Shell Expro marks progress on Gannet satellite development

In the U.K. North Sea many current developments are so small that operators hardly bother announcing them before they begin production.

This was the case with the news this week that Shell U.K. Exploration & Production, the operating joint venture of Shell U.K. Ltd. and Esso Exploration & Production U.K. Ltd., started oil production from an additional subsea satellite of U.K. North Sea Gannet field, called Gannet G.

Production was started through a single wellhead connected by a 5 km pipeline to Gannet platform. A second producer is expected to be drilled, and the development is budgeted at #40 million ($64 million).

Gannet G has estimated reserves of 13 million bbl of oil equivalent. Initial oil output was 7,500 b/d. While it is small, though, Gannet G is likely to be typical of developments to come.

Chris Finlayson, Shell Expro`s oil director, said: "Gannet G is an example of a relatively small project which has been pursued despite the recent low oil price because the development is close to, and will utilize, our existing infrastructure.

"Gannet G highlights the fact that the continued drive to cut costs of new projects by applying new technology, standardization, and good supply-chain management is bearing fruit and unlocking some small marginal developments."

The 22/21-10X development well was drilled by Transocean Offshore Inc., Houston. The contractor said the field has a very complex reservoir. Drilling the 11,500 ft horizontal well required accurate steering, which was aided by the use of state of the art formation evaluation while drilling equipment.

Nicaragua gears up for licensing round next year

Look out for exploration opportunities next year when Nicaragua`s Caribbean continental shelf is opened for licensing in early 2000.

The bidding round will be Nicaragua`s first, and the first time the play has been open to the international petroleum industry since the 1970s. Nicaragua passed new petroleum legislation in March 1998 to facilitate licensing.

In anticipation, exploration contractor Fugro-Geoteam AS, Oslo, announced the availability of non-exclusive seismic data. The contractor acquired 3,097 line km of 2-D seismic data in shallow water off Nicaragua`s east coast. The package on offer incorporates eight earlier wells, and will be available to potential bidders in August/September.

The contractor said initial processing shows features with potential for structural and stratigraphic trapping. Several of these were said to have amplitude anomalies suggesting the possibility of hydrocarbon entrapment.

"Previous exploration," said Fugro-Geoteam, "has established the presence of a Tertiary succession of up to 4,000 m with good quality clastic and carbonate reservoirs, some of which have tested oil and gas. Geochemistry indicates that the oil is of Tertiary origin and from sources closely linked to the reservoirs.

"The presence of a Cretaceous succession with a separate, mature hydrocarbon system is known from offshore drilling in neighboring Honduras and from outcrop on the Coco river, which forms the Honduras-Nicaragua border."

The main objective was said to be a 2,000 m thick rudistid carbonate unit outcropping along the Coco river, with heavy oil stain under a shale seal: "It is expected that this succession will extend into Nicaragua`s offshore. So far exploration drilling in Nicaragua has been confined to the Tertiary."

New contracts

Coflexip Stena Offshore SA, Paris, let contract to the Hyundai Mipo dockyard to build a pipelay and construction vessel capable of operating in up to 2,500 m of water.

The contractor said the new vessel is expected to be operational in the second quarter of 2001, and will be the only such vessel capable of laying flexible as well as rigid lines in deep water.

The 192 m long, 32 m wide vessel will be able to store more than 8,000 tons of pipe sections and have a transit speed of 13 knots and a lift capability of 400 tons.

Coflexip Stena decided on a newbuild instead of a converting the Kitt submersible carrier which it bought for the purpose, because it would bring operational advantages and a longer life expectancy. The vessel is expected to cost $170 million.

Tuskar Resources plc, Dublin, chartered the Crystal Sea production, storage, and offloading ship from Green Sea AS, a unit of Brovig Offshore AS, Oslo.

The ship will be used to produce oil in Obe field on Block OML 110 offshore Nigeria, beginning in the fourth quarter. First production will be from the existing Obe-4 well at an anticipated rate of 4,000 b/d of oil.

Tuskar is considering further development options with a view to raising output to 8,000 b/d. Costs to bring the well into production will be paid by Brovig, which will be repaid out of oil production revenues.

Tuskar will share production revenues with indigenous operator and co-venturer Cavendish Petroleum Nigeria Ltd., and anticipates receiving 75% of oil revenues.

Project Focus: Phillips finds oil and gas in Bohai Bay off China

Phillips China Inc. disclosed an oil and gas strike on Block 11/05 in the Bohai off China, which it plans to appraise this year.

The discovery well was drilled to a total measured depth of 5,531 ft and encountered a gross pay interval of more than 1,400 ft, which included 712 ft of net pay in the Minghuazhen and Guantao formations.

An appraisal well was drilled immediately after the find, 1.6 miles southwest of the discovery well. This was drilled to a total measured depth of 5,325 ft and encountered 748 ft of net pay in the same formations.

Phillips conducted three drill stem tests: the first two flowed 700-800 b/d of 22? gravity oil, with gas-oil ratios in the range 250-300/cu ft/bbl. The third interval flowed 105 b/d of 16.8? gravity oil with a gas-oil ratio of 138 cu ft/bbl.

The operator said the tests were conducted under naturally flowing conditions, and rates were limited to avoid sand production: "Analysis of the test results indicates that the zones would be capable of producing at a rate of 3-5,000 b/d with artificial lift."

Up to five further appraisal wells are lined up for this year, while Phillips plans to initiate commercialization studies with China National Offshore Oil Corp., which has existing production facilities nearby.

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