Drilling/Production news briefs, July 24

American Petroleum Institute ... Syncrude Canada ... TotalFinaElf ... National Petroleum Construction Co. of Abu Dhabi ... Chiles Offshore ... Perforadora Central

Jul 24th, 2000

The American Petroleum Institute said Thursday that US well completions jumped 54% in the second quarter, compared with the same period in 1999. API said completions totaled 6,326, vs. 4,116 in the same period last year, when oil prices were very low. It said in the second quarter, oil well completions rose 95% to 2,133, gas well completions 42% to 2,982, and dry holes 31% to 1,211. The institute also said total exploratory completions rose 14% in the second quarter, and completed development wells were 58% higher. It said total footage drilled in the second quarter was 34,073,000 ft, a 41% increase.

High natural gas prices have boosted production costs above targets set for this year, says northern Alberta oilsands operator Syncrude Canada Ltd., Edmonton. Syncrude says its gas costs have increased 48% this year and are a factor in increasing production costs to $14.16/bbl. (Can.) from a target cost of $12.25. Another factor in increased costs was a 45-day maintenance shutdown and work related to Syncrude�s $6 billion expansion program now under way. The consortium says its 2000 production will be 82-85 million bbl, depending on whether a coker requires maintenance this year. Syncrude produced 81.4 million bbl in 1999 and had set a target of 92.5 million bbl for 2000. Production averaged 225,000 b/d in the second quarter and established a new daily record Apr. 2 of 279,500 bbl.

TotalFinaElf SA subsidiary Elf Petroleum Qatar and National Petroleum Construction Co. of Abu Dhabi earlier this month signed a multimillion dollar contract for engineering, procurement, installation, and commissioning the second phase of expanding the crude oil production facilities at the Al Khalij Block 6 field off Qatar. That second phase will double production capacity to 60,000 b/d. The contract covers three platforms and about 31 miles of 10, 16, and 20-in. pipelines linking the platforms to the Halul processing and loading terminal; a subsea power cable; and modifications to existing facilities. Elf Petroleum Qatar is operator of Al Khalij field.

Chiles Offshore LLC has entered into an agreement to acquire the jack up drilling rig Tonala from Perforadora Central SA de CV of Mexico City. In exchange, Perforadora Central will receive an interest of about 24% in Chiles Offshore. Chiles will assume or refinance about $64.6 million in debt incurred by Perforadora Central to construct the Tonala. It expects to complete the merger this year. The deal is contingent on approval of the US Maritime Administration, consummation of transactions transferring the Tonala to a Delaware corporation that will merge with Chiles, consummation of Chile's initial public offering, and receipt of customary consents and approvals.

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