Drilling/Production news briefs, July 3

Australia to give a tax break to the North West Shelf project � Record wells planned in New Zealand � Shell awards subsea contract to Kvaerner � Forcenergy installs platform off Alaska

The Australian government is expected to reduce excise charges on crude oil production in order to provide a tax break for the proposed $3 billion (Aus.) North West Shelf expansion. The move is a way of providing $100 million (Aus.) in investment incentives to the expansion under a strategic investment process that will not break international trade rules. The excise reduction will cover some other producers, but the largest beneficiaries will be the North West Shelf joint venturers. Other producers are more affected by the resource rent tax regime, which has been specifically excluded from the North West Shelf project license blocks.

A record 26 wells are planned or already drilled in New Zealand for the year 2000. This compares to only 10 wells drilled in 1999. The previous record of 23 wells was set in 1994, although 10 of those were appraisals drilled from the Maui B platform. The new exploration effort is broadly spread, with 9 companies operating the 26 wells. Eighteen of the wells will be wildcat exploration and include regions not often visited, such as the East Coast basin (Hawkes Bay region of North Island) and the Canterbury basin off the east coast of the South Island. However, the majority will be in the Taranaki basin�on and offshore�which is still the only producing region in the country.

Royal Dutch/Shell Group this week awarded a $15 million subsea system contract to the Anglo-Norwegian engineering and construction business Kvaerner AS. Kvaerner Oilfield Products will provide engineering, procurement, and construction services to install a subsea tieback system on the Garn West field in the Norwegian sector of the North Sea. As part of the contract, Kvaerner will provide two Christmas trees, an overtrawlable manifold, control system, tie-in equipment, and a steel tube umbilical. The equipment will be manufactured at Kvaerner's fabrication facilities in Norway and Scotland. Engineering work will begin immediately, with delivery scheduled in 2001. Garn West will be developed as a satellite field to the Draugen field. The Rogn South field also forms part of this project, providing the potential for an additional three-well development, connected to Garn West.

Forcenergy Inc., Metairie, La., reported it has successfully installed the Oprey platform over its Redoubt Shoal field in Cook Inlet, Alaska. Drilling from the platform is scheduled to begin early in fourth quarter 2000 with the Redoubt Shoal Unit No. 1 well, in which Forcenergy owns all of the working interest. The well will be drilled to 12,500 ft TD and will be the first of two wells to be drilled in the next 6 months. Forcenergy holds 200,000 acres of developed and undeveloped acreage in the Cook Inlet basin, where it has identified numerous prospects and leads. The company's other planned activities for 2000 in Alaska include the drilling of an onshore exploratory well adjacent to Forcenergy-controlled infrastructure and an exploitation well in the West McArthur River unit, along with development activity within the McArthur River field. That field is operated by El Segundo, Calif.-based Unocal Corp.

RIGCO North America LLC agreed to sell the semisubmersible drilling rig Bill Shoemaker to Fred. Olsen Drilling AS for $43.6 million. The semisub will be renamed Bredford Dolphin. The rig is stacked at Long Harbour, Newf., but will be mobilized to the North Sea as soon as possible. With the approval of a US bankruptcy court, the sale was handled through Normarine Offshore Consultants USA Inc.

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