What's happening in production
Optimism abounds for Caspian oilKazakh President Nursultan Nazarbayev said that his Caspian-rim country would produce as much oil as Saudi Arabia, the world’s leading producer, by 2015. He predicted that the country would increase production to eight million bopd, which is quite an increase, given that current production is 578,000 bpd. Apparently, the prediction is based on a potentially huge oil discovery off Kazakhstan’s Caspian coast. OKIOC (Agip, BG International, BPAmoco, ExxonMobil, Inpex, Phillips Petroleum, Shell, Statoil and Totalfina) is drilling the Kashagan East site, which lies just offshore. Reuters reported that it could be "one of the largest untapped structures of its kind in the world." The Kashagan East well reached its original target depth of 14,765 ft and will now be deepened to 16,400 ft. OKIOC said, "its shareholders are encouraged by the well-logging data." However, initial test results will not be completed until sometime in June. So, based on what is known, the eight million-bopd production estimate by President Nazarbayev is quite a stretch. Guesses based on seismic put reserves as high as 30 billion bbl. This may have an impact on the $2.7-billion, U.S.-backed, Baku-Ceyhan pipeline. Washington is backing the east-west route, because it bypasses both Iran to the south and Russia to the north. The U.S. believes it can be built by 2004 with help from several U.S. credit agencies funding part of the project. Although BPAmoco and the U.S. support the Baku-Ceyhan route, other oil companies are unsure there will be enough crude production to justify building it anytime soon. Thus far, studies have failed to confirm commercial viability of the pipeline. Tom Cirigliano, a spokesman for ExxonMobil, said, "It’s just too early to tell." He said ExxonMobil is not convinced that Baku-Ceyhan is the best pipeline route. "We don’t think all potential export routes have been evaluated, and that needs to happen." If the discovery proves true, it could be just what the pipeline project needs to be viable. But a gas or condensate discovery would be less positive for Kazakhstan and the Caspian region, because the new export pipelines being planned and built are designed for oil, not gas, to exchange for hard currency from the West. A great producer. Anadarko released results from its Blair A-3 field-extension well in the Bossier Sand play in East Texas. The well began producing at the end of April and was flowing 51.5 MMcfgd at 4,500 psi FTP in May. Blair A-3, located in Dew field, Freestone County, was spudded March 6, reaching a TD of 12,885 ft just 38 days later, and was subsequently perforated and fractured. Anadarko has an 82.5% interest in Blair A-3, with El Paso owning the remainder. The company currently has 21 rigs operating in the East Texas Bossier play, and is upgrading its Dew gathering infrastructure to accommodate the large increase in gas production, which now totals more than 195 MMcfgd. Big gas deal. ExxonMobil’s subsidiary Middle East Gas Marketing signed a development and production agreement with Qatar General Petroleum Corp. (QGPC) in early May for an Enhanced Gas Utilization project (EGU). This is the fourth major project to develop gas reserves from Qatar’s giant North field, and follows earlier developments to bring gas to domestic markets and supply gas to QGPC and partners in the Qatargas and Rasgas LNG projects. The EGU project will further supply these markets from the North field with a nominal production capacity of 1.75 Bcfgd. It will also produce condensate, butane and propane for export, as well as ethane for future petrochemical feedstock. NORM update. Naturally Occurring Radioactive Materials (NORMs) principally result from produced fluids and associated scale but can also be the product of drilling operations. They mainly comprise small amounts of radioactive radium isotopes in the thorium and uranium decay series. Treating / disposing of NORMs is a high-priority issue for both regulators and operators. Currently, there are no U.S. federal regulations for disposal of NORM wastes. Several states now have some regulations, and others are developing them for NORM treatment and disposal. EPA is now considering development of national regulations. At the same time, some companies that have conducted or proposed NORM disposal projects have run into considerable public opposition. DOE began studying the NORM issue a decade ago and has funded a series of assessment projects to provide scientific data needed for risk-based regulatory development. The intent of these studies was not to assess the radiation risk associated with NORMs, but to provide a database and recommendations for environmental-policy making by state and federal agencies. Recently, Argonne National Laboratory (ANL) began analyzing exposure risks that could result from disposal of oilfield NORM waste in a variety of settings, including injection wells, salt caverns, Resource Conservation and Recovery Act (RCRA) landfills and landspreading. Texas is farthest along in addressing this issue. It is the only state certified by the EPA for commercial, salt-cavern disposal of nonhazardous oilfield wastes. Operators in Texas estimate the disposal cost for this method at $150 per bbl, which is competitive with other methods. ANL is also assessing the costs of disposal alternatives. Brookhaven National Laboratory has investigated the risks associated with discharging NORM wastes from offshore platforms. Meanwhile, DOE is supporting an effort by the IOGCC to develop scientifically defensible, risk-based, model NORM regulations for states. Future work will include consolidation of the risk-assessment work in a form easily accessible by state regulators, and research into the risks associated with melting down NORM-contaminated equipment. As a source of public information, DOE and the Interstate
Oil and Gas Compact Commission (IOGCC) are developing a website to disseminate information,
including an overview of NORM programs and existing regulations.
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