Ophir and BG Group extend rig assignment for use in Tanzania and Kenya
LONDON -- Ophir Energy has secured a drilling rig and executed a letter of agreement for a Rig Share Assignment with BG Group for the continuation of its 2013-14 East African offshore drilling program. Odjfell Drilling is the contract counterpart and drilling service contractor.
The Deepsea Metro I (DSM-1) drillship is currently being used by Ophir and BG Group’s joint venture in Tanzania. This contract was previously due to expire in June, but has now been extended for at least 18 months. During this period, the DSM-1 will be used to drill a combination of wells in Tanzania for the Ophir-BG Group JV in Blocks 1-3-4, and also to drill operated wells for Ophir in Tanzania and Kenya and for BG Group in Kenya.
The Ophir-BG Group JV is currently using the DSM-1 to drill the Ngisi-1 exploration well in Block 4. Ophir management estimates Ngisi-1 could increase the mean in-place resource of the Chewa-Pweza-Ngisi hub to 5.8 Tcf of gas (4.1 Tcf mean recoverable), and would also provide critical scale for gas aggregation and development from Block 4. Gas aggregation from Block 4 will be tied into the Block 1-3-4 LNG development project in southern Tanzania.
The JV is currently reviewing the immediate forward program for Tanzania Blocks 1-3-4. The group will likely begin with a satellite exploration well close to the Jodari discovery in Block 1, then drill an appraisal well and DST in Block 4. By early September, the JV plans to spud an outboard exploration well in Block 1 to test basin floor prospectivity. A series of outboard prospects are presently being evaluated for this well.
Once this next phase of the JV exploration and appraisal program has been completed, Ophir will take over operatorship of the drillship for exploration in Ophir’s Tanzanian Block 7, which is expected to target the substantial Mlinzi feature.
Ophir and BG Group have both utilized the DSM-1 drillship for their Tanzania exploration program since December 2011. By extending the DSM-1 contract, the parties save on the considerable cost of mobilizing a drillship from another region, reducing the drilling effective day rate. The extension will allow Ophir to keep up exploration activity on its operated acreage, while continuing with exploration and appraisal in the Ophir-BG Group JV.