Indonesia is pushing forward with its campaign to increase exploration interest and shore up its dwindling production. The government recently awarded a dozen exploration blocks to a variety of bidders, both foreign and domestic. Anadarko Petroleum Corp. won a 100% interest in the Northeast Madura III Block, offshore East Java. The shallow-water block covers 1 million acres and is 50 miles north of Madura Island. The Houston firm will operate the license and hold a 100% working interest. Other awards included the Nunukan Block, offshore East Kalimantan, which was taken by PT Medco E&P Indonesia, and the offshore Northeast Madura IV Block in East Java, which was taken by Petronas Carigali. Additionally, Altar Sociedade de Investimentol Mobiliario of Portugal received the Barito Block in Central Kalimantan, while Genting Oil & Gas Ltd. won the offshore Northwest Natuna Block. The Seruwai Block, offshore northern Aceh, was awarded to Bermuda-based Transworld Exploration Ltd. Finally, local companies took the Manokwari, Pandan, Air Komering, Belida and East Sepanjang and Senangka Senipah blocks. Together, the winning bidders are expected to invest $163 million on the 12 blocks during the first three years of exploration. -Peggy Williams 1 Canada Calgary-based Questerre Energy has farmed into a venture with Hydro-Quebec and Gastem Inc. on the Restigouche block in the Gaspe Peninsula in Quebec's maritime region. Questerre will participate in the Hydro-operated Miguasha-1 well, currently being drilling on the block. Questerre also has an option to participate in the Miguasha West-1 well, also operated by Hydro. This activity represents one of the largest exploration programs in the Gaspe Peninsula in recent years. 2 Canada Talisman Energy has drilled a successful Paleozoic gas well in its core Monkman area in northeastern British Columbia. The well tested at a restricted rate of 40 million cu. ft. of gas per day. The Brazion b-60-E /93-P-5 was drilled on a previously untested structure. Talisman estimates that the find could contain more than 200 billion cu. ft. of original gas in place. During 2005, the company plans to drill four Paleozoic wells at Monkman, including a follow-up well on the Brazion structure. The company has 30 potential drilling locations; to date it has drilled three successful wells out of six attempts. The Calgary-based firm operates and owns an 80% interest in the discovery, and Seneca Energy Canada Inc. owns the remaining 20%. 3 Mexico Pemex has awarded the first block in its second Burgos Basin round. The Pandura-Anahuac block will be developed by a Mexican consortium consisting of Industrial Perforadora de Campeche and Compania de Desarrollo de Servicios Petroleros. The group bid $900.4 million to drill 166 wells at Pandura-Anahuac. Expected production will be 110 million cu. ft. of gas a day. The block is the first of four that will be awarded in the second round of multiple service contracts in the basin, which lies in northeastern Mexico. 4 Venezuela Venezuelan President Hugo Chavez has decreed that government royalties on heavy-oil production in the Orinoco Belt will immediately rise from 1% to 16.67%. Currently, ChevronTexaco, ConocoPhillips, ExxonMobil, Total, Statoil and state firm Pdvsa are involved in heavy-oil extraction projects that are affected by the decree, which applies to existing contracts. As profit margins on the projects are quite robust, due both to high commodity prices and to technological advances that have improved efficiency, the operators are unlikely to curb production. The Orinoco projects are now making about 500,000 bbl. of oil per day. 5 Suriname State oil company Staatsolie Ltd. has awarded a contract on offshore Block 31 to Danish firm Maersk Oil. The 13,800-square-kilometer block lies some 30 kilometers off the coast of Suriname, the smallest independent country in South America. In mid-2004, Staatsolie awarded Block 30 to Repsol YPF. That block covers 18,900 square kilometers and is more than 100 kilometers from the coast. Water depths on Block 30 range from 100 to 3,000 meters. Maersk and Repsol are both planning seismic surveys over their respective blocks. 6 Bolivia Total reports that its Incahuasi X1 well, on the Ipati Block in southern Bolivia, is a discovery. The 5,150-meter well flowed gas at the rate of 35 million cu. ft. per day. Total operates and owns an 80% interest in the block and Argentine company Tecpetrol owns the remaining 20%. The new find is near the Bolivia-to-Brazil pipeline. 7 U.K. BG Group reports success at its appraisal of the Maria discovery in the Central North Sea. The 16/29a-13 appraisal well encountered a 900-ft. column and flowed at the rate of 6,720 bbl. of oil per day. The well confirmed the viability of the Maria discovery, which has been fallow since its discovery in 1994. BG also drilled a sidetrack that confirmed the adjacent Maria Horst prospect. The company estimates recoverable reserves for Maria and Maria Horst are about 35 million barrels. It expects to produce first oil in late 2006 or early 2007. BG operates the discovery and holds a 36% interest, Centrica Plc has 35.04% and Total owns 28.96%. Also in the Central North Sea, Shell has brought Howe Field onstream. The Block 22/12a field is tied back to the Nelson platform. Plateau oil production is expected to be around 13,000 bbl. of oil equivalent per day. Shell's partners are Petro Summit Investment UK Ltd. and OMV Ltd. 8 Egypt Calgary independent Centurion Energy International is in the midst of an 18-well drilling program on its El Wastani and South Manzala production licenses in the Nile Delta region. The company recently received government approval to increase gas sales from the fields to 250 million cu. ft. per day, up from current levels of 65 million cu. ft. per day. Centurion is also finalizing its plans on its two new exploration blocks in the region, West Manzala and West Quantara. The company was awarded the concessions, which cover 800,000 acres, in 2004. 9 Tunisia ENI has drilled a successful appraisal well in the Hawa area on its the Adam concession in the Ghadames Basin. The Hawa-2 is currently producing more than 3,000 bbl. of oil per day. The well is the fifth producer on the concession, which includes the Adam, Dalia and Hawa producing areas. ENI operates the concession and Dallas-based Pioneer Natural Resources has a 28% interest. 10 Gabon Shell has a second light-oil discovery on its onshore Awoun permit on Gabon's coastal plain. The Awodam-1 was drilled to a total depth of 2,079 meters and encountered a 25-meter oil column in the Gamba reservoir. The well was drilled on the flank of the Damier prospect, some four kilometers southwest of the recent Koula discovery. The two finds are several kilometers north of Avocette Field. Shell operates the 1,112-square-kilometer permit, and it and PanOcean Energy each have a 50% interest prior to a 20% government back-in. 11 Kazakhstan Construction has begun on the 613-mile oil pipeline from Atasu, in northwestern Kazakhstan, to Alataw Pass in northwestern China. Completion of the $700-million pipeline is slated for December 2005. China National Petroleum Corp. and KazMunaiGaz signed the agreement to build the line in May 2004. It will have an initial capacity of 192,000 bbl. of oil per day. 12 China Kerr-McGee Corp. has drilled its eighth discovery well in Bohai Bay. The CFD 14-5-1, in Block 09/18, was drilled in 23 meters of water to a total depth of 4,250 meters. It encountered 26 meters of net oil pay in the Eocene Shahejie sand, the main producing reservoir in the giant Shengli complex. The company now plans to drill the CFD 11-1N-1 exploratory well on Block 04/36. In separate activity in the southern part of Bohai Bay, state concern CNOOC Ltd. reports that it has placed two wells in Bonan Field on production. The Bozhong 28-1 and Bozhong 26-2 are producing at rates of 4,200 bbl. of oil and 1.4 million cu. ft. of per day. The wells are in 22 meters of water. CNOOC operates the project and has a 100% interest. 13 Vietnam An international consortium consisting of Petronas Carigali, ATI Petroleum Inc., Singapore Petroleum Co. Ltd. and PetroVietnam has made the first oil discovery in the Song Hong Basin in the Gulf of Tonkin. The Yantu-1X was drilled in 28 meters of water in Block 106, about 70 kilometers offshore Haiphong. The discovery, named Yen Tu Field, could contain as much as 320 million bbl. of light, sweet oil. An appraisal well is planned for early this year. The concession is offshore northern Vietnam, in an area that has been the subject of a boundary dispute between the Vietnamese and Chinese governments.

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