Kerr-McGee makes two new field discoveries in China's Bohai Bay

By OGJ editors

HOUSTON, June 18 -- Kerr-McGee Corp. has made two oil discoveries on Block 04/36 in Bohai Bay off China. The discoveries were made by two Kerr-McGee operated exploration wells—CFD 11-3-1 and CFD 16-1-1.

The CFD 11-3-1 exploration well was drilled in 90 ft of water on a 4-way structural closure. The well, which is 6 km east of CFD 11-1 field and 10 km northeast of CFD 11-2 field, penetrated 45 gross ft of log-calculated oil-bearing Guantao sandstone reservoir. The oil found was high quality and 32-38° gravity.

Meanwhile, the CFD 16-1-1 exploration well, which lies in 74 ft of water, penetrated multiple zones of Minghuazhen formation that had log-calculated oil-bearing sandstones totaling nearly 70 gross ft. The well also penetrated 20 gross ft of Dongying formation that logs calculated as oil-bearing. Oil tested from the well, which is 15 km southwest of CFD 11-1 field, was 16-21° gravity.

Because the oil reservoirs found with these latest wells are similar to oil-bearing sands that have been drill stem tested (DST) in numerous nearby wells on Block 04/36, additional DSTs were unnecessary, said block partner Sino-American Energy Corp., a unit of Houston-based Ultra Petroleum Corp.

"We expect to begin appraisal drilling to evaluate potential commerciality later this year," said Kenneth Crouch, Kerr-McGee senior vice-president, oil and gas operations.

"Our 'hub and spoke' development strategy, with the CFD 11-1 field development as the 'hub' and the CFD 11-2 field, along with new discoveries, being satellite field 'spokes,' is coming together just as we envisioned (see map, OGJ, Dec. 17, 2001, p. 58)," said Michael D Watford, Ultra's chairman, CEO, and president. "These prospects, which are analogous to the fields we've discovered, will give us the opportunity to add additional, highly profitable, low-cost, satellite fields to our Bohai portfolio over the next several years," Watford added.

In May, Kerr-McGee approved development of its CFD 11-1, CFD 11-2, and CFD 2-1 fields on Block 04/36 using a centrally located floating production, storage, and offloading vessel (OGJ, May 27, 2002, p. 9).

Kerr-McGee operates Block 04/36 with an 81.8% foreign contractor's interest. The remaining interest is held by Sino-American.