FSU/ Eastern Europe: Eastern Europe

FSU/EASTERN EUROPE

Eastern Europe

Albania. Occidental Petroleum (operator, 50%) and partners lifted force majeure from two of three onshore blocks. In mid-April 2000, Oxy resumed activities on Blocks 2 and 3 but kept force majeure on Block A. The blocks were awarded in June 1998, and force majeure was declared on them in December 1998, due to deteriorating security conditions in neighboring Yugoslavia. A wildcat will be drilled during fourth-quarter 2000 on the Shpiragu prospect in Block 2. Similarly, OMV had declared force majeure on Blocks 1, 4 and 5, but the firm resumed activity in early July 2000. OMV also arranged a farm-in by Hellenic Petroleum for all three blocks. OMV now holds 51%, and Hellenic has 49%. In late summer, seismic work began on Block 5, south of Vlora.

The future of Patos Matinza field’s EOR scheme, as well as exploration in Dumre and Velca Blocks, is in doubt, due to Premier Oil’s stated intent to withdraw from the country this year. Premier no longer considers Albania a "core area." Patos Matinza is funded by International Finance Corp.

Operation of Cakran-Mollaj and Ballsh-Hekal oil fields by Drillsearch Energy was still under force majeure in first-half 2000, although the firm said it would work with the National Petroleum Agency to resume activity. After raising heavy oil output to 1,200 bpd, Drillsearch has been in a dispute with Albpetrol over oil sales to that company. As of early 2000, Albpetrol still owed Drillsearch US$759,318.

Bulgaria. Last August, Ramco Energy abandoned its Tangra 1 wildcat as dry in Shabla Block 91-1 offshore. Ramco is studying the results, to assess better, future drilling locations. Oil production rose 22%, but that figure is misleading, as output is still only 785 bpd from 219 active wells. Drilling increased 50%, to six wells and 59,055 ft.

Prospects for marked improvement in Bulgaria are not bright. As the director of the Geology and Mining Environment Protection Directorate wrote World Oil, "Oil fields are in their final stages of production, with high water-oil ratios. There is only one new field under development now – Selanovtzy, in the north, at the border with Romania. Unfortunately, it proved to be a minor (field), both (in terms of) reserves and production capacity, developing dissolved gas drive with little chances for waterflooding." He said the decrease in crude reserves to only 870,000 bbl from 4.2 million bbl is "due to some re-estimation work performed here recently."

Croatia. Following installation offshore of Ivana field’s A platform, production of 24.7 MMcfgd from five wells went onstream last November, 27 mi west of Pola. INAgip – a 50/50 JV between Italy’s Agip and Croat state firm INA – operates the field. Gas produced from Ivana is transported 42 mi to the Garibaldi K platform in Italy’s Adriatic sector. Supplies belonging to INA are sent to Croatia through the Italian and Slovenian gas transport system. Ivana field’s reserves are about 283 Bcf of gas. Peak output should occur in 2001, when four satellite platforms (Ivana B, C, D and E) are added. Eni/Agip and INA also agreed to build and operate a 205-mi, 500-MMcfd gas pipeline from Italy to Croatia.

Croatian seismic activity dropped significantly, with only 287 sq mi of 3-D work conducted, versus 1,155 sq mi in 1998. No seismic surveys are slated this year. Drilling dropped another 30%, to a very low level – only seven wells and 22,214 ft. However, a rebound to 23 wells is forecast this year, including eight wells offshore. Liquids production (23% is condensate) dipped 6.1%, to 24,557 bpd. Gas output slid 7.4%, to 162.1 MMcfd.

Czech Republic. Ramco Energy hit gas in February with its Krumvir 1 reentry well. Krumvir 1 originally was evaluating the producing sands of the Krumvir 2 find (early 1999). However, the well was deepened to 11,837 ft and struck new gas-bearing sands. Ramco tested the well this year, but no results have been announced. Czech drilling fell 40%, to nine wells and 48,885 ft. That level should be maintained this year. Oil production averaged 3,690 bpd (a slight gain).

Hungary. MOL (Hungarian Oil Corp.) began a major restructuring / cost-cutting effort last fall. From now until 2002, MOL will cut its 20,000-member workforce by 40% and reduce operating costs by $100 million. In addition, the firm will not explore outside Hungary, except for places where the company is present for production purposes. MOL hopes to keep production costs within Hungary at $4.50/bbl.

Seismic work included 852 mi of 2-D surveys and 378 sq mi of 3-D work. Another 590 mi of 2-D and 439 sq mi of 3-D are on tap this year. Hungarian drilling totaled 34 wells and 184,144 ft. Wells may decline to 25 this year. Liquids output was 32,308 bpd, including 6,184 bcpd. Natural gas output was 328.6 MMcfd.

Poland. A gas / condensate find was struck last January by Apache Corp. (45%, operator), FX Energy, Inc. (45%), and Polish Oil and Gas Co. (POGC/10%). The Wilga 2 tested 16.9 MMcfgd and 570 bcpd from three zones between 7,732 and 8,550 ft. The well is the first Polish find for Apache and FX Energy, in Block 255 of the Vistula concession, 25 mi southeast of Warsaw. The firms followed with the Wilga 3 appraisal that was a dry hole. Its failure was blamed on "faulting," and Apache spudded the Wilga 4 appraisal in June, east of the discovery and on the opposite side from Wilga 3.

While exploring the Vistula concession onshore Poland, Apache Corp. last January struck a commercial gas / condensate find. (Photo courtesy of Apache Corp.)

Separately, POGC and FX Energy struck a natural gas find in June 2000, in the "Fences" area of western Poland. The Kleka 11 flowed 34.3 MMcfgd at a depth of about 9,840 ft. The firms plan to exploit the discovery and utilize recent 3-D seismic data to drill other structures in the Kleka trend.

Ramco Energy is acquiring additional seismic data before drilling one or more prospects in 2001. During July 2000, EuroGas, Inc., was awarded 10 exploration tracts that cover 1,671 sq mi in southeastern Poland. EuroGas will shoot seismic lines during second-half 2000 and drill a wildcat next year.

Polish wells drilled rose 4% last year, and a 2.5% increase is forecast this year. Crude and condensate output was virtually unchanged at about 7,500 bpd. Gas production slipped slightly, to 429.1 MMcfd from 433.0 MMcfd.

Romania. The National Agency for Mineral Resources’ effort to spark additional exploration licensing interest has largely failed, due to foreign firms’ perception that not enough regulatory reform has occurred. A good example is the Elf Aquitaine (now TotalFinaElf) / Petrom project to explore Neptun Block in the Black Sea, awarded in April 1998. After their operational proposal was initially accepted last September, the firms were still waiting for final Finance Ministry approval in second-quarter 2000.

Tullow Oil is shooting seismic onshore, on the EPI3 and EPI8 Blocks. Paladin Resources and Enron Corp. last December signed a deal for the latter firm to market natural gas produced from Paladin’s Blocks XIII and XV, about 70 mi offshore. Paladin acquired 70% interest and operatorship of the blocks last September. Block XV contains the Doina gas find, and Paladin is acquiring additional seismic before drilling another well in 2000.

Ramco Oil and Gas said that 146 mi of seismic were shot on Block VI last year; a well was likely before this year ends. During April, Hunt Exploration (operator, 50%) and Castle Energy (50%) drilled a wildcat (no results released) on a 3.1-million-acre, onshore tract. Up to four more wells could be drilled before September 2001.

Total Romanian seismic activity included 1,419 mi of 2-D surveys and 25 mi of 3-D work. This year, 932 mi of 2-D and 116 mi of 3-D are slated. Drilling declined 12% last year, to 310 wells. About 300 wells are forecast for 2000. Oil production slipped 2.7%, to just over 128,000 bpd, while gas output rose 7.3%, to 553.9 MMcfd.

Yugoslavia. Owing to the country’s relative isolation after last year’s NATO attacks during the Kosovo crisis, the flow of E&P information out of Yugoslavia is scant. The country produces about 19,000 bopd, most of it from Serbia’s autonomous province of Vojvodina in the north. Other output comes from newer fields in central Serbia, south and southeast of Belgrade.

During the last 50 years, 90 oil and gas fields have been found in Vojvodina, with about 2,000 wells drilled. In central Serbia, there are five oil fields, with less than 100 wells drilled. Federal officials say that programs are in place to increase crude output and intensify exploration in the new oil fields, south of the Sava and Danube Rivers. In Montenegro, Ramco Oil & Gas is shooting fresh seismic on the Ulcinj Block, along the southern coast, off and onshore.

Others. Drilling fell 60% in Slovakia, to eight wells and 29,190 ft. Seven wells are slated this year. State firm Nafta a.s. Gbely produced 909 bpd (up 5.6%) from 123 oil wells (119 on artificial lift. Output from 58 active gas wells averaged 21.15 MMcfd and 256 bcpd, down 16% in both cases. Oil and gas reserves were virtually unchanged, at 70.7 million bbl and 930 Bcf, respectively. No seismic was shot in 1999, but 60 mi of 2-D surveys and 28 mi of 3-D work are expected this year.

In Slovenia, output from 12 oil wells was 11 bpd, down from 15 bpd in 1999. There were 12 gas wells producing 706,294 cfd (down 11%) and 6 bcpd (down 25%). No drilling took place, nor is any expected.