Europe
The Danish Energy Authority has published the terms for the sixth licensing round for oil and gas licenses in the Danish sector of the North Sea.
Blocks for lease lie partly in the Central Graben, where the majority of the Danish fields have been found to date, and partly in areas further east.
Though exploration activities have now been ongoing for almost 40 years, assessments made by the Danish Energy Authority show that the area holds considerable amounts of oil and gas still to be found.
Blocks for lease in Denmark�s sixth licensing round lie partly in the Central Graben, where the majority of the Danish fields have been found to date, and partly in areas further east.
As in previous rounds, the Danish State will be a partner in the new licenses with a share of 20%. In past licensing rounds, DONG was partner on behalf of the Danish State. For the first time, a new national unit will fill this role, contributing to exploration activities and receiving part of the proceeds when oil and gas are found.
In 2003, Denmark changed taxation regulations for oil/gas licenses to ensure a higher revenue from the North Sea licenses for the Danish State. Despite the change, licensing terms are still favorable, the government says. Bids are due Nov. 1.
A/S Norske Shell made a significant gas discovery in the Onyx South West prospect in block 6406/9 of Production License 255 in the Norwegian Sea off mid-Norway.
TheTransocean Leader semisubmersible drilled the well to 5,052 m TD in 308 m of water. Shell has completed a comprehensive logging, sampling, and testing program, testing two zones, each of which flowed at a maximum rate of about 1.4 MMcm/d.
Core, fluid sample, and production test data indicate the presence of a substantial gas column, and there are indications that Shell is dealing with a significant find.
The company intends to follow up this discovery with an accelerated program of appraisal and exploration in 2006. The strategy is to add more integrated gas to Shell’s portfolio. The Norwegian Sea is an important area of focus for the company’s exploration efforts in Europe.
In September 2004, Shell announced its exploration focus would be on what it calls ‘big cat’ wells, which are prospects greater than 100 MMboe, Shell share.
Rien Herber, exploration director of Shell Exploration & Production in Europe says, “We drilled Onyx South West as one of our global ‘big cat’ prospects.”
Thorhild Widvey, Norway’s Minister of Petroleum and Energy, believes the Onyx South West discovery could lead to a renewed interest in the area. “The new discovery in the Norwegian Sea is very encouraging and proves that the Norwegian continental shelf has great potential for new and significant finds.”
Shell operates PL255 with 30% interest. Partners in the license are Petoro with 30%, Statoil with 20%, and Total with 20%.
Toreador Resources Corp.’s Akkaya-1 well in the Black Sea has produced natural gas offshore Turkey.
The Akkaya-1 delineation well logs showed indications of gas in zones between 1,136 m and 853 m. The first gross interval the company perforated and tested was between 1,135 m and 1,050 in which an 11-m section tested at a sustained rate of approximately 7.6 MMcf/d of gas on a 36/64-in. choke at a flowing wellhead pressure of 913 psi.
Other productive intervals are present between depths ranging from 927 to 853 m. Estimated net pay section in the Akkaya-1 well is 47 m.
The Akkaya-1 well is in the shallow-water South Akcakoca sub-basin five mi offshore in the western Black Sea. Akkaya-1 is the first confirmation well following the completion of the company’s Ayazli-1 well last September, 7 km northwest of Akkaya-1.
The Akkaya-1 well will be temporarily suspended as further development activity in the South Akcakoca sub-basin continues.
This discovery supports Toreador’s previous estimate of potential reserves in the South Akcakoca area of approximately 350 bcf of gas based on available information.
As operator of the well, Toreador has a 36.75% working interest. The Turkish state oil company, TPAO, owns a 51% stake, with Stratic holding the remaining 12.25%.
Middle East
Qatar plans to award offshore block 14 by the end of this year. The interesting thing about the block is that it is oil, not gas, which underlies the vast majority of Qatar’s leases.
For several years, the country has been trying to increase oil production, which today stands at 750,000-800,000 b/d.
In 3Q 2003, Qatar Petroleum and Qatar Petroleum Development Co. signed an agreement for full field development of the offshore Al-Karkara and A-North structures in one of the first moves toward increasing domestic oil production. The project consists of three stages comprising seven wells (four in Al-Karkara and three in A-North).
At present, QP has two offshore production stations, PS-2 and PS-3, in the northeast quadrant of Qatar’s territorial waters in the Maydan Mahzam and Bul Hanine fields.
Both platforms produce crude oil, associated gas, and condensate.
Central Asia
The inauguration of the Baku-Tbilisi-Ceyhan oil pipeline marks a major step in BP’s continuing long-term strategy of delivering growing volumes of oil and gas from new hydrocarbon provinces around the world.
The 1,770-km BTC pipeline will carry 10 MMb/d of oil from the BP-operated Azeri-Chirag-Gunashli field in the Caspian Sea to the eastern Mediterranean port of Ceyhan, Turkey, bypassing the sensitive and heavily used Bosporus Straits.
President Ilham Aliyev of the Azerbaijan Republic, President Mikhail Saakashvilli of Georgia, and President Ahmet Sezer of Turkey, joined by President Nursaltan Nazarbayev of Kazakhstan officially opened the pipeline at the Sangachal terminal, near Baku.
“The pipeline opens up massive new fields in the Caspian Sea to world markets, enhancing security of supply for decades to come, and it does so in a way that avoids the transit of large numbers of tankers through the narrow and congested Bosphorous,” Lord Browne, BP CEO, says.
Filling the line will be a staged process, with first oil due to take more than six months to reach Ceyhan. Once this process is complete, crude can travel from Sangachal to the Mediterranean in a week and a half. Plans call for the first oil cargo to be lifted from Ceyhan toward the end of 2005.
BP holds a leading 30% stake in the consortium running the pipeline. Other consortium members include SOCAR, Amerada Hess, ConocoPhillips, Eni, Inpex, Itochu, Statoil, Total, TPAO, and Unocal.
Asia-Pacific
Exxon Mobil Corp. subsidiary ExxonMobil Exploration and Production Malaysia Inc. began oil and gas production from the Guntong F satellite platform offshore Peninsular Malaysia. Guntong F is the second of two platforms to come onstream under the Satellite Fields Development III (SFD III) project.
Guntong, discovered in 1978, is 210 km offshore the east coast of Peninsular Malaysia in 64 m water depth. Guntong F is the fifth platform to be installed to develop the field. Produced oil and gas will flow via a new 10-in. pipeline to Guntong A for processing and then to shore via existing pipelines.
Installed in November 2004, Guntong F is expected to produce 20,000 b/d of crude oil and 40 MMcf/d of gas at peak production. This field will help Exxon increase recovery from existing reservoirs and to extend the economic life of reserves from mature producing areas.
Thailand’s PTT Exploration & Production Co. Ltd. reportedly hit oil and gas offshore Vietnam in the 1,370-sq-km Vietnam 9-2 project.
The company began drilling its third appraisal well, CNV-3X, in the East Vietnam Sea southeast of Vung Tau City, in late January. The final well test found a maximum flow of 13,000 boe/d, 9,000 b/d of oil, and 22.6 MMcf/d of gas, according to a filing to the Stock Exchange of Thailand.
PTTEP holds 25% interest in the Vietnam 9-2 project. PetroVietnam Exploration Production Co. holds 50%, and SOGO Vietnam Ltd. holds the remaining 25%.
Africa
Kerr-McGee Oil & Gas Corp. affiliate Kerr-McGee Angola Ltd. signed an agreement with Angola’s national petroleum company to explore for hydrocarbons on block 10 offshore Angola.
Kerr-McGee has already identified two primary prospects through an extensive 3D seismic program that covered the majority of the block. The company believes both prospects appear to have the potential to be stand-alone developments.
Block 10 extends 30 mi offshore from the coastline and covers 1.2 million acres with water depths to 3,300 ft.
“Obtaining interest in this offshore Angola block is consistent with our strategy of pursuing high-potential exploration opportunities in proven world-class petroleum provinces,” Dave Hager, Kerr-McGee senior vice president responsible for oil and gas exploration and production, says. “We have successfully used this strategy for our entry positions in China’s Bohai Bay, the Brazilian Campos and Espírito Santo basins, and the North Slope of Alaska. We believe the Benguela basin is an under-explored basin with exciting hydrocarbon potential.”
Kerr-McGee anticipates drilling one or two wells on block 10 this year.
Devon Energy Corp. operates block 10 with 35% interest. This agreement gives Kerr-McGee a 25% interest. Sonangol and affiliates retain 40% interest.
At long last, the heads of state from Nigeria and São Tomé and Príncipe, have approved block awards for the countries’ Joint Development Zone. The 2004 JDZ licensing round awards were decided at a meeting in Abuja, Nigeria, May 31, following a recently concluded meeting of the joint ministerial council (JMC). The JMC had forwarded the harmonized award structure to the heads of state for endorsement.
Nigeria and São Tomé and Príncipe awarded five blocks in the 2004 round.
Americas
Northern Oil ASA has executed an agreement to buy into three licenses in the Camamu-Almada basin offshore Brazil.
The Manati field lies in one of the licenses. A significant gas discovery was made in the field in 2000, and the area is being developed for anticipated mid-2006 production. Northern Oil has 10% interest in this project and holds 18.33% interest in the other two licenses.
Northern Oil will also participate in drilling five scheduled exploration wells this year in each of the three licenses.
Also included in the project is 10% ownership of a 125-km, 24-in. onshore/offshore pipeline constructed with a terminus point close the city of Salvador. Northern Oil’s 10% license also includes a discovery south of the Manati field. Anticipated oil reserves in this field are estimated by the consortium at 10 MMbbl with 2 bcm of natural gas.•
Santos expands in Southeast Asia
Santos Ltd. is increasing its 2005 exploration program for offshore Australia and overseas, and Indonesia will see some of the investment.
According to Stephen Gerlach, Santos’ chairman, “Recently, the Indonesian government announced both a reduction in domestic diesel subsidies - which will significantly expand domestic gas sales - and new incentives to encourage the development of marginal oil fields. It is clear that Indonesia, through market and financial incentives, is focused on strengthening its domestic energy supplies.”
Santos will continue exploration and production efforts in Australia’s Cooper basin while it looks for foreign investment opportunities.
Almost half of Santos’ annual production now comes from other locations, Gerlach says, and the company continues to broaden its areas of operations.
This year’s exploration budget is $170 million, 35% higher than last year’s. The money will be spent drilling 28 wildcat exploration wells, according to John Ellice-Flint, the company’s managing director.
Ellice-Flint points to 2004 exploration successes offshore Australia and Indonesia, citing the Jeruk oil discovery off Indonesia as one of the company’s biggest coups. Santos shortly will evaluate the area through re-entry and sidetracking to the northwest of last year’s successful Jeruk 2 well. In addition, 3D seismic over the Jeruk field and surrounding areas will drive exploration efforts.
According to Ellice-Flint, another promising Indonesian area was the deepwater Kutei basin off Kalimantan, where the Hiu Aman gas and oil discovery was drilled early this year.
Off Australia, Santos expects to meet its production projections of around 54 MMboe in 2005, primarily based on the success of the Mutineer-Exeter oil field development. Production started three months ahead of schedule and ramped up to an initial rate of 105,000 b/d.
“Additional appraisal and development drilling is planned for the second and third quarters of this year with the successful Mutineer 11 appraisal well having just finished drilling,” Ellice-Flint says.
