Global E&P Briefs

Americas

BHP Billiton Ltd./Plc. has increased its acreage offshore Trinidad and Tobago. The company is part of a consortium that was awarded the 150,000-acre Block 3(a) off the northeast coast of Trinidad. BHP already holds adjacent blocks 2(ab) and 2(c), where five exploration wells have been drilled, yielding three hydrocarbon discoveries in the past two years. BHP Billiton is operator with a 30% interest in Block 3(a), which lies 25 miles off the northeast coast of Trinidad. Talisman Energy Inc. (30%), BG International (30%), and TotalFinaElf SA (10%) are partners.

Petroleos de Venezuela (PDVSA) and Statoil have signed a memorandum of under- standing for work in Lake Maracaibo. The agreement addresses increasing oil production from the Ceuta Area 2 Sur field through the application of new well technology. A study phase will take four months and will be devoted to assessing technical options for increasing production.

In early November, the Nova Scotia Offshore Petroleum Board announced the results of the call for bids No. NS01-1, issued in June 2001 for nine new offshore exploration licenses. Federal and provincial governments were notified of the bid results. Protocol is for the Board to issue exploration licenses provided that no joint ministerial veto is filed within 30 days and that the bidder satisfies the security deposit requirements specified in the call for bids. The board announced the decision not to proceed with call for bids NS01-2 in December 2001. The next nomination closing date is March 31, 2002.

Europe

Conoco Inc. subsidiary Clyde Petro-leum Exploratie B.V. made a natural gas discovery with the Q4-10 exploratory well in the Dutch section of the North Sea. This is the largest of seven commercial discoveries Clyde Petroleum has drilled offshore the Netherlands in the past three years.

Norsk Agip found oil on the Goliath discovery in Block 7122/7-2 offshore Norway 31 miles southeast of Sn hvit field in the Barents Sea. Estimates of recoverable reserves range from 91 million bbl to 250 million bbl. Norsk Agip operates Goliath (25% interest), with partners Phillips Petroleum (25%), Statoil (20%), Enterprise Oil (15%), and Fortum Petroleum (15%).

Five licensees have signed separate contracts with two international energy companies for the sale of liquefied natural gas (LNG) from the Sn hvit field in the Barents Sea. Statoil, Norsk Hydro, RWE-DEA, Amerada Hess, and Svenska Petroleum Exploration will sell LNG to El Paso Global LNG Company, which will purchase 2.4 bcm/year, and to Iberdrola S.A., which will purchase 1.6 bcm/year. Deliveries will begin when Sn hvit comes on stream in 3Q 2006.

Asia/Pacific

The sultanate of Brunei has established a national oil company to consolidate and mobilize the petroleum industry, breaking the monopoly Royal Dutch/Shell has long held in the country. The newly formed oil company is expected to play a more active role in petroleum E&P and accelerate development of a domestic industrial base in Brunei. This could open the door to new investors in the region. Brunei is Southeast Asia's fourth largest producer, generating 163,000 bb/d of oil.

In mid-November, Matrix Oil NL announced completion of development operations at the L Field in the Langsa Technical Assistance Contract Area in the North Sumatra Basin offshore Indonesia. Matrix recently moved into production from the L1 and L2 wells. The MV8 Langsa Venture floating production, storage, and offloading (FPSO) vessel will be used to produce the field.

Shell plans to use heat exchange technology developed originally by Statoil and Linde for use in an LNG plant in the Sn hvit development in the Barents Sea for Shell's North West Shelf project in Karratha, Australia. The new technology uses spool-wound heat exchangers as part of a process to cool gas to -163

China's CNOOC Ltd. announced plans to drill 4-6 wildcat wells in the Xihu Trough in the East China Sea early next year as part of a US$200 million investment in East China Sea exploration. CNOOC Ltd. has agreed to buy a 50% stake in the Xihu Trough from the parent company, China National Offshore Oil Corp.

Central Asia

Japan Azerbaijan Oil Co., a consortium made up of Japanese oil companies and the State Oil Company of Azerbaijan, began exploration drilling at the Yanan Tava Field in the Caspian Sea, 120 km southeast of Baku. The consortium plans to drill two exploration wells, the first of which should be complete in two months. Reserve estimates are 75-80 million tons of oil. Partners include Socar (50%) Japan Petroleum Exploration (22.5%), and Itochu Corp. (7.5%).

TotalFinaElf SA has had positive results from the East-2 well in the Kashagan oil field, located in the Kazakhstan portion of the Caspian Sea. This is the third well drilled in the field, and it will be followed by additional appraisal drilling, which is moving forward at an accelerated pace in the eastern block. The nine-member consortium, which is hoping to begin commercial production in 2004, includes TotalFinaElf, Eni, ExxonMobil Corp., BP Plc., Royal Dutch Shell Group, Statoil ASA, BG Group Plc., Inpex, and Phillips Petroleum Co.

Africa

Vaalco Gabon, Inc. executed a five-year extension to the production sharing contract covering the Etame Block offshore Gabon. The 3,000-sq-km block contains the Etame discovery, which Vaalco is planning to bring onto production in the second half of 2002. The block also contains earlier discoveries - North and South Tchibala - that the consortium is studying for development. The terms of the contract provide for a three-year extension for two wells and a further two-year extension for one additional well. Vaalco Energy is operator (30.35%), with partners Pan African Energy Corporation Ltd. (32.5%), Sasol Petroleum International (30%), PetroEnergy Resources Corporation (4.525%), and Nissho Iwai Corporation (2.625%).

TotalFinaElf announced the signing of a contract with Morocco's state-run Onarep to carry out hydrocarbon studies in the Dakhla region offshore southern Morocco. The contract provides for the company to conduct geological and geophysical studies over a 44,400-sq-mile area during a 12-month period. Morocco also granted a permit for the offshore Boujdour area in the north to Kerr-McGee. Ownership of this area is being disputed by Polisario, the government-in-exile of Western Sahara, a region that Morocco annexed in 1976 and occupied in 1979. New regulatory laws offering better financial terms and lower state participation have encouraged increased foreign investment in the country.

Middle East

In November, ChevronTexaco signed an exploration and production sharing agreement for the eastern offshore areas of Bahrain, which includes the Hawar Islands. This award follows the World Court ruling on a border dispute with Qatar. ChevronTexaco said it would drill the first well by the end of 2002.

BG Egypt and Edison International announced the successful completion of Sapphire-3, the West Delta Deep Marine Concession offshore the Nile Delta, Egypt. The first target attained was Saffron Channel C in the Scarab/Saffron Complex. The Sapphire-3 well proved pressure communication between Channel C and the Saffron discovery, indicating a gas column about 575 meters - the largest gas column recorded in Egypt. The Scarab/Saffron is expected to produce first gas 1Q 2003. The Sapphire Field is the first gas condensate field in the west Nile Delta area.