INTERNATIONAL HIGHLIGHTS

Rebels versus roughnecks: In eastern Ethiopia, Malaysia’s Petronas is planning gas exploration and development in the Ogaden Basin, while the ethnic Somali group, Ogaden National Liberation Front (ONLF), is threatening to stop any such action.

Ethiopia’s Ogaden Basin consists of Calub and Hilala fields where reserve estimates range from 118 billion cubic feet (Petronas) to 4 trillion cubic feet (U.S. Energy Information Administration). In April 2007, ONLF killed 73 workers, and abducted and later released seven Chinese civilians from the Degehabur zone in the Somalian regional state. According to The Reporter, an Ethiopian newspaper, Petronas paid about $80 million in 2007 to the Ethiopian government to develop the gas fields and a 600-kilometer, 24-inch gas pipeline to Awash, east of the capital of Addis Ababa.

A September 2009 ONLF statement said that “no business should be conducted until there is a political solution to the conflict.” The Addis Ababa government has not commented. The ONLF is seeking autonomy for southeastern Ethiopia’s arid Somali region, home to about four million people, most of whom are ethnic Somali nomadic herders. Conflict between the ONLF and Ethiopia has existed for about 20 years.

—Larry Prado

1 Canada

Quicksilver Resources Inc., Fort Worth, has completed its first well in the Horn River Basin in northeastern British Columbia with an initial production rate of 13 million cu. ft. per day. A 3,500-ft. lateral was drilled in the Muskwa shale in the D-50A well, and was treated in 10 frac stages. The well averaged approximately 10 million cu. ft. per day during the first month of production.

In separate activity, Calgary-based Nexen Inc. reports that three recent wells in the Dilly Creek area of the Horn River Basin are now producing. The company has five shale wells onstream making 15- to 20 million cu. ft. per day, and says most of the production is coming from the new completions. Nexen holds 88,000 acres in the Dilly Creek area with a 100% working interest.

2 Venezuela

In the shallow offshore waters of the Gulf of Venezuela, Madrid-based Repsol YPF SA reported a significant gas discovery. According to the company, #1 Perla may hold 7- to 8 trillion cu. ft. of gas, making it one of the world’s largest discoveries. The offshore field is 60 meters deep and could have a surface of 33 square kilometers, and testing is ongoing. In the case of future production, the respective stakes of Repsol and partner Eni SPA of Italy would be reduced to 32.5% each, while Venezuela’s state-owned oil company Petroleos de Venezuela would get a 35% stake.

3 Brazil

Brazilian state-owned Petrobras announced another discovery in the Santos Basin pre-salt BM-S-9 concession area in ultradeep waters offshore Brazil. According to E&P Daily, the well, #4-SPS-66C Abare West, had an accumulation of oil and gas in a separate structure within the Carioca evaluation plan area. This is the fourth well drilled in Block BM-S-9. Abare West is in 2,163 meters of water, approximately 290 kilometers east of the state of Sao Paulo. Well testing showed that the reservoir is at 5,150 meters. The shareholder stakes are operator Petrobras, 45%, BG Group, 30%, and Repsol, 25%.

4 Brazil

Brazil’s Guara pre-salt discovery could hold up to 2 billion bbl. of oil equivalent. A drillstem test on Guara flowed at 7,200 bbl. of oil per day, according to E&P Daily. The flow rates were constrained by facilities. Test data indicate a permanent production well could produce up to 50,000 bbl. of oil equivalent per day. Current plans call for production in 2012 via a 120,000-bbl. floating platform. State-owned Petrobras operates Guara with a 45% stake, while BG has 30% and Repsol 25%.

5 Scotland

Dong Energy has hit pay in its Glenlivet prospect well, West of Shetland, in the North Sea. Copenhagen-based Dong reported the Paleocene reservoir showed gas, with preliminary log analysis that indicates a net gas column of 201 ft. A gas-water contact has not been encountered. The penetrated net reservoir section has excellent reservoir quality with anticipated high porosity and permeability. A sidetrack well may be drilled to delineate the discovery. The Glenlivet discovery is close to the planned U.K. West of Shetlands gas-gathering system. Partners in the Glenlivet find are Dong (80%), Faroe Petroleum (10%) and First Oil Expro (10%). Glenlivet is a large Paleocene gas prospect in a proven play, situated approximately 15 kilometers from the proposed Laggan gas-export pipeline to Sullom Voe in the Shetland Islands.

6 Norway

In the northeastern portion of offshore Norway’s Smørbukk Field, StatoilHydro has found more oil, gas and condensate. The company is looking to tie the finds back to the Åsgard B platform. The extra reserves, estimated at between 15- and 25 million bbl. of oil equivalent, were found in the wells #6506/12-12 S and #6506/12-12. The Åsgard Field development includes 58 production and injection wells divided among 16 subsea templates. Two vessels and one platform are in the field.

7 Italy

Gas flowed at a combined rate of 13 million cu. ft. per day from four gas-bearing levels during tests at Po Valley Energy’s #2-Sillaro well in northern Italy. Including the results of the latest test, the Rome-based company has detected a total of six gas-bearing intervals in Sillaro Field. The field has proven and probable gas reserves of 14 billion cu. ft. and is expected to have an initial gas production rate from its two wells of 3.8 million cu. ft. per day in the final quarter of 2009. Sillaro, in the Crocetta License area east of Bologna, is the company’s largest gas field discovered to date. It contains gas-bearing zones in the Pliocene and Miocene.

8 Greece

Aegean Energy of Athens has begun new drilling operations in Epsilon Field, offshore Greece. Aegean, the majority shareholder of Kavala Oil, which is the only operator of oil and gas in Greece, is extending operations following the completion of #PNA-H3 in Prinos North Field in the Aegean Sea. Plans call for drilling the new well to 18,045 ft. (vertical depth of 9,515 ft.). The Epsilon well will be the deepest ever drilled in Greece.

9 Pakistan

Islamabad, Pakistan-based Oil & Gas Development Corp. announced a discovery at its #1-Nashpa exploratory well in Pakistan. In the Karak district of the North West Frontier Province, #1-Nashpa produced 3,000 bbl. of oil and 9.68 million cu. ft. of gas per day. The #1-Nashpa is the second discovery in the block. The first discovery, #1-Mela, was completed in September 2006 and reportedly tested 4,100 bbl. and 12 million cu. ft. of gas per day, according to Dow Jones Newswires. Additional details about #1-Nashpa are not available.

10 India

Cairn India Ltd. started oil production at its Mangala Field in Rajasthan state in part of the larger complex of Mangala, Bhagyam, and Aishwariya (MBA) fields. The largest of 25 discoveries made in the Barmer Basin on Block RJ-ON-90/1, Mangala’s initial output of 30,000 bbl. of oil per day will increase to 130,000 bbl. by first-half 2010, with production rising to a peak of 175,000 bbl. per day over the next two years. According to Cairn, the MBA fields hold nearly 1 billion bbl. of recoverable oil, including proven plus probable gross reserves and resources of 685 million bbl. and 300 million bbl. of enhanced-oil-recovery potential. Cairn India, with headquarters in Gurgaon, India, operates and has a 70% stake in RJ-ON-90/1 block in Rajasthan, while India’s Oil & Natural Gas Corp. holds 30% interest.

11 China

Newfield Exploration Co. of Houston reported an oil discovery in Block 16/05 in the Pearl River Mouth Basin offshore China. The #LF 7-1 tested a single zone at 6,000 bbl. of 35-degree-gravity API oil, which was the maximum limit of the test equipment on location. The new well is in 350 ft. of water and was drilled to 10,000 ft. It encountered more than 246 ft. of high-quality oil pay in multiple sands. The well was drilled to test a downthrown anticline and was an offset to Newfield’s #LF 7-2 2008 oil discovery. State-owned China National Offshore Oil Corp. (CNOOC) has the right to participate in any development with a 51% stake.

12 China

At a third appraisal well, #3-1-4 Liwan in Liwan 3-1 Field, Block 29/26, the South China Sea, gas flowed at an unrestricted rate of 52 million cu. ft. per day for Husky Energy. The well was drilled to 11,044 ft. in a water depth of 4,757 ft. The company reported that the producer could deliver more than 150 million cu. ft. per day. Gas production is targeted for 2013. Husky Energy’s headquarters are in Calgary.