BHP starts oil production from Genghis Khan in gulf

By OGJ editors
HOUSTON, Oct. 8 -- BHP Billiton, on behalf of partners Hess Oil Corp. and Repsol-YPF SA, has begun oil production from the Genghis Khan development in the deepwater Gulf of Mexico 120 miles off Louisiana.

The BHP-led group acquired an interest in Genghis Khan earlier this year for $1.33 billion. The development, which has pegged gross reserves of 65-170 million boe, may include as many as seven production wells (OGJ Online, Nov. 12, 2006).

Currently, production is flowing from a single well connected to a subsea manifold on Green Canyon Block 652. A second well is being drilled, and two more wells are to follow shortly. One of these additional wells is slated to test Green Canyon Block 608.

The produced oil is transported to a third-party owned and operated facility where it is processed and sent via existing pipelines to markets in Texas or Louisiana. The oil is sold as a blend, commingled with crude oils from other pipeline shippers.

The Genghis Khan development comprises the western flank of the Shenzi structure, which lies on adjacent blocks in 4,300 ft of water. The Shenzi project is also being developed by the same BHP-led group. Interests in the Genghis Khan and Shenzi developments are operator BHP 44%, and Hess and Repsol-YPF, 28% each.

"This project allows us to optimize the development of the reserves at Shenzi-Genghis Khan, providing flexibility in selecting well locations, production facilities, and the pace of development to capture the most value possible over the expected 25 to 30-year life of the field," said J. Michael Yeager, chief executive for BHP Billiton Petroleum.

Genghis Khan is one of three fields BHP has in development in the deepwater gulf that is scheduled to come on stream this year.

The Atlantis and Neptune fields, which are also in the Western Atwater Foldbelt region of the gulf, are expected to begin production by yearend. These three projects, combined, boost BHP's net production in the region to more than 100,000 b/d of oil. In the 12-month period ending June 30, the company's production from the gulf averaged 12,000 boe/d.

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