Repsol-YPF secures Libyan onshore exploration license
Repsol-YPF awarded exploration and production license in western Libya, plus Shell prepares to start work on $800 million oil fields redevelopment in Iran.
The National Oil Corp. of Libya awarded an exploration and production sharing agreement for Block M-4 to a consortium led by Repsol-YPF SA.
The newly designated Block M-4 covers 12,300 sq km of Libya's Murzuq Basin, and was awarded by NOC under an addendum to an existing EPSA contract for Blocks NC-186 and NC-187, let in 1997.
Interest holders in the three blocks are: operator Repsol-YPF 32%, OMV Aktiengesellschaft 24%, Total Fina SA 24%, and Saga Petroleum AS - in the process of being taken over by Norsk Hydro AS - 20%.
The three blocks lie close to Block NC-115, where Repsol-YPF is also operator, and which contains the El Shahara field, which currently produces 150,000 bo/d.
According to OMV, Repsol-YPF aims to raise El Shahara output to 200,000 bo/d "within a short period of time." El Shahara interests holders are operator Repsol-YPF 40%, OMV 30%, and Total Fina 30%.
Four other blocks in the Murzuq Basin are under negotiation by foreign firms. NOC reportedly has designated 80 onshore and offshore tracts for award to foreign companies under EPSA contracts.
TECO Energy Services of Florida let a $100 million contract to Kvaerner Energy AS, Oslo, to build a 315 Mw capacity gas turbine power plant for a facility in Accomack County, Va.
The plant will be brought into operation in two stages: 135 Mw of capacity is due to be put into service by June 2000, with the remaining capacity to be operational by June 2001. Engineering, procurement, and fabrication will take place in Oslo.
Australia LNG Pty. Ltd. signed a memorandum of understanding with Tuntex Gas Corp. of Taiwan for the supply of up to 4 million tonnes/year of LNG beginning in 2003.
The MOU calls for ALNG, which is a six-company venture operated by Woodside Energy Ltd. and Tuntex to complete commercial and technical agreements for the deliveries and regasification for ale of gas to power stations and industrial customers in Taiwan.
ALNG hopes to secure further LNG sales to Tuntex, as the Taiwan company bids to supply gas to a new power station in northern Taiwan.
Total Fina SA acquired a 15% interest in Shell Gas Eastern Inc., which owns an LPG import and storage terminal in Tabangao, The Philippines. This is the only refrigerated butane and propane storage facility in The Philippines, and has a combined storage capacity of 50,000 tonnes.
Total said its acquisition, through its Total Philippines Corp. subsidiary, is intended to enable the company to enter The Philippines and provide logistical support for its other LPG marketing operations in Southeast Asia.
Project Focus: Shell plans $800 million redevelopment offshore Iran
Shell Exploration BV announced its plan to proceed with an $800 million redevelopment of two oil fields offshore Iran under an agreement with the National Iranian Oil Co.
The deal potentially conflicts with the US Iran Libya Sanctions Act (ILSA) of 1996. A Shell official explained that the US State Department was launching an investigation into the Shell/NIOC deal and that the process was expected to take "some time."
On Nov. 14 Shell signed an agreement with the NIOC to redevelop the Soroosh and Nowrooz oil fields, which lie in shallow waters 80 km west of Kharg Island in the Arabian Gulf, in return for repayment of capital outlay plus a remuneration fee paid in crude oil.
Shell has been negotiating with Iran in the period since the US imposed sanctions. The company's understanding, after consulting the British and Dutch governments and the European Union, is that ILSA is not applicable.
The Shell official added that US subsidiary Shell Oil would have no involvement with the NIOC deal, and would not provide either capital or expertise for the project.
Work in Soroosh and Nowrooz was slated to begin immediately, and the project team is already being assembled. Meanwhile, Shell is studying Iranian Caspian Sea exploration prospects in a joint venture with Lasmo PLC, London, and NIOC, holds a crude oil purchasing agreement with NIOC, and has submitted a proposal for the South Pars Phases IV and V developments.
Soroosh and Nowrooz were brought into production in 1967 and 1970, respectively, but were both damaged extensively in 1983 during the Iraq-Iraq war.
Soroosh was shut in but Nowrooz currently produces 5,000 bo/d. Shell aims to begin early production from Soroosh after redevelopment in autumn 2001 and full production from both fields 2 years later.
The fields will be redeveloped jointly: in Nowrooz Shell will install a production platform and separate wellhead and quarters platforms, while in Soroosh it will install two production platforms, two separate wellhead platforms, and a quarters platform. The new production platforms will be tied back to a floating storage unit to enable exports of crude by shuttle tanker.
Soroosh has estimated reserves of 500 million bbl of oil and Nowrooz reserves are estimated at 550 million bbl. Shell intends to raise production from Soroosh and Nowrooz to 100,000 bo/d and 90,000 bo/d, respectively.