Upstream News

Shenandoah appraisal well deemed one of the largest GOM discoveries for Anadarko

With its Shenandoah-2 well, Anadarko Petroleum Corp. (NYSE: APC) has made one of its largest oil discoveries in the Gulf of Mexico, the company noted March 19. The deepwater appraisal well encountered more than 1,000 net feet of oil pay in multiple high-quality Lower Tertiary-aged reservoirs.

"The successful Shenandoah-2 well marks one of Anadarko's largest oil discoveries in the Gulf of Mexico, with more than 1,000 net feet of oil pay and reservoir rock and fluid properties of much higher quality than previously encountered by industry in Lower Tertiary discoveries," said Bob Daniels, Anadarko senior vice president Deepwater and International Exploration. "With ownership in the successful Shenandoah wells, the adjacent Yucatan prospect, and the very encouraging results from the nearby Coronado well, Anadarko is strategically positioned in the Shenandoah Basin, which has the potential to become one of the most prolific new areas in the deepwater Gulf of Mexico."

The Shenandoah-2 well, located in Walker Ridge block 51, was drilled to a total depth of 31,405 feet in approximately 5,800 feet of water, more than 1 mile southwest and approximately 1,700 feet structurally down-dip from the Shenandoah-1 discovery. Similar to the initial Shenandoah discovery well, log and pressure data from the Shenandoah-2 well indicate excellent-quality reservoir and fluid properties. The well was drilled to test the down-dip extent of the accumulation, and the targeted sands were full to base with no oil-water contact.

"We are incorporating the information obtained from Shenandoah-2 into our planning and anticipate further appraisal drilling to advance this potentially giant project," Daniels added.

With the thick oil zone encountered at the well, analysts at Jefferies & Co. Inc. anticipate Anadarko will re-work the existing rig schedule to accommodate further appraisal drilling this year. Based on the recent testing, the discovery could turn into another mega-project for the company with resource potential possibly exceeding Heidelberg's 300+MMboe, said the analysts in a note to investors following the announcement.

"Based on Heidelberg's development schedule, we estimate that Shenandoah could come online by 2017. If the nearby Yucatan exploration well (APC 15% WI) is successful, these two Shenandoah Basin properties could potentially be jointly developed," the analysts continued.

Anadarko is the operator of the Shenandoah-2 well and the previously announced Shenandoah-1 discovery well, located in Walker Ridge block 52, with a 30% working interest. Other co-owners in Shenandoah are ConocoPhillips (NYSE: COP) with a 30% working interest, Cobalt International Energy LP (NYSE: CIE) with a 20% working interest, Venari Resources LLC with a 10% working interest and Marathon Oil Company (NYSE: MRO) with a 10% working interest.

Additionally, in the Shenandoah Basin, Anadarko has a 15% working interest in both the Coronado well, located in Walker Ridge block 98, and the Yucatan prospect, located in Walker Ridge block 95.

Total, Chevron launch Moho Nord development in the Republic of the Congo

Chevron Corp. (NYSE: CVX) subsidiary Chevron Overseas (Congo) Ltd. will proceed with the joint development of the Moho Bilondo "Phase 1 bis" and Moho Nord projects offshore the Republic of the Congo with Total, operator of the Moho-Bilondo license.

The project is expected to cost a total of $10 billion and achieve first oil from the Moho Bilondo "Phase 1 bis" project in 2015 and first oil from the Moho Nord project in 2016. The joint development will produce 140,000 barrels per day of crude oil at its peak production in 2017.

Situated approximately 46 miles (75 kilometers) offshore southwest of Pointe-Noire in water depths ranging from 1,500 to 4,000 feet (450-1,200 meters), the Moho-Nord joint development is the largest-ever oil and gas project in the Republic of the Congo. The Moho Bilondo "Phase 1 bis" project includes 11 subsea wells tied back to an existing floating production unit with a processing capacity of 40,000 barrels of oil per day. Production in the permit area began in 2008 with the Moho Bilondo 1E development. The Moho Nord project involves a tension leg platform, a floating production unit with a processing capacity of 100,000 barrels of oil per day, and a new 50-mile (80 kilometer) pipeline to the onshore Djeno terminal.

"The development of Moho Nord marks another milestone in Total's long established presence in the Republic of the Congo and leverages our demonstrated expertise in successfully managing major projects, especially in the deep offshore. The launch enhances visibility on Total's production growth objective," commented Yves-Louis Darricarrère, president of Total Upstream.

The installations have been designed to limit environmental impact. Measures include eliminating flaring under normal operating conditions and reinjecting all produced water.

"We are proud to partner with the Republic of the Congo to develop the nation's offshore resource potential," said Ali Moshiri, president of Chevron Africa and Latin America Exploration and Production Company. "Moho Nord is further indication of our commitment to West Africa where Chevron has made sizable investments."

Total E&P Congo, the Group's wholly owned subsidiary, operates the Moho Bilondo license with a 53.5% interest, alongside state-owned Société Nationale des Pétroles du Congo (15%) and Chevron Overseas Congo (31.5%).

Aker Solutions to support redevelopment of landmark subsea field

International oil services provider Aker Solutions has secured a NOK 650 million (GBP 70 million) contract with BP to help redevelop one of the largest oil fields in the UK sector.

The Aberdeen operation of Aker Solutions will manufacture and supply all subsea controls equipment for the Quad 204 project, the redevelopment of the Schiehallion and Loyal fields located approximately 100 miles west of the Shetland Islands.

The scope of work includes subsea controls equipment for subsea trees, manifolds and subsea safety isolation valves as well as controls distribution assemblies.

The Schiehallion and Loyal fields are estimated to contain a further 450 million barrels of recoverable oil and a GBP 3 billion upgrade is underway. Due to the water depth in the area, Schiehallion is entirely reliant on subsea production technology and is collected on a floating production, storage and offloading vessel (FPSO).

Alan Brunnen, head of Aker Solutions' subsea business said: "West of Shetland is an exciting area for oil and gas and we are delighted to continue our successful relationship with BP by playing such a significant role in the continuing development of this project."

The first deliveries are expected to be made in the first half of 2014.

Lundin Petroleum discovers oil offshore Malaysia

Lundin Petroleum has discovered oil in the Ara-1 well that was drilled in Block PM308A, offshore Peninsular Malaysia.

Ara-1 was drilled to a total depth of 13,221 feet by the jackup West Courageous (350' ILC) in 246 feet water depth. The objective of the well was to target the extension of the Paleogene intra-rift oil sands that had been encountered in the Janglau-1 well drilled by Lundin in 2011.

Ara-1 encountered 9 thin oil-bearing sands in a high-pressured intra-rift section extending over a vertical interval of 2,624 feet.

The well confirmed the extension of the new intra-rift oil play across a very large structural complex in the northeast of PM308A below a major regional seal. The well also found effective sand reservoirs at depths below 11,482 feet. The oil pay zones intersected by Ara-1 were however individually thinner than pre drill expectation.

Ara-1 was plugged and abandoned as an oil discovery well after completion of the well evaluation program. Work has commenced to estimate the range of resources discovered.

Lundin intends to incorporate the well results into the recently extended regional 3D seismic data set to identify areas where local sand reservoir sources may be better developed and can high grade future drilling prospects.

The West Courageous jackup rig will be demobilized following completion of Ara-1, the final well of Lundin's 2012 drilling campaign.

The PM308A production sharing contract (PSC) is operated by Lundin Malaysia BV with 35% equity interest. Partners are JX Nippon Oil & Gas Exploration (Peninsular Malaysia) Limited with 40% and PETRONAS Carigali with 25%.

Eni discovers oil offshore Angola

Eni has made its ninth oil discovery in Block 15/06, in deep water offshore Angola, increasing the resource base of the West Hub project. The discovery was made through the Vandumbu 1 well, located approximately 93 miles (150 kilometers) from the coast. The well was drilled at a water depth of 3,202 feet (976 meters) and reached a total depth of 13,474 feet (4,107 meters).

Additional drilling has been carried out from the Vandumbu 1 well in different direction (side track), Vandumbu 1 ST, that reached a depth of 11,417 feet (3,480 meters), finding a net oil (34 degree API) pay of 374 feet (114 meters), contained in Lower Miocene high quality sand. As suggested by data acquired, Eni estimates that Vandumbu 1 ST has a production capacity in excess of 5,000 barrel of oil per day. Eni is operator of Block 15/06 with 35%. The other partners of the joint venture are SSI Fifteen Limited (25%), Sonangol (15%), Total (15%), Falcon Oil Holding Angola SA (5%) and Statoil Angola Block 15/06 (5%).

Eni has been present in Angola since 1980 with a net production of 102,000 barrels per day in 2011.

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