International Focus

Dev George
Houston

Current block holders in the Falklands. [29,228]
Dragon's head brick with traces of bitumen mortar. From Babylon's Ishtar Gate, 1000BC. [17,809]
Elf's new Rockall Trough blocks. [21,772]

New Gorgon licensse areas off Western Australia. [10,567]

Finally the Falklands

Since Margaret Thatcher's war with the Argentine generals, very little has occurred in the Falkland Islands (Malvinas) save extensive seismic acquisition by Western, Geco Prakla, and Spectrum. Now, however, this far-flung frontier is beginning to show movement: the local government has awarded several blocks in the North Falkland Basin and delineated others in the South Falkland Basin. Argentina, has delineated blocks in the Malvinas Basin's Special Cooperation Area, but withdrew them from licensing following a request for additional time to study the area's data.

The most prospective area, blocks in the North Falkland Basin, was awarded in the region's first round in October 1996 to Amerada Hess, Shell, Lasmo, IPC, and Desire. Lasmo is currently acquiring additional seismic data and plans to drill its first well in early 1998, but Amerada Hess, on the other hand, has taken the lead in a syndicate that includes Lasmo, IPC, and Shell to tender for a semisubmersible that can carry out a five firm, four optional well drilling program in the first quarter of next year. If the prospectivity is as high as seismic indications say they are, the near future of the Falklands looks promising.

The Hong Kong precedent

Does Hong Kong's return to the Chinese fold presage any change in China's policy toward the South China Sea? Indications are that it is not a new direction but a strong affirmation of its claims to both islands and aquatory well beyond its present internationally recognized frontiers. Macao is not far behind, and, of course, Taiwan remains in question.

Of interest to the international petroleum industry, however, is whether China will press its claims to the distant reaches of the South China Sea where its suzerainty is disputed by almost a dozen of its neighbors, but especially in the area of the Spratley Islands and the sea frontier with Vietnam.

Recent pronouncements by President Zemin and other significant spokesmen for China policy indicate that both areas will likely see a renewed effort on China's part to enforce its claim, but in this age of Western involvement, it is unlikely anything more than bravado, such as that expressed last year when Taiwan was making waves of an independence nature, should be expected. Additionally, China has an ongoing dialogue with Vietnam that relieves much of the bellicose pressure, despite the latter's anger over new Chinese developments in the Gulf of Tonkin between Hainan Island and the Vietnamese coast.

Oil's ancient history

Dr. Zayn Bilkadi, a senior research scientist at 3M, has gone far beyond the historical account of the petroleum industry provided by Daniel Yergin's The Prize, to present the ancient history of man and his relationship with hydrocarbons in his recently published "coffee table" book, Babylon to Baku. The new, oversized tome weaves a remarkable story of more than 40,000 years of encounters with and uses of the resource by ancient civilizations.

Published by the UK's Stanhope-Seta and created in cooperation with the British Museum and the Musee du Louvre, Babylon to Baku is the result of 20 years' research and includes over 260 full color plates as illustrations.

Bilkadi begins his account with a review of archaeological evidence of man's association with oil and focuses first on the ancient Near Eastern land of Mesopotamia and the natural occurrence there of bitumen seeps in the deserts of what is now southern Iraq. There, among the Sumerians, Babylonians, and Assyrians, the recognition of a natural source of energy was first recorded on clay cunieform tablets, more than 5,000 years ago.

Around 450 BC, Herodutus was the first European to record natural bitumen seeping from rocks and creating fiery pools. Alexander the Great, 100 years later, reported pillars of smoke and fire during his conquest of Persia. And the ancient Arabian people, the Nabataeans, traded in natural bitumen that erupted from the Dead Sea and other subterranean sources. Even in distant China, when digging water wells, oil was discovered and put to various uses.

Babylon to Baku explores these uses - mostly as media of religious or artistic expression, and provides a beautiful record of exquisite objects found beneath the sands of the Tigris-Euphrates valley that testify to the sophistication of ancient Sumerian and Babylonian artistic design and craftsmanship. Examples range from wigs molded to adorn religious figurines to sculptured drinking vessels and pottery and a medium for inlaid stones in jewelry and ornamental artifacts.

This colorful account of man's first encounters with hydrocarbons is a fascinating read and a remarkable collection of drawings and photographs of the ancient art and artifacts that illustrate it. For more information, contact Stanhope-Seta, London.

Briefs:

Americas:

No Florida drilling will be done by Mobil. In a new decision, Mobil announced that it will not drill the six blocks it holds offshore the Florida Panhandle and that it will abandon the leases, which would have expired in November.

Cook Inlet lease sales off until 2001. The US Minerals Management Service's Alaska office has put off any further lease sales as a result of a disappointing turnout for the federal oil and gas sale in June, which received only one bid.

Trinidad & Tobago's Blocks 4A and 4B have been awarded to Conoco. The company plans to spend $50 million in a 3D seismic program and two-well drilling program. Located off Trinidad's east coast, the 300,000-acre blocks lie in water depths ranging from 200 to 2,500 ft.

Brazil's Petrobras plans 20-30 JVs for exploration and production with private sector companies within a year of enactment of regulatory legislation, set for vote July 15th. Expected JVs will be largely in high risk projects.

Europe:

Ireland has awarded Elf Petroland operatorship on eight blocks in two Irish Rockall Trough areas, with 50% interest in the blocks, and 50% in another four blocks on which it is not operator. The licenses lie west of Ireland in water depths of approximately 1,500 meters. Elf also holds six blocks in the Rockall northwest of the Hebrides.

Ireland's Connemara Field has gone onstream, becoming the country's first commercial offshore oil field. Statoil is operator of the field, some 100 miles off the isle's west coast. Approximately 300,000 bbl will be produced to a tanker for transport to shore.

Croatia's Ivana gasfield, now being developed by INA, will be expanded into a Northern Adriatic offshore gas development project by Agip's parent company ENI and INA. Agip will invest $24 million to explore the adjacent Aiza-Laura Block. The joint operator, INAGIP is a 50-50 agreement between the two companies.

Mideast:

Kazakh Caspian agreement is pending. After a year of extensive seismic acquisition and a $300 million study, six major oil companies are negotiating a joint production sharing agreement with Kazakhstan for 12 blocks on the Caspian shelf. Agip, British Gas, BP/Statoil, Mobil, and Shell had first choice for the 12 blocks in return for funding the study. Oman Oil is expected to also gain a block, and Lukoil will likely receive one or two blocks.

Azerbaijan's Chiraq Field is set to go onstream this month despite a slight setback caused by a well blowout that occurred in May. The field's first test well is expected to go into production at the end of this month, and, if delayed, by the first week of September.

Africa:

The race for the ultradeep is on in the Gulf of Guinea. In June, Elf acquired the Mer Tres Profunde Sud, which lies in 2,000-3,000 meters offshore Congo. Northward, in the Gabonese aquatory, the US independent Vanco, signed the country's first ultradeep exploration agreement, for the Astrid Marin Block, located 90 miles from the coast in water depths between 2,500-3,000 meters. All of this is taking place even though the hydrocarbon prospectivity of the deepwaters has not been firmly proven. In Nigeria, where nine out of 12 deep offshore wells have been disappointing, Exxon, Chevron, and Mobil are reported to have signified intention for the six ultra deepwater leases (1,500-2,500-meter water depth) recently carved out by the government.

Deepwater Senegal seismic has been completed by Western Geophysical and will be available later this year from Western and Petrosen, the Senegalese state oil company. The survey covered 1,700 km of the St. Louis Profond, Cayar Profond, Rufisque Profond, and Sangomar Profond blocks. Licensing is expected early next year.

Ghana's GNPC has awarded Keta Block in the Gulf of Guinea to Santa Fe Energy in a three-year production sharing contract. Located 100 miles east of Accra, the block will see a $10 million new seismic and a drilling program of at least one well.

The miniscule Democratic Republic of Sao Tome e Principe, 200 miles west of Gabon in the Gulf of Guinea, is about to capitalize on the region's boom with offerings of its own aquatory and promotion of its island as the perfect E&P port facility site.

Asia Pacific:

New Gulf of Thailand area produces two new wells for Pogo Producing. The Maliwan area is adjacent and west of Pogo's Tantawan Field, which went into production in February, and southwest of Benchamas Field, which Pogo now has under development. Maliwan covers some 1.3 million acres.

China's Bohai Bay Cheng Zi Kou Block has been awarded to Noble Affiliates' subsidiary Energy Development Corp. for exploration and development. The 117,000-acre block lies in very shallow waters adjacent to the highly productive Shengli oil field, one of China's largest. The newly acquired field is immediately connected to the company's Cheng Dao Xi Block, acquired earlier this year.

Western Australia's prime Carnarvon Basin Blocks W96-11 and W96-14 have been awarded to Texaco and partners. The latter block is adjacent to the huge Gorgon complex that includes Gorgon, Chrysor, and Dionysus Fields. Extensive seismic and exploratory drilling is expect ed by early next year.