Murphy Oil Corp.’s deepwater Azurite Marine No. 1 exploration well hit oil off West Africa. The exploration well, drilled in 4,531 ft of water in the Mer Profonde Sud block offshore the Republic of Congo encountered significant oil pay in multiple reservoirs of Lower Miocene age.
“The discovery of over 160 ft of net oil pay with no associated water in two main horizons is an outstanding result from our first exploration well offshore deepwater Congo,” says Claiborne P. Deming, Murphy’s president and CEO. “We found high quality oil in sands with excellent reservoir properties and believe this structure could contain over 100 MMbbl. There are a number of similar prospects in this area of MPS, and we look forward to aggressively exploring them.”
At long last the Nigeria-São Tome é Príncipe Joint Development Authority has begun awarding licenses. Exxon Mobil Corp. subsidiary Esso Exploration and Production Nigeria-São Tome “One” Ltd., and its coventurers have signed a PSC to explore in block 1 of the offshore Joint Development Zone.
Signing the PSC provides for exploration to proceed in block 1, followed by economic development of commercial hydrocarbons discovered. It also provides for disclosure of payments made under the contract.
The block, initially awarded in April 2004, is in 5,700 ft of water 190 mi north of the city of São Tome.
Repsol YPF has won the right to explore and develop offshore block 16 in Liberia’s first international bidding round. Woodside Petroleum Ltd. subsidiary, Woodside West Africa Pty Ltd., won 100% interest in adjoining block 15.
Last summer, Repsol won the rights to block 17 through direct negotiations with the Liberian government. Repsol’s two Liberian blocks are next to two other blocks (block 6 and block 7) offshore Sierra Leone, for which the company has an agreement with the Sierra Leone government. A 2004 3D seismic survey confirmed Repsol’s interest in the two blocks.
In Sierra Leone, Woodside’s partner is Repsol, operator of all of the blocks, with 50% interest. The companies are in talks regarding the possibility of jointly exploring the Liberian blocks.
Repsol plans to acquire 400 km of 2D seismic and 1,600 sq km of 3D seismic within an initial exploration period of four years. Woodside’s initial four-year work commitment on block 15 includes geological and geophysical studies as well as a 600-km 2D survey and a 1,600-sq-km 3D survey.
Europe
The first well on Statoil’s Snøhvit development in the Barents Sea is now under way. Transocean’sPolar Pioneer semisubmersible, which has been on station since early December 2004, is due to complete the initial 10-hole drilling phase by spring 2006.
ThePolar Pioneer is designed to work in Arctic conditions and to meet strict environmental standards required in the Barents Sea.
Transocean's semi Polar Pioneer has begun drilling in the Barents Sea.
Water-based mud devoid of environmentally harmful chemicals is being used to drill the Snøhvit wells, and the rig crew is specially trained to comply with strict environmental standards.
Designated F-2H, this first well will be used to inject carbon dioxide back below ground during the production phase.
The next well, one of nine producers included in the first drilling phase, was spudded in February.
There will be 20 production wells plus the carbon dioxide injector drilled in three phases, the second and third of which are scheduled for 2011 and 2014.
While Statoil moves forward on Snøhvit, Norsk Hydro is beginning exploratory drilling of the Obelix prospect, also in the Barents Sea. The exploration zone is 190 km offshore between the island of Bjørnøya (a.k.a. Bear) off Norway’s northern coast, and the Snøhvit field.
Hydro’s drilling operation in production license 225 will be the most environmentally friendly exploratory well ever drilled on the Norwegian continental shelf, according to Hydro.
The drilling program has been prepared in accordance with the Norwegian Storting’s decision on activities in the southern Barents Sea.
Asia-Pacific
Kerr-McGee Corp. subsidiary Kerr-McGee China Petroleum Ltd. signed a production-sharing contract with CNOOC for block 43/11, which covers 2.4 million undeveloped acres in the South China Sea. Kerr-McGee holds a 100% foreign contractor’s interest in the first phase of the exploration period, with CNOOC reserving the right to participate with up to a 51% interest if Kerr-McGee enters into the development phase.
Block 43/11 is 220 mi southeast of Hong Kong, in 5,000-10,000-ft water depth.
“This contract allows us to leverage our deepwater expertise and build on our long-standing relationship with CNOOC, as we explore the proven hydrocarbon basins of the deepwater South China Sea,” says Dave Hager, Kerr-McGee senior vice president responsible for oil and gas exploration and production.
This is Kerr-McGee’s first deepwater exploration contract with CNOOC, and it more than doubles the company’s acreage in China to 4.1 million acres. Kerr-McGee has had eight discoveries in Bohai Bay and developed two fields that came online in July 2004.
Total signed two agreements to partici- pate in exploring two offshore blocks off northwest Australia.
Under the terms of one agreement with Australia’s Woodside, Total takes a 30% interest in WA-269-P, 150 km offshore in 300-1,500 m water depth. Woodside, as operator, is in the joint venture with Japan Australia LNG (MIMI) Pty Ltd., which holds 20% interest.
Total also signed an agreement with Woodside, BHP Billiton, and MIMI to take a 50% interest in exploration block WA-297-P, which lies 200 km offshore in water depths of 1,000-2,000 m.
Exploration activities are planned in both blocks this year.
While Total signs on for exploration, Tap Oil Ltd. is in the process of formally accepting a 25% interest in a new exploration permit (W04-13) as part of the recent government gazettal acreage offering.
The permit is in Western Australia’s Car-narvon basin and is contiguous with the producing Woollybutt field permits in which Tap has a 15% interest. The new permit is also contiguous with permits WA-320-P and WA-290-P, in which Tap will earn a 25% interest by participating in drilling two wells. Permit W04-13 is partially covered by 3D seismic data and is considered by Tap to be very prospective with a number of prospects similar to the Woollybutt field already mapped.
Meanwhile, BHP Billiton reported first production from the Minerva gas field in the Otway basin offshore Victoria.
The Minerva development consists of two subsea well completions in 60 m of water, 10 km offshore from the township of Port Campbell. A single flowline transports gas to an onshore gas processing facility where liquids are removed prior to exporting the gas to South Australia.
Central Asia
Saipem will soon begin work offshore Kazakhstan. The company won a contract to install the offshore facilities system relating to the experimental phase of the Kashagan field development program in the Caspian Sea.
The contract, awarded by Agip KCO, operator of the North Caspian Sea PSA, includes fabricating, assembling, transporting, and installing 45 piles and two flares, with a total weight of 15,000 tons. The contract also includes installing 16 module barges. The piles and flares will be fabricated in the newly developed Ersai yard in the Kuryk area of Kazakhstan, a yard in which Saipem has 50% participation. The scope of work also includes procurement, fabrication, and installation of associated mooring and protection structures.
Installation activities are scheduled to be completed by year-end 2007.
Middle East
Technip, in conjunction with Qatar’s National Petroleum Construction Co. (NPCC), will be in charge of the engineering, procurement, and construction contract for the offshore facilities of the Qatargas II LNG plant expansion project. Qatar Liquefied Gas Co. Ltd. II (Qatargas II) awarded the contract to NPCC.
Technip’s share of the $500-million contract is 30% and includes engineering as well as a share of the procurement activities, which will be undertaken by its engineering center based in Abu Dhabi, UAE.
The project consists of three unmanned offshore platforms, refurbishment and tie-in work to the existing platform, two new 34-in. and 38-in. pipelines to shore, and several new power and/or communications umbilicals, which will support the two new Qatargas II LNG Trains 4 and 5 at Ras Laffan City.
The offshore facilities will be completed to support the onshore facilities of Train 4 by December 2007 and those of Train 5 by October 2008.
Production from the North field at 2.9 bcf/d of raw gas will supply Trains 4 and 5, which Technip and Chiyoda will build under a separate contract signed on the Dec. 15, 2004.
Americas
BHP Billiton reported first oil from the Angostura field offshore Trinidad in early January. Gas production began in mid December of last year. The new facility was commissioned on a rapid schedule, just 40 months after the discovery of crude oil at the Kairi-1 exploration well in 2001.
Start-up from Angostura represents the first oil production from the northeast coast of Trinidad. Initial production is expected to be around 60,000 b/d. The bulk of the produced gas is being re-injected into the Angostura reservoirs to support oil production. In the second phase of the project,Angostura’s large gas resources will be commercialized.
Production infrastructure at Angostura in-cludes a central processing platform (CPP) with three satellite wellhead protector platforms. A pipeline connects the CPP to newly constructed storage facilities at Guayaguayare, where an export pipeline allows offloading to tankers in Guayaguayare Bay. Production facilities are 38.5 km off the east coast of Trinidad in 40 m water depths.
BHP is continuing its work program in Trinidad, with an exploratory drilling program on block 3(a) near Angostura and on block 2(c) retention acreage planned for 2005.
Mediterranean
Libya awarded its first oil exploration licenses to foreign companies in 18 years following easing of US and European Union trade embargoes.
More than 150 companies registered bids, with Occidental Petroleum Corp. of the US and Liwa of UAE picking up the most licenses. Amerada Hess and ChevronTexaco each won a license, and Australia’s Woodside partnered on a winning bid.
Canada’s Verenex Energy, Sonatrach of Algeria, and Indonesia’s Medco Energy International also won bids. Petróleo Brasileiro SA won a bid as part of a consortium with Oil Search Ltd.
India’s offshore draws a crowd at the NELPV road show
A delegation from the Indian government, accompanied by representatives from India’s Oil and Natural Gas Corp. Ltd., drew a record crowd at the New Exploration Licensing Policy (NELP) V road show in Houston in January.
India launched a domestic multi-billion-dollar deepwater drilling program last year, showing its own confidence in the prospectivity of its offshore. And recent discoveries by domestic and foreign operators have proven that the country has sizable reserves.
India’s Reliance Industries Ltd. joined Cairn Plc and BG of the UK and Canada’s Niko Resources at the NELP V road show to encourage investment. Their enthusiasm might well bring more companies into the mix.
While India has gone out courting business, the country has also worked internally to smooth the way for foreign participation in its upcoming bidding round. Mani Shankar Aiyar, minister of petroleum and natural gas, pointed out reforms undertaken by the Indian government that should simplify and streamline foreign investment, noting that attractive opportunities alone are inadequate to draw the kind of investment India hopes to attract.
According to Aiyar, 82% of the countries onshore and offshore sedimentary basins are unexplored and are awaiting the drill bit.
India is overflowing with enthusiasm for the opportunities offered by its offshore and is working hard to garner investors.
"We are pleading for, I would even go so far as to say ‘begging for,’ your investment,” Aiyar said. “India is California in 1848. You should join the gold rush now!”
