Asia-Pacific
In early March, the Indian government signed production-sharing contracts (PSCs) for 52 oil and gas blocks
Heavy activity looks set to continue if the results of the NELP VI licensing round are any indicator.
India’s state oil company, ONGC, signed PSCs for 24 blocks, and Reliance Industries Ltd. signed seven. Indian veteran Cairn India added two blocks, while Australia’s Santos Ltd. made its entry into India’s offshore with two blocks. BG Exploration and Production India Ltd. signed on as a minor shareholder with ONGC on a shallow-water block in the Krishna-Godavari basin, increasing its presence in the area.
There were 55 onshore and offshore blocks offered in the latest round, of which 52 received bids. Altogether, 162 blocks have been awarded over six licensing rounds.
Reliance has been very active since it entered into the offshore exploration game several years ago.
In early March, Reliance and its partners spudded exploratory well GS01-B1 in 79 m (259 ft) water depth in block GS-OSN-2000/1 off the west coast of India. TheActinia semisubmersible rig is expected to continue working on the block into 2Q 2007.
The well will explore carbonates of Middle Miocene, Lower Miocene, Upper Oligocene, Eocene Bassein Limestone, and the Panna Formation.
The well is 240 km (149 mi) northwest of Mumbai.
This is the second exploratory well in the block after the A1 well was drilled in 2006. The A1 well had significant hydrocarbon shows, but could not be tested because of mechanical problems.
Reliance operates the GS-OSN-2000/1 block with 90% interest. Hardy Oil and Gas holds the remaining 10% interest.
Indonesia also awarded blocks recently.
International oil companies are expected to spend $411 million on drilling and seismic surveys over the next three years on the nine blocks awarded in the country’s recent bidding round.
Unfortunately, bidding did not quite meet the expectation of the country’s Energy and Mineral Resources Ministry.
The result is that the Indonesian government is planning to offer 40 additional blocks this year through tender calls or directly negotiated offers. The move is designed to raise the rapid decline in domestic crude oil production, which last year fell to 1.01 MMb/d, below the government’s 1.05 MMb/d target.
Indonesia hopes to attract $1 billion in three-year exploration commitments from the 40 additional blocks in addition to the $411 million in three-year commitments secured for the recently awarded blocks.
The country signed 18 production sharing contracts last year.
Americas
In early March, Petrobras discovered light oil with well 4-ESS-172-ES in the Espírito Santo basin.
A formation test carried out in a lined well at 1,011 m (3,317 ft) water depth indicates the reservoirs have excellent productivity, Petrobras says. Potential production could reach 10,000 b/d.
Preliminary geological studies indicate an in-place potential of 570 MMbbl. Additional studies will more precisely evaluate the reserves potential of the field.
This find is in the BC-60 block off the coast of the state of Espírito Santo, 120 km (75 mi) south of the city of Vitória and 15 km (9 mi) southeast of the Jubarte oil field.
The discovery is a new horizon that is part of the Caxaréu oil field in the northern Campos basin and was declared commercial to the National Petroleum Agency (NPA) in December 2006.
Total verified the discovery while carrying out work for the 1-ESS-121-ESS discovery assessment plan.
Petrobras operates the concession with 100% interest.
A side note on Brazil is the recent Petrobras/Gazprom memorandum of understanding. Petrobras and Russia’s Gazprom, the world’s biggest gas company, have signed a memorandum of understanding to identify cooperation opportunities for oil and gas projects at a meeting that took place in Brazil at the end of February.
Three potential initiatives include cooperation possibilities in LNG, natural gas storage, and natural gas transportation system projects.
Although the activity schedule will extend through next year, Petrobras and Gazprom expect to materialize actual partnerships, particularly in the LNG area, in 2007.
The February meeting was the third meeting held between the companies for this purpose.
It looks as if EnCana is going to move ahead with the Deep Panuke project offshore Nova Scotia. The company reportedly is looking for a jackup rig for a work program that includes re-entering four wells on the field and drilling two more, a production well and an acid gas injection well.
An official request for bids is to be issued in May, with an award following project sanction, which is expected in 4Q 2007.
Meanwhile, rig problems have plagued the Chevron drilling program in the deepwater Orphan basin offshore Newfoundland.
TheEirik Raude semisubmersible spudded the Great Barasway well in mid-August 2006. The rig since has been out of commission twice, in January because of a broken topdrive main shaft and in February because of broken riser tensioner wires. The semi is now in Marystown, Newfoundland and Labrador, where it is undergoing additional repairs.
The Great Barasway prospect lies in 2,350 m (7,710 ft) water depth in license 1076. Chevron, Exxon Mobil Corp., Shell, and Imperial Resources are partners in the field.
Africa
In the first quarter, Total announced that the deepwater Egina field in OML 130 offshore Nigeria could be suitable for stand-alone development.
The first stage in exploration in block OML 130 resulted in the discovery of the Akpo field in 2000. Akpo is expected to start production in late 2008 and to reach peak production of 225,000 boe/d, of which nearly 80% will be condensate.
Egina-1 was discovered in December 2003 and Egina-2 in October 2004. An appraisal program followed seismic data processing, resulting in wells Egina-3 in September 2006, Egina-4 in November 2006, and Egina 5 in November 2006.
The Egina field is about 20 km (12 mi) from Akpo and 150 km (93 mi) from the Nigerian coast.
Partners in OML 130 include NNPC, Sapetro, Petrobras, CNOOC and Total.
Mediterranean
Dana Gas, the Middle East’s first regional private-sector natural gas company, plans to drill 15 wells in Egypt in 2007 through its exploration and production subsidiary, Centurion Energy. Ten exploration and five development wells are planned, with target depths ranging from 1,000 m (3,280 ft) to 4,000 m (13,123 ft).
“Today we are making further investments in the natural gas industry to benefit from the capabilities of Centurion, in the exploration and production field. In addition to investing to maximize the potential of our Egyptian assets, Dana Gas soon will be expanding into exploration and production activities in other countries in the region, and we currently are pursuing a number of opportunities of this type, in addition to other gas-related projects across the Middle East,” says Rashid Saif Al-Jarwan, general manager of Dana Gas.
Farther north, Northern Petroleum has landed three new offshore licenses adjacent to its permits off southern Italy.
The licenses are the re-designated G.R20.NP (ex-d23GR.-NP), G.R21.NP (ex-d22GR.-NP) and G.R22.NP (ex-d24GR.-NP). All are next to Northern’s existing three licenses in the Apennine-Maghreb thrust belt west of Sicily and adjoining the Tunisian median line. Across the border, Anadarko, PetroCanada and Shell hold interests in the equivalent structural setting.
Northern believes its enlarged offshore acreage, now extending over 4,370 sq km (1,687 sq mi), has strong oil-bearing potential. A seismic survey acquired last November over the company’s existing licenses revealed potential for several billion-barrel prospects. Northern and and partner ATI Oil are looking for farm-in partners.
Middle East
In February, Qatar Petroleum and Exxon Mobil Corp. announced Qatar Petroleum had offered ExxonMobil Middle East Marketing Ltd. an opportunity to participate in the Barzan gas project. The offer brought with it the right to participate in all future phases of the project as well.
The two companies also decided not to move forward with a Gas to Liquids (GTL) project and instead to pursue the development of the Barzan Project in the North field.
The initial phase of the Barzan project will supply domestic gas to meet the State of Qatar’s infrastructure and industry growth.
Qatar Petroleum and ExxonMobil signed a statement of participation principles for the Barzan project and a heads of agreement for all future phases of the project.
The companies expect the initial phase of the Barzan project to yield about 1.5 bcf/d of sales gas. Startup is anticipated in 2012.
Central Europe/Caspian
Dragon Oil is continuing its work in the Caspian Sea. The company has signed a five-year extension for theIran Khazar jackup. The rig, operated by North Drilling Co., will continue to drill development wells from Dragon’s new LAM A platform in the Turkmen sector of the Caspian Sea.
In early March, another jackup, theAstra, completed perforating and testing of a well from the LAM 13 platform. The well tested at a rate of up to 1,525 b/d of oil from three reservoir zones.
Upon test completion, the same rig began drilling the first appraisal well on the Lam West structure, 28/120, from the LAM 28 platform.
Europe
In late February, Hydro’s exploration well on the Nucula prospect in the Barents Sea proved the presence of oil and gas. Transocean Inc.’sPolar Pioneer semisubmerisble drilled the Nucula discovery well 110 km (68 mi) northeast of the Goliat discovery and 65 km (40 mi) north of the Norwegian town of Honningsvåg.
The well was drilled to 1,592 m (ft) TD, finding hydrocarbons in the Realgrunnen Group formation and in the Kobbe formation. The well was not production tested, but extensive data collection and sampling work has been carried out.
“It is positive that a new, functioning petroleum system has been proven in this part of the Barents Sea, too. However, it is important to emphasize that there is a need for further evaluation and analysis of collected data in order to ascertain whether or not the discovery is commercial,” says Tore Lilloe-Olsen, vice president and head of exploration in the development Norway sector, in Hydro’s Oil & Energy business area.
Hydro operates the Nucula license with 30% interest. Partners include Eni with 30% interest, BG with 20% interest and Petoro with 20% interest.
Toreador Resources Corp. continues to see successes from its Black Sea acreage. The company recently published a summary of its year-end 2006 reserves report results along with an operations update that indicates it will continue to invest in the area.
Toreador’s capex for 2006 totaled $128.5 million, compared to a 2006 budget of $100 million. The company says expenditures for 2006 exceeded the budget primarily because of incremental cost increases for infrastructure construction and because the drilling schedule for the South Akcakoca sub-basin offshore Turkey in the Black Sea was expedited. During 2006, 70% of Toreador’s capex, amounting to $89.9 million, went to Turkey.
For fiscal year 2007, Toreador’s preliminary capital budget is $81.5 million. Of that total, about $52.5 million (64% of the total budget) is allocated to Turkey. US capital spending will be minimal.
More drilling is planned for August. ThePrometheus jackup is to begin work for Toreador in its Thrace Black Sea permit area in the extreme western end of Turkish coastal waters.
