The Pyrenees is the latest in a cluster of projects using floating processing, storage and offtake vessels that are slated for start-up in the next few years.
The region’s first development, Enfield, which produced first oil in July last year, will soon be followed by Vincent, Van Gogh and Stybarrow. The BHP Billiton-operated Pyrenees development is very likely to follow these other projects.
The region is characterised by heavy oil, with most discoveries being between 19 and 22 degrees API, which has meant that until recently explorers and developers were reluctant to put much effort into the province.
In the Pyrenees area, for example, several wells with oil or gas shows were drilled in the 1970s, then there was a long period of little activity before a significant oil discovery was made at West Murion-5 in 1993.
Even then, the geology of the find was complex and the oil was 19 degrees API, so BHP sought a retention lease and put the project on the backburner.
But now the region’s time has come. Australian oil production is declining and refiners around the world are having to grit their teeth and work with heavy oil.
Woodside started the ball rolling with Enfield (Woodside 60% and operator, Mitsui 40%).
Initially estimated to have 2P reserves of about 127 million barrels (MMbbl) of oil with peak rates of 90,000bpd, Enfield soon struck problems, including water ingress at one well. Reserves were cut to 73.5MMbbl and output fell drastically before stabilising at about 49,000bpd.
But remedial work and 4D seismic have improved the outlook. Analyst Macquarie Private Wealth said recently that a reserves upgrade now seemed likely and Woodside should be able to apply the lessons learned at Enfield to its other oil projects.
“Following the issues at Enfield, [Woodside] believes it will be in a better position to respond to any well or field uncertainty, including top side capacity, multi-phased pumps and spare manifold slots,” Macquarie said.
“[Woodside] has also responded by implementing an inventory program for subsea equipment (trees and flow lines), long-term access to drilling capabilities and the ability for rig-less intervention.”
Woodside’s next oil project, Vincent, also in the Exmouth Sub-basin, is due to come online in the third quarter of 2008, with development drilling and floating production, storage and offtake conversion now underway.
“Vincent will be better prepared for uncertainty,” Macquarie said.
Vincent, which is believed to contain about 73MMboe, was discovered in 1998 but has lagged behind other developments in the area because of the technical nature of the reservoir.
First oil from Vincent is planned for 2008, at an initial rate of 100,000 barrels per day.
Eight production wells are planned for the first phase of the project. The oil will be processed and stored using FPSO vessel.
The success of the initial phase will determine whether and how the project is expanded.
Meanwhile operator BHP Billiton and 50:50 partner Woodside plan to produce first oil from their Stybarrow project in 2008.
Discovered in 2003, Stybarrow and the adjacent small oil rim of the Eskdale field are estimated to contain recoverable oil reserves of between 60 and 90MMbbl.
The $700 million field is in water 825m deep and will be Australia's deepest-ever oil development. The joint venture plans to operate the field for 20 years. Stybarrow will involve a subsea development and an FPSO that will initially produce about 80,000 barrels a day, stabilising at about 50,000-60,000bpd, and will have a storage capacity of 900,000 barrels.
Elsewhere in the Sub-basin, Apache Energy is already drilling wells for the next program in the Exmouth oil queue, Van Gogh. Apache is operator and owns 52.5% of the $US500 million ($A590 million) development, while Tokyo-based Inpex owns 47.5%.
Apache last month announced the first horizontal well at Van Gogh, Theo-3H, had flowed 9694 barrels of oil per day on test.
The US major is planning to drill 18 additional long-reach horizontal laterals at Van Gogh later this year, with first production anticipated in 2009.
The partners have signed a contract for a floating production, storage and offtake vessel, with a processing capacity of 63,000bpd and storage capacity of 620,000bbl.
The moored FPSO will be linked to two subsea drill centres with 10 production wells, two water injection wells, and one gas injection well. Van Gogh is expected to deliver about 40,000bpd.
In addition to these confirmed projects, operator BHP Billiton is conducting feasibility work on the Pyrenees Development Area project. At the time of going to press, formal approval for this project was expected to be imminent.
The Pyrenees area includes several finds in two adjacent permits with estimated oil reserves totalling more than 120MMbbl.
These finds are located in WA-12-R, where BHP operates with 71.43% interest while Apache Energy has 28.57%, and in WA-155-P(1) where BHP operates with 39.99% in partnership with Apache (31.51%) and Japanese major Inpex (28.5%). The fields include the Pyrenees discovery itself, Ravensworth, Crosby, Stickle, Harrison and Moondyne.
Ravensworth, Crosby and Stickle are the initial focus, with the draft environmental impact study suggesting these fields could form a potential Phase 1 of the development program.
The plan is to produce from subsea wellheads on each of these three fields and connect them with flow lines to an FPSO. Water depths are around 220m.
Other discoveries in the area may then be connected to the system in a later Phase 2.
With oil being the primary goal, associated gas is likely to be re-injected rather than flared. BHP and its partners have planned a new seismic survey for early 2006 in WA-12-R and WA-155-P(1) to clarify the structural make-up of the area and to look for a suitable location for a gas disposal well.
Production from the Pyrenees is expected to begin in 2010.
First published in a different form in the July issue of Petroleum magazine
