Upstream News

Eni makes gas find offshore Mozambique

ENI SPA said October 27 that the recently discovery of gas made in the exploratory prospectus of Mamba South 1, Area 4 offshore Mozambique, is about 50% larger than what was announced October 20.

On October 20, the company announced that the natural gas discovery well encountered a total of 212 meters of continuous gas pay in high-quality Oligocene sands.

During deepening of the well, it encountered a new separated pool that contains a potential of up to 7.5 Tcf of gas in place in clean sands from the Eocene age. The new sequence has about 90m of gross gas pay and has also been successfully cored.

The well will be now drilled to the total depth of about 5000 meters after which Eni will move to drill the second commitment well, Mamba North 1, located about 22km north of Mamba South 1 location.

It is expected that the unprecedented potential of Tertiary Play existing in area 4 will be further defined in the forthcoming appraisal campaign.

Eni has already begun the front end activities to timely market the gas both internationally and locally.

Eni considers that this discovery can lead to a potential of up to 22.5 Tcf of gas in place in the Mamba South Area.

The Mamba South 1 discovery well is located in water depths of 1585 meters approximately 40 km off Cabo Delgado coast, in the Northern offshore of Mozambique. This is the first exploration well in Area 4. Results exceed pre-drill expectations and confirm the Rovuma Basin as a world-class natural gas province.

The Mamba South discovery marks a new milestone for Eni since the resource potential assessed with the first exploration well makes it the largest operated discovery in the company's exploration history.

Eni is the operator of Offshore Area 4 with a 70% participating interest. Co-owners in the area are Galp Energia (10%), KOGAS (10%) and ENH (10%, carried through the exploration phase).

Overall, Eni seems to be performing well in the upstream segment, noted Jefferies & Co. Inc. in a report to investors October 27. "Eni reported good 3Q11 results, beating consensus EBIT by 10%. But more importantly the company also confirmed an earlier Galp announcement that its current Mozambique drilling campaign has proved up a very large gas field, which will almost certainly lead to an LNG development towards the end of the decade. This confirms the substantial improvement of Eni's upstream business and adds NPV, hence our valuation upgrade," noted the analysts.

A net income of €1.8 billion was reported, a 21% beat to consensus. Exploration and production EBIT was €4.1 billion, beating estimates by 11%.

Production was 1.47 million boe/d, in line with expectations, falling 12% year-over-year due to Libya (but flat excluding one-off factors), but the company said it expects Libyan production to come back in full in 12 months.

Statoil doubles estimates for Aldous field

Statoil, together with partners Petoro AS, Det norske and Lundin, has confirmed significant additional volumes in its appraisal well in the Aldous Major South discovery (PL265) in the North Sea.

The results of appraisal well 16/2-10 have increased production license PL265 estimates to between 900 million and 1.5 billion barrels of recoverable oil equivalent.

This is a doubling of the previously announced PL265 volumes of between 400 and 800 million barrels of oil equivalent.

It has previously been confirmed that there is communication between Aldous in PL265 and Avaldsnes in PL501, and that this is one large oil discovery.

"Aldous/Avaldsnes is a giant, and one of the largest finds ever on the Norwegian continental shelf. Volume estimates have now increased further because the appraisal well confirms a continuous, very good and thick reservoir in Aldous Major South," said Tim Dodson, executive vice president for Exploration in Statoil.

Final data show that the oil column in appraisal well 16/2-10 is approximately 60 meters. These data also confirm that the reservoir is of the same, excellent quality as in the Aldous Major South discovery well 16/2-8. This is the main reason for the substantial upward revision of PL265 volumes.

The Aldous/Avaldsnes discovery extends over a large area of approximately 180 square kilometers, and there is considerable variation in both reservoir thickness and oil column height in the structure. Additional appraisal wells will be drilled in both licenses.

Statoil will await the results from these wells before providing updated and more accurate volume estimates for the combined discovery.

After completion of the appraisal well, the Transocean Leader drilling rig will move to the Troll field in the North Sea.

Aldous Major South is situated in production license PL265 in the North Sea, and appraisal well 16/2-10 was drilled 4.2 kilometers north of the 16/2-8 discovery well.

Statoil is the operator and has a 40% interest in PL265. The partners are Petoro AS (30%), Det norske oljeselskap ASA (20%) and Lundin Norway AS (10%). Well 16/2-10 is the seventh exploration well in PL265. The license was awarded in the North Sea Awards 2000.

Avaldsnes is located in production license PL501. Lundin Norway AS is the operator with a 40% interest, while partners Statoil and Maersk have 40% and 20% interests, respectively.

BP makes another gas discovery in Egypt's Nile Delta

BP Egypt has made a gas discovery in the North El Burg offshore concession, Nile Delta. Salmon is the third gas discovery BP has made in the concession following Satis-1 and Satis-3 Oligocene deep gas discoveries.

Salmon, drilled by IEOC, the affiliate of ENI in Egypt, on behalf of concession operator BP, is located 50 kilometers to the north of Damietta. The wireline logs and pressure readings confirmed the presence of gas in two shallow Pleistocene intervals. The well was drilled by Scarabeo 4 rig in water depths of 87m and reached a total depth of 1600m. Further appraisal work to evaluate the resources is underway.

Hesham Mekawi, president and general manager of BP Egypt stated, "The success of Salmon highlights the great potential of the shallow reservoirs within the Nile Delta, and helps unlock additional resources in surrounding acreage. It demonstrates the ongoing cooperation with the Ministry of Petroleum to deliver new gas discoveries and incremental supply to meet the future growth of the gas business in Egypt."

The parties to the North El Burg Offshore Concession agreement are: BP (operator 50%) and IEOC (50%).

Chevron begins Gulf of Thailand production, adds to Australian portfolio

In late October, Chevron Corp. (NYSE: CVX) commenced natural gas production in the Gulf of Thailand and made natural gas discoveries offshore Western Australia. First, on Oct. 24, Chevron said that its Thailand subsidiary commenced natural gas production from the Platong II project in the Gulf of Thailand.

The US$3.1 billion project is expected to ramp up production to 330 million cubic feet per day. The natural gas will feed growing demand for energy in Thailand, increasing the country's domestic production by more than 10%, and boosting Chevron's net natural gas production from the Gulf of Thailand by more than 20%. The project is also expected to produce 18,000 barrels per day of natural gas liquids.

George Kirkland, vice chairman, Chevron Corp., said, "Asia is becoming the center of global energy demand growth. Platong II is one of Chevron's many developments in the region that will allow us to supply safe, reliable, and affordable energy to meet this need."

Melody Meyer, president, Chevron Asia Pacific Exploration and Production Company, said, "From the start-up of the first natural gas field in the Gulf of Thailand 30 years ago, to Platong II, Chevron has worked in close partnership with the Kingdom to develop the energy industry, building a foundation for energy security and long-term economic development."

Chevron's Thailand subsidiary is operator and holds a 69.9% interest in Platong II, with the remaining interest held by Mitsui Oil Exploration Co. Ltd. (27.4%) and PTT Exploration and Production Public Co. Ltd. (2.7%). The development, located in shallow water 120 miles (200 kilometers) from Thailand's southern coastline, is one of Southeast Asia's largest offshore structures. New facilities, which will be connected to the current processing infrastructure at the Platong Field, include a central processing platform, pipelines, four initial wellhead platforms, and living quarters for 200 people.

Later, on October 27, Chevron noted that its Australian subsidiary made natural gas discoveries in the Carnarvon Basin offshore Western Australia.

The Acme West-1 well encountered approximately 377 ft (115 m) of net gas pay, while Acme West-2 well encountered 184 ft (56 m) of net gas pay. The two wells, located in the WA-205-P permit area, add additional resources adjacent to last year's Acme discovery.

The Acme West-1 and Acme West-2 exploration discovery wells are approximately 93 miles (150 km) from Onslow, and were drilled in 3,035 ft (925 m) of water. Acme West -1 was drilled to a total depth of 15,558 ft (4,742 m) and Acme West 2 was drilled to 14,590 ft (4,447 m).

Kirkland commented, "This is our 11th exploration discovery in a 24-month period. Our exploration success and ability to continually add to our Australian portfolio supports our long-term plan to position Chevron as one of the world's leading LNG suppliers."

"The discoveries are expected to help underpin potential expansion opportunities at the Wheatstone liquefied natural gas (LNG) hub, which moved to the construction phase in September 2011.

Meyer commented, "We are realizing the benefits of our investment in an extensive drilling campaign and the opportunities we have as a leading lease holder in the Carnarvon Basin."

Chevron Australia is the operator of the WA-205-P permit and holds a combined 67% interest, while Shell Development (Australia) holds the remaining interest.

More Oil & Gas Financial Journal Current Issue Articles
More Oil & Gas Financial Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com