Judy Maksoud • Houston
Mediterranean
In mid-June, BG Group Plc. and partners Shell Egypt NV and Edison International completed the Rosetta-11 exploration well in the offshore Rosetta concession in the Nile Delta.
The Rosetta-11 completes the exploration program in the Rosetta concession with a Pliocene gas discovery in a new field, Rashid North, 20 km northeast of the Rosetta field. Rosetta-11 was drilled to a depth of 1,605 m in a water depth of 160 m and was suspended as a future production well.
BG and its partners have applied to the Egyptian General Petroleum Corp. for a development lease for this new discovery. Approval is expected to be granted later this year. All areas of the concession not included in a development lease or development lease application were relinquished to the Egyptian government on May 29, 2003.
BG has had phenomenal success in the Nile Delta. According to Stuart Fysh, president of BG Egypt, "Since 1997, the company has realized a 92% success rate, having drilled 23 successful wells out of a total of 25." The total includes wells drilled in both the Rosetta and West Delta Deep Marine concessions.
BG and its partners signed a 25-year gas sales agreement with EGPC in October 1997 to supply gas from the Rosetta concession into the domestic market. EGPC received first gas from Rosetta on Jan. 31, 2001. WDDM produced first gas in late March 2003.
The initial stage of the Rosetta development ties six wells back to a not normally manned platform with a 66-km gas/condensate pipeline to the onshore terminal for delivery into the national grid system near Idku, east of Alexandria.
Phase 2 of the Rosetta concession development will consist of an unmanned minimum facilities wellhead platform tied back to the existing Rosetta platform. The project front-end engineering and design work began in March 2003. First gas is scheduled for 4Q 2005.
BG Group has a 40% working interest in Rosetta. Shell Egypt NV holds 40%, and Edison International holds the remaining 20% interest.
Egypt has been a focus area for BG for nearly a decade. From 1997 to the end of 2001, BG invested $440 million in operations in Egypt. Over the next five years, investment of $770 million is planned, mainly to realize gas export projects. On a gross basis, including partner contributions, investment over the 10-year per-iod 1997-2006 will reach an estimated total of $2.7 billion.
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Partner Shell has said it plans to invest $1 billion in exploration over the next several years on its North East Mediterranean field. Shell operates onshore and offshore concessions in Matruh in the west, in the Nile Delta, and in the Mediterranean. Drilling on the North East Mediterranean field is expected to begin in September.
Independent operator Apache Corp. is also continuing to invest in Egypt's offshore. In March of this year, the company announced the successful appraisal of its deep-water Abu Sir field discovery in the West Mediterranean concession.
The Abu Sir-2X well was Ap-ache's fifth well in the company's deepwater Egyptian program and the first appraisal well after four successful exploratory tests.
Americas
The Greenland and Danish governments have agreed on a new petroleum licensing policy for Greenland, including a license round in 2004 for selected areas offshore West Greenland.
The round will open with a letter of invitation. An opening meeting is planned to be April 1, 2004, in Copenhagen, followed by a meeting in Houston, Texas. The closing date for applications is scheduled for Oct. 1, 2004. Licenses are to be granted around the turn of the year from 2004 to 2005.
TGS-Nopec Geophysical Co. announced in early July the details of its 2003 non-exclusive seismic acquisition projects for offshore West Greenland. The 2003 West Greenland programs, scheduled to begin in August, will supplement the company's existing 2D seismic coverage over key blocks included in the 2004 licensing round. The program will add 7,000 km to existing seismic surveys, including 3,500 km of additional data directly over the leasing round acreage. This season's acquisition will complement the company's existing 25,000 km of 2D data in the area. Oil industry pre-funding has been secured for the new programs.
Exploration activity could soon be underway off the Bahamas. Kerr-McGee Corp. affiliates Kerr-McGee Bahamas Ltd. and Atlantic Exploration and Production Co. have acquired 100% interest in nine oil and gas licenses offshore the Bahamas. The licenses, in the Blake Plateau basin about 100 mi north of Freeport, Grand Bahamas Island, cover 6.5 million acres in water depths ranging from 650 ft to more than 7,000 ft. The Blake Plateau basin is on the southern margin of a large structural terrace that is situated between the shelf margin and Atlantic abyssal plain.
"These blocks expand our exploration opportunities along the deepwater Atlantic Margin, where we have licenses offshore Nova Scotia, Brazil, Morocco, Benin, and Gabon," said Luke R. Corbett, Kerr-McGee chairman and CEO. "With the addition of this acreage, Kerr-McGee holds interests in more than 70 million undeveloped acres worldwide, of which approximately 85% is in deepwater trends."
The first phase of Kerr-McGee's work program for the Bahamas includes acquisition and interpretation of seismic data.
Middle East
Pre-exploration drilling surveys have been conducted offshore Bahrain to determine the potential impact of drilling on the natural and socio-economic environments. Emu Ltd. performed six months of pre-exploration drilling surveys for ChevronTexaco and Petronas.
The surveys, including water and sediment quality analysis, biotope mapping (by divers and remote video), and benthic sampling with subsequent laboratory analysis, established a baseline environmental reference. The baseline survey was designed to enable future monitoring surveys to determine whether any changes in the environment recorded at baseline level were due to natural changes, by other development activities, or by the exploration activities themselves.
The collected data were used to assess the sensitivity of the environment in the area where exploration operations are to be carried out and to provide a reference against which interim and post-drill monitoring results could be compared.
The results of the study were submitted to the Department of Environmental Affairs in the kingdom of Bahrain.
Delek Drilling and Dorgaz will invest $10.5 million to drill the Nir 2 prospect offshore southern Israel.
The Nir 2 well follows the Nir 1 well in the Med Ashdod concession, 12 mi offshore, where natural gas was discovered in August 2000. Estimates placed reserves at 274 bcf.
The reservoir is near the Yam Thetis Mari concession, which contains an estimated 1 tcf of gas. Delek completed platform installation on the Mari-B gas field in January 2003. A subsea pipeline to connect the platform to an onshore power station was to be completed by mid-year.
Europe
The Seven Heads partners have successfully drilled and tested well 48/24-7A offshore Ireland. Well 48/24-7A is the second production well completed this year and is part of a six-well program that will move the field into production by year-end.
The semisubmersible Sedco 704 drilled the well to a depth of 3,626 ft. After completing the test, the vessel relocated within the field and began drilling well 48/24-9. Sister rig Sedco 711 drilled well 48/24-8. Upon completion of these wells, one further well and the re-completion of the 2001 appraisal well 48/24-5A were scheduled for completion by the end of August.
The 25.5 km of 8-in. infield pipelines that will connect the wells to a central field manifold have been laid and trenched, as has the 35 km of 18-in. main pipeline back to Marathon's Kinsale A platform. The control umbilical lay began in June, and the manifold was installed later the same month. At that time, construction work to connect the Seven Heads gas pipeline to the Marathon Kinsale A platform was well underway.
The field remains on schedule for first gas production during the 4Q 2003.
Ramco operates the Seven Heads field with 86.5% interest. Partners are Island Petroleum Developments Ltd. with 12.5% and Sunningdale Oils Ltd. with 1%.
As Seven Heads moves toward production, the Faeroes is seeing renewed exploration. Eni spudded a deepwater exploration well offshore the Faeroes in license 2 in mid June.
Site surveying and environmental sampling for the well were completed last December.
Eni drilled the well in partnership with independent Faroe Petroleum, which plans to drill a series of exploration wells in licenses 2 and 5.
Asia-Pacific
The race is on to attract foreign investment in promising new Asia-Pacific acreage.
Forty-six new exploration blocks will be offered in the first Philippines Petroleum Public Contracting Round. The bid area covers 215,000 sq km of onshore and offshore acreage in northwest, southwest, and east Palawan, the Sulu Sea, and Reed Bank.
The area up for bid is believed to have the highest potential for hydrocarbon reserves and is expected to entice major international oil exploration and production companies.
Bids will close at the end of September for India's New Exploration Licensing Policy IV, and awards are expected by Dec. 31, 2003. Recent deepwater discoveries have raised the profile of India's offshore, making investment opportunities considerably more attractive.
Private sector participation has increased in the recent past, and there is room for new participants in this underexplored and underdeveloped region.
Africa
Getting gas to market offshore South Africa is still a matter of the cart before the horse. Forrest Oil, in partnership with PetroSA, discovered an estimated 13 tcf of gas in the offshore Ibhubesi field, north of Saldanha Bay. The trick now is bringing the gas to market.
Two factors are at play. The first is that the gas will not be easy to extract. The second is that before any gas is produced, Forrest is obligated to secure a market for the gas. At present, no such market exists in the Western Cape.
The South African government has been more of a hindrance than a help in getting the project underway, putting a number of obstacles in the way of development. Forrest must secure a license to sell the gas and a license to market it, and there is no policy or agency in place to make that happen.
Despite these hurdles, Forrest remains optimistic that the project will come off. The company hopes to begin producing gas by 2006.
Sierra Leone's first licensing round received international interest, drawing bids from three companies.
Repsol-YPF of Spain, Oranto Petroleum of Nigeria, and US company 8 Investments are working out the details of their new acreage with the Sierra Leone government.
Seven blocks, each covering 4,000-5,000 sq km in depths ranging from shallow water to 3,000 m, were put out for bid in an offshore area that has seen only two wells, the deepest in 700 m.
TGS-Nopec shot 5,784sq km of 2D over the area in 2001. Work programs are expected to include 3D seismic and a well commitment during a seven-year exploration period.
Central Asia
The playing field is changing in the Caspian Sea.
Gazprom and Lukoil are creating a joint venture to develop the Central oil and gas field in the Russian sector of the Caspian. A new company, TsentrKaspneftegaz, will be set up on a parity basis as part of an agreement between Russia and Kazakhstan on delimiting the northern part of the sea.
Lukoil owns an exploration license for the field, which reportedly holds recoverable reserves of 521.1 million tons of oil and 91.7 bcm of gas.
While Russia and Kazakhstan lay their plans, Dragon Oil is resuming activity in Turkmenistan's Cheleken block. Dragon Oil awarded Lukoil a contract to drill from November though June 2004.
In January, Dragon reported the completion of testing of well LAM 22-105, the fifth and last of a series of development wells to be drilled on the LAM 22 platform. Dragon said it exceeded its 15,000 b/d oil output target for 2002 at the Lam 22 platform following the completion of the last well. Despite its success, the company did not move forward with the project because it lacked funding. Dragon demobilized early this year.
Kazakhstan plans to put more than 100 oil blocks out for bid in its sector of the Caspian next year. KazMunaiGas, Kazakhstan's national oil company, will be given first choice on the acreage and will tender for partners and work out development plans that will then require government approval. In 2005, Kazakhstan will offer acreage packages that will be open to foreign oil companies.
There are no royalty terms in place, and guidelines for bidding have not yet been established.
While the future is looking up for Russia, Turkmenistan, and Kazakhstan, companies are pulling out of Azerbaijan.
The Japan Azerbaijan Operating Co. left the Caspian Sea after failing to find commercial quantities of oil or gas reserves. A spokesperson for the company said that JAOC will close the project at the conclusion of the exploration period in late October 2003.
The last exploration well, drilled on the Atechgyah structure in March, did not find commercial hydrocarbons.
Azerbaijan has lost a third of the 21 production sharing agreements signed in the past ten years as a result of poor drilling results.
