In its quarterly report to the ASX, the Perth-based company said Woodside was firming up a development concept for the geologically complex field. This follows further geoscience, reservoir engineering and facilities studies undertaken during the quarter.
“The next step would be a joint venture decision anticipated in the current quarter to take the selected concept forward,” Hardman managing director Simon Potter said.
Woodside proposes to initially develop the central area of the Tiof field to access reserves of between 40 million and 60 million barrels of oil. Further development would depend on the level of success at stage one, Hardman said.
The company estimates that the Tiof field has about one billion barrels of oil in-place, comprising 600 million barrels from the Miocene horizon (with P10 upside of some 900 million barrels) and additional contingent resources from the Oligocene horizon discovered in the Tiof-4 well.
Stage one development would occur via a dry tree unit – either a tension leg platform or possibly a spar platform – with a lightweight integral drilling facility.
Hardman says the main advantage of this concept, rather than a Floating Production, Storage and Offtake-based development with subsea wellheads similar to Chinguetti, was that drilling and subsea equipment costs would be significantly reduced. This would subsequently lower the economic threshold of recoverable reserves per well, it said.
However, the company said this concept would involve a higher initial facilities capital cost than a leased FPSO, with project capital expenditure in the $650-700 million range.
“Given the complexity of the Tiof reservoir, and particularly concerns about the connectivity within the reservoir, reducing costs per well may be a key determinant of ultimate economic recovery,” Potter said.
At this stage, the development concept involves six initial production wells targeting between 40 and 60mmbbls of oil. First production of about 50,000 bbls per day is expected by 2009.
“With the facility having some 15 to 18 well slots to allow for future expansion, there would be considerable potential for additional reserves to be accessed from further development drilling,” Potter said.
“Potential reserves could be further enhanced by better-than-assumed reservoir parameters.”
Potter added that the Chinguetti FPSO could be used for final processing and storage before export.
Woodside holds a 53.846% stake in Tiof while Hardman owns 21.6%. Other partners include ASX and AIM-listed Roc Oil (3.693%), and UK companies BG Group (11.63%) and Premier Group (9.231%).
