September 1998 Vol. 219 No. 9  Offshore

Robert E. Snyder,  Editor

New life in the sub-salt; deepwater Philippine project

After being overshadowed by the booming deepwater activity, the U.S. Gulf of Mexico sub-salt play has resurfaced with Anadarko Petroleum Corp.'s announcement of a significant oil/gas discovery in its sub-salt exploration program. The 100%-owned Tanzanite discovery is located in the GOM at Eugene Island South Addition Block 346, in 314-ft water, about 75 mi offshore Louisiana. The exploration well (OCS-G 14482-1) encountered more than 450 ft of continuous hydrocarbon pay. An extensive suite of well logs confirms a major hydrocarbon accumulation and an "excellent" porosity of about 30%.

Extensive 3-D seismic indicates a productive reservoir extent of about 1,000 acres; and Anadarko believes the reservoir contains at least 140 MM boe reserves. Three additional payzones totaling about 70 ft are present in the wellbore. Further drilling could increase these estimates by increasing the areal extent of the main reservoir and further defining the other payzones.

The company says the Tanzanite discovery dramatically increases its domestic reserve base, and this could be one of the largest discoveries made in the shallow waters of the Gulf of Mexico since it discovered the Matagorda Island 622/623 field in 1980. And it proves that giant fields can still be found in the U.S.

The exploration well reached a 14,350-ft TD. Extensive production tests will be conducted. Rowan has been contracted to drill a delineation well. The operator has acquired and will install a template on the sea floor to space future wells; design work on the production platform is underway; and a construction contract is being negotiated.

Anadarko remains active in the GOM sub-salt. Since 1993, it has participated with partners in drilling 10 exploration wells. Five of these successfully found hydrocarbons: Mahogany, '93; Teak, '94; Agate, '95; Monazite, '96; and Tanzanite, '98; five were dry holes.

Two of these discoveries are currently on production. Mahogany was the industry's first commercial sub-salt discovery; it went on production in December 1996; partners are Phillips, operator, with 37.5%; Anadarko, 37.5%; and Amoco, 25%. Current production is about 15,000 bopd and 30 MMcfgd, and field development continues. Agate began production in July through the Mahogany platform and is producing about 17 MMcfgd and 2,000 bcpd; partners are Phillips, operator with 50%, and Anadarko, 50%.

Anadarko presently owns 41 lease blocks that encompass 20 sub-salt prospects in the shallow GOM waters. One other sub-salt exploration project is now drilling at Grand Isle Block 116. Called Hickory, the prospect's partners are Anadarko, operator, with 50%; Shell USA, 37.5%; and Ocean Energy, 12.5%.

Deepwater project in the Philippines. Allseas Marine Contractors has been awarded a contract by Shell Philippines Exploration for installation of infield and export pipelines associated with the Malampaya deepwater gas to power project. The pipelaying work includes installation of a 24-in. dia., 506-km (325-mi) gas export line from the production platform to landfall at Batangas on the island of Luzon. Offshore work will commence in 2000.

Water depths from the site north of Palawan Island further north to Luzon vary between 200 and 650 m (650 to 2,230 ft). Additionally, two16-in., 30-km carbon steel Incoloy 825 clad lines will be installed from the deepwater subsea production manifold located in 850-m water to the platform, together with a 24-in., 3-km condensate export line from the platform to a nearby CALM.

The work scope includes installation of deepwater PLEMs and SSIV protection frames and controls, stabilization of the pipelines, offshore surveys, landfall, tie-ins and pre-commissioning services. The contractor will install the lines with its DP vessel Solitaire.

Routing of the main export line encounters difficult soil conditions, and many seabed irregularities; however, the contractor says, its ability to install these lines at relatively low tension levels on DP has a significant impact on reducing route preparation and rectification work normally expected in such areas. Working on DP, Solitaire will not disturb the seabed and can accurately position the pipeline in the deep waters. This also minimizes interference with other concurrent field activities.

Offshore drilling drops for third month. Global Marine reports that the company's worldwide SCORE (Summary of Current Offshore Rig Economics) for July fell 1.0% from June, to 71.4% of estimated speculative new construction dayrate levels. The July decrease is the third consecutive monthly decline in the index this year, even though the July level is 9.8% up from July 1997, and a 105.9% improvement from five years ago.

Global's CEO Bob Rose said, "Weakness in worldwide oil prices continues to depress offshore drilling activity, particularly in the U.S. Gulf of Mexico. The number of work-ready idle rigs in the Gulf has grown from none in March, to 19 at the end of July. Dayrates for some jackups in the region have fallen from $50,000 earlier this year to less than $25,000. Weakness is also beginning to emerge in dayrates for some semis working in water depths of 400 to 2,000 ft. Deepwater markets beyond 2,000 ft, however, remain firm."

Global's SCORE reflects current offshore mobile drilling rig dayrates as a percentage of the estimated dayrates contractors would need to justify speculative new construction. New construction dayrates are calculated as the sum of daily cash operating costs plus a capital recovery factor of $700 per day per million dollars invested.

The July 1998 SCORE for the Gulf of Mexico slumped 4.7% from June, the sharpest month-to-month decrease for the region since February 1995. At 57.1%, the July level is a 3.8% decrease from July 1997, but a 46.2% increase from five years ago. The North Sea's SCORE inched upward from 83.6% in June, to 83.7%. The region's SCORE is up 16.6% for the one-year and five-year periods, respectively.

West Africa's SCORE edged upward slightly from June, to 74.7%. Southeast Asia's level rose 0.8% from June to 69% in July. The region has seen an increase in its SCORE of 16.2% from July 1997 and 64.1% from five years ago.

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Copyright © 1999 Gulf Publishing Company