Horizon’s latest quarterly report says that although evaluation work was not proceeding as quickly as it would like, “nothing so far has changed our view of the high quality of the asset”.
Horizon, which holds a 10% interest in PEP 38413, said detailed technical studies and screening of conceptual development options for the field continued, with the main focus of subsurface work being on reserves definition, flow assurance and artificial lift.
Recent reservoir simulation work, coupled with analysis of alternative artificial lift systems such as electric submersible and hydraulic submersible pumps, had shown the potential for “power lift” systems to supplement reservoir pressure and increase well productivity.
The potential benefits of these schemes, in terms of both acceleration of production and increases in technically recoverable reserves, had led to “significant increases” in the scope of the development screening studies for the field.
In addition, flow assurance studies indicated the waxy nature of Maari crude could be managed during the production phase using a variety of mitigation techniques, coupled with each of the development schemes currently under investigation.
The development concepts currently being considered were: subsea wellheads with a floating production, storage and offtake (FPSO) vessel; dry wellheads on a minimum facilities platform, with a FPSO; dry wellheads on a jack-up drilling unit, with a Floating Storage and Offtake (FSO) vessel.
The increases in the scope of both surface and subsurface studies had delayed the project schedule, as efforts were made to bring the technical and commercial data associated with each option to a similar confidence level.
The current project schedule now targeted definition of a preferred concept in the third and fourth quarters of 2004, followed by a technical assurance and Front End Engineering and Design phase. On this basis, a Final Investment Decision was not expected until this coming December 2004, as opposed to this month August as had been previously expected.
In July 2003 an independent report by Perth-based Resource Investment Strategy Consultants confirmed the robust economics and significant value of Maari.
RISC said likely recoverable reserves for Maari were 49 million barrels of oil from the Moki and Mangahewa reservoirs, plus the M2A sands; plus a further six million barrels from the Manaia prospect to the southwest.
RISC also said the medium reserves case - at an 11% discount rate and oil prices of US$22 per barrel - indicated recoverable reserves net to Horizon of 11.3 million barrels. Even if oil dropped to US$17.10 per barrel, Maari would still have a positive NPV and give Horizon an 11% rate of return on capital.
