Oil country hot line

Oil finds prove West African coast is hot spot

Offshore Angola, TotalFinaElf and ExxonMobil hit oil at the Perpetua-1, on Block 17. Production tests verified a flowrate of 8,740 bopd. Additional geological and engineering studies are planned to fully appraise the structure, which is the firms’ 10th deepwater discovery in the area. For ExxonMobil, this find follows several previous discoveries, including Saxi-1, on Block 15. ENI, BP and Statoil all share an interest in this well, drilled to a 10, 800-ft TD in 2,200 ft of water. The well flowed at 5,400 bopd. Meanwhile, offshore Nigeria, where international majors are vying for exploration licenses to be awarded by the government in a future round, ExxonMobil confirmed reserves of at least 600 million bbl of oil in its OPL 209 deepwater block.

GOM lease sale succeeds, bid amounts up

In what was the fifth-largest Western Gulf of Mexico lease sale in 10 years, 266 bids were received on 226 of the 3,789 blocks offered. Winning bids totaled $167.4 million, while high bids totaled $153.7 million – up 62% from last year. Of the 60 companies that participated in the sale, 53 submitted high bids compared to 41 in the previous sale. The success was due in part to increased independent operator participation and a growing interest in deepwater operations.

   Meanwhile, MMS published the final regulation for training lessee and contractor employees engaged in oil / gas / sulfur operations in the Outer Continental Shelf (OCS). The regulation initiates a training system based on performance measures – audits, tests and interviews – that will ensure safer and cleaner OCS operations. A two-year transition period from the current Subpart O regulation to the new rule is anticipated.

E&P permits awarded offshore Australia

The Minister for Industry, Science and Resources, Senator Nick Minchin, along with Western Australian Minister for Mines Norman Moore, announced the winners of eight offshore exploration permits in the Western Australian adjacent area. Over the next six years, an estimated $283 million is expected to be spent on exploring these tracts. "This includes the drilling of 10 exploration wells, the acquisition of 20,150 line-km of 2-D seismic and 1,730 sq km of 3-D seismic surveying," said Sen. Minchin. Winning companies include Atrim Energy, Rawson Resources and affiliates of Shell, BHP Petroleum, Kerr-McGee and Texaco.

Iran claims big finds, major deals pending

Multiple large discoveries, containing 1.13 billion bbl of liquids and 5.5 Tcf of natural gas, were reported by Iran. The National Iranian Oil Company’s director of exploration, Mahmoud Mohaddes, said more reserves could be found after drilling a number of appraisal wells in Changuleh field in western Ilam Province. The new Zireh gas field, located in Bushehr Province, may produce up to 80 MMcfgd. A prior gas find, Homa, reportedly contains some 4.7 Tcf of gas and 5.8 million bbl of LNG. Against the backdrop of alleged E&P successes, Iran may finalize buy-back deals – worth more than $8 billion – that could increase its production by 1 million bopd. Iranian officials said reserves have increased by 5.34 billion bbl of oil and 30.2 Tcf of gas over the last three years.

Two oil companies find GOM success

About 30 mi offshore Louisiana, in 34 ft of water, CXY Energy struck the A-6 discovery at West Cameron 170. The 17,125-ft well encountered 180 ft of net pay in five main pay zones. It tested 4,300 bopd and 9 MMcfgd. It is tied-in to production facilities, allowing a flowrate of 2,100 bopd and 6.5 MMcfgd after additional infrastructure is erected. Also, in the Altwater Foldbelt ultra-deepwater area of the GOM, results from BP’s (56%) Atlantis 2 appraisal confirmed a major, multimillion-bbl potential oil accumulation, with net pay in excess of 200 ft. BHP has a 44% working interest.

Transocean forges $8.8-billion acquisition

Transocean Sedco Forex Inc will create the largest offshore drilling contractor and the world’s third-largest oil field service company with its agreement to acquire R&B Falcon Corp. As a merged company, Transocean will once again participate in the U.S., shallow-water GOM market, where it has not been since 1995. The company sees these GOM waters as a growing market for drilling, as gas supplies fail to keep up with U.S. demand.

Husky deal granted final approval

The transaction that allows shareholders of Renaissance Energy and Husky Oil to trade under a new public company, Husky Energy Inc., has been completed. Following over 95% of shareholders’ and optionholders’ votes, the Final Order of the Court of the Queen’s Bench Alberta and the Articles of Arrangement were filed with the Registrar of companies under the Business Corporations Act. The new company will be ranked as Canada’s second-largest, integrated energy firm in terms of combined oil and gas production.

MOGA celebrates discovery’s 75th anniversary

In 1925, Saginaw Prospecting Co. discovered Michigan’s first commercial oil field, drilled to just an 1,823-ft depth. Throughout the years, Michigan Oil and Gas Association members produced in excess of 1 billion bbl of oil and more than 4 Tcfg. In 1927, the association received its first contribution – a royalty check for $424.80 – from the oil and gas industry. The association has continued to give back to the state of Michigan through park promotion, job creations, energy / heat supply and tax payments.