With net production of over 400,000 boe/d from the Gulf of Mexico, BP is already the largest producer of oil and gas in the region. Recently, the company made another GoM discovery with its Tiber well located in Keathley Canyon block 102, roughly 250 miles south east of Houston in 4,132 feet of water in the Lower Tertiary play.
Utilizing Transocean Ltd.'s Deepwater Horizon, the well is one of the deepest drilled by the industry at 35,055 feet. The well encountered oil in multiple Lower Tertiary reservoirs, an emerging area in which BP has a large acreage position. Appraisal will be required to determine the size and commerciality of the discovery.
"Tiber represents BP's second material discovery in the emerging Lower Tertiary play in the Gulf of Mexico, following our earlier Kaskida discovery," said Andy Inglis, chief executive, exploration and production.
Shortly following the announcement, shares of BP stock were up a modest $2.00 to $52/share. To determine the size of the discovery and determine how to proceed, BP will need to drill additional wells. The capital required for the project, along with the difficult operating environment will likely push production years into the future - perhaps a decade or longer.
Tiber is operated by BP, with a 62% working interest with co-owners Petrobras (20%) and ConocoPhillips (18%).
BP is currently working with nine Gulf of Mexico projects: Atlantis Phase 2, Tubular Bells, Kodiak, Freedom, Kaskida, Isabela, Santa Cruz, Mad Dog tiebacks and Great White.
The last major development by the company in the deepwater Gulf of Mexico was Thunder Horse in 2008.
BP's first major discovery in the Lower Tertiary, Kaskida in 2006, is currently under appraisal.
– Mikaila Adams
Anadarko makes discovery offshore Sierra Leone
Anadarko Petroleum Corp. has made a deepwater discovery at the Venus exploration well in block SL 6/07 offshore Sierra Leone. The Venus B-1 well, the first deepwater test in the Sierra Leone-Liberian Basin, was drilled to a total depth of roughly 18,500 feet in about 5,900 feet of water and hit over than 45 net feet of hydrocarbon pay.
While testing is still needed to determine whether or not the well is commercially viable, company management sees potential in the area. "The Venus discovery confirms the existence of an active petroleum system in the basin and enhances the prospectivity of our vast West Africa acreage position," said Bob Daniels, Anadarko senior vice president, Worldwide Exploration.
At presstime, Anadarko and partners were still logging the well, but in a conference call shortly after the initial discovery announcement, company officials noted the hydrocarbon pay encountered was likely only part of a "tremendous amount" of reservoir-quality rock the well penetrated.
"With Jubilee on the east and Venus on the west, we have established bookends spanning approximately 1,100 kilometers (700 miles) across two of the most exciting and highly prospective basins in the world," he continued.
He went on to say the company plans to drill two to five wells in the trend next year. According to other company officials, Anadarko's goal is to drill opportunities to discover more than 150 million to more than 1 billion gross barrels of oil equivalent, noting the company sees multiple such features across its acreage position.
The Venus prospect is one of Anadarko's more than 30 identified prospects and leads on its West Africa acreage position, which includes interests in almost 8 million acres across 10 blocks offshore Sierra Leone, Liberia, Cote d'Ivoire and Ghana.
The company plans to continue its West Africa drilling operations in the Cretaceous Trend by drilling the South Grand Lahou exploration well in block CI 105 offshore Cote d'Ivoire once activities are completed at the Venus discovery well.
Anadarko stock jumped 9.6 % to $64.85 at the end of the day of the announcement.
Anadarko operates the Venus well with a 40% working interest. Partners on the project include Australia's Woodside Petroleum Ltd. and Spain's Repsol. Both hold a 25% working interest, while UK's Tullow holds a 10% working interest.
– Mikaila Adams
StatoilHydro strikes oil, gasat Nona prospect in Norwegian Sea
An oil and gas discovery has been made by StatoilHydro in the Nona prospect, roughly six miles south east of the Asgard field in the Norwegian Sea.
The company is estimating reserves of between 13 and 31 million barrels of oil and 1 to 2 billion standard cubic meters of gas based on preliminary calculations.
"The Nona discovery further confirms the good results achieved by infrastructure-led exploration on the Halten Bank," said Sivert Jorgenvag, StatoilHydro's head of infrastructure-led exploration on the Halten Bank.
The well was not formation tested, but data gathering and sampling have been carried out. A development of the discovery involving production via the existing infrastructure will be considered.
ATP discovers additional sands at Deepwater Telemark Hub
Houston-based ATP Oil & Gas Corp. has discovered additional pay sands at the Mirage Prospect located at Mississippi Canyon Block 941(MC 941) at its deepwater Telemark Hub in the Gulf of Mexico. The MC 941 #3 well, located in roughly 4,000 feet of water, hit more than 250 feet of logged net oil and gas pay, more than doubling the pre-drill estimates. Mirage is one of the three Telemark Hub fields that will be tied back to the ATP Titan to be located at MC 941. ATP has a 100% working interest and is the operator of the Telemark Hub.
Commenting on the announcement, ATP chairman and CEO T. Paul Bulmahn stated, "ATP is exceptionally pleased with these initial results. Not only have we encountered the development sands at greater thicknesses than expected but we have logged other hydrocarbon-bearing sands that were not present in the original wells, beyond even what was discussed and projected [on August 27]."
Bulmahn expects the additional sands to lead to production and reserve estimates greater than what is currently booked in ATP's third-party reserve reports. The company is already predicting the Telemark Hub to more than double ATP's production beginning in 2010.
Mainland Resources, American Exploration join forces to develop contiguous Mississippi acreage
Natural gas exploration company Mainland Resources Inc., will jointly develop contiguous acreage in Mississippi with American Exploration. Mainland will commit nearly 8,500 net acres and American Exploration will commit another 5,000 net acres to the project.
As operator of the project area, Mainland Resources has committed to pay 80% of the initial well (drilling and completion costs) to earn a 51% working interest in the well and total project area. American will contribute the additional 20% to earn a 49% working interest in the well and total project area. Going forward, future costs for activities in the project area will be split 51%/49% between Mainland and American, respectively.
Schlumberger recently evaluated the total gas in place within the Haynesville formation on American Exploration's 5,000 acres slated for the project and determined similar reservoir attributes to those of the Haynesville Shale of northwestern Louisiana and demonstrates estimated gas in place of roughly 300 bcf/section. If estimates are correct, the evaluation places more than 2 tcf of estimated gas covering the 5,000 acres of American Exploration lands.
Providence brings new US offshore gas field online
Dublin, Ireleand-registered upstream oil and gas company Providence Resources has brought the new Galveston Island A-155 gas field in the Gulf of Mexico online. The field, which is located roughly 62 miles off the coast, achieved first gas within 17 months of discovery. The company holds a non-operated 10.8% working interest in the field.
The field has been developed with a dedicated unmanned production platform connected to a new gas export pipeline that extends over 18 miles.
Newfield makes discovery in Pearl River Mouth Basin
Newfield Exploration Co. has tested a second well on Block 16/05, located in the Pearl River Mouth Basin in China. The LF 7-1 well tested a single zone at 6,000 bo/d.
The LF 7-1 well, located in approximately 350 feet of water, was drilled to a total depth of nearly 10,000 feet and cut more than 250 feet of oil pay in multiple sands. The well was drilled to test a downthrown anticline and was an offset to Newfield's 2008 oil discovery - the LF 7-2. Success with the LF 7-1 well set up a deeper oil prospect within the same fault trap, which the company may test in 2010 through a down-dip sidetrack of the LF 7-1 well.
"Our two successes on Block 16/05 confirm that we have a commercial oil development with considerable running room," said William Schneider, Newfield's vice president - Onshore Gulf Coast and International. "We estimate that the gross reserves associated with our two discoveries to date are in excess of 30 MMbbls. This development will provide significant new oil production for Newfield beginning in 2012."
In 2007, Newfield acquired 200 square kilometers of new 3-D seismic data to better assess this structural complex. Additional drilling in the area is planned, including the LF 7-6 structure, located 15 kilometers to the northeast, which is scheduled to begin drilling in 2010.
The China National Offshore Oil Corp. (CNOOC) has the right to participate in any development with a 51% interest.
Chevron begins Tombua-Landana oil production; signs multiple sales agreements for Gorgon LNG
Chevron Corp. has made progress in both the oil and gas fronts by bringing on new production from a deepwater project in Angola and signing four deals to supply gas to the world's largest LNG markets.
Through Cabinda Gulf Oil Co. Ltd. (CABGOC) and its partners, Chevron began crude oil production at the Tombua-Landana project located 50 miles offshore Angola.
Located in nearly 1,200 feet of water in Block 14, the $3.8 billion development is expected to achieve peak production of 100,000 barrels of crude oil per day in 2011. Recoverable resources for the two fields are estimated at 350 million barrels.
"Tombua-Landana is one of seven major projects coming online this year in which Chevron's share of the investment is over $200 million. An additional six projects are scheduled to come on-stream in 2010," said George Kirkland, Chevron's executive vice president, global upstream and gas.
Chevron, through CABGOC, has a 31% interest and is the operator of the Block 14 contractor group which includes SONANGOL P&P with a 20% stake, Eni Angola Exploration BV with another 20%, Total E&P Angola with 20%, and GALP Energia with a 9% stake. Chevron produces a total of 168,000 barrels of liquids per day from Block 14, where the company and its partners have achieved 11 exploration discoveries since 1995.
Later in September, Australian subsidiaries of Chevron signed three long-term sales and purchase agreements for Chevron's share of liquefied natural gas (LNG) from the Gorgon project. The agreements are for a total supply of nearly 3 million tons per annum (MTPA) of LNG to Osaka Gas, Tokyo Gas, and GS Caltex.
Chevron will supply Osaka Gas 1.375 MTPA of LNG for 25 years. Osaka Gas will also purchase 1.25% equity in the Gorgon Project. Tokyo Gas will be supplied 1.1 MTPA over 25 years and will purchase a 1% equity stake. Supply from both agreements is expected to commence in the second half of 2014.
Chevron Australia Pty Ltd. and Chevron International Gas Inc., have also signed separate agreements with GS Caltex Corp. for 0.5 MTPA of LNG for up to 20 years. The LNG to GS Caltex will be supplied from the Gorgon project and other gas within the global Chevron portfolio. GS Caltex is 50% owned by Chevron.
Signing on a few days later was Korea Gas Corp. The state-owned company signed on for 1.5 million tonnes/year of LNG for 15 years with an option to extend the contract another 5 years.
Chevron Australia Pty. Ltd. officials believe it to be the largest long-term LNG sale between Australia and South Korea.
No price was given in the corporate announcement, but Australian media reported an estimate of $30 billion (Aus).
As South Korea's sole provider of LNG, Kogas claims to be the world's largest LNG import firm. South Korea is the world's second largest importer of LNG after Japan.
Chevron expects further sales of Gorgon LNG to be executed in the coming months.
The Gorgon project, which includes a three-train, 15 MTPA LNG facility, a carbon dioxide injection project and a domestic gas plant, is operated by Chevron Australia Pty Ltd. with a 50% interest which will drop to 47.75% once equity sales are approved to Osaka Gas and Tokyo Gas. Subsidiaries of ExxonMobil and Shell both hold a 25% interest.
– Mikaila Adams
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