SAKHALIN ISLAND SLATES BIDDING ON LARGE BLOCK IN SEA OF OKHOTSK

Russia's Sakhalin Island tender committee plans a competitive bidding round on tracts in a large area in the Sea of Okhotsk.

Details of bidding terms and available geological and geophysical data are to be presented next month in Denver by tender committee members, including the Russian Federation and regional petroleum associations Sakhalinmorneftegaz and Dalmorneftegeophysica.

Acreage to be offered lies in the East Odoptu offshore area, which covers more than 20,000 sq km in the North Sakhalin basin on Sakhalin Island's northeast continental shelf. Several fields in the East Odoptu area, each with reserves estimated at more than 2 billion bbl of oil equivalent (BOE), are to be excluded from the tender.

The Sakhalin Island tender committee plans to divide East Odoptu into tracts as large as 5,000 sq km. Companies will be allowed to bid on one or more tracts, with work commitments based on a federally approved model contract.

A bidding deadline has not been announced. Also not reported is the type of agreement under which exploration and development is to occur.

RESERVES ESTIMATED

Among acreage to be excluded from the tender are Piltun-Astokhskoye and Lunskoe fields, subject of a feasibility study by the 4M/S international multi-company group led by Marathon Oil Co., and Chaivo and Odoptu fields.

However, prospective oil and gas structures in the East Odoptu area are found as shallow as a few hundred meters to as deep as 5,000 m, and areas to be included in the tender are believed to hold reserves of more than 20 billion BOE, said Wavetech Geophysical Inc., Denver. Reserves include both oil and gas, with some tracts likely to be more as prone than oil.

The North Sakhalin basin's offshore reservoirs appear to be better quality than those onshore. Offshore reserve estimates are based on undrilled structures adjacent to and with features analogous to fields included in 4M/S's feasibility study. About 15 wells have been drilled in East Odoptu in areas not included in the tender, Wavetech estimates.

"There's no doubt in anybody's mind about the prospectivity and enormous reserve potential of the area," Wavetech said. "The only drawback is the extremely difficult conditions in which companies will be operating there.

"Drilling season is 4 1/2 months long. The rest of the time the island is iced in. At times, ice in the area can deeply scour the seabed, so production facilities must be designed to withstand extremely hostile conditions."

With the southern tip of Sakhalin Island about 25 miles from Japan, difficult operating conditions in the East Odoptu are offset in part by the nearness of a possible market.

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