What's new in production

	Vol. 227 No. 6
VICTOR SCHMIDT, DRILLING ENGINEERING EDITOR

Sakhalin update. One of, if not the largest, oil development projects in the world is moving into full production. Offshore Sakhalin Island holds an estimated 20 billion bbl of oil and 137 Tcf (45 billion boe) of gas, making it a major oil and gas province.

Sakhalin Island is off Russia’s eastern coastline, north of Hokkaido Island (Japan). The Pacific side was first leased in the early 1990s. Exxon Neftegas Ltd and Sakhalin Energy won Sakhalin-I and Sakhalin-II, respectively.

Sakhalin Energy is a consortium of Royal Dutch Shell (operator, 55%), Mitsui (25%) and Mitsubishi (20%) and was the first to produce oil. Using a modified Canadian arctic rig – the Molikpaq – the Piltun Astokhskoye discovery became the first Sakhalin field to produce oil. Shell expects to spend around $20 billion to fully develop it and the Lunskoye discovery. This figure also includes the construction of LNG trains and related facilities.

Production began from the Astokh portion of the field in July 1999 and the gravity-based, Molikpaq structure has produced more than 50 MM bbl of oil. Water injection maintains reservoir pressure. Lunskoye will be developed soon.

Sakhalin Energy recently signed a 20-yr contract to deliver LNG to Japan’s Tohoku Electric Power. Once facilities are completed at the southern end of Sakhalin Island, 420,000 tons of LNG will be shipped yearly, beginning in 2010.

Sakhalin-I includes three major discoveries, Chayvo, Odoptu and Arkutun Dagi, that have a combined potential of 2.3 billion bbl of oil and 17.1 Tcf of gas. These are being developed by Exxon Neftegas Ltd, a consortium that includes ExxonMobil (operator, 30%), SODECO (30%), RN-Astra (8.5%), Sakhalinmorneftegas-Shelf (11.5%) and ONGC Videsh Ltd (20%). The group began producing oil in October 2005 from Chayvo.

Sakhalin-I recently began producing from Chayvo field with Odoptu and Arkutun Dagi fields to follow in later years. Source: Exxon Neftegaz.

Chayvo field is 3 to 9 mi (5 to 15 km) offshore, but is being developed with extended reach wells drilled from a shore-based on the Chayvo Spit. The rig, Yastreb, is operated by Parker Drilling. So far, the rig has drilled nine extended reach wells to the northwestern flank of Chayvo. One well, the Chayvo Z-4, reached out 30,334 ft (9,246 m), MD, in 33,408 ft (10,183 m). The wells are producing 50,000 bopd and 90 MMcfd.

A 20-slot offshore concrete platform, Orlan, will be placed in 15-m water depth to reach the southwestern parts of the field. The structure was installed last summer and has drilled one well.

Later this year, a new Onshore Processing Facility (OPF) will begin operating that will increase field production to 250,000 bopd and 270 MMcfgd. Field development cost $4.9 billion, to date, for environmental studies, exploration, engineering, infrastructure and other costs.

Construction is underway on a 24-in. pipeline to connect the OPF to the export terminal at De-Kastri. This will go into operation this summer, servicing vessels up to 110,000 dwt. Sakhalin oil will soon be available on world markets. Conventional tankerage will be possible with the help of icebreakers.

Gas production is presently being sold into Russian’s domestic market, but future development plans call for more pipelines to move gas to the broader region. Both Odoptu and Arkutun Dagi fields are scheduled for later development.

Odoptu field is 4 to 6 mi. (6 to 10 km) offshore of the northern end of the island. It will be developed from two onshore sites, Northern and Southern, about 6 mi. apart. The consortium plans to drill 24 extended reach wells to tap the reservoirs, up to 7 mi. from the coast.

Work is underway on Sakhalin’s other tranches: III, IV and V. A well was drilled in 2004 in Sakhalin V by Elvary Neftegaz, a joint venture between BP and Rosneft. The well produced 1,900 bpd through a 28/64-in. choke. Plans are to bring in a second rig this summer.

The region around Sakhalin Island is a significant new producing region that is just beginning to show its promise after more than 10 years of industry investment. We should be hearing much more from the region in coming years.

Chinese jacket. China National Offshore Oil Corporation (CNOOC) recently installed a 213-m (699-ft) high, 25,200-ton production jacket for Panyu 30-1 gas field in the South China Sea. The jacket was designed in China and is a significant development in China’s deepwater engineering. It is reportedly the largest jacket yet produced by China. CNOOC expects to begin development drilling this coming September, once platform construction is complete.

Deepwater pipeline. Chevron USA Inc. approved the construction of a 55-mi. deepwater pipeline to connect its Gulf of Mexico Tahiti project to the Amberjack pipeline. This new, 24-in., crude oil pipeline will carry 300,000 bopd. It will be laid in a 4,200-ft water depth in Green Canyon Block 641, then run north-northwest from the Tahiti platform and connect to the Amberjack pipeline system in Green Canyon Block 19. It will have enough capacity for future discoveries in Walker Ridge and Green Canyon areas.

The pipeline will be built by Amberjack Pipeline Co. LLC and be owned 50/50 by Chevron Pipe Line Co. and Shell Pipeline Co. LP. Tahiti platform, presently under construction, will begin producing in 2008 building to a maximum 125,000 bopd and 70 MMcfgd.