International Outlook: South Pacific

Plans stress offshore developments

International operators are being offered licenses to find/develop more reserves offshore, particularly gas, to supply expanding markets

 Australia. During 2002, drilling totaled 172 wells; offshore wells totaled 73. Crude and condensate output averaged 646,563 bpd, down 1.8%. Gas production was off less than 1% at 3.145 Bcfd. Australian federal officials are worried about a predicted 40% drop in oil production over the next 10 years.

 Offshore Western Australia, ExxonMobil and ChevronTexaco made a world-class gas find, about 125 mi off Karratha. The Jansz field covers in excess of 760 sq mi, with a 1,300-ft gas column. In July 2003, the Jansz 3 appraisal tested 72 MMcfgd after being drilled to a 9,425-ft TD in 4,355 ft of water. The two firms are studying development options.

 Meanwhile, BHP Billiton struck oil in July 2003. The Ravensworth 1 was drilled to a 4,698-ft MD in 686 ft of water, 28 mi north-northwest of Exmouth. This follows the firm’s Stybarrow 1 oil discovery, drilled in 2,706 ft of water. Apache and partners last August struck oil in the South Simpson 1 (5,000 bopd). The wildcat was brought online to Varanus Island last October, along with the Tanami 6 extension (2,500 bopd).

 ENI continued developing Woollybutt oil field off Barrow Island. The installation went onstream last March and, by mid-year, was producing 41,000 bopd. Apache’s Harriet JV finalized a contract to supply more than 600 Bcf of gas to the planned Burrup Fertilisers plant over a 25-year period. The plant will begin taking 73 MMcfgd in July 2005. The state said 51 wells were drilled in 2002. 

 Offshore Victoria, Santos hit with the Sole 2 appraisal. It was drilled to 3,297 ft and suspended as a future gas producer. Sole field may be tied into the Patricia/Baleen gas development. OMV’s Patricia and Baleen fields went onstream in mid-2003. State officials said 30 wells were drilled last year.

 Woodside Petroleum and partners committed to an early engineering/planning phase for the Otway Gas Project, relating to Geographe and Thylacine offshore gas fields, discovered in 2001. The firms plan to install a wellhead platform at Thylacine, put eight wells onstream (three wells at Geographe), construct a subsea pipeline and build onshore facilities. BHP Billiton also received approval for the two-subsea-well Minerva gas field development in Otway basin in early 2004.

 Halfway between Tasmania and Victoria, development of Yolla gas field within the BassGas Project received federal approval. Operator Origin Energy has begun construction of an unmanned platform, 91 mi from the Victorian coast. A pipeline from Yolla will be built to Kilcunda, where an onshore line will carry the gas to a plant at Lang Lang and eventual connection to the state gas grid.

 Onshore Queensland, Santos drilled several wildcats, including last December’s Sardine Creek 1 gas find. The firm planned seven exploration wells for 2003. In addition, Santos signed two new, long-term gas/condensate supply contracts with Australian Gas Light Co. for supplies from the Cooper basin of Queensland and South Australia. Offshore the latter state, Santos drilled a gas find last September, Casino 1. The company also won four deepwater blocks in Otway and Sorrel basins. A 50% gain in drilling for 2003, to 84 wells, is expected in the State.

 In Northern Territory, drilling totaled 10 wells, all offshore. State officials forecast another nine wells for 2003, including three onshore. In June 2003, Newfield Exploration said that it would sell its interest (50%, operator) in Challis and Jabiru oil fields in the Timor Sea. Combined, the fields produce about 8,000 bopd.

 JPDA. Australia and East Timor earlier this year concluded the International Unitization Agreement for the Joint Petroleum Development Area. The pact gives legal certainty to the A$6.6-billion LNG development of Woodside’s Greater Sunrise gas field in the Timor Sea. Provided customers can be lined up for the LNG, Woodside hopes to begin output in 2009. Meanwhile, ConocoPhillips has given approval to the LNG portion of the Bayu-Undan field development project. First delivery is slated for 2006. 

 Papua New Guinea. Crude and condensate production averaged 65,700 bpd in 2002, plus 345 MMcfd gas. A large percentage of the crude is exported. Five onshore oil wells were drilled last year; five to ten are expected in 2003. No offshore activity is planned. The country has five major basins, still not fully explored.

In Papua New Guinea tract PPL 238 (Eastern Papuan basin), Australia’s Inter Oil has been drilling the Moose 1 ST wildcat. At press time, the firm said it would begin testing two limestone sections between 2,178 and 2,657 ft. (Photo courtesy of Inter Oil.)

 In exploration activity, InterOil ran the Falcon survey over license areas PPL 210/230. It planned an eight-well drilling program, starting in early 2003, with the Moose 1 in PPL 230; the second well, was to start in mid-year. In April, the company was awarded three new PPLs, 236, 237 and 238, which supersede the previous 210, 220 and 230 licenses. Santos logged a successful oil flow from its Bilip 2, in PPL 190, 6 mi SE of Gobe field. Santos Niugini Exploration P/A’d the Bosavi 1 on PPL 206. 

 ChevronTexaco sold its interest in Kutubu, Moran, Gobe Main and SE Gobe oil fields. Oil Search has been elected operator of Kutubu, Moran and Gobe. Esso Highlands, an ExxonMobil subsidiary, has expanded its role in PNG and will operate PRL 2 and 3 (Juha and P’nyang gas discoveries). It continues as operator of the PNG Gas Project, plus seven of the 11 E&P licenses in which it has equity. PNG’s two major indigenous oil and gas companies, Oil Search and Orogen, merged in May 2002 to create a “new” Oil Search; the new company will also operate PPL 227 for five years. 

 The major, $56.8-billion, 2,695-km PNG to Queensland gas pipeline project got a significant breakthrough in late 2002 by securing the Queensland Government as a foundation customer. CS Energy agreed to take 15 petajoules/year for 20 years, for its Swanbank E power station near Brisbane. With supply already secured by Australian Gas and Light, the project reportedly has more than half the commitments needed to start the development, which will open stranded gas in four major fields in PNG. 

 New Zealand. The two-island nation, with eight key onshore/offshore basins, is underdeveloped regarding its oil/gas resources. Total production reported by Crown Minerals averaged 32,000 bpd oil and condensate and 640 MMcfd gas in 2002. Eight fields have notable production, paced by Shell’s offshore Maui field, which produces about 80% of the country’s oil and 70% of its gas. Taranaki basin on/off North Island, is the most active; the East Coast basin on/off North Island, and Canterbury basin in the east of South Island are also active. Only 15 wells were drilled in 2002 and 18 are scheduled this year. 

 In August 2002, 21 new permits were awarded in Taranaki, 18 onshore and three offshore; 19 companies were awarded interests. A licensing round over five deepwater blocks, down to 1,800 m, in Taranaki has applications closing September 30, 2003. Five blocks over the mostly offshore Canterbury basin had applications closing in May 2003. And another round was announced in 2003 for 17 blocks in offshore North and onshore Taranaki; applications were to close October 31. A study predicting early depletion of the leading Maui offshore gas field has prompted more exploration activity. 

 In 2005, Maari oil field is expected to come onstream. Shell Todd, the Pohokura gas/condensate field operator, drilled the Pohokura North offshore appraisal with the Ocean Bounty semi; Shell is waiting on well results, and the South-2 appraisal, to finalize field development plans for 2006 startup. Swift Energy’s Rimu onshore oil/gas discovery in Southern Taranaki is a development candidate. Other important drilling includes: Swift Energy’s Kauri A3 and A4, and Rimu A2. Indo Pacific drilled Huinga 1B and Kahili 1A onshore Taranaki; and Transworld Oil drilled the Tui-1 oil wildcat, 13 mi NW of Maui with the Ocean Bounty.