July 2007

oil pipeline from Skovorodino in Russia's Far East, to Daqing, China. Posted Thursday, July 26, 2007 - 7:28 by petromin
Russia's OAO Transneft and China's state-owned China National Petroleum Corp. signed a protocol in June for constructing a proposed 43-mile, 300,000 b/d spur of the East Siberia-Pacific Ocean (ESPO) oil pipeline from Skovorodino in Russia's Far East, to Daqing, China.
Andrey Dementyev, deputy head of Russia's Industry and Energy Ministry, said China will fund construction of the $400 million spur and will also provide 2,000 workers for the project.
Transneft has drawn up a feasibility report on investment for the construction, Russian authorities have approved it, and the document has been submitted to the Chinese.
Construction of the ESPO pipeline, designed to carry 80 million tonnes/year of East Siberian crude 4,700 km to Russia's Pacific Coast, was launched in April 2006. The line will supply Siberian oil to the Asia-Pacific market.
Construction of the pipeline is being carried out in two stages. The first leg, a 2,757-km, 30 million-tonne pipeline, will link Taishet in East Siberia's Irkutsk region to Skovorodino in the Amur region of Russia's Far East on the border with China. The second leg will reach a further 2,100 km from Skovorodino on to Russia's Pacific Coast.

India's Cauvery has first deepwater find Posted Thursday, July 26, 2007 - 6:49 by petromin
Reliance Industries Ltd., Mumbai, made the first deepwater hydrocarbon discovery in the Cauvery basin off southeastern India at the company's first well in the basin.
The CY-III-D5-A1 well found a clastic reservoir with a 150-m gross hydrocarbon column in Cretaceous. TD is 4,081 m in crystalline basement in 1,185 m of water.
The main zone drillstem tested 31 MMscfd of gas and 1,200 b/d of condensate, while another deeper zone produced 550 b/d of oil and 1 MMcfd of gas.
The discovery, named Dhirubhai-35, is on 14,325-sq-km Block CY-DWN-2001/2 awarded in NELP III. Reliance holds 100% participating interest in the block.
Reliance noted that in 6 years as an E&P operator it has discovered hydrocarbons in India's four major offshore basins: Krishna-Godavari, Mahanadi, Saurashtra, and Cauvery.

Saipem leases eight rigs in four contracts Posted Thursday, July 26, 2007 - 6:42 by petromin
Saipem SPA will lease eight drilling rigs in Egypt, Nigeria, and Saudi Arabia under four deals jointly valued at $510 million.
International Egyptian Oil Co. (IEOC) has contracted Saipem's Scarabeo 4 for for 28 months for work off Egypt starting in the fourth quarter. Scarabeo 4 is a second-generation semisubmersible capable of drilling to 8,000 m in water as deep as 500 m.
Addax Petroleum has hired the second-generation Scarabeo 3 semisubmersible for drilling off Nigeria, extending its charter of the rig for 1 year. The new period will come into effect immediately at the end of the existing commitment. Scarabeo 3 also can drill to 8,000 m in water as deep as 500 m.
Saipem said: "Saudi Aramco has signed a 3-year contract extension taking effect in the second half of 2007 for the charter of five Saipem rigs that have been operating in Saudi Arabia on behalf of Saudi Aramco since 2000."
In addition, Eni Repsa has let a contract to Saipem to charter a new rig for 12 months onshore in Saudi Arabia. The charter starts in the first quarter of 2008.

ONGC to resume exploration at Contai in West Bengal. Posted Thursday, July 26, 2007 - 6:38 by petromin
India's state-owned Oil & Natural Gas Corp. (ONGC) has firmed up plans to resume exploration at Contai in West Bengal.
The company received the exploration block in 1997 during the first round of bidding under the New Exploration Licensing Policy (NELP-I). It recently cleared plans for drilling one exploratory well in the block on the Bay of Bengal coast in Midnapore district. Previous drilling in the block tested negative.
This may be the company's last attempt to explore the Bengal coast before the Directorate-General of Hydrocarbons forces it to relinquish the block. ONGC has already given up one block in the state.
However, the pace of exploratory drilling has picked up in the Mahanadi basin off the coast of Orissa, where the company has struck gas twice in the last 6 months.
After successfully drilling the MN-DWN-98/3 deepwater block and MN-OSN-2000/2 in shallow water, ONGC has embarked on a drilling campaign in the MN-OSN-97/3 offshore block.

Exploratory drilling in New Zealand's East Coast basin Posted Thursday, July 26, 2007 - 6:35 by petromin
Exploratory drilling will be increased late next year in the onshore portions of New Zealand's East Coast basin as Trans-Orient Petroleum Ltd. begins its drilling program on its acreage there.
The company has identified 50 prospects and leads over its two permits�PEP 38348 and PEP 38349�covering 2 million acres. It will target potential source rocks of Paleocene and late Cretaceous age in the Whangai formation, which is "exposed in outcrop in some areas, and greater than 10,000 ft down in others," said Dave Bennet, chief executive officer of Trans-Orient.
Bennet said, "[The Whangai] is now a forearc basin with lots of active structuration going on. Up until the Oligocene, i.e., through the time of deposition of Whangai and Wapawa sequences, it was a passive margin basin."
There are fewer than 10 wells drilled on Trans-Orient's acreage. The company is obligated, per its work program, to drill two wells by November 2009. Trans-Orient, however, plans to drill additional wells, but said the timing will depend on rig availability.
Bennet said drilling will "most probably" begin on PEP 38349, but added that a decision has not yet been made. The company has filed an application to extend this permit.

Essar Oil Ltd. struck oil in Gugarat Posted Thursday, July 26, 2007 - 6:31 by petromin
Essar Oil Ltd. struck oil in its Mehsana onshore production block CB-ON-3 in Gujarat, its second find this year after its strike in March.
The in-place reserves of the first discovery were estimated at 18 million bbl of oil equivalent, with recoverable reserves in the range of 2.8 million boe. Essar has been producing around 500 b/d of oil from the March discovery.
The discovery, announced July 12, is touted by company officials to be of the same magnitude. It's expected to yield 300-400 b/d once the company drills 6-7 prospects in the vicinity of the current well in the 500 sq km block.
"We have discovered oil in the well ENM-1, in the Mehsana exploration block, using the heater treater technology," said a senior Essar Oil executive. The crude is heavy in consistency, unlike the medium-quality oil produced from the first discovery.
The CB-ON-3 block in the Cambay basin was awarded to Essar in 1998. Essar is operator with 70% equity; Oil & Natural Gas Corp. has the remaining 30%

PTTEP awarded exploration blocks in New Zealand Posted Tuesday, July 17, 2007 - 2:22 by petromin
PTT Exploration and Production Public Company Limited (PTTEP) and its partners have won 6 exploration blocks offshore New Zealand.

The offshore blocks are in the Great South Basin, south of New Zealand �s South Island. They are part of the 40 blocks offered in the New Zealand Offshore Great South Basin Bidding Round 2006 organized by the Crown Minerals, Department of Economic Development of New Zealand.

The partnership comprises OMV New Zealand Limited who will be the operator, with 36% interest, PTTEP Offshore Investment Company Limited, a subsidiary of PTTEP with 36% interest, and Mitsui E&P Australia with 28% interest.

PTTEP President Mr. Maroot Mrigadat said that the company sees this success as a major step in its investment expansion in the Asia Pacific Region as it is the first time PTTEP invests in projects in New Zealand.

The bids that PTTEP and its partners won comprise of 3 packages of blocks. Package 1 comprises Block 11 and 12 covering an area of 18,000 square kilometers; package 2 comprise Block 13 covering an area of 9,000 square kilometers; and package 3 comprises Block 5, 6 and 14 covering a combined area of 27,000 square kilometers.

The Great South Basin is a large sedimentary basin with thick sediment, conducive to hydrocarbon generation. Past exploration activities in this area have been limited due to low oil price environment and its remoteness. The 6 blocks awarded to PTTEP and its partners are considered to have high petroleum potential as they are located in the area where hydrocarbon has been founded from past exploration wells.

Mr. Maroot said �We are not only delighted to have the opportunity to expand our investment in a high potential frontier but we are also pleased to have a chance to work with esteemed companies from Austria and Japan who have strong expertise in oil and gas exploration and production.�

New Zealand is a country with high petroleum potential which had not much been explored. Its proved and probable remaining reserves are 520 million barrels oil equivalent. The average 2006 oil & condensate production is approximately 23,000 barrels per day which will be increased to approximately 40,000 barrels per day in 2007, and its 2006 average gas production is about 420 million cubic feet per day.

Trans-Afghan gas pipeline back in news Posted Monday, July 16, 2007 - 9:40 by petromin
Turkmenistan and Afghanistan have agreed to cooperate on several energy-related projects, including revival of the long-mooted Trans-Afghan natural gas pipeline.

The two sides signed several agreements following talks between Turkmen President Gurbanguly Berdymukhammedov and Afghan President Hamid Karzai, who visited Turkmenistan July 5-6.

Berdymukhammedov said his country remains interested in the $2 billion project to build a gas line more than 1,460 km across Afghanistan to Pakistan and then to India. He said Turkmenistan would be ready to send 30 billion cu m/year of gas through the line.

The original plan was to deliver gas from Turkmenistan's Dauletabad field to Kandahar, Afghanistan; Multan in central Pakistan, and onward to India (OGJ Oct. 28, 2002, p. 47).

The two leaders also agreed to construct additional electric power lines and related infrastructure in Afghanistan.

Arab Gas Pipeline's first Syria section completing Posted Saturday, July 7, 2007 - 3:03 by petromin
The first Syrian section (Phase III) of the Arab Gas Pipeline is expected to be completed within the next 2-3 months, Syria's oil minister, Sufian Al Alao told OGJ in London. This 324-km (201-mi) section will link the Rihab power station in northern Jordan�24 km (15 miles) south of the Syrian border�to Homs, Syria.
Documents are being prepared for the two final Syria sections and for an extension of the pipeline another 230 km to the Turkish border to deliver Egyptian gas to Europe. "We hope to execute [these remaining Syrian sections] within the next 2 years," Al Alao said. "Syria, Turkey, and Egypt are in talks about financing and the execution of this part, either in one stage or two stages," he said.
Gas exports depend on the agreements reached between Egypt and Turkey, he added. The pipeline has a capacity of 10 billion cu m/year.
Much of the 600 km (373 mi) of pipelines in Syria (Phase III) is complete and will be commissioned in 2008. It is being built in three stages, Stage 1, completing by September, is the line from Rihab, Jordan, to Homs, Syria.
In Stage 2, the pipeline at Homs will split northwest to the Syrian port of Banyas on the Mediterranean and westward to the Zahrani refinery in Lebanon. Stage 3 of Phase III includes extending the pipeline northward to the Turkish border, and future phases will extend the line west under the Mediterranean to Cyprus.
Still further phases will extend the pipeline north through Turkey, where it will connect with the European gas pipeline system. Previous speculation about the project also mentioned an extension to Lebanon, but Omar Al Hamad, general manager of the Syria Petroleum Co., told OGJ there are no talks with Lebanon about exports. "We will charge a transit fee, but let's see what happens," he said. The focus has been on securing enough gas for Syria's domestic needs, primarily for power generation.
Egypt and Jordan in July 2003 initiated the Arab Gas Pipeline's $200 million first phase from Egypt to Jordan: 270 km (168 mi) of pipeline across the Sinai desert, with a 16-km (9.9-mi) subsea line under the Gulf of Aqaba from Taba to Aqaba. It delivers 1 billion cu m/year of Egyptian gas to the Aqaba Thermal Power Station, which provides 50% of Jordan's electricity.
The $300 million Phase II Jordan section extended the line 390-km (242-mi) from Aqaba in the south to the Rihab power station in northern Jordan. It was completed in December 2005

China's Zhoushan oil port to expand Posted Saturday, July 7, 2007 - 2:59 by petromin
China's National Development and Reform Commission has approved an oil port and storage expansion project at Zhoushan port, Ningbo, in eastern China's Zhejiang province.
NDRC said Zhejiang Jianqiao Energy Development Co. Ltd. will invest 325 million yuan to build the facility, which will include a 50,000-tonne-capacity berth for oil products, a 5,000-tonne-capacity berth, and storage for 290,000 cu m.
The port currently has a throughput capacity of 4 million tonnes/year, NDRC said. However, in May the New China News Agency reported that Zhoushan port handled 2.02 million tonnes of imported crude, up 48.6% from last year. The imports were primarily from the Middle East, the news agency said.

BHP to develop Pyrenees fields Posted Saturday, July 7, 2007 - 2:57 by petromin
BHP Billiton Ltd. has received formal approvals and will proceed with development of three shallow-water Pyrenees fields on Block WA-12-R in the Exmouth subbasin off Western Australia (OGJ, July 2, 2007, Newsletter). The Pyrenees project includes Crosby, Ravensworth, and Stickle oil fields, which lie in 560-820 ft of water.
First production is expected during first half 2010.
The plan for the $1.7 billion development calls for purchase of a double-hulled floating production, storage, and offloading vessel having processing capacity of 96,000 b/d of oil and storage capacity of 850,000 bbl. It also requires 13 subsea wells to be tied back to the FPSO and for the produced oil to be exported via shuttle tankers.
Oil reserves in the development area are estimated at 80-120 million bbl of oil and the economic life of the development at 25 years.
Development of WA-155-P will follow development of WA-12-R, said project coventurer Apache Corp.
Project operator BHP Billiton holds 71.43% of the Pyrenees development, while Apache holds 28.57%.

Sudan awards Red Sea PSC to China's CNPC Posted Saturday, July 7, 2007 - 2:55 by petromin
China National Petroleum Corp. has signed a production-sharing contract with Sudan for exploration areas off northern Sudan.
Under the 20-year contract, CNPC will have exploration rights to Block 13 with an area of about 3.8 million sq km in shallow water on the Red Sea. The exploration period is 6 years.
CNPC will conduct exploration jointly with Sudan's state-run Sudapet Ltd. and Indonesia's state oil and gas company PT Pertamina

Salamander Energy has signed a production-sharing contract with PetroVietnam Exploration & Production Co Posted Saturday, July 7, 2007 - 2:54 by petromin
Salamander Energy, an independent focused on Southeast Asia, has signed a production-sharing contract with PetroVietnam Exploration & Production Co. for exploration of Cuu Long River Delta Block 1 (DBSCL1) in the Cuu Long basin off eastern Vietnam.
Salamander plans to begin a seismic acquisition program on the block this year ahead of an exploration drilling program slated for 2008.
DBSCL1 covers 8,300 km of offshore, onshore, shoreline, and river delta in the southern provinces of Tra Vinh, Soc Trang, and Bac Lieu. The block is Salamander's first exploration interest in Vietnam.
The company said the prospect has many structural similarities to the highly productive Cuu Long basin, which was first explored in 1970s when Petrovietnam drilled three shallow onshore wells following seismic studies in 1976.
Salamander is block operator and holds 100% interest.

Lam Som reports oil strike off Vietnam Posted Saturday, July 7, 2007 - 2:51 by petromin
Lam Som Joint Operating Co, a joint venture of PetroVietnam Exploration & Production Corp. (PVEP) and Petronas Carigali Overseas Sdn. Bhd. of Malaysia, has reported a discovery off southern Vietnam.
The Dong Do-1X well was spudded on May 17 in the Dong Do Prospect, Block 02/97. The well flowed 2,500 b/d of oil.
The location is 5 km southwest of the recent Thang Long dicovery well, 30 km southeast of Ruby oil field, 80 km northeast of Bach Ho oil field, and 160 km east of Vung Tau.

state-owned PT Pertamina to increase its stake and operate the Natuna D-Alpha natural gas block Posted Saturday, July 7, 2007 - 2:50 by petromin
Indonesia wants state-owned PT Pertamina to increase its stake and operate the Natuna D-Alpha natural gas block, even as negotiations with ExxonMobil Corp. are under way.
"We want Pertamina to increase its equity (in the block) and become the operator," said Energy and Natural Resources Minister Purnomo Yusgiantoro. ExxonMobil holds a 76% stake in the block, while Pertamina holds the remaining 24%.
"We are also targeting a better split under the renegotiated contract," Purnomo said. Official media said under the old contract, the production split between ExxonMobil and the government was 100% to zero. At other fields, the split is said to be 30%-70% in favor of the government.
Maman Budiman, ExxonMobil vice-president for public affairs, declined to comment on the suggestion that the government would appoint Pertamina as the operator of the block, saying that negotiations are still under way.
The block, which is estimated to hold 46 tcf of gas, has become the subject of a dispute between ExxonMobil and the Indonesian government (OGJ Online, Jan. 19, 2007).
In 1980, the company secured a 25-year contract to develop the block. In 1995, ExxonMobil won a revision to the contract allowing it to operate the block until 2009 on condition that it made "significant progress" in developing it.
The government, however, claimed that the contract was terminated in 2005 on the grounds that ExxonMobil had failed to make any significant progress in developing the block�a claim ExxonMobil denies.
To resolve the dispute, the government 3 months ago formed a special team, called the Natuna Block Management Committee, to renegotiate the contract with ExxonMobil. These negotiations continue.