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Shenzi well confirms huge oil field likely in Gulf of Mexico BHP Billiton says appraisal well validates discovery well, previous appraisal well; ‘multi-hundred million barrel’ oil field possible; drilling sidetrack Ray Tyson Petroleum News Houston Correspondent
Australia’s BHP Billiton, based on the success of its latest appraisal well, is sounding more confident about the future of its Shenzi discovery in the deepwater Gulf of Mexico.
“Indications are that we could have a commercial field with a multi-hundred million barrel hydrocarbon resource,” Philip Aiken, president of BHP’s energy group, said Nov. 15.
Based on previous drilling results, industry analysts speculated that the Shenzi prospect could hold 250 million to 500 million barrels of recoverable oil.
BHP said that information gleaned from the Shenzi-3 appraisal well validated previous drilling results from the Shenzi-1 discovery well and the Shenzi-2 appraisal well.
Located in water depths of 4,355 feet and drilled to a total depth approaching 28,000 feet, Shenzi-3 encountered hydrocarbons in lower Miocene-aged reservoirs with about 330 feet of net oil pay in a 410-foot gross hydrocarbon column, BHP said.
BHP said an updip sidetrack well drilled from the initial Shenzi-3 well bore specifically confirmed the presence of a hydrocarbon column. Meanwhile, drilling is under way on another sidetrack to collect additional reservoir data and further corroborate the information found from the first two penetrations at Shenzi-3, the company added.
In previous drilling, the Shenzi-1 discovery well encountered a gross hydrocarbon column of 465 feet with a net pay of 140 feet. The Shenzi-2 appraisal well encountered 1,250 feet of gross hydrocarbon column and 500 feet of net oil pay in lower Miocene sandstones.
Even before disclosure of Shenzi-3 results, some analysts had concluded that Shenzi-2 and its 500 feet of net oil pay greatly raised the prospects for a stand-alone production facility. That appeared to put Shenzi in the same league as other relatively recent deepwater discoveries, including Unocal’s St. Malo discovery in Walker Ridge and BHP’s own Neptune prospect in nearby Atwater Valley. Drilling began in May Shenzi-3 began drilling in May 2004 with the BHP operated drillship CR Luigs on Green Canyon Block 653. The discovery is about 9 miles northwest of the company’s Atlantis field, which is currently in development.
“This is further evidence of the Gulf of Mexico becoming the third core business for our Petroleum Customer Sector Group,” Aiken said. “We are planning further appraisal drilling to more fully delineate the reservoir.”
BHP is the designated operator at Shenzi and holds a 44 percent interest in the field. Amerada Hess and BP each hold a 28 percent interest.
In addition to its interest in Shenzi, BHP’s exploration and development portfolio in the U.S. Gulf includes a 23.9 percent interest in Mad Dog and a 44 percent interest in the Atlantis development. In total, BHP holds interests in more than 430 Gulf blocks.
The Shenzi prospect is on the same Atwater Fold Belt trend that produced the Atlantis, Mad Dog, Neptune and Holstein discoveries.
Mad Dog is scheduled to come on stream in 2005 with capacity of 80,000 barrels per day, followed by Atlantis in 2006 at up to 150,000 barrels per day. BP operates both projects.
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