Cantarell Field, in the Bay of Campeche in the southern Gulf of Mexico, supplied nearly 60% of Mexico's average daily crude production of 3.2 million barrels in 2005. But Cantarell, which has been producing since 1979, is showing its age. The 20-billion-barrel supergiant field, the largest in North America, has about 2 billion barrels of remaining reserves, says Bernard J. Picchi, Wall Street Access analyst.

Cantarell's output has fallen 25% from 2 million barrels a day in December 2005 to 1.5 million in December 2006. Total crude oil production in Mexico averaged 3.3 million barrels a day during 2006, but fell to 3 million a day at the close of 2006.

This year, Cantarell's daily output could decline by as much as 600,000 barrels. Mexico should be able to partially offset the decline with oil from new offshore fields, which would bring its net production loss to 400,000 barrels a day. That's sharper than the net decline of 200,000 barrels currently forecast for Mexico by Pemex, the state oil company, and the International Energy Agency.

Mexico has a steep hill to climb to overcome the expected losses at its premier field. "As goes Cantarell, so goes Mexico's oil production," says Picchi.

-Peggy Williams



1 Canada

Calgary-based EnCana Corp. has made a discovery at an exploratory project in the Prophet River prospect in the Peace River region of northeastern British Columbia, reports Vancouver-based partner Wyn Developments Inc. The Prophet River d-60-E/94-G-15 was perforated in Mississippian and yielded gas at an initial unstabilized rate of up to 7.94 million cu. ft. per day. Pressure tests are in progress to determine the size of the find, which could encompass wells drilled five to 24 kilometers away. In addition, the well encountered 23 meters of prospective pay in the Triassic Halfway. The Prophet River project covers some 21 sections.



2 Venezuela

PDVSA has been signing international deals in its Orinoco Belt in Junin province. PetroVietnam will explore for hydrocarbons on Block 2; Brazilian firm Petrobras has renewed its commitment to the Carabobo-1; and Malaysian company Petronas will discuss development of Boyaca 5. In addition, companies from China, Spain, India, Iran, Argentina, Uruguay and Belarus are involved in new projects on the belt.

In separate activity, Russian firm Lukoil Overseas drilled its first stratigraphic test in Junin-3 Field in the Orinoco Belt as it started the second stage of an assessment program in the area. The NZZ-213, drilled to 1,370 meters, is the first of 17 planned tests.



3 Colombia

Colombia's Ecopetrol, operator, will team with Occidental Petroleum to drill 90 new wells in La Cira Infantas Field in Santander department this year. This is the third phase of a program that also involves 150 workovers, reports Business News Americas. Last year, Oxy drilled 30 wells and completed more than 240 workovers. The field currently produces 8,000 bbl. of oil per day, down from a peak of nearly 60,000 a day in the 1940s. The Middle Magdalena Valley field had some 3.7 billion bbl. of original oil in place and has produced approximately 740 million bbl. to date.



4 Peru

Barrett Resources (Peru) LLC will declare commerciality on its Block 67 in the Maranon Basin. The company has conducted exploratory work on the tract for the past decade and discovered heavy-oil deposits in Paiche, Pirana and Dorado fields. The company estimates peak production from the block at up to 100,000 bbl. per day, which would double current production from the entire basin. The first phase of development will include 3-D seismic acquisition to determine drilling locations that have minimal impact to the rain forest. The project includes reinjection of produced water, construction of a heavy-oil upgrading plant, and a 400-kilometer pipeline to the North Peruvian pipeline system. First oil is expected in 2010. Barrett says its Block 67 discoveries, along with recent discoveries on adjacent Block 39, form part of a multibillion-barrel trend of heavy and moderately heavy oil that extends across the Peruvian border north into Ecuador.



5 U.K.

Houston-based Endeavour International Corp. tested its Columbus wildcat in Block 23/16f for 17.5 million cu. ft. of gas and 1,060 bbl. of condensate a day from Paleocene Forties. Endeavour, as operator, ran the tests on the 23/16f-11 well on a 56/64-in. choke with 1,200 psi of wellhead flowing pressure. The well penetrated at least 38 meters of gross gas column and 26 meters were tested through pipe. Endeavour's partner is Serica Energy. The discovery is near existing infrastructure and could be tied back to nearby platforms. The two companies have drilled four wells in 16 months and found gas in all of them.



6 Norway

Activity is picking up around the Gjøa discovery in blocks 35/9 and 36/7 in the Norwegian sector of the North Sea. Statoil has submitted its plan to develop the field via subsea wells that are tied back to a semisubmersible production platform. It expects to drill 13 wells for the field, beginning in October 2008. First production should come online in 2010. Estimated reserves are 83 million bbl. of oil and condensate and 1.4 trillion cu. ft. of gas. The plan also calls for Norsk Hydro's Vega and Vega South gas and condensate fields to tie back to the Gjøa platform. The whole complex carries a price tag around $3.3 billion.



7 Egypt

Egypt has approved Apache Corp.'s development plan for a new discovery. Late last year Apache drilled the Hathor Deep 1X well on the Khalda Offset concession. It tested at 12 million cu. ft. of gas and 1,237 bbl. of oil per day from two separate formations. The Egyptian General Petroleum Corp. has approved Apache's plan of development. Surface equipment has been installed and production will start upon approval by the minister of petroleum. The Houston-based independent also released results on its Alexandrite 1X well. The well is a recompletion in a new formation in the Matruh concession. The well tested 19.8 million cu. ft. of gas and 4,045 bbl. of condensate per day. The nearest production from the same formation is in Emerald Field, some 30 kilometers east.



8 Angola

Total SA will be looking to add a new field to a planned development in the Eastern Development Area (EDA) in offshore Block 32. The French firm struck oil at its Salsa-1 exploration well in 1,806 meters of water. The Salsa-1 tested at a rate of 3,686 bbl. of oil per day from a Miocene reservoir. The discovery is in the southeastern part of Block 32, some 15 kilometers southwest of the Mostarda-1 discovery. The EDA project is currently in feasibility planning and will take in crude from Mostarda, Gengibre, Gindungo and Canela fields.



9 Kazakhstan

The Ansagan 1X wildcat encountered a 135-meter oil column for the TengizChevroil (TCO) consortium operated by Chevron, 50% owner. The company said the discovery is in a low-permeability reservoir, apparently in presalt Carboniferous limestone. The discovery lies some 18 kilometers east of Tengiz Field. The $30-million-plus well bottomed at 6,200 meters. A number of additional prospects are identified on the license.



10 Iran

State-owned China National Petroleum Corp. is edging closer to sealing a memorandum of understanding that will kick-start a $3.6-billion investment to develop South Pars gas field offshore Iran. The deal with Iran calls for CNPC to spend $1.8 billion on E&P in the SP14 Block and a further $1.8 billion to construct a liquefied natural gas (LNG) plant, an official says. CNPC is in talks with Norway's Statoil regarding a joint venture on the South Pars gas project, reports Dow Jones. The SP14 Block is in the south-central sector of South Pars Field and has estimated gas reserves of 13.1 trillion cu. ft. The development plan envisages CNPC building an LNG facility that will ship the product to China.



11 India

India's Reliance Industries Ltd. found large new oil reserves on its D-6 block offshore Andhra Pradesh in the Krishna Godavari Basin. The company is developing an estimated 50 trillion cu. ft. of gas reserves on the block. According to minority interest-owner Niko Resources, the MA-2 well reached target depth of 3,581 meters and found a 170-meter gross gas/condensate interval and a 24-meter oil column in Cretaceous sand. The companies have applied for commerciality for the oil discovery and plan to start oil production in 2008. The MA-2 well is two kilometers from the MA-1 well that tested at 6,700 bbl. of oil, more than 3,000 bbl. of condensate and more than 40 million cu. ft. of gas.



12 Indonesia

ConocoPhillips will sell its 50% stake in Block A offshore Aceh in northern Sumatra, Indonesia, to a consortium of Medco Energi, Premier Oil and Japex. The major has changed its mind after initially saying it was keen to keep the equity and develop Block A Field after ExxonMobil sold its half of the block to the consortium for $51 million. Development of the block has been delayed due to disagreements between ConocoPhillips and ExxonMobil over the price of gas sales. Block A is estimated to have gas reserves of 1 trillion cu. ft., sufficient to supply liquefied natural gas to three fertilizer companies in Aceh for 20 years.



13 Australia

Chevron Corp. has confirmed that the Western Australia government has cleared the way for environmental approval to be granted to the 40-trillion-cu.-ft. offshore Gorgon project. The project involves a two-train liquefied natural gas plant and a domestic gas plant on Barrow Island, a Class A nature reserve. The Gorgon project is operated by Chevron and its partners are ExxonMobil and Shell.

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