It wasn't the best of times.
It wasn't the worst of times.
In terms of exploration success, the year 2001 may
be remembered as a politely stifled yawn.
But perception isn't always everyone's reality.
Ken White, for one, sees plenty of promise from the
past 12 months.
White, London-based senior editor of the International
Oil Letter, has gathered a list of candidates for most significant
find of the year. He said suggestions came from the regional editors
of the newsletter, published by IHS Energy Group.
And for 2001, White ended up with 10 pages of nominees
for Well of the Year.
"The list is quite extensive," he said, "and certainly
bigger than I thought it would be."
White's list includes wells that showed more promise
than performance, however. "We're not trying to determine if a well's
commercial or if it's a record-breaker," he said.
So his candidates for most important find list several
wells that fell short of commercial production, but indicated the
potential for future developments.
Other wells gave confirmation to previous discoveries.
Even the impressive Kashagan West 1 well in Kazakhstan added validity
to the scope of the earlier Kashagan East find.
What's missing from the list is an abundance of large-reservoir
discoveries with immediate impact. Despite a fair number of successes,
2001 didn't produce a significant number of significant producers.
"It hasn't been one of those years," White conceded.
"But it hasn't been bad, either."
The International Oil Letter list of major 2001 finds
excludes North American wells, because those are already widely
reported and thoroughly documented, White said.
And he warns that results from the former Soviet
republics may not be "fully representative," for the opposite reason:
reliable reporting and documentation are far from assured.
But one of the biggest stories of the year came out
of Kazakhstan, where the Kashagan West well confirmed what could
be a super-giant structure under the North Caspian Sea.
Offshore Kazakhstan International Operating Company
(OKIOC) spudded the Kashagan West in October 2000, about 40 kilometers
west of the field's discovery well.
In May 2001, OKIOC reported that the new find had
reached bottom-hole depth of 16,200 feet and had tested up to 3,400
barrels of oil per day and 7.6 million cubic feet of gas per day
Kashagan oil is hosted within a late Paleozoic —
late Devonian to Carboniferous — isolated carbonate platform sealed
by Permian shale and evaporite, according to Willam G. Zempolich,
an OKIOC geologist and a 2001-2002 AAPG Distinguished Lecturer.
The reservoir lies beneath thick and variable salt,
and is located 50-100 kilometers from neighboring onshore wells.
Drilling for Caspian sub-salt, Paleozoic-carbonate
reservoirs presents numerous challenges, Zempolich said. The goal
is to penetrate reservoirs at depths from four-five kilometers that
are sealed by shale and carbonate lithologies, and that are likely
to contain karstified intervals and overpressured, H2S-rich
Ultimate recoverable reserves in Kashagan may eclipse
those of Kazakhstan's Tengiz field.
"The potential there is enormous," White noted.
Extreme conditions, however, make development problematic.
Limited water depths require the use of shallow-draft ships. Structures
must be protected from the pressure of winter sheet-ice. Special
environmental measures are needed because Kashagan overlaps a marine
ENI serves as operator in the project for industry
partners BG, BP, ExxonMobil, Inpex, Phillips Petroleum, Shell, Statoil
The recent opening of the Caspian Pipeline Consortium
(CPC) pipeline from Kazakhstan to a port on the Black Sea guarantees
transportation for the region's oil.
Backers put more than $265 billion into the pipeline
project, a 1,580-kilometer connection that links the Tengiz field
to a loading facility in the Russian port of Anapa.
Initial pipeline capacity is 600,000 barrels per
day, with a potential future capacity of 1.5 million barrels per
Ukraine reported the first discovery on the Ukrainian
Black Sea shelf with the Olimpiyskaya-1, in waters disputed with
Romania. In Russia, the Pakhancheskaya-1 wildcat in the Barents
Sea found Silurian oil, but test rates were not disclosed.
UK: An 'Astonishing' Discovery
One of the year's most startling discoveries came
on Block 20/6 in the United Kingdom section of the North Sea, an
area long recognized for its productive capacity.
BG Group served as operator in drilling the 20/6-3
well, a 300 million-barrel discovery, on behalf of license holder
PanCanadian Energy, Intrepid Energy North Sea Ltd. and Edinburgh
Oil and Gas. White called the Buzzard Prospect find a company-maker
for Edinburgh Oil, which has a 5 percent interest.
"To find a 300 million (barrel) discovery after all
these years in the North Sea, and almost 20 years after drilling
the last discovery there, is quite astonishing," he said.
In addition to reopening a mature area, the well
came in larger than life-size, according to White.
"We haven't had a discovery like that in 15 years,"
he said. "They tend to be in the order of 15-100 million."
To the north, Amerada Hess found promise with the
6004/16a-1 well in Faeroe Islands waters. Initial reports indicated
a 170-meter hydrocarbon column, and appraisal wells will be drilled
in 2002. The discovery was a first in the Faeroes.
DONG E&P also holds an interest in the well,
with Atlantic Petroleum a minor participant. BG is part of the Faeroes
Partnership but was not involved in the discovery.
Around the World
Other notable discoveries from around the world in
The Shell-ExxonMobil company Nederlandse Aardolie Maatschappij
(NAM) reported a major gas find 60 kilometers northwest of Den
Helder. With a 200-meter gas column, the K/15-16 discovery may
represent NAM's largest North Sea well in 15 years.
In Africa, two non-commercial discovery wells showed good
prospects for future exploration. The Semba-1 in Angola produced
a substantial oil flow in the Benguela sub-basin. And offshore
Mauritania, the Chinguetti-1 established a new Miocene sands
Petroleum Development Oman (PDO) started the year right with
the early announcement of a major gas discovery in northern
Oman. The Kauther-1, at 4,200-meter depth, was regarded as PDO's
biggest find in six years.
Better still, PDO soon followed with news of an even bigger
gas discovery. The Khazzan-1 found sandstone pay in an area
west of the giant Saih Rawl field. At 4,500-meters depth, the
well indicated potential for production from deeper layers.
Although testing continued, early estimates put combined reserves
at three-five trillion cubic feet. Both wells came as part of
the kingdom's program to define its natural gas resource base.
Iran claimed the title for biggest new gas well in the region,
however. The Daryaie-1 encountered a gas layer reportedly 560-meters
thick, with recoverable reserves in the reservoir of 3.6 trillion
China National Offshore Oil Company (CNOOC) announced a 1,500-meter-depth
gas discovery with its Liuhua 19-3-1 wildcat.
CNOOC tested several intervals and reported the most prolific
at 1.7 million cubic feet per day on choke.
Liuhua 19-3 is in the eastern sector of the South China Sea,
about 70 kilometers from the Liuhua 11-1 oilfield and some 220
kilometers south of Hong Kong.
PetroChina recorded another gas discovery in the Seibei Field
area of northwestern China. The Yikeyawuru structure test reportedly
flowed about 1.23 million cubic feet per day.
Seibei sits in the Qaidam Basin, believed to contain as much
as 18 trillion cubic feet of gas reserves. A recently opened
pipeline connects the basin's gas fields with provincial capital
Xining and other cities.
Commenting on a string of 2001 Chinese discoveries, White
said, "Certainly, China has got quite a big representation.
But what's missing is the foreign operators. And there may be
lots of reasons for that."
Origin Energy added to a list of gas strikes offshore Australia
in the Otway Basin. Its Thylacine-1 found a 281-meter gas column
in Waarre sandstone, in a structure that could hold 600 billion
to one trillion cubic feet of reserves.
In Argentina, the Macueta 1001 1b(1H) encountered a significant
gas reservoir. The find could prove an added 2- 3 trillion cubic
feet of gas reserves adjoining acreage where a possible three
trillion cubic feet already has been booked.
A BP subsidiary found gas in Brazil's Foz do Amazonas Basin
with the 1-BP-2-APS. More importantly, the well indicated oil
generation might be taking place in the area. A 2,500-square-kilometer
block in the basin was earlier licensed to BP, Petrobras, Esso
Brasil and TotalFinaElf.
Offshore Brazil, Petrobras discovered extra-light oil in the
Campos Basin, Espirito Santo State. The 1-BRSA-18-ESS was drilled
in 2,243-meters of water.
Brazil remains a hot spot for drilling activity and will continue
to be active in 2002, "which is of course a natural consequence
of the licensing rounds that took place a couple of years ago,"
With the industry going full-bore, the year 2001
shaped up as good to very good, but not great. In an optimistic
view, White sees plenty of reasons for continued capital investment
"I think the Caspian region will yield some very
good wells next year," he said. "The CPC pipeline is up now, and
that's a very good thing.
"I can't see anywhere waning. When you get a discovery
like our 300 million-barrel discovery in the North Sea, it's bound
to make the people in the boardrooms sit up and take notice."