Arctic capex set to rise, report says

The world’s Arctic/sub-Arctic regions hold reserves of over 130 Bboe, according to a new report from Infield Systems. Gas makes up 86% of figure, with gas fields offshore northern Russia accounting for 99 Bboe.

Pennwell web 400 260

Jeremy Beckman • London

The world’s Arctic/sub-Arctic regions hold reserves of over 130 Bboe, according to a new report from Infield Systems. Gas makes up 86% of figure, with gas fields offshore northern Russia accounting for 99 Bboe. Infield has also identified 147 discovered fields, of which only 25 are in production, with a further 13 under development or in the planning phase.

Throughout this decade, the authors add, Arctic capex should rise steadily, exceeding $7 billion/yr through 2017. Russia should drive expenditure during this period, provided that the 24 Bboe Shtokman gas condensate project goes ahead. Eastern Canada should also undergo a rise in activity, particularly offshore Newfoundland, with the potential for further projects on smaller fields around the Canadian Arctic islands.

South America

Drilling is under way in the deepwater Zaedyus prospect in the Guyane Maritime permit off French Guiana. Operator Tullow Oil sees geological analogies with its Jubilee field offshore Ghana, across the Atlantic. The well, drilled by theENSCO 8503, is testing a Late Cretaceous channel fan system. In neighboring Guyana, Tullow is a partner in the Georgetown block – this summer, the jackup Atwood Beacon will drill the first well on the license, designed to target Jaguar, a Late Cretaceous turbidite fan prospect. 

••• 

OGX has proven hydrocarbons in the Albian section of its latest well in Brazil’s Campos basin. TheOcean Star drilled appraisal well 3-OGX-36D-RJS in block BM-C-41, 77 km (48 mi) off Rio de Janeiro state in 128 m (420 ft) of water, encountering an oil column with 60 m (187 ft) of net pay. A drillstem test was scheduled to confirm the area’s productivity. 

••• 

Rockhopper Exploration claims its Sea Lion oil find in the offshore North Falkland basin is commercial, and has started development planning. Appraisal well 14/10-4 intersected 33 m (108 ft) net pay in good-quality reservoir, also establishing an oil/water contact at 2,477 m (8,127 ft) TVD subsea. The semisubOcean Guardian has since reverted to Desire Oil for a program on the Ninky prospect, but should return thereafter to drill three more appraisal wells on Sea Lion. 

West Africa

Netherlands, Sewell & Associates has evaluated hydrocarbon potential in Hyperdynamics’ deepwater Guinea concession, based on leads selected from a 2D seismic survey in 2009. These could contain 2.3 Bbbl of recoverable oil, reduced to 400 MMbbl when screened by risk factors. Currently, Hyperdynamics is interpreting data from a recent 3D survey over the shallow-water zone – the company aims to spud its first well on the permit late this year.

••• 

Anadarko plans to resume drilling in the offshore Liberian basin this summer using the drillshipDiscover Spirit. The program on Caesar/Tonga will include an appraisal well off Sierra Leone, 7 mi (11.3 km) west of the Mercury discovery in block SL-07B-10, and an exploratory well on the Jupiter prospect in the same block. Anadarko will also target the Montserrado exploration prospect in Liberian block 15. 

••• 

Tullow Oil says it is examining various production scenarios for its Tweneboa and Enyenra oil and gas finds in Ghana’s Deepwater Tano permit. Concepts include a large FPSO with capacity to handle 75,000-125,000 b/d of oil, with water and gas injection to improve oil and condensate recovery. Remaining gas would be exported to shore to help satisfy Ghana’s energy demands. A declaration of commerciality should be submitted for the fields later this year.

In the adjacent West Cape Three Points concession, Kosmos Energy recently drilled an appraisal well on its Teak discovery. Teak-2 found high-quality oil, gas, and gas/condensate in Campanian reservoirs, and rich gas in Turonian reservoirs – which may be a gas cap to the Jubilee oil field.

In Keta, another deepwater Ghanaian block adjoining the maritime boundary with Benin, Eni is set to take a 35% operating interest from current incumbent Afren. In exchange, Eni will carry Afren’s costs for one exploration well. That could spud this summer, as Eni has a suitable rig available.

••• 

Offshore South Africa, Afren has taken a 25% stake in block 2B in the Orange River basin, which covers around 5,000 sq km (1,930 sq mi) between the Ibhubesi gas field and the Namaqualand coast. Maximum water depth is 250 m (820 ft). A well drilled in 1989 encountered oil in the Lower Cretaceous AJ graben, and reprocessed 2D seismic suggests the acreage bears analogies with the Lake Albert play in Uganda. The partners plan to acquire 3D seismic, after which Afren will become operator, with exploration drilling to follow in 2012.

Adriatic Sea

Eni expects to deliver first gas from the Guendalina field off eastern Italy in September. The platform jacket was due to be installed in March, followed by mating with the deck and completion of two development wells. Guendalina is in the AC 35 AG concession.

Pennwell web 400 260

Installation of the Guendalina jacket offshore Italy.

Azimuth LT has agreed to take a 15% interest in Italian offshore permits F.R39.NO and F.R40.NP, both operated by Northern Petroleum, which contain the undeveloped Rovesti and Giove oil accumulations. These were discovered in 1978 and 1998 by, respectively, Eni and Enterprise Oil. The new partners plan to define drilling targets on these and other mapped prospects – Northern estimates potential oil and gas in the concessions at over 3 Bbbl and over 2 tcf.

Black Sea

Melrose Resources has formalized agreements for two shallow- water exploration blocks in the western Romanian sector. The country’s National Agency of Mineral Resources awarded Melrose an 80% operating interest in the EX-27 (Muridava) and EX-28 (Est Cobalcescu) concessions last June, in partnership with Petromar Resources. Both blocks contain multiple plays and are on trend with Pliocene and Miocene gas finds elsewhere in Romanian waters. The work program includes appraising the 2001 Olimpiskyi gas/oil discovery in EX-27.

••• 

Wintershall is acquiring a 15% stake in South Stream AG, the company that will develop, construct, and operate the offshore section of the South Stream pipelines that will bring gas from Russia to southern and central Europe. Four parallel lines will be laid, each 940 km (584 mi) long, and crossing the southern part of the Black Sea. The first line could come onstream in 2015.

East Africa

Kenya’s Ministry of Energy has awarded Dominion Petroleum operatorship of deepwater block L9 in the Manu basin. One well was drilled on the acreage in 1979, encountering gas shows. Offshore oil seeps have been identified to the north.

••• 

BG Group has notched its third successive deepwater gas discovery off southern Tanzania. The Cheza-1 well was drilled in block 1 in 950 m (3,117 ft) of water, around 200 km (124 mi) south of the company’s Pweza and Chewa finds. BG and its partner Ophir Energy have also acquired extensive 3D seismic over blocks 1, 3 and 4 this year, and plan to resume drilling later in 2011.

Caspian Sea

Statoil has signed a heads of agreement with KazMunayGas for the Abay block, 65 km (40 mi) offshore Kazakhstan. The companies will evaluate hydrocarbon potential in the concession, where water depths average 8-10 m (26-33 ft). The work program includes seismic surveys and drilling of at least one well by a joint operating company. Statoil will also help KazMunayGas procure a newbuild jackup for drilling in the Caspian Sea.

Middle East

Offshore gas has started flowing through the Pearl Gas to Liquids (GTL) complex in Ras Laffan Industrial City, Qatar, less than four years after the project was initiated. Shell operates the plant under a production-sharing agreement with Qatar Petroleum.

The offshore development involved construction of two platforms on the North field, 60 km (37 mi) off the Qatar coast, exporting sour gas through a subsea pipeline. At peak, Pearl GTL will process 1.6 bcf/d.

Also in Qatar, Maersk Oil has entered a long-term collaboration with Dutch research institute TNO to develop new technologies to increase oil recovery from the offshore Al Shaheen field. The focus of the program, based at the Qatar Science and Technology Park in Doha, will be on long horizontal wells, integrated operations, and production optimization.

••• 

ZADCO has contracted Technip to provide engineering services for the UZ 750 development, designed to increase oil production from the Upper Zakum field offshore Abu Dhabi to 750,000 b/d by 2015. The work scope includes front-end engineering and design (FEED) for process equipment on four artificial islands, including gas separation, gas-lift compression, power generation, and interconnecting pipelines.

Australasia

PTTEP has contracted AGR Field Operations to manage subsea well abandonments on the Challis and Jabiru fields in the Timor Sea, off northern Australia. AGR staff will work from the company’s offices in Darwin and Perth, with AGR’s offshore service center in Darwin providing equipment and support services. The program should take 10 months to complete.

••• 

Carnarvon Petroleum has completed acquisition of a 3D and 2D seismic survey over the WA-435-P and WA-437-P permits in the Bedout sub-basin offshore Western Australia.

The 3D data was acquired to assist appraisal of the Phoenix gas field and to target other gas prospects nearby. Processing of this data should be complete in July. A reservoir characterization study is also in progress which will integrate results from the Phoenix-1, Phoenix-2, and Keraudren-2 wells into the 3D interpretation. Carnarvon and partner Finder Exploration plan to use the results to attract a farm-in partner for further wells on Phoenix.

••• 

Woodside Energy has discovered further gas in its WA-404-P permit in the Carnarvon basin off Western Australia. The Martin-1 well intersected around 100 m (328 ft) of gas within the Triassic target. The location is within 14 km (8.7 mi) of other gas finds in the permit, Larsen-1, Larsen Deep-1, Martell-1, Noblige-1, and Remy-1.

••• 

Clough AMEC is forming a joint venture with New Zealand contractor Beca. This will offer EPC services to New Zealand’s oil and gas industry, ranging from conceptual design through commissioning, operations, and maintenance.

Asia-Pacific

Gazprom expects to drill two gas production wells this year on the Kirinskoye field in eastern Russia, 28 km (17.4 mi) off Sakhalin Island in the Sea of Okhotsk. Output will provide feedstock for the new Sakhalin-Khabarovsk-Vladivostok gas transmission system.

••• 

The petroleum contract has been modified for the Zhao Dong block in Bohai Bay offshore China to bring in two additional blocks, Zhanghai and Chenghai. The aim is to help commercialize near-field discoveries in the area via the existing Zhao Dong production facilities and to encourage further exploration.

Roc Oil will retain operatorship of the expanded concession, with PetroChina having a 51% back-in option for a future commercial development.

••• 

Brunei Shell Petroleum (BSP) has discovered oil in the Geronggong prospect, 100 km (62 mi) offshore Brunei. The well was drilled in 1,000 m (3,281 ft) of water – the deepest to date for a BSP discovery – by the drillshipNoble Phoenix. BSP expects to follow up with appraisal drilling over the next two years. 

••• 

Chevron Indonesia has awarded Technip a FEED contract for two floating production units for each of the Gendalo and Gehem fields, in water depths of 3,500-6,000 ft (1,070-1,830 m). Technip’s operating centers in Jakarta and Houston will handle this program, the company’s first deepwater engineering project in Indonesia.

Indonesia’s oil and gas regulating authority MIGAS has granted Lundin Petroleum a PSC for the Guarita block in the Natuna Sea. The 8,018-sq km (3,096-sq mi) permit is next to the main oil and gas production area in this region, and includes numerous exploration prospects that Lundin plans to further delineate via 3D seismic.

More Offshore Issue Articles
Offshore Articles Archives
View Oil and Gas Articles on PennEnergy.com
More in Regional Reports