GLOBAL E&P BRIEFS

Marshall DeLuca
Houston

Africa

Esso has made a third oil discovery in Block 15 off Angola. The Hungo well, located in 1,202 meters water depth, follows the Kissanje and Miramba finds made recently by the company. One production test has been done with no results released. Further work is planned to evaluate the discovery's commerciality. The three fields are less than 20 km apart and plans are to develop the finds using a joint production system. However, a decision will not be made until the first quarter of 2000, with production beginning up to three years later.

Mobil and Sao Tom? & Pr!ncipe National Petroleum have agreed to explore for oil in the country's Exclusive Develop ment Zone. Under the agreement, Mobil will complete an 18-month evaluation of Blocks 1 through 22 and then have an exclusive option on the acreage to acquire a production sharing contract with Sao Tom? for further evaluation through exploratory drilling. Sao Tom? & Pr!ncipe National Petroleum is owned 51% by Sao Tom? and 49% by Environmental Remediation Holding Corp.

Vanco Energy has signed an Exclusive Reconnaissance Permit with the state oil company of Morocco for the Safi Haute Mer Block off Morocco. Safi Haute Mer covers 18,700 sq km and extends from the Atlantic shore out to 3,000 meters water depth. The agreement calls for a one-year geological and geophysical study, in which the Geco-Prakla MV Polshkov has been contracted to survey an estimated 1,800 km on the block.

Ocean Energy has brought three new wells onstream off Equatorial Guinea. The company drilled and completed the Jade 4 horizontal development well and brought it on production in Block B. The well tested at a rate of 9,862 b/d of oil. Also on Block B, the Opalo East 1 and 2 wells were completed and brought onstream after testing a combined 24,365 b/d of oil. Work is also currently being done to upgrade the capacity of the facilities on the Zafiro Field to 120,000 b/d of oil from 80,000 b/d by 2000.

Pioneer Natural Resources has signed a petroleum exploration and production agreement with the Soekar, the state oil company of the Republic of South Africa, that allows the company to conduct exclusive exploration and production activities over a single contract area covering about 10 million acres. The concession area is designated Block 7/10-14B and consists of all of former Blocks 7 and 10 and the shallower water portions of former Blocks 11, 12, 13, and 14.

Namibia has opened the Third Licensing Round for bidding. This third round includes the whole of the unlicensed part of the Namibia's offshore region, including the deepwater region which covers nearly a third of the area. For the round, 4,200 km of non-exclusive seismic data has been acquired together with a new 5,100 km non-exclusive deepwater seismic survey extending the coverage out to 2,500 meter water depths. The bid deadline will close on March 31, 1999.

Americas

$6.239 million was offered in high bids for 27 offshore tracts in Alaska's Beaufort Sea offered for lease by the US Minerals Management Service. Lease Sale 170 was the seventh held in the Beaufort Sea since 1979. Leases on offer covered a limited area near shore and near sites where exploration is already occurring. Phillips was the most active bidder, acquiring 13 tracts, followed by BP Exploration, which submitted the highest single bid ($911,922) for a tract offshore Prudhoe Bay. Other bidding companies included Chevron, Arco, and Petrofina.

Petrobras has reported a record for daily oil output in the domestic market. The company said it produced 1.03 million bbl (1.08 million bbl if it takes into account oil output outside of Brazil). Average production was previously at 1 million b/d. The record was attributed to an improvement in the company's production facilities installed at the Campos Basin and the start up of production at Voador.

Operator BG and partner Texaco have encountered a significant gas and condensate discovery in Block 5a of the East Coast Marine Area off Trinidad. The discovery well, Dolphin Deep-1, was drilled in 650 ft of water and encountered 546 ft of net gas pay in three zones and tested at a rate of 36 MMcf/d of gas and 430 b/d of condensate.

Chevron has begun drilling a world record water depth well in the US Gulf of Mexico using the Glomar Explorer drillship. The well is being drilled in the Atwater Valley 118 Block in 7,718 ft water depth. Chevron anticipates that the #1 well will reach a target wellbore depth of 15,471 ft in the fourth quarter. Chevron is operating the prospect on behalf of partners Shell Deepwater, EEX, and Enterprise Oil.

Forest Oil has brought the Ship Shoal 276 #2 gas well in the Gulf of Mexico onstream. The well is currently producing about 15 MMcf/d of gas. The #2 well is a subsea horizontal well drilled in the second quarter to recover natural gas encountered by the first well drilled on the block. Forest holds 100% interest in the well.

Baldpate has come onstream. Production has begun on Amerada Hess' Baldpate Field in Garden Banks 260 in the Gulf of Mexico. Baldpate is utilizing the world's tallest free-standing structure, a 1,902-ft compliant platform. Production from the first well is being increased from an initial 2,000 b/d of oil and 8 MMcf/d of gas. Six additional wells onstream are planned by the end of the first quarter of 1999 and the company is also planning to tie-in two wells from the Penn State Shallow reservoir on Garden Banks 216. Baldpate lies in 1,650 ft of water and is owned 50-50 by Amerada Hess and Oryx.

Anadarko has announced a record-setting flow rate from its Tanzanite subsalt field in Eugene Island 346 in the Gulf of Mexico. The Tanzanite #1 discovery tested 21,917 b/d of oil and 29.7 MMcf/d of gas, the highest flow rate ever achieved from an Anadarko-operated well and is one of the highest rates ever tested by industry in the shallow water of the Gulf of Mexico. Tanzanite is located in 314 ft of water and is owned 100% by Anadarko.

Shell has plugged and abandoned its first well offshore the Falkland Islands. The well, Sebald A-1, encountered non-commercial quantities of hydrocarbons after being drilled to a total depth of 4,525 meters. This is the third failed attempt to find oil in the disputed area, but the operators are not giving up. Sweden's Sodra Petroleum has spudded the next well in Block 14.24 in Tranche F of the Braela prospect. All drilling in the Falklands is being done by the Borgny Dolphin semisubmersible. Sodra recently signed an agreement with Desire Petroleum granting Desire a 12.5% working interest in Tranche F. This gives Desire interest in Tranches C, D, F, I, and L.

Asia-Pacific

Unocal and Mobil have discovered a new oil field in the deepwater Kutei Basin area off East Kalimantan, Indonesia. The Seno prospect is located on the Makassar Strait production-sharing contract area in 2,800 ft of water. The well, West Seno #2, was drilled to a TD of 8,770 ft and encountered 172 ft of vertical oil pay in two zones. First tests flowed 2,900 b/d of 37° API oil and 3.1 MMcf/d of gas. A sidetrack well is planned to further appraise the reservoir. Reserves are estimated between 210 million bbl and 720 million bbl BOE.

XCL has signed a production sharing agreement with China National Oil and Gas Exploration and Development for the development of the Zhang Dong Block in Bohai Bay. A subsidiary of China National Petroleum, Dagang, has already conducted extensive seismic studies on the block as well as drilling nine exploration wells (eight of which were hydrocarbon-bearing). XCL will be the operator of the block with 49% interest and is entitled to drill at least one well in the first year of the agreement.

The Mutineer-1B well in permit WA-191-P in the Carnarvon Basin on the Northwest Shelf off Western Australia has been plugged and abandoned as an oil discovery by Santos. The well was drilled to a TD of 3,399 meters and encountered an eight-meter oil column of 41° API. A drill stem test was in preparation, but was aborted for mechanical reasons and the well was plugged and abandoned. Interest holders are reviewing the possibility of exploration wells on nearby prospects in the permit.

Chevron has been awarded a 20% interest in an offshore exploration permit in Northwest Australia that covers more than 1.14 million acres. the permit, W97-16 is located in the Browse Basin and ranges in water depths from 600 ft to 6,500 ft. Other partners in the permit include Woodside, BP, Shell, and BHP.

Lundin Oil has spudded the Bunga Kekwa A5 well on Block PM-3 CAA, the commercial arrangement area between Malaysia and Vietnam. Bunga Kekwa A5 is being drilled from the same platform which supports the three current producing wells on the Kekwa Field. Target well depth is set at 7,700 ft and the well will be brought on production immediately. Production from the field is processed and stored on board an FPSO.

Conoco has conducted four drill stem tests on the Belut #3 exploration well in Block B in the Natuna Sea off Indonesia. The well flowed at a combined rate of 5,600 b/d of oil from two zones at 5,300 ft and 8,300 ft. The well was drilled to a total depth of 10,450 ft and also encountered a shallow gas zone that was not tested.

Vietnam has signed an oil and gas joint venture with four foreign companies for the exploration of offshore Block 15-1. State oil company Petrovietnam signed the agreement, originally announced last year, with Geopetrol of France, a Conoco-led consortium, and two South Korean firms - Korea Petroleum Development and SK. This marks the 33rd agreement Petrovietnam has signed with foreign partners for oil and gas exploration, research and exploitation.

Central Asia

Japan Petroleum Exploration is planning to begin discussions with Exxon to launch a feasibility study on building a natural gas pipeline network from Russia's Sakhalin Island to Japan by year-end. No commitment towards the study has been made as of yet, but, if is carried through, would begin next year at the earliest and would take about two years. The study would include construction costs and examine topographical features of the ocean floor on possible pipeline routes.

The government of Kazakhstan has signed two separate agreements with foreign oil companies for oil and gas exploration in the Caspian Sea. Both US-based Phillips Petroleum and Japanese-owned Indonesian Petroleum gained 1/14th stakes in a consortium exploring an area of the Caspian 50 miles off the country's northwest shore. The overall value of the deals is reportedly $3 billion, with $2 billion in direct investment and $1 billion in loans pledged by the foreign companies in return for exploration rights.

Europe

The Ekofisk II redevelopment - onstream. [19,916 bytes]
Ekofisk II has come onstream - on time and under budget. Phillips has brought the massive North Sea redevelopment into production after four years of planning and is expected to produce profitably through 2028. The redevelopment consists of a new platform for drilling and production and a new platform for processing and transportation, 31 miles of new pipeline, and the phase out or modification of 14 existing platforms at a cost of $2.5 billion. Production capacity is ex pect ed to be 306,000 b/d of oil and 789 MMcf/d of gas.

Conoco has encountered hydro carbons in a high temp erature/high pressure well in the Norwegian sector of the North Sea. Well 1/5-3SX was plugged and abandoned when high well pressures were encountered after drilling to a depth of 5,056 ft using the Byford Dolphin semi. Conoco has not released plans as to whether further drilling will be continued on the block.

A steel processing platform has been proposed for the optimal development of the Kvitebjorn Field in the Norwegian sector of the North Sea. Statoil and partners Elf Exploration and Norsk Hydro feel that this solution provides the best economics, offers the ability to drill without the need of a separate rig, and provides flexibility to produce smaller fields in the area. Kvitejborn is a gas and condensate field with reserves estimated at over 50 bcf of gas. The gas from the field will be transported via pipeline to the Troll gas facility or via the Oseberg or Heimdal fields.

The first Statoil cargo of 600,000 bbl of oil from the Schiehallion Field, West of Shetland, has been sold. The first cargo is on its way by shuttle tanker to the Sullom Voe terminal in Shetland for storage and transshipment. Peak production from the field is expected to be close to 140,000 b/d. Statoil holds 6% interest in the field and is entitled to about 9,000 bbl.

Further gas reserves have been confirmed by BP Norge's exploration well 6305/7-1 into the southerly part of the Ormen Lange dome off mid-Norway. According to the NPD, provisional estimates suggest reserves in the order of 200-400 Bcm. Gas was found at a depth of 2,900 meters in Early Tertiary sandstone. The well, which was drilled by the Ocean Alliance semisubmersible in 857 meters of water. This marks the first deepwater well in Norway to be tested, following the development of special equipment.

Middle East

Samedan Mediterranean Sea has entered into an exploration participation agreement for nine licenses offshore Israel. The agreement encompasses about 890,000 acres in water depths ranging from 2,500 ft to 5,000 ft. The first well is planned for early spring 1999 and will be drilled to approximately 7,250 ft to test a prospect that has been delineated by recent seismic. Samedan will pay 53.3% of the well cost to earn a 40% working interest in the licenses.