M. Scherer
Shell Philippines Exploration BV
Manila
E.J.T. Lambers, G.S. Steffens
Shell International Petroleum Co. Ltd.
London
J.R. Phillips
Occidental International E&P Co.
Bakersfield, Calif.
Shell International Petroleum Co. Ltd. negotiated a farmout in 1990 from Occidental International Exploration & Production Co. for Block SC-38 in the South China Sea off Palawan, Philippines, following Oxy's discovery of gas in 1989 in a Miocene Nido limestone buildup.
Under the terms of the farmout agreement, Shell became operator with a 50% share.
Following the disappointing well North Iloc 1, Shell was successful in finding oil and gas in Malampaya 1. Water 700-1,000 m deep, remoteness, and adverse weather conditions have imposed major challenges for offshore operations.
TECTONIC SETTING
The Northwest Palawan block lies on the southeastern margin of the South China Sea and can be structurally characterized as a continental fragment that has been juxtaposed against an island arc setting. It is thought to have occupied a pre-drift position contiguous with the South China mainland prior to the opening of the South China Sea in mid-Oligocene.
The prospective Nido carbonate sequence accumulated on the North Palawan-Reed Bank continental block in the late Oligocene through early Miocene, during the drift phase of the South China Sea. Mid-Miocene-late Pliocene collision of this continental terrane with the Palawan subduction system resulted in uplift of the Palawan block.
The Palawan shelf was tilted to the northwest, and regional compressional and transpressional faulting was superimposed on the original half graben terrane. An extensive Middle Miocene-Pliocene clastic wedge developed from this uplift, burying the Block SC-38 Nido reefs beneath deepwater shales, sandstones, and conglomerates.
NIDO LIMESTONE PLAY
The primary play in the concession area is the Miocene Nido limestone reef and its associated platform carbonate, sealed by overlying deep marine sediments. Hydrocarbon charge is postulated to come from the underlying Paleogene rift sediments in adjacent restricted half grabens.
By the mid-1980s a number of Nido oil and gas discoveries had been made on the shelf immediately east and north of the block. Further offshore, exploration efforts before 1989 were disappointing. Three exploration wells were drilled into the Nido limestone, but these either had no hydrocarbon shows (Enterprise Point-1), minor shows (Destacado-1), or contained a noncommercial gas accumulation (San Martin-1).
Oxy commenced drilling Camago-1 in 1989 with an anchored drillship in 736 m of water. Several operational difficulties had to be overcome.
Severe mud losses with accompanying gas influx occurred in cavities or fractures in the Nido limestone, necessitating the use of more than 10,000 sacks of cement to combat the losses.
Operating problems also occurred at the seabed due to gas hydrate formation at the blowout preventer equipment. The well was drilled to a total depth of 3,404 m below derrick floor, penetrating some 650 m of reef section with a 370 m gas column.
Electric logs indicated hydrocarbon saturation to TD, but the nature of the porefill in the lower section was unknown. The matrix porosity was low, on average 9%.
Shell Philippines Exploration BV drilled North Iloc-1 (TD 2,770 m below derrick floor) in 1991 as the first well under the farmout from Occidental. The well tested a reef about 28 km north of Camago-1.
The penetrated Nido section was generally tight, but periodic lost circulation indicated local fractures or solution channels. The limestone section was water bearing, probably due to either lack of seal in the overlying section (which forms a broad syncline with a relatively high sand content) or poor charge to the area (migration shadowing).
MALAMPAYA DISCOVERY
Shell then drilled Malampaya-I (TD 3,613 m below derrick floor) on a reef 9 km north-northeast of Camago-1.
Shell had acquired and processed, within 5 months in 1991 prior to drilling, a 140 sq km 3-D seismic survey over the Malampaya-Camago reefal complex to provide for best possible drillsite selection.
The location's 346 m water depth required use of a dynamically positioned drillship. The well was spudded in early December 1991 and suspended after testing in early June 1992.
As a direct consequence of operating in very deep water, problems related to the BOP control system resulted in 2 months' downtime.
Mud losses occurred upon entry into the Nido limestone, but due to innovative loss curing techniques, the 9-5/8 in. casing could be set substantially deeper than originally planned, thereby allowing penetration of the entire reef.
The well penetrated the Nido limestone at 2,956-3,494 m below derrick floor, with a gas column of 394 m, average gas saturation of 35%, overlying a 106 m oil column with 71% average oil saturation (excluding 38 m of very low porosity limestone at the base of the reef.
Average matrix porosities are about 21%, considerably higher than Camago-1. Through extrapolation of the oil and water pressure gradients, the oil-water contact was placed at the base of the limestone section.
Production tests at the oil zone, after acidization, produced 29 gravity oil at an aggregate rate of 12,623 b/d. An industry first for the water depth and for using a drillship in dynamically positioned mode, the gas test produced 28.9 MMscfd through a 11/64 in. choke with 1,623 b/d of condensate.
APPRAISAL STUDIES
A major uncertainty associated with the calculation of potential oil and gas reserves in the reefs drilled is the distribution of the reservoir properties, highlighted by the different average carbonate porosities found in Camago-1 (9%) and Malampaya-1 (21%).
Reservoir studies are in progress, using mainly material from 29 rotary sidewell cores, spaced throughout the Malampaya reef section. Attempts will be made to model reservoir variations using the 3-D seismic data.
Another uncertainty is the lateral extent of the accumulations. From mapping the 3-D data set it appears that Camago and Malampaya may form one structure.
This, together with the identical gas gradients that were measured in the two wells, might suggest that an oil leg could be present below the gas in Camago-1. Unfortunately, the low porosity nature of the Camago limestone within the postulated oil column precludes a definitive interpretation regarding the hydrocarbon type present.
Possible communication between the reefs, however, has yet to be investigated, as seismic data indicate that in the saddle between buildups the Nido limestone is thin and may only consist of the fight basal carbonates found in Malampaya-1.
To further explore the prospect and produce a reliable estimate of reserves, two appraisal wells are planned during the current drilling season. The first appraisal well, Malampaya-2, was spudded in early November 1992 and reached TD at 3,550 m in February 1993.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
