Lasmo details plan for Venezuelan field

Lasmo plc, London, has outlined its plans for redevelopment of the Dacion license area in Venezuela, of which it assumed operatorship in March.

When Lasmo took control, Dacion-area production was 11,000 b/d of oil, but the company plans to hike output to 120,000 b/d by the end of 2002 through a $1.3 billion redevelopment program.

Dacion potential

Lasmo acquired the Dacion license under Venezuela's third licensing round, with a bid of $453 million (OGJ, June 16, 1997, p. 27). The company was stung into revealing its plans in full by analysts' suggestions that it paid too much for the license. The redevelopment program is expected to lead to recovery of an extra 550 million bbl of oil.

Lasmo said that capital costs and forecast operating costs equate to a full-cycle cost of $4/bbl of oil recovered: "This is very low by global industry standards."

Joe Darby, Lasmo chief executive officer, said, "We are very encouraged by the early results of our Dacion work program and are confident that strong production growth, low costs, and substantial exploration potential will deliver value, even at low oil prices."

Beyond the reserves and production targets, Lasmo reckons there is potential to add a further 100 million bbl to Dacion-area reserves through exploration and to take production as high as 140,000 b/d.

Dacion redevelopment

Phil Mead, Dacion asset manager at Lasmo, said the Dacion block is in the Oficina trend of the Eastern Venezuelan basin. There are four fields in the block: Dacion, Leguas, Levas, and Ganso.

First production was in 1944, and production to date amounts to 312 million bbl of oil. Commercial reserves currently booked amount to 325 million bbl of oil.

Mead said oil in place is estimated at 2.2 billion bbl of 20° gravity crude. Peak production was in 1958.

Ten producing stations have been installed, with 111 wells currently active and 234 shut in.

Seventy percent of the block's 430 sq km area was said to be underexplored, while there is potential for discoveries in Cretaceous horizons in the producing fields, below the producing reservoirs.

Mead characterized Dacion as a large, simple, and accessible oil field, limited by facilities capacity, old technology and infrastructure, and a depletion rate inconsistent with the reserves base: "It has low-risk, low-cost upside."

Mead said that Dacion redevelopment objectives include increasing estimated stock tank oil initially in place by 20% to 2.6 billion bbl. This will be achieved by use of 3D seismic to improve reservoir knowledge, application of modern logging techniques, exploration of deep Oficina structures, and exploration to identify additional accumulations.

Lasmo intends to increase productivity of wells to a typical 1,000 b/d of oil by using modern completion techniques and artificial lift.

The aim is to achieve a recovery factor of 35% compared with 14% to date.

The company has set target milestones for production: 16,000 b/d by the end of 1998, 30,000 b/d by mid-1999, 90,000 b/d by mid-2001, and 120,000 b/d by the end of 2002.

Seismic data acquisition is under way. Lasmo intends to acquire 472 sq km of 3D data, which will be followed by an exploration drilling program involving about 20 wells.

In 1999, six rigs will be in use in the field-three for exploration and development drilling and three for work- overs.

Lasmo plans to drill 300 new development wells, including artificial lift wells, and to work over about 180 existing wells.

Besides drilling, the company also plans to upgrade existing facilities to increase production and gas compression capacities, and to install a 42-km, 16-in. pipeline to boost export capacity to 120,000 b/d from the current 35,000 b/d.

Lasmo is operator and 90% interest holder in the Dacion license, which is expected to contribute one third of Lasmo's total net production in 2001. Dacion development work is being carried out by Schlumberger Ltd. under a 20-year contract.