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July 2006

Thailand eyes Myanmar's natural gas reserves Posted Monday, July 31, 2006 - 7:24 by petromin
Thailand's largest energy firm PTT Plc has said it has joined the race against China and India in a bid for exclusive rights to military-run Myanmar's northwestern natural gas reserves.

"We have expressed interest to buy gas from Myanmar's A-1 block," Chitrapongse Kwangsukstith, PTT senior executive vice president for exploration and production, told AFP.

Neighbouring countries have been jostling to take advantage of Myanmar's abundant natural resources, despite international condemnation of Myanmar's human rights record and calls for the release of detained pro-democracy leader Aung San Suu Kyi.

Myanmar, which borders both China and India, possesses significant untapped natural gas reserves off its western Arakan coast, and the two Asian giants have been pushing to formalize a deal to build pipelines from the A-1 block in the northwest.

It was reported that an unnamed energy ministry official, said that the rights to the gas would probably go to the highest bidder.

"At present we haven't decided which country to sell A-1 gas to," the senior official said, adding that they were considering three options; selling the gas via pipeline, building a LNG (Liquefied Natural Gas) plant and construction of gas-based industries in the country.

China signed a deal with Myanmar in November 2005 to study building a pipeline from the Arakan Coast to its Yunnan province.

India has been trying to negotiate a three-billion-dollar deal to run a pipeline from Myanmar across Bangladesh to the eastern Indian city of Kolkata, but has failed to make headway.

In March this year, Indian President Abdul Kalam visited Yangon and left with an agreement for studies into a much longer pipeline through northeast India, or converting the gas to LNG for shipping.

Thailand already pipes about one billion cubic feet of gas per day from Myanmar's offshore reserves in the southeast in the Andaman Sea.

PTT's Chitrapongse said Thailand's negotiations for the A-1 block would depend on the results of the firm's exploration in the Martaban Gulf, where they were granted a 100-percent concession from the Myanmar government.

ExxonMobil to invest US$1.1 bil. in Cepu Posted Monday, July 31, 2006 - 3:55 by petromin
ExxonMobil Indonesia (EMOI) will invest US$1.1 billion for exploration and exploitation of the Cepu Block oil fields, which contain a 250-million-barrel oil reserve in Bojonegoro, a spokesman said.

"We will build production facilities, pipeline network for crude oil supply to terminals at sea in Tuban and land clearance of 770 ha," EMOI Vice President Maman Budiman said Friday. Related Products

The company, which has developed the Cepu Block since 2000, will exploit Banyu Urip oil field while exploring other oil fields.

It is expected the Banyu Urip oil field will start producing in 2008-2009.

EMOI, which has so far invested US$450 million, hopes exploration and exploitation activities of Cepu Block can be implemented soon.

"Many parties--ranging from the government, local people to EMOI, which has invested a big amount of funds--have an interest in the development of the Cepu Block," Maman added.

Pipeline carries Kazakh oil to China Posted Monday, July 31, 2006 - 3:54 by petromin

PetroChina has announced that a first batch of crude oil has been successfully piped from Kazakhstan to its oil tank field in northwestern Xinjiang Uygur Autonomous Region via the China-Kazakhstan Pipeline. The oil reached the refinery at 5 p.m. Saturday.

The arrival of the first crude oil imports signals full commercial operation for China's first cross-country crude oil pipeline, said a circular released by PetroChina.

The transnational section of the crude oil pipeline linking China to Kazakhstan is 962 km long. It joins a 246 km domestic section, making a total length of more than 1200 kilometres.

The pipeline, which can carry 10 million tons of crude oil per year, starts at Atasu in west Kazakhstan. It enters China at Alashankou port on the Sino-Kazakhstan border before reaching its destination at PetroChina Dushanzi Petrochemical Company.

Jointly built by China National Petroleum Corporation, China's largest oil producer and the parent company of PetroChina, and construction companies from Kazakhstan, the pipeline will strengthen China's oil supply security by offering a land route.

It will also give China better access to oil in both Kazakhstan and Russia, according to analysts.

New Zealand: Major discoveries at Maui field Posted Monday, July 31, 2006 - 3:53 by petromin
Major discoveries of gas have been made in the Maui field which are likely to keep production flowing to at least 2016.

The gas has been discovered on the northern side of a geological fault called Ihi, which until now has been considered the northern boundary of the field.

The field's owners yesterday confirmed the new wells will "contribute to extending the life of the field" but are saying nothing more.

There was more positive energy news from onshore Taranaki with the announcement that the Cheal oilfield, at Ngaere, is to be developed at a cost of more than $25 million.

Full production is expected to be about 1900 barrels of oil a day, which at current oil prices will gross the owners more than $1.5 million a week.

The first oil is expected to be available early next year.

A new onshore gas field is also being commissioned in Taranaki. The Turangi field, discovered earlier this year by Greymouth Petroleum, should begin exporting gas next month. Greymouth has applied for resource consents to build a new production station on the intersection of Inland North and Upper Turangi roads.

This comes as rumours are suggesting that at least 300 petajoules of gas may have been discovered via the two exploration wells drilled off the Maui-A production platform this year.

New Zealand's total annual gas consumption is about 130 petajoules. A petajoule of gas is worth about $6 million.

Last night, the Maui joint venture said the project had been challenging because of weight restrictions on the platform, and because the drillers had had to precisely target locations some distance from the rig. But the drillers had set a record for lateral distance drilled offshore, at 5603m.

The news adds to an extremely busy Taranaki energy scene, which is seeing at least $3.5 billion being spent on oil and gasfield development projects over the next three years, plus hundreds of millions more being spent in exploration.

Major projects include:

* The $1 billion Pohokura gasfield development off the North Taranaki coast, which is now nearing completion.

* The $1 billion Kupe gasfield development off the South Taranaki coast, which is scheduled to begin this summer.

* The Maari and Tui oilfield developments off Western Taranaki, which will begin next year at a combined cost of more than $1 billion.

* Development of the Cheal oilfield at Ngaere, and Turangi gasfield near Tikorangi, which will be at a combined cost of an estimated $40 million.

New Plymouth MP and Associate Energy Minister Harry Duynhoven says this activity is easing concerns over the future of New Zealand oil and gas supplies.

"You could say the level of anxiety is vastly lower than what it was," he says.

"Whereas there were worries that things might start to get difficult from around 2008/09, now it looks like the horizon is moving out to around 2016. Things are looking a lot more optimistic - - the supply problems will now begin to occur later rather than sooner."

Inpex takes stake in offshore Australia permits Posted Thursday, July 27, 2006 - 7:24 by petromin
Inpex Holdings Inc. has acquired a 35% interest in the WA-357-P permit and a 20% interest in each of the WA-274-P and WA-281-P permits. All three permits are located in the North West Shelf offshore Western Australia. The acquisitions, made through the company’s Inpex Browse and Inpex Alpha subsidiaries, are subject to the Commonwealth and Western Australian Government approvals.

The WA-274-P covers an area of about 2,760 sq km, with a water depth ranging 300m to 500m. Inpex Browse acquired a 20% interest from the operator, Coveyork Pty. Ltd, a wholly owned subsidiary of Santos Limited. Santos will have a 30% interest in the permit after the transfer and Unocal Western Australia Pty Ltd, a wholly owned subsidiary of Chevron Corp. holds the remaining 50% interest.

The WA-281-P covers an area of about 2,340 sq km, with a water depth ranging from 150m to 450m. Inpex Browse acquired a 17.3394% from Santos Offshore Pty. Ltd (another wholly owned subsidiary of Santos) and a 2.6606% interest from Beach Petroleum Ltd, giving Inpex Browse a 20% interest in the permit. After the transaction is completed, Santos will hold 72.6606%, Beach will hold 7.3394%, and Inpex Browse will hold 20%.

Currently, both WA-274-P and WA-281-P are in the first year of the renewal terms.

The WA-274-P and the WA-281-P are in the offshore North West Shelf and located in the petroliferous Browse Basin, in which Inpex Browse has discovered the giant Ichthys field. This field is currently under evaluation for the LNG and liquids commercial development project. The WA-285-P, with its Ichthys gas condensate field, is adjacent to both of the WA-274-P and WA-281-P areas. The discovery of natural gas in both permits would be expected to expand the commercial development in the Ichthys field.

The WA-357-P covers an area of about 481 sq km, with a water depth ranging from 200m to 500m. The permit was originally granted to Apache on December 2004 and currently the permit is in the second year of the exploration terms. After this transaction, Apache operates with a 65% interest and Inpex Alpha has a 35% interest.

Inpex Alpha is producing oil in the Griffin field, and holds discovered and undeveloped oil and gas fields such as the Ravensworth oil field and the Van Gogh/Theo oil field, all these fields in the Carnarvon Basin, Western Australia, where the newly acquired WA-357-P is also located and adjacent to these fields. These undeveloped oil fields are evaluated for future commercial development and the area has much potential for hydrocarbon discovery.

Beach Petroleum reports new field discovery in Cooper-Eromanga Posted Thursday, July 27, 2006 - 7:23 by petromin
Beach Petroleum reports new field discovery in Cooper-Eromanga

Beach Petroleum said Wednesday that a new oil field has been discovered at Callawonga-1 in the Cooper-Eromanga Basin in South Australia.

Located in permit PEL-92, the new field is approximately 7 kilometres from a Beach-Cooper Energy, Ltd. joint venture’s established facilities at Christies.

“DST 1 conducted late yesterday over the uppermost Namur Sandstone interval 1,340-1,346 meters resulted in a flow of oil to surface in 15 minutes,” said Hector Gordon, Beach’s chief operating officer, in a written statement to the Australian Stock Exchange. “The final rate was 2,400 barrels of oil/day flowing at a stabilized wellhead pressure of 115 psi through a ½-inch surface choke. No water was observed during the test and a full string of oil was recovered.”

At 6 a.m. local time on July 26, the rig was preparing to drill ahead to further evaluate the Namur Sandstone oil zone and deeper objectives.

Participants in the Callawonga-1 well are Beach Petroleum Ltd (Operator) 75 % and Cooper Energy Ltd (25 %).

ExxonMobil, Petronas, among others seek stake in offshore India oil block Posted Thursday, July 27, 2006 - 7:04 by petromin
Malaysia's Petronas and 11 other major oil companies including ExxonMobil have shown interest in taking a stake in Gujarat State Petroleum Corp's (GSPC's) gas field off India's Andhra Pradesh coast, it was reported recently.

The companies have submitted non-binding bids for development of the Krishna Godavari basin gas and oil discovery block.

Other companies bidding for the gas block include Royal Dutch Shell, BP plc, the UK's BG Group PLC, France's Total SA, Brazil's Petrobras and Italy's ENI.

Interest also came from Statoil of Norway, Spain's Repsol YPF, U.S.-based Anadarko Petroleum Corp, Canada-based Husky Energy Inc and Crescent Petroleum of the United Arab Emirates.

Last month, GSPC found new reserves of high quality oil and gas in the block where the company plans to invest US$369.9 million for further exploration.

GSPC is also interested in selling 20 to 30 pct of its 80 pct participating interest in the block.

UBS is the financial adviser for GSPC on the proposed sale of the stake in the block.

Australia: Santos discovers gas at Evans Shoal South-1 Posted Thursday, July 27, 2006 - 7:02 by petromin
Santos reported that the Evans Shoal South-1 exploration well reached a total depth of 4,097 metres and encountered hydrocarbons in both the primary and secondary objectives.

No hydrocarbons were recovered to surface.

The well was not drilled to the planned total depth of 4,225 metres due to poor hole conditions, and has now been plugged and abandoned as programmed.

Technical assessment will continue, to better understand the significance of the well results.

The rig will has been moved into the adjacent permit to drill the Barossa-1 exploration well in NT/P69, to be immediately followed by the Caldita-2 appraisal well in NT/P61.

Evans Shoal South is located in permit NT/P48, 278 kilometres northwest of Darwin and 17 kilometres south of the existing Evans Shoal gas resource, in water depths of approximately 100 metres.

The participants in NT/P48 are:

Santos Offshore Pty Ltd Limited (Operator) 40%
Shell Development (Australia) Pty. Ltd. 50%
Osaka Gas Australia Pty Ltd. 10%

Lack of rigs deters Philippine oil hunt Posted Thursday, July 27, 2006 - 6:40 by petromin
Exploration for oil in the Philippines this year has been blighted by a lack of oil rigs while higher costs could deter development of new fields despite the value of crude oil to be above $70, an industry executive said yesterday.

Eduardo Manalac, CEO of the Philippine National Oil Company (PNOC), said the country hoped to increase oil and geothermal drilling in the next year, as well as boost wind power and build a biofuel refinery to reduce imported fuel dependence.

"This year no wells were drilled because of a lack of rigs," Manalac said. "Next year we foresee between three and five exploration wells, contingent on the availability of rigs," he said on the sidelines of an industry conference.

Oil majors are turning back to Asian exploration as reserves dwindle. Royal Dutch Shell is taking part in a 2-D seismic survey of 10,000km offshore northern Palawan island together with PNOC and the Philippine unit of Australia's Nido Petroleum Ltd, which should start next month.

Indonesia to offer 41 oil, gas blocks to investors Posted Thursday, July 27, 2006 - 6:39 by petromin
The Indonesian government plans to offer 41 oil and gas blocks across the country to investors in a public tender in August, it was reported Thursday.

The offer is part of the government's efforts to boost oil production to 1.3 million barrels per day to be achieved in 2009, said Bisnis Indonesia.

The blocks on offer are located on Java, Sumatra and Sulawesi islands.

National oil production has continued to fall to 909,240 barrels per day at the meantime, far below the targeted 1.05 million barrels this year.

Australia's Woodside starts Enfield oil production Posted Tuesday, July 25, 2006 - 12:46 by petromin

Australia's Woodside Petroleum today said it had started production at its Enfield oil project offshore Western Australia.

Woodside said it was ramping output up towards capacity rates at the 100,000 barrel per day (bpd) field, boosting the company's total production and adding competition to the region's small heavy and medium sweet crude market.

The company originally slated first Enfield production for the fourth-quarter of 2006, before accelerating the timetable to the third and then the second quarter, which then slipped back into July after the field's floating production storage and offtake vessel, Nganhurra, needed repairs.

Woodside operates the Enfield project with a 60 per cent share, with the remainder held by Japan's Mitsui & Co.

Enfield crude, from the second-largest development in the Asia-Pacific market this year after Russia's Sakhalin-1, is a heavy sweet crude, similar to Indonesian Duri grade in terms of gravity but with a better products yield, traders have said.

Its API gravity stands at around 21.7 and its sulphur content at 0.12 per cent, making it much heavier than Australian flagship light-sweet Cossack crude.

Woodside cut its 2006 production outlook by 5 per cent in June, mainly blaming start-up delays at new projects such as Enfield, as well as bad weather earlier in the year.

The company has also experienced problems at the Chinguetti oil field, offshore Mauritania in West Africa, and construction delays at the Otway project in southern Australia.

In Western Australia six cyclones earlier this year affected production on the North West Shelf, while US Gulf of Mexico development delays have been caused by high demand for oil and gas services after hurricanes Rita and Katrina in late 2005.

Indonesian Govt set to boost oil production Posted Monday, July 24, 2006 - 3:39 by petromin
The government said it hopes to see an additional oil production of 24,250 barrels per day (bpd) from 12 new oil fields in August to offset a recent decline in the country's total output.

The country's crude oil production is expected to average only 909,240 bpd this year, falling short of the government's target of 1.1 million bpd.

Deputy Chief of the upstream oil and gas regulatory body (Migas) Trijana Kartoamodjo said so far the production could reach only 1.05 million bpd.

The productivity of the existing oil fields is on the decline, therefore, without new discovery of reserves, the country's production will likely average only 909,240 bpd, Trijana said.

The government, therefore, hopes to boost production from new oil fields, including Zamrud South, Nilam, Krisna Waterflood, Argo, Tiaka, MESG-01, SE Bene, Bekasap, Oyong, OPndok Tengah and Kaji Semoga Telisa, he said.

CNPC achieves positive oil-gas prospects Posted Monday, July 24, 2006 - 3:38 by petromin

Up until the end of June, China National Petroleum Corporation (CNPC) had already finished 61 percent of its yearly target in verifying the geological reserve of petroleum. Among which the reserves in Changqing and Jilin oilfields are expected to hit more than 30 billion tons.

The petroleum reserves controlled and forecast respectively had contributed to 69 percent and 59 percent of the plan of the whole year. Altogether 53.7802 million tons of crude oil was produced, realizing 50.73 percent of the year's target. The output of natural gas had been realized at 50.31%, increasing by 28.18 per cent over the same period of the year.

The oil-gas reserve is the core resource of CNPC to enhance its strength and competitive ability. The joyful prospecting results obtained in the first half year have given CNPC a promising future.

There are eight belts altogether found with large scale of oil sand and whose oil-bearing structure and formation have already been verified. After evaluation, 11 reserves have been presented in Honggang region in the South of Songliao Basin, Dagang Tanhai area in Bohai Bay Basin, Eerduosi basin, and Northwest edge of Songorine Basin, etc.

ExxonMobil sets deadline for Guntong project Posted Monday, July 24, 2006 - 3:37 by petromin
US oil giant Exxon Mobil Corp’s subsidiary, ExxonMobil Exploration and Production Malaysia Inc (EMEPMI) will focus on completing the commissioning of the remaining turbo-compressors at its new Guntong E platform this year as part of its aim to meet the growing demand for gas in the country.

“We have started operations on the Guntong E gas compression platform of the first of three turbo-compressors to capture incremental gas sales and liquid production,” general manager (operations) Zainal Abidin Jalil said.

“Our focus is to complete the commissioning of the remaining turbo-compressors before year-end. This will bring Guntong D and E’s combined gas handling capacity to more than 800 million cubic feet of gas per day,” he said.

The company had on July 14 announced that it started operations at its Guntong E gas compression platform in a move to help meet the high demand for gas in the country.

Guntong E was developed under the Gas Production Sharing Contract between EMEPMI and Petronas Carigali Sdn Bhd. Both hold a 50% participating interest each, in the contract.

Located about 210km off the east coast of Peninsular Malaysia, the facility consists of an eight-leg jacket and six modules for gas receiving, separation, dehydration and compression.

Guntong E is connected to EMEPMI’s existing Guntong D gas compression platform via a bridge.

It is developed under the Gas Production Sharing Contract between ExxonMobil Exploration and Production Malaysia Inc and Petronas Carigali Sdn Bhd.
Zainal said the Guntong Hub would provide the compression needs for existing and future developments, including non-associated gas developments from the Tabu and Tapis fields.

“The Guntong Hub development will involve new drill wells, satellite platforms and new pipelines,” Zainal said, adding that the Guntong E project would enable EMEPMI to embark on several future gas resource development commitments under the gas production-sharing contract with Petronas.

Designed and constructed in Malaysia, the Guntong E platform is one of the largest commissioned by the company, weighing 17,800 tonnes. The fabrication of the platform began in April 2004, and installation was completed in October last year.

There are more than 200 workers on the platform, according to Zainal, adding that it was equipped with comfortable living quarters and catering services to meet the needs of all.

EMEPMI operates in 17 oil producing fields in the country and has 42 offshore platforms to-date, with the first one established in 1978.

On how much it takes to maintain all its offshore platforms, Zainal said EMEPMI spent US$180mil to operate and maintain its production operations last year.

Over the last 25 years, ExxonMobil subsidiaries in Malaysia have chalked up total investments of US$13bil in upstream and downstream businesses.

“This had not only created direct jobs in our own operations, but many more in the service and manufacturing sectors that support our operations.

“Our upstream business activities have resulted in a significant transfer of technologies to our local workforce, contractors and vendors. Today, these local companies have become globally competitive and have won overseas jobs,” he added.

Zainal said the company’s upstream business began operations here in the late 1970s with around 300 expatriates. “Almost all of these positions have been nationalised. Today, there are only around 20 expatriates in Malaysia who are employed for their specific experience and for building local expertise,” he added.

“Some of the project development and production operation work practices developed over the last 20 years in Malaysia have become the best practices that are now used in ExxonMobil’s operations in other parts of the world,” Zainal said.

He said as a multinational corporation, the company also placed a lot of emphasis on training and had allocated some US$5mil for it this year, compared with US$3mil last year.

“This year, we recruited more than 100 new trainee technicians who will have to complete a two-year training programme before they are certified competent to work in our production operations,” Zainal added.

On research and development (R&D) activities, he said they were undertaken at the company’s headquarters in the US. “About US$600mil is spent on R&D every year.”

Zainal believes that the oil & gas sector in Malaysia is experiencing a high level of work activities, resulting in higher costs of goods and services across the industry.

“As a production-sharing contractor to Petronas and a partner to Petronas Carigali Sdn Bhd, ExxonMobil continues to work closely with the national oil company to meet Malaysia’s energy needs and aspirations,” he said.

Daqing oilfield may continue producing for 50 more years Posted Wednesday, July 19, 2006 - 10:46 by petromin

China's Daqing oilfield, operated by PetroChina Co, may continue producing for at least another 50 years as technology used to extract crude from the nation's largest onshore source of the fuel improves.

Production from the field will be maintained at 2005's level of 45 million metric tons (about 900,000 barrels a day) for the next five years, Han Xuejian, mayor of the north-eastern city of Daqing, in Heilongjiang Province, said on Thursday.

China pumped the first oil from the Daqing field in 1959 and output peaked at 55 million tons over a 27-year period. The field had produced 1.9 billion tons of oil by the end of last year, accounting for more than 40 per cent of the country's onshore output. PetroChina got 46 million tons of oil from Daqing in 2004.

"We're confident of using better technology to keep the field pumping for 100 years" since it started producing, Han said. "We want to continue to contribute significantly to China's oil industry."

PetroChina reports crude output slightly up in first half year Posted Wednesday, July 19, 2006 - 10:45 by petromin
PetroChina Company Limited announced Monday that the company's crude oil output reached 419 million barrels in the first six months, representing an increase of 7.3 million barrels, or 1.8 percent, from the first half of last year.

A statement from the company said it produced 684.7 million cubic feet of marketable natural gas, up 161.1 million cubic feet, or 30.8 percent.

PetroChina processed 392 million barrels of crude in the first six months, an increase of 13.2 million barrels or 3.5 percent.

The company produced 11.06 million tons of gasoline, up 3.2 percent, and 22.22 million tons of diesel, a rise of 2.6 percent.

The company produced one million tons of ethylene, up 6.6 percent, 155,000 tons of synthetic rubber, up 9.2 percent, and 1.52 million tons of synthetic resin, up 16.3 percent from the first half of last year.

PetroChina is a joint stock company under China National Petroleum Corporation (CNPC), China's largest oil and gas producer.

CITIC takes stake in Indonesian oil field Posted Monday, July 17, 2006 - 7:14 by petromin

CITIC Resources, the Hong Kong-listed arm of conglomerate CITIC Group, made its first entry into an overseas oil asset yesterday by buying a 51-percent stake in an Indonesian field for US$97.4 million.

"We have already entered into an agreement with KUFPEC Indonesia to buy from the latter a 51-percent participating interest in the Seram Island Non-Bula Block," said Shou Xuancheng, Vice-Chairman of CITIC Resources.

As the company's first-ever overseas oil asset acquisition, the deal will allow CITIC Resources to explore, develop, and produce oil from Seram Island Non-Bula Block until 2019.

Seram Island Non-Bula Block's principal oil field, Oseil field, had an estimated gross oil reserve of about 39 million barrels by December 2005, including 7 million barrels of proven reserves. It produced an average of 4,300 barrels of oil per day in the first half of 2006.

Shou said that completion of the acquisition was now waiting for final approval from the Indonesian government and its regulatory bodies.

"We have regular contact with the Indonesian government and other (regulatory) bodies. We should be able to get the final approval at the end of August or early September," he said.

Shou, who worked as a senior oil exploration expert and consultant for China's top oil producer China National Petroleum Corp. for more than 3 decades before joining CITIC Resources, said that the new phase of Indonesia's oil field was the company's first step to explore oil reserves, particularly in Southeast Asia.

"Energy products such as oil will become our flagship product," said Shou, who told reporters that a team of about 30 oil professionals was working on the firm's future oil exploration plan in Southeast Asia.

"We will continue to observe and assess other oil fields in the region," Shou said.

CITIC Resources will fund the Indonesian acquisition through internal resources and existing facilities.


Bangladesh to seek foreign bids for oil and gas exploration Posted Monday, July 17, 2006 - 5:44 by petromin

Bangladesh will seek bids from overseas energy companies to explore for oil and gas in the Bay of Bengal after a court removed an obstacle blocking agreements with them.

Last Thursday, Bangladesh's High Court lifted an injuction preventing state-owned energy firm, Petrobangla, from signing production-sharing contracts with other oil companies, company chairman Mosharraf Hossain Bhuiyan said Saturday.

"We are now free to open bids for offshore oil and gas exploration. We have done the paperwork and will now seek bids from overseas companies within one to two months' time," Bhuiyan said.

The Petrobangla chairman said the company had divided Bangladesh's portion of the Bay of Bengal into several blocks and would seek bids for each of them.

"Geological surveys show that the Bay of Bengal is rich in oil and gas and several oil giants have also expressed their interest for exploration in the region," he said, without naming them.

The fresh round of bidding would be the third in the South Asian nation's history.

Bangladesh, home to South Asia's biggest gas reserves, was divided into 23 blocks for hydrocarbon exploration after the government amended the country's Petroleum Act in 1993.

British oil company Cairn Energy won the first offshore exploration rights on June 5, 1994. It struck gas in Sangu in the Bay of Bengal in 1997 and started production from 1998.

The government allowed a second round of exploration for onshore blocks in 1997.

Among the blocks to be offered in the latest bidding are three offshore blocks in the Bay of Bengal near the site of a recent discovery of big gas fields in waters controlled by neighbouring Myanmar.

Officials said the discovery prompted foreign oil companies to seek exploration rights.

Bangladesh has proven recoverable gas reserves of 15 trillion cubic feet of which more than three trillion cubic feet have already been extracted, according to official figures.

Current reserves of natural gas are expected to last until 2017.

The Petrobangla chairman said growing energy needs, driven by impressive domestic economic growth in the past few years and rising prices of fuels in the world market have prompted authorities to hunt for more energy sources.

MODEC awarded FSO for Rang Dong Field, offshore Vietnam Posted Monday, July 17, 2006 - 5:43 by petromin

MODEC, Inc. reported Friday that it has signed a contract with Japan Vietnam Petroleum Co., Ltd. (JVPC), which is a group company of Nippon Oil Corp., for the supply and operation of a floating storage and offloading (FSO) vessel for JVPC's Rang Dong field offshore Vietnam. JVPC is operating in the Rang Dong field jointly with ConocoPhillips (UK) Limited Vietnam and PetroVietnam Exploration and Production Co.

The Rang Dong field is located approximately 135 kilometres southeast of Vung Tau on Block 15-2. The FSO is planned to be installed in approximately 60 meters water depth and is designed to have receiving capacity of 60,000 barrels of oil per day and storage capacity of 350,000 barrels.

MODEC is responsible for the engineering, procurement, construction, installation, commissioning, and operations of the FSO, including the external turret mooring system.

The oil production from the Rang Dong field is expected during the third quarter of 2008. MODEC will own and provide FSO operation services for the Rang Dong field for an initial 9-year period with the option of 1-year extensions for further 5-years.

MODEC is a turnkey service supplier of floating production, storage, and offloading (FPSO) vessels, FSO vessels, tension leg platforms (TLPs) and production semi submersibles (CPSs) for the offshore oil and gas industry. MODEC currently operates seven FPSOs and one FSO around the world.

Kazakhstan starts oil deliveries to China by oil pipeline going across Alatau Posted Monday, July 17, 2006 - 5:42 by petromin
Kazakhstan has begun to deliver oil to China by the oil pipeline going across Alatau to the oil storages, built in the Xinjiang Uygur Autonomous Region, in the north-east of the country. So, the commercial operation of the first direct oil pipeline going across the Chinese border has been started, as reported on Wednesday.

According to Zhu Minjie, an officer of the Chinese customs service, within 15 days, after the filling up of the intermediary oil tank, oil will start coming to the oil refinery in Dushanzi, the biggest in China.

The 962-kilometres-long oil pipeline connecting Atasu, Kazakhstan, and the Alatau crossing was built jointly by the Chinese National Petroleum Corporation (CNPC), the Kazakhstan State Energy Company and the Kazgaz Company. It was put in operation last November. After that CNPC continued to build the next section of the pipeline, whose total length is 252 kilometres, and brought it to the Dushanzi oil refinery. The maximum design capacity of the oil pipeline is 20 million tons a year.

China is expected to import this year 4.75 million tons of oil from Kazakhstan and to bring the figure to eight million tons in 2007.

Chevron in big gas find off Western Australia Posted Friday, July 14, 2006 - 2:32 by petromin
A big gas discovery has been made off the West Australian coast that could add billions of dollars to the country's export earnings.

US energy giant Chevron said yesterday the Chandon-1 well, drilled about 260km offshore from Dampier, had found gas. Later one of Chevron's partners in the Gorgon LNG project, ExxonMobil, described the find as "significant".

Chevron declined to give details of the well and its target but analysts said it appeared Chandon-1 had penetrated a structure that could contain 4 trillion cubic feet (tcf) of gas.

This would place it in the top four gas discoveries in the world during the past year. Woodside's Pluto discovery, announced in April last year and closer to shore than Chandon, is estimated to contain about 3.5tcf of gas. Australia's gas reserves are estimated at 153tcf.

The Gorgon project is backed by reserves totalling about 40tcf, including Australia's biggest single gas discovery, Exxon's Jansz field, which is estimated to contain 20tcf.

Chandon-1 was drilled in permit WA-268-P to a total depth of 3100m by the semi-submersible rig Jack Bates in water 1200m deep.

Making the announcement from Chevron's headquarters in San Ramon, California, John Watson, president of Chevron International Exploration and Production, said the find underscored the value of focusing Chevron's exploration program on high-impact opportunities.

"Our continued exploration success in Australia, combined with our commitment to develop these resources, offers great prospects for gas markets across the Asia-Pacific and North America regions." Chevron, with 50 per cent, leads the Gorgon joint venture, with Exxon and Shell each holding 25 per cent.

They plan to build an LNG plant on Barrow Island producing 10 million tonnes a year, but are appealing a recent decision of Western Australia's Environmental Protection Authority not to recommend approval for the project because of the effect of the project on the flatback turtle and the inshore marine environment.

Earlier this year Chevron told potential customers in Japan that Gorgon's delivery start-up had been pushed backed to 2012.

Chevron said yesterday that while it owned 100 per cent of the Chandon permit, under an agreement signed last year covering Gorgon, Exxon and Shell would each take 25 per cent of the discovery.

Chevron Australia managing director Jay Johnson said Chandon could be an important addition to the company's Australian gas resources.

"Success in our exploration efforts is always welcome, and as Chandon-1 is an exploration well, further work is required to determine the potential of the gas field," he said. "Our efforts to commercialise the fields of the Greater Gorgon area, our commitment to the expansion of the North West Shelf venture and our increased exploration program in the region all have the potential to deliver significant long-term benefits to Australia."

China finds natural gas reserve in South China Sea Posted Friday, July 14, 2006 - 2:31 by petromin

China's Ministry of Land and Resources on Thursday announced the discovery of natural gas reserves exceeding 100 billion cubic meters in the northern South China Sea.

The reserves were found in a prospect well numbered LW 3-1-1, in the Zhujiangkou basin 250 kilometres from Hong Kong, the ministry said.

It was China's first prospect well with a drilling depth of more than 1,000 metres, according to the ministry.

This important discovery showed the potential reserves of oil and gas in the blue water of the South China Sea, the ministry said.

China launched its strategic exploration and appraisal of potential oil and gas reserves in the northern South China Sea in 2004.

GAIL, GSPC discover natural gas in Gujarat Posted Thursday, July 13, 2006 - 6:53 by petromin
Gujarat State Petroleum Corporation has discovered a natural gas field estimated to contain 10 billion cubic feet, a government official said on Wednesday.

Gujarat's Energy Secretary Balvant Singh said that the gas field was discovered in a block jointly owned by the company and GAIL (India) Ltd.

CNOOC in new discovery Posted Wednesday, July 12, 2006 - 7:03 by petromin

CNOOC Limited reported that its wildcat Luda (LD) 6-2-1 drilled independently in Bohai Bay hit a new discovery LD 6-2.

LD 6-2-1 is located in the Liaodong Bay, with a water depth of about 30 meters. The well was drilled to a total depth of 2,395 metres.

The well was tested to flow about 620 barrels of oil and 240,000 cubic feet of gas per day via 7.14mm choke during the drill stem test.

We’re optimistic about our exploration in Bohai Bay in 2006. Several new discoveries have been made up to now, including LD 6-2, BZ29-4 and BZ28-2S," said Mr. Zhu Weilin, Vice President of the Company and General Manager of the Exploration Department.

These new discoveries will further enlarge our reserve base in Bohai Bay.”

Thai-Malaysian gas pipeline ready to start operations Posted Tuesday, July 11, 2006 - 2:26 by petromin

The Thai-Malaysian gas pipeline from the Joint Development Area (JDA) in the Gulf of Thailand has been completed and is ready to supply gas to Malaysia within the next two months.

Nuruddin Dasaesamoh, the public-relations manager for Trans Thai-Malaysia (Thailand) Co (TTM), said final tests on the pipeline and gas separation plant were expected to be finished within two months.

TTM is a joint venture between PTT Plc of Thailand and Petronas, Malaysia's national energy company.

Mr Nuruddin said that, although TTM was now steered by the Petronas president, Kalantar Mastan Mohamed, the company's key policies remained unchanged.

He said the company still had a commitment to environmental preservation in local communities, as well as investing 10 million baht annually in a local social development fund.

He said that, following the official launch of operations for the pipeline and gas separation plant, the company would also supply natural gas for vehicles (NGV) to PTT via the Klong Wa gas terminal.

"It is good news that people in Songkhla and neighbouring provinces have an opportunity to consume NGV at low prices because there are no transport costs for the gas supply," he said.

Booncherd Panyasai, a manager for PTT's NGV sales and marketing department, said it had invested 100 million baht in building the main NGV supply terminal at Klong Wa in Hat Yai to link with the Thai-Malaysia pipeline.

The main terminal will collect and supply NGV to three small terminals that are under construction, as well as existing service stations of PTT. It is expected that the small terminals will begin to offer NGV services in October.

"Our main terminal will be built in Klong Wa where the gas pipeline crosses over. It is expected that construction will be completed in mid-September. Then the equipment will be installed and a test run will be carried out. The terminal is expected to open for service in October," he said.

He said PTT would also invest around 20-30 million baht to install equipment in each small terminal.

If NGV demand increases in the future, PTT plans to raise the number of terminals. It also plans to open 25 more terminals in the South next year.

Mr Booncherd said PTT was willing for other oil traders to offer NGV services at their service stations if they were interested.

Currently, alternative energy is available in some service stations of Bangchak Petroleum Plc. Other oil traders, including Petronas, have shown interest in selling NGV at their service stations. Negotiations are under way.

Thailand: PTT gears up for natural gas imports Posted Tuesday, July 11, 2006 - 2:25 by petromin

Thailand's state-owned national petroleum company, PTT, on Friday announced plans to invest 36 billion baht (US $947 million) in a deepsea port, pipeline and receiving terminal to prepare for increased imports of liquefied natural gas (LNG).

PTT president Prasert Boonsumphon on Friday signed a 30-year lease with the Industrial Estates Authority of Thailand at Mab Ta Phut, on Thailand's eastern seaboard, to construct the deepsea port and other facilities.

The port, receiving terminal and pipeline, which are slated to be completed by 2010, are part of Thailand's preparations to boost its natural gas imports, Prasert said.

He said that initially, the facilities would be able to handle 5 million tons of natural-gas imports a year, which would eventually be boosted to 10 million tons.

The country currently uses natural gas piped in from reserves in the Gulf of Thailand and from neighbouring Myanmar (Burma) as a major energy source.

PTT executive vice president Chitrapongse Kwangsukstith told reporters that PTT would spend 26 billion baht on constructing the deepsea port and receiving terminal at Map Ta Phut with another 10 billion baht invested in a pipeline to deliver the gas to power plants in north-eastern Thailand.

Shell, Total Saudi gas venture drills first well Posted Tuesday, July 11, 2006 - 2:25 by petromin

South Rub Al Khali Company (SRAK), a joint venture between Saudi Aramco, Royal Dutch/Shell and Total, said it had started digging its first gas well in Saudi Arabia's Empty Quarter.

SRAK began exploring in 2004 for gas, condensate and natural gas liquids in nine blocks in two separate parts of the vast desert area of southeast Saudi Arabia, known in Arabic as the Rub Al Khali ('empty quarter').

'The spudding comes after important regional geographical work to understand the petroleum systems in this area... The well is considered a rank wildcat... The well is anticipated to take up to four months to drill,' a statement said.

'A second drilling rig is planned to be mobilised to the area in 2007,' it added.

SRAK, which won rights to seek gas in the 210,000 square km bloc in November 2003, has said it does not expect to produce the first gas until 2009 at the earliest.

Three other consortia of Russian, Chinese and European firms were awarded smaller exploration blocs in the Empty Quarter in a second round of concessions in January 2004.

The awards were pared down from an ambitious $25 billion gas initiative which originally included power and water desalination projects.

Exxon, BP and Shell eye India's gas reserves Posted Tuesday, July 11, 2006 - 2:24 by petromin
Exxon, BP and Shell eye India's gas reserves

Mumbai: At least 13 oil companies, including ExxonMobil, Royal Dutch Shell, BP, BG Group and Total have submitted a preliminary offer to buy a stake in one of India's biggest gas field, its operator said on Thursday.

State-run exploration firm Gujarat State Petroleum Corp struck gas off India's southeast coast in June last year and said the field was likely to hold up to 20 trillion cubic feet of gas.

"We have received expressions of interest (EOIs) from companies who have the expertise in deepwater drilling," an official at the unlisted Indian firm said.

Shares in the firm's subsidiary, gas transporter Gujarat State Petronet Ltd, rose more than 1 per cent to Rs33.95 on the news but later fell in line with a weak Mumbai market to Rs33.15.

Local officials of Exxon and BG confirmed their interest in the field, while others declined comment.

Other companies in the fray are: Brazil's Petrobras, Malaysia's Petronas, Italy's ENI, Norway's Statoil, Spain's Repsol YPF, US-based Anadarko Petroleum Corp, Canada's Husky Energy and UAE-based Crescent Petroleum.

Gujarat State Petroleum struck gas off India's southeast coast in June 2005 and said the field may hold 20 trillion cubic feet of gas.

Exxon, BP and Shell eye India's gas reserves Posted Friday, July 7, 2006 - 8:04 by petromin

Mumbai: At least 13 oil companies, including ExxonMobil, Royal Dutch Shell, BP, BG Group and Total have submitted a preliminary offer to buy a stake in one of India's biggest gas field, its operator said on Thursday.

State-run exploration firm Gujarat State Petroleum Corp struck gas off India's southeast coast in June last year and said the field was likely to hold up to 20 trillion cubic feet of gas.

"We have received expressions of interest (EOIs) from companies who have the expertise in deepwater drilling," an official at the unlisted Indian firm said.

Shares in the firm's subsidiary, gas transporter Gujarat State Petronet Ltd, rose more than 1 per cent to Rs33.95 on the news but later fell in line with a weak Mumbai market to Rs33.15.

Local officials of Exxon and BG confirmed their interest in the field, while others declined comment.

Other companies in the fray are: Brazil's Petrobras, Malaysia's Petronas, Italy's ENI, Norway's Statoil, Spain's Repsol YPF, US-based Anadarko Petroleum Corp, Canada's Husky Energy and UAE-based Crescent Petroleum.

Gujarat State Petroleum struck gas off India's southeast coast in June 2005 and said the field may hold 20 trillion cubic feet of gas.

Exxon, BP and Shell eye India's gas reserves Posted Friday, July 7, 2006 - 7:40 by petromin
Mumbai: At least 13 oil companies, including ExxonMobil, Royal Dutch Shell, BP, BG Group and Total have submitted a preliminary offer to buy a stake in one of India's biggest gas field, its operator said on Thursday.

State-run exploration firm Gujarat State Petroleum Corp struck gas off India's southeast coast in June last year and said the field was likely to hold up to 20 trillion cubic feet of gas.

"We have received expressions of interest (EOIs) from companies who have the expertise in deepwater drilling," an official at the unlisted Indian firm said.

Shares in the firm's subsidiary, gas transporter Gujarat State Petronet Ltd, rose more than 1 per cent to Rs33.95 on the news but later fell in line with a weak Mumbai market to Rs33.15.

Local officials of Exxon and BG confirmed their interest in the field, while others declined comment.

Other companies in the fray are: Brazil's Petrobras, Malaysia's Petronas, Italy's ENI, Norway's Statoil, Spain's Repsol YPF, US-based Anadarko Petroleum Corp, Canada's Husky Energy and UAE-based Crescent Petroleum.

Gujarat State Petroleum struck gas off India's southeast coast in June 2005 and said the field may hold 20 trillion cubic feet of gas.

CNOOC Ltd announces the start-up of BZ25-1/25-1S Platform A Posted Friday, July 7, 2006 - 7:08 by petromin

CNOOC Limited announced today that Bo Zhong (BZ) 25-1/25-1S Field Phase II Platform A has successfully come on stream. More than 2,200 barrels of light crude oil per day are produced from 2 wells currently.

The successful commencement of Platform A concluded the development of the field by six platforms in the overall development plan of BZ 25-1/25-1S field.

BZ 25-1/25-1S field is producing 30,000 barrels of crude oil per day. The daily production of this field is expected to increase, with more wells coming on stream later on.

BZ 25-1/25-1S field is located in southeast Bohai Bay, about 127 kilometres southeast of Long Kou City. Water depth of the field is 20 meters approximately. Development period is divided into two phases. Platforms B, D, E in Phase I and Platforms C, F in Phase II successfully started production in 2004 and 2005 respectively.

Mr. Liu Jian, Executive Vice President of the Company commented, "This is our first field development under a unitization agreement with the adjacent block. Its full-scale production reflected the outstanding project management capability of the Company and its partners."

CNOOC Ltd holds 83.3% interest of BZ 25-1/25-1S field and acts as the Operator.

GAIL, GSPC discover natural gas in Gujarat Posted Friday, July 7, 2006 - 11:44 by petromin
Gujarat State Petroleum Corporation has discovered a natural gas field estimated to contain 10 billion cubic feet, a government official said on Wednesday.

Gujarat's Energy Secretary Balvant Singh said that the gas field was discovered in a block jointly owned by the company and GAIL (India) Ltd.

Another record profit year for Petronas Posted Thursday, July 6, 2006 - 4:57 by petromin
Petroliam Nasional Bhd (Petronas) reported yet another year of record profit as crude oil prices and sales of liquefied natural gas (LNG) continued to rise.

The national oil company recorded a 22.6% increase in net profit at the group level to RM43.6bil for its financial year ended March 31, 2006 as revenue rose 21.8% to RM166.9bil but president and CEO Tan Sri Hassan Marican said spiralling cost, the shortage of human capital and ongoing gas subsidies were concerns.

“Cost to develop and explore has gone up. It has become another challenge, coupled with the shortage of human resources around the world,'' he told the media at the release of Petronas' full-year financial results.

Notwithstanding such problems, Petronas enjoyed a bumper financial year as the weighted average price of crude oil sold from all the territories it operated in was markedly higher than in the previous financial year.

Petroleum products, such as refined products, was the biggest contributor to Petronas' revenue last year, bringing in RM55.6bil of the overall revenue of RM166.9bil. This was followed by crude oil, LNG and petrochemical products.

“We are able to achieve these results due to the high reliability of our plants,'' Hassan said.

Pre-tax profit for the year rose 21% to RM70.2bil.

Petronas said 58.4% of group revenue, which had been growing at a compounded annual rate of 26.3% over the past five years, came from manufacturing activities. Its domestic manufacturing revenue constituted 27.8% of the manufacturing sector's contribution to Gross Domestic Product.

Hassan said that percentage would have been much higher if LNG activity was included under manufacturing instead of mining.

Exports accounted for RM73.6bil of total revenue. Total shareholders' funds and liabilities jumped to RM269.2bil from RM239.1bil and the group's gearing ratio dropped to 0.16 times from 0.22 times a year earlier.

Total debt was RM43.9bil with the majority of it in US dollars and payable over the next 10 years. Petronas has RM93.1bil in cash and investments compared with RM75.2bil a year earlier.

While higher oil prices were the main driver of revenue and profit growth, Hassan said dividends from subsidiary companies amounted to RM15.8bil, which was a 216% increase from the previous financial year. Total investment in such subsidiaries totalled RM64.5bil.

Budgeted capex for its 2007 financial year was RM27.7bil, of which RM19.2bil was for the domestic market. Of the total amount, 48% was for exploration and production and 26.1% was for logistics and maritime, or for subsidiary MISC Bhd.

Total capex in 2006 was RM18.5bil and the majority of that was contributed by production sharing contract partners in Malaysia.

Comparing financial ratios of Petronas with other oil giants, Hassan said its pre-tax profit margin and return on average capital employed were much better than what the other majors were achieving.

He added that the return on total assets at 26% was lower than some of the majors but if property assets were taken out, the ROA would be about 35%.

Petronas also said that as at Jan 1 2006, total reserves in Malaysia amounted to 19.91 billion barrels of oil equivalent, a 2.8% increase from 2005.

The bulk of that is in natural gas, which has a lifespan of 34 years based on current production levels. The reserve lifespan of oil is 20 years based on the current rate of production.

Total average production in the country is 1.656 million barrels of oil equivalent a day and for Petronas, total average production is 1.164 million barrels of oil equivalent a day.

Hassan said total production by Petronas fell because of maintenance of major facilities and PSC cost recovery.

“There are 270 platforms offshore in Malaysia, of which 150 are above 20 years old,'' he said, adding that oil pipelines were also aging and would result in shutdowns for refurbishment.

“There will be times where we have to bring down production and conduct major refurbishments.''

Sinopec aims to secure more gasfields Posted Thursday, July 6, 2006 - 4:56 by petromin
Sinopec aims to secure more gasfields

China's biggest oil refiner Sinopec aims to secure up to three medium- or large-sized natural gas finds with reserves of 60 billion cubic metres (bcm) in Northeast China by 2008.

The new gas finds will be located south of China's biggest oilfield Daqing in the Songliao Basin, a Sinopec official, who refused to be identified, said yesterday.

Analysts said the new discoveries, if successful, would significantly increase Sinopec's gas reserves and help the country ease its heavy reliance on imports for the cleaner fuel.

By the end of last year Sinopec had proven natural gas reserves of 83.6 bcm.

"We expect to find two or three fields in the southern part of Songliao Basin, which will be strategically important for Sinopec to sustain its resources," the official said.

The company found a natural gas well in the region last month, which could produce 205,000 cubic metres of natural gas per day.

Zhang Kang, a senior geologist with the Beijing-based oil firm, said the well discovery raised the potential of there being more gas reserves located in the deep seams around the basin.

"We have been working on exploration of oil and gas in the region for quite a long time and the new discovery is a very positive sign," Zhang said.

The new find followed announcements from both Sinopec and PetroChina on major gas discoveries in Northeast and Southwest China.

Hong Kong and New York-listed Sinopec in April said it had found the Puguang Gasfield with proven recoverable reserves of as much as 251 bcm in southwestern Sichuan Province.

When commercial operation begins, annual production of the Puguang field is expected to reach 4 bcm and 8 bcm by 2008 and 2010 respectively, Sinopec said in a statement.

In another significant move, the nation's biggest oil producer PetroChina at the end of last year announced the discovery of another 100-bcm gas field under the Daqing Oilfield in Northeast China's Heilongjiang Province.

Beijing-based Sinopec has budgeted 29.8 billion yuan (US$3.7 billion) on oil and gas exploration this year, an increase of 29.6 per cent from last year.

"We should step up exploration efforts to ensure a sustainable balance between production and reserves," Sinopec said in its annual report.

The State-owned oil refiner, Asia's largest, produced 6.28 bcm of natural gas last year, and its newly added recoverable gas reserves amounted to 3.98 bcm for the same period.

Rising global gas prices have dampened the country's ambitious target of importing the cleaner fuel in meeting energy demands and cutting reliance on oil and coal, and analysts said strengthening domestic exploration would help alleviate the shortage.

Xu Dingming, vice-chairman of the government's leading energy group, last week said the country would not import large volumes of natural gas if prices remain high.

China will be able to produce up to 150 bcm of natural gas by 2020, and imports could reach about 90 bcm by then to meet surging demand, Zhai Guangming, a senior expert with PetroChina, said in May.

New Qian 12-14 well producing double the barrels than predicted Posted Tuesday, July 4, 2006 - 4:44 by petromin
China North East Petroleum Holdings Limited (CNEH), an oil producing company in Northern China, today announced the most recent completion of its 21st well of the Company's Qian 112 oil field drilling project.

On May 22nd, the drilling team successfully completed the drilling work on a new well (reference number Qian 12-14). Its engineers report the Qian 12-14 well is producing 38 barrels of crude oil per day, which is double the amount originally expected by its technicians. By analyzing the borehole log and well log, our geological experts confirm that there are two oil layers with the thickness of 4.4 meters, and seven oil-water layers with the thickness of 17.4 meters. Such evidence, along with other geological indexes, further proves the production feasibility of the Qian 112 oil field.

In an ongoing effort to increase production, the drilling rig and equipment have now been moved from the Qian 12-14 well to a new drilling location - Qian 12-16 in the Qian 112 oil field and the work to drill this new well has already begun.
Hongjun Wang, President of China North East Petroleum, comments: 'We are very pleased with the well drilling results of the Qian 12-14 well, especially with the higher than expected production output. It further proves the production feasibility and growth potential of the Qian 112 oil field. It is currently executing a plan to finish drilling an additional 19 wells for a total of 40 wells by the end of 3rd quarter this year, which will at least double our current production output and revenue. This increased revenue will be invested to increase the speed of which we drill the new wells.'

Santos says test well hits oil and gas in Vietnam Posted Tuesday, July 4, 2006 - 12:01 by petromin
Australian oil and gas producer Santos said yesterday it had found oil and gas at its Dua-4X exploration well offshore Vietnam, operated by the United Kingdom's Premier Oil.

Santos said the joint venture would now drill a side-track well to provide further geological information on the extent and quality of the hydro-carbon reservoir, in the Nam Con Son Basin.

The well is adjacent to the Dua-1X oil body, discovered in 1974, which flowed 1,500 barrels of oil per day. As yet no flow testing has taken place at the Dua-4X well.

"This is an encouraging start to our Vietnam drilling programme," said Santos Managing Director, John Ellice-Flint in a statement.

Following completion of the side-track, equipment will be moved to the nearby Blackbird prospect where a previous well also encountered "very good oil shows", Santos said.

On completion of a recent farm-in arrangement, Santos and Premier will each hold 37.5 per cent of the Vietnam acreage. The remainder is held by Delek Energy, a subsidiary of Israel's Delek Group.

New oil wells in western Philippines to yield production 2007 Posted Tuesday, July 4, 2006 - 12:00 by petromin
Two new oil wells offshore the Philippines' Palawan Island are scheduled to yield production as early as November 2007, with a daily flow rate of 21,000 barrels, local newspaper reported on Monday.

The drilling will start in June 2007 and will be completed by September. Installation of facilities will be in October and start of production is anticipated in early November 2007, the Philippine Daily Inquirer quoted project owners as saying.

This was reported by Oriental Petroleum and Minerals Corp. (OPMC) chairman James L. Go and President Robert Coyiuto Jr. during OPMC stockholders' meeting last week.

The oil wells belong to the Galoc oilfield, which is located at a water depth of 1,000 feet and situated in Block C of Service Contract-14 in northwest Palawan, according to a developing map of the Philippine Department of Energy.

Meanwhile, officials said that the Department of Energy has approved Phase 1 of the development for Galoc. It includes the drilling of two wells, the installation of production facilities, and the lease of a floating production storage offloading tanker with a capacity of 450,000 barrels.

The first phase of development is estimated to cost 100 million U.S. dollars and the recoverable oil reserves are estimated to be in the range of 10 to 20 million barrels, the report said.

The Galoc crude is expected to be sold at a conservative price of 55 dollars a barrel or better during production. Should results of Phase 1 prove to be encouraging, more production wells will be drilled under Phase 2 of Galoc development.

In the upcoming Phase 1, the local company OPMC has the biggest share of the distributable oil revenues, which is 7.6 percent.

The overall Galoc development project is carried out by a consortium led by Galoc Production Co.

The consortium includes Nido Petroleum Philippines Pte. Ltd. from Australia as paying parties and a group of Philippine-owned companies as non-paying partners.

The Philippines depends heavily on imported energy. The surge in crude oil prices has prompted local and foreign drillers to revive oil exploration activities offshore Palawan, where is the hopeful energy reserve for the country.

Eni starts Blacktip development offshore Australia Posted Tuesday, July 4, 2006 - 11:59 by petromin
Eni has started the development of the Blacktip gas field, located in the Timor Sea approximately 110 km off the shore of Northern Australia in the Bonaparte Basin, at a water depth of some 50 meters. The Blacktip field is fully owned and operated by Eni and has recoverable reserves of 150 million boe.

Through the development of the new field, Eni further strengthens its presence in Northern Australia and in the Timor Sea, where it was recently awarded five new exploration licenses. In the same area Eni holds 12% of the gas and liquids field of Bayu Undan, whose liquids production started in 2004, and 12% of the Darwin gas liquefaction plant, whose nominal capacity is 3.5 million tons of LNG per year.

The project provides for the drilling of 2 initial development wells, the installation of a production platform, the laying of a 108-kilometre long offshore pipeline and the construction of an onshore treatment plant with a capacity of 1.3 billion cubic metres per year.

The gas drilled from Blacktip field will be mainly used to generate electricity in Darwin and other Northern Territory locations, through a 25-year Gas Sales Agreement with Power Water Corporation. Production is planned to start in 2009 at an initial annual rate of 650 million cubic meters, increasing to 1.1 billion cubic meters.

Eni has been present in Australia since 2000. Current hydrocarbon production net to Eni averages about 30,000 boe/day. Eni is also operator with a 65% interest of the offshore Woollybutt oil field, which in 2005 accounted for some 30% of Eni's production in Australia.

Cairn to get $150m IFC loan to develop Rajasthan oil find Posted Tuesday, July 4, 2006 - 11:58 by petromin
International Finance Corporation (IFC), the private sector arm of the World Bank Group, will lend $150m to Cairn Energy. The loan is to part-finance UK-based Cairn’s $1bn capital expenditure programme, primarily the development of its recent discoveries in Rajasthan. With a target peak production of around 1,50,000 barrels per day, the Rajasthan development will equal around 25% of India’s current oil production and about 8% of its current oil imports, when fully developed.

Cairn operates Block RJ-ON-90/1 under a production sharing contract (PSC) signed on May 15, ‘95. The development area, which includes Mangala, Aishwariya, Saraswati and Raageshwari, is shared between Cairn and ONGC, with Cairn holding 70% and ONGC having exercised their back in right for 30%.

“With our investment, we are supporting the local economy and helping to satisfy India’s demand for domestically produced fuel,” said Iyad Malas, IFC’s director for South Asia. A central component of the Cairn-IFC development programme is the establishment of an enterprise centre, to provide information and expertise on business practices to local small and medium-sized firms.

This will allow them to become potential suppliers and service providers to the oil and gas operation and other ventures. The enterprise centre is part of a joint community development plan that aims to maximise positive impacts of the large-scale oil and gas projects in Rajasthan, where more than 20% of households live below the poverty line.

IFC’s 9-year term loan and IFC’s social and environmental due diligence have given a group of international commercial banks assurance to provide $850m in 5-year term funding.