Royal Dutch/Shell has agreed with Iran to invest $800 million to develop two Persian Gulf heavy-oil fields, Soroush and Nowruz. The company will spend the money during the next 45 months to raise output from the fields. The target for Soroush Field, currently producing 60,000 barrels of oil per day, is between 100,000 and 150,000 barrels per day. Nowruz Field will be renovated, with peak production expected at 90,000 barrels per day. The offshore fields, which contain recoverable reserves of more than a billion barrels, lie about 130 kilometers from the Kharg Island terminal. Shell is bidding for more Iranian projects, including much larger ones onshore. Shell and BP Amoco are particularly interested in developing the huge Bangestan reservoir, which contains Ahwaz, Mansouri and Ab-Teymour fields. Shell plans to proceed with the deal despite U.S. sanctions against Iran. The U.S. State Department says it is disappointed and concerned by Shell's moves into Iran. Other foreign concerns, including TotalFina, Elf Aquitaine and Gazprom, have previously been granted waivers to do business with Iran. -Peggy Williams 1 Canada Nova Scotia's offshore licensing round NS99-1 drew bids for all 11 parcels offered. A total of C$61.2 million was pledged for the blocks, the amount bidders committed to spend in exploring the parcels during the first five years of the nine-year licenses. PanCanadian Petroleum Ltd. made the winning bids on six blocks, including the sale-high bid of C$15.3 million for Parcel 3. Richland Minerals won three parcels, Canadian 88 Energy Corp., two, and Murphy Oil Co., one. Murphy is also a partner with PanCanadian on five of the latter's blocks. 2 Ecuador Agip will exercise its preemptive right to purchase Arco's interests in Ecuador's Block 10, comprising a million acres, overriding Burlington Resources Inc.'s bid. Agip holds a 40% working interest in the contract; Arco, the remaining 60%. The major asset is Villano Field, which contains estimated recoverable reserves of 200 million bbl. of oil. Villano currently produces 13,000 bbl. of oil per day. Burlington says it will continue with its plans to acquire and explore Ecuador's Block 24, subject to government approvals. 3 Venezuela U.K. oil and gas group Lasmo Plc says that early results from its Tortola-1 well confirm the potential of the Dacion contract area. Lasmo said the well was drilled to a total depth of 2,082 meters and encountered 21 meters of oil and gas pay. The well is the first of a 17-well exploration drilling program planned for the field. Production from Dacion passed 30,000 bbl. per day in September, and levels are expected to reach 90,000 bbl. per day in 2001. 4 Argentina Petrolera Argentina San Jorge, recently acquired by Chevron Corp., reported an oil discovery in the Rio Negro Norte block in the Rio Negro Province. The El Latigo Este discovery well tested 3,880 bbl. of 39-gravity oil per day from multiple reservoirs in the Upper Jurassic Punta Rosada formation at depths ranging from 7,115 to 7,886 ft. The discovery is the seventh since January 1999 in the vicinity of Loma Negra Field, which was found in 1997. Potential reserves from the Loma Negra Field complex are now estimated to be 240 million bbl. of oil equivalent. Partners in the block are San Jorge (37.5%), Repsol-YPF (35%), International Finance Corp. (15%) and Metro Holding SA (12.5%). 5 Angola Exxon Corp. has participated in yet another deepwater discovery on offshore Block 17. The 1-Cravo, drilled in 4,451 ft. of water, flowed at a test rate of 12,800 bbl. of oil per day. Prior Block 17 discoveries are Girassol (1996), Dalia (1997), Rosa (1998), Lirio (1998), Tulipa (1999) and Orquidea (1999). All of the discoveries are offshore approximately 125 miles northwest of Luanda. Exxon has a 20% interest in the block; Elf Aquitane operates and holds a 35% interest; BP Amoco has 16.67%; Statoil, 13.33%; Norsk Hydro ASA, 10%; and TotalFina, 5%. 6 Qatar Occidental Petroleum Corp. has begun production from the offshore Idd el Shargi South Dome enhanced oil recovery project at an initial rate of approximately 2,500 bbl. of oil per day. South Dome is operated as a satellite of Occidental's larger Idd el Shargi North Dome enhanced oil recovery project. The fields are connected via a 22-kilometer undersea pipeline. The production comes from the first of seven appraisal wells scheduled to be completed by the second quarter of 2000. 7 Yemen Houston independent Adair International Oil & Gas has signed an agreement with Yemen to explore for oil on Block 20. The block covers approximately half a million acres and offsets Yemen Hunt's Marib Block 18, which produces some 160,000 bbl. of oil per day and contains an estimated 800 million bbl. of reserves. Block 20 contains between 50- and 100 million bbl. of oil, with production targeted between 50,000 and 70,000 bbl. per day, says Adair. Dallas-based Partners in Exploration is an equal partner in the Adair-operated venture. The companies have committed to spend a minimum of $16.8 million during two exploratory periods, and Adair has also agreed to invest $50 million in a power station and sugar refinery near Aden. 8 Pakistan TotalFina has taken a deepwater exploration license in the Indus concession area off the coast of southern Sind province. The French firm committed to spend $5.6 million on the license, which has a term of three years. 9 China Phillips Petroleum Co. has drilled and tested a fourth successful well on a large anticline in Block 11/05, Bohai Bay. The PL 19-3-5 appraisal well was drilled to a total depth of 6,094 ft. and encountered a gross pay interval of 850 ft., with approximately 260 ft. of net pay in the Minghuazhen and Guantao formations. The company drilled the well in a previously untested fault block on the western flank of the PL 19-3 field, nearly two miles from the PL 19-3-1 discovery well. Immediate plans are to drill three additional appraisal wells on the field. Phillips has a 100% interest in the 2.3-million-acre block. In separate activity, Santa Fe Snyder Corp. announced a second discovery on its 15/34 Block in the Pearl River Mouth Basin in the South China Sea. The Panyu 5-1-1, located 18 kilometers east of its 1998 Panyu 4-2 discovery, encountered approximately 400 net ft. of oil-bearing sands within 20 individual reservoirs. Two zones were tested; one flowed in excess of 3,300 bbl. per day from an 18-meter interval, and the second tested 530 bbl. per day from an eight-meter interval. Santa Fe Snyder operates Block 15/34 and has a 50% working interest. SCS Resources Ltd. has the remaining 50% interest. 10 Vietnam Unocal Corp. has signed a production sharing contract for petroleum exploration with Petrovietnam on Block 52/97 in the northern part of the Malay Basin. The 500,000-acre block, which lies in approximately 200 ft. of water, is adjacent to Unocal's Block B exploration area. Unocal also has a 16% interest in the adjacent blocks 14, 15 and 16 on the Thailand side of the continental shelf. In 1997, Unocal discovered gas with its first exploration well on the Kim Long prospect on Block B, which it operates and in which it holds a 45% working interest. On Block 52/97, the company will operate and hold a 70% working interest, and a subsidiary of Mitsui Oil Exploration Co. Ltd. will hold the remaining 30% interest. 11 Indonesia Conoco Inc. has made two oil and gas discoveries in Block B of the South Natuna Sea, offshore Indonesia. The North Belut #3 was tested in three zones at a combined rate of 38 million cu. ft. of gas and 2,480 bbl. of oil per day. The 9,082-ft. well encountered approximately 200 ft. of oil and gas pay and proved up a hydrocarbon column in excess of 1,500 ft. Another discovery, the 6,300-ft. Keong #1, found 295 ft. of pay in several reservoirs in the Arang Formation. Conoco operates South Natuna Sea Block B and holds a 40% stake. Indonesia Petroleum Ltd. and Texaco Inc. have stakes of 35% and 25%, respectively. 12 Philippines Texaco Inc. has agreed to acquire a 45% interest in the Malampaya Deep Water Natural Gas Project, which is wholly owned by Shell, in the Philippines. Shell will continue as the operator. Malampaya Field, discovered in 1992, lies 50 kilometers northwest of Palawan. Estimated recoverable reserves are more than 3 trillion cu. ft. of gas and 120 million bbl. of condensate, says Texaco. First production is expected by the end of 2001. 13 Australia Apache Corp. tested 5,940 bbl. of oil per day from its North Gipsy-1 discovery in the offshore Carnarvon Basin. The 45-gravity crude was produced from a 63-ft. interval between 7,336 and 7,399 ft. in the Late Triassic Brigadier sandstone. The shallower North Rankin sandstone, a gas/condensate reservoir that is developed in the area, also appears to be productive. The North Gipsy discovery joins the Gipsy, Rose and Lee finds on Production License TL/1. Apache operates and owns a 68.5% working interest in the discovery; its partners are Kufpec, with 19.3%, and Tap Oil, with 12.2%. The group plans additional wildcat drilling.
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