Shell slates $1 billion oil and gas field development in Niger Delta

Shell Petroleum Development Co. of Nigeria Ltd. gave the green light for a $1 billion development of the EA oil and gas field in the Niger Delta.

The field lies 90 km south of Warri in shallow waters, and is one of a number of Nigerian projects put forward earlier in the year by Shell under an $8.5 billion program (OGJ, Feb. 15, 1999, p. 32).

Shell said that it discovered the field in 1965 but that the complex geological setting prohibited early development. The company cited new drilling technology as the key to making the field economically viable.

The field is expected to be developed with a number of platforms linked to shore by oil and gas pipelines. Oil will be exported through links to existing terminals while gas is earmarked for supply to the Nigeria LNG export scheme, which came on stream last month.

The EA field has estimated reserves of 350 million boe and is due on stream in the second half of 2002. It is expected to yield 120,000 bo/d and 100 MMcfd of gas when fully developed.

BG boosts exploration program in the Israeli Mediterranean Sea area

BG International Ltd. acquired a 50% interest in five exploration tracts in the Mediterranean Sea offshore Israel through a $10 million farm-in deal with current operator Isramco Inc.

The tracts cover a total 2,000 sq km and comprise: Med Yavne, Block 239; Med Tel Aviv, Block 240; Med Hedera, Block 241; Med Ashdod, Block 242; and Med Hasharon, Block 243.

BG is expected to take over the operatorship of Med Yavne once the Or-1 wildcat, currently drilling ahead, is completed. The well was spudded in early October and will be followed immediately by Or-South.

Then the Med Yavne license interests will be: operator BG 50%, Isramco 42%, and Delek Drilling Ltd. 8%. For the other four licenses the ownership will be: operator Isramco 46%, BG 50%, and Delek 4%.

The farm-in follows the award of three deepwater exploration tracts off Israel to BG this summer (OGJ, July 5, 1999, p. 29). BG retained a 70% interest in these blocks but farmed out 30% to the Middle East Energy consortium of Israeli companies.

BG and MEE have pre-qualified to develop the Israel Gas Co. to transmit and distribute gas throughout Israel. Tenders for this project are due to be submitted later this year with the contract award anticipated in early 2000.

New projects

Shell Temir Petroleum Development BV disclosed first oil production from Saigak field in Kazakhstan, where it is operator of a 60:40 joint venture with Veba Oel Kasachstan GMBH under a production sharing contract.

The Saigak-2 well is being produced with a view to appraising reserves and reservoir characteristics over a 3-month period. So far 1,200 tonnes of crude has been delivered to a nearby oil terminal at Shubarkduk, 150 km south of Aktobe, from where it will be exported by rail.

Shell intends to reach a decision on full field development plans early in 2000, before which the company must prove viability of an export route and commerciality of this small find in a remote spot.

China National Machinery Export & Import Corp. let a 35 million euros ($36.8 million) contract to ABB Alstom Power BV, Brussels, to build the Yele hydroelectric power plant for the Sichuan Electric Power Corp.

ABB Alstom will supply two 120 Mw turbines, two generators, 220 kv circuit breakers, and a computer control and monitoring system. Commissioning of the first turbine set is slated for October 2004 and the second for March 2005.

Statoil AS let a 60 million kroner ($7.7 million) contract to ABB Offshore Systems AS, Stavanger, to prepare the Sleipner field platforms for low-pressure production.

The work will comprise project management, engineering, procurement, fabrication, installation of new systems. The work is expected to be completed in November 2000.

Project focus: Engineer designs spar variant to speed production

Engineers from Deep Oil Technology Inc., Houston, gave details at the deep Offshore Technology conference in Stavanger last week of a variant on the spar platform design intended to shorter the time from drilling to first production.

The C-spar concept comprises a spar-type floating platform, as used in a number of recent Gulf of Mexico deepwater field developments, which can support a drilling rig and still enable production facilities to be installed during the development drilling stage.

Deep Oil Technology's Paul N. Stanton, J. Lynn LeJune, and Jun C. Chao present at paper at DOT which informed delegates that a C-spar platform would allow a field to be brought into production sooner after its commercial viability had been established than a typical spar.

"The C-spar can be moved to another field at relatively low cost," said the authors. "Thus an operator can accept more reservoir uncertainty before committing to development since less capital is at risk. Leasing rather than buying the C-spar may further enhance an operator's project economics."

The authors explained that a C-spar is a drilling spar that is convertible to a permanent production facility. It has a center-well that encloses a moon pool, one drilling slot, and up to 22 production well slots. It can support a payload of 18,000 tonnes and supports steel catenary risers. The concept compares to the Chevron Corp. Genesis field spar platform, which has a 16,000 tonnes payload and 20 production well slots plus one drilling slot.

"Once the drilling program has progressed far enough to define the process requirements," said the authors, "the production modules can be designed and fabricated.

"During this period the mooring system can be upgraded if necessary, and export lines laid and tied back to the spar. If the situation warrants, a temporary process module might be installed early in the development drilling phase to obtain revenues from early production.

"Once the permanent process and utility modules are completed, they can be installed on the spar at a selected time consistent with the drilling operation and seasonal weather conditions. When drilling is completed, the drilling rig can be removed and replaced with a workover rig."

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