Phillips Petroleum Pty Ltd. issued an award notification to Aker Maritime and Australian partner Clough Engineering for the hookup and commissioning contract for the Bayu-Undan Gas Recycle Project in the Timor Sea off Australia. This award to the Aker Maritime-Clough Joint Venture, an equal-interest partnership, is the final construction contract award to be made on the Bayu-Undan project. Work began immediately. Completion and startup are slated for 2004.
Work will include commissioning the wellhead platform, the drilling, production, and processing topsides (DPP) and compression, utilities, and accommodation topsides (CUA). The topsides work will be done in construction yards in Singapore and Korea. Completion work offshore includes the hookup and commissioning of all facilities of the entire field production systems as well as floating condensate and LPG storage and offloading facilities.
Nexen ups share in Buffalo
Nexen Inc. said it has exercised its pre-emptive right to acquire BHP Petroleum Ltd.'s 50% interest in the Buffalo oil field offshore Australia for US $21 million. Buffalo, located in the Timor Sea 560 km northwest of Darwin, has been on production since December 1999 and is producing approximately 15,000 b/d of 53 degree API crude oil through a floating producer. According to Charlie Fischer, Nexen's Chief Operating Officer, "This crude generates excellent netbacks and at current oil prices, the acquisition will pay-out during the first quarter of 2001. In addition, we have five exploration blocks on the northwest shelf of Australia and the revenue and cash flow from Buffalo enables us to explore much more cost effectively."
This transaction, subject to regulatory approval, will increase Nexen's interest in the field to 100%. The acquisition is expected to close in the first quarter of this year.
Seismic off Australia's Northwest Shelf
TGS-Nopec Geophysical Company ASA announced the start of a new non-exclusive 3D seismic survey covering the Barrow Sub-basin in the Carnarvon Basin of Australia's Northwest Shelf. The 1,500 sq km 3D survey will be acquired and processed through a revenue-sharing agreement with Veritas DGC Inc., whose M/V Pacific Sword began acquisition in mid-January. The survey should conclude by July 1. As part of the Carnarvon Basin, the premier hydrocarbon producing region in Australia, the Barrow Sub-basin is the site of escalating exploration activity. All of the major players in Australia are active in the Carnarvon Basin.
Discovery offshore East Kalimantan
Unocal Corporation's subsidiary, Unocal Rapak, Ltd., announced it drilled a natural gas and crude oil discovery on the Ranggas prospect in the southern portion of the Rapak Production Sharing Contact (PSC) area, offshore East Kalimantan, Indonesia, on a new geologic structure about 28 miles southeast of Indonesia's first deepwater field, West Seno, which is also being developed by Unocal. The Ranggas-1 well, drilled to a depth of 11,845 ft in 5,303 ft water depth, encountered 250 ft of gas pay and 40 ft of oil. Unocal Rapak is operator of the Rapak PSC. Pending Pertamina approval, Unocal holds an 80% working interest, with Lasmo PLC holding the remaining 20%.
BP doubling Malaysian investment
British Petroleum's Malaysian subsidiary plans to double its investment in the country by 2010. Company sources say that BP has particular plans to invest in oil exploration in the Gulf of Thailand. The company has already invested more than $1.6 billion in Malaysia in oil marketing, chemicals, exploration, and solar energy.
Murphy begins drilling offshore Malaysia
Murphy Oil Corporation announced the successful drilling and testing of its first well in Malaysia in early January. The West Patricia No. 2 exploration well, offshore Sarawak, was drilled in 110 ft water depth to a total depth of 7,054 ft, encountering hydrocarbons at multiple levels. Transocean Sedco Forex's jackup Trident 16 drilled the well, which tested 2,900 b/d of 37 degree gravity crude with a gas-oil ratio of 290, from a single zone at 3,021 ft.
Murphy's wholly owned subsidiary Murphy Sarawak Oil Company Ltd. (85%) with partner Petronas Carigali Sdn Bhd (15%) operated the well in Block SK309, which covers an area of approximately 1.1 million acres. This block, along with the adjoining comparably sized SK311, was awarded to Murphy and Petronas Carigali in January 1999.
Last year, Murphy acquired a 650 sq km 3D seismic survey over the southern portions of both blocks.
Murphy plans to drill up to three more exploration wells this year on other prospects contained within this 3D seismic survey. In addition to SK309 and SK311, Murphy also holds an 80% interest in deepwater Block K, offshore Sabah.
Esso makes rig award
Esso Production Malaysia Inc. awarded new contracts for two self-erecting tender rigs (T-2 and T-3) owned 49% by Smedvig. The three-year contracts have an option for an additional year and a right to terminate after two years. The value for the contract period is about $50 million for T-2 and approximately $48 million plus mobilization fees for T-3. The T-2 contract began Jan. 18. T-3 began work in early February.
First gas delivery from West Natuna
Gas from Premier's West Natuna offshore Indonesia has been delivered to Singapore six months ahead of the main contractual start for sales in July. Initial deliveries are expected to rise quickly to greater than 150 MMcf/d, reaching a plateau of about 325 MMcf/d. The gas is produced from fields in the Kakap production sharing contract (PSC) as well as the Premier-operated Anoa field in the Natuna Sea Block A PSC area about 500 km northeast of Singapore in the West Natuna Sea.
Premier has a 66.7% interest in Block A; Kuwait Foreign Petroleum Exploration holds the remainder. Partners in the Kakap PSC are Gulf Indonesia Resources (31.25%), Novus Petroleum (25%), Premier (18.8%), Singapore Petroleum (15%), and Pertamina (10%).
Cairn continues to make discoveries offshore western India
Cairn Energy is off and running in India. The company completed an extensive test program in mid-December of last year on appraisal well CB-A-2 on Block CB-OS/2, offshore Gujarat, West India. The appraisal well confirmed a complex reservoir distribution across the structure.
Cairn made a second hydrocarbon discovery on Block CB-OS/2 with exploration well CB-C-1, located about 25 kilometers west of the Lakshmi gas discovery. Two zones tested and flowed gas. A third zone flowed oil. A third discovery was made in mid-January, on Block CB-OS/2 with exploration well CB-B-1, approximately 6 kilometers southeast of the Lakshmi gas discovery.
An appraisal program is planned for the first half of this year. Initial gross reserve estimates for the discovery are between 100 and 300 billion cubic feet of gas equivalent.
