A group consisting of Argentinean firm Pluspetrol, U.S. independent Hunt Oil Co., and South Korean company SK Corp. won the contract to develop Camisea, one of South America's largest natural gas fields. The partners offered a 37.2% royalty on the value of any gas produced, besting a competing bid by French firm TotalFina Elf. Pluspetrol will operate Camisea and hold a 40% interest; Hunt will also have 40%, and SK Corp., 20%. The companies expect to spend about $400 million in the first several years of the contract. Ultimate development costs are in the range of $1.6 billion. In 1998, Royal Dutch/Shell and Mobil Corp. declined to develop Camisea, walking away from the $250 million they had invested in the project. The apparent sticking point was the government's control over the sale and marketing of the natural gas. For this auction, the Peruvian government split the deal into two parts. The Pluspetrol group will develop the field, and six Peruvian companies have already signed contracts with the government to purchase the production. The Camisea field complex, about 350 miles southeast of Lima, contains reserves estimated at 13 trillion cubic feet of natural gas and 600 million barrels of condensate. -Peggy Williams 1 Canada A discovery in northeastern British Columbia has tested gas at the rate of 31 million cu. ft. per day. Operator Murphy Oil Co. Ltd. completed the well, drilled in the Ladyfern area, in the Slave Point Carbonate at a depth of 9,100 ft. Murphy holds a 33% interest in the discovery; Apache Corp., 37%; and Beau Canada Exploration Ltd., 30%. The partners hold more than 25,000 acres in the area and are presently drilling two additional wildcat wells on separate structures. 2 Canada In Alberta's Central Foothills, Petro-Canada reports success at its Hanlan Robb area. Located approximately 60 kilometers southwest of Edson, the Basing 4-19-48-20 W5M well encountered 1,500 ft. of horizontal net pay in the Turner Valley Formation. The well, drilled to a measured depth of 15,189 ft. (TVD 12,461 ft.), flowed natural gas at the rate of 26 million cu. ft. per day. Petro-Canada operates the well and holds a 32% working interest; Mobil Oil Canada, Talisman Energy and Tulsa-based PetroCorp Inc. also hold interests. About 50 kilometers to the north, Petro-Canada participated in the drilling of the Pepper 7-17-52-23 W5M. Renata Resources Inc., operator of the well, notes that log results indicate 245 ft. of net pay in the Leduc. Petro-Canada has a 62.5% working interest in that test. 3 Colombia State oil company Ecopetrol has signed an exploration contract with two Chilean companies, Empresa Nacional Petrolera de Chile SA and Compania Petroleos de Chile SA, covering the 56,400-hectare Altamizal Block in the central province of Tolima. The contract brings to 13 the number of association exploration contracts signed by Ecopetrol since late December; the company expects to finalize another seven contracts in the next several months. Last year, Colombia revised its terms for foreign investors in its oil sector. Ecopetrol's automatic share of production in joint ventures was trimmed from 50% to 30%, royalties were lowered, and environmental licenses were simplified. 4 Algeria Houston independent Burlington Resources Inc., Algerian oil company Sonatrach and Canadian major Talisman Energy Inc. tested their MLSE-3 appraisal well on the Menzel Lejmat Block 405a in the Berkine Basin at a combined rate of 21,857 bbl. of oil and 26.2 million cu. ft. of natural gas per day. The well was tested from 131 ft. of perforations in three intervals in the Triassic TAG-I reservoir. The highest individual flow rate of 11,121 bbl. per day came from a 57.4-ft. interval at the base of the productive zone. Gas was also encountered in the deeper RKF Formation, but was not flow tested. Burlington Resources operates the MLSE-3 well and has a 65% working interest in the block, which now contains 16 successful wells. Talisman holds the remaining 35% working interest, and Sonatrach has the option to participate in the development and production of commercial discoveries. 5 Egypt Canadian firm Drucker Industries Inc. says that it has begun drilling a three-well development program in Hana Field on the West Gharib Block in the Gulf of Suez Basin. The first two wells, the Hana-3 and Hana-4, will be drilled as Miocene development wells to projected depths of 5,000 ft. The third well, Hana-5 will target the Nubia Formation at about 9,000 ft. Commercial production from Hana Field began late last year; presently the field is producing 1,650 bbl. per day. Tanganyika Oil Company Ltd., also based in Canada, operates the West Gharib Block and holds a 50% interest; TransAtlantic Petroleum (USA) Corp., 30%; and Drucker, 20%. The partners plan to acquire an extensive 3-D seismic program over a large portion of the block this year. 6 Egypt Apache Corp. has stuck oil again on its 1.9-million-acre Khalda Offset Concession in the Western Desert. The Neith South 1X well tested at a combined rate of 2,778 bbl. of oil and 4.5 million cu. ft. of gas per day from two zones in the Jurassic-age Khatatba Formation. The well was perforated between 14,380 and 14,464 ft. The Neith discovery, about 50 miles southwest of the Khalda production complex, opens up a new play, the Zarif structural trend, which extends approximately 50 miles in an east-west direction. Apache holds a 40% contractor interest in the discovery; Repsol SA operates and owns a 50% interest; Australian firm Novus Petroleum Ltd. owns the remaining 10%. The partners plan additional exploratory drilling. 7 Azerbaijan Conoco Inc. plans to acquire a 20% interest in the Zafar Mashal exploration block, in the Volga Delta play in the South Caspian Basin about 80 miles offshore of Baku. Exxon Mobil Corp. operates the block and holds a 30% interest, and Socar, the state oil company, holds 50%. The transaction, for undisclosed terms, is still subject to ratification by the Azerbaijan parliament, Conoco says. 8 India India has awarded the first exploration licenses under its new program, tendering 25 offshore and two onshore concessions. A total of 45 bids were received on the 27 blocks. Indian firm Reliance Industries and Canadian firm Niko Resources were awarded 12 offshore blocks-three deepwater blocks in the Krishna-Godavari and Mahanadi basins, and nine shallow water blocks in Saurastra, Gujarat, Bombay, Kerala Konkan Northeast Coast and Krishan-Godavari basins, reports Hart's E&P Daily. The state-owned Oil & Natural Gas Corp. (ONGC) won five blocks: three deepwater blocks in Krishna-Godava and Mahandi basins and two shallow blocks in Krishna-Godavar and Kerala Onkan basin. 9 China Oklahoma City-based Kerr-McGee Corp. says that its appraisal well, CFD 11-1-2, on Block 04/36 in Bohai Bay encountered 210 ft. of net oil pay within the Minghuazhen and Guantao formations. The 5,082-ft. test flowed at a combined rate of more than 1,400 bbl. of oil per day from three zones. The well lies in 80 ft. of water, approximately two miles northeast of the discovery well, CFD 11-1-1. Operator Kerr-McGee estimates recoverable reserves to be more than 100 million bbl. of oil on the block, in which it holds an 81.8% interest; Pendaries Petroleum Ltd. has the remaining 18.2% interest. The partners plan an additional appraisal well and a 3-D seismic survey on the block. Following the second appraisal well, Kerr-McGee will drill an exploratory well on trend on the adjacent Block 05/36. Interests in that project are held 50% by Kerr-McGee, 15% by Pendaries, and 35% by Houston independent Newfield Exploration Co. 10 China Calgary firm Ivanhoe Energy Inc. reports that its wholly owned subsidiary, Sunwing Energy Ltd., has completed the first phase of the pilot development program at its Kongnan project in Dagang Field. The Kongnan project consists of six blocks covering 22,400 acres in the field, which is about 200 kilometers southeast of Bejing. The Nan 103 was drilled to its target depth of 11,810 ft. and encountered 177 ft. of oil-bearing formation. The company is currently production testing the well. Four additional wells will be drilled and tested this year. Sunwing has also completed workovers on four of the 82 existing wells. Sunwing's long-term development plan calls for drilling more than 100 wells and reworking 50 existing wells. Production levels in the range of 36,000 bbl. of oil per day are anticipated by the end of 2003. Nippon Oil Exploration Ltd. owns a 20% interest in the project. 11 Vietnam Conoco Inc. reports that it has farmed in to a 30% working interest in Block 15-2 in the shallow-water Cuu Long Basin. The block is currently producing about 35,000 bbl. of oil per day from Rang Dong Field. A second phase of development drilling will begin shortly. Conoco acquired the interest from Japan Vietnam Petroleum Co., a Nippon Mitsubishi Oil Corp.-led group. Petrovietnam, the state oil company, is also a partner. In a separate deal, Conoco also agreed with Petrovietnam and the Korean National Oil Co. to operate and take a 40% interest in Block 16-2. Additionally, the company holds a 23.25% interest in Block 15-1-also in the Cuu Long fairway-and plans to drill its first exploratory well there midyear. 12 Australia Broken Hill Proprietary Co. reports an oil discovery on its WA-225-P permit area offshore Western Australia. The Coniston-1, drilled in 389.5 meters of water to a total depth of 1,350 meters, flowed at a rate of 2,199 bbl. per day. BHP and Exxon Mobil Corp. are equal partners in the find, which lies in the vicinity of BHP's Macedon and Pyrenees discoveries. In separate activity onshore South Australia, Santos Ltd. made an oil discovery in the Copper/Eromanga Basin. The Moomba 104 well encountered a nine-meter hydrocarbon column. Based on similar discoveries, Santos says that the well could flow oil at rates between 2,000 and 3,000 bbl. per day. The well lies about 6 kilometers from the Santos-operated Moomba gas processing plant. Santos owns a 60% interest in the find; Exxon Mobil Corp., 20%; Australian-based firms Boral Ltd. and Novus Australia Resources NL, 13% and 2%, respectively; and Austrian-based OMV AG, 5%.