Shell leases 150,000 acres in Eagle Ford shale play

Shell Oil has leased 150,000 acres in the Eagle Ford shale play in South Texas. Shell’s move is parallel to Statoil’s entry into the Marcellus, Total’s joint venture in the Barnett and Exxon’s purchase of XTO, an independent active in the Barnett and Marcellus plays.

Marvin Odum, president of Shell Oil Co., the US division of Royal Dutch Shell, told The Houston Chronicle’s Brett Clanton that the Eagle Ford lease is a key piece of the company’s North American gas portfolio. Three years ago, Shell partnered with Canadian independent Encana to participate in the Haynesville shale play in Louisiana.

The Eagle Ford shale play runs beneath the Austin Chalk Shale at depths between 4,000 and 10,000 ft and geographically extends from the border with Mexico across the South Texas counties of McMullen, LaSalle, Maverick and Dimmit.

CNX’s Marcellus Shale well achieves record 4.9 MMcfpd production rate

CNX Gas Corporation announced production results from its latest horizontal well targeting the Marcellus Shale, the GH2BCV well in central Greene County, PA. This well has been producing for 16 days, at an average production rate of 4.9 MMcf per day.

The peak daily production rate was 5.7 MMcf, and the current daily production rate is 5.5 MMcf. The well was drilled with a horizontal lateral of 2,035 feet and was hydraulically fractured with a 7-stage frac.

The previous highest producing well was the CNX 3 well, which came on line in October 2008. That well had cumulative production of 1 Bcf through February 2010.

Shell, Nexen announce significant joint oil discovery

Royal Dutch Shell and Canadian energy giant Nexen said Friday they had made a significant oil discovery under 7,217 meters of water in the Gulf of Mexico.

The drilling in the Appomattox project is the third joint discovery between the two companies in the area following two others in the Mississippi Canyon also named for American Civil War encounters, Vicksburg and Shiloh.

The companies did not estimate the size of the reserves except to call the discovery "significant" and to say "well results have exceeded our pre-drill expectations.” The discovery is close to 5 miles deep. A vertical depth of 7,217 meters is 25,077 feet of depth.

Shell operates and holds an 80% working interest in the prospect, with partner Nexen holding the remaining 20%.

Shell made an initial discovery in the deepwater eastern Gulf of Mexico in 2003 with the Shiloh discovery (Shell 80%, Nexen 20%). A second discovery followed in 2007 at Vicksburg (Shell 75%, Nexen 25%), located about ten kilometers (six miles) east of Appomattox.

Anadarko, Shell announce new find in GOM

Anadarko Petroleum Corp. announced Monday it encountered more than 600 ft of high-quality oil pay, or the thickness of rock that can deliver oil or gas to the well, in subsalt Miocene sands, in the Shell-operated Vito appraisal well in the Gulf of Mexico.

Bob Daniels, senior vice president at Anadarko, said the find in the Vito appraisal well shows his company is "off to a great start" for its exploration activity in 2010. The Vito well was drilled to a depth of more than 31,000 ft in roughly 4,000 ft of water. An additional sidetrack appraisal well is planned for 2010 in order to determine the size of the find.

"With more than 1 mile separating the appraisal location and the discovery well, the initial results of the Vito appraisal well substantiate the field's large areal extent and thick, high-quality reservoirs," said Daniels.

The Gulf of Mexico is considered one of the most lucrative deep-water basins in the world. Offshore exploration in the United States is seen as a key to reducing foreign dependency on oil.

The Vito oil well is located in Mississippi Canyon block 940. Anadarko holds a 20% stake in the block. Shell Offshore Inc. holds a 55% interest while Statoil USA E&P Inc. holds the remaining 25% stake.

Petrobras makes new discovery in Brazil's Piracuca field

Petroleo Brasileiro has notified the Brazilian government petroleum industry regulator Agencia Nacional do Petroleo (ANP) that it has found oil in a well drilled offshore Brazil in the Piracuca Field, Block BM-S-7.

The ANP said today that Petrobras achieved the oil discovery on testing the well, 4BRSA781SPS, which was drilled to a total depth of 5,175 meters (16,979 ft) at a site in the southern part of the Santos Basin in shallow waters of 214 meters depth with the semisubmersible drilling rig Pride South Atlantic. It said that the field was originally discovered in April 2009 by Petrobras and its partner in the concession, Repsol-YPF, and that the field was declared commercial with estimated recoverable reserves of approximately 550 million boe.

The operator notified ANP of the find on the Piracuca Field in accordance with government regulations requiring oil companies operating in Brazil to inform the agency whenever an exploratory well encounters indications of oil, gas, or condensates within 48 hours of the discovery. The disclosure is routine and does not signify a commercial discovery.

Petrobras is the operator of Block BM-S-7 and the Piracuca discovery with 63% interest, with Repsol holding the remaining 37%. It lies about 200 km south of the city of Santos.

Gazprom begins drilling first prospecting well in Africa

In compliance with its obligations under the contract with the Algerian National Agency for the Valorization of Hydrocarbon Resources (ALNAFT), the Gazprom Group has commenced drilling of the first prospecting well (Rhourde Sayah-2) in Africa within the El Assel license area of Algeria’s Berkine basin.

The well drilling is provided for in the minimum scope of geological exploration activities according to the terms and conditions of the tender won by Gazprom EP International B.V. for hydrocarbons exploration and drilling of four wells in the onshore El Assel area.

In the meanwhile, Gazprom EP International carries our large-scale 3D seismic surveying in other parts of the license area. According to preliminary estimates, drilling of the first well is to be completed in June 2010 and another three wells are to be drilled within 2 years.

The project operator is Gazprom EP International. The first well will be drilled at an estimated depth of 4,400 meters. The target horizons are the Triassic and Cambrian-Ordovician sandstones.

ExxonMobil to explore Black Sea with ultra-deepwater Transocean drillship

ExxonMobil Exploration and Production Turkey B.V., an ExxonMobil affiliate, will use the Deepwater Champion, a specially designed, newly built drillship from a subsidiary of Transocean Ltd. to explore the deepwater Black Sea offshore Turkey.

Elwyn Griffiths, vice president, ExxonMobil Exploration Company, announced plans for the Deepwater Champion during a speech today at the annual 9th Turkish Oil and Gas Showcase and Conference in Ankara.

"We look forward to utilizing a world-class drillship with superior ultra-deepwater technology in the Turkish Black Sea," Griffiths said.
Drew Goodbread, ExxonMobil Turkey general manager in Ankara, said the Deepwater Champion is currently under construction at the Hyundai Heavy Industries shipyard in Ulsan, South Korea. It is expected to drill its first well in the Turkish Black Sea in the first half of 2011.

Goodbread said the Deepwater Champion is a sixth-generation drillship capable of drilling to 12,190 meters (40,000 feet) in up to 3,660 meters (12,000 feet) of water. The vessel’s drilling derrick contains two drilling stations capable of a variety of simultaneous operations to improve efficiency. The derrick has two removable sections for more efficient transit under the bridges spanning the Bosphorus Strait at Istanbul. The double-hulled vessel is self-propelled and capable of holding its position in open water in nine meter (30 feet) waves and 60 knot (70 miles per hour) winds.

ExxonMobil entered into an agreement with the Turkish national oil company TPAO in November 2008 to jointly explore deepwater prospects in the Samsun block of AR/TPO/3922 exploration license and the eastern portion of AR/TPO/3921 exploration license in the Black Sea. In January 2010, ExxonMobil signed an agreement with Petrobras and TPAO to acquire a 25% interest in the Sinop, Ayancik and Çarşamba sub-blocks of the AR/TPO/3922 exploration license.

Transocean’s ultra-deepwater drillship Dhirubhai Deepwater KG2 begins contract in India

Transocean Ltd. today announced that the newbuild ultra-deepwater drillship Dhirubhai Deepwater KG2, which is owned by a joint venture with Pacific Drilling Limited, has commenced operations for Reliance Industries in India under a five-year drilling contract.

The dynamically positioned Dhirubhai Deepwater KG2, one of 24 Ultra-Deepwater Floaters in the Transocean fleet, includes the most advanced drilling capabilities in the offshore drilling industry. The vessel features National Oilwell Varco drilling packages, significant off-line tubular-handling and stand-building capabilities, advanced mud system designs, systems for building, storing and running several subsea trees and efficient riser and BOP (blowout preventer) handling systems. The drillship has a variable deckload of approximately 20,000 metric tons and is equipped to work in water depths of up to 12,000 feet and outfitted to construct wells up to 35,000 feet deep.

In addition to the Dhirubhai Deepwater KG2 and five newbuild units placed into service last year, Transocean has four newbuild Ultra-Deepwater Floaters in various stages of construction or preparation for initial contracts which are scheduled to commence operations in 2010 and 2011. Those four units are the Discoverer Inspiration, the Discoverer India, the Discoverer Luanda (the latter owned by a joint venture company with Angco Cayman Limited) and the Deepwater Champion.

Petrobras expecting Cascade/Chinook to come online in June

Petrobras Chief Executive Jose Sergio Gabrielli reiterated Monday that oil production should commence at the Cascade/Chinook development in mid-2010, Dow Jones reported.

Speaking at an executive luncheon in Houston, Gabrielli said the Chinook FPSO unit should see first oil in June 2010; however, production could also come online in July.

Located in the Greater Chinook Area of the U.S. Gulf of Mexico, the Chinook and Cascade fields have a combined estimated production capacity of 80,000 barrels of oil per day.

WesternGeco's UniQ system sets seismic record in Kuwait

WesternGeco reported that the UniQ integrated point-receiver land seismic system has set a new industry record in Kuwait for Kuwait Oil Company (KOC) in acquiring data from 80,000 live digital point-receiver channels at a two-millisecond sample interval.

During sustained slip-sweep production in February, UniQ technology acquired and real-time quality checked one terabyte of data per hour -- the equivalent of five days of production for a typical 3000- channel conventional crew. All data were concurrently pre-conditioned using the Q-Xpress* in-field integrated seismic data acquisition and processing workflow for near real-time seismic data analysis. The UniQ system is being deployed in conjunction with WesternGeco DX-80 Desert Explorer vibrators and MD Sweep low-frequency technology.

Part of the Q-Technology point-receiver seismic hardware and software portfolio, the UniQ system combines extreme channel count technology with support for advanced simultaneous source techniques. Building upon the fidelity provided by the broad bandwidth geophone accelerometer sensor, the system can support up to 150,000 live channels at a two-millisecond sample interval.

Saudi Aramco to invest $90 billion over next 5 years

Speaking at an IHS CERA conference in Houston, Saudi Aramco Chief Executive Khalid Al-Falih said that oil still underpins the global economy and is likely to remain at the core of the world's energy needs in the future. The conference, known as CERAWeek, reunites some of the world's top oil and gas executives.

"Global demand for petroleum will recover very strongly" as population and living standards grow, the executive said. The development and deployment of viable alternatives to fossil fuels "does remain an open question," Al-Falih added.

Al-Falih said Saudi Arabia is committed to maintaining 1.5 million barrels of oil a day of spare production capacity. The kingdom, which recently underwent a big expansion of its oil output, currently has a spare capacity of 4 million barrels a day.

"We believe it's helping markets to be steady," Al-Falih said.

The executive said Saudi Aramco was not slowing down over the next five years, and will invest over $90 billion during that period.

Chevron wins shale exploration rights in Poland

Chevron this month acquired rights to explore for natural gas in Poland, the company said today in a filing with the Securities and Exchange Commission. Chevron said the exploration acreage is in the Grabowiec concession in the southeastern part of the country.

The confirmation follows Chevron's announcement in December that the company was awarded three five-year exploration licenses for the

Zwierzyniec, Kransnik and Frampol concessions, also located in Poland, to explore for unconventional gas resources.

In December 2009, the Environment Ministry of Poland granted Chevron permission to carry out seismic studies and exploratory drilling up to 3,500 meters underground, as well as to develop shale gas resources.

Lukoil, Vanco and GNPC discover hydrocarbons offshore Ghana

A consortium of three companies, LUKOIL Overseas (56.66%), US Vanco (28.34%) and Ghana National Petroleum Corporation, GNPC (15%), has discovered a significant hydrocarbon accumulation in the Dzata structure of the Cape Three Points Deep Water Block in the Gulf of Guinea offshore the Republic of Ghana.

The discovery was announced at a meeting in Accra today between Vagit Alekperov, President of OAO LUKOIL, and John Mills, President of the Republic of Ghana.

The total area of the block is about 5,200 square kilometers, while the water depth within the block ranges from 200 meters to 3,000 meters. The Dzata-1 structure lies at a depth of almost 2 kilometers. The Dzata-1 well, drilled to a depth of some 4.5 kilometers from the sea level, tapped a 94-meter-thick hydrocarbon column containing a 25-meter multilayer oil and gas pay. The primary reservoir sandstone contains gas and light oil. The well was drilled by a semi-submersible drilling unit for deepwater drilling, equipped with a dynamic positioning system. At present, the drilling is completed, the well is plugged and temporarily abandoned. The newly discovered hydrocarbon reserves are assumed to be quite significant. A program of detailed field appraisal will help assess and commercialize the discovery.

The agreement for exploration and development of the Cape Three Points Deep Water Block was signed in 2002. In 2005, a 3D seismic survey covering 1,500 square kilometers and a geological engineering study were carried out in the block. LUKOIL joined the project in 2007. On April 1, 2009, the Government of Ghana, LUKOIL, Vanco and GNPC signed a new exploration and development agreement for the block, which was ratified by the Parliament of Ghana on June 30, 2009.

Petrobras poised to launch biggest project ever in US GOM

A senior official with Brazil’s state-owned has announced that the company remains on track to launch its biggest project ever in the U.S. in coming months. Petrobras, keeping with its original timeline, is set to begin producing oil by mid-2010 from two ultra -deepwater fields in the Gulf of Mexico known as Cascade and Chinook, said Cesar Palagi, a Gulf of Mexico asset manager for the company.

The Petrobras project is being closely watched because it will be among the first to come on-stream in the emerging Lower Tertiary play, an ancient rock layer under the Gulf of Mexico some 150 miles offshore from Louisiana and Alabama, where the industry has made huge oil discoveries in recent years.

It's likely to follow only Shell's multibillion-dollar Perdido project -- capable of 100,000 barrels per day of oil and 200 million cubic feet per day of natural gas -- which is slated to start production early this year.
For the project, Petrobras also has secured the first U.S. license to use a Floating Production, Storage and Offloading vessel, or FPSO, to operate in the Gulf of Mexico. The vessel, currently en route to the Gulf from Singapore, has the capacity to produce 80,000 barrels per day of oil, a mark Palagi said the project could hit within two years.

In January, Petrobras exercised an option to acquire the remaining 50 percent of the Cascade field held by Oklahoma City-based Devon Energy Corp. The move came after Devon said last year it would sell its international and Gulf of Mexico assets to reduce debt and refocus on North American onshore gas fields. In Chinook, Petrobras has a 66.7 percent stake, while France's Total holds the remaining 33.3 percent.

Petrobras is operator of both fields and plans to develop them jointly.

Pemex makes 900-million bbl discovery offshore Campeche

Petroleos Mexicanos (Pemex) has made a new offshore oilfield discovery in the southern part of the Mexican sector of the Gulf of Mexico in the Gulf of Campeche.

The Mexican newspaper Reforma quoted Pemex today in saying that the new field is located off the coast of Campeche state and is believed to contain an estimated 900 million bbl of oil, making it one of the most important discoveries in Mexico in a decade.

Pemex is reported to have indicated that the new field, which has not been named as yet, could be developed quickly to bring it on production in about two years at a start-up rate of around 150,000 b/d - output that is sorely needed to compensate for some of the dwindling production from Mexican fields over the past few years. It is thought it may be able to make up for about a third of the production losses.

The new discovery, adjacent to the Sihil Field not far from the giant Cantarell Field, is said to be an extensive reservoir containing sweet, light crude oil.