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BP’s Kodiak discovery ranks high in GOM Deepwater oil find could be among largest in Gulf of Mexico, but exploration CEO stopped short of declaring it commercial Ray Tyson For Petroleum News
BP America says its latest discovery in the U.S. Gulf of Mexico contains 500 feet of “hydrocarbon-bearing sands,” ranking it among the largest deepwater oil discoveries in the U.S. Gulf based on pay thickness alone.
However, BP stopped short of declaring Kodiak a commercial success, explaining that further appraisal work would be required to determine Kodiak’s true size and economic worth.
Nevertheless, “This discovery … has the potential to become an important new source of production for the USA,” Andy Inglis, BP’s chief executive officer for exploration and production, said in an April 3 statement.
The Kodiak prospect is located relatively close to BP’s 2003 Tubular Bells discovery, BP noted, suggesting that Kodiak and Tubular Bells may be able to be developed jointly.
The Kodiak discovery well, located on Mississippi Canyon block 771 about 60 miles southeast of the Louisiana coast, is in about 5,000 feet of water. The well is operated by BP Exploration & and Production Inc., a BP subsidiary.
500 feet of net pay The Kodiak well was drilled to a total depth of about 31,150 feet and encountered the 500 feet of net pay in the Middle and Lower Miocene reservoirs, BP said, adding that the well was deviated with a horizontal step-out of 7,400 feet.
BP Exploration & Production holds a controlling 63.75 percent working interest in Kodiak. Italy’s Eni holds a 25 percent working interest and Japan’s Marubeni Oil & Gas (USA) Inc. has an 11.25 percent working interest.
The federal lease containing the Kodiak discovery was acquired at OCS Lease Sale 182 in March 2002.
“This significant discovery is a further step in Eni’s growth strategy in the region,” Eni said in a statement, noting that Kodiak is located in one of Eni’s core focus areas, around five miles from the company-operated Devil’s Tower producing platform.
The Mississippi Canyon block containing Kodiak is part of an exploration portfolio recently acquired by Eni from U.S.-based Dominion. Eni currently owns lease interests in 408 U.S. Gulf blocks, 70 percent of which are located in deepwater. Eni also has rapidly grown into a major Gulf player with equity production in excess of 110,000 barrels of oil equivalent per day, of which 60 percent is Eni-operated. In addition, Eni owns lease interests in 158 tracts on Alaska’s North Slope.
“This significant discovery is a further step in Marubeni’s growth plans for the region,” Marubeni said. The Kodiak discovery is part of a deepwater exploration portfolio Marubeni acquired from Pioneer Natural Resources in March 2006. Marubeni now owns lease interests in 82 U.S. Gulf exploration blocks.
The nearby Tubular Bells discovery is located on Mississippi Canyon block 725, about 135 miles southeast of New Orleans. The discovery well is situated in about 4,300 feet of water and was drilled to a depth of 31,131 feet. It reportedly encountered 90 feet of net oil pay. Like Kodiak, Tubular Bells will require appraisal drilling to determine the extent of the discovery. BP operates Tubular Bells with a 50 percent interest. Hess Corp. holds a 20 percent stake and Chevron has a 30 percent working interest.
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