Panama Has an Estimated 900 Million Barrels of Oil in Two Basins

- Panama Has an Estimated 900 Million Barrels of Oil in Two Basins

Monday, September 05, 2011
OilPrice.com
by Joao Peixe

Panama’s National Energy Secretariat has announced that 900 million barrels of oil have been detected at two basins in eastern Panama, representing a potential contribution to the Panamanian Treasury of $15 billion dollars over the next two decades at current oil prices.

Panamanian Energy Secretary Juan Manuel Urriola said that the Venezuelan firm OTS conducted the geological survey and detected the oil reserves in Panama’s Garachine-Sambu and Bayano-Chucunaque-Atrato basins in Darien province, which borders Colombia.

While the quality of the deposits’ oil has yet to be determined Urriola estimated their “commercial potential” at roughly $15 billion in taxes and royalties, based on OTS projected estimate of a per-barrel price of 100 dollars over the next 20 years, MercoPress news agency reported.

OTS recommended that in the bidding process the exploratory areas in the Garachine-Sambu and Bayano-Chucunaque-Atrato basins be divided into four geographical blocks per basin.

Urriola added that a bidding process for exploration rights and for determining the deposits’ quality and volume would begin before the end of the year.

Panamanian President Ricardo Martinelli is promoting oil exploration because of Panama’s need to have its own indigenous energy resources in order to reduce the country’s dependence on oil imports, where recent high costs have caused local fuel prices to soar.

(Joao Peixe is a Deputy Editor OilPrice.com. The full article appears here.)

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DNO, RAK Petroleum Agree on Merge of RAK's Operating Units

- DNO, RAK Petroleum Agree on Merge of RAK's Operating Units

Monday, September 05, 2011
Dow Jones Newswires
STOCKHOLM
by Dominic Chopping

Norwegian oil company DNO International said Monday it has signed a definitive agreement to merge RAK Petroleum's oil and gas operating companies into the Norwegian company, completing talks that started in July of this year.

Under the proposed transaction with United Arab Emirates-based RAK Petroleum Public Company Limited, DNO will issue RAK Petroleum shares at NOK9.50 a share, valuing DNO at $1.64 billion, against a value of the RAK Petroleum assets of $250 million.

"By combining our two companies' assets and people, the enlarged DNO International will be positioned not only to extract greater value from the existing exploration and production properties but to play an even more active role in the Middle East and North Africa or MENA region," DNO Managing Director Helge Eide said in a statement.

He added that DNO is committed to further expanding its operations in the Kurdistan Region of Iraq.

Copyright (c) 2011 Dow Jones & Company, Inc.

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BP Moscow Office Resumes Work After Raid; Documents Sealed

- BP Moscow Office Resumes Work After Raid; Documents Sealed

Monday, September 05, 2011
Dow Jones Newswires
MOSCOW
by William Mauldin

BP's Moscow office resumed work Monday following a raid last week by Russian court officials, a spokesman in Moscow for the U.K. oil giant said.

Documents gathered by the court bailiffs are currently sealed inside the office, and no papers have been removed, said the spokesman, Vladimir Buyanov.

BP said Friday that the search had been halted for 10 days and that it would challenge the operation in court.

Russian bailiffs on Wednesday and Thursday entered the BP office with special police armed with automatic weapons, as part of a search requested in a $3 billion lawsuit by investors in a traded unit of the oil company's Russian joint venture.

BP has called the lawsuit "absurd" and the search "unfounded" and directed at the wrong unit of the company.

The minority investors' attorneys said the search was carried out according to Russian law, regardless of which BP unit was searched.

The minority investors are seeking documents related to BP's Russia joint venture, TNK-BP Ltd., and to a failed Arctic deal between BP and state-controlled oil company Rosneft, as part of a lawsuit brought in Siberia's Tyumen Region Arbitration Court.

The minority investors, who live in Tyumen, have filed suits against BP and two of the U.K. company's executives at TNK-BP, claiming at least $3 billion in lost opportunities as a result of the failed Arctic deal with Rosneft.

The raid suggests BP's difficulties in Russia are likely to continue despite its efforts to put the fiasco of the Rosneft deal behind it, energy analysts said. BP initially disclosed the landmark alliance with Rosneft in January but found a deal blocked by opposition from its billionaire partners in TNK-BP Ltd.

Copyright (c) 2011 Dow Jones & Company, Inc.

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BOEMRE: Operators Evacuate Ops in GOM

- BOEMRE - Operators Evacuate Ops in GOM

Monday, September 05, 2011
BOEMRE

Offshore oil and gas operators in the Gulf of Mexico are evacuating platforms and rigs in the path of Tropical Storm Lee. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is monitoring the operators' activities. The team will continue to work with offshore operators and other state and federal agencies until operations return to normal and the storm is no longer a threat to Gulf of Mexico oil and gas activities.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT Sunday, personnel have been evacuated from a total of 239 production platforms, equivalent to 38.7 percent of the 617 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project's duration

Personnel have been evacuated from 25 rigs, equivalent to 35.7 percent of the 70 rigs currently operating in the Gulf. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 60.2 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 44.3 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the hurricane has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will continue to update the evacuation and shut-in statistics at 1:00 p.m. CDT each day as appropriate.

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Circle Oil Granted Extension for Oman Exploration

- Circle Oil Granted Extension for Oman Exploration

Monday, September 05, 2011
Circle Oil plc

Circle Oil announced the following operational update on its activities in Blocks 49 and 52 in Oman.

Block 49

Circle confirmed that the Ministry of Oil and Gas, Oman has granted an extension to the exploration period for our onshore Block 49 now ending December 26, 2012. Within this time frame, Circle will be required to complete an additional 2,500 line kilometers of closely spaced 2D seismic survey and drill one exploration well. The seismic program is to be acquired in the south-eastern part of the permit, north-east of and adjacent to the 3D survey which was completed in 2010. This survey is intended to provide a better understanding of the whole southern permit area, and outline potential additional drilling targets. It will complement the existing dataset, and cover an area with sparse coverage of legacy 2D lines. Acquisition parameters for the survey will draw on the experience obtained during the acquisition and processing of the 3D survey.

Block 49, covering an area of over 15,438 square kilometers, lies about 700 kilometers south-west of Muscat in a relatively unexplored area of Southern Oman. The concession agreement includes the right of conversion to a production license of 30 years in the event of commercial discoveries. Circle Oil Oman Ltd is the operator of Block 49 with a 100% working interest.

Block 52

The processing of the 5,026 line kilometers of marine 2D seismic, recorded from December 2010 to February 2011, has been completed. The processed data received to date are of a significantly improved quality over the historic seismic data. Interpretations have confirmed the presence of multiple structures and potential targets for exploration drilling. As result a farm-out process has recently been initiated using both internal data rooms and an external agency. The farm-out process is aimed at seeking a partner(s) to drill a commitment well in Block 52 within the next 18 months.

Circle's interpretations detailed in the farmout package in Block 52 have identified several promising play types in stratigraphy ranging in age from Pre-Cambrian to Tertiary, but the offshore Outer Sawquirah Area of Late Cretaceous to Palaeogene structural closures is considered the most prospective.

The identified principal reservoir intervals are Palaeogene Hadhramaut carbonates and clastics and late Cretaceous Aruma Group carbonates. Potential source rocks are considered to be Lower Hadhramaut and Aruma shales with additional potential in the basinal Jurassic Sahtan Group and the Infra-Cambrian Huqf Super Group. Sealing units for potential traps are provided by extensive shale units of the Fars, Hadhramaut and Aruma groups.

Nine large four way dip closed prospects are recognized in the Outer Sawqirah Area. Internal pre-drill deterministic STOIIP of these nine prospects for the most likely unrisked case is calculated as 7,264 MMBO. The associated ultimate recoverable resources for the nine prospects are estimated internally as 2,179 MMBO.

The water depths for proposed drilling locations on the nine prospects range from 724 to 956 m and target depths range from 1,490 to 2,850 m. The largest individual prospect, presently designated as Prospect A1, is situated in a water depth of approximately 769 m, with an internally estimated deterministic most likely STOIIP of 2,435 MMBO and associated most likely ultimate recoverable resources of 731 MMBO, with depth to top target at 1,490 m.

The Company would emphasize the point that the pre-drill deterministic estimates of STOIIP and resources are based on the information and interpretations available at time of issue and are made based on Circle's management deterministic best estimates. There can be no assurance that such estimates will prove to be accurate as future technical evaluations and results, including drilling results, could lead to variations or differ materially from those indicated in this release.

As expected, further exploration work is necessary and the Company is now seeking partners to join in this effort. Further announcements will be made in due course.

Block 52, covering an area of over 63,460 square kilometers, lies about 500 kilometers SSW of Muscat in an underexplored area of offshore Southern Oman. The concession agreement includes the right of conversion to a production license of 30 years in the event of commercial discoveries. Circle Oil Oman Offshore Ltd is the operator of Block 52 with a 100% working interest.

Commenting Prof. Chris Green, CEO, said, "The granting of the extension for Block 49 will allow Circle to further evaluate drilling opportunities within the southern area of the permit. In Block 52, the new seismic is of excellent quality and multiple closures, including some leads we mapped previously, have been firmed up as prospects. The interpretations coming from Block 52 seismic have allowed us to prepare a comprehensive farm-out package."

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Gulf Keystone All Smiles over Shaikan Appraisal Program

- Gulf Keystone All Smiles over Shaikan Appraisal Program

Monday, September 05, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its ongoing exploration and appraisal program for the Shaikan block in the Kurdistan Region of Iraq. Shaikan is a major discovery with independently audited gross oil-in-place volumes of between 4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis with a mean value of 7.5 billion barrels.

Shaikan-2 Well Test Update

Further to the announcement on the new Triassic discovery with the Shaikan-2 Appraisal Well, the Company has completed a flow test in the lower section of the Kurre Chine B zone in the Upper Triassic zone of the Shaikan-2 Appraisal Well drilled approximately nine km to the south-east of the Shaikan-1 discovery well.

The Kurre Chine B flow test in Shaikan-2 achieved flow rates of 2,600 barrels of 40 degree API oil per day with associated gas of 5.4 MMcf per day through a 48/64"choke.

So far, the Company has conducted three wells tests on Shaikan-2 with the maximum aggregate flow rate in excess of 15,000 barrels of oil per day ("bopd") with up to five additional tests still to be performed as part of the ongoing Shaikan-2 testing program in the Triassic and Jurassic. The next test will be conducted on the upper section of the Kurre Chine B.

Shaikan-4 Drilling Update

The Shaikan-4 Appraisal Well, drilled six km to the west of the Shaikan-1 discovery well, is currently drilling ahead at a measured depth (MD) of 2,580 meters. Preliminary well logs through the upper Jurassic (down to the top of the Butmah formation) indicate that the net pay count on this well for the upper Jurassic reservoirs is significantly better than those achieved with either Shaikan-1 or Shaikan-2.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "This latest in a series of successful Shaikan-2 well tests follows the announcement of the new Triassic discovery made with this well earlier this month. Together with the progress in the Shaikan-4 drilling operations and the oncoming spudding of Shaikan-5, it is a confirmation of Gulf Keystone's success in both drilling and proving the value of the giant Shaikan field, which is our immediate focus".

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Max Petroleum Begins Drilling Kazakh UTS-4 Appraisal

- Max Petroleum Begins Drilling Kazakh UTS-4 Appraisal

Monday, September 05, 2011
Max Petroleum plc


Max Petroleum has commenced drilling the UTS-4 appraisal well on the Uytas prospect in Block A, Kazakhstan. The total depth of the well will be approximately 800 meters, targeting potential Cretaceous and Jurassic reservoirs.


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GPC OKs Commencement of FEED Work at Galoc Field

- GPC OKs Commencement of FEED Work at Galoc Field

Monday, September 05, 2011
Otto Energy Ltd.

Otto reported an announcement by the Galoc Production Company (GPC) regarding approval to commence the Front End Engineering and Design (FEED) work and the acquisition of new 3D seismic in support of the planned Phase II development at the Galoc Oil Field (Galoc).

The FEED work will determine the exact locations and number of additional wells to be drilled, expected to commence in 2013. The new 3D seismic will support the placement of Phase II wells in the reservoir and de-risk capital expenditure.

Otto currently owns an 18.78% holding in Galoc through GPC. Otto has entered into an agreement to increase its interest to a direct 33.00% in Galoc, including 100% ownership of GPC, and to assume control of the operator of the field. Completion of the agreement is scheduled to occur prior to 30 September 2011.

Otto's Acting CEO Matthew Allen said, "These two approvals are key steps in the Phase II development of the Galoc Oil Field which we are currently on track to sanction in mid-2012. Given Otto's recent agreement to assume control of the operator and become the largest shareholder in Galoc, the development of Phase II is a core focus for Otto and we are very pleased with progress to date.

"The Galoc Oil Field recently produced its eight millionth barrel of oil and delivered its 23rd cargo. With the upgrade of the mooring and riser system for the FPSO Rubicon Intrepid expected to occur in the fourth quarter of 2011, the field's performance continues to reinforce our confidence in its reserves and future production."

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Det norske Submits First PDO as Field Operator

- Det norske Submits First PDO as Field Operator

Monday, September 05, 2011
Det norske Oljeselskap

Det norske will present a plan for development and operation (PDO) of Jette to the Minister of Petroleum and Energy Ola Borten Moe, Monday. The PDO will be submitted on behalf of the partners in the Jette Group, which in addition to Det norske includes Petoro, Dana Petroleum and Bridge Energy.

Erik Haugane, CEO of Det norske, said it is a big and important decision for the company to submit a PDO for Jette. "This is a small development relative to other North Sea-projects, but it is our first field development as operator. We believe it is best to start off with a small-scale development before moving on to bigger projects, like Draupne. In a few years, we could also become a significant operator of field developments off Norway."

Jette is a small field located in the North Sea, just east of the Jotun Field. Jette will be produced with two horizontal wells, tied back to the Jotun floating production storage and offloading vessel (FPSO). Jette is a very good example of what the government describes as time-critical resources.

"Even though Jette is a small development, it still represents value for the companies and the Norwegian society. Det norske believes that oil companies should also take on these projects," said Haugane

First oil in 2013

Jette contains about 14 million barrels of oil equivalents, based on a 30 percent recovery rate. Daily production the first year will be approximately 14 000 barrels, of which some 9 000 barrels will accrue to Det norske. Estimated development costs of Jette is approximately 2,5 billion NOK. Given the current oil price, Jette may generate gross revenues of 8 billion NOK. Operational costs are lower compared to typical operating costs of stand-alone developments and therefore enhancing the profitability of the development. Production startup is set to 1st quarter 2013.

Through a share issue last week, Det norske strengthened its equity ahead of developing Jette. Field development and operation will be led by Det norske in Trondheim, while daily monitoring of operations is carried out by ExxonMobil.

The partners in Jette are Det norske (63.3 percent, operator), Dana Petroleum (19.2 percent), Bridge Energy (6.0 percent) and Petoro (11.5 percent).

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Jubilant Reports Testing Results for Kharsang Field in India

- Jubilant Reports Testing Results for Kharsang Field in India

Monday, September 05, 2011
Jubilant Energy N.V.

Jubilant announced the testing results of the first development well KSG-57 (earlier referred to as "KPL-A") drilled under the Phase-III development drilling campaign in the Kharsang field. The well was spudded on July 28, 2011 and was successfully drilled to 875 meters measured depth (800 meter true vertical depth) on 15th August 2011, on time and within budget. The well was tested with a smaller capacity work-over rig, which was deployed at the site on August 21, 2011.

Based on wireline log interpretation results, formation pressure data from Sequential Formation Testing and Side Wall Core results, the consortium identified four separate intervals, totaling 20 meters of net sand, for testing of shallow C-50 and D-00 Girujan targeted reservoirs.

Upon testing the D-00 sands interval between 786-793 meters and activation through swabbing, the well started self-flowing. The well is presently flowing through 5.56 millimeter choke at a rate of around 170-180 barrels of oil per day (bopd), with Gas-Oil-Ratio of 30 volume by volume and maximum flowing tubing head pressure of 11 Kg/cm2. The initial results are as expected and encouraging. The production from the well is being sent to the Oil Collecting Station (OCS) for further processing.

The KSG-57 well will continue to remain under extended production testing to carry out a multi choke study till production is optimized. The testing of the remaining 11 meters of the two shallower sands will be completed at a later date.

GeoEnpro Petroleum Ltd., a joint venture of GeoPetrol and Jubilant Enpro (a member of the wider Jubilant Bhartia Group), is the operator of the Kharsang Field. Jubilant holds a 25% interest in the block through its subsidiary, Jubilant Energy (Kharsang) Pvt Ltd. The other members of the consortium are Oil India Ltd and GeoPetrol.

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