Cairn Energy has concluded all operations offshore Greenland with the end of the drilling season as agreed with the Greenland Bureau of Minerals and Petroleum (BMP), and the drillship Stena Forth and semisubmersible drilling rig Stena Don have been released off contract.
Cairn said it has suspended its Alpha-1S1 exploration well in the Sigguk Block approximately 175 km offshore Disko Island, west Greenland, to allow possible re-entry to sidetrack or deepen the well at a later date, and that the T8-1 and T4-1 exploration wells have been plugged and abandoned. It said the Alpha-1S1 well encountered oil shows in the volcanic section. In accordance with the BMP regulations, however, drilling operations ceased as of 30 September with the well still in volcanics and the prognosed Mesozoic section had not been reached.
The T4-1 well, which was targeting a Tertiary objective at a different stratigraphic level to T8-1, failed to encounter any significant hydrocarbons and found only thin reservoir sands, although geochemical analyses continue on selective samples. The T8-1 well, which encountered gas in thin sands has also been plugged and abandoned. Neither well resulted in commercial discoveries and their costs, some US$185 million, will be written off.
Cairn said since the primary objectives of the Alpha prospect were not reached, the well was suspended and any future re-entry work will depend on further evaluation.
Geophysical operations in Greenland are still active with a 2,500-km 2D seismic survey currently ongoing on the Eqqua Block, with some data to also be acquired in the Sigguk Block (less than 215 km) for well-tie purposes. A 7,400-km 2D survey was completed during the summer across the offshore south Greenland blocks.
Cairn said it has now drilled one third of all exploration wells ever drilled offshore Greenland and the first wells in the Greenland Arctic for almost 35 years, and that its campaign has demonstrated that drilling operations can be successfully and safely carried out in this area.
Mike Watts, Cairn's deputy CEO, said, "Exploration in Greenland is at a very early stage and consequently to have encountered both gas and oil in two of the first frontier exploration wells in the previously undrilled Baffin Bay geological basin is extremely encouraging. Cairn continues to evaluate all the data acquired this summer. Plans for the forward exploration program in 2011 are already underway and will be announced in the first quarter of 2011."
Cairn is the operator of the Sigguk Block and the three wells with 77.5% interest in partnership with Greenland's national oil company, Nunaoil, and Petronas Carigali, which holds 10% interest. Nunaoil is carried through the exploration phase but has a 12.5% stake in any development.
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