Global E&P Briefs

April 1, 2002
In a move to diversify its energy sources, the government of South Africa has approved petitions from a number of companies interested in exploring the potential for gas prospectivity.

By Judy Maksoud • Houston


In a move to diversify its energy sources, the government of South Africa has approved petitions from a number of companies interested in exploring the potential for gas prospectivity. South African's Sasol got the nod to look for natural gas over an area that covers 28,395 sq km off the country's west coast and ranges in water depth to 300 m.

Any gas discovered could be used for industry, for fuel in the country's first gas power facility, or for feedstock for a gas-to-liquids program.

Sasol subsidiary Sasol Petroleum International will organize the gas exploration and possible production projects.

The agreement, sanctioned Jan. 25, 2002, is subdivided into five parts and will terminate in July 2011. A minimum work program covering 300 sq km of new 3D seismic data has already been completed for the first 24-month period. The remaining four periods are optional.

Amerada Hess Corporation has reported yet another oil discovery offshore Equatorial Guinea on Block G in the Rio Muni Basin about 12 miles northeast of the Ceiba Field and two miles southeast of the Ebano discovery. The new discovery, named Akom, was made by the G-7 well, which was drilled to a total depth of 8,140 ft in 1,456 ft water depth.

Amerada Hess is reportedly evaluating development scenarios for the Okume, Oveng, Ebano, and Akom discoveries while exploration drilling continues.

Amerada Hess operates Block G (85%) with South African partner Energy Africa Ltd. (15%). The two companies share ownership of the adjacent Block F with the same split.

The government of Equatorial Guinea will have a 5% carried interest in commercial production from Okume, Oveng, Ebano, and Akom.


Harken Energy Corp. announced that political and regulatory conditions in Costa Rica continue to hinder development. Harken subsidiary Global Energy Development Ltd., holds a 40% working interest in a number of onshore and offshore properties on the Gulf Coast, but work awaits the granting of a drilling permit. All of the preliminary work was completed and the petition for a permit filed by Harken a year ago.

Recent decisions reached by the Costa Rican Supreme Court make the granting of the environmental permit for this project unlikely. To date, the company's investment in the country totals $8.8 million.

In 1Q 2002, Mexican state oil company Pemex announced a sizable offshore exploration effort that will cover areas from shallow water to 2,600 ft water depth. The company is also making plans to gather more information through seismic surveys over its holdings in the Gulf of Mexico, particularly in deepwater. Plans include seismic surveying and exploration drilling over the next four years.

Natural gas is becoming a higher priority in Venezuela, which holds the eighth largest reserves of gas in the world. Part of this switch is likely due to US demand.

The offshore Deltana region in the northeast will see immediate activity with a $375 million exploration effort launched by state-owned Petr

In bringing the Deltana plan to fruition, the government intends to increase domestic gas use and to export extra volumes.


Murphy Oil Corp. announced the completion of a three-well exploration and appraisal program offshore Sarawak, Malaysia, that confirmed the commerciality of the company's holdings on Block SK 309 and Block SK 311. The three wells were South Acis-5, Sepang-1, and West Patricia-5.

South Acis-5 encountered gas, and the Sepang-1 well, though it failed to find hydrocarbons, fulfilled the company's production sharing contract obligation to drill Block SK 309. The best results came from West Patricia-5, which confirmed in excess of 30 MMbbl of recoverable oil. Plans are in place to have the West Patricia field producing by 3Q 2003. A production facility on West Patricia will facilitate development of the surrounding acreage.

Murphy plans to drill two more exploration wells in Blocks SK 309/311 later this year and to carry out additional 3D seismic operations.

Murphy subsidiary Murphy Sarawak Oil Co. Ltd. operates the blocks with 85% interest. The company's sole partner is Petronas Carigali Sdn. Bhd.

Central Asia

While the littoral Caspian states inch toward resolution of the sea's resources, Iran has decided to move forward with oil and gas projects. Iran has been insistent that the sea's resources be divided in equal shares among the countries along the Caspian's borders. Despite the fact that the countries involved have approved no such division, Iran's Oil Minister Bijan Zanganeh announced that Iran would no longer hold back investment.

By moving forward before reaching a solution to the ownership issue, Iran could be setting the stage for more conflict. In July of last year, an Iranian gunboat and a military aircraft ordered two Azeri research vessels out of an oil field that claim both Iran and Azerbaijan.

Though Iran has pushed for acceptance of its plan to divide the Caspian's resources into 20% interest for each of the five littoral states, this move indicates that the country could be taking a different tack to secure what it perceives as its portion of the sea's riches.


In mid-February, BG Group received government approval for its application for seven offshore exploration licenses offshore Spain. The licenses, located in the Ebro Delta 90 km northeast of Valencia, cover a 6,500-sq km area (equivalent to 30 North Sea blocks). BG Group will hold 100% equity in the licenses.

Securing these licenses expands BG Group's Mediterranean presence and opens up opportunities for gas development. The company plans to spend $28 million carrying out an exploration program over the next three years.

A 3D seismic survey covering 1,500 sq km is scheduled to begin this summer, and exploration drilling is expected to start by the end of next year.

Middle East

Sofresid, a joint venture (JV) formed by a subsidiary of Bouygues and Foster Wheeler, signed a $10 million front-end engineering and design (FEED) contract with Dolphin Energy Limited for the upstream facilities Dolphin project offshore Qatar.

The JV's portion of the FEED is worth $4 million and covers:
• Two offshore production platforms
• Two subsea pipelines from the platforms to the port of Ras Laffan in Qatar
• An onshore gas processing facility in Ras Laffan
• A gas compression facility in Ras Laffan
• Two gas receiving and metering stations
• Telecommunications and control systems.

The $3.5 billion Ras Laffan project will pipe natural gas to Abu Dhabi and Dubai from Qatar's huge offshore North Field.