Uruguay’s Ancap has 180 days to review bids made for two offshore blocks in the country’s first licensing round.
Both of the blocks that drew bids are in the Punta del Este basin. Uruguay has no hydrocarbon production, and Argentina has none in this part of the Atlantic Ocean.
Brazil’s Petroleo Brasileiro SA, YPF SA, and Portugal’s GALP Energia formed a group that bid for areas 3 and 4.
Area 3 covers 5,500 sq km in 100-2,000 m of water 150-300 miles off Montevideo, and Area 4 covers 3,000 sq km in 50-200 m of water 125-150 miles off Montevideo. Area 3 borders Argentina waters, and Area 4 is north of Area 3.
Interests are Petrobras and YPF 40% each and GALP Energia 20%.
YPF, a subsidiary of Repsol YPF of Spain, is Argentina’s largest oil producer.
Ancap will evaluate the offers on behalf of the government and decide whether the bids should be accepted.
The initial term of the licenses, if issued, is 4 years, and Ancap has the right to participate in the exploitation phase if hydrocarbons are discovered.
Uruguay had offered 11 blocks in the Punta del Este, Pelotas, and Oriental del Plata basins (see map, OGJ, May 18, 2009, p. 19).
Besides the companies that bid, BHP Billiton, Petroleos de Venezuela SA, and Pluspetrol of Argentina had also qualified.
Total, Novatek to develop Termokarstovoye gas field
Total SA will develop the onshore Termokarstovoye gas field in Russian Arctic under a joint venture with OAO Novatek, Russia’s largest independent gas producer.
Russian Prime Minister Vladimir Putin said the deal indicated Russia’s strategic gas fields are open to foreign investment.
According to a heads of agreement, Total will take a 49% interest in Terneftegas, a wholly owned subsidiary of Novatek, with the remaining 51% interest in Novatek’s hands.
A final investment decision on the estimated $900 million project is expected in 2011 once Novatek and Total complete appraisal and development studies. Termokarstovoye is 250 km east of Tarkosale where Novatek operates a processing facility for its own onshore production. The field has a potential of more than 47.3 billion cu m of gas and about 10.3 million tons of condensate.
Total’s “technological capabilities will complement our experience developing complex geological assets and facilitate the effective development of the remote Termokarstovoye field,” said Leonid Mikhelson, chief executive of Novatek.
The deal shall be closed upon approval of the Federal Antimonopoly Service.
It builds upon Total’s other projects in Russia, including Shtokman gas-condensate field in the Barents Sea where the final investment decision is to be made next year. The Shtokman first development phase will produce 23.7 billion cu m/year, including 7.5 million tons/year that will be exported as LNG.
Total also operates Kharyaga field in the Nenets Autonomous Region. Under the third phase current production level will rise by 50% to 30,000 boe/d by 2011.
According to an analyst report from the Royal Bank of Scotland, the partnership between Total and Novatek could lead to expanded LNG cooperation on the massive South Tambey field.
“Termokarstov holds less than 6-7% of overall Novatek reserves, and we believe that by 2013 the field would contribute only about 1 billion cu m, or less than 2%, to Novatek production based on the 51% stake,” the report said. “Novatek needs an international partner to develop this field and build an LNG facility, and we believe that Total, one of the top three companies worldwide in LNG and with an existing relationship with Novatek, is an ideal partner. Future cooperation on LNG is also facilitated by the enthusiastic support of the Kremlin, with Putin also calling for higher Russian LNG production.”
Foreign investors have been hesitant to develop projects following Royal Dutch Shell PLC’s significant cession of its stake in Sakhalin-2 to OAO Gazprom under intense government pressure. Under a draft law, the government stipulated foreign companies need approval from a special government commission if they want to participate in developing strategic oil and gas fields.
Christophe de Margerie, chief executive officer of Total, told the Moscow Times, “I don’t think it’s difficult to work in Russia. One only needs to learn to work efficiently with Gazprom, Novatek, and Rosneft. We’re prepared to invest more into the Russian economy.”
USGS lists 76 billion boe on Barents Sea shelf
More than 76 billion boe may be technically recoverable on the Barents Sea shelf, the US Geological Survey said.
The mean estimate of undiscovered, conventional, technically recoverable petroleum resources in four geologic provinces on the Barents shelf included 11 billion bbl of oil, 380 tcf of natural gas, and 2 billion bbl of natural gas liquids.
The US Department of the Interior agency completed the assessment in 2008 as part of its Circum-Arctic Oil and Gas Resource Appraisal. The shelf lies entirely north of the Arctic Circle covering 1.76 million sq km off northern Norway and Russia. Most lies in less than 500 m of water.
“This area shares important characteristics with many Arctic basins, such as sparse data, high geologic uncertainty, substantial petroleum-resource potential, and technical barriers that impede exploration and development,” the USGS report said.
Most of the undiscovered petroleum appears to be in the East Barents basin province, it indicated.
Shah gas field development agreements signedConocoPhillips and Abu Dhabi National Oil Co. (ADNOC) have signed joint venture and field entry agreements for developing Shah gas-condensate field in Abu Dhabi.
The development involves onshore sour gas-condensate reservoirs in Shah field, about 180 km southwest of Abu Dhabi city.
The field, discovered in 1966, had original reserves of 500-600 million bbl of 30° gravity oil in Cretaceous carbonates at 8,000 ft. The gas-condensate is in the deeper Jurassic Arab formation (see map, OGJ, Aug. 18, 2008, p. 44).
The development includes construction of gas gathering systems, gas processing trains, and product pipelines designed to process and transport 1 bcfd of gas, associated liquids, and sulfur.
The companies note that due to the sour gas, the development required extensive risk-assessment studies with front-end engineering and design stages selecting state-of-the-art health, safety, and environmental systems.
The project will included one the world’s largest sulfur-removal plants as well as sulfur processing and exporting facility at Ruwais Industrial City, Abu Dhabi, according to the companies.
To date, the companies have released for tender 6 of 10 major engineering, procurement, and construction bid packages to prequalified contractors and plan to release the remaining EPC bid packages later this year. Tender results will be known in early 2010, the companies say.
ADNOC has a 60% interest in the joint venture with ConocoPhillips having the remaining 40%.
Personnel from both ADNOC and ConocoPhillips will staff the new operating company.
Cameroon
Victoria Oil & Gas PLC expects to spud a well in mid-July to develop Logbaba gas-condensate field in the city of Douala, Cameroon.
Logbaba, discovered in the 1950s, has independently assessed proved and probable reserves of 104 bcf. Industrial customers are to take up to 8 MMcfd.
The development plan calls for drilling one new well to 10,000 ft, build a 12 MMcfd gas processing plant, and lay 15 km of 16-in. pipeline to the users. A second well would be drilled later. Production is to start in 2010.
Colombia
Test results at the Costayaco-8 development well in southern Colombia keep Gran Tierra Energy Inc., Calgary, on track towards a 19,000 b/d production plateau at Costayaco field in the 2009 fourth quarter, the company said.
The well made 2,640 b/d from the Caballos formation and 2,211 b/d from the Villeta Upper T sandstone. The rate was 2,988 b/d in 20 hr commingled on a jet pump. The company is building location for Costayaco-9, to spud July 14 some 1,958 ft southwest of Costayaco-8, and finalizing test results for Costayaco-7. Next up is Costayaco-10.
Indonesia
GeoPetro Resources Co., San Francisco, said its 12% owned Continental-GeoPetro (Bengara-II) Ltd. subsidiary let a contract for a seismic survey in the Bengara-II block in East Kalimantan, Indonesia.
An undisclosed local seismic contractor will shoot 120 sq km of 3D and 844 line-km of 2D seismic at an estimated acquisition cost of $28.5 million. A large part of the program is in the transition zone of the Bulungan River and Sulawesi Sea. Completion is set for 2010.
The surveys are mainly to delineate the Seberaba oil discovery and Makapan gas-condensate discovery. A large part of the 2D program is intended to further define exploration prospects, including the Galiadap structure, for drilling in 2010-11.
Trinidad and Tobago
Niko Resources Ltd., Calgary, obtained a 26% interest from Centrica PLC and becomes operator of Block 2AB off Trinidad and Tobago, its first block in the country.
The block covers 1,605 sq km near giant Angostura oil and gas-condensate field off northeastern Trinidad. Angostura is in 130 ft of water.
Other interests in Block 2AB are Centrica 29.25%, Voyager Energy 9.75%, and Petroleum Co. of Trinidad and Tobago 35%.
New York
The New York Department of Environmental Conservation issued three permits to a partner of Gastem Inc., Montreal, to drill wildcats to Ordovician Utica shale in west-central New York.
Two of the permits issued to Covalent Energy Corp., Arlington, how called Utica Energy, are for wells near Springfield in northern Otsego County. Gastem USA plans to begin drilling as soon as possible. The wells are to core the Devonian Marcellus shale and log the full vertical interval including the Silurian Oneida formation.
Studies compiled by Gastem’s experienced Utica Geology Team on both successful Utica Energy test wells drilled in 2007 along with related area shale characteristics accumulated over the past year have confirmed the potential of the area, Gastem said.
Oklahoma
A group led by Beard Co., Oklahoma City, plans a secondary recovery project in Dilworth oil field in northern Oklahoma. Participants include Subsurface Minerals Group LLC, RSE Energy LLC, True Energy Exploration LLC, Royal Energy LLC, and Beard Dilworth LLC.
The project, in 17, 18, and 20-28n-1e, Kay County, 15 miles northwest of Ponca City, is expected to recover 3.4-4.4 million bbl at a peak projected rate of 220,000 b/d of fluid, 1-2% oil.
The field is estimated to have produced 70 million bbl of oil since discovery in 1911.
West Virginia
GeoMet Inc., Houston, engaged a divestment firm to market a 50% nonoperated working interest in 147 wells in the eastern part of Pond Creek field in West Virginia.
The company estimated that the 50% interest represented 20% of its net daily production and 10% of its proved reserves as of Dec. 31, 2008. A data room will be open until Aug. 14.
