GLOBAL E&P

The spending includes $144 million to shoot 1,500 sq km (579 sq mi) of 3D seismic and to drill four wells in the 3,910-sq-km (1,510-sq-mi) block N. The companies have earmarked $12.4 million for 800 sq km (309 sq mi) of 3D seismic on the 4,748-sq-km (1,833-sq-mi) block Q.

The work is expected to take seven years to complete. The area is thought to be similar to the deepwater discoveries of Kikeh, Malikai, Gumusut Kakap, and Ubah.

CNOOC Ltd. is still drilling exploration wells in China’s Bohai Bay. Late in March, the company made an independent discovery in the Yellow River Mouth Sag.

Discovery well Bozhong (BZ) 28-2 E-1, south of structure BZ 28-2E in the Yellow River Mouth Sag, penetrated oil pay zones with total thickness of 35 m (115 ft) and gas sections of 35 m (115 ft). The well was drilled to a TD of 2,575 m (8,448 ft) in 20 m (66 ft) water depth.

During the drillstem test, the well flowed at an average rate of 1,600 b/d of oil from the oil zones via 7.14-mm (0.28-in.) and 14.29-mm (0.56-in.) chokes and 10 MMcf/d of gas via 15.08-mm (0.59-in.) choke.

BZ 28-2E lies between the BZ 28-1 and BZ 28-2S oil fields.

“Since 2006, CNOOC Ltd. has made four discoveries in the Yellow River Mouth Sag of Bohai Bay,” says Zhu Weilin, vice president of the company and general manager of the exploration department. “We hope to develop a large-scale cluster of oil and gas fields in the future.”

Niko Resources Ltd. made three new discoveries in two blocks off India’s east coast in March. Wells KG-D6-Q1 and KG-D6-P2 are in block D6 in the Krishna-Godavari basin.

The KG-D6-Q1 well is 15 km (9.3 mi) southwest of the AA-1 gas discovery. The KG-D6-P2 well is 6 km (3.7 mi) west of the P1 gas discovery. The KG-D6-Q1 well encountered pay zones in the distal part of the earlier established channel levee systems in the KG D6 block. Data obtained from logging and modular dynamic testing (MDT) prove the presence of hydrocarbons.

Well KG-D6-P2 encountered two gas bearing zones, both of them channel fan complexes. Data obtained from logging and MDT corroborates the presence of hydrocarbons. These two wells demonstrate the continued high prospectivity of the block, the company says.

Niko’s third discovery is in block NEC-25. Well NEC-25-A5 lies in the Mahanadi basin 12 km (7.5 mi) northwest of the earlier natural gas discovery NEC-25-A1 (Dhirubhai 9). The recent well, Dhirubhai 32, is the seventh consecutive discovery in this block. Commerciality is under evaluation, Niko says.

Americas

Canadian Superior Energy Inc. is moving theKan Tan IV semisubmerisble to Trinidad. Maersk Contractors, a part of A.P. Moller - Maersk A/S will manage the drilling rig, which is owned by Sinopec Star Petroleum Co. Ltd. of Beijing, China.

TheKan Tan IV has been undergoing a $60-million refit in Brownsville, Texas. The rig is scheduled to begin drilling on Canadian Superior’s Victory prospect on Intrepid block 5(c).

Canadian Superior has contracted theKan Tan IV to drill a three-well program on separate large natural gas prospects: Victory, Bounty, and Endeavour, approximately 97 km (60 mi) off the east coast of Trinidad.

“As with any major construction and refurbishment program of this nature, the rig refurbishment has taken longer than we and Maersk and Sinopec had originally planned, but I am pleased to say that we are very close now,” Mike Coolen, Canadian Superior president and COO, says.

The rig was being towed to the port of Chaguaramas in Trinidad to load supplies and finalize drilling preparations before moving to the first drilling location, Victory-1. Canadian Superior expected the first well on the Intrepid block to be spudded by the end of April.

Awards are being made for work on the Deep Panuke gas project offshore Nova Scotia.

Intec Engineering and alliance partner IMV Projects Atlantic have landed a contract for subsea and pipeline design. Front-end engineering and design (FEED) work will support project sanction, which is expected before the end of the year. The FEED work will also lead to bid packages for the subsea and pipeline contracts.

Intec plans to assign a subsea/pipeline engineer to EnCana’s office in Halifax as part of the client’s integrated project management team.

Mediterranean

In mid-March ONGC Videsh Ltd. signed an agreement to operate in deepwater offshore Libya. The company signed an exploration and production-sharing agreement (PSA) with National Oil Corp. of Libya for contract area 43. The PSA was part of the country’s recently concluded third bid round.

The contract area consists of four blocks with a total area of 7,449 sq km (2,876 sq mi) in the Cyrenaica offshore area of the Mediterranean Sea. The block boundaries extend from the coastline to a water depth of about 2,200 m (7,218 ft).

OVL’s work program includes acquiring 1,000 km (621 mi) of 2D seismic data and 4,000 sq km (1,544 sq mi) of 3D data, as well as drilling an exploratory well during the five-year exploration phase of the contract. About two-thirds of the contract area has sparse coverage of 2D seismic data. There is also a shallow-water exploration well that established the presence of hydrocarbons at the southwest boundary.

Libya is reportedly planning to hold another bidding round later this year to develop onshore and offshore gas fields. The round will include 10-15 blocks.

Libya has an estimated 100 Bbbl of oil reserves and is looking to nearly double production in the next ten years.

Middle East

Qatar Gas Transport Co. Ltd. (Nakilat) has signed an agreement with Keppel Offshore & Marine Ltd. subsidiary KS Investments Ltd. to jointly develop a world-class shipyard facility in the Port of Ras Laffan, Qatar.

This agreement is a partnership between a major LNG transporter and the global leader in ship repair, ship conversion, and construction of offshore drilling rigs.

The proposed shipyard will be part of the expansion of the Arabian Gulf Port of Ras Laffan and is expected to begin operation in 2010.

The new facility will be suitable for repair and maintenance of very large LNG carriers and a wide range of other vessels and the conversion of tankers to FPSO and FSO vessels. The estimated cost of the shipyard is approximately $450 million.

“This business venture is in line with our ‘Near Market, Near Customer’ strategy to be close to our customers so that we can better serve them,” Tong Chong Heong, managing director/COO of Keppel O&M, says.

Nakilat and KS Investments have agreed to form an 80/20 joint venture company to manage the design, construction, and operation of the 43-hectare (106-acre) shipyard, which will be built on reclaimed land. KS Investments will contribute $23 million for its 20% interest in the joint venture.

The name of the JVC is Nakilat-Keppel Offshore & Marine Ltd.

Europe

Toreador Resources and TPAO each have reported Black Sea gas discoveries.

Toreador found more gas in the Black Sea offshore Turkey.

The Guluc-1 well flowed approximately 17 MMcf/d of gas. It was drilled in a fault-separated prospect along the same trend as the Akcakoca-3 and Akcakoca -4 wells in the deeper waters of the SASB project area.

Turkish national oil company TPAO reportedly tested 6.8 MMcf/d of gas at the Alapli-1 well northeast of the Akkaya field and adjacent to the SASB area.

Africa

Most of the big West Africa news at the beginning of 2007 was offshore Angola, but more recently, the spotlight has moved north to Nigeria.

In late 3Q, Eni signed a production-sharing contract (PSC) with Nigerian national oil company NNPC for the OPL 135 exploration license. The area lies northeast of the Niger Delta near the Kwale/Okpai treatment plants, operated by Eni.

The PSC has a duration of 25 years. The first five years will be devoted to the exploration phase, and the following 20 to development and production, with a contractual option of putting gas discoveries into production.

Through this acquisition, Eni plans to promote increasing involvement of local companies in the domestic market, with the main objective of eliminating gas flaring.

Eni will operate OPL 135 activities through NAOC. Eni has a 48% stake in the block. Partners include Nigerian companies Global Energy Co. with 42% interest and BLJ Energy with the remaining 10% interest.

Offshore Namibia, Tullow Oil is drilling again on the potentially giant Kudu gas field.

Exploration and analysis to date suggest reserves of at least 3 tcf, with potential for up to 9 tcf. The parts of the reservoir drilled so far have achieved good flows, but Tullow wants to test other sections in a different geological setting.

Depending on the outcome of the two-well appraisal program, development could be expanded from the present option of fueling a gas-to-power project on the border with South Africa, to an export project, possibly involving LNG.

Tullow is negotiating to bring in a potential partner and expects to conclude arrangements before drilling the first well.

Central Europe/Caspian

Dragon Oil is embarking on a three-rig development campaign in the Turkmen sector of the Caspian Sea. The project will involve deployment of one jackup and two platform-based rigs.

The jackup will drill several wells from the Lam A platform this year. The platform-based rig CIS-1 is scheduled to arrive onsite this spring. Meanwhile, Dragon’s own platform-based Rig 40 is undergoing refurbishment. Rig 40 is expected to begin drilling in the spring as well.

In addition to the drilling program, Dragon is planning a sustained program of workovers through 2007.

Between 2007 and 2009, the company plans to drill up to 25 development and appraisal wells, subject to rig availability, leading to a 25% year-on-year increase in its crude production. Dragon also expects to spend around $500 million over this period on new production platforms, offshore facility upgrades, new pipelines, and enhanced export capability.