Looking ahead

Reserve and production estimates at Alaska’s Alpine oil field increase. ARCO Alaska and Anadarko approved a revised development plan that will increase production rates and reserve estimates for Alpine oil field. Upon full development, projected recovery from the field is expected to be 429 million bbl of oil. An estimate made in 1997 was 365 million bbl of oil. Peak production is expected to be 80,000 bopd by 2001, up 10,000 bopd from the previous estimate. ARCO Alaska President Kevin Meyers said, "Startup of the field in mid-2000 will help to offset the decline of North Slope oil production." The field is expected to be operational by mid-2000, with initial production of 40,000 bopd. The companies originally planned 94 wells, both horizontal and conventional. Now, subject to final regulatory approval, 112 wells will be drilled, all in horizontal configurations, for a total of more than 60 mi of reservoir penetrations. Upon completion of the project, ARCO and Anadarko will have invested more than $1 billion, with about $750 million spent in Alaska.

Land drilling beginning to show upturn in U.S. In its first edition of Land Drilling Monthly Update, Prudential Securities highlights an industry "on the verge of a massive recovery, particularly in North America." The company says that after 15 years of rig attrition and three years of onshore equipment consolidation, a balanced land drilling market is in the oil industry’s foreseeable future. The Baker Hughes U.S. rig count has increased by 139 rigs since the low of 488 units was reported in late April. About 127 of these additional rigs have been added on land. Also, U.S. drillers will be trying to "catch up" over the next year, after declines in production and sparse field investments that occurred during the past two years.

U.S. to assist Nigerian energy industry. U.S. Energy Secretary Bill Richardson signed a tentative cooperation agreement to aid Nigeria’s troubled energy sector in return for substantial free market reforms. The agreement, signed with Energy Minister Bola Ige, calls for Nigeria to begin privatizing state energy companies and removing trade/investment barriers. In return, the U.S. will provide short-term aid to help alleviate oil, gas and electricity shortages in the country. Richardson also declared U.S. support for plans by a Chevron-led consortium to build a $400-million pipeline that will ship Nigerian gas to neighboring Benin, Ghana and Togo. Meanwhile, the country’s first civilian president in 15 years, Olusegun Obasanjo, recently took office. He has promised to fight corruption and focus on resolving violent disputes between rival groups vying for state oil revenues. A joint venture between Texaco and Chevron was forced to stop pumping oil off the Nigerian coast because angry residents in the area blocked supplies from reaching the company’s platforms.

UK task force makes plans to preserve North Sea oil. Secretary of State for Trade and Industry Stephen Byers launched a plan to secure the future of the North Sea oil and gas industry. A key proposal in the plan calls for setting up a new body — LOGIC (Leading Oil and Gas Industry Competitiveness) — to "promote best practice through the oil and gas industry supply chain." The new body was included as part of a report published by the Oil and Gas Industry Task Force at the Offshore Europe Conference in Aberdeen last month. The Department of Trade and Industry will provide £2 million ($3.3 million) to help fund the initiative. Other initiatives in the secretary’s plan include: 1) maintaining UK oil production at above 3 million bpd; 2) increasing the UK share of the world market for oil and gas goods and services in the next five years by 50%; and 3) generating new business, especially in environmental services and technology, of around £1 billion a year.

Barge rig spuds its first well in Caspian. Parker Rig 257 commenced drilling its first well in the Caspian Sea for Offshore Kazakhstan International Operating Co. (OKIOC) last month. The rig arrived on the Kashagan East 1A location, about 47 mi south of Atyrau, Kazakhstan, in July after completing extensive modifications in Astrakhan, Russia. The rig is under a long-term contract to OKIOC, a consortium comprised of Agip, BG, BP Amoco, Mobil, Phillips, Royal Dutch Shell, TotalFina and Inpex. The well’s target depth is 16,404 ft and will take about 257 days to drill.

Sudan looks to foreign firms to invest in its oil industry. Sudanese Energy Minister Awad Eljaz invited foreign oil companies, including U.S. firms, to invest in development of the country’s oil fields. The invitation came after the country announced last month that it had exported 100,000 bbl of oil for the first time. Although Sudan is still on Washington’s blacklist of states it considers to be sponsors of terrorism, the minister said, "All companies are welcome, but they must respect our sovereignty and our laws." TotalFina has been present in Sudan since 1980, with a license to operate a 46,332-sq-mi field in the southeast.

Statoil considers partial privatization. In a report to the Norwegian government, Statoil board chairman Ole Lund recommended that the operation be partly privatized and that it take over all or most of SDOE, the agency that controls 40% of Norway’s oil and gas reserves. Putting the two operations together would create one of the world’s largest groups, behind Exxon Mobil, BP Amoco and Royal Dutch Shell. "The state would grow richer, and Statoil would become a more powerful and competitive company in the international oil market," Lund said, when he presented the report in August. The Norwegian parliament is slated to come to a decision regarding the future of the country’s oil and gas industry in February of next year.

Copyright © 1999 World Oil
Copyright © 1999 Gulf Publishing Company