September 2007

SPC’S Oyong Field Produces First Oil Posted Tuesday, September 25, 2007 - 2:11 by petromin
Singapore Petroleum Company Limited (SPC or the Company) has begun oil production at the Oyong field of its Sampang Production Sharing Contract (Sampang PSC or the Block) in Indonesia.

Mr Koh Ban Heng, Chief Executive Officer said, “First oil at Oyong is a significant event for SPC. It’s the Company’s second producing asset, and affirms our strategy to develop existing discoveries. With Oyong coming on-stream, our current oil production will be more than doubled and contribute positively to the Company in the longer term.”

After the initial ramp-up, gross production at Oyong is expected to stabilise at between 8,000 and 10,000 barrels of oil per day. SPC’s 40% interest will be between 3,200 and 4,000 barrels of oil per day.

In addition, SPC and its partners are also developing the Oyong gas reserves. Front-end engineering design for the development of the gas reserves is currently underway, with first gas production expected in 2009. Under a gas sales agreement with PT Indonesia Power, the gas will be transported via a 55km pipeline to an onshore processing facility adjacent to the Grati Power Station in East Java.

The Wortel gas discovery, also located in the Sampang PSC, approximately 7km west of Oyong, could potentially be incorporated into the Oyong gas development. Further appraisal of the Wortel discovery has been planned in the first half of 2008.

At SPC’s Kakap Production Sharing Contract (Kakap PSC), light oil (44º API) had been discovered at the Pancing-1X exploration well (Pancing-1X). However the discovery is non commercial and the well has been plugged and abandoned. The rig will immediately move to drill the KG West-1 gas development well, about 4km east of Pancing-1X. It is expected that this well will be drilled to 4,260 feet measured depth.

The Company does not expect the Oyong oil production to have any material impact on the earnings per share and the net tangible asset per share of the SPC group of companies for the current financial year.

Tethys to explore Bishtinchak field in Tajikistan Posted Tuesday, September 25, 2007 - 2:06 by petromin
Tajikistan reported that Tethys Petroleum Ltd. would begin prospecting in Bishtinchak oil and gas field in southern Tajikistan on Sept. 20.
The Tajik Energy and Industry Ministry said an agreement was signed Sept. 6 between Tethys and Tajikstan's state enterprise for exploration and production of oil and natural gas in Bishtinchak field.
In a separate statement, Tethys said it received rights for rehabilitation and further exploration at Beshtentyak, Uznohor, and South Pushion oil fields and the Khoja Sartez gas-condensate deposit.
Production from the fields, currently 100 b/d, will go to Tajikistan, but additional incremental production will be split between the state and Tethys.
The firm will receive 75% of the additional production until it covers its investment costs and then 70% thereafter.

China, Japan delay dispute resolution talks Posted Tuesday, September 25, 2007 - 2:05 by petromin
Conflicting diplomatic schedules have caused Japan and China to postpone their next round of talks aimed at resolving a dispute over gas exploration rights in the East China Sea, according to Japanese Foreign Ministry press secretary Mitsuo Sakaba. No new date for talks has been decided upon, he said.
Sakaba said the gas dispute talks overlapped the six-party talks on North Korea's denuclearization that were scheduled to commence Sept. 19.
The two nations last met in June in Tokyo for working-level talks, and reports say they have been stepping up efforts to reach an agreement, as they are seeking to compile a plan by the fall to jointly develop the disputed gas fields.
One report said Japan had been sounding out the Chinese side on paying for half of the cost for developing the four gas fields on the Chinese side near what Tokyo calls the Japan-China median line in the East China Sea.
Tokyo's Sankei Shimbun newspaper said the proposal is expected to become an item on the official agenda of the Japan-China talks. If Japan's cost to transport gas by sea is not commercially profitable, selling Japan's share to China for cash is also being considered.
The proposal consists of two main parts:
Upon agreement on sharing the development cost, rights to the newly produced natural gas will belong to both Japan and China.

Russia approves gas production, delivery to Asia Posted Friday, September 14, 2007 - 3:53 by petromin
Russia's Industry and Energy Ministry has approved the Eastern Gas Program leading to the creation of a unified system for East Siberia's natural gas production and delivery to China and other areas in the Asia-Pacific.
The program will create four gas production centers in Sakhalin, Yakutia (Chayanda field), Irkutsk, and Krasnoyarsk territories, according to Anatoly Yanovsky, chief of the ministry's energy policy department in a Sept 7 announcement.
Ministry officials said "absolute priority" will be given to meeting domestic needs, while the dates of the fields' development and respective exports will depend on the outcome of commercial talks between the companies involved.
Industry analysts said approval of the ministry's program guidelines essentially ratifies OAO Gazprom's plans for the region, including construction of LNG facilities on Sakhalin Island and direction of gas supplies from the ExxonMobil Corp.-led Sakhalin-1 project to the domestic market.

Petronas, PNOC commence drilling off Mindoro Posted Friday, September 14, 2007 - 3:52 by petromin
Malaysia's Petronas Carigali Overseas Sdn. Bhd. and Philippines National Oil Co. began drilling Aug. 31 at the Kamaia-1 well off the Philippines' Mindoro Island.
According to PNOC documents, the two partners in the Mindoro Block will invest some $81.84 million in initial drilling activities—about $12.26 million for PNOC, with Petronas carrying the remainder.
The documents also said work on the block will be extended to 2012, with activities to include the drilling of one exploration well and two appraisal wells this year.
The Philippines in January 2005 awarded Petronas and PNOC a service contract to explore for oil and gas in the block.
The partners are committed to drill one exploratory well in the Mindoro Block, with an option to either drill another exploratory well or acquire new seismic data.
Contracted work also will include geological and geophysical studies and a possible seismic survey on the 14,667 sq km block.
Petronas, with an 80% stake, is operator, while PNOC-EC holds the remaining 20%.

Lukoil Uzbekistan completes section of Khauzak pipeline Posted Thursday, September 6, 2007 - 7:10 by petromin
Lukoil Uzbekistan, a subsidiary of Lukoil Overseas, has completed a 45-km section of 711-mm (28-in.) gas pipeline on the Khauzak block in southwestern Uzbekistan. The line will enable sour gas to be delivered to a tie-in point on the Dengizkul-Mubarek main pipeline.
The line is part of the Kandym-Khauzak-Shady-Kungrad project, which involves the drilling of more than 180 development wells and construction of more than 1,500 km of pipeline and two compressor stations
The project also involves construction of an 8 billion cu m/year gas processing plant in the Kandym area.
The main gas pipeline for Khauzak gas field will be commissioned at yearend, Lukoil said.

Work starts on Turkmenistan-China gas line Posted Thursday, September 6, 2007 - 7:08 by petromin
Construction has started on a 7,000-km pipeline that will deliver 30 billion cu m/year of gas from Turkmenistan to China starting in 2009.
Turkmen President Gurbanguly Berdimuhamedov attended a ceremony at which he made a symbolic weld on the pipeline, which will cross Uzbekistan and Kazakhstan.
About 188 km of the pipeline will be laid in Turkmenistan, 530 km in Uzbekistan, 1,300 km in Kazakhstan, and over 4,500 km in China.
China plans to import 30 billion cu m/year of Turkmen gas for 30 years through the pipeline but has not given the value of the deal.
China National Petroleum Corp. has received exploration rights for Bagtiyarlik territory.
"Turkmenistan is granting a foreign country the right to produce gas on the mainland for the first time," Berdimuhamedov said.
The president, who came to power last December following the death of his predecessor, has welcomed foreign investment in his country's oil and gas industry