General Interest - Quick Takes
Total confirms deepwater oil find off Angola
Total SA, operator of Block 32 off Angola, and Sonangol EP reported that an ultradeepwater delineation well has confirmed the commercial potential of the adjacent Gengibre-1 oil discovery (OGJ Online, June 10, 2005).
The Gengibre-2 appraisal, 100 miles off the Angolan coast in 5,564 ft of water, was drilled to a TD of 14,245 ft.
On test, the well flowed oil at a rate of 4,540 b/d from a Miocene reservoir and 5,100 b/d from an Oligocene reservoir. Technical studies are under way for joint development of the discoveries.
West Azeri production begins off Azerbaijan
BP Group LLC, operator of the 10-company consortium Azerbaijan International Operating Co., began oil production Dec. 30 from West Azeri (WA) field, part of the Azeri-Chirag-Gunashli (ACG) complex in the Caspian Sea off Azerbaijan.
Giant ACG, 100 km east of Baku, has reserves of 5.4 billion bbl of oil and is planned as a 30-year development and production project (OGJ Online, Sept. 24, 2004). WA production began from the first of three predrilled wells in 118 m of water. Production rates are expected to increase through 2006 as other predrilled wells come on stream. More drilling is expected later this year.
Plateau production from WA is expected to be 300,000 b/d in addition to the expected plateau production of 340,000 b/d from Central Azeri (CA) (OGJ Online, Feb. 15, 2005).
The WA facilities include a 48-slot production, drilling, and quarters (PDQ) platform and a 30-in. oil pipeline tie-in to the expanded onshore Sangachal terminal.
Associated gas from WA will flow via subsea pipelines to a CA compression and water injection platform for reinjection into the reservoir for pressure maintenance or to be used as fuel. Surplus gas will be exported via subsea pipeline to the Sangachal terminal and onward via a new pipeline for Azeri use.
ACG is being developed in several phases. Chirag has been producing since 1997, followed by Phase I of Azeri in early 2005 and the current start-up of WA.
Production from East Azeri is scheduled to come on stream in 2007 (OGJ Online, Sept. 18, 2002).
ACG Phase III involves development of deepwater Gunashli field, already sanctioned and expected to begin production in 2008. Plateau producton in 2009 is expected to surpass 1.1 million b/d.
Nigeria LNG begins production from Train 5
Nigeria LNG Ltd. (NLNG) has begun production from the fifth train at the Bonny LNG plant in Nigeria. NLNG further reported that the first LNG cargo from Train 4, which began production November 2005, is being shipped to the Lake Charles, La., terminal in the US.
Trains 4 and 5 will increase the company’s LNG production capacity to more than 17 million tonnes/year.
NLNG will ship more than 14 million tonnes/year of LNG to Europe and more than 8 million tonnes/year of LNG to the US after Train 6 comes on stream in 2007.
It is planning a further expansion project to add more than 8 million tonnes/year of LNG capacity also targeted for North America.
NLNG is a Nigerian joint venture of Nigeria National Petroleum Corp., 49%; Shell Gas BV, 25.6%; Total LNG Nigeria Ltd., 15%; and ENI International NA, 10.4%.
Venezuela regains control of 32 oil fields
Thirty-two privately operated Venezuelan oil fields returned to state control with the start of the new year, the government said.
The deadline expired at midnight on Dec. 31, 2005, for all private companies with contracts to independently produce oil. The companies now will have to agree to joint ventures that will give Venezuela’s state oil company, Petroleos de Venezuela SA (PDVSA), majority control.
The 32 operating agreements were signed during 1990-97 when Venezuela’s petroleum industry, nationalized in 1976, was opened to private and foreign capital. The objective at the time-when the price of crude was below $10/bbl-was to increase production at low-priority oil fields that had been closed because of their location or states of depletion and which PDVSA had no plans to reactivate.
As oil prices rebounded in recent years, Venezuelan President Hugo Chavez’s government has sought to boost its control and share of profits. In 2001, it passed a hydrocarbons law that made the operating agreements illegal by requiring oil production to be carried out by companies that were majority owned by the government.
As of Jan. 1, Venezuela had successfully completed “the recovery” of the 32 fields, Venezuelan Oil Minister Rafael Ramirez said in a statement.
The government had threatened to reclaim oil fields from companies that refused to sign transitional joint venture agreements, which will later be converted into permanent agreements with PDVSA.
Chevron Corp., BP PLC, Royal Dutch Shell PLC, and Petroleo Brasileiro SA (Petrobras) were among those that signed earlier. Repsol YPF SA was the last to sign after buying out ExxonMobil Corp.’s stake in the Quiamare-La Ceiba oil field. ExxonMobil had resisted the contract changes, which will slash the oil companies’ shares of profits and control over operations.
The state could take as much as a 90% stake in the new ventures. The amount the private companies have invested in the fields will determine the amount of control they have, Ramirez has said.
The 32 oil fields have been responsible for about 500,000 b/d of Venezuela’s officially declared production of 3.2 million b/d of oil. ✦
Industry Scoreboard
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Exploration & Development - Quick Takes
Total tests oil discovery in Yemen
Total SA reported an oil discovery and successful production test of the Jathma-1 well in the East Shabwa Development Area (ESDA) on Block 10 in Yemen.
Jathma-1 is the first of a three-well exploration program targeting a new area in the northern part of Block 10, said Total, ESDA operator. The well reached TD of 3,175 m and tested 1,900 b/d of 35° gravity oil.
Total holds 28.57% interest in ESDA in partnership with Occidental Yemen Ltd., Comeco Petroleum Inc., and Kuwait Foreign Petroleum Exploration Co.
Rosa field off Angola due more subsea trees
FMC Technologies Inc. has received a contract amendment worth $27 million to provide an additional five subsea trees and well jumpers for Rosa oil field on Block 17 in 4,200-4,900 ft of water off Angola (see map, OGJ, Mar. 18, 2002, p. 53).
Initially, FMC was committed to supplying 18 subsea trees, manifolds, production controls, and associated systems for the Rosa project. Delivery of the additional equipment is scheduled for the first quarter of 2007.
Rosa field, scheduled to come on stream in the first half of 2007, will be tied back to the Girassol floating production, storage, and offloading (FPSO) facility about 9 miles away. The field will raise and prolong the peak production of the FPSO, which will be upgraded with six new 5,300-ton modules.
Total E&P Angola is the block operator with 40% interest.
Pakistan Petroleum gets Barkhan license
Pakistan has granted a petroleum exploration license to state-owned exploration and production firm Pakistan Petroleum Ltd. (PPL) for Block 2969-8 (Barkhan), covering 2,104 sq km in the Dera Bugti, Kohlu, Musa Khail Bazar, Barkhan, and Loralai districts of Balochistan Province (Zone II).
A Petroleum Ministry official told OGJ that PPL plans to invest more than $15.6 million on the block. The company will shoot 200 km of 2D seismic survey and drill three exploratory wells during the first phase of the 3-year initial exploration license period.
PPL serves as operator of seven onshore and two offshore exploration licenses. It also holds nonoperating working interests in six development and production leases as well as seven exploration licenses.
Agip KCO lets Kashagan service contract
Agip KCO, an international consortium led by Italy’s Eni SPA, has let contracts to Petrofac, Woking, UK, for construction management of the onshore facilities of the Kashagan Phase I development 40 km northeast of Atyrau, Kazakhstan (OGJ, June 13, 2005, p. 34).
Involved are the main works contract, which covers the oil, gas, and sulfur processing units, and contracts for power generation and utilities, tanks and offsite facilities, industrial buildings, initial civil works, and pipe rack erection.
Petrofac already is providing engineering and procurement services for the onshore oil, gas, and sulfur processing units.
Superior eyes drilling on Oklahoma acreage
Superior Oil & Gas Co., Yukon, Okla., says at least 10 wells might be drilled to develop 1,200 acres in Nowata County, Okla., under leases it has agreed to acquire from Palmer Energy Co., Tulsa.
Superior says the acreage is suited for further development in pay zones that include the Mississippi lime and Rowe and Mulky coal zones, which produce on offsetting acreage.
The acquisition includes three completed gas wells, which flowed on tests at rates as high as 150 Mcfd each. These wells will be connected to the Southern State pipeline 520 ft away.
Pent to boost production from Oklahoma unit
Pent Energy LLC, Fort Worth, plans to increase production from the 2,800-acre Stroud Prue Sand Unit between Tulsa and Oklahoma City in Creek and Lincoln counties.
The waterflood unit, with 41 producing wells and 35 injection wells, currently produces about 135 b/d of 46° gravity oil and 40 Mcfd of gas solely from the Pennsylvanian Prue sand.
Pent Energy expects to triple production within 12 months and believes the drilling of three or four infill wells will make the increase possible. The area, with estimated recoverable reserves of 18 million bbl, currently has 20-40 acre spacing. Pent Energy expects to increase density to 10-acre spacing, which would allow drilling of 120 wells. The company also plans to reenter old wells and drill directional sidetracks in three Prue layers.
Pent Energy, formed in early 2004, acquired the unit as part of a purchase last month of Dadson Production LLC and Oil Center Operating Inc., both of Ada, Okla.
Wood Group unit to install ESPs in Argentina fields
PanAmerican Energy LLC has let a 6-year contract to Wood Group ESP Argentina, a subsidiary of John Wood Group PLC, for the supply and installation of electric submersible pumping systems in three oil fields in the San Jorge basin, just south of Buenos Aires.
The $120 million contract also commits Wood Group to supply field services, electrical maintenance services, equipment testing and repair, operational data collection, data base maintenance, and application engineering support for 500 existing units.
The contract supports PanAmerican’s development of a waterflood project in its mature fields, which includes the Cerro Dragon field, Argentina’s most productive oil field (OGJ Online, Aug. 17, 2005). ✦
Drilling & Production - Quick Takes
Oil flow starts from field off Brunei
Brunei Shell Petroleum Co. Sdn. Bhd. (BSP), a 50-50 joint venture of Royal Dutch Shell PLC and the Brunei government, has reported the start of oil production from Phase III of its Champion West field, 90 km offshore.
BSP Managing Director Grahaeme Henderson said the Champion West well flowed at an initial rate of 16,700 b/d, a record for BSP. The well also is producing natural gas.
Forvie North gas, condensate flow begins
Total SA reported production has started from Forvie North gas and condensate field on UK North Sea Block 3/15, 440 km northeast of Aberdeen, in 120 m of water.
Total owns 100% of the field, which was developed as a satellite to Alwyn North, 33 km away. A high-pressure, gas-condensate pipeline was built from Forvie North to Alwyn North.
The Forvie North subsea system has expansion capacity to allow the tie-in of additional wells (OGJ Online, Apr. 7, 2005). At plateau, Forvie North is expected to produce 20,000 boe/d.
Statoil secures rigs for Algerian drilling
Statoil ASA secured two rigs for exploratory drilling in Algeria. Separate contracts, with a combined value of $32 million, are with Nabors Drilling International Ltd. and Algeria’s Entreprise Nationale de Forage (Enafor).
The contracts await approval from Statoil’s partner, Algeria’s state-owned Sonatrach. Statoil has 75% interest in the Hassi Mouina Block, on which the drilling will occur. Sonatrach has 25% interest.
The contracts provide the rigs through March 2008 with extension options. Statoil, the block operator, plans to spud a well during the second or third quarter using Nabors Drilling Rig 284. Enafor’s rig ENF 39 is expected to start drilling in the fourth quarter.
“This is the first time Statoil is in the market for land rigs,” said Statoil’s country manager in Algeria. “It is a tight market.”
The block covers 22,993 sq km in the Timimoun basin. Sonatrach previously drilled one well on the block and discovered gas, which Statoil will develop (OGJ Online, July 28, 2004).
Quest Oil plans Texas field upgrades
Units of Quest Oil Corp., Houston, are undertaking a development expansion program in Texas that includes workover operations in Hawkeye field and Quest Oil’s newly acquired Midkiff field in Eastland County and the Nettie Gardner lease in McCulloch County.
Petrostar Oil Services Inc. plans to conduct workover operations in Midkiff field, which consists of 17 leases covering about 1,070 acres with 91 total wells. Work will include rebuilding wellheads, downhole motor repairs, and replacing pipelines with 2,340 ft of fiberglass to increase pressure to over 300 psi from 120 psi and enable increased daily production doubling or tripling the current 12-15 b/d from each of three producing wells.
Midkiff is adjacent to Quest Oil’s producing Hawkeye field, where Frontier Surveying Co. has been contracted by Wallstin Petroleum LLC to conduct surveys. Frontier staked two wells in Hawkeye for infill drilling to test the deeper Barnett Shale and Ellenberger sections. A drilling permit request is before the Texas Railroad Commission (TRC).
Frontier also has completed surveying the Nettie Gardner lease, which contains Exoc field, and has staked five new well locations. Filings for the drilling permits are before TRC. The target horizon is the Gardner oil sand, from which Gardner No. 2 well on the lease has produced, Quest Oil said. Production is anticipated from the Jennings gas sands that overlie the Gardner sand, and an evaluation of the sand will be performed to determine the feasibility of conducting a horizontal well program. Wallstin currently is negotiating with the drilling contractor on supplies and spud date.
Quest completed the $210,000 purchase of Midkiff field from Hadley Scott’s company Stellex, De Leon, TX, in late December.
US drilling activity continues to slip
US drilling activity continued to slip as the industry entered a new year, marking the second consecutive week of decline, down by 7 rotary rigs to 1,464 working, Baker Hughes Inc. reported.
That was up from 1,242 during the same period in 2005, which was the lowest weekly rig count for that year.
All of the latest loss was in land operations, which were down by 7 rigs with 1,365 still drilling. Offshore drilling was unchanged with 80 rotary rigs at work in US waters, including 75 in the Gulf of Mexico. There were 19 rigs working inland waters, also unchanged from the previous week. ✦
Processing - Quick Takes
Air Products plans Edmonton hydrogen plant
Air Products Canada Ltd. plans to build a second hydrogen production plant adjacent to Petro-Canada Products Ltd.’s 135,000 b/d refinery in Edmonton, Alta.
The first plant, a 71 MMscfd facility, is under construction and is expected to be on stream in April 2006.
The new 105-MMscfd hydrogen and steam generating plant, expected on stream in April 2008, would be the first to supply hydrogen to the refinery for use in the upgrading of syncrude from Canadian oil sands, Air Products said.
Air Products will own and operate the two hydrogen facilities, which will be interconnected and will supply hydrogen also to several other customers in the Edmonton industrial corridor.
Technip, Paris, is providing the design and construction for hydrogen generation units while Air Products provides gas separation technology.
Air Products will own, operate, and maintain the plants under long-term agreements with customers. ✦
Transportation - Quick Takes
Sempra seeks to expand Cameron LNG terminal
Sempra LNG Corp., San Diego, plans to expand the production capacity of its Cameron LNG regasification terminal, under construction 15 miles south of Lake Charles, La., to 2.65 bcfd of natural gas from the originally planned 1.5 bcfd.
It has received Federal Energy Regulatory Commission approval to begin the prefiling process for the proposed $250 million expansion and intends to start work in 2007 for completion in 2010.
The terminal site covers 275 acres along the Calcasieu River. Aker Kvaerner of Norway and Tokyo-based Ishikawajima-Harima Heavy Industries are performing the engineering, construction, and procurement for this initial construction phase, which is scheduled for completion in late 2008 (OGJ Online, Aug. 2, 2005).
Expansion will add more gas processing facilities and a new LNG storage tank for a total of four 160,000 cu m capacity LNG storage tanks.
The Energy Policy Act of 2005 requires LNG facility applications to undergo a prefiling process. The final FERC decision on the expansion is expected in early 2007.
Japanese group to expand Indian LNG terminal
India’s state-owned Petronet LNG Ltd. has awarded a ¥30 billion contract to a joint venture of Ishikawajima-Harima Heavy Industries Co. (IHI), Toyo Engineering Corp., Itochu Corp., and Mitsui & Co. to expand an LNG receiving terminal.
Capacity at the terminal, in Dahej in India’s west coast state of Gujarat, will be doubled to 10 million tonnes/year, with work scheduled for completion by yearend 2008. The partners will oversee the entire project from materials procurement to construction.
In December, a consortium of Japanese shipping lines-Mitsui OSK Lines, NYK Lines, and K Line-won a 25-year contract from Petronet LNG to deliver LNG from Qatar to the Dahej terminal (OGJ Online, Dec. 29, 2005).
LNG carrier to become storage, regas unit
Golar LNG Ltd., Hamilton, Bermuda, has awarded a $90 million (Sing.) contract to Keppel Shipyard Ltd., Singapore, to convert an existing LNG carrier into a floating LNG storage and regasification unit (FSRU), a first conversion of this type, Golar said. Golar will work with Keppel on project engineering, procurement, and construction. Saipem SPA unit Moss Maritime of Norway has prepared conceptual specifications for the FSRU and will perform design and engineering for the project.
The floating terminal’s conversion will be based on DNV (Det Norske Veritas) class rules and international standards. It will have a steel monohull with LNG tanks in the middle, a regasification plant in the forward section, and crew quarters with control room and utility machinery aft. Work includes installation of a forward turret, a side-by-side mooring system, LNG loading arms, aft thruster with compartment, and a regasification plant and replacement of cargo pumps. Existing steam power electrical and marine systems will be upgraded.
The FSRU, scheduled for completion in second-quarter 2007, will be capable of sending 2.75 billion standard cu m/year of natural gas ashore via a subsea pipeline at pressures of up to 85 bar.
Application due for Teesside LNG plant
ConocoPhillips Petroleum UK Ltd. will submit an application on behalf of Norsea Pipeline Ltd. for planning permission for an LNG regasification facility and combined heat and power plant on the site of Norsea’s Teesside, UK, oil terminal.
ConocoPhillips is a Norsea Pipeline shareholder. Others are Total SA, Statoil ASA , Eni SPA, and Norsk Hydro AS.
ConocoPhillips expects planning permission to be complete by the middle of 2007. Subject to a final investment decision and official approvals, the facilities could be in operation within 3-4 years.
Enterprise to expand Independence Hub, pipeline
Enterprise Products Partners LP, Houston, has signed agreements with the Atwater Valley Producers Group to increase the processing capacity of the Independence Hub platform in the eastern deepwater Gulf of Mexico by 150 MMcfd to a total capacity of 1 bcfd.
The deep-draft semisubmersible platform will be located on Mississippi Canyon Block 920 in 8,000 ft of water, where it will process gas from 10 fields (OGJ Online, Nov. 10, 2004).
The $28 million expansion project includes increasing, by the same amount, the transportation capacity of the Independence Trail natural gas pipeline, which will transport the gas to the Tennessee Gas Pipeline system in West Delta Block 68.
The expansions are required to accommodate expected natural gas production from three discoveries made in the area since the project was initially announced (OGJ Online, Mar. 28, 2005).
The facilities, currently under construction, are expected to be installed in 2006 and receive first production in 2007.
Crude line expansion planned in Minnesota
Minnesota Pipe Line Co. has applied to the Minnesota Public Utilities Commission for a $300 million pipeline expansion project to increase deliveries of Canadian crude oil to Minnesota refineries. The existing pipeline system, operated by Koch Pipeline Co., is operating at capacity. Minnesota Pipe Line proposes to start construction on the expansion in 2007 and put it in operation in early 2008. The proposed 24-in. pipeline would use the system’s existing rights-of-way with the northern portion following the existing system’s route from Clearbrook, Minn., south-southeastward toward Minneapolis and St. Paul.
The proposed southern portion of the MinnCan Project would run west and south of Minneapolis and St. Paul to the 270,750 b/cd Flint Hills Resources Refinery in Rosemount. ✦