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March 2004

Vol. 9, No. 11 Week of March 14, 2004

MMS: Record dozen rigs working ultra-deepwater

Ray Tyson

Petroleum News Houston Correspondent

The U.S. Minerals Management Service says a record dozen rigs are currently drilling at water depths greater than 5,000 feet in the Gulf of Mexico.

“This is an important milestone and demonstrates how industry continues to focus on new frontiers,” MMS Director Johnnie Burton said.

Burton noted that deepwater oil production in the Gulf rose 535 percent and natural gas output 620 percent between 1995 and 2002. Oil from the Gulf now accounts for 30 percent and gas 23 percent of the country’s entire domestic hydrocarbon supply, she said.

Burton also mentioned several announced oil and gas discoveries made in the Gulf’s ultra-deepwaters over the past three years, most notably five in 2001, three in 2002 and six in 2003.

ChevronTexaco drilling deepest

ChevronTexaco, using Transocean’s Discoverer Deep Seas, is drilling the deepest well among the dozen rigs currently active in waters over 5,000 feet. The major is targeting a 9,020-foot prospect on Alaminos Canyon block 818. The company also is drilling a 6,989-foot well at Mississippi Canyon 696, using Transocean’s Deepwater Pathfinder.

Big exploration and production independent Anadarko Petroleum is drilling an 8,730-foot prospect on Atwater Valley 349, using Transocean’s Deepwater Millennium.

Shell Offshore is currently drilling separate wells using GlobalSantaFe’s Jack Ryan at Alaminos Canyon block 943 (7,962 feet) and Transocean’s Deepwater Nautilus at Mississippi Canyon Block 657 (7,570 feet).

BHP Billiton Petroleum also is drilling two ultra-deep wells. One is planned for 6,257 feet at Atwater Valley block 618, using GlobalSantaFe’s Explorer, and the second is targeting a 5,065-foot prospect at Green Canyon Block 826, using Diamond Offshore’s Ocean Confidence.

Independent Dominion Exploration & Production has three ultra-deep wells under way in Mississippi Canyon. The company is using Transocean’s Cajun Express to drill a 5,724-foot well on block 734, Pride International’s 1503 rig to drill a 5,610-foot well on block 773, and Transocean’s Marianas to drill a 5,413-foot well on block 772.

And Unocal is currently drilling a 5,314-foot well on Green Canyon Block 943, using Transocean’s Discoverer Spirit.

Anadarko sets record, reduces cost

Meanwhile, Anadarko, drilling in 9,000 feet of water at its Hawkeye and Atlas prospects on Lloyd Ridge blocks 50 and 360 in the Eastern Gulf of Mexico, achieved record-setting penetration rates using MI Swaco’s new inhibitive water-base mud system.

When compared to similar deepwater projects elsewhere in the Gulf, drilling costs were said to be reduced by $1.1 million. Specifically, the fluid enabled discharge of cuttings generating a direct cost savings of $432,000, while minimal mud loss saved the operation roughly $700,000 as compared to wells drilled with synthetic base mud.

While Hawkeye was a dry hole, Anadarko’s Atlas, Atlas NW, Jubilee and Spiderman prospects all turned out to be natural gas discoveries. Operators in the Eastern Gulf region are currently working on a plan to tie Anadarko’s finds, along with Kerr-McGee’s Merganser and BHP’s Vortex discoveries in Atwater Valley, into a central production hub.

Anadarko plans to start booking reserves in the Eastern Gulf and appears confident a development plan for the region could be in place by year-end. Anadarko says it also may drill another well at Jubilee and possibly another at the Atlas-Mondo complex.






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