Global Update

Latin America

Gazprom Neft has signed a supplementary agreement to a PSC covering deepwater blocks 44, 45, 50, and 51 offshore Cuba. The company is assigned a 30% interest, the remainder held by Petronas Carigali. Previously, the partners and state-owned Cubapetroleo (Cupet) had signed a joint operating agreement.

OGX has continued its run of shallow water successes in the Campos basin. A well drilled by theOcean Ambassador in 130 m (426 ft) of water in the BM-C-41 block encountered hydrocarbons in Santonian sandstones and in Albian carbonates, close to the Waimea field.

Keppel Shipyard says it has virtually complete modification works on the FPSOOSX-1, which will be deployed on Waimea. The vessel (ex-Nexus-1), is due to leave Singapore shortly. Waimea will provide OGX with its first commercial oil production, four years after the company was established.

SBM Offshore has signed a 21-year charter and operations contract for the FPSOCidade de Paraty to work on the Lula Nordeste development, 265 km (165 mi) offshore in the Santos basin. The project is operated by Petrobras as head of the BM-S-11 block consortium. The vessel will operate in 2,100 m (6,890 ft) water depth, with facilities to process 150,000 b/d of production fluids, and also providing treatment of associated gas, compression, water injection, and removal of carbon dioxide.

The government of Trinidad and Tobago has awarded BP two adjacent, deepwater exploration and production blocks in frontier acreage off Trinidad's east coast. Block 23a covers 2,600 sq km (1,004 sq mi) in water depths of 2,000 m (6,561 ft). Block TTDAA 14 extends over 1,000 sq km (386 sq mi) in similar water depths.

West Africa

LUKOIL and Vanco have acquired interests totalling 70% from ORANTO Petroleum in the SL-5-11 block off Sierra Leone. Water depths extend from 100 m (328 ft) out to 3,300 m (10,827 ft). According to LUKOIL, 2D and 3D seismic surveys have revealed several prospective structures. Terms call for at least one well to be drilled on the block before 2013.

The first exploration well in the deepwater AGC Profond PSC off Senegal/Guinea Bissau has been abandoned as a dry hole. DrillshipMaersk Deliverer drilled the Kora-1 well in 2,600 m (8,530 ft) of water, targeting a salt-cored, dip-closed anticline. Operations were halted when the well encountered a largely claystone and thin limestone sequence rather than the prognosed sandstone reservoir facies.

Eni has found gas and condensate while drilling the Gye Nyame prospect in the OCTP block, 50 km (31 mi) offshore Ghana. Eni plans further delineation – the location is 16 km (9.9 mi) east of its Sankofa gas discovery, which could be fasttracked for development to provide supplies for Ghana's domestic market. The new find may also open opportunities for LNG exports.

Offshore Gabon, Harvest Natural Resources has discovered more oil in the Dussafu Marin PSC. In June, the Dussafu Ruche Marin-1 well proved oil in the pre-salt Gamba reservoir, and the latest find arose following deepening of the well into the Middle Dentale formation.

ExxonMobil has reportedly stopped production at the depleted Xikomba oilfield in block 15, 90 mi (145 km) offshore Angola. The field started up in 2003 and has generated around 100 MMbbl.

Mediterranean Sea

ADX Energy has been awarded an exploration permit offshore southern Italy, and has also applied for an adjoining permit. The d364C.R.-.AX concession is next to ADX's Kerkouane permit in Tunisian waters, where prior exploration has identified numerous leads and prospective hydrocarbon fairways. These are thought to extend into the new Italian acreage.

Delek Drilling and Avner Oil Exploration have approved the $212-million Noa North gas development offshore Israel. Two diagonal wells – Noa 2 and Noa 3 – will be drilled with subsea completions in water depth of 800 m (2,624 ft). The wells will produce 100 MMcf/d for export through a pipeline to the Mari B extraction platform for processing and subsequent transport through an existing 30-in. (76-cm) pipeline to a reception terminal in Ashdod. TheNoble Homer Ferrington should complete drilling by next September.

Burullus Gas Co. has sanctioned Phase VIIIb of the West Delta Deep Marine Concession (WDDM) development offshore Egypt's Nile delta. This will involve adding seven new wells to meet contracted gas commitments. First-stage drilling for Phase VIIIa was recently completed and first gas is expected late in 2011. An associated gas compression project for WDDM Phase VII is also due onstream this year.

Caspian Sea

Dragon Oil is drawing up plans to P&A, then decommission old non-producing wells offshore Turkmenistan in the Cheleken Contract Area. It has awarded a contract to a well abandonment specialist, and expects up to 15 non-producing wells to be tackled starting this month and throughout 2012. The company also plans to tender construction contracts for three new wellhead platforms and associated pipelines.

Russian companies ITERA Oil and Gas and OJSC Zarubezhneft have signed a joint operation agreement for a production-sharing agreement for Turkmen offshore block 21. OJSC Zarubezhneft will act as project operator. The block is thought to hold recoverable reserves of 219 MMtons (≈1.6 Bbbl) of oil, and 192 bcm (6.78 tcf) of natural/non-associated gas. Investments could total up to $6 billion.

Middle East

Saudi Aramco has started production at Karan, its first non-associated gasfield development, offshore eastern Saudia Arabia. The facilities comprise five wellhead platforms connected to a main tie-in platform, 160 km (99 mi) north of Dhahran. All but two wells should be onstream by June 2012, at which point output should have reached 1.5 bcf/d.

UAE-based Dana Gas has invited tenders to build and install a platform for its Zora field in Sharjah's Western Offshore concession. Construction will start when all contractual arrangements are in place, with an estimated cost of $125-150 million for the development.

Pars Oil and Gas Co. has brought onstream six new wells from the South Pars Phase X project in the Persian Gulf. These should lift gas production to 600 MMcf/d. All remaining wells should be on line by next month. At Phase IX, seven wells are now in service with the remaining five due to come onstream before the winter. Both phases are the first developed entirely by Iranian manufacturers and contractors.

Australasia

INPEX and partner Total are preparing to launch the Ichthys LNG project in the Browse basin, 200 km (124 mi) offshore Western Australia. Gas from the Ichthys field will be part-processed offshore, before being exported to onshore process facilities in Darwin via an 885-km (550-mi) subsea pipeline. INPEX has issued a letter of intent to the Clough DORIS joint venture to provide a range of services under a $252-million contract. These include detailed engineering design, fabrication, and commissioning of a central processing facility and an FPSO.

Reserves recovery from the Tui oilfields in New Zealand's offshore Taranaki basin could be 10-15% down on earlier estimates, according to partner Pan Pacific Petroleum. This follows a new assessment from operator AWE that 40-42 MMbbl can now be produced from existing infrastructure. However, AWE has identified potential infill drilling opportunities.

Asia/Pacific

Lundin Oil has found gas in its first two wells in block SB303 offshore Sabah, eastern Malaysia. The Tarap and Cempulut structures both flowed gas from Miocene targets. TheOcean Courageous was due to drill a third well thereafter for Lundin on the Batu Hitam prospect in block PM308A.

Murphy Sabah Oil has commissioned McDermott International to engineer and install a pipeline, an umbilical, and subsea facilities for the Kikeh subsea expansion project, 120 km (75 mi) northwest of Labuab, in 1,350 m (4,400 ft) water depth. The work should be completed in 3Q 2012.

Keppel Shipyard should by now have delivered the converted FSOSepat to Bumi Armada for deployment on Petrona's Sepat field offshore Malaysia. The refurbished vessel, newly equipped with a helideck and 12-point spread mooring system, will have capacity to store 500,000 bbl of oil.

The jackupKolskaya sailed last month from Murmansk to the port of Magadan in eastern Russia to prepare to drill offshore the western Kamchatka peninsula. Operator Gazprom was awarded a subsurface license in 2009 for the Zapadno-Kamchatsky block in the Sea of Okhotsk, which is thought to contain large gas reserves.

CNOOC has re-started production from its four BoZhong 28-2 South oil fields in Bohai Bay. Operations had to be suspended in April when severe sea conditions caused a malfunction in the single point mooring system of the FPSOHaiyangshiyou 102 that serves the fields. Following remedial work, production is back to its previous level of around 39,000 b/d of oil.

PTTEP has awarded Sembcorp Marine a $492-million contract to engineer, construct, transport, and install a production platform offshore Myanmar.

Another PTTEP platform recently sailed out of Hyundai Heavy Industries' yard in South Korea. The 30,000-ton (27,215-metric ton) structure is designed to produce 385 MMcf/d of gas and 18,000 b/d of condensate from the Bongkot field, 600 km (323 mi) southeast of Bangkok. It should be installed by year-end. Hyundai also supplied three bridges under the $1-billion contract.

Eni has discovered gas while drilling the Jankgrik Northeast prospect in the Kutei basin, off East Kalimantan. The well was drilled in 460 m (1,509 ft) of water in the Muara Bakau block, 15 km (9.3 mi) from the Jangkrik field. It encountered over 60 m (197 ft) of net gas pay in Pliocene and Miocene reservoir sands, also flowing at a constrained rate of 30.6 MMcf/d during a production test.

Off East Java, ExxonMobil has awarded the first of five EPC contracts for work on production facilities at the Banyu Urip field in the Cepu block. Recoverable resources under a full development are estimated at 450 MMbbl. The plan is to eventually produce 165,000 b/d of oil from 49 wells and a central processing facility, connected to a 1.7-MMbbl FSO in the Java Sea via a 60-mi (95-km) pipeline.