David Knott
Senior Editor
Arethusa Neptune drilling rig is working on Green Canyon 82 block in the Gulf of Mexico for British-Borneo Petroleum Syndicate plc. The company has focused its operations outside the U.K. in the gulf, following the current trend of U.K. independents focusing on exploration prospects outside the domestic arena. Photo courtesy of British-Borneo.
U.K. independents are adopting novel approaches in their efforts to accelerate exploration and development activity around the world.
One Edinburgh independent, Cairn Energy plc, is casting a wider net for worldwide exploration prospects after pulling off an unusual approach to an upstream development: taking on a service company as an equity partner.
Among other top U.K. independents not covered in a previous story (OGJ, Sept. 23, p. 29):
- British-Borneo Petroleum Syndicate plc, London, claims to be one of the first independents to take part in Gulf of Mexico deepwater exploration.
- Contrary to the growing trend of independents securing direct access to producing assets, Premier Oil plc, London, believes in doing things the traditional way: first finding oil and gas, then developing it-with a focus on East Asian prospects.
- Monument Oil & Gas plc, London, is now pursuing exploration opportunities in Colombia and Turkmenistan after seeing its first return on a key domestic project.
Cairn
Cairn Energy plc is on a roll and looking for new exploration opportunities, following discovery of Sangu gas field off Bangladesh and an increase in net production.
The company hiked net production with the help of asset purchases and takeover of Holland Sea Search BV, to an average 8,435 b/d (boed) in the first half, compared with 2,797 boed for first half 1995.
Cairn's producing assets are a 10% stake in U.K. North Sea Gryphon field, operatorship of a number of onshore oil fields in southern England, and a share in Markham field off the Netherlands.
Mike Watts, Cairn's exploration director, said development of Sangu discovery on Block 16 off Bangladesh is the company's current priority. Cairn is operator of Blocks 15 and 16, of which half of the former and 16% of the latter is onshore.
"We have just completed 2D seismic acquisition over the Sangu find," said Watts, "and we are in the middle of an extensive onshore seismic campaign on the two blocks, to be completed in 1997."
Next year Cairn plans to drill five wells across the two blocks. Watts said two will be development wells in Sangu, two will be onshore exploration wells, and the fifth may be in the vicinity of Sangu.
In the meantime, conceptual work for a platform in Sangu is under way with development partner Halliburton Co., Houston. Watts said the company anticipates installing a 12 slot offshore fixed platform in Sangu, with first gas slated for second quarter 1998.
Sangu reserves are estimated at a minimum 1 tcf, and further appraisal and tests of untried pay zones is planned. Watts said the aim is to produce 200 MMcfd of gas from the field at plateau.
Cairn is currently negotiating sales of Sangu gas to state firm Petrobangla for delivery into its distribution grid. Cairn also has plans to build a 150,000 kw power plant in the Dhaka area with partner Midlands Electricity plc, a U.K. electricity supplier.
Last December Cairn acquired Block 23/10 off southern China from China Offshore Oil Nanhai West Oil Corp. Here Cairn bought existing seismic data, which are being reprocessed, and plans a 2D seismic survey early next year and a well in fourth quarter 1997.
In Thailand, Cairn has bid for an onshore tract, Block 5643/38, near the border with Laos, and hopes to hear the result of its offer soon.
The company was also involved in the Enterprise Oil plc-operated well in Block 17 off Viet Nam. The well tested 750 b/d of oil but was plugged and abandoned as noncommercial.
Watts said Cairn's policy is to look mainly overseas for projects, because it is too late to get good acreage in the North Sea. The company is specifically targeting the Indian subcontinent and the Pacific Rim.
"Cairn is looking to grow organically," said Watts. "Exploration is the number one priority, but we are prepared to make acquisitions. Ideally, we are looking for low-risk, meaningful exploration operations where we can take a high interest."
British-Borneo
British-Borneo's activities are split between U.K. North Sea and U.S. Gulf of Mexico assets, with the company's net 13,000 b/d production split roughly 40/60 between the two regions.
British-Borneo recently thought like a major to charter Ocean Endeavor and Atwood Hunter semisubmersible rigs for 1 and 2 years, respectively, to give it access to scarce drilling capacity in today's tight rig market.
Ocean Endeavor is drilling a well in Morpeth discovery on Ewing Banks Blocks 921, 964, and 965, which has estimated reserves of 44-58 million bbl of oil and 44-58 bcf of gas.
The Morpeth license was acquired from Shell Offshore Inc., which had previously drilled two wells there.
John Lander, executive director of British-Borneo, said the Morpeth appraisal well has found oil-bearing sands, and these will be tested. He added that the company hopes to exploit the find using a SeaStar design tension leg platform.
British-Borneo has formed a strategic alliance with Atlanta Corp., Houston, for commercial development of the SeaStar system. The design is intended to produce as much as 50,000 b/d of oil from fields in water as deep as 600 ft, at reduced cost compared with conventional developments.
The alliance gives British-Borneo some rights for exclusive use of the design and potential for royalties if it is taken up by other operators around the world. If the Morpeth well test is successful, the company plans to commit to development at yearend, with a view to first production in summer 1998.
Seven miles south of Morpeth, British-Borneo has a 35% stake in Green Canyon 82 block, where a recent wildcat made an encouraging find, although the operator experienced mechanical difficulties that halted testing.
British-Borneo was sufficiently impressed to add adjacent blocks Green Canyon 37 and 81 to its growing portfolio of Gulf of Mexico leases, at a recent lease sale. A second well, with British-Borneo operating, is planned on this acreage in first half 1997.
Premier
Announcing interim financial results recently, Premier Chairman Barrie Stephens said the company's aims are: "Becoming a consistent oil and gas finder, an international production operator, and finding more creative ways of using technology and closing deals in a competitive market."
Premier's average net 28,350 boed production comes mainly from the U.K., with its only overseas production being a net 20 MMcfd of gas from Qadirpur field in Pakistan, brought on stream in September 1995 by state firm Oil & Gas Development Corp.
"During the first half of 1996," said Stephens, "the company drilled or participated in exploration wells in the North Sea, Tunisia, Cuba, Pakistan, and Thailand, and although hydrocarbons were encountered in several of the wells, there were no commercial successes."
Premier has just spudded 2 Kandra appraisal well on Pakistan's Kandra Block to evaluate a 1990 find. Here Premier is 95% interest holder and operator. Kandra is said to contain a large quantity of low-BTU gas, with potential for development for power generation.
Other than Kandra appraisal, Premier's exploration program for the remainder of this year is expected to focus on the North Sea, although further exploration, particularly in Pakistan and the Far East, is being planned.
Off Myanmar, Premier has a 30% stake in Yetagun gas discovery, operated by Texaco Inc. The find has estimated reserves of 1.4 tcf of gas and 44 million bbl of condensate. The partners are preparing to develop the field, and are negotiating with Petroleum Authority of Thailand for sale of gas and participation in the project.
Monument
Monument is beginning to see returns on a period of capital investment, through its 20% stake in the Liverpool Bay fields off the U.K., which came on stream in January.
First half 1996 oil production net to Monument averaged 12,100 boed. This was restrained by commissioning problems in Liverpool Bay.
Exploration spending had been held back during that period, anyway, but the company has been pursuing new exploration prospects in Turkmenistan and Colombia.
In early August, Monument signed a production sharing agreement with the Turkmen government and state firm Turkmeneft, covering 2,000 sq km onshore western Turkmenistan near the Caspian Sea.
Monument said the block straddles an extension of the prolific Apsheron sill that cuts across the Caspian Sea and contains three producing oil fields-Burun, Nebit Dag, and Kum Dag-the small Kara Tepe gas fields, and Kyzi-Kum condensate field.
The agreement is intended to increase production from Burun and Kyzi-Kum fields, where Monument claims considerable improvements in production are possible.
The agreement also allows for further exploration in the block. Monument will take a share of production increases in Burun and Kyzi-Kum and all new developments in the license area.
"Initial work on the block will focus upon improving production from Burun field," said Monument. "This is estimated to contain more than 500 million bbl of light oil in place, with some 20 million bbl recovered to date.
"Arrangements have been made for the provision to Monument of tankers for transportation of its share of oil to delivery points within the Caspian area and through the Volga-Don river system to world markets."
Monument participated in six wells during the first half of the year, three off the U.K. and one each in Argentina, Thailand, and Tunisia. One U.K. well and the Argentine well were successful.
A well spudded in June in Argentina's Block CNQ-10, operated by Santa Fe Energy Resources Inc., encountered gas shows in a horizon directly beneath and separate from the producing Sierra Chata gas field.
In Colombia, Monument has acquired a 40% interest in an exploration block close to supergiant Cusiana/Cupiagua oil field complex. Recently acquired seismic data are being evaluated with a view to drilling a well in 1997.
In Pakistan, Monument holds a 53.5% interest in Sulaiman concession, operated by British Gas plc. Monument said seismic data indicate a large structure on the block, which will be drilled early in 1997.
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