What's new in exploration

July 2002 Vol. 223 No. 7  What's New in Exploration

Perry A. Fischer,  Editor

NPR-A vs. ANWR. While everyone’s attention was focused on ANWR, the U.S. Geological Survey completed its work on a four-year reassessment of potential oil and gas resources in the nearby National Petroleum Reserve in Alaska (NPR-A) – without the political fallout. The new estimate is that the federal part of NPR-A contains 1.3 to 5.6 billion barrels (Bbbl) of economically recoverable oil, at market prices between $22 and $30/bbl, respectively, and technically recoverable oil between 5.9 and 13.2 Bbbl. Most of the assumed oil resources are believed to lie in the northern third of the vast NPR-A. The previous study – done 21 years ago – did not take into account economics and had reported that technically recoverable oil in the entire NPR-A lie between 0.3 and 5.4 Bbbl.

New estimates of technically recoverable gas resources on federal NPR-A lands range between 39.1 and 83.2 Tcf. Most of the gas resources are thought to occur in the central and southern NPR-A. The USGS assessment reflects a comprehensive examination of all public-domain data and considers new exploration and development strategies being applied on the Alaska North Slope. Comparing the federal study areas of NPR-A and the ANWR 1002 area for technically recoverable oil shows: NPR-A federal area = 22.5-million acres, mean value of 9.3 Bbbl; ANWR 1002 federal area = 1.5-million acres, mean value of 7.7 Bbbl.

Thus, in terms of purely technical recovery capability – without regard to cost or infrastructure – ANWR and NPR-A could hold similar amounts of oil. The report concluded that at below $35/bbl, ANWR 1002 has more economically recoverable oil. Above $35/bbl, NPR-A and ANWR 1002 would have nearly equal volumes of economically recoverable oil. Portions of NPR-A were leased in 1999, and additional lease sales are anticipated. The Bureau of Land Management recently completed a lease sale (see "Oil country hot line").

A spate of giants and great finds. Several noteworthy discoveries have occurred in the past month.

   Unocal’s subsidiaries have discovered three gas fields offshore southwest Vietnam, named Kim Long, Ac Quy and Ca Voi. The discoveries cap a string of 10 successful exploration wells in Blocks B and 52/97. Including Block 48/95, the area is estimated to hold at least 2.5 Tcfg. The fields lie in a core area that would allow a unified development program using shared offshore facilities. Unocal estimates the gross unrisked resource potential for the combined areas, including possible field extensions and undrilled prospects, at 5 to 8 Tcf. Unocal’s partners include Mitsui Oil Exploration Co. of Japan and PTT Exploration and Production Public Co. Ltd. of Thailand.

   Elf Petroleum Nigeria Ltd. made a significant new oil discovery in its deepwater OPL 222 license, about 60 mi offshore Nigeria. The Usan-1 discovery well was drilled in 2,460 ft of water to a 8,940-ft TD. The well tested at 5,000 bopd. Additional analyses are underway to fully evaluate the discovery and decide how to proceed. Elf (operator, 20% interest) has other partners in the license: ExxonMobil (30% interest); Chevron Petroleum Nigeria Ltd. (30% interest); and Nexen Petroleum Nigeria Ltd. (20% interest). Nigeria’s national oil company, NNPC, is concessionaire of the block.

   Shell’s deepwater Bonga Southwest field could hold a billion barrels in reserves, as results of an appraisal well drilled earlier this year show. Plans are underway to drill a second appraisal in the third quarter. A firm date has not been set to begin field development, but Shell’s (55% stake) plans to begin production are well advanced for neighboring Bonga field, which is also located in Block OML 118. ExxonMobil has a 20% interest in License OML 118.

Bonga, Nigeria’s first deepwater development, is expected to start production in 2004. The $2.7-billion development, with about 560-million bbl of recoverable reserves, should produce 200,000 bopd.

   China state media reported that a giant gas field with "massive proven reserves" has been discovered in the Ordos basin in northern China’s Inner Mongolia Autonomous Region. The operator is Changqing Oil and Gasfield Co. The Ministry of Science and Technology said that the field, called Sulige, contains about 21 Tcf (600-Bcu m) of probable gas reserves. The field could produce an average 630 MMcf (17.8 MMcu m) of gas a day. No further details were given, except that the gas would supply northern and northwestern Chinese cities and provinces.

   Amerada Hess discovered oil on Garden Banks Block 344 in the Gulf of Mexico. Its GB 344-4 well in Devils Island prospect encountered more than 100 ft of net oil pay in a single, high-quality reservoir. The well was drilled in about 2,300 ft of water to a 24,525-ft TD by GlobalSantaFe’s semisubmersible, Glomar Arctic I. The discovery is located 135 mi offshore Louisiana, 12 mi southwest of Amerada-operated Baldpate field and 8 mi east of Llano field. Further evaluation and appraisal is planned. Amerada Hess has an 80% working interest and is operator of the Devils Island prospect. EEX Corp. owns the remaining interest.

Dear Mobutu Ofumee, Oadike Koffi, Oghale Osiobe and Dr. Fotubee Yakasai. I am deeply touched by your recent emails describing your desperate situations in Nigeria. Apparently, many of your countrymen are having comparable difficulties, as I have received hundreds of similar emails from them as well. Nigeria must be a place of terrible injustice, but filled with charitable people. Although I thank you for your generous offer – and 30% of $20 million is more than fair – regretfully, I will not be depositing $15,000 dollars of earnest money into a Cayman Islands bank account at this time.

Mobutu, I am sorry that your uncle has died, and you are owed millions in oil royalties that you cannot place in a Nigerian bank. Oadike, I regret that your throne has been stolen from your family dynasty, and that you are having such difficulty claiming your rightful inheritance. Oghale, I, too, am heir to a throne, and I sit upon it every morning while I read your tragic letters. Apparently, many of the mothers in Nigeria are overexerting themselves; and Dr. Fotubee, I regret whatever discomfort this may cause in delaying your elderly mother’s hernia operation. Perhaps she could wear a truss.  

Comments? Write: fischerp@gulfpub.com