Europe
In mid June, the UK authorities approved the Statfjord late life project in the North Sea, a project sanctioned by Norway earlier in the month. Approvals from both governments were necessary because 15% of the Statfjord field extends into the UK sector of the sea. A treaty between the Norwegian and British authorities regulates overall management of the field.
The British Department of Trade and Industry is responsible for sanctioning the changed plan for development and operation, which entails the pressure in the reservoir being lowered to recover as much as possible of the field’s remaining reserves.
The objective is to achieve a recovery factor of close to 70% for the oil and 75% for the gas.
Africa
Sociedade Nacional de Combustíveis de Angola EP and Total have a new ultra-deepwater oil discovery offshore Angola with the fourth well drilled in block 32.
The Gengibre-1 well, drilled in 1,703 m of water, tested at 4,724 b/d from a single reservoir. Gengibre-1 is in the eastern section of block 32, 17 km from the 2003 find Gindungo-1 and 12 km Canela-1, discovered in 2004.
The companies are carrying out further geological and engineering studies to appraise the production potential of the Gengibre discovery.
Sonangol is the block 32 concessionaire. Total operates the block with 30% interest. Partners are Marathon Oil Co. with 30%, Sonangol EP with 20%, Esso Exploration and Production Angola Ltd. with 15%, and Petrogal with 5%.
• • •
Liberia’s national petroleum company, National Oil Co. (NOCAL) signed production-sharing contracts with three foreign oil companies in the country’s first bidding round.
The three companies include the joint consortium of Regal Liberia Ltd., Broadway Consolidated, and Oranto Petroleum Ltd. These companies were among five awarded blocks in the bidding round.
Broadway says it is being encouraged to participate in the country’s second licensing round and hopes that the strength of its presentation in the first licensing round will leave it well placed.
The Republic of Liberia has been at peace for nearly two years and is preparing for democratic elections, which are expected to take place in October.
• • •
South Africa’s Sasol has signed an agreement to explore for gas in an area covering more than 11,000 sq km off the coast of Mozambique. The exploration area is directly offshore the gas fields of the $1.2-billion Natural Gas Venture that supplies natural gas to Sasol’s petrochemical operations and customers in South Africa and Mozambique.
Sasol is searching for additional gas resources to the proven reserves that it already has in Mozambique for the Natural Gas Venture. This initiative is aimed at new market opportunities.
“Sasol is targeting gas prospects with the potential to provide low-cost gas for markets in Mozambique and South Africa. We have been involved in Mozambique for several years, and this exciting new development forms an integral part of our upstream exploration focus. We are particularly pleased with the support and encouragement that we have received from the government of Mozambique,” Sasol chief executive Pieter Cox says.
Sasol Petroleum International, the Mozambican Ministry of Mineral Resources, Mozambique’s national oil company, Empresa Nacional de Hydrocarbonetos (ENH), and Sasol Petroleum Sofala Limitada signed the exploration and production concession contract (EPCC) agreement for blocks 16 and 19. The agreement is subject to final approval by the government of Mozambique’s Administrative Tribunal.
Americas
Falkland Islands exploration activity is heating up. Argos Resources Ltd. has extended its exploration license for Tranche A in the North Falklands basin until November 2006. The license was granted on the same commercial terms as previously agreed on. Argos plans to shoot a 3D seismic program this year. The new agreement will allow Argos to pursue its plans for the area.
“The Tranche contains several structural and stratigraphic prospects with multi-million-barrel reserves potential in play types that were not tested during the previous drilling campaign of 1998,” John Hogan, chief executive of Argos Resources, says.
Argos will carry out a 3D seismic program next year to further define and rank the prospects for later drilling. Argos previously announced a drilling campaign covering at least three wells in the North Falklands basin beginning early next year. The contract extension will allow Argos to be in a position to respond promptly to drilling successes, Hogan says.
Meanwhile, Falkland Oil and Gas Ltd. secured a two-year extension to its 33,000-sq-km license held in joint venture with Hardman Resources. Phase one of the license now runs until July 2007, and phase two will run from July 2007 to July 2010. During the first phase, FOGL and Hardman will be required to acquire and interpret an additional 4,000 km of 2D seismic data and 2,000 sq km of 3D seismic data. A two-well commitment will be required for the companies to enter Phase two.
The extension will allow more time to investigate the increased number of leads identified during the recently completed 9,450 km 2D seismic survey, which identified more than 130 leads.
The new 4,000-km 2D seismic survey has already begun, and the JV expects the 3D survey to begin before the end of the year.
While seismic work continues, Desire Petroleum PLC and Rockhopper Exploration have contracted The Peak Group for well design and drilling project management of a planned three-well program in the North Falkland Islands basin.
The Peak Group will deliver complete well project management service, including detailed well and test design, tendering and contracting for all services, and complete drilling program execution.
• • •
Activity is also picking up offshore Newfoundland and Labrador. Partners in the Orphan basin are continuing their seismic surveys through the summer, and Exxon Mobil Corp. subsidiary Esso Exploration Inc. has contracted Ocean Rig ASA’sEirik Raudefor drilling in the basin next year.
Meanwhile, Rowan Companies Inc. has sent a Super Gorilla class jackup rig to Atlantic Canada to drill two wells in the Grand Banks. The contract provides an option for a third. Drilling was expected to begin around mid-year and to last into December.
While exploration activity moves ahead in the Grand Banks, Husky Energy is getting ready to begin production on the White Rose field.
The SeaRose FPSO will produce the White Rose field in the Jeanne d'Arc basin offshore Newfoundland.
On July 4, Husky, along with the federal, provincial, and local governments, participated in a ceremony commemorating the sail away of theSeaRose FPSO, which will produce the White Rose field. The FPSO was scheduled to leave Marystown, Newfoundland, in early August for installation and commissioning before year-end.
White Rose, the third offshore oil development on Canada’s East Coast, lies 350 km east of St. John’s.
• • •
South of the Falklands offshore southern Argentina, the Carina-Aries gas fields came onstream in late 2Q.
The Carina field is 80 km offshore in 80 m water depth, and Aries is 40 km offshore in 60 m water depth. Two unmanned platforms produce the gas, which is piped onshore, where it is processed in the Rio Cullen and Cañadon Alfa units.
Production at Carina-Aries will ramp up to a plateau of 8 MMcm/d, yielding gas production of 11.5 MMcm/d for the consortium.
Total operates the project with 37.5% interest alongside partners Wintershall and Pan American Energy.
Central Asia
At the end of June, Kazakhstan’s state oil company KazMunaiGaz signed a memorandum of understanding with Statoil that creates the framework for negotiating a Caspian exploration and development project.
According to Statoil, the companies’ aim is to reach agreement on the main technical and commercial aspects of a joint venture covering the Abay area in the Caspian by the end of 2005.
“This is an important first step in establishing a strategic partnership between us and KazMunaiGaz in the Caspian,” Per Einar Rettedal, Statoil’s country manager for Kazakhstan, says.
Rettedal sees the MOU as a first step in identifying further exploration and development opportunities in Kazakhstan.
The two companies signed a joint declaration on dialogue and cooperation in the oil and gas sector in late May 2004.
Mediterranean
Sweden’s PA Resources AB signed an agreement to buy outstanding ownership interest in the Didon oil field and the Zarat exploration license offshore Tunisia.
Based on evaluation in a new independent third-party report, Didon’s proven and probable reserves and discoveries made in the Zarat exploration permit are estimated at 189 MMboe, net 22.9 MMboe to PAR. This will increase PAR’s total proven and probable reserves to 30.9 MMboe, totaling 21.1 MMbbl of oil and 9.8 MMbbl of equivalent gas, an increase of 124%.
When the transaction is completed, PA Resources will own 100% of Didon and at least 45% of the Zarat permit. The transaction is conditional upon concession from the Tunisian authorities, which is expected to be lifted in September.
Asia-Pacific
Murphy Oil Corp. is still making waves offshore Malaysia. In late 3Q, the operator announced its shallow-water Endau No. 1 exploration well discovered oil and gas in multiple horizons in block SK 311 offshore Sarawak. Murphy also announced that it encountered oil at its deepwater Kerisi No. 1 well offshore Sabah that lies in the Kikeh Trend.
The company says that although Kerisi is not of a stand-alone size, it is evaluating the find as a potential satellite development tied to the Kikeh field less than 8 km south.
Talisman Energy Inc. subsidiary Talisman Malaysia Ltd. is expanding its presence in the region with the grant of additional acreage to be included within the block PM-3 commercial arrangement area (CAA) offshore Malaysia and Vietnam.
Jim Buckee, Talisman’s president and CEO, says, “The additional acreage to block PM-3 CAA represents another important step in our strategy to grow our Malaysia and Vietnam business. The PM-3 CAA additional acreage contains an extension of the highly prospective PM-3 CAA play and offers the potential for small field discoveries which, if economical, can be quickly tied back to the existing PM-3 CAA facilities.”
The block covers 348,000 acres and contains six oil and gas fields, which comprise the PM-3 CAA phase two and three project, which is producing 60,000 b/d oil and 270 MMcf/d of gas. The additional acreage includes another 148,000 acres on the southeastern border of the original PM-3 CAA block.
Talisman Malaysia Ltd. operates the block with 41.44% interest. Partners include Petronas Carigali Sdn. Bhd. with 46.06% interest and PetroVietnam Investment & Development Co. with 12.5% interest.•
Barents Sea gets busy
Total has signed a memorandum of understanding for developing the giant Shtokman gas field in the Barents Sea. The memorandum covers studies in the upstream sector as well as development of LNG production and marketing.
Total has stated its plans to invest in further developing Russia’s oil and gas resources and is already participating in the Snøhvit development.
The Snøhvit partners are assessing the feasibility of doubling the capacity of the processing and liquefying natural gas facilities at the Hammerfest LNG plant.
Now under development by Statoil, the Snøhvit project provides an annual gas liquefaction capacity of 5.67 bcm. Expansion of this facility on Melkøya island in northern Norway would be conditional on discovering more gas in the Barents Sea.
Field operator, Statoil, says expansion on Melkøya would mean new offshore installations and another pipeline to shore as well as new processing installations and associated utilities on land. According to Statoil, space has already been allocated for extending the existing plant. Room will also be available for a possible third construction stage.
Statoil would not be in a position to decide to proceed with such a project before next year. Assuming that enough gas can be secured to warrant expansion, a plan for development and operation could be submitted to the authorities as early as 2008.
“A new processing plant in parallel with the one now under construction could be operational in 2011-12 at the earliest,” Håkon Larsen, head of license administration in Statoil’s exploration and production Norway business area, says. Larsen says he hopes new resources can be found near Snøhvit, in the North Cape basin or in new areas of the Barents Sea recently put on offer in Norway’s 19th licensing round.
Statoil operates the Snøhvit development with 33.53% interest. Partners include Petoro with 30% interest, Total with 18.4%, Gaz de France with 12%, Amerada Hess with 3.26%, and RWE-Dea with 2.81%.
Statoil has obviously gotten serious about developing the Barents Sea. In early June, the company organized an environmental conference attended by Norwegian and Russian experts on the far north to address issues that will impact development in the region.
“The Barents Sea is a single region, and we must draw on knowledge in both nations from scientific studies and ecological understanding,” says Bjørn Kristoffersen, who managed the conference.
“Pursuing a dialogue between Norway and Russia on the environmental challenges posed by petroleum operations in the Barents area is important,” Kristoffersen says.
Statoil’s objectives for the conference were to establish a common platform for knowledge, technology, and development in Norway and Russia with regard to these waters. The forum allowed participants to contribute to a shared understanding of the ecosystem in the Barents region and to evaluate approaches to solving the challenges relating to oil and gas production.
Statoil plans to make the environmental conference an annual event.
BP’s Miller platform could be adapted for C02 reinjection.
The Oseberg field includes three platforms, Oseberg A, B and D, connected to one another with bridges, in the south part of the Oseberg field, and the Oseberg C platform, which lies 14 km north of Oseberg A, B, and D (collectively referred to as the Oseberg Field Center).
The Pride Angola drillship left Cape Town, South Africa, in late June following dry docking and upgrades.
As the region’s operational infrastructure moves beyond its intended productive life, concerns are growing over safety, productivity, and environmental standards.
