as Nigeria’s Minister of State for Petroleum Resources and was recently Nigeria’s Presidential Advisor on Petroleum and Energy. He also previously served as the Group Managing Director of the Nigerian National Petroleum Corp. (NNPC), working on government funding for LNG projects. He has served with Shell Petroleum Development Co. of Nigeria in senior management positions as Executive Director & General Manager, Exploration and Non-Traditional Business, as well as a Divisional Manager for Shell’s Western Division.
Offshore West Africa has become one of the industry’s most active E&P arenas, not only in terms of activity, but also in advancing new field development concepts, according to PennWell’s authoritative Offshore West Africa monthly newsletter. Earnings from the sale of crude oil and related resources in Nigeria alone totaled $11.9 billion in the first half of 2005. This represents a 39.6% increase over the $8.53 billion in the corresponding period a year earlier.
