Americas
ChevronTexaco de Mexico won a permit from the Regulatory Energy Commission (CRE) for a proposed natural gas import terminal off the coast of Baja California, Mexico. The company also received notice from the Port Authority of the Communication and Transport Secretariat (SCT) that Chevron is the winner of the public licensing round for an offshore concession to construct and operate its offshore natural gas import terminal.
John Gass, president of ChevronTexaco Global Gas, says, “These important new milestones, together with the previously received environmental authorization from the Environment and Natural Resources Secretariat, move us a step closer to being able to import essential supplies of natural gas to help meet Mexico’s long-term energy needs. It also provides a potential outlet to supply neighboring markets with any excess capacity.”
According to Carlos Atallah, president of ChevronTexaco de Mexico, “The terminal will be designed to have an initial capacity of 700 MMcf/d of natural gas and can be expanded based on future demand.”
ChevronTexaco’s terminal will be more than 13 km offshore.
The US Minerals Management Service plans to evaluate a second sale in the federal waters of Cook Inlet, Alaska. The MMS made these plans public with a Request for Information and Notice of Intent to Prepare an Environmental Assessment for Cook Inlet Sale 199. The sale is tentatively scheduled for May 2006. This is the second Cook Inlet sale held under the MMS’s 2002-2007 Five Year Plan.
The federal Outer Continental Shelf area in Cook Inlet remains relatively unexplored, with the last exploration well drilled in 1984.
The goal of this sale is to supplement energy supplies needed in south-central Alaska. According to MMS Regional Director, John Goll, “MMS’s goal is to keep options open both nationwide and in the state in the search for new energy. By holding predictable sales in the federal portion of Cook Inlet, we will complement the state’s strong program to find the energy and raw materials to keep the state’s economy growing. We hope this sale will be an added incentive for someone to bring a drill rig into Cook Inlet.”
MMS is proposing to let leases in the federal waters of Alaska’s Cook Inlet between three and 30 nautical mi offshore. The area covers 2.5 million acres extending just south of Kalgin Island to just northwest of Shuyak Island. Water depths in the area range from about 30 to 650 ft.
Navidec Inc. subsidiary BPZ Energy Inc. announced the independent certification by Gaffney, Cline & Associates Inc. of the gross natural gas reserves on block Z-1 off northwest Peru. The possible reserves are untested, but are updip of existing wells in the Corvina and Piedra Redonda fields. One successful appraisal well in each field in an updip location could allow BPZ to reclassify a significant portion of the possible reserves into the proved and probable categories.
BPZ also announced that the PeruPetro board of directors approved the company’s earlier acquisition of the remaining interest in block Z-1 and its designation as operator. This amendment awaits official ratification and issuance of a Supreme Decree by the government of Peru to become effective. Ratification is expected in 1Q 2005.
Major and independent oil companies discovered and appraised the Corvina and Piedra Redonda fields in the 1970s and 1980s. Both fields have existing production platforms and completed gas wells confirmed by extended production testing. Until recently, there was no market for natural gas, but this has changed with the rise in world energy demand and prices, increased economic development in the region, and the resulting higher demand for electricity, in particular natural gas-fired generation.
The company plans to refurbish the Corvina C-11X platform and rehabilitate its shut-in gas well in 2Q 2005.
Africa
Total subsidiary Elf Petroleum Nigeria Ltd. discovered hydrocarbons west of the deepwater Usan field offshore southeastern Nigeria early this year.
The Usan 6 appraisal well is 110 km offshore and 4 km south of the Usan-5 well in 850-m water depth. It is the fifth successful appraisal well on the Usan field, which was discovered in 2002.
Usan 6 flowed at a rate of 5,800 b/d under restricted flow conditions. The well confirms the high potential of the Usan structure on an extension of the accumulation west of Usan 1 to 4 wells and south of Usan 5.
Total has another deepwater discovery in the Usan field offshore Nigeria.
Nigerian National Petroleum Corp. is concessionaire for OPL 222 under a production-sharing contract operated by Elf Petroleum Nigeria Ltd., which holds a 20% interest. Other partners include Chevron Petroleum Nigeria Ltd. with 30% interest, Esso Exploration and Production Nigeria Ltd. with 30%, and Nexen Petroleum Nigeria Ltd. with 20%.
ChevronTexaco Corp. subsidiary Cabinda Gulf Oil Co. Ltd. saw first oil from the Bomboco field in its block 0 concession offshore Malongo, Cabinda province, Angola in January. Bomboco is expected to reach an average production of 30,000 b/d of oil within the next year and is an integral component of the Sanha Condensate project.
Condensate production from Sanha field should begin early this year, and first liquefied petroleum gas (LPG) production from theSanhaFPSO is forecast for early 2Q.
Combined Sanha and Bomboco peak production of an estimated 100,000 b/d of oil and LPG should begin in 2007. Sanha operations will significantly reduce gas flaring in block 0.
>Jim Blackwell, managing director of ChevronTexaco’s Southern Africa Strategic Business Unit, says, “What truly sets Sanha apart is the creativity of its concept and its complexity. The project team, contractors, and suppliers have delivered the Sanha and Bomboco development projects on time, on budget, and with world-class safety performance.”
Cabinda Gulf Oil Co. Ltd. operates block 0 with 39.2% on behalf of its partners Sociedade Nacional de Combustíveis de Angola with 41% interest, Total with 10%, and Eni Angola Exploration B.V. with 9.8%.
Asia-Pacific
Aminex Plc. has signed a share exchange agreement to acquire 10% of the issued share capital of Kobril Ltd., an international company controlled by the authorities of the Democratic Peoples Republic of Korea.
Under the agreement, Aminex will receive 10 shares, and Kobril will receive new shares in Aminex at a value of £200,000, along with 5% net revenue interest in Aminex’s future earnings from oil and gas discoveries in the DPRK.
Kobril has been set up by the DPRK under power of attorney from the DPRK cabinet as its vehicle for international cooperation in developing natural resources, including not only oil and gas, but also gold, coal, iron ore, and coal-bed methane. Kobril is already one of the parties to the 20-year Petroleum Agreement between Aminex and the DPRK, which was announced on Sept. 20, 2004.
This agreement gives Aminex access to involvement in and benefits from a broader base of the DPRK’s potential natural resources.
Murphy Oil Corp. plans to increase spending in Malaysia this year.
Expenditures for upstream operations are expected to be $887 million, 83% of the 2005 capital budget. Exploration expenditures are expected to be $356 million and include increased spending in block K offshore Malaysia, continued funding of the company’s deepwater Gulf of Mexico drilling program, and two wells off the coast of the Republic of Congo.
The money in Malaysia will go toward major deepwater development work at Kikeh, which got government approval in September of last year, and preliminary development operations at the deepwater Kakap field, also in block K offshore Sabah.
Meanwhile, Amerada Hess is reaping the benefits of its exploration investment offshore Malaysia. Late last year, the company announced an oil and gas discovery with the Belud South exploration well on block SB302 offshore Sabah. The well is 12.5 mi northwest of the offshore Tembungo oil field.
Belud South-1 reached 8,773 ft TD in 508 ft of water and encountered 352 ft of net pay. A sidetrack established oil in several of the sands. Hess plans more exploratory and appraisal drilling this year.
Hess operates the block with 40% interest. Partners are Kufpec with 40% and Petronas Carigali with 20%.
Central Asia
Dragon Oil is continuing its work on the LAM field offshore Turkmenistan. Late last year, Dragon spudded the LAM 10/110 in the Cheleken block in the southern sector of the Caspian Sea.
LAM 10/110 is the first well in a planned series to be drilled from the LAM 10 platform as part of the Dragon drilling program in the block. Topside facilities on the platform are being upgraded to process the additional expected production, and a new 8-in. pipeline has been installed to flow production.
Mediterranean
US investors are showing increasing interest in Libya’s offshore. The country’s National Oil Corp. officially announced that there will be two licensing rounds this year, one in the first half of the year and the other in the second half. Awards from last year’s bidding round were to be announced at the end of January 2005. A delay in awards resulted from internal bureaucracy.
The hold-up in making awards hasn’t affected Libya’s ability to draw international interest, and gas potential is one of the main attractions. With LNG import terminals cropping up around the world, there is a growing need for LNG production. Although that would be breaking new ground for Libya, it remains a distinct possibility and a definite draw for potential investors.
Oil and gas companies from as far afield as the US and China are looking at Libya as a good investment. In fact, China has reportedly begun setting up businesses in Libya and will no doubt throw its hat in the ring for Libyan acreage this year.
While China positions itself to compete, US companies are bidding with the added onus of internal red tape. Because Libya remains on America’s black list for state-sponsored terrorism, US companies still have to secure permits from the US government before they can legally move equipment into Libya, a requirement that restricts rapid equipment deployment and ultimately effects the bottom line.
Middle East
Indian companies are making a move on the Persian Gulf.
India’s Reliance Industries Ltd. won a deepwater oil and gas block in the Gulf of Oman in a bidding round that offered six deepwater licenses. Reliance, a privately held company, also holds a block offshore Yemen.
Meanwhile, state-run ONGC Videsh Ltd. put in a bid for a block offshore Qatar. Award of the Nazwat Nazim block will precede a production-sharing agreement between the Indian company and the government of Qatar.
Varied foreign investments are materializing even as India implements its $9.5-billion domestic exploration and production program, Sagar Samriddhi, which includes drilling 47 deepwater wells through 2009.
India’s domestic demand continues to grow as crude production stagnates. ONGC’s hope is to use its enormous investment to generate considerably more oil to meet domestic growth.
Statoil ups production numbers
Statoil has set performance goals through 2007. Among these is boosting production from the Norwegian shelf by 100,000 b/d.
Raising the production target will provide an annual output growth of 8% up to 2007, with both the Norwegian continental shelf and foreign areas contributing to the increase.
Plans for the NCS call for production to rise from 1 MMb/d to 1.1 MMb/d by 2007.
Increased international output from 2007 to 2010 will help achieve annual production growth of 2-4%.
Statoil’s management is also introducing an improvement program for both the near term and the long term. These corporate objectives embrace the entirety of Statoil’s business and are intended to strengthen profitability and operations while providing growth over the next few years.
Statoil already has plans to participate in 18-20 exploration wells on the NCS this year - twice as many as in 2004. The company’s exploration budget for the year is NKr1.8 billion, up NKr700 million from 2004.
Three of the 2005 wells are in the Barents Sea, seven to nine are in the Norwegian Sea, and nine to 11 are in the North Sea. Statoil calculates that 15 Bboe remain to be discovered in the Norwegian Sea, 8 Bboe in the Barents Sea, and 5 Bboe in the North Sea. Seven of the planned wells are high risk, with the potential for high gain because of the possibility of proving substantial volumes. These include all three of the Barents Sea wells, three in the Norwegian Sea, and one in the North Sea.
