Exploration and appraisal drilling on the U.K. continental shelf has rebounded to levels not seen since 1998, reports consulting firm Hannon Westwood LLP. Operators drilled some 55 to 60 exploration and appraisal wells (plus sidetracks) in 2007, and look set to continue that pace for several years.

Between now and 2010, more than 220 exploration and appraisal wells will be drilled offshore the U.K., according to the Glasgow-based firm. The prospects contain potential of 9.6 billion barrels of oil equivalent (BOE), on an unrisked basis, and will cost $4 billion. The majority of the tests are sited in the Central and Southern North Sea, although activity is also rising in the Northern North Sea.

Some 34 billion BOE have been produced from the U.K. offshore, and another 9 billion BOE remain in producing oil and gas fields. Hannon Westwood estimates undrilled prospects and undeveloped discoveries contain an additional 15 billion BOE.

On an annual basis, about 600 million BOE of new reserves and 700 million BOE of appraised reserves have been added. That’s good news, as production ranges from 1.1- to 1.2 billion BOE a year.

1 Canada

BP Plc, London, has jumped back into Canada’s oil-sands after an eight-year absence. The major announced that it is acquiring a 50% interest in Calgary-based Husky Energy Inc.’s Sunrise project in Alberta’s Athabasca oil-sands deposit. At the same time, Calgary-based Husky will acquire 50% of BP’s refinery in Toledo, Ohio. Sunrise, a SAGD project, has been fully delineated with 650 appraisal wells. First production is expected in 2012 at the rate of 60,000 bbl. of bitumen a day. Plateau production will eventually be 200,000 bbl. a day.

The project, some 60 kilometers northeast of Fort McMurray, is adjacent to the Kearl Lake and Firebag developments. The Sunrise leases included in the transaction cover about 42,000 acres and are estimated to contain discovered resources of about 9 billion bbl.

2 Peru

BPZ Energy Inc., Houston, has taken two exploration contracts in northwestern Peru. The 948,000-acre Block XXII is mainly in the Lancones Basin, although its southern portion is in the Talara Basin. The company committed to shoot 200 kilometers of 2-D seismic and drill four exploration wells during the initial seven years of the contract. Block XXIII covers 248,000 acres in the Tumbes Basin. It’s between BPZ’s offshore Block Z-1 and onshore Block XIX. On this tract, the company will shoot 600 sq. kilometers of 3-D seismic and 400 kilometers of 2-D, and drill four exploration wells during the initial contract period.

3 Brazil

Brazilian state oil company Petrobras and its partner El Paso Corp., Houston, have made a light oil and gas discovery in the offshore Espirito Santo Basin, north of Camarupim Field. The 4-ESS-177 discovery was drilled in 708 meters of water and encountered 101 meters of gas-saturated sand at a depth of 3,417 meters. A reservoir at 2,461 meters also showed light oil. The well is in Block BM-ES-5. Petrobras owns 65% and El Paso has 35%.

4 Brazil

Petrobras, Brazil, drilled a confirmation well in the subsalt Tupi discovery in the offshore Santos Basin that flowed 2,000 bbl. of oil and 2.3 million cu. ft. of gas a day. The 3-RJS-646 well drilled to 5,314 meters on BM-S-011 Block 1 and found 28-degree oil. The well was drilled in 2,167 meters of water about 9.5 kilometers southwest of the 2006 discovery well for Tupi. Petrobras estimates Tupi’s recoverable reserves at between 5- and 8 billion bbl. of oil equivalent, making it the largest discovery in the world since 2000, when Kashagan was found in the Kazakh portion of the Caspian Sea. Petrobras’ partners in the super-giant field are BG Group, U.K. (25%), and Galp Energia, Portugal (10%).

5 U.K.

Total SA, France, plans to spend $800 million on E&P in Alwyn in the North Sea during the next three years, reports E&P Daily. The investment will extend Alwyn’s life beyond 2020. Since first oil, Alwyn and its satellites have produced 900 million bbl. of oil. The latest addition is Jura Field, which will begin production this year and achieve a plateau rate of 45,000 bbl. a day. An appraisal is in progress at Jura, and additional wells are planned. The Alwyn area is in blocks 3/4A, 3/9A and 3/10B, about 440 kilometers northeast of Aberdeen.

6 U.K.

Endeavour International Corp., Houston, reports a recent appraisal well and sidetrack on its Columbus discovery have confirmed a find. Well 23/16f-12 and its 23/16f-12z sidetrack, drilled on Block 23/16f in the Central North Sea, encountered 40 to 70 feet of gas and condensate Paleocene reservoirs at locations about 1.8 and 1.2 miles north, respectively, from the December 2006 discovery well. Serica Energy Plc, London, with 50% interest, is the project operator. Endeavour has 25% and EOG Resources Inc., Houston, has 25%.

7 Turkey

Toreador Resources Corp., Dallas, reports its Bati Eskikale-1 in the Turkish sector of the Black Sea flowed 8.8 million cu. ft. of gas a day. The discovery encountered about 10 meters of net gas pay in a 37-meter interval in the Eocene Kusuri formation. The 2,198-meter test was drilled in the South Akcakoca Sub-basin, and was the 14th well to successfully encounter gas in the project area. Toreador has a 36.75% interest in the project, Turkish state company TPAO has 51% and operates, and Calgary-based Stratic Energy Corp. has the remaining 12.25%.

8 Tunisia

Pioneer Natural Resources Co., Dallas, has made more discoveries in Tunisia and is talking with the government about a large-scale gas and condensate project to commercialize the finds. It operated the Angham and Methaq discoveries on the Jenein Nord Block, the sixth and seventh finds on the block since late 2006. The company is constructing production facilities that will have initial gross capacity of 10,000 bbl. a day and will be expanded to 20,000 bbl. a day during the second half of 2008.

9 Libya

Occidental Petroleum Corp., Los Angeles, has agreed to new terms on several of its existing petroleum contracts with Libya’s National Oil Corp. (NOC). The 30-year agreements cover Occidental’s projects in the Sirte Basin. Recoverable reserves in the fields are some 2.5 billion bbl. During the next five years, Occidental, Austrian firm OMV and NOC will spend about $5 billion to increase gross production to more than 300,000 bbl. a day. Currently, the fields make 100,000 bbl. a day. Oxy (75% interest) and OMV (25%) will contribute half the funds and NOC will supply half. Oxy and OMV will receive 10% or 12% of after-tax gross production, depending on the field. The companies will also pay a $1-billion signature bonus.

10 Libya

ExxonMobil Corp., Irving, Texas, signed a heads of agreement to execute an exploration agreement with Libya’s NOC in the offshore Sirte Basin. The agreement includes four blocks in Contract Area 21, approximately 110 miles off the Libyan coast. The contract area comprises 2.5 million acres and is in 5,400 to more than 8,700 feet of water. ExxonMobil committed to a five-year work program consisting of at least 2,500 miles of 2-D seismic, 770 sq. miles of 3-D seismic, and a deepwater exploration well. The company will also pay a signature bonus. The major already has a substantial seismic acquisition program under way in adjoining Contract Area 20 in the Sirte Basin.

11 Egypt

Apache Corp., Houston, has successfully appraised a gas field in Egypt. The Jade-2x well in the Matruh concession in the Western Desert flowed 26.7 million cu. ft. of gas and 1,325 bbl. of condensate a day from the Jurassic Alam El Bueib-6 (AEB) formation. Jade-2x, drilled around 1.4 kilometers northeast of Jade-1x, logged 45 meters of AEB pay. Jade-4 reached total depth of 3,862 meters and logged 71 meters of net pay in the AEB formation. It will be tested and completed following the Jade-2x test.

12 Angola

Total SA, France, has its 11th discovery on ultra-deepwater Block 32 offshore Angola. The Alho-1 tested 5,400 barrels of oil a day from Oligocene reservoirs. It was drilled to total depth of 4,981 meters in 1,607 meters of water in the northeastern part of prolific block. Total operates the project; Sonangol, Angola, is the concessionaire. Partners are Marathon Oil Co., ExxonMobil and Galp Energia.

13 Malaysia

Murphy Oil Corp., El Dorado, Ark., plans two ultra-deepwater wildcats near its Rotan Field offshore Sabah. The two wells will be drilled in Block H, the site of the company’s Rotan-1 discovery drilled in 2007. That well, in 3,773 ft. of water, hit a net gas column of 279 ft. Murphy owns an 80% interest in Block H and state oil company Petronas owns 20%.

14 Australia

Murphy Oil Corp., El Dorado, Ark., has farmed into a 40% interest in a Browse Basin block, offshore Northwestern Australia, its first deal there. It made the deal with private firm Finder Exploration Pty Ltd. Murphy will take over operations on the AC/P36 permit, which covers 1 million acres in 1,200 to 1,600 ft. of water. It plans to start drilling in late 2008. Finder now holds 40% in the permit, and PTTEP Australia Offshore Pty Ltd. holds 20%.

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