Drilling has started on a high-stakes exploration well in the Orphan Basin, about 350 kilometers offshore of Newfoundland, Canada. Chevron Corp. is operating the Great Barasway F-66 on Exploration License 1076. Located in some 2,300 meters of water, it will be the deepest offshore well ever drilled in Canadian waters.

The Orphan Basin, which covers an immense area north of the productive Jeanne d'Arc Basin, is almost completely unexplored, although between 1974 and 1985 seven dry holes were drilled in its shallower-water western part. According to U.K.-based consulting firm Wood Mackenzie, reserves estimates for the Orphan Basin range from 4- to 10 billion barrels, and individual fields could be as large as 1.5 billion barrels.

The harsh-environment semisubmersible Erik Raude, fresh from work in the Barents Sea, is drilling the well. It will face a sub-Arctic climate, savage winter weather and great icebergs.

Chevron and partners ExxonMobil and Imperial Oil paid C$672 million for eight deepwater exploration blocks, including EL 1076, in the eastern part of the Orphan Basin in December 2003. Shell farmed into the project in March 2005.



1 Canada

Corridor Resources Inc., Halifax, Nova Scotia, completed the McCully J-66 well in its tight-sand McCully Field, near Sussex, New Brunswick. The company has drilled 17 wells to date in overpressured Hiram Brook sandstones in the field, and has potential for 100 additional locations. The J-66 flowed 1.06 million cu. ft. per day at a flowing wellhead pressure of 410 psi from the A sand. The well was tested through a 9.53-millimeter choke. It also flowed gas from the B sand at a measured rate of 2.88 million cu. ft. per day and a flowing wellhead pressure of 1,066 psi. Two wells currently sell gas under an existing local gas contract, and the company plans to connect the rest of its completed wells in McCully Field to the Maritimes and Northeast Pipeline.



2 Brazil

Canada's EnCana Corp. sold its half interest in offshore Block BM-C-7 in the Campos Basin, including the recent Chinook heavy-oil discovery, to Norsk Hydro. Brazilian authorities have approved the transfer. Anadarko Petroleum Corp., through its Kerr-McGee Corp. subsidiary, owns the other half. Hydro will operate the field in the development phase. The field lies in 100 meters of water approximately 75 kilometers offshore. The companies estimate 250- to 450 million bbl. of reserves from 2 billion bbl. of in-place oil.



3 Chile

The Layne Energy Inc. subsidiary of Kansas-based Layne Christensen Co. and a group of Chilean investors will negotiate exclusively with Chile for the development of coalbed-methane (CBM) and associated shale-gas resources on 72,000 acres of land in the Arauco Basin of south-central Chile. If approved, Layne Energy will be the operating partner. Layne reports the thick coal seams offer gas contents often seen in the better western U.S. CBM-producing basins. Industrial and consumer markets are near the properties.



4 U.K.

Operator ConocoPhillips discovered a substantial gas/condensate deposit straddling blocks P011 and P00032 30/7a in the Central North Sea. Well 30/6-6 found the accumulation, and was followed by a sidetrack to a true vertical depth of approximately 4,800 meters. The sidetrack encountered a gross hydrocarbon column of more than 600 meters in the Triassic Joanne sandstone. Partners BG and Eni UK Ltd. estimate reserves between 100- and 275 million bbl. of condensate. The companies will likely tie back the discovery, in 81 meters of water, to the existing Judy Field infrastructure some nine kilometers east.



5 Poland

Petrobaltic Oil & Gas Exploration-Production Co. Ltd., Gdansk, Poland, will start oil production from B8 and B23 fields in the Polish economic zone of the Baltic Sea. The fields have estimated combined reserves of 101 million bbl. of oil. B8 is almost 68 kilometers off the Hel Peninsula at a depth of approximately 2,100 kilometers. Plans call for production from three oil wells to a platform in the center of the tract, with first oil in 2008. Based on an extended production test, B8 Field holds nearly 6.29 million bbl. of oil and more than 3.5 billion cu. ft. of gas, which will be piped to the company's production facilities at B3 Field.

Meanwhile, B23 Field is in the Gotlandia exploration license area 135 kilometers north of Gdansk. Seismic surveys show a potential reservoir size of 94 million bbl. of oil equivalent. The field is in 125 meters of water, at a subsea depth of 1,600 meters. Petrobaltic plans to drill both exploration and appraisal wells on the prospect in 2010, and to start development a year later, if it proves up adequate reserves.



6 Congo (Brazzaville)

French operator Maurel & Prom has announced results of the first exploration well on the Loufika prospect within the Kouilou license area in Congo (Brazzaville). The Loufika-1, 35 kilometers southeast of M'Boundi Field, encountered 100 meters of sandstone at a depth of 551 meters. The upper 50 meters of the interval were oil-bearing, and tested at a rate of 380 bbl. of oil per day on pump. Gravity is 26 degrees API. The well opens a new upper pre-salt play that could extend throughout the Congolese coastal basin. A deeper exploration well targeting the producing Vandji reservoir will be spudded once the testing of the current shallow well is completed. U.K.-based Burren Energy has a 35% interest in the Kouilou exploration license.



7 Azerbaijan

BP lowered the East Azeri platform deck into place as it continued development of its Azeri-Chirag-Gunashli (ACG) Field offshore Azerbaijan. It took two days to move the platform from the construction site near Baku to the jacket, which already was positioned in 150 meters of water. Following the successful positioning of the deck, all that remains are offshore hook-ups and commissioning of facilities prior to first oil, reports Statoil, a partner. First oil is anticipated before the end of this year, and the rate will build in phases to a peak of 260,000 bbl. a day. The full ACG complex is to produce 1 million bbl. per day in 2009, with most of that oil going into the Baku-Tbilisi-Ceyhan pipeline.



8 Kazakhstan

Houston independent Transmeridian Exploration Inc.'s fifth drilling rig arrived at South Alibek Field in western Kazakhstan, as the company ramped up its field development campaign. That rig went to work on the SA-27 location. With the five rigs, Transmeridian expects to be able to drill approximately 14 to 16 wells annually. As of mid-summer, the company had drilled 10 wells on the 14,000-acre South Alibek license, which is adjacent to 30,000-bbl.-per-day Alibekmola Field. South Alibek is on the downthrown side of a large north-south trending fault that separates the two fields.



9 Saudi Arabia

A joint venture of Royal Dutch Shell, Total and Saudi Aramco kicked off exploration drilling for nonassociated gas and condensate in the southern part of the Empty Quarter, Saudi Arabia. South Rub al-Khali Co. Ltd. (SRAK) spudded the first of seven wells planned for the next 28 months. It has also been shooting seismic surveys to fulfill its commitment to acquire at least 16,000 kilometers of 2-D data during a five-year initial exploration period. Drilling the first well, Isharat 1, is expected to take four months. SRAK holds two blocks covering 50,000 sq. kilometers near Shaybah Field and 160,000 sq. kilometers next to the border with Yemen.



10 Iran

The National Iranian Oil Co. (NIOC) signed a $107-million contract for the exploration and development of an oil block with Norsk Hydro. The 7,740-sq.-kilometer Khorramabad Block is in the western Iranian province of Lorestan. Norsk Hydro will initially invest $49.5 million on exploratory drilling and seismic operations, and if recoverable oil is discovered, it can invest an additional $58 million. The contract on Khorramabad is the fourth of 16 oil blocks that were put on international tender in 2004 by NIOC. Iran signed a similar contract with Chinese firm Sinopec for the development of the Garmsar oil block in Semnan province earlier this year. According to reports, NIOC will soon hold international tenders on an additional 24 oil blocks after ambiguities surrounding their legal status are settled.



11 Iraq

Norwegian firm DNO plans to put its Tawke area in Kurdistan in northern Iraq on production as soon as early 2007. During an openhole test, the company's Tawke-1A flowed at the rate of 5,000 bbl. of oil per day. The reservoir is the same interval that tested 5,000 bbl. per day in its Tawke-1 well. It has also moved in a second rig to drill its Khanke prospect. At present, DNO is acquiring 3-D seismic across the area, and it plans to shoot additional 2-D seismic in unexplored areas of the license.



12 India

Niko Resources, Calgary, received a production license for Block CY-ONN-2003/1 in the Cauvery Basin of southeast India. The tract is in Tamil Nadu state. The company plans a 550-sq.-kilometer 3-D seismic shoot over the property and a multi-well drilling program. The block is prospective for both oil and gas. Nearby fields have produced from Cretaceous formations.



13 Vietnam

Premier Oil Plc intersected multiple gas and oil reservoirs in its Dua-5X RE well, drilled on Block 12E, in the offshore Nam Con Son Basin, reports partner Santos Ltd. The well tested the southern fault block of the Dua structure. It was drilled after successful evaluation of the northern fault block by the Dua-4X and Dua-4X ST1, completed earlier this year. Those wells confirmed the down-dip extent of the hydrocarbon-bearing reservoirs in the northern block. The discovery well for the feature, the Dua-1X, was drilled in 1974 and flowed 1,500 bbl. of oil per day.

The partners now plan to drill the 12E-CS-1X well on their Blackbird prospect, also in Block 12E. This well will test a large tilted fault block up-dip of a preexisting well that encountered very good oil shows. After farm-out terms are met and government approval is received, Premier, based in the U.K., and Santos, based in Australia, will each hold 37.5% interests in Block 12E and also in adjoining Block 12W. Israeli firm Delek Energy will hold 25% in the two blocks.

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