GLOBAL E&P BRIEFS

Beauty is in the eye of the beholder.

• New deepwater action in the Gulf of Mexico: Tanzanite, Leo, and King. [93,071 bytes]
• Block PM-3 in the Malaysia/Vietnam Commercial Arrangement Area, increases in importance with the newly-discovered North Bunga Pakma Field. [44,871 bytes]

Africa

Mobil and partner Ocean Energy have decided to step up production in the prolific Block B off Equatorial Guinea, which includes the Zafiro Field. The new plans include the drilling of four wildcat wells before the end of year using an additional rig - the Percy Johns. Plans also include increasing the production of the Zafiro Field from 80,000 b/d to 120,000 b/d by the year 2000. Spending is estimated at $900 million through 2000. Sixteen wildcat wells have been drilled on the block to date; seven have yielded commercial oil discoveries.

Sasol Petroleum, Arco Mozambique, and Zarara Petroleum have signed two production sharing agreements with Empresa Nacional de Hidrocarbonetos de Mocambique, the state oil company of Mozambique, and the Government of Mozambique for the Sofala and M10 exploration permits offshore Mozambique. These are in addition to a previous agreement signed earlier this year for the Temane permit, which includes the Temane gas field. Under the agreement, the companies must acquire new seismic data in the blocks and drill five wells in Sofala and four wells in M10 within a period of seven years. Drilling in the Sofala permit is expected in early 1999.

Americas

Anadarko has announced a giant subsalt oil and gas discovery on Eugene Island Block 346 in the Gulf of Mexico. The discovery, Tanzanite, was drilled to a TD of 14,350 ft in 314 ft of water and encountered more than 450 ft of continuous hydrocarbon pay. Well logs confirm a major accumulation of hydrocarbons and extensive 3D seismic data indicate a productive reservoir extent of about 1,000 acres.

A discovery has been made in the Leo prospect in Mississippi Canyon Block 546 in the deepwater Gulf of Mexico. The well, drilled in 2,500 ft water depth, was drilled to a TD of 18,090 ft and penetrated multiple pay zones between 11,500 and 17,500 ft that encountered a total net oil and gas pay of 200 ft. The well has been temporarily abandoned until development plans are fin alized. British-Borneo is the operator of the prospect with 37.5% interest, along with partners Spirit Energy 76 with 37.5%, Petrobras America with 12.5%, and Snyder Oil with 12.5%.

Two new major oil-bearing zones have been encountered on the King prospect in Mississippi Canyon Block 764 in the Gulf of Mexico. The Vastar-operated King well was previously drilled to 17,580 ft before being suspended due to repairs to the drilling rig earlier this year. The well was since reentered, sidetracked, and deepened to a measured depth of 20,796 ft and encountered 290 ft of net pay. King is located in 3,285 ft of water and is the company's first operated deepwater well.

Petrobras, the Brazilian state oil company, has released plans to cut the country's $5 billion oil import expenditure by expanding the company's overseas presence in exploration and production. The country imports about 70,000 b/d, which covers 38% of its crude oil needs. Petrobras operates in 13 countries and plans to increase that to 20 by the end of 1999. The company has reportedly entered into an agreement with UK-based Lasmo for a stake in an offshore development in Azerbaijan. Petrobras also plans to increase domestic production to 1.2 million b/d by next year, and 1.5 million b/d by the end of the decade.

Regardless of presidential order, plans are underway to allow offshore drilling along the coast of California for the first time in 14 years. The US Minerals Management Service is working to allow drilling on 39 undeveloped prospects off Ventura, Santa Barbara, and San Luis Obispo counties. The recent extension of a ban on oil drilling within three miles of the coastline by President Clinton will have no effect on the leases. Local residents are against the drilling plans because oil platforms are "ugly."

Central Asia

Russia and Kazakhstan have finally put to rest the dispute over the northern Caspian Sea. A boundary line agreement has been signed by the two countries which will open up exploration drilling in the area, which includes the Kashagan area. Under the agreements, Russian government decided to accept the Kazakhstan demand to apply the median line principle in dividing the area. Plans are now underway to begin the first exploration well in the area.

Amoco has signed on to be the operator during the first phase of an exploration, devel opment, and production sharing agreement in the Caspian Sea. A consortium of Amoco, SOCAR, Monument Resources (Caspian), and Central Fuel Caspian Sea has been formed to explore an area 160 km south of Baku, which includes the Inam geological structure. Amoco will serve as operator during the explo ration phase, and a joint SOCAR-Amoco operating company will operate during the development phase.

Asia-Pacific

Apache has tested a new gas discovery off Western Australia at a rate of 89 MMcf/d and 3,100 b/d of condensate. The Rose-1 discovery is located in the Harriet Production License TL-1 permit area about three miles from the company's Gipsy-1 discovery which encountered oil pay earlier this year. Apache is planning to tie in the oil production from Gipsy with the condensate production from Rose due to the close proximity. The company plans to begin production by next year. Apache holds a 47.5% interest in the discovery and is the operator with partners Kufpec Australia, Novus Petroleum, Tap Oil, Hardy Petroleum, and New World Oil & Developments.

Santa Fe has signed a production sharing contract with Petronas, the state oil company of Malaysia, for Block PM 308 located along the east coast of the Malaysian peninsula. The agreement also includes the right to develop the Rhu Field, which was discovered in 1992. The Rhu Field is deemed potentially commercial but will require additional appraisal work. At least one well is planned. Santa Fe is the operator of the concession with an 80% interest, and Petronas holds the remaining 20%.

Lundin Oil has discovered an oil and gas field in the Commercial Arrangement Area between Malaysia and Vietnam. The North Bunga Pakma Field is in the northwest portion of Block PM-3 CAA. The well, North Bunga Pakma-1, was drilled to a TD of 10,781 ft and encountered 12 commercially significant hydro carbon-bearing reservoirs with a gross thickness of 400 ft. Testing yielded a combined maximum flow rate of 111 MMcf/d of gas and 2,036 b/d of condensate. Development studies are underway to incorporate the field into the block's development plans.

ENI of Italy has signed an exploration and production agreement with China National Offshore Oil for an 850-sq km area in the Yellow Sea. The agreement involves the Qibei 09/11 block. ENI signed an initial contract to explore the Beipuxi Block in the Gulf of Chihli.

Mobil has encountered additional oil and gas in a deepwater discovery in the Greater Merah Besar area off East Kalimantan, Indonesia. The Hitam Besar-2 well was drilled in 1,973 ft of water and encountered 66 ft of net hydrocarbon pay. The well Hijau Besar-3 was drilled in 2,250 ft water depths and found 34 ft of net gas pay. An additional 125 ft of net condensate-rich gas pay and 16 ft net oil pay was encountered by two deep sidetrack wells from the original hole in adjacent fault blocks. Development plans are expected by the end of the year, with initial production in 2001.

Europe

Conoco has brought Britannia onstream. The field is one of the largest remaining gas fields to be developed in the UK sector of the North Sea. Gas and condensate are being produced from a platform and subsea facility located nearby the field. Gas is being transported to the SAGE terminal in St. Fergus, Scotland through a 115-mile pipeline, with condensate being sent via a 27-mile pipeline to the Forties Pipeline System through the Unity Platform. Britannia is operated jointly by Conoco and Chevron on behalf of a group of six co-venturers.

BHP restarted production last month at Liverpool Bay in the Irish Sea after a five-week shut-in caused by oil spillage. Production was resumed after loading 600,000 bbl of oil onto a tanker from the development's offshore storage facility. Production has been gradually brought back to levels achieved before the problem which averaged 71,000 b/d. The spillage was caused by a valve leak during a loading operation.

Amerada Hess and Premier Oil have been given the go-ahead from the UK Department of Trade for the development of the Flora discovery in Blocks 31/26A and 31/25C in the North Sea. Development plans call for the field to be a subsea satellite of the Fife and Fergus fields as well as two horizontal wells being tied-back to the Uisge Gorm FPSO. Production is slated to begin in October, with peak rates expected to reach 20,000 b/d of oil.

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