CNOOC starts production in Bohai Bay

CNOOC announced that BZ 29-4, an independent oil field in the Bohai Bay, has commenced production successfully.

BZ 29-4 oil field, with an averaged water depth of about 22 meters, is located in the south part of Bohai Bay. The field's development and production operation will mainly rely on the facilities of the producing field BZ 28-2S. BZ 29-4 is projected to peak its daily production at 7,800 barrels within 2010.

Mr. Chen Bi, Executive Vice President of the Company, said, "The start-up of BZ 29-4 gives us more confidence in meeting our annual production target. We will continue to enhance our operation performance and ensure more projects to be brought on stream within this year."

BZ 29-4 is an independent oil field. CNOOC Ltd holds 100% interest and acts as the Operator.

OGX finds hydrocarbons in well OGX-15

OGX Petróleo e Gás Participações S.A. (“OGX”), the Brazilian oil and gas company conducting the largest private sector exploratory campaign in Brazil, announced today that it has identified an oil-bearing interval in the Albian section of well 1-OGX-15-RJS, located in the BM-C-41 block, in the shallow waters of the Campos Basin. OGX holds a 100% working interest in this block.

An oil column of about 96 meters with approximately 32 meters of net pay was encountered in carbonate reservoirs in the Albian section. The drilling of well OGX-15, also known as the Santa Helena prospect, is still in progress and is expected to continue to a maximum final depth of approximately 3,450 meters.

The information obtained to date from the drilling of the well OGX-15, mainly pressure data from the structure, analyzed in conjunction with the interpretation of 3D seismic data, suggests connectivity between this prospect and the discoveries of Etna (OGX-6) and Pipeline (OGX-2). The Santa Helena prospect is located 1.81km northwest of the Etna prospect and 6.41 km northeast of the Pipeline prospect.

“This information reinforces the hypothesis that the accumulation identified in the Albian section of the Santa Helena prospect is the same that was verified through the drilling of the Etna and Pipeline prospects. This ratifies the great importance of petrolific potential of the southern Campos Basin and contributes enormously to a better understanding of the recently discovered province in the region,” commented Mr. Paulo Mendonça, General Executive Officer of OGX.

The OGX-15 well, located in the BM-C-41 block, is situated approximately 78 kilometers off the coast of the state of Rio de Janeiro at a water depth of approximately 130 meters. The rig Ocean Ambassador initiated drilling activities there on June 18, 2010.

GOM spill relief efforts resume

BP today provided an update on developments in the response to the MC252 oil well incident in the Gulf of Mexico.

Subsea Source Control and Containment
On July 23, with the guidance and approval of the National Incident Commander (NIC) and the leadership and direction of the federal government, relief well activities at the MC252 well site were temporarily suspended because of potentially adverse weather associated with Tropical Storm Bonnie. Following the passing of the weather system, the DDIII drilling rig returned to the relief well site on July 24 and is taking steps necessary to reconnect with the well and resume drilling operations. These steps are expected to take a number of days.

The DDII drilling rig is moving back into position, and will take steps necessary to reconnect to the second relief well. However, work on the second relief well has been suspended so as not to interfere with the first.
The MC252 well has been successfully shut-in for integrity testing since July 15.

BP continues to closely monitor the MC252 well and well-capping structure, under the guidance of the Unified Command.

Tullow hits oil pay in deep waters offshore Ghana

Tullow announced that the Owo-1 exploration well in the Deepwater Tano license offshore Ghana has intersected a significant column of excellent quality light oil, potentially adding a billion barrels of oil equivalent to the resource estimate for the area. Results of drilling, wireline logs and samples of reservoir fluids have established Owo as a major new oil field requiring further appraisal.

The deviated well, located approximately 6km to the west of the Tweneboa wells, has encountered a gross vertical reservoir interval of 154 meters containing 53 meters of net oil pay in two zones of high quality stacked reservoir sandstones. Pressure data indicates that these zones are part of the same accumulation and samples show that it is a light oil of between 33 and 36 degrees API.

Following completion of logging operations the well will be sidetracked 0.6km east to provide additional information on lateral reservoir distribution and to intersect a deeper part of the Owo channel system.

The Sedco-702 dynamically positioned semi-submersible drilled Owo-1 to a final depth of 3,891 meters in water depths of 1,428 meters. On completion of operations on the Owo-1 sidetrack, the rig will remain in the Deepwater Tano block to drill the Onyina-1 exploration well which targets a large fan/channel system between the Tweneboa and Jubilee fields.

Tullow (49.95%) operates the Deepwater Tano licence and is partnered by Kosmos Energy Ghana (18%), Anadarko Petroleum (18%), Sabre Oil & Gas (4.05%) and the Ghana National Petroleum Corporation (GNPC) (10% carried interest).

Commenting today, Angus McCoss, Exploration Director, said, "Owo-1 has made a very substantial light oil discovery and continues the success of Tullow's Equatorial Atlantic exploration campaign in West Africa. Given this success, we are immediately drilling an appraisal sidetrack to further assess the size of this find. Accelerated appraisal drilling will now focus on maturing the resources in both Owo and the adjacent Tweneboa accumulation towards commercialization."

Petromanas begins seismic work in Albania

Petromanas announced that the start up of seismic operations on Blocks D-E and Blocks 2-3 in Albania as planned and on schedule, and is anticipated to be completed by October 2010. All operating licenses and permits have been received and the contractor's personnel and equipment are on site. This program includes 250 km of 2D seismic survey including 105 km which is part of the licenses required work commitments.

Manas Adriatic GmbH, a wholly owned subsidiary of Petromanas Energy Inc., has signed two agreements for Land Seismic Services with the Italian company Geotec S.p.A, on May 27, 2010, one each for Blocks D-E and Blocks 2-3 which are onshore Production Sharing Contracts in Albania. Geotec S.p.A. has extensive experience in the hydrocarbon exploration industry performing seismic work in Albania in conjunction with international oil and gas companies for many years.

The majority of the seismic work will be carried out with heliportable rigs and the remainder through conventional shallow drilling rigs.

This seismic survey is being carried out to improve the quality of the existing prospect data, and hence increase the chances of success of the exploratory wells to be drilled upon completion and interpretation of the new seismic data. The first well is anticipated to be drilled in early 2011.

BP’s capping stack continues to shut in well

Subsea Source Control and Containment
BP continues to work cooperatively with the guidance and approval of the National Incident Commander and the leadership and direction of federal government including the Department of Energy, Department of the Interior, Federal Science Team, Bureau of Ocean Energy, Management, Regulation and Enforcement, U.S. Coast Guard and secretaries Ken Salazar and Steven Chu. At this time, the well integrity test on the MC252 exploratory well continues.

During the test, the three ram capping stack has been closed, shutting in the well. All sub-sea containment systems (namely, the Q4000 and Helix Producer systems) have been temporarily suspended.

The pressure inside the well recently has been measured at approximately 6,792 pounds per square inch and continues to rise slowly. As directed by the National Incident Commander, extensive monitoring activities are being carried out around the well site. Information gathered during the test is being reviewed with the government agencies, including the Federal Science Team, to determine next steps. Depending upon the results of the test and monitoring activities, these steps may include extending the well integrity test or returning to containment options.

Should the test conclude, the Q4000 is expected to resume capturing and flaring oil and gas through the existing system. It has been capturing and flaring an average of 8,000 barrels a day (b/d) of oil in recent weeks.

The Helix Producer also is expected to be available to resume capturing oil and flaring gas through the recently installed floating riser system. It has the capacity to capture approximately 20,000 - 25,000 b/d of oil.
Plans continue for additional containment capacity and flexibility that are expected to ultimately increase recoverable oil volumes to 60,000-80,000 b/d.

The sealing cap system and many of the other containment systems have never before been deployed at these depths or under these conditions, and their efficiency and ability to contain or flare the oil and gas cannot be assured.

To date, the total volume of oil collected or flared by the containment systems is approximately 826,800 barrels. Information on the subsea operational status is updated daily on BP's website, www.bp.com.

Work on the first relief well, which started May 2, continues. The well reached a depth of 17,864 feet as of July 18th and the next scheduled operation is to carry out a ranging run. The first relief well has approached its last casing end point and, following the casing set, additional ranging runs will be used to guide the drill bit to a MC252 well intercept point. After interception, operations are expected to begin to kill the flow of oil and gas from the reservoir by pumping specialized heavy fluids down the relief well.

The second relief well, which started May 16, is at a measured depth of 15,874 feet and has been temporarily halted so as not to interfere with the ranging runs being performed in the first relief well.

Although uncertainty remains, the first half of August remains the current estimate of the most likely date by which the first relief well will be completed and kill operations performed.

Surface Spill Response as of July 17
Work continues to collect and disperse oil that has reached the surface of the sea, to protect the shoreline of the Gulf of Mexico, and to collect and clean up any oil that has reached shore. Approximately 43,100 personnel, more than 6,470 vessels and dozens of aircraft are engaged in the response effort.

Operations to skim oil continued over the weekend. These operations have recovered, in total, approximately 807,143 barrels (33.9 million gallons) of oily liquid. In addition, a total of 408 controlled burns have been carried out to date, removing an estimated 261,904 barrels of oil (11 million gallons) from the sea's surface.

The total length of containment boom deployed as part of efforts to prevent oil from reaching the coast is now almost 3.36 million feet (681.8 miles).

Additional information
To date, almost 116,000 claims have been submitted and more than 67,500 payments have been made, totalling $207 million.

The cost of the response to date amounts to approximately $3.95 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs. On June 16, BP announced an agreed package of measures, including the creation of a $20 billion fund to satisfy certain obligations arising from the oil and gas spill. It is too early to quantify other potential costs and liabilities associated with the incident.

OGX concludes drilling well OGX-12 in Santos Basin

OGX has concluded the drilling of the well 1-OGX-12-SPS, located in the BM-S-57 block, in the shallow waters of the Santos Basin. OGX holds a 100% working interest in this block.

The drilling of well OGX-12, also known as Niterói, reached a total depth of 5,074 meters, and encountered carbonate reservoirs in the Albian section with good conditions of permo-porosity, although with an ineffective geological seal. In addition, two thin intervals of carbonate reservoirs with indications of hydrocarbons were found in the Aptian and Barremian sections, confirming an active petrolific system. Although these hydrocarbon evidences are considered to be non-commercial, information obtained in the drilling of this well will play a very important role in calibrating the new geological model for the region.

"After a highly successful exploratory campaign with announced discoveries in all 14 of our previously drilled wells, the drilling of the Niteroi prospect had as main objective the testing of a new geological model. The post-mortem of the well leads us to believe that the lack of a geological seal was the cause of a non-commercial hydrocarbon accumulation, given that the Albian structure is prominent. The fact that we encountered good reservoirs and confirmed the existence of an active petrolific system in this part of the basin is very positive since it decreases the risk in future wells," commented Paulo Mendonça, General Executive Officer of OGX.

The OGX-12 well, located in the BM-S-57 block, is situated approximately 95 kilometers off the coast at a water depth of approximately 150 meters. The rig used in this drilling will be moved to the BM-S-56 block and will drill the Belém prospect.