What's new in production

	Vol. 225 No. 7
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

North Sea attracts global interest. In the UK, latest offshore and onshore licensing rounds proved a success. Responses to the 22nd Offshore and 12th Onshore Rounds show there is still a great deal of international interest in opportunities afforded in the UK for oil/gas exploration/recovery.

In addition to the Traditional licenses and the recently introduced Promote licenses, the 22nd Round saw introduction of the innovative Frontier license, designed to spark interest in the newly offered blocks to the North and West of the Shetlands. All three licenses generated an encouraging amount of interest.

Four Frontier license applications were received, proving the worth of innovation when seeking to encourage exploration. For Promote applications, 42 were received, a further improvement on last year's highly successful result. Traditional applications totaled 30, equaling the tally from 2003.

For seaward blocks, 164 were applied for in total, 25 more than the previous round. Of the 68 companies applying, 20 are potentially new entrants in the North Sea, further endorsing the belief that the UKCS is still a vibrant basin for investment and reward. And for onshore licenses, 30 applications were received, more than three times the amount from the previous round.

UK Energy Minister Stephen Timms said he was delighted with the positive response to the latest offshore licensing round, which builds on last year's success. Applications for the new Frontier license were particularly encouraging. ''Applications for licenses from 20 potential newcomers are a further sign that there remains plenty of interest and belief in the potential of the UK North Sea,'' he said.

Timms added, ''Applications from the 22nd and 12th Rounds will now be studied. Applicants will be interviewed by DTI to ensure that licenses are awarded to those with the best ideas and ability for taking prospects forward to development. Offers of awards are planned for August/September this year.''

The 22nd Offshore and 12th Onshore Rounds opened for applications on March 4; the application window closed June 4. The new Frontier license allows companies to apply for relatively large amounts of acreage and then relinquish three-quarters of that after an initial screening phase. Additionally, E & D periods will be extended by two years over and above those stipulated for the Traditional license.

The Promote license lets licensees assess and promote the prospectivity of the licensed acreage for an initial two-year period without the stringent entry checks required for a Traditional license. To continue beyond the first two years into the third and fourth year, with activity commitments, the licensee will be required to submit a report to DTI during the first two years.

In the Norwegian North Sea, 16 licenses covering 46 blocks and partial blocks were awarded in the country's 18th Round. Statoil acquired four operatorships and five partnerships. Eni, Norsk Hydro and Shell each got two operatorships and stakes in two other licenses. ChevronTexaco, ExxonMobil and Total got one operatorship, each, as did several smaller companies. The most popular area was the Southern North Sea, where Norsk Hydro, Paladin and ExxonMobil, among others, picked up licenses on essentially undrilled acreage. Shell remains active in the Western edge of the Continental Shelf in water over 3,000 ft deep. The Government says the 19th Round will occur in 2006.

New recovery chemical under test. Sequoia Interests Corp., based in Richmond, Texas, has developed a ''new, cost-effective, environmentally friendly, inorganic compound trademarked DiamondFlo that has a unique ability to relieve surface tension.'' The chemical reportedly has the ability to displace oil from a solid, allowing embedded oil to flow. As it displaces the oil, it floats in the water, but does not emulsify with the water – similar to a lava lamp – allowing the oil to be extracted on a cost-effective, environmentally friendly basis.

The product is undergoing characterization analysis at the University of Houston's Chemistry Department. It is also being tested for other applications at an R&D organization in San Antonio, Texas, and EFIRD Corrosion International, Inc., in The Woodlands, Texas.

According to Daniel Efird, an independent chemical engineer, ''If what we suspect is true, it is a new class of polymeric material. Its primary use would be its ability to displace oil from a solid, and it seems to be very effective at low concentrations. It appears to actively seek out solid surfaces and displace oil from the rock as it absorbs onto the rock. It appears to be more efficient than many other chemical solutions being used to recover oil. It has a pretty high percentage of recovery – in the 80% range in the lab.''

If what initial testing indicates is proved in field tests, the new product could be a boon to the oil industry's marginal well segment. The Office of Fossil Energy states, ''There are nearly 500,000 of these wells in the US and, together, they produce about the same amount of oil as America imports from Saudi Arabia.'' It says further that, ''More than 60% of all known oil reserves in the US remain untapped because of difficulties in extraction from the ground.'' We look forward to more application reports on this exciting new product.

New N₂ injection project. United Heritage Corp. announced that its subsidiary, UHC Petroleum Corp. has received a permit from the State of Texas to inject nitrogen for the attempted recovery of a greater portion of oil reserves under its leases in the Val Verde basin, in SW Texas. This technique may ''unlock the potential'' of the company's Texas property, which has some 168 MMbbl of oil remaining in place.

The company has completed all of the site work and has an N₂ generator at the field. All wellheads, flowlines, electric lines and controllers are installed. The initial phase will have four injectors and 26 producing wells. The company is prepared to increase this to six injectors and 86 producers. Total injection during the first phase can be about 100 Mcf per day.

United Heritage Corp., based in Cleburne, Texas, through subsidiaries, holds four leasehold properties totaling 30,500 acres in Edwards County, Texas, and Chaves and Roosevelt Counties, New Mexico, that are estimated to contain over 275 MMbbl of remaining oil.