Lukoil Targets 150,000 Barrels per Day from West Qurna-2

OAO Lukoil Holdings, Russia's largest non-state oil producer, aims to produce 150,000 barrels of oil a day at Iraq's supergiant West Qurna-2 oilfield by the end of December 2013, a company executive said Tuesday. 

The 13-billion-barrel field is expected to raise output to 400,000 barrels a day by April 2014 and to hit 550,000 barrels a day in 2015, the executive told Dow Jones Newswires. 

Lukoil will invest $1 billion in 2013 to start first production from the green field, located in the Basra governorate near the Iranian border, he said. Last year the company invested a similar amount, putting total investment in the field by the end of this year at $2 billion. Lukoil had said that it would invest a total of $30 billion to upgrade the field. 

To date the company has drilled eight production wells and is planning to drill another 27 wells this year, he said, adding that four rigs are drilling in the field. 

In January, Lukoil signed a supplementary agreement with Baghdad to reduce the project's target production and prolong its duration. The agreement also put on record the transfer to Lukoil of Statoil ASA's participation interest of 18.75% in the project. 

The parties agreed to reduce the project's target production level to 1.2 million barrels a day from 1.8 million barrels a day, and to prolong the validity of the contract to 25 years from 20. 

The company has increased its stake in the West Qurna-2 project in Iraq to 75%, following last year's withdrawal of Statoil. Iraq's state-owned North Oil Company owns 25%. 

Operator Lukoil and Statoil were awarded the technical service contract at West Qurna-2 in December 2009.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Has Canada’s government been muzzling its scientists?

By Pallab Ghosh Science correspondent, BBC News. 2 April 2013

Canada's Information Commission is to investigate claims that the government is "muzzling" its scientists.

The move is in response to a complaint filed by academics and a campaign group.

BBC News reported last year instances of the government blocking requests by journalists to interview scientists.

Some scientists alleged that the muzzling could help suppress environmental concerns about government policies.

The former president of the Canadian Science Writers' Association, Veronique Morin, says that the commissioner's office will now have to find out if the federal government has in effect been operating a policy of censorship.

"Vital stories pertaining to the environment, natural resources, food safety, fisheries and oceans are not coming out in Canada because, for several years now, the government has imposed rules which prevents its scientists from speaking freely about their publicly funded research," she said.  Read the full article

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Gulfsands Appoints New CEO

North Africa and Middle East-focused Gulfsands Petroleum announced Thursday that it has appointed a new chief executive officer.

Gulfsands said that Mahdi Sajjad, currently the firm's executive director and president, has been appointed to succeed Ric Malcolm as CEO. The change is effective immediately, although Malcolm has agreed to remain available until the early summer to facilitate the transition in management.

Malcolm commented in a statement:

"Following the acquisition of Cabre Maroc in Morocco, the successful award of two permits in Colombia and the consolidation of our position in Tunisia, Gulfsands Petroleum has embarked upon a new phase in its evolution. This represents an appropriate time for me to move on, confident that I am leaving to my successors a solid business platform that should provide the company with a promising future. 

"I have therefore offered to remain available until the early summer to assist the company during this period of management transition."

Gulfsands Chairman Andrew West added:

"I would like to record the board's gratitude to Ric for his contribution to the company over the past four and a half years.  In the face of all the challenges we have had to deal with, particularly in recent times, he has remained resolute and has played a key role in identifying and implementing the company's recent diversifications and developing its technical capabilities.  Ric leaves the company in very good hands and with some promising new opportunities in train."

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Petrofac Consortium Wins $3.7B Abu Dhabi Deal

A Petrofac-led consortium has been awarded a $3.7-billion contract to supply the Upper Zakum, UZ750 field development in Abu Dhabi.

The contract was awarded by Zakum Development Company (an Abu Dhabi National Oil Company subsidiary). It has been secured by a consortium including Petrofac Emirates (Petrofac's joint venture with Mubadala Petroleum) and Daewoo Shipbuilding & Marine Engineering Company. Petrofac Emirates' share of the contract is valued at $2.9 billion.

Petrofac said the project comprises engineering, procurement, construction transportation and commissioning of island surface facilities on four artificial islands.  Specifically, this will include wellhead control, manifolds, crude oil process facilities, water injection and gas lift, oil export pumps, power generation and associated utilities. These facilities are scheduled to commence operations during 2016.

Subramanian Sarma, managing director of Petrofac's Onshore Engineering & Construction business, commented in a company statement:

"I am delighted that Petrofac has been selected to deliver this landmark project for the Upper Zakum development in Abu Dhabi. Through Petrofac Emirates we continue to show our commitment to supporting the oil & gas industry in Abu Dhabi and this project builds on the substantial work we have underway in the UAE.  We look forward to developing our relationship with ZADCO through the successful delivery of this strategically important project."

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Aker Wins Solan Field Contract

Aker Solutions reported Thursday that UK independent Premier Oil has awarded it a $46-million contract to provide hook-up, commissioning and facility management services to Premier Oil at its Solan field development, west of Shetland. The contract is valid for three years from first oil, with two one-year extension options.

Aker said the hook-up project will see two subsea production and two subsea injection wells tied back to a fixed production platform located in Block 205/26a of the UK North Sea, the first of its kind west of Shetland. The platform, which will not be permanently manned, will produce oil that will be stored in a subsea tank before being exported via an oil-offloading system to shuttle tankers.

Aker said that work on the project will be led from its Aberdeen facility.

 Mike Forbes, Aker's managing director for its maintenance, modifications and operations business, commented in a statement:

"I am pleased that we are continuing to develop our relationship with Premier Oil and their joint venture partner on this significant project in a challenging and increasingly important sector of the North Sea.

"Having worked with Premier Oil and Chrysaor on the project since 2010 and played a supporting role in the sanction of this development and the technology behind it, we look forward to embarking on the next stage of Solan's evolution."

The UK's Department of Energy and Climate Change approved Premier's plans for the Solan oil field in April 2012. Once brought online, Solan is expected to produce 40 million barrels of oil at an initial rate of 24,000 barrels per day.

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Regal Updates on Ukrainian Reserves

Regal Petroleum issued an update Monday on its reserves and resources in its onshore Ukrainian gas and condensate fields.

Regal reported that remaining reserves as of Dec. 31 2012 in the Visean reservoirs of its Mekhediviska-Golotvshinska (MEX-GOL) and Svyrydivske (SV) gas and condensate fields stood at 7.7 million barrels of oil equivalent of proved (1P) reserves, 31.6 MMboe of proved and probable (2P) reserves and 52.6 million barrels of proved, probable and possible (3P) reserves.

Contingent resources at the reservoirs were estimated at between 36.6 MMboe (1C) and 148.8 MMboe (3C).

Regal noted that there has been a "material reduction" in 1P and 2P reserves compared to estimates made in 2010 that showed them to be 40.9 MMboe and 151.3 MMboe respectively. The firm said that these reductions reflect lower expected recovery factors. However, it said that further development of the fields may result in future movement of contingent resources into reserves.

Regal said that independent petroleum consultants ERC Equipoise carried out the assessment for the remaining reserves and contingent resources.

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FX Energy 'Disappointed' over Polish Mieczewo Well

FX Energy, Inc. reported on plans for three of its wells in Poland.

Field operations are underway to frac three intervals in the Rotliegend and carry out three separate production tests. The project is expected to take approximately four to six weeks in total and results are anticipated in the latter part of May. Halliburton will carry out three separate fracs at intervals between 12,336 and 13,445 feet (3,760 and 4,098 meters). After all three fracs have been completed, each interval will undergo a five or six day production test.

The Plawce-2 well was completed in the 3rd quarter of 2011 and is located in what is believed to be a several kilometer wide uplifted band of tight Rotliegend sandstone that stretches across the northern border of the Fences concession. The Plawce-2 well was designed to test whether a vertical multi-frac well could yield commercial production and whether this tight sand band merits further evaluation. The Plawce-2 well encountered 1,575 feet (480 meters) of tight Rotliegend sandstone. Logs, cores and a drill stem test yielded gas shows with no water. The Polish Oil and Gas Company is the Operator and owns 51 percent of the working interest; FX Energy owns the remaining 49 percent working interest.

The Tuchola-3K encountered good light hydrocarbon shows but poor reservoir quality in a 118-foot (36-meter) section of the Main Dolomite. Deeper in the well it also encountered very good hydrocarbon shows and up to 20 percent interpreted log porosity within a 328-foot (100-meter) section of the reefoidal Upper Devonian. This horizon warrants further testing.

The well is now approximately 1,115 feet (340 meters) from an estimated total depth of 13,058 feet (3,980 meters), where the target is oil in the middle Devonian sands. Once drilling is complete the Company plans to log, evaluate the middle Devonian, and then move uphole to test the reefoidal Upper Devonian.

Meanwhile, the Company's technical team has recalibrated the seismic to directly image porous dolomite in the Main Dolomite near the existing wellbore. If they interpret better reservoir quality nearby, and if the well is not completed for production in the Devonian, the Company is considering a side-track operation further uphole to test the Main Dolomite a few hundred meters away from the current well bore.

The Tuchola-3K well is the Company's first test well in one of the Edge concession blocks in northern Poland. Previous drilling by other companies encountered live oil and gas in a number of horizons in the region, including the Zechstein, Rotliegend, Devonian and Carboniferous. The Tuchola-3K well was designed to test the Zechstein Main Dolomite, the Upper Devonian and middle Devonian. FX Energy is the operator and owns 100 percent of the working interest.

The Mieczewo well was drilled on a small Rotliegend structural target in the western part of the Fences concession. It is the Company's thirteenth well targeting a Rotliegend structural feature. A drill stem test of the upper 31 feet (9.6 meters) of Rotliegend flowed gas with no water. The well now has been completed and production tested. Based on test results plus log and core data it appears the gas column is not much more than 33 feet (10 meters). This is not commercial and the well will be plugged and abandoned. The Polish Oil and Gas Company is the Operator and owns 51 percent of the working interest; FX Energy owns the remaining 49 percent working interest.

"Of course we are disappointed that the trap is too small to be commercial," said David Pierce, FX Energy's CEO. "This small a target would not have been on our drilling schedule but for encroaching home building which forced the decision to drill now or permanently abandon the target. Our primary focus in the Fences concession is on much larger targets, such as the Lisewo area where we plan to begin production and drill 2 to 3 more wells later this year."

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