Cliff Head comes online
Production began this week at the $A285 million Cliff Head oil field development.
First production from the CH-6 well was around 1000 barrels per day of oil and field production rates are expected to increase to more than 10,000bpd as the five other designated oil producers come on-stream.
Cliff Head is expected to establish a strong base for offshore infrastructure in the northern Perth Basin.
Partners include operator Roc Oil (37.5%), AWE (27.5%), Wandoo Petroleum (24%), Arc Energy (6%) and CIECO Exploration and Production (5%).
Santos to expand Timor Sea, LNG operations
Santos has committed $100 million to accelerate exploration and appraisal of its Timor Sea and Bonaparte Gulf operations.
Success with this program would lead to expanding Santos’ liquefied natural gas production. Santos began LNG sales this year with first production from Bayu-Undan (Santos 10.6% interest) via the Darwin LNG plant.
The company aims to leverage its large contingent gas resources into future LNG developments.
Longtom contingent reserves upgraded
Gaffney, Cline & Associates’ analysis of reprocessed seismic data has boosted the best estimate of contingent gas resources at the Longtom gas field in VIC/P54 by 38%. The contingent resource is now 438 billion cubic feet.
The Longtom-3 appraisal well is now expected to spud in the second half of June, a month behind schedule due to the Basker/Manta development wells taking longer than expected, Nexus said.
Longtom-3 is being drilled by Nexus as a sole risk project.
BHPB increases Gulf of Mexico focus
BHP Billiton has appointed Texas-based Mike Yeager to head its petroleum arm, signalling an increased focus on Gulf of Mexico operations.
Yeager replaces Phil Aiken, who joined BHPB in 1997 as chief executive of the petroleum division.
Aiken indicated to the company last July that he wanted to retire. A search for Aiken’s replacement began last October. Aiken will retire in December but leaves the energy division immediately.
Yeager has a strong background working on oil and gas projects in North America and Europe.
Analysts agreed that the appointment made sense as Yeager has plenty of experience in areas where BHPB is aiming to grow, particularly the Gulf of Mexico.
Unlike its Australian operations, BHPB will be operating some projects in the Gulf and will need management with very strong local knowledge. Yeager will be based in Houston, Texas.
He will have to make some tough decisions early on. BHPB’s Atlantis South project is way over budget and well behind schedule. BHPB has a 44% stake in Atlantis, which is operated by majority partner BP (56%).
ExxonMobil raises hopes for Scarborough LNG
ExxonMobil now wants to develop the deepwater Carnarvon Basin Scarborough gas field, a move that it has ruled out until now, much to partner BHP Billiton’s frustration.
Exxon had been refusing to let development proceed as it believed reserves were too small to justify development in deep water 280km from the coast. But BHPB evaluation work has now confirmed Scarborough can support a stand-alone development.
This work was undertaken entirely by BHPB after ExxonMobil refused to participate in evaluation work. ExxonMobil refused to provide any funding or technical assistance for this program.
ExxonMobil had argued that the field’s recoverable reserves were no more than 5 trillion cubit feet – too little to support a world-scale liquefied natural gas project, particularly in deep water so far from shore.
But BHPB had previously said the Scarborough and smaller nearby Jupiter fields contained more than 8tcf of gas resources. It is not yet clear whether the appraisal program has confirmed this estimate or has led to it being upgraded.
The company has said this could sustain a 6 million tonne a year LNG plant, based onshore near the town of Onslow, for 25 years.
BHPB wants to use Scarborough to supply LNG to the US West Coast but many Californians still oppose the company’s Cabrillo Port floating offshore LNG terminal proposal and it may not be approved.
Kipper on the menu
The Victorian Government has leaned on the Kipper partners – operator ExxonMobil, BHP Billiton, Woodside and Santos, to finally serve up the big fish.
Kipper is the largest undeveloped gas field in south-east Australia – 620 billion cubic feet of gas and 30 million barrels of condensate.
The offshore Gippsland field was discovered in 1986, and the State Government got fed up of waiting and refused to renew the retention lease.
Now it has granted a production licence. ExxonMobil must therefore take the first step to production or risk losing control of Kipper.
Browse Basin set for LNG boom
The Browse Basin looks set to become a major liquefied natural gas hub with both Woodside and Japanese giant Inpex progressing plans for the region.
Inpex’s Ichthys field is expected to produce up to 6 million tonnes of LNG a year – about 10% of Japan’s total LNG imports. Field reserves are estimated at 9.9 trillion cubic feet.
The Woodside-led Browse joint venture also includes BHP Billiton, Chevron, Shell and BP. Their reserves are estimated at 20tcf.
Inpex and Woodside are considering options for joint development of Browse gas. Both projects are aiming for production between 2011 and 2014.
Big IPO likely for Coogee
Privately owned Coogee Resources has made two commercial Timor Sea oil discoveries this year – Swallow last month and Swift in March.
Swallow and Swift are within tie-back distance of the Montara and Skua oil fields. Combined reserves in the area are about 38 million barrels.
Coogee Resources intends to develop the three adjacent fields – Montara, Skua and Swift – through a new Floating Production, Storage and Offtake vessel.
Coogee is planning a $300 million partial float in which parent company Coogee Chemicals will retain 60% of the company.
