Monthly Archives: October 2014

Eni Finds 1B Barrels of Oil in Congo’s Pre-Salt Play

MILAN, Oct 30 (Reuters) – Italian oil and gas group Eni on Thursday said it had found around 1 billion barrels of oil equivalent in its shallow-water Marine XII block off the coast of Congo, according to a statement.

The discovery was made through the Minsala Marine 1 well drilled in 75-metre deep water, striking light oil trapped beneath a layer of salt and passing through a hydrocarbon column 420 metres thick.

Eighty percent of the discovery is crude oil.

In a statement, ENI Chief Executive Claudio Descalzi said exploration work in Congo and Gabon had already discovered about 4 billion barrels of oil equivalent in place.

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Official: Algeria To Hold Oil And Gas Auction Within Weeks

ALGIERS, Oct 29 (Reuters) – Algeria is preparing a new auction of oil and gas blocks, an official said on Wednesday, after the North African country awarded just four of 31 fields last month in the first attempt to lure foreign investors since 2011.

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Algerian officials described last month’s result as acceptable but analysts said the OPEC member needed to do more to improve conditions and attract more foreign oil operators.

“We are preparing a new bidding round. It will be launched within weeks,” Sid Ali Beta, head of hydrocarbons agency ALNAFT which oversaw the bidding, told reporters at the signing of contracts with the winners of the Sept. 30 auction.

He gave no details.

One of the winners, Italy’s Enel, plans to invest $700 million at its four oil and gas blocks in Algeria in the next five to six years, Marco Arcelli, the company’s executive vice president for upstream gas, said at the signing ceremony.

The Italian utility’s consortium with Dragon Oil won two new blocks, adding to two existing ones.

Beta said the first phase of operations at the four blocks will include drilling around 11 wells at an estimated cost of $150 million.

Hydraulic Stimulation Program Commences at Redland-1 Well in Queensland

Icon Energy Limited reported Wednesday that the ATP 855 Joint Venture has completed the Hydraulic Stimulation program at the Etty-1 well in the Cooper Eromanga Basin in Queensland, Australia.

The flow testing of the Etty-1 well will be conducted over the coming weeks and more information will be announced upon a stabilized flow rate from the well.

Condor Energy Services has now moved the hydraulic stimulation equipment to the Redland-1 well location and the hydraulic stimulation program commenced Oct. 28.

As the stimulation and testing program in ATP 855 progresses over the coming weeks, we will provide timely updates to the market.

Eni Opts Out of Heron Area in Timor Sea, Keeps 50% Stake in Blackwood Area

MEO Australia Limited disclosed Wednesday that Eni Australia Limited (Eni) has elected not to drill an additional well on the Heron structure and will therefore withdraw from the Heron Area of NT/P68, approximately 186 miles (300 kilometers) northwest of Darwin in the Timor Sea. As a consequence, MEO will regain a 100 percent Participating Interest in the Heron Area. Eni has also elected not to increase its Participating Interest in the Blackwood Area and has advised that it intends to retain a 50 percent Participating Interest. The Parties have agreed a process to negotiate certain amendments to the Blackwood Area agreements to define the basis of the Joint Venture’s future activities on Blackwood.

The proposed amendments include agreement on the scope and commencement of Blackwood Development Studies, as required by the NT/P68 Farm-in Agreement, to determine whether the resources contained in the Blackwood Area are commercial to develop. The Parties will also seek to agree a strategy for Blackwood Area permit management beyond the current Permit expiry April 26, 2015.

MEO’s CEO and MD Jürgen Hendrich, commented on the announcement:

“We are pleased to regain a 100 percent participating interest in what we consider to be substantial discovered and prospective resources at Heron. MEO looks forward to assuming Operatorship of the Heron Area, undertaking a resource assessment and determining a future direction for realising shareholder value from these resources.”

Minister: Croatia Gets Six Bids For Adriatic Oil And Gas Exploration

ZAGREB, Nov 3 (Reuters) – Croatia has received six bids in an international tender for oil and gas exploration areas in the Adriatic Sea and will choose the best ones by the end of the year, Economy Minister Ivan Vrdoljak said on Monday.

“We are satisfied, we’ve received bids from big, serious companies,” Vrdoljak told reporters. The government sees oil exploration as a key project for the newest European Union member, whose economy has been stuck in recession since 2008.

Croatia, an EU member since July last year, said earlier this year it expected investment worth some $2.5 billion over the next five years in exploration activities.

Local media have earlier reported oil majors like Exxon , Shell, Chevron and Total as being interested but Vrdoljak declined to name any of the bidders.

The tender, which closed on Monday after running for seven months, comprised 29 block areas for exploration and future exploitation, eight in the north and 21 in central and southern Adriatic. The size of one block ranges from 1,000 to 1,600 square kilometres.

Each bidder was allowed to compete for an unlimited number of blocks. The six submitted bids were for 15 blocks altogether, Vrdoljak said. The government plans to sign concession agreements by the spring 2015.

The exploration concession will be awarded for five years with a possibility to extend it for another year, while exploitation concessions are planned for 25 years.

According to the preliminary data, gas reserves are more likely to be found in the north while crude deposits are expected in the southern part of Croatia’s Adriatic, where the seabed is deeper.

Local environment groups say oil drilling could destroy the Adriatic and hurt Croatia’s lucrative tourism industry. The government said the concessionaires would be required to respect the highest international environmental protection standards.

Croatia currently covers about 65 percent of its annual gas consumption of 3 billion cubic metres from its own fields offshore. It hopes to be able to meet the entire local demand from the domestic wells following the new exploration efforts.

Croatia is currently also running an international tender for onshore oil and gas exploration which expires in February.

Horizon Reports Oil Discovery at WZ 12-10-2 Well in Beibu Gulf Block 22/12

Horizon Oil Limited disclosed Monday that drilling of the second of a two exploration well program in the Beibu Gulf Block 22/12 offshore China has been completed. The WZ 12-10-2 well is located is located in 118 feet (36 meters) of water 1 mile (1.6 kilometers) east northeast of the existing WZ 12-8W platform and about 2 miles (3.2 kilometers) west southwest of the recently drilled WZ 12-10-1 oil discovery. The well spudded at 2300 hrs China Standard Time Oct. 3 with the jackup HYSY 935 — formerly COSL 935 (300′ ILC).

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The current exploration well, WZ 12-10-2, discovered high porosity net oil pay of around 36 feet (11 meters) true vertical depth in the Jiaowei T42 formation. The well was drilled to a total measured depth of 5,216 feet or 1,590 meters (4,534 feet or 1,382 meters total vertical depth subsea or TVDSS), where granite basement was intersected, as prognosed.

Wireline evaluation logging programs, including pressure measurements, fluid sampling, formation imaging and sidewall coring, have been run and confirmed the oil pay in the Jiaowei T42 reservoir has favorable reservoir porosities of about 31 percent and oil gravity of approximately 29 degree API.

The well has been plugged and abandoned and the rig will be released shortly. The 2014 Beibu exploration drilling program has been successfully completed with no safety or environmental incidents.

Further work will now be undertaken to evaluate both the extent of the structure and reserves, and assess the most effective route for integrating these additional oil resources into the existing Beibu project.

Participating interests in the Beibu Gulf Project are:

  • Exploration
    • Horizon Oil (Beibu) Ltd and Petsec Petroleum LLC (wholly owned by Horizon Oil Limited) – 55 percent
    • CNOOC – 0 percent
    • Roc Oil (China) Company – 40 percent
    • Oil Australia Pty Ltd. (Majuko Corp.) – 5 percent
  • Production and Development
    • Horizon Oil (Beibu) Ltd. and Petsec Petroleum LLC (wholly owned by Horizon Oil Limited) – 26.95 percent
    • CNOOC – 51 percent
    • Roc Oil (China) Company – 19.6 percent
    • Oil Australia Pty Ltd. (Majuko Corp.) – 2.45 percent

Horizon Oil’s CEO, Brent Emmett, commented:

“This is a very pleasing result, being the second discovery in a two well exploration campaign. Horizon Oil’s view is that it is likely that the WZ 12-10-2 oil accumulation will be able to be developed from the WZ 12-8W platform development facilities, thereby taking advantage of the existing development facilities. In the same way, the WZ 12-10-1 discovery will support the future integration of the proposed WZ 12-8-E development. As a result, we expect the new discoveries to deliver favorable economics and to extend the life of the Beibu Gulf project.

Horizon Oil would like to acknowledge that these discoveries are the result of very productive collaboration and cooperation between our joint venture and CNOOC-Zhanjiang (CLZ). The positive results we have been able to report during this program are a direct result of that successful team work.”

Lundin Strikes Oil in Barents Sea

Sweden’s Lundin Petroleum reported Tuesday that it has found a significant amount of oil and gas with its Alta well in Norwegian production license 609 in the Barents Sea. Exploration well 7220/11-1, located on the Alta prospect in the Barents Sea some 13 miles northeast of the Gohta discovery well, was designed to prove the presence of hydrocarbons in reservoir rocks of the Permo-Carboniferous and Triassic age. The well found a gross hydrocarbon column of 187 feet that contained 36 feet of gas and 151 feet of oil in carbonate rocks of good reservoir quality. Two production tests (DSTs) were performed in the oil zone, producing at a maximum rate of 3,260 barrels of oil per day and 1.7 million cubic feet of gas per day through a 36/64-inch choke constrained by rig facilities. Lundin said that the preliminary evaluation of the gross recoverable oil and gas resource range in the Alta accumulation is estimated at 125 to 400 million barrels of oil equivalent, with the oil resource range is estimated at 85 to 310 million barrels of oil. Lundin Norway holds 40-percent interest in PL609. Partners are RWE Dea Norge AS and Idemitsu Petroleum Norge AS with 30 percent each.

Seabird’s Hawk Explorer Lands $12M Seismic Survey Contract in Asia Pacific

Norwegian seismic survey firm SeaBird Exploration Plc (SeaBird) disclosed Thursday that the firm’s Hawk Explorer vessel has received a letter of intent for a 2D seismic survey in Asia Pacific region. The survey will cover approximately 9,320 miles (15,000 kilometers) and will have an estimated value of $12 million. The project is expected to start in mid-December and will have an estimated duration of 120 days.

SeaBird is a global provider of marine acquisition for 2D/3D and 4D seismic data, and associated products and services to the oil and gas industry. SeaBird specializes in high quality operations within the high end of the source vessel and 2D market, as well as in the shallow/deepwater 2D/3D and 4D market. Main focus for the company is proprietary seismic surveys (contract seismic). Main success criteria for the company are an unrelenting focus on Health, Safety, Security, Environment and Quality (HSSEQ), combined with efficient collection of high quality seismic data.

Lundin Spuds Gobi-1 Well in Natuna Sea with Hakuryu-11 Jackup

Lundin Petroleum AB (Lundin Petroleum) announced Monday that it has commenced exploration drilling in the Gurita Production Sharing Contract (PSC), Natuna Sea, Indonesia.

Gobi-1 is a wildcat oil exploration well designed to test the hydrocarbon potential of Oligocene and Early Miocene stacked fluvial reservoirs in a 3-way fault dependent structure in the Jemaja Basin.  

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Lundin Petroleum estimates the Gobi prospect to have the potential to contain unrisked, gross, prospective resources of 25 million barrels of oil equivalent (MMboe). The planned total depth is 7,874 feet (2,400 meters) below mean sea level (MSL) and the drilling and evaluation is expected to take approximately 30 days using the Hakuryu-11 (425′ ILC) jackup. Lundin Petroleum, through its wholly owned subsidiary Lundin Gurita BV, is the operator and has a 90 percent working interest in the Gurita PSC. Partner is Nido Petroleum Limited with 10 percent working interest.

Cairn Well Makes ‘Substantial’ Oil Find Offshore Senegal

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Independent producer Cairn Energy reported Tuesday that its FAN-1 exploration well, offshore Senegal, has made a “substantial” oil discovery. The well is located in 4,680 feet water depth and lies approximately 60 miles offshore in the Sangomar Deep block. It was drilled to a target depth of 16,165 feet and targeted several stacked deep-water fans. Cairn said that preliminary analysis of results from the well indicated a 95-foot oil-bearing reservoir in Cretaceous sandstones.

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No water contact was encountered in a gross oil-bearing interval of more than 1,640 feet. Initial estimates for the well range from 250 million to 2.5 billion barrels, with oil types having gravities that range from 28 degrees API to 41 degrees API. Cairn has no plans for immediate well testing, but further evaluation will now be required to calibrate the well with existing 3D seismic data in order to determine future plans.

Once completion operations are finished on the FAN-1 well, the Cajun Express (DW semisub) rig used to drill it will move to complete a second well – SNE-1 – where the top hole has already been drilled pending re-entry. This Shelf Edge prospects is targeting a dual objective in 3,600 feet of water, also in the Sangomar Deep block. Cairn has a 40-percent working interest in three blocks offshore Senegal, including Sangomar Deep, Sangomar Offshore and Rusifique.

ConocoPhilips holds a 35-percent working interest in the blocks, while FAR Ltd and Petrosen hold 15 percent and 10 percent respectively. Cairn CEO Simon Thomson commented in a company statement: “The oil discovered in the FAN-1 prospect is an important event for Senegal and the joint venture. “We have encountered a very substantial oil bearing interval which may have significant potential as a standalone discovery. Furthermore, this result materially upgrades the prospectivity of the block with a proven petroleum system and a number of deep fan and shelf prospects established.

“Work is already underway with the joint venture partners to determine follow up activity which is targeted for 2015 onwards. “Cairn looks forward to working with the Government of Senegal and our partners to realize the full potential from this large acreage position off the west coast of Senegal.” Oil sector analysts at London-based investment bank First Energy hold a more cautious view, stating in a research note Tuesday morning: “This is a frontier area and this discovery could potentially be commercial on a standalone basis, however much uncertainty remains and further drilling will be required to de-risk the play.”