A California operator has proposed another extended reach drilling program to tap offshore reserves from an onshore site on the Santa Barbara Channel coast.
The proposal comes in the wake of an indefinite ban on leasing in state waters off California that Gov. Pete Wilson recently signed into law. It takes effect Jan. 1, 1995 (OGJ, Oct. 3, Newsletter).
Molino Energy Co., Santa Barbara, Calif., submitted a preapplication to Santa Barbara County for an extended reach drilling-production program to develop sweet gas reserves in Molino offshore field.
The project would be only 15 miles from Mobil Exploration & Producing Inc.'s proposed Clearview project.
Mobil last year approved plans for the $1.8 billion Clearview project. It's designed to tap 155 million bbl of oil in the Coal Oil Point extension to South Ellwood field on state leases off Goleta Point with extended reach wells from upland drillsites (see map, OGJ, July 5, 1993, p. 20).
Mobil has cited advances in extended reach drilling from onshore sites to offshore locations as a way to meet heavy local opposition to offshore platforms. That opposition has paralyzed efforts to develop hydrocarbons in state waters since 1987, when the state rejected ARCO's dual platform Coal Oil Point project involving the same leases.
MOLINO'S PLANS
Molino Energy, a joint venture of Santa Barbara companies Gaviota Energy Group and Santa Barbara Facilities Inc., plans to produce as much as 60 MMcfd of sweet gas from Eocene Matilija at an average 10,000 ft true vertical depth in Molino offshore gas field.
The reserves underlie state leases PRC 2920 and PRC 2199. Molino Energy plans to drill as many as six extended reach wells from an onshore site to produce the gas along with condensate and natural gas liquids.
In addition, plans call for construction of a 60 MMcfd design capacity gas processing plant near the drillsite. The sweet gas will be sold directly into a Southern California Gas Co. transmission pipeline on the project property.
The gas processing plant, 28 miles west of Santa Barbara, also will handle 650 b/d of 520 gravity condensate and 16,000 gal/day of NGL.
The liquids will move to Chevron Corp.'s Gaviota oil and as processing complex via a proposed 2 mile pipeline. Chevron will use the condensate for blending with crude from offshore giant Point Arguello field that is processed at the Gaviota plant. Chevron will process Molino NGL and sell the resulting products.
The project will be developed in two phases. The first entails a single test well and production facilities with an initial test capacity of 10 MMcfd to confirm gas reservoir data. Assuming successful production testing, a second phase will proceed with three to five more wells, a permanent NGL separation plant, and the pipeline to the Gaviota plant.
All wells will be drilled with an electric rig. Wells will build to angles of 50-600, extending as much as 2 1/2 miles offshore.
The new state leasing ban exempts development of existing leases and drainage or unitization tracts.
While Mobil faces permitting concerns over its Clearview project, which would involve drilling under a marine sanctuary and much bigger onshore facilities closer to urban development, Molino Energy Pres. John V. Stahl told Santa Barbara County, "We do not want to get caught up in the more complex issues facing the Mobil Clearview project."
Molino Energy is seeking a county ruling that allows development of offshore reserves from an onshore site. It is expected to submit permit applications this month.
"We feel a reasonable interpretation of the county's coastal policies would allow us to proceed under existing regulations," Stahl said.
If the county agrees with Stahl, formerly a consultant to Celeron Corp.'s All-American pipeline system, Molino would be ready to start drilling late next year and production in 1996.
MOBIL CLEARVIEW UPDATE
Meanwhile, once it gains an exemption under the drilling ban, Mobil plans to pursue extensions to the boundaries of its current lease PRC 3242, site of Platform Holly in South Ellwood field, to cover PRC 308 and PRC 309.
Mobil originally intended to file a formal application by yearend to beat the Jan. 1, 1995, deadline of the California Coastal Sanctuary Act of 1994. But with the built-in exemptions, there should not be a problem with waiting until after the Jan. 1 leasing ban deadline because Mobil's project involves existing leases, said Mobil's Shauna Clarke.
Mobil may decide to wait until after January to pursue permits. At that point, the political makeup of the Santa Barbara County board of directors is expected to shift, resulting in a more probusiness tilt than the current one. Currently a 3-2 majority on the board tends to side with environmentalist groups and against oil and gas development.
At the same time, Mobil is studying the political ramifications and seeking legal opinions on the Clearview project. Mobil's project is strongly opposed by Santa Barbara's politically powerful environmental coalitions because of concerns over drilling under the marine sanctuary.
There also remain concerns over the legal status of the former ARCO leases. ARCO had quitclaimed the leases to the state and abandoned its Coal Oil Point project in return for state permission to expand its Long Beach Unit waterflood project.