Australia: Expand LNG projects?
Chevron has made two deepwater gas discoveries in the Carnarvon Basin off Western Australia that the company believes have the potential to drive expansions of its Gorgon and Wheatstone LNG projects in the same region. The discoveries are Pinhoe-1, located in 932m of water in the 3,627 km2 WA-383-P, which encountered around 60m of net gas pay, and Arnhem-1, located in 1,208m of water in the 3,782 km2 WA-364-P, that confirmed 45.5m of net gas pay. According to Melody Meyer, Chevron Asia Pacific Exploration and Production Company president, “These discoveries in the Exmouth area are significant as they are located farther out from other discoveries in the greater Gorgon and Wheatstone development in the Carnarvon Basin and indicates development potential in the broader region.”
Along with a number of other operators off Western Australia, Chevron has had to deal with huge cost blowouts on major LNG projects. In December 2012 the company revealed that costs for the flagship Gorgon project had increased from US$ 37 billion to US$ 52 billion. The increases are blamed on the high dollar, union demands, high-cost local manufacturing, productivity issues and weather-related delays. While encouraging, it could be some time before these latest deepwater finds are absorbed into the infrastructure as output from the first of four LNG trains, due onstream in 2014, is already sold.
Mexico: Biggest Onshore Find in Decade
Pemex says it has found oil reserves of up to 500 MMb in southern Mexico with its Navegante-1 wildcat, a Sureste Basin discovery that outgoing President Felipe Calderon hailed as the ‘biggest find’ of petroleum on land in the past decade.
Located around 20 km from Villahermosa, the capital of the southern state of Tabasco, the well was drilled to a total depth of 6,911m. Tested in the Upper Jurassic between 6,584m and TD, the well flowed 1,770 b/d of 45° API oil and 7.3 MMcfg/d. Future plans include the drilling of two appraisal wells and seismic acquisition that will help determine if the reservoir extends southwards as far as the Antonio Bermudez complex, located in the Tabasco-Chiapas region of southern Mexico, which has between 700 and 1,000 MMboe reserves and is the largest crude producer in southern Mexico. The significance of the discovery was underlined when Pemex revealed that its oil production had dipped to its lowest level in three months, with crude falling to 2.54 MMbopd. It will be down to Pemex to provide most of the financing for development, even though the Federal government takes a significant share of its revenue, as there remains a constitutional ban on private companies holding exploration and production concessions. However, the inauguration of a new president on 1 December 2012 could lead to reform, but the issue is very politically sensitive.
Kenya: Discovery in Block 13T
Only the second prospect to be tested in the onshore north-west Kenyan Lokichar Trough as part of Tullow Oil’s multi-well drilling campaign in Kenya and Ethiopia, the Twiga South-1 wildcat is the first oil discovery in the 8,429 km2 Block 13T in Kenya. Further up dip potential exists that Tullow plans to appraise but the result has de risked a number of other similar features on the western margin of the basin.
Drilled in late 2012 to a total depth of 3,250m, the well found three sandstone reservoir zones, which are analogous to the untested Ngamia-1 discovery around 22 km south-west in Block 10BB, and found good quality 30° API oil. It is understood that five tests are planned. In addition to the 30m of net oil pay, the well penetrated a thick section of tight fractured rock below 2,272m which had extensive hydrocarbon shows over a gross interval of 796m. This tight fractured rock section is a new play-type for the region that will require further evaluation to understand its extent and any productive potential. Tullow has a 50% operated interest in the Twiga South-1 well, with Africa Oil holding the remaining 50% interest.
Following completion of the testing programme, the Weatherford ‘804’ rig will move back to flow test Ngamia-1, which has 100m of net pay in a gross oil-bearing interval of 775m in the Upper Lokhone/Auwerwer Sandstone. The well also found an additional 43m of potential oil pay over a gross interval of 175m in the Lower Lokhone Sandstone.
The government remains cautiously optimistic that a commercial discovery has been made and that Kenya is on the road to being an oil producer.