DEVELOPMENT STUDIED FOR GAS FIELD OFF INDIA

A group led by a unit of Mosbacher Energy Co., Houston, is preparing an appraisal program that could lead to phased development of a 100 bcf gas field off India (23729 bytes).

Preparations are occurring under a production sharing contract (PSC) signed early in October by the Indian government and Mosbacher India LLC, Hindustan Oil Exploration Co. Ltd., Baroda, India, and Petrodyne Inc., Dallas. Operator Mosbacher India holds 51% interest in the agreement, Hindustan Oil 30%, and Petrodyne 19%.

The Mosbacher group aims to confirm the significance of gas discoveries reported by India's Oil & Natural Gas Commission (ONGC) in the Cauvery basin, about 100 miles south of Madras in the Bay of Bengal.

Of specific interest is an offshore field in the Tranquebar depression consisting of a heterogeneous, Precambrian, weathered granite reservoir on the crest of a northeast-southwest basement ridge known as the Portonovo high. Named PY-1 (23729 bytes), the field lies in about 250 ft of water.

Based on ONGC data, Mosbacher India and partners estimate PY-1 (23729 bytes) could yield as much as 116 bcf of gas and 1.16 million bbl of condensate in primary production.

WORK PROGRAM

In the 1 year long work program it is preparing, the group proposes to confirm PY-1's (23729 bytes) commercial potential by drilling an appraisal well and conducting an extended production and pressure draw down test.

Depending on results of the appraisal well, later work in PY-1 (23729 bytes) could include drilling two wells, installing a minimum structure, unmanned platform, and laying a 10 in. gas pipeline to shore. Partners would move the field's full production stream to shore for separation.

If activity proceeds as partners hope, PY-1 (23729 bytes) field could start commercial production as early as first quarter 1998 with flow averaging 20-25 MMcfd of gas. Partners estimate the cost of developing PY-1 (23729 bytes) at $70-80 million during 4-5 years.

Lloyd Martin, Mosbacher Energy vice-president of international production, said the PY-1 (23729 bytes) group expects to submit the first year work plan by the end of this month. Review and approval of the plan should occur later in fourth quarter 1995. That would allow partners to spud the PY-1 (23729 bytes) appraisal well in second quarter 1996.

The group, meantime, is evaluating jack up rigs in the region and developing drilling program parameters. Partners plan to core the pay zone.

The other major component of the first year work program will be to conduct negotiations with potential gas purchasers. Partners have had preliminary talks with a U.S. power developer that plans to build a power station onshore at Tennepatanam, near the coast.

PY-1 (23729 bytes) FIELD

ONGC earlier logged four apparently productive gas wells in PY-1 (23729 bytes) field, including the PY-1 (23729 bytes)-1 discovery well in 1980, but conducted only limited tests at each site. Production tests of the wells reportedly ranged as high as 13 MMcfd.

Because the Mosbacher group didn't know whether it would be able to use--or even find--existing well bores in PY-1 (23729 bytes), it excluded the possibility in its bid for the acreage.

Martin said PY-1 (23729 bytes) pay in existing wells occurs in sections as thick as 200 ft at depths of 5,000-5,500 ft.

The structure is sealed by lapping Cretaceous and Eocene shales. However, some parts of the weathered granite reservoir have natural fractures, some are dominated by matrix porosity, and others have both.

"With this first well, we'll be trying to determine the extent of heterogeneity in the field, then confirm the reserve potential," Martin said.

Partners have yet to settle on a drillsite but likely will drill at a location between existing wells to test pay thickness and quality. If characteristics of the pay encountered warrant, the PY-1 (23729 bytes) group plans a 2-4 week production test.

Partners bid for rights to develop PY-1 (23729 bytes) in July 1993, and ONGC announced it had accepted the offer the following December.

PY-1 (23729 bytes) is within and surrounded by Block CY-OS/2, a 3.8 million acre tract formerly known as Block 17.

India has accepted a bid from a group led by Vaalco to develop oil and gas on CY-OS/2 and is negotiating terms of a PSC covering the tract. The group includes operator Vaalco, Mosbacher India, Hindustan Oil, and Tata Petrodyne with 25% interest each. Vaalco also heads a group seeking to develop PY-3 field, also within CY-OS/2.

Although surrounded by CY-OS/2, PY-1 (23729 bytes) and PY-3 are separate tracts.