BP Amoco eyes gas exports to Turkey from Caspian giant discovery

BP Amoco plc confirmed a major gas condensate discovery in the Caspian Sea off Azerbaijan with a wildcat drilled on the Shah Deniz license area.

Speculation about a major find on Shah Deniz began in May, when the State Oil Co. of the Azerbaijan Republic (Socar) announced that the well had cut gas and condensate pay zones in the Shah Deniz structure (OGJ, June 7, 1999, Newsletter).

BP Amoco announced on July 12 that results from the SDX-1 well suggest a significant resource in the structure - enough to justify the early establishment of a joint working group to explore prospects for "material gas exports."

A BP Amoco official said that the most likely estimate of reserves was put at 15 tcf of gas. Azeri sources have quoted figures as high as 25 tcf, though these estimates are thought to be based on politicians` hopes rather than engineers` expectations.

The working party is expected to push for exports of Shah Deniz gas to Turkey by pipeline. Unusually for such a find, no consideration has yet been made of condensate reserves: "Gas is the driver for this project, not liquids."

The well was drilled to a total measured depth of 6,316 m and encountered gas condensate in three separate horizons with a combined net pay of 220 m. The lowest horizon flowed 50 MMcfd of gas - the maximum capacity of the rig`s equipment - and 2,965 b/d of condensate through a 38/64-in choke at a wellhead flowing pressure of 7,126 psi.

The operator began drilling an appraisal well, SDX-2, into the Shah Deniz structure 6 km to the south of the discovery well in early May, with the Istigal semisubmersible rig operating in 348 m of water. The appraisal well is expected to be completed by mid-October.

Andy Hopwood, Azerbaijan exploration unit leader at BP Amoco, said: "Clearly SDX-1 is a good result for the Shah Deniz participants and the Republic of Azerbaijan.

"The second well should give us more information about other areas of the reservoir and, as work continues, we will be able to build up a much more complete understanding of the resource.

"But even at this early stage this discovery has confirmed the exciting potential to create a new dimension, namely gas exports, to the development of Azerbaijan`s energy industry."

The working party to study potential gas markets would include representatives of the Azeri government, Socar, and Shah Deniz interest holder: operator BP Amoco 25.5%; Statoil AS 25.5%; Socar 10%; Elf Petroleum Azerbaijan BV 10%; LukAgip NV 10%; Iran`s Oil Industry`s Engineering & Construction 10%; and Turkish Petroleum Overseas Co. Ltd. 9%.

Projects update

Norsk Hydro AS let a 250 million kroner ($32 million) contract to Kvaerner Oilfield Products AS, Oslo, for subsea equipment to develop Tune gas field. Tune will be developed with four subsea wells tied back via a seabed template to Oseberg field. Tune is due on stream in 2002 and has estimated reserves of 55 million bbl of condensate and 955 bcf of gas.

Production peaks of 35,300 b/d of condensate and 425 MMcfd of gas are anticipated. The field lies on Norwegian North Sea Blocks 30/8 and 30/5 where water depth is about 90 m.

Agip Algeria Exploration BV bought the combined interests of Anadarko Petroleum Corp. and Lasmo plc in two Algerian exploration and production blocks for $127 million.

The deal involved Blocks 401a and 402a in the Berkine Basin, in which Anadarko held 27.5% and Lasmo 13.75%, and which are operated by BHP Petroleum Pty. Ltd.

The two blocks contain a number of oil discoveries which are being evaluated for development. One find extends into Agip`s adjacent Block 403 license area.

Anadarko said the sale brought better value from a non-operated property, while Lasmo said the blocks were non-core assets. Both companies retain interests in nearby Blocks 404a and 208, where Anadarko is operator.

Saga Petroleum AS, recently acquired by Norsk Hydro AS, sold its Varg production ship to Petroleum Geo-Services AS, Oslo, for $350 million. Saga will lease the ship from PGS for the remaining production period of Varg.

The contract is due to last a minimum of 3 years, and the lease rate is $177,000 b/d. Varg was brought on stream in December 1998 and had estimated reserves of 50 million bbl of oil. Production currently average 33,000 b/d. Saga said the deal gave it a book value gain of more than 500 million kroner ($63 million).

Project Focus: Shell Expro lays Brent Spar to rest

Shell U.K. Exploration & Production completed the disposal of Brent Spar, after an initially rocky 4-year process, at last over the weekend of July 10-11.

That weekend three remaining cut and cleaned rings of the hull were placed on the seabed in Mekjarvik harbor, near Stavanger. The 1,200-1,800 metric ton rings, each about 22 m high and 29 m in diameter, were lifted into place by the Thialf crane barge. They were to be filled with ballast and covered in concrete to form a new quay, due to open in 2000 (OGJ, Feb. 9, 1998, p. 30).

The dismantling was carried out by Heerema Marine Contractors Nederland BV using H581, the world`s largest flat-top barge. This was fitted with a specially designed lifting cradle to raise the cylindrical spar vertically so the hull could be sliced. The barge was also used to transport and cut the cleaned ring sections to the quay site for placement by Thialf.

Eric Faulds, Shell Expro`s decommissioning manager, said: "We`ve learned a great deal in the process and, in the spirit of openness and communication which has been a feature of Brent Spar decommissioning, since we launched the `Way Forward` in October 1995 we will be publishing information on the technical and other lessons learned in a `close out` report later this year.

"In the report we will also be able to provide details of all aspects of the work including final costs and other statistical data compiled over the whole project."

Related Articles

Gov. Wolf says state forests, parks off limits to new drilling

04/01/2015

Pennsylvania Gov. Tom Wolf (D) signed an executive order reinstating a moratorium on new drilling leases on state forests and parks.

Anadarko joins Magellan, PAA to build Saddlehorn system

03/19/2015 Magellan Midstream Partners and Plains All American Pipeline LP reported that a wholly owned subsidiary of Anadarko Petroleum Corp. has exercised i...

Anadarko cuts spending, stalls well completions

03/03/2015 Anadarko Petroleum Corp. on Mar. 3 said it will cut spending 33% during 2015 compared with 2014 and will reduce drilling and defer 125 onshore well...

EPP, Anadarko, others form NGL pipeline joint venture

02/24/2015 Enterprise Products Partners LP, Anadarko Petroleum Corp., DCP Midstream Partners LP, and MarkWest Energy Partners LP have formed a joint venture a...

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/09/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/03/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

Study finds small subset of wells accounts for most methane emissions

12/15/2014 A small subset of natural gas wells are responsible for most methane emissions from US natural gas production, said a study from the University of ...

Anadarko boosts Wattenberg production

10/16/2014 Anadarko Petroleum Corp. stepped up production in Wattenberg field in Colorado during the second quarter. The rise was attributed to the success of...

SM raises initial production rates in the Eagle Ford shale

10/16/2014 An improved completion design that utilizes longer laterals and increased sand loadings is raising initial production (IP) rates for SM Energy Corp...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected