P. 4 ~ Continued - OGJ Newsletter

Dec. 20, 2011

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Drilling & ProductionQuick Takes

BLM seeks comments on proposed Rough Draw

The US Bureau of Land Management is seeking public comments on Patriot Energy Resources LLC's proposed Rough Draw Project 13 miles north of Gillette, Wyo., the agency's Buffalo, Wyo., field office announced on Dec. 7. It said BLM is preparing an environmental assessment for injection of nutrients and produced water into federal coal seams to stimulate methane gas generation.

The project would use 283 existing wells within an 18,000-acre area that already has several CBM wells, BLM said. This also includes fee and state surface ownership, with federal, fee, and state mixed mineral ownership, it indicated.

Patriot is a Gillette-based subsidiary of Golden, Colo.-based Luca Technologies Inc., which wants to determine the effects of its biogenic gas generation process on the coal resource in a mature CBM field producing from multiple publicly owned coals, according to the proposed project's development plan.

Comments will be accepted on the field office's scoping notice and Patriot's application and supporting documentation until Jan. 3, 2012, BLM said.

Victoria nears completion of Logbaba field

Victoria Oil & Gas PLC said production facilities for Logbaba gas and condensate field near Douala, Cameroon, are mechanically complete and precommissioning is substantially finished. The company expects first gas sales by yearend.

Victoria also has completed a 5 km, 400 mm, 250 mm, and 63 mm diameter pipeline from the production facilities to the first customer hub at the Magzi Industrial Estate.

The company anticipates steadily building gas sales to about 20 customers after completion of a 34-km pipeline network by yearend 2012.

The pipeline network will have a 60 MMscfd capacity.

Victoria plans to sell 8 MMscfd by yearend 2012, rising to 44 MMscfd by yearend 2014.

A June 2011 Victoria investor presentation said the gas price is fixed at $16/MMbtu for 5 years, in a 20-year exclusive contract.

The production facilities will separate and stabilize the condensate before it is trucked 60 km to the Sonara refinery at Limbe. Victoria expects to sell 160 b/d of condensate by yearend 2012, rising to 880 b/d of condensate by yearend 2014.

The company estimates that the field contains proven and probable reserves of 212 bcf of gas and 4.2 million bbl of condensate.

In the 1950s, four exploration wells delineated the field but at that time there was no gas market in Cameroon.

Victoria drilled two successful development wells in 2009-10 at a cost of $53 million and encountered more than 600 ft of gross sandstone pay. On test, one well at depths between 7,005-8,500 flowed 11-56 MMscfd of gas and 210-1,000 b/d of condensate at wellhead pressures of 2,750-4,552 psi. The other well flowed up to 22 MMscfd of gas at a 3,078 psi wellhead pressure.

Victoria holds a 95% interest in the field and is the operator.

Petrobras lets power generation contracts

Petroleo Brasileiro SA (Petrobras) let a $651 million contract for gas-turbine power generation packages to Rolls-Royce. The work will be in support of Petrobras' production off Brazil, the supplier said.

Rolls-Royce will supply 32 RB211 gas-turbine power generation packages, including waste-heat recovery units, to meet the power-generation requirements of eight separate floating production, storage, and offloading vessels. The FPSOs, used to process hydrocarbons and store oil, will operate in Lula (formerly Tupi) and Guara fields in the presalt area of the Santos basin off Brazil.

The new packages will be delivered in groups of four, said the vendor, with the first units scheduled for delivery in first-quarter 2013. Four gas-turbine generating sets will be installed on each of the eight FPSOs. Rolls-Royce will also provide Petrobras with long-term services, technical support, and training.

In February, Rolls-Royce announced plans to build a new $100-million gas turbine assembly and test plant in Santa Cruz, state of Rio de Janeiro, which is to become operational in first-quarter 2013. Equipment from these contract awards will be among the first units to be assembled and tested at the new plant.

The manufacturer said the latest contract award increases the number of RB211-powered industrial gas-turbine units installed in Brazil over the last 10 years to 62. The combined total amount of energy generated by these units equals 1.8 Gw of electric power, the company said.

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