Chevron encounters 220 ft of net gas pay with latest offshore Australia find

An Australian subsidiary of Chevron Corp. has made another natural gas discovery in the Greater Gorgon Area, located in the Carnarvon Basin, offshore Western Australia.

The find follows on the heels of a previous natural gas discovery in the area in July of this year when the Pontus-1 exploration well encountered approximately 97 feet of net gas pay.

In this latest discovery, the Satyr-4 exploration discovery well confirmed approximately 220 feet (67 meters) of net gas pay. The well is located in the WA-374-P1 permit area approximately 75 miles (120 kilometers) northwest of Barrow Island, off the Western Australian coast. The well was drilled in 3,570 feet (1,088 meters) of water to a total depth of 15,023 feet (4,579 meters).

Melody Meyer, president, Chevron Asia Pacific Exploration and Production Company, said, "Satyr-4 further underscores Chevron's continuing success in this prolific block and supports our long-term growth plan for the Gorgon Project, and our goal to be a leading LNG supplier to the Asia Pacific region."

Chevron Australia is the operator of WA-374-P with a 50% interest while Shell Development (Australia) Pty Ltd and Mobil Australia Resources Company Pty Limited each hold 25%.

Marathon Oil enters Ethiopia

Marathon Oil Corp. subsidiary, Marathon Ethiopia Limited BV, has entered into a sale and purchase agreement with Agriterra Ltd. to acquire its 20% working interest in the South Omo concession in Ethiopia. The companies expect to close the transaction, subject to completion of the necessary Ethiopian government approvals, before the end of the year.

Tullow Oil is the operator of the South Omo concession with a 50% working interest, and Africa Oil holds the remaining 30% working interest. The concession has an area of approximately 7.2 million gross acres (29,465 gross square kilometers). An exploration well is anticipated to spud in South Omo in the fourth quarter of 2012.

In consideration for the assignment of these interests, Marathon Oil will pay Agriterra $40 million, before closing adjustments, with an additional payment of $10 million due upon Marathon Oil's participation in a declaration of a commercial discovery.

"This acquisition is a strong addition to Marathon Oil's position in the Tertiary rift trend onshore East Africa and is on trend with the recent Ngamia-1 discovery in Kenya," said Annell Bay, Marathon Oil vice president, Global Exploration.

Gazprom Neft, TNK-BP report first oil from Messoyakha field

Gazprom Neft and TNK-BP reported that first oil has been produced by the pilot project at the Vostochno-Messoyakhskoe field. The inflow received from the first two development wells points to the field's high potential. The project is being implemented by Messoyakhaneftegaz, Gazprom Neft and TNK-BP's joint venture controlled by the two companies on a parity basis.

A more accurate assessment of reservoirs and well flow rates will become available in 2014 upon completion of a series of production tests. According to the preliminary estimate, production from the field's main reservoir will peak by 2022-2023 at 10 million tons of oil and 5 billion cubic meters of gas.

In 2012, the total investment into development of the Vostochno-Messoyakhskoe field reached about $140 million. The work completed at the field included the drilling of four E&A wells and two clusters of pilot wells. Next year, Gazprom Neft and TNK-BP will boost project investments to $240 million, continue exploration and appraisal activities, drill new wells under the pilot production program, prepare design documents and construction sites, and begin infrastructure development. In addition to that, Gazprom Neft, the project's operator, has joined forces with Halliburton to come up with a conceptual framework for the development of the Messoyakha fields group. Full-scale production in these areas will start upon completion of the construction of the Zapolyarye–Purpe trunk oil pipeline.

"By creating a new production cluster in the north of Yamal, Gazprom Neft is consistently implementing its strategic production increase plans. The Messoyakha pilot project will help us get a clearer picture of the reserves and area profiles in preparation for development of one of the country's largest oil and gas fields. I am positive that, with requisite state support, Gazprom Neft and TNK-BP will continue to invest into development of the northern territories seeking to begin full-scale production at Messoyakha," said Vadim Yakovlev, Gazprom Neft First Deputy General Director.

"Commencement of Messoyakha pilot production is a critical stage in long-term development of Yamal as a new petroleum province. The expertise and technologies contributed to the project by the TNK-BP/Gazprom Neft partnership have already yielded the first important results. Continued success of the Messoyakha project depends on efficient interaction with the state in creating the necessary transportation and production infrastructure and a favorable tax regime to assure considerable increase of hydrocarbon production in this region of strategic importance for the Russian oil and gas industry," noted Mikhail Slobodin, TNK-BP executive vice president, Strategy and New Business Development.

CNOOC Ltd. sees production from New Beibu Gulf oil fields

CNOOC Ltd. announced October 19 that two new oil fields, Weizhou 11-2 and Weizhou 6-9/6-10, successfully commenced production.

Weizhou 11-2 oil field, located in Beibu Gulf in the South China Sea with an average water depth of about 35.4 meters, currently has four producing wells. This oilfield was designed to share the existing facilities of Weizhou oil fields group in production to achieve the low-cost oil field development and hit its peak production of approximately 3,960 barrels per day in 2012.

Weizhou 6-9/6-10 oil field is located in Beibu Gulf in the South China Sea with an average water depth of about 32.5 meters. The development and production operations of this oil field primarily rely on the facilities of its surrounding oil fields. Currently with nine producing wells, Weizhou 6-9/6-10 is expected to hit its peak production of approximately 5,870 barrels per day in 2013.

Weizhou 11-2 and Weizhou 6-9/6-10 are both independent oil fields. The company holds 100% interest and acts as the operator of the two oil fields.

Confidence returning to UK offshore sector

Drilling activity is reviving the UK offshore sector, according to the latest North West Europe Review by Deloitte's Petroleum Services Group.

The number of wells drilled in the UK sector during the first nine months of this year is only 6% below the total for all of 2011.

Additionally, the number of transactions involving UK offshore oil and gas fields is already 5% above last year's count. And the number of fields granted development approval in the UK this year has surpassed the total in 2011.

Although there was a decrease in the number of exploration and appraisal wells drilled in 3Q 2012 compared to 2Q 2012, the underlying trend is of greater stability, according to Graham Sadler, managing director of Deloitte's Petroleum Services Group.

"We're still not seeing pre-recession levels of activity, but there's a definite feeling of some confidence coming back to businesses operating in the UK continental shelf," he said.

New field allowances introduced by the government this year, including the shallow water gas allowance, are starting to deliver benefits, and the government's plans to create more certainty around decommissioning tax relief should stimulate further interest in the sector.

"Along with a sustained high oil price, smaller and technically challenging fields continue to be a much more attractive investment proposition than might have otherwise been the case," Sadler said.

Seven new UK fields are online this year so far, compared to five in 2011.

Drilling activity fell by 44% in offshore Norway during the third quarter compared to the same period last year, the review found, although activity has largely focused on appraising existing discoveries and exploiting major fields as opposed to new well exploration and appraisal.

No new field development approvals were issued granted by the Norwegian government during the third quarter, and there were no new production starts in this period.

TAQA, Antrim discover North Sea oil

Antrim Energy Inc. an international oil and gas exploration and production company headquartered in Calgary, Canada, has released preliminary results of drilling operations from well 211/21-N94 (the Contender Well) in UK Northern North Sea Block 211/22a Contender Area (the Contender Block, Antrim interest 8.4%).

The Contender Well has been drilled to a total drilling depth of 16,903 feet (11,550 feet true vertical depth) by operator TAQA Bratani Ltd. (TAQA) from the TAQA-operated North Cormorant production platform. Preliminary estimates indicate a net oil pay in excess of 60 feet was encountered in the Tarbert member of the Jurassic Brent sandstones, with greater than expected porosity and hydrocarbon saturation. The total Brent oil column exceeded 112 feet, with no water bearing sands identified. Further reservoir evaluation is being undertaken. Should the discovery be commercial, the field will be developed under the name ‘Cormorant East' and production will be processed through the North Cormorant platform.

Under the terms of a farmout agreement (as previously announced on August 25 2011), Antrim retained an 8.4% interest in the Contender Block. Other interests are TAQA 60%, Dana Petroleum (E&P) Ltd. 20%, First Oil Expro Ltd. 7.6% and Bridge Energy Enterprises Ltd. 4%. With the successful drilling of the Contender Well, TAQA also earned a 35% interest in the adjacent Block 211/22a Kerloch Area, with Antrim retaining a 13.65% interest.

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