Shell subsidiary hits oil in Siberia’s Salym field, ConocoPhillips, Talisman sign $4 billion gas deal
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A joint venture of a Shell subsidiary and a unit controlled by London-based Sibir Energy hit oil at an exploration well in Siberia’s Upper Salym field.
Salym Petroleum Development N.V., a 50-50 venture, said Aug. 10 that the well hit 16 meters of oil-bearing sand. It was drilled to a depth of 2,316 meters into the Bonus structure. Testing of the well is expected later this year, and executives say it should boost reserve numbers.
The Salym field is in the Ob region in western Siberia. The joint venture is already pumping oil from Upper Salym. West Salym, considered the largest deposit, is expected to start producing by the end of next year and reach 120,000 barrels a day by 2009. A third field, called Vadelyp, is on tap to begin pumping in 2006. Total field development budget is more than $1 billion.
ConocoPhillips project gets $4 billion gas dealThe Indonesian state gas transportation company has signed a 17-year deal to buy natural gas worth more than $4 billion from a joint venture that involves ConocoPhillips and Talisman Energy of Canada.
The deal calls for the sale of 2.3 trillion cubic feet of gas from the Corridor Block PSC in south Sumatra at $1.91 per thousand cubic feet. Deliveries would start in 2007 at a rate of 170 million cubic feet daily and plateau at 400 million cubic feet a day in 2012.
A pipeline will be built by Perusahaan Gas Negara, the Indonesian company, from existing gas processing facilities at Grissik in south Sumatra to Cilegon in West Java, and another from Grissik to Muara Tawar east of Jakarta.
ConocoPhillips holds 54 percent of the Corridor Block PSC, while Talisman has 36 percent and Pertamina, the Indonesian state oil and gas company, has the remaining 10 percent.
Australian LNG pact with CNOOC expectedChevronTexaco says it’s on track to complete a 25-year $22.5 billion deal to ship LNG from its Gorgon gas project to China, according to Dow Jones. Gorgon is a huge deposit off the coast of western Australia.
ChevronTexaco is operator and controls four-sevenths of the field, while Shell has two-sevenths and ExxonMobil one-seventh. The venture has conditional approval for an LNG facility on remote Barrow Island.
Gorgon, discovered about 30 years ago, is about 80 miles off the coast and has proven reserves of 12.9 trillion cubic feet of natural gas.
When the agreement is completed, the China National Offshore Oil Corp. is expected to contract for up to 100 million metric tons of LNG, with the Chinese company expected to purchase an eighth of the project.
Executives of ChevronTexaco say the deal should be completed by the end of the year.
Total, Mitsui join Bali exploration ventureTotal of France and Mitsui Oil Exploration of Japan have farmed into a deepwater exploration block north of Bali, in Indonesia, according to Santos Ltd., which is currently the operator of the project.
Total will take over as operator from Santos after the first three-year exploration period and will take a 39.9 percent interest, with the right to obtain a further 10.1 percent. Mitsui Oil will take 20 percent, and Santos will have 40.1 percent, declining to 30 percent if Total takes on the remaining share.
Santos has done 2D seismic in the block about 130 miles west of Surabaya and six miles north of Bali Island. Water depths range from about 300 feet to 3,000 feet. An exploration well is expected to be drilling by October.
Santos recently signed a deal with ConocoPhillips to explore a gas prospect in the Timor Sea, and another with Devon for an eight-well program in the Gulf of Suez off Egypt. Santos, based in Adelaide, is listed on the Australian Stock Exchange and the NASDAQ.
Kazakhstan expects to reach top five by 2015Kazakhstan expects to push its oil output to more than 3.3 million barrels daily by 2015, making it one of the world’s top five producing countries, according to the state oil company KazMunaiGas. That would triple current production.
Most of the growth is expected to come from giant developments being husbanded by Western oil companies, according to Uzakbay Karabalin, the state oil firm’s president. ChevronTexaco is the lead company for the TengisChevroil project, BG Group and Eni are working on the Karachaganak field, and Eni head the Kashagan project in the North Caspian Sea.
Parker Drilling completes Turkmenistan wellParker Drilling and Chalyk Energy have completed a second exploratory well in western Turkmenistan at the Korpeje field.
The well reached 3,930 meters and two more wells of about the same depth are in process using Parker Drilling land rigs.
Gas from the Korpeje field is already flowing to Iran. The field has about 100 producing gas and oil wells.
Russia plans to cut export tax for CIS countriesRussia’s parliament has approved a measure to end the value-added tax on petroleum exports to countries in the former Soviet Union starting at the first of next year.
The Duma approved the legislation Aug. 5, according to the Prime-Tass news agency. Russia currently levies a VAT of 18 percent on the exports of oil, gas and condensate.
The bill also boosts the royalty tax to 419 rubles per metric ton of oil from 400 and to 135 rubles per thousand cubic meters of natural gas from 107 rubles now.