Aug. 2001 Vol. 222 No. 8  Exploration

Perry A. Fischer,  Engineering Editor

Exploration up in 2000

IHS Energy Group has released its World Petroleum Trends Report 2001, which presents key E&P data for 2000 and the preceding decade. Year 2000 was up, but subdued, as worldwide (outside North America) wildcat drilling recovered from a 1999 low of 629 wells to a completion rate of 826 wells, which was still fewer than any other year in the 1990s. Despite the recovery, newly discovered reserves declined 10% in 2000 to 14.3 billion bbl.

However, as in 1999, the 2000 reserves total depended on one giant discovery – the Kashagan East field, located offshore Kazakhstan, with 6.4 billion bbl of recoverable liquids. Subsequent appraisal of Kashagan West field, which might be continuous with Kashagan East, could boost proven reserves to 10 billion bbl. If this is confirmed, then 2000 will have seen the greatest volume of liquids discovered in a single year since the 1991 discovery of Iran’s South Pars gas / condensate field.

Although wildcat drilling showed an upturn in 2000, the number of oil discoveries declined slightly, while gas discoveries increased. Overall, the exploration success rate was 38%, which is close to the 10-year average. However, the average field size discovered in 2000 was 93 million boe, well above the 10-year average of 73 million boe.

Both 2-D and 3-D seismic data coverage increased above 1999 levels, with 2-D at its highest level since 1993. Areal coverage using 3-D rose during the decade. By 2000, it covered 12 times the area recorded in 1991. After a dramatic decline in 1999, new exploration awards showed a significant increase during 2000.

Caspian showdown. On July 23, an Iranian jet overflew two seismic vessels operating in the southern Caspian Sea, about 90 mi southeast of Baku, presumably as a warning. Later that night, an Iranian warship arrived on the scene and threatened to fire on the two vessels unless they turned around. After some tense minutes, the vessels, the Geophysic-3 and an unnamed companion, retreated. The ships were operating for a BP-led consortium.

Because of the incident, BP said it is suspending marine operations near Alov-Sharg-Araz field, in which BP has an exploration / production-sharing contract with the Azeri government. The consortium partners are Azerbaijan’s state oil company SOCAR, Statoil, Turkey’s TPAO, Alberta Energy and ExxonMobil. Projected investment in the venture is (was?) $9 to $10 billion.

This is the first armed threat to Caspian Sea oil projects. Iran had begun saber-rattling over the area only a few days earlier. Although its territory comprises only 13% of the coastline, Iran claims 20% of the Caspian. Azerbaijan disputes this and is a bit perplexed by Iran’s actions, since the field in question might not lie within the disputed territory. Adding to the puzzle is the fact that the field area was contracted with the Azerbaijan government in 1998, without protest from Iran. Further, last year, 3-D seismic work over the field was completed again without protest from Tehran.

Speculation is that Iran may be stalling attempts to ease relations with Azerbaijan due to internal political conflicts; but whatever the reason, the rhetoric is tense. State Department spokesman Philip Reeker said that the U.S. is "particularly concerned" by Iran’s threat of force in the Caspian Sea. Iran’s oil minister warned that his country would stop any incursions into its claimed waters and, more important, bar oil companies from business with Iran if they carried out contracts with Azerbaijan in the disputed area.

The five nations bordering the Caspian have been negotiating for years to establish their maritime borders, but remain deadlocked.

Dating faults. Scientists at the University of Michigan and ExxonMobil Upstream Research Co. have developed a new method for direct dating of near-surface faults. "Until now, we have not been able to get a firm handle on how fast processes like mountain building occur; when old faults stop being active; when new ones kick in; and the link between tectonic processes and their surface expression," explained Ben van der Pluijm, professor of geological sciences at the University of Michigan.

Previously, the age of shallow crustal faults could only be inferred through indirect dating methods, such as studying fossils in associated deposits. Such estimates determine a broad age range spanning many million years. However, the new technique narrows the age to within two million years – pinpoint accuracy, geologically speaking.

The new method combines several types of clay analysis to date near-surface faults. The work was supported by the National Science Foundation and ExxonMobil Production Research Co. A report on the work appears in the July 12 issue of Nature.

Good finds. Located 230 mi southeast of Ho Chi Minh City, Noble Affiliates struck gas with its 12W-TN-1X well offshore Viet Nam. Drilled to a 14,626-ft TD, the well tested 20 MMcfg and 150 bbl of condensate per day from a 131-ft interval.

   Unocal said it found high-gravity oil in its Gulf of Mexico Trident prospect. The prospect contains as much as 10,000 acres of structural closure. Drilled in 9,687-ft water, the exploration well encountered more than 300 ft of gross pay. Located 185 mi southeast of Corpus Christi, Texas, in Alaminos Canyon Block 903, the well took 66 days to reach 20,500-ft TD at a cost of $34 million.

   Spinnaker Exploration found gas in the oldest Shelf sands (Frio) west of the Mississippi. The Mustang Island 861 well encountered several gas-bearing sands, one of which – the S3 – tested (after stimulation) 21.1 MMcfg and 130 bbl of condensate per day at 11,000 psi FTP. The well is located in shallow water about 25 mi south of Corpus Christi.

Correction. In this column in May, we incorrectly gave the web address for the American Geophysical Institute. The correct address is: www.agiweb.org. Also, SPE is not listed among its 37 member societies.

Comments? Write: fischerp@gulfpub.com