The first direct shipment of Russian crude entered the US via the Port of Houston on July 3. Yukos Oil Company, the largest fully privatized Russian integrated oil company, supplied the shipment, which was lightered from the supertanker Astro Lupus to facilities in Baytown and Beaumont.
There are many logistical challenges involved in shipping Russian oil to the US, but this successful pilot shipment is the first step toward creating an efficient transporting process.
Following the events of Sept. 11, 2001, the US has worked to improve its relationship with Russia to obtain a secure source of non-OPEC oil outside the Middle East.
Russia, which has enormous oil and gas reserves, has become a potential supplier of crude to partially displace imports from unstable countries in the Middle East.
Nicaragua will soon see offshore exploration. Four oil consortia are already prepared to begin exploration activities. And a number of other companies have expressed interest in the Miskitos and Perlas island chains off the country's Caribbean coast and in the swamp and marsh areas of the Pacific and Caribbean coastlines, which has opened to outside investment through recently signed legislation.
Interest in Nicaragua's offshore got a boost last year after a Fugro-Geoteam survey identified promising subsea structures.
The Greenland government will award licenses for exploring the area between lat-itudes 63° and 68° north off the island's west coast by the end of the year. The deadline for applications fell in mid-July and, surprisingly, attracted a fair amount of interest. The high cost associated with deepwater drilling coupled with the complication of harsh environment operations failed to deter potential investors despite a poor showing to date in the region. The only wells drilled off Greenland recently yielded two dry holes, resulting in Statoil and Phillips handing back their licenses.
Canadian Superior Energy Inc. reported that drilling has begun on its Marquis L-35 exploration well offshore Nova Scotia, Canada. Rowan Companies Inc.'s Gorilla V jackup spudded the well on July 6 and will drill the well to 16, 700 ft TD in just over 10 weeks, followed by two more weeks of testing. The Marquis project is 12.5 mi northwest of Sable Island and is upslope to the recent Deep Panuke gas discovery.
Conoco has moved into Nova Scotia's deepwater by farming in to ChevronTexaco's ongoing wildcat Newburn H-23. Transocean's Deepwater Millennium drillship spudded the well on May 23 and is expected to reach total depth by early September.
In late 3Q 2002, BG Group announced that the pre-emption process for interest in the North Caspian Sea Production Sharing Agreement was completed. The process began in 2001 after BP and Statoil announced that they would divest themselves of their interest.
In late June, the Kashagan discovery was declared commercial, with reserves estimated at 7 Bbbl to 9 Bbbl. Now, a development plan will be prepared to extract the reserves while exploration continues, with wells planned for Kalamkas this year and for Kashagan South West, Aktote, and Kairan in 2003.
BG now owns 16.67% of the Kashagan discovery, which is operated by Eni-Agip, also holding 16.67%. Other partners in the North Caspian Sea PSA are ExxonMobil with 16.67%, Shell with 16.67%, TotalFinaElf with 16.67%, Inpex with 8.33%, and Phillips with 8.33%.
The North Caspian Sea PSA covers 5,600 sq km in the Kazakhstan sector of the sea.
The Norwegian Ministry of Petroleum and Energy gave TotalFinaElf the green light to develop the Skirne and Byggve gas and condensate fields. The plan for development and operation includes subsea development for the fields via a single-well tieback on each field. Produced gas and condensate is to be treated at facilities 20 km west of the fields at the Heimdal Gas Centre. Processed gas will go via the Nor-wegian system to Europe or via the Vesterled system to the UK. Condensate will be exported to Scotland.
The fields are in production license 102 in the south central portion of block 25/5, in the Norwegian North Sea.
TotalFinaElf operates the license with 40% interest. Partners include Petoro, Marathon, and Norsk Hydro.
Pioneer Natural Resources announced that it has drilled a second successful well on its Olowi block offshore Gabon. The Olowi Marin-2 well, 4 km southeast of the Olowi Marin-1, drilled last year, was tested and flowed at over 2,000 b/d with no water from a 15-m perforation interval. The Glomar High Island V was moved 9 km north to drill the Gnadi Marin-1 well to test the same reservoir.
The government of Tanzania recently concluded its Second Offshore Licensing round, putting 11 deepwater blocks and one shallow-water block up for bid. The results were seemingly meager, with only two companies, Shell and Global Resources, bidding on the same blocks, 9-12. However, the bidding showed improvement over the first licensing round, which closed in 2001 after receiving only a single bid. Shell's interest in the region could pique the curiosity of more companies when the East African country issues its next call for bids.
Qatar is building its future on gas exploitation, according to H.E. Abdulla Bin Hamad Al Attiya, minister of energy and industry for the State of Qatar, in remarks at Rice University in Houston in late 2Q 2002.
"Looking at the future, gas is expected to be the fuel choice for many industrial countries for many reasons," Al Attiya said.
Limited oil reserves have placed Qatar in the shadow of major oil producing countries in the Middle East. However, the country's gas reserves could move Qatar to center stage.
A recent evaluation by SSI, a US consulting company, placed Qatar's gas reserves at 900 tcf. Now, Qatar is looking for ways to exploit its tremendous reserves. Primary objectives are LNG and gas-to-liquids (GTL) projects. Qatar launched its LNG industry in the 1990s with the Ras Laffan LNG facility. Now, the country aims to be the "world capital of GTL," according to Al Attiya.
To reach this goal, Qatar needs foreign investment. The minister's speech was an expedient for making the country's needs known. "We have adopted an open door policy toward foreign participation," Al Attiya said.
BP has contracted with Australia's Frontier Engineering Solutions Asia-Pacific to prepare a feasibility study to develop gas from block 05/2 in the Nam Con Son basin offshore southern Vietnam.
The feasibility study, which will be completed by year-end, will determine the most cost-effective way to develop the block. Nam Con Son, which holds gas reserves of 2 tcf, is scheduled to produce first gas by the end of 2005.
BP's objective is to transport Nam Con Son gas via a 400-km pipeline from nearby block 06/1 to power stations in Ho Chi Minh City.
Phillips, Shell, and China National Off-shore Oil Corp. are making plans to increase production from the Xijiang fields in the South China Sea. Their goal is to average 37.5 MMbbl/yr over the next four years from Xijiang 24-3 and 30-2, up from the current level of 30 MMbbl/yr.
Phillips and Shell each hold a 24.5% stake in Xijiang 24-3, with Cnooc holding the remaining 51%. Phillips has a 12.5% stake in Xijiang 30-2, with partners Shell holding 47.5% and Cnooc holding 40%.