ExxonMobil enters Black Sea, signs agreements with Turkish NOC, Petrom SA
Two of Exxon Mobil Corp.’s affiliates, ExxonMobil Exploration and Production Turkey BV, and ExxonMobil Exploration and Production Romania Ltd. have signed agreements for work in the Black Sea.
The agreement that marked Exxon Mobil’s entry into Black Sea exploration was signed in late November with Turkish national oil company, Türkiye Petrolleri Anonim Ortakligi (TPAO). Together, the companies will explore in two large deepwater blocks off the coast of the Black Sea port cities of Samsun and Kastamonu.
ExxonMobil will become operator during the initial exploration phase and earn a 50% interest in the Samsun Block, which measures roughly 2 million acres and the eastern portion of 3921 Block, which measures nearly 5 million acres. Water depths reach an approximate 6,500 feet.
TPAO and ExxonMobil intend to collaborate to merge skills and operational abilities during the development and production phases. Seismic acquisition and evaluation programs for the two blocks are currently being operated by TPAO and are scheduled for completion in 2009. Assignment of the interest to ExxonMobil by TPAO is subject to Turkish government approval.
Mehmet Uysal, president and CEO of TPAO, said, “Together, TPAO and ExxonMobil have all the tools required to fully evaluate the potential of these blocks and safely develop whatever commercial quantities of oil and gas we discover. We look forward to working together on an aggressive exploration program to see what we can find.”
Turkey’s Energy Minister Hilmi Guler anticipates exploration costs to reach as high as $450 million. Turkey hopes to see production by 2015. Developing resources could reach $20 billion.
In 2004, TPAO announced its objective to meet Turkey’s increasing oil and natural gas demand through domestic and international exploration and production projects like this one. The NOC inked a similar deal with Petrobras in early 2006.
Just two short weeks after the initial agreement was signed, Exxon Mobil set to expand its new presence in the region. In December, ExxonMobil Exploration and Production Romania Ltd. signed an agreement with Petrom SA to help explore deepwater portions of the Neptun Block offshore Romania. The agreement is ExxonMobil’s second major exploration venture in the Black Sea.
ExxonMobil and Petrom, the largest Romanian oil and gas company and a member of the OMV group, agreed to cooperate on a 3D seismic acquisition and evaluation program of the Neptun Block. Petrom will operate the initial work program. ExxonMobil will help fund the work program and provide expertise in evaluating the deepwater seismic data.
Apache arranges $350M financing for Australia oil projects; Van Gogh, Pyrenees expected to add 40,000 b/d by mid 2010
Apache Corp. has arranged a $350 million financing for the Van Gogh and Pyrenees oil developments offshore Western Australia. The two projects are expected to add a total of 40,000 barrels per day to Apache’s worldwide net oil production over the next 18 months.
The interest rate for initial borrowing in the financing will be roughly 3.5% for the first six months; thereafter, interest rates will float with LIBOR. BNP Paribas and HSBC were the lead banks in the financing.
Apache’s Van Gogh development is expected to commence production in the second quarter of 2009 and add 20,000 barrels per day to Apache’s net worldwide oil output. Apache is the operator and owns 52.5% of the development.
First oil production from the Pyrenees development is expected in early 2010. The project also is expected to add 20,000 barrels per day to Apache’s net oil production. Pyrenees, which is operated by BHP Billiton, will develop reserves in two blocks; Apache has a 28.57% interest in License WA-12-R and a 31.5% interest in WA-155-P.
Apache reduced much of the commodity price risk in conjunction with the Pyrenees and Van Gogh investments by fixing a portion of US cash flow by hedging a quantity of US production equal to approximately two thirds of the projects’ anticipated net production for the first three years. The hedges lock in prices ranging from $60 to $75 per barrel.
Chevron subsidiary starts production from North Duri Field in Indonesia
Chevron subsidiary, PT Chevron Pacific Indonesia, has started producing crude oil from the North Duri Field Area 12 in Indonesia.
First oil was achieved on Nov. 14, 2008, and production is projected to increase to 34,000 barrels of crude oil per day by 2012. Initial production from North Duri Area 12 will increase with the application of steamflood technology this year.
North Duri Area 12 represents the latest expansion of the Duri field, the largest producing field Chevron operates in Indonesia. The Duri Field currently produces nearly 200,000 barrels of crude oil per day. Discovered in 1941 on the island of Sumatra, the field is one of the world’s largest steamflood projects. At the Duri Field, steamflooding has more than tripled oil production, and has enabled the recovery of more than 2 billion barrels of crude oil.
FMC, Shell set new world deepwater record
FMC Technologies Inc.’s global standard enhanced vertical deepwater tree system was used to set a new subsea deepwater completion record of 9,356 feet. The world record depth was achieved at the Shell-operated Silvertip field, part of the Perdido Development located in the Gulf of Mexico. FMC’s previously established record depth of 8,995 feet, also in the Gulf of Mexico, was set in July 2007 with Anadarko’s Independence Hub project.
BHP Billiton gains approval for North West Shelf oil project
BHP Billiton has received approval for the North West Shelf Cossack, Wanaea, Lambert, Hermes (CWLH) redevelopment project for a capital investment of US$245 million (BHP Billiton share).
The CWLH redevelopment project comprises the replacement of the existing Cossack Pioneer FPSO vessel, selected refurbishment of existing subsea infrastructure, and the existing riser turret mooring. It will also capture additional oil production from the Cossack, Wanaea, Lambert and Hermes fields located in roughly 245 to 440 feet of water, approximately 84 miles offshore north west Western Australia by extending existing field life and through tie-back of exploration opportunities.
It is expected the CWLH redevelopment project will be completed and fully operational by early 2011 calendar year. The Cossack Pioneer FPSO is to be replaced by the SBM owned “Okha” which is currently configured as a Floating, Storage and Offtake vessel and will require conversion to add topside production facilities.
BHP Billiton Petroleum chief executive J Michael Yeager commented, “We anticipate this project will generate over 10 million barrels of oil (BHP Billiton share) during its life and it will also extend the life of these fields beyond 2020. During the 2008 calendar year, BHP Billiton has approved the investment of over US $1.1 billion in the overall North West Shelf infrastructure with North Rankin B gas compression and now this project. North West Shelf is a world class asset and represents a significant part of Petroleum’s deep portfolio of growth projects that will carry us forward.”
The five participants in the project are: Woodside Energy Ltd. (33.33% and operator); BHP Billiton Petroleum (North West Shelf) Pty Ltd. (16.67%); BP Developments Australia Pty Ltd. (16.67%); Chevron Australia Pty Ltd. (16.67%) and Japan Australia LNG (MIMI) Pty Ltd. (16.67%).
Petrohawk places new Haynesville Shale wells on production; combined rate of 73 MMcfe/d
Petrohawk Energy Corp. has placed three additional Haynesville Shale wells on production at a combined rate of 73 MMcfe/d, one with the highest reported initial production rate of any well in Petrohawk’s history, as follows:
- The Brown 17 #4 (69% working interest (WI), located in Section 17-T16N-R11W, Bossier Parish, La., was completed on November 18 and produced at a rate of 23.4 MMcfe/d on a 26/64” choke with 7,700# flowing casing pressure.
- The Goodwin 9 #5 (97% WI), located in Section 9-T16N-R11W, Bossier Parish, La., was completed on November 25 and produced at a rate of 21.1 MMcfe/d on a 26/64” choke with 6,750# flowing casing pressure.
- The Sample 9 #1 (100% WI) is located in Section 9-T14N-R11W, Red River Parish, La., roughly 12 miles south of Elm Grove Field. It was completed on November 27 and produced at a rate of 28.2 MMcfe/d on a 30/64” choke with 7,100# flowing casing pressure.
El Paso makes Tot discovery
El Paso Corp.’s Tot exploration well, 1-ESS-185D, located in the ES-5 block offshore Brazil, is a discovery. Through its Brazilian E&P subsidiary, El Paso has a 35% working interest in the Petrobras-operated well.
The well is located 30 kilometers offshore in 61 meters of water, and was drilled to a total vertical depth of 4,521 meters. Preliminary evaluation of logs and core analysis suggests a reservoir thickness similar to the main objective in the Camarupim development on the south end of the block. Continuing formation evaluation, including possible drill stem tests, will be forthcoming.
Brent Smolik, president of El Paso Exploration and Production stated, “In 2009, we will begin to realize the benefits of our successful exploration efforts in Brazil, and our production there will become an increasingly important part of our future production and reserve growth.”
Baker Hughes opens Phase II of Center for Technology Innovation
Baker Hughes Inc. held the grand opening of Phase II of its new Center for Technology Innovation (CTI).
Located on a 14-acre campus in northwest Houston, the CTI consists of 209,000 sq-ft of research and engineering space. Phase I, consisting of research laboratories, xHPHT test facilities, and advanced machining and rapid prototyping shops, was inaugurated in April, 2008. Phase II consists of additional office buildings and research facilities.
“The CTI is a world class research and engineering center. This $42-million investment demonstrates our company’s commitment to developing new completion and production technologies,” said Chad Deaton, Baker Hughes chairman, president, and CEO.
“Innovations created and tested here will enable our customers to unlock the value of their reservoirs even in the most challenging environments.”
“The CTI is the first – and currently, only – one of its kind in the industry, capable of testing full-size prototypes of the next generation of completion and production equipment in a test environment with gas pressure up to 40,000 psi and temperature up to 700° F,” said Rustom Mody, vice president of technology.
KazMunayGas, KMG EP, BG Group sign upstream co-operation agreement
JSC National Company, KazMunayGas; NC KMG subsidiary KazMunaiGas Exploration Production (KMG EP); and BG Group plc, have signed an agreement to co-operate in exploring a range of upstream opportunities.
The agreement, which was signed in the presence of the Prime Minister of the Republic of Kazakhstan, Karim Massimov, sets out the principles of a joint study of the hydrocarbon reserves potential of specific areas in Kazakhstan and other countries.
The companies will work in partnership to identify opportunities across a range of potential oil and gas exploration and production projects. A joint team will examine specifically-targeted regions and recommend prospective acreage to partners for their consideration.
