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Vol. 224 No. 2 |
| KURT S. ABRAHAM, MANAGING/INTERNATIONAL EDITOR |
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OPEC raises quotas; Silva-Calderón says supplies okay
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To calm rising oil prices, as well as in reaction to production shortfalls in Venezuela, and the possibility of a disruption in Iraqi supplies due to war, OPEC ministers hiked their collective oil output ceiling 6.5%, to 24.5 million bpd. The output boost took effect on Feb. 1, 2003. Meanwhile, at the World Economic Forum’s annual meeting in Davos, Switzerland, OPEC Secretary-General Alvaro Silva-Calderón told attendees that this period of high prices “is not a crisis. It is transitory.” Both Silva-Calderón and Saudi Aramco President & CEO Abdallah Juman took pains to reassure participants that OPEC members can manage global oil supplies, even if Iraqis supplies are halted. “There is no lack of supply,” said Silva-Calderón. “The market is well-supplied.” He proposed that OPEC adopt rules to limit volatility, while insisting that his organization is not a cartel.
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ConocoPhillips’ Alaskan exploration to be more remote
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Although the firm will drill fewer Alaskan exploration wells this year, ConocoPhillips said its spending would still be on a par with 2002 levels. This is because the wells will be more remote pushing up costs. Speaking to the Anchorage Chamber of Commerce, ConocoPhillips Alaska President Kevin Meyers said that four to six exploratory wells are planned, compared to nine or 10 the firm has averaged annually in the past few years. The company’s Alaskan capital spending will be $640 million said Meyers, who noted that his firm drilled 31 exploratory wells during the last three years, more than all other companies combined. He said that the greater risk of exploring far from existing oil fields is balanced by hopes of bigger – than – average discoveries.
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Group of six firms to aid Iran’s output boost efforts
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Eager to improve the average percentage recovery from its oil and gas fields, National Iranian Oil Co. has enlisted the help of six significant operators to work with its research department over a five-year period. If these efforts to improve recovery are successful, the deal will be extended beyond the initial five years. Consortium members include BP, Norsk Hydro, Petronas, Statoil, Tatneft and TotalFinaElf. Each firm has pledged to pay between $200,000 and $300,000 to participate in the project. Meanwhile, Iranian Oil Minister Bijan Namdar Zangeneh said that giant Salman oil field in the Persian Gulf will be developed by Petroiran Development Co., an NIOC subsidiary. Salman’s development will provide output of 500 MMcfgd and 50,000 to 130,000 bopd.
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UAE’s Dolphin Project issues short list of bidders
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To build onshore facilities for its $3.5-billion inter-Gulf gas project, Dolphin Energy Limited (DEL) has released a list of finalists. Among the firms pre-qualified to bid on the project are Japan’s JGC and the joint ventures of Snamprogetti/Chiyoda; Saipem/Hyundai; and Technip/Coflexip and Bechtel. Due to be awarded this summer, the contract will cover construction at Ras Laffan in Qatar, including a gas processing plant, compression plant and offsite facilities. DEL’s gas network will pump an initial 2 Bcfgd from Qatar’s North field to buyers in the UAE by 2006.
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Shell announces deepwater Trinidad plans
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Trinidad Shell E&P (TSEP) said it will begin a new exploratory drilling program in deepwater Block 25, utilizing an unnamed semisubmersible rig. TSEP’s plan was spurred by BHP-Billiton’s recent Angostura oil find in Block 2c, 50 km (31mi) west of Block 25. Shell re-evaluated 3D seismic data to gauge the site’s potential and found the results encouraging enough to justify a new drilling effort. This will be a test of the oldest seabed section ever drilled in Trinidad’s deepwater area.
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MMS approves cell spar use in GOM
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Officials at MMS gave broad approval to use of the world’s first cell spar in the Red Hawk deepwater project. Red Hawk field is in 5,300 ft of water in Garden Banks Block 877 of the Central Gulf of Mexico. Representing the third generation of spar technology, the cell spar will measure 64 ft in diameter and 480 ft in length. It will be composed of seven tubes, each 20 ft in diameter, with a center tube surrounded by the other six tubes, all connected by structural steel. The deck will be 110 ft by 132 ft. To approve the conceptual portion of the Red Hawk Deepwater Operations Plan (DWOP), MMS Director Johnnie Burton said her agency reviewed such issues as cell spar buoyancy compared to that of traditional spars. “MMS has a responsibility to thoroughly review new technology for safety and reliability,” she added. At a later date, Kerr-McGee will be required to submit a more detailed version of the development concept as a Preliminary DWOP
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Petrobrás strikes another offshore oil field
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Approximately 150 million bbl of new oil reserves were found in the 9-MLL-3 wildcat near Marlim Leste field in the Campos basin. The site is 59 mi (95 km) offshore the coast in 3,234 ft of water. Preliminary testing showed the crude to be a heavy grade of about 20°API. Petrobrás anticipates commingling the new find with Marlim Leste field for first output of 140,000 bopd in 2006. Meanwhile, the firm flow-tested its first well at Coral field in the Santos basin at 8,650 bopd. All three producing wells at Coral are due to go onstream during the second quarter of 2003.
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Kyrgyzstan well underway
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Australia’s Afminex Ltd. began drilling two shallow development wells in Charvak A field of western Kyrgyzstan last month. They will be followed by re-entry and deepening of a third well that was drilled last year. Afminex is spending $150,000 on these wells as part of a farm-in deal for a 50% interest in seven blocks held by Canadian firm Textonic Consulting. If all goes well, Afminex will spend another $1.25 million to further develop the field.
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Algerian find announced
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Anadarko and Sonatrach struck an additional oil discovery at the Hassi Berkine North East prospect on Block 404. The HBNE 1 wildcat was drilled to a 10,827-ft TD, 3 mi east of Hassi Berkine field. It tested 4,092 bopd and 6.7 MMcfgd. Rex Alman, Anadarko’s managing director in Algeria, said, "We are considering a number of development options for placing this discovery on production quickly and cost-effectively.
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Ugandan well suspended
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Heritage Oil said it has temporarily suspended the Turaco 1 wildcat on Uganda’s Block 3 in the Mokondo area of the Semliki basin. The well was drilled to 8,160 ft, and wireline logs were acquired for analysis as to how to proceed. There was no mention of whether hydrocarbons were indicated. Turaco 1 is the first exploratory well drilled in Uganda since 1938. 
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Opinion
As this issue of World Oil was about to go to press, there were signs that the general strike throughout Venezuela that began in early December was easing. However, this was not because the opposition to President Hugo Chavez was losing its determination to oust him. Rather, opposition leaders said that they wanted to focus on launching and completing a new petition, to gather 1.8 million signatures (equal to 15% of Venezuela’s population) needed to force passage of a new constitutional amendment. This amendment would reduce Chavez’s term from six to four years, in effect paving the way for general elections later this year. Opposition leaders also said that they would collect signatures for a second initiative that would hold a referendum on Chavez’s rule in August, halfway through his second term. We should note that former US President Jimmy Carter conceived both ideas. In addition, the opposition said it was easing the strike, to protect businesses from bankruptcy. By the end of January, the strike had cost at least $4 billion in lost oil revenues, alone. Bankers also estimated that the Venezuelan economy would shrink 40% during first-quarter 2003.
Meanwhile, World Oil received a heart-felt note from a retired PDVSA employee, Eduardo Prato, who urges the removal of Chavez for the good of the nation and PDVSA. Here are his comments, in their entirety:
“Stabilizing Chavez may be considered a step toward the immediate comeback of PDVSA´s oil flow. This is absolutely wrong. Chavez is waging total war on PDVSA. (In his mind,) it has to be destroyed and rebuilt to become his master geo-political tool. His guidelines are low production, high prices and strategic alignment with the interests of Cuba, Algeria, Libya, Iran, Iraq, China, etc. On national TV, Chavez has made very clear that his intent – insane as it may sound – is to fire 90%-plus of PDVSA´s workforce and ‘recruit a new PDVSA,’ made of revolutionary volunteers commanded by a Babel of technicians and managers coming from his list of "friendly" countries. More than a thousand top employees were dismissed (during the second week of January). All employees in Caracas have been banned from entering PDVSA´s buildings. The same thing happens in most offices around the country. It is political destruction of the payroll – and the know-how.
“Remember Cuba’s sugar industry after Castro took over? Compare oil drilling with sugar cane harvesting. Compare deep-conversion refineries with sugar mills. You can estimate the amounts and timing of oil and products that such a new PDVSA would place in the market. With most plants idle during recent weeks, the accidents, damage to installations, and severe environmental effects demonstrate what we can expect. What would be the dependability of Venezuela, if the always ready source (for the US and Western countries) in so many ‘oil squeezes’ now goes to an ‘oil axis’ at the opposite side of the table? The choices are simple – Take either the PDVSA that you know as part of a democratically ruled Venezuela, or take the ‘new PDVSA,’ an (untested) supplier located in the trenches of the so-called “Venezuelan revolution” of Hugo Chavez. God forbid it.”
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