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Phillips strikes oil on Alaska’s North Slope

The Meltwater oil discovery is the first for the new millennium on Alaska’s North Slope. It contains about 50 million bbl of proven and potential crude reserves. Located about 10 mi south of Tam oil field, the Meltwater North No. 1 tested 4,000 bopd. Phillips Alaska (58.46%) said the discovery has the potential to be the fourth Kuparuk satellite field to begin production. A second well and sidetrack, Meltwater North 2 and 2A, confirmed a northern portion of the reservoir. The Meltwater find occurred on acreage purchased in June 1998 in Alaska’s first-ever, area-wide lease sale.

U.S. firms ditch Mexican gas market

Of the four U.S. energy companies that won local Mexican gas distribution concessions bids, two have sold out already to European companies, and another is looking for a buyer. Dallas-based TXU is the latest to go, deciding to sell its Mexico City rights to a unit of Repsol. The firms were daunted by lower-than-expected returns on investment and lack of economies of scale. Unlike the U.S. firms, Europeans seem patient for investment returns, which may take five to 10 years, said Jean-Noel Mesnard, director of Gaz de France in Mexico.

Meanwhile, the Mexican industry admitted that legal shortcomings and bureaucratic delays (regarding local distribution areas and transport) affect the industry. Local authorities apply differing distribution rules that cause delays and expense. In transport, similar results occur, due to the need to achieve a separate agreement with each landowner along a pipeline route.

Israel finds another large gas reservoir

Within a month, Avner Oil & Gas – a leading Israeli offshore oil company – found a second gas reservoir in the Mediterranean sea, about 48 km (30 mi) south of Tel Aviv. The company said the field should be able to supply all of Israel’s needs for quite a few years, making the six-year long negotiations to purchase gas from Egypt pointless. Currently, the "pipeline of peace" is being constructed in Egypt from the Nile Delta to El Arish, about 25 km (16 mi) from the Israeli border. However, oil companies and industry analysts disagree as to the effects it will now have on Israel’s economy. While analysts favor the construction, Israeli oil companies disapprove, claiming that it will harm national interests.

Output starts at UK’s Cook field

Enterprise Oil has begun oil production from Cook field, its third operated field in the UK North Sea sector. Cook’s initial production rate was 10,000 bopd, and output is expected to double by 2001. The field, located in UK Block 21/20a, has estimated reserves of 20 million bbl of oil and 15 Bcfg. The field was developed by a tie-back to Shell’s Anasuria FPSO.

Study shows U.S. oil/gas revenues rising

According to the annual reports of the top 50 oil and gas companies in the U.S., revenues rose by an average 16% during 1999. This was due to escalating crude oil and natural gas prices and lower operating costs, said petroleum analyst John S. Herold. The annual reserves replacement cost study found reserve levels were sustained, despite a 25% decline in capital spending. U.S. oil reserves at the end of 1999 were almost equivalent to that of year-end 1998, declining 0.2% to 18.1 billion bbl. Natural gas reserves, on the other hand, were up 0.7% to 94.1 Tcf at the end of 1999.

Iran finds large gas field

Iran claims to have discovered a gas field with reserves of more than 445 Bcmg (15.7 Tcfg) and over 240 million bbl of gas liquids. Tabnak field, valued by Iran at about $16.5 billion, was discovered in southern Fars province by the National Iranian Oil Exploration Co. Begun in 1998, exploratory drilling has, so far, reached a 2,245-m depth and cost about $10 million. Production (estimated to be 1.5 to 2 Bcfgd and 24,000 to 32,000 bpd of gas liquids) will start in the second half of the current Iranian calendar year, said Iranian Oil Minister Bijan Namdar Zanganeh.

BP Amoco / ARCO deal is complete

After clearing many hurdles, the BP Amoco / ARCO deal is finally complete. The FTC unanimously approved BP Amoco’s $27.6-billion purchase of ARCO after ARCO agreed to sell large oil holdings in Alaska to Phillips. ExxonMobil, BP Amoco, ARCO and Phillips Petroleum resolved outstanding issues relating to ownership and operation of the Prudhoe Bay and Point Thompson Units – just one of several obstacles that caused setbacks for the BP Amoco / ARCO deal. The ARCO acquisition, creates the second largest non-government oil company in the world.

Major oil find struck in GOM

The Entrada prospect, held by Callon Petroleum (20%) and operator Vastar Resources (80%), has yielded a significant deepwater discovery in the U.S. Gulf of Mexico. The Garden Banks 782-1 exploratory well found over 360 ft of net pay in four intervals, all at predicted depths and in excess of anticipated thickness.

Meanwhile, Texaco has successfully installed the second deck module of its Petronius compliant tower platform, also in the GOM. The $500-million project stands 2,001 ft above the seafloor in 1,754 ft of water, making it the world’s largest free-standing structure. The South Deck Module replaces the original module that was lost during its offshore lift in December 1998.

More gas found in Dutch offshore

Two Canadian firms – Gulf Canada Resources and TransCanada Pipelines – found gas in the Dutch sector of the North Sea. Gulf is the operator of the P6-9 discovery well, located on the P6 Block, 4.5 km northwest of the P6-8 producing gas field. The well tested 45 MMcfgd from a 164-ft perforated interval. TransCanada operates the K12-13 exploration well, which tested about 800,000 cmgpd (28.3 MMcfgd). The discovery is estimated to contain 4 to 10 Bcm (141 to 353 Bcf), subject to appraisal drilling.