July 1, 2003
Dafora Group has contracted to drill two wells with an option for two more on the Nyuni license offshore Tanzania.

Judy Maksoud Houston

Dafora Group has contracted to drill two wells with an option for two more on theNyuni license offshore Tanzania. This well marks the first offshore drilling in the region in 12 years.

Aminex has signed Dafora to spud the Nyuni 1 well in early August, with drilling continuing into next year. The initial drilling program will comprise two wells to test separate structures. Drilling will be carried out from a redesigned land rig operating from two small islands in the Nyuni license area.

Aminex participates in the Nyuni license through a production sharing agreement with Tanzania Petroleum Development Corp., Tan-zania's state oil and gas company.

Kenya could also see exploration activity after two decades of inactivity.

Woodside Energy acquired 40% interest from Dana Petroleum in four exploration blocks in Kenya's offshore. Steps are already underway to fulfill the exploration requirement. The seismic survey is being planned and is expected to begin in 3Q 2003. The survey is limited to acquisition of 5,000 km of 2D seismic and will be completed by the end of 2004.

Woodside will operate blocks L5, L7, L10, and L11, which include some onshore areas in addition to the offshore portion. Water depths offshore reach 3,000 m.

According to Tom Cross, Dana's chief executive, the farm-in will allow Dana to reach its objectives more quickly. "Bringing in a new partner will accelerate exploration offshore Kenya by applying additional resources," he said.

In farming in on the production sharing contracts, Woodside has committed to paying 80% of the costs associated with certain work obligations. Under the farm-in agreement, Dana continues to hold 40% interest in each of the four PSCs. Star Petroleum International (Kenya) Ltd., a subsidiary of Global Petroleum Ltd., holds the remaining 20%.

Tullow Oil plc has discovered oil on the Acajou prospect off Côte d'Ivoire, confirmingthe hydrocarbon potential of the area, southeast of the Espoir field.

The well on license CI-26 was drilled on the Acajou South prospect at 3,050 ft water depth.

The Acajou-1X well, operated by Canadian Natural Resources, reached a total depth of 8,027 ft and encountered a gross oil column of over 250 ft.

Acajou-1X well finds oil off of Côte d'Ivoire.
Click here to enlarge image

According to Brian O'Cathain, managing director of Tullow Oil International Ltd., the well's success "underlines the potential of the Acajou area. The test rate is encouraging for the economic development of the discovery." The Acajou co-venturers will evaluate how to bring this potentially commercial discovery into development.

Tullow has a 24% interest in the Acajou discovery. Co-venturer CNR holds 66% interest, with Petroci holding the remaining 10%.

Total SA has a new oil discovery with its first exploration well in Angola's ultra-deepblock 32. The Gindungo-1 well was drilled in 1,445 m water depth and tested at rates of 7,400 b/d and 5,700 b/d from two separate zones. The well lies 40 mi from the Girassol field on block 17. Current plans are for an additional exploration or appraisal well on block 32 this year.

Total operates block 32 with a 30% interest. Partners are Marathon Oil Corp. with 30%, Sonangol with 20%, Esso Exploration and Production Angola with 15%, and Petrogal with 5%.

Marathon had a discovery last year in neighboring block 31 with Plutão. The company also participated in a well on the Saturno prospect on the same block. This well, near the Plutão discovery, reached total depth in April. One additional exploration well, which should spud in 3Q 2003, is planned for block 31.

BG Gas Marketing Ltd. has signed a letter of understanding (LOU) with MarathonOil Corp. subsidiary Marathon Offshore Alpha Ltd. for long-term LNG supply from Bioko Island, Equatorial Guinea.

The LOU calls for the supply of 3.4 million tons of LNG per year for 17 years, beginning in 2007. LNG would be shipped from a proposed LNG project to be developed by Marathon and its partners. The offshore Alba field, operated by Marathon, would supply gas for the project.

Marathon and its partners in the Alba field are expanding their existing production facilities to increase gas production from 50,000 boe/d to 90,000 boe/d by the end of 2004. Marathon believes this LNG project could provide the basis for a regional gas hub to develop stranded gas in this area.

According to Frank Chapman, chief executive at BG Group plc, "We are delighted to announce significant progress in our rapidly developing LNG strategy. The Lake Charles import terminal in Louisiana is the principal market for this LNG, but this agreement provides total flexibility on the destination of the gas."

Clarence P. Cazalot Jr., Marathon's president and CEO, pointed out the significance of bringing West African gas to the US market. "LNG from West Africa promises to play an increasingly important role in meeting the growing energy demands of the United States, and we are pleased to be working with all our LNG project partners to help meet this need for clean, efficient energy."

Approval of the LNG project by the govern-ment of Equatorial Guinea is pending. A definitive LNG sale and purchase agreement is expected by year-end 2003.


Algeria has announced its fourth bidding round in three years to be offered to foreign companies. The new round, issued by the Ministry of Energy and Mines, includes 12 onshore and offshore areas.

Though the primary focus is onshore in the southern part of the country, offshore blocks have been included for the first time in the upcoming round. The two offshore blocks are on opposite sides of the country. Block 143-2, covering 8,794 sq km, lies off the coast of Mostaganem on the northwest coast. Block 145-1 covers 6,924 sq km off Bejaia, 450 km to the east of Mostaganem.

Algeria, which currently produces 1.3 MMb/d, is hoping to increase production to 1.5 MMb/d by 2005. If the gas the country hopes to find is discovered, Algeria will also increase gas exports to Europe in the next six to seven years.


Though expectations were high for Ecua-dor's four offshore blocks, the government took in no bids. The blocks, located in the Gulf of Guayaquil and covering 1.3 million hectares, brought in no offers from companies reportedly more interested in exploration acreage off South America's east coast.

The probable cause for lost interest is the government's failure to provide investment safeguards. With its poor track record dealing with foreign oil companies that have invested in its onshore acreage, the government of Ecuador will have to work hard to earn the confidence of investors.

At long last, new acreage could be up for grabs off Newfoundland with the Canada-NewfoundlandOffshore Petroleum Board's announcement of the particulars for the 2003 call for bids. The offering includes two parcels in the northeast Newfoundland shelf, 10 in the Orphan basin, and two in the Flemish Pass. Together, the parcels cover 3.17 million hectares.

The Cnopb will conduct a strategic environmental assessment of the entire area that includes input from advisory agencies in government, fisheries interests, and public stakeholders.

Companies will have until Dec. 17, 2003, to submit bids. The total amount of money the bidder commits to spending on exploration will be the determining factor for awards.

Exploration licenses will be awarded for a nine-year term, during which a well must be spudded to validate the license for the full term. Winning bidders can secure a six-year extension to the nine-year term by posting an additional deposit of $1 million as security for drilling.


Black Sea activity could be heating up. Toreador Resources has identified at leastsix gas prospects in the shallow water of the western Black Sea. Toreador believes that these prospects have a per-prospect reserve potential ranging from 200 bcf to 1 tcf. The reserve potential estimate is the result of a 2D seismic survey completed on four contiguous permits in 2002.

The company anticipates selecting two well locations, with drilling targeted to begin early next year. Toreador is operator and holds a 49% working interest in eight Black Sea permits. The Turkish national oil company, TPAO, holds the remaining interest.

Ramco Energy plc and Hellenic Petroleum SA plan to explore their extensive acreage inthe Adriatic Sea offshore Montenegro.

Ramco has been involved with the Ulcinj block in the Adriatic since 1998. Seismic data acquired in 2000 was added to extensive existing seismic and drilling data from earlier exploration activity, with the result that a number of potentially significant oil and gas leads have been identified.

This year's work program includes the acquisition of 200 sq km of 3D seismic over a shallow-water area of high potential that is thought to contain gas. A well will likely test the structure in 2004, with the possibility of a second Ramco-funded exploration well.

Central Asia

China National Offshore Oil Corp. will continue to look around the world for investmentopportunities after being blocked in its bid to get into the Caspian.

Eni, Royal Dutch/Shell, Total, and Exxon-Mobil blocked Cnooc's bid to buy into BG's percentage of the North Caspian Sea prod-uction sharing agreement in Kazakhstan. The production area is home to one of the world's biggest oil and gas projects and includes the Kashagan field, which holds estimated producible reserves in the range of 7-9 Bbbl of oil.

The decision to pre-empt the sale of part of BG's interest in the project seems to be based on keeping the status quo in the project, not simply to exclude Cnooc. Regardless, the move to pre-empt Cnooc's buy-in has led the Chinese company to look elsewhere in the Asia-Pacific region for purchase opportunities. The company is actively looking to replenish reserves and will certainly find other ways to reach that objective now that the door to the Caspian has closed.


Murphy Oil Corp. subsidiary Murphy Sarawak Oil Co. Ltd. saw first oil from itsshallow-water West Patricia field in block SK 309, offshore Sarawak, Malaysia, in late May.

The initial development phase includes a single production platform and a floating storage and offloading facility. Later phases will include installing additional production platforms and drilling more development wells. Production is expected to level off at 15,000 b/d of oil.

Coming onstream on schedule and within budget 16 months following project sanction, West Patricia has set a new benchmark in Malaysia for both timing and costs. Design and fabrication of key facilities took place in Malaysia, with 82% of total field contracts placed with Malaysian companies.

Murphy Sarawak operates block SK 309 with 85% interest. Petronas Carigali holds the remaining 15% interest.

While West Patricia begins production, Murphy Sabah Oil Co. Ltd. is developing the deepwater Kikeh discovery. The Wood Group's Mustang Engineering and J P Kenny have completed a feasibility engineering contract that included evaluating multiple dry and wet tree development scenarios for Kikeh.

Kikeh will be the first major deepwater project in the Asia-Pacific region.

Murphy is the operator with 80% interest. Petronas Carigali holds the remaining 20%.