Russian giant Lukoil is investing heavily in the Caspian Sea region. It recently took two new concessions in the central part of the Kazakh sector, in the Tyub-Karagan and Atashsky areas. The former covers 1,168 square kilometers and is 40 kilometers northwest of the port of Bautino. The latter area, which covers about 8,400 square kilometers, contains several Mesozoic structures, dubbed Atashskaya, Kazakhstan and Maral, within its boundaries. The company is currently acquiring seismic on the licenses, which are in water depths of seven to 35 meters. In the Russian sector, Lukoil has already drilled eight exploratory wells and has found Khvalynskaya, 170-km, Shirotnaya, Sarmatskaya and Rakushechnaya fields, multi-layer accumulations containing oil, gas and gas condensate. Flows of more than 35 million cubic feet of gas per day were recorded at wells in Khvalynskoye and Sarmatskoye fields, and oil production of 2,400 barrels per day was gauged at the 170-km Field discovery. This year, the company also plans to drill its first well on the Yalama-Samur structure, a very large feature in more than 300 meters of water on the D-222 Block in the Azerbaijani part of the shelf. The Northern Caspian will be an essential oil and gas- producing region in the future, says Lukoil. The company forecasts that production from the area will begin in 2008, and will grow to 360 million barrels of oil equivalent per year by 2018. -Peggy Williams 1 Canada Five exploration licenses were awarded in a recent Crown land sale in the Northwest Territories, netting total work commitments of C$124.9 million. The high bid was C$61.88 million, placed by BP and Chevron Canada for a license in the Beaufort Sea. The other four parcels were in the central Mackenzie Valley. Northrock Resources, Husky Oil, EOG Resources, Pacific Rodera Energy Inc. and International Frontier Resources Corp.‚ proposed a C$24.8-million program on Exploration License 423, located about 125 kilometers south of Norman Wells. Petro-Canada offered C$22 million for EL-425, and Paramount Resources Ltd. picked EL-424 and EL-426 for work commitments of C$8.1 million apiece. 2 Canada Calgary junior Duvernay Oil Corp. is developing a sour-gas trend in the Sunset-Groundbirch-Saturn area of northeast British Columbia, reports Nickle's Petroleum Explorer. The company is targeting the Triassic Doig sandstone, a tight-gas reservoir that requires fracture stimulation. To date, the Doig trend appears to be 80 kilometers long and three kilometers wide. During the past year and a half, Duvernay has drilled 20 wells in the play, and is currently producing 10 million cu. ft. of gas per day from its 2002 Groundbirch discovery. The company plans to drill as many as 10 delineation wells along the trend during the next year. 3 Paraguay A 1993 discovery on the Gabino Mendoza Block, in northwestern Paraguay's Chaco Basin, has been tested by U.K. firm CDS Oil & Gas, reports IHS Energy. The Independencia-1 well flowed 960,000 cu. ft. of gas per day from a Carboniferous sand at 588 meters, but it could not test the entire prospective interval due to mechanical problems. The company now plans to twin the well. The last drilling in Paraguay was an outpost to the Independencia-1 that was completed in 1997. Eight wells have tested the block to date, six of which had shows of hydrocarbons. CDS is working on the properties in a joint venture with Asuncion-based Primo Cano Martinez. 4 Algeria Canadian explorer First Calgary Petroleums Ltd. has a discovery at its ZCH-1 exploratory well in the southeast portion of Block 406a, Rhourde Yacoub, in the Berkine Basin. The 3,864-meter well encountered 60 meters of net pay over multiple intervals. The firm is presently testing the discovery, and is also moving a rig to its MZLN-1 location on Block 405b. On that license, the Calgary independent reported that the MLE-5 appraisal well, the fifth well in its MLE Field, tested 8,546 bbl. of oil equivalent per day from three zones. The company says that the test is significant because the well tapped a separate fault flock from the previous wells and confirmed the eastward extension of the field. First Calgary has begun the development process on MLE Field. 5 Equatorial Guinea Pioneer Natural Resources, Dallas, has taken farmouts on deepwater Block H, offshore Equatorial Guinea. The company is taking a 20% nterest in the concessions from Australian firm Roc Oil and a 20% interest from Atlas Group, the block's operator. Roc will retain a 15% interest and Atlas will have 25%. Sasol also holds a 20% share in Block H. The partners recently completed the Bravo-1 wildcat, drilled in 1,509 meters of water on Block to a depth of 3,222 meters as a dry hole. 6 Oman Dallas explorer Hunt Oil Co. has taken an oil concession in offshore Block 40 in the Strait of Hormuz. The 6,120-square-kilometer block is in the Musandam area. Hunt will spend $16- to $21 million exploring the license. 7 Kazakhstan KazMunaiGaz¸ has approved the development plan for Kashagan Field that was submitted by the members of the North Caspian Production Sharing Agreement. Production start-up of 13-billion-bbl. Kashagan is expected in 2008, with an initial output of 75,000 bbl. of oil per day. Subsequent development will raise production to a plateau of 1.2 million bbl. per day. The capital investment for full field development is currently estimated at $30 billion. Partners in the consortium are Eni,ExxonMobil, British Gas, Shell, Total , ConocoPhillips and Inpex is presently selling its interests to members of the PSA. Kashagan figures large in Kazakhstan's future; the country plans to increase its oil production to 3.5 million bbl. per day by 2015, up dramatically from 2003 levels of 1 million bbl. per day. Additionally, the governments of China and Kazakhstan have worked out terms for the construction of the 800-mile Atasu-Alashenko portion of the 1,875-mile oil pipeline linking the two countries. The latest agreement covers the second section of the pipeline, which runs from central Kazakhstan to its border with China. Construction is scheduled to start this summer and to be completed by year-end 2005. Initial capacity will be 200,000 bbl. of oil per day. 8 Uzbekistan Lukoil and Uzbekneftegaz have signed a production-sharing agreement to develop the Kandym-Khauzak-Shady oil and gas fields. The investment in the project is estimated at $1 billion, with initial gas production of 175 billion cu. ft. per year. Eventually, volumes will reach up to 350 billion cu. ft. annually. Kandym, the largest field, is estimated to contain some 5.2 trillion cu. ft. of gas reserves. The agreement has a 35-year term; first production is slated for 2007. The project includes construction of a gas-chemicals complex, two compressor stations, and power transmission and gas-gathering infrastructure. More than 240 production wells will be drilled. Lukoil will have a 90% interest in the project and Uzbekneftegaz will have 10%. 9 Turkey Dallas independent Toreador Resources has farmed out a quarter of its 49% interest in eight blocks in the shallow waters of the Black Sea. Calgary-based Stratic Energy Corp. will pay 25% of the cost of the Ayazli-1 well, scheduled to spud this summer, to earn a 12.5% interest. In addition, Stratic will pay 25% of the costs of a 1,275-kilometer 2-D seismic survey that was acquired in 2002. The Ayazli-1, located in 76 meters of water, will be the first test drilled offshore Turkey in five years. TPAO, the Turkish national oil company, will be carried on the well for a 51% working interest. 10 India U.K. independent Cairn Energy has scored more success in its Rajasthan onshore drilling program. At Mangala Field, located in the northern third of its RJ-ON-90/1 license, it reported that it encountered 110 meters of net pay in the Paleocene Fatehgarh formation at its fourth appraisal well. It has also drilled a successful appraisal of its N-A-1 discovery on the same block. The N-A-2Z flowed at a stabilized rate of 1,600 bbl. of oil per day from one zone, 200 bbl. of oil per day from a second zone, 450 bbl. per day from a third zone, and 165 bbl. of oil per day from a fourth interval. 11 China CNOOC Ltd., has hit a wildcat on Huizhou 26-3 Field in the Pearl River Mouth Basin in the South China Sea, reports Ogilvie's E&P Daily. The HZ-26-3-1 is in the Huizhou Trough, about 170 kilometers southeast of Hong Kong. The well was drilled in 110 meters of water to 3,780 meters total depth. During a drillstem test, it flowed more than 1,400 bbl. of oil and nearly 2 million cu. ft. of gas per day. CNOOC owns a 100% interest in the discovery. Also, in northwestern China's Gansu province, CNCP reports it has found a new oil field with reserves of 800 million bbl. of oil. The Xifeng find is located in Changqing Field, in the Erdos Basin. Changging Field is expected to produce 60 million bbl. of this year, and Xifeng is currently making some 19,000 bbl. per day. 12 Malaysia Murphy Oil reports two exploration successes offshore Malaysia. The Kenarong #1 discovered oil and natural gas in multiple horizons. The 10,453-ft. well was drilled in 225 ft. of water in Block PM 311, offshore Peninsular Malaysia. The company now plans to test its nearby Pertang prospect, a test of a four-way dip closure for the equivalent section. El Dorado, Arkansas-based Murphy operates and holds a 75% working interest Block PM 311, and the same interest in adjoining Block PM 312. Petronas Carigali holds the remaining 25% in both blocks. Additionally, the company's Kakap #1, drilled in 3,037 ft. of water on Block K, offshore Sabah, encountered significant pay in multiple reservoirs. The well is a new discovery on the block, which is owned 80% by Murphy and 20% by Petronas. 13 Malaysia Operator Shell reports that it has commenced production from Serai Field, located offshore Sarawak on Block SK-8. The accumulation was discovered in 1993, and is being produced as a satellite to Shell's M3 Field. Serai's 300 million cu. ft. of gas per day is supplying the Tiaga liquefied natural gas plant on Bintulu. Partners in the project are Shell, with a 37.5% interest; Nippon Oil, also with 37.5%; and Petronas Carigali, with 25%.