Woodside Petroleum Limited

Woodside Petroleum Limited,Woodside Petroleum Limited,Woodside Petroleum Limited

Woodside Petroleum Limited is planning to drill 17 exploration wells in Libya, 13 offshore and 4 onshore, over the next 18 months after recently completing its seismic work commitments.

Woodside Exploration and New Ventures Director, Agu Kantsler, said two drill rigs will be used in its onshore areas, sometimes working simultaneously. “Our onshore targets are generally in the range of 20-50 MMbbl, but smaller accumulations can be economic dependent on the vicinity of existing infrastructure”, Kantsler said.

“Our drilling campaign commenced in early March with the A1-NC209 well in the Sirte Basin. It is located 1,000 km east of Tripoli and 30 km north of the producing Bu Attifel oil field, and reached a total depth of 4219 m. Analysis of the mud log and wireline log data indicated that the well had encountered two separate hydrocarbon bearing zones. A production test confirmed the presence of an oil column.”

He said Woodside will evaluate all the geological, drilling and DST (Drill Stem Test) data that have been gathered before determining what work is required to further assess the accumulation. A second exploration well in the Sirte Basin (A1-NC205) started drilling in July.

Drilling in the Murzuq Basin commenced at the end of May with the A1-NC210 exploration well. “The well is located 1000 km SSW of Tripoli and 150 km south of the producing Al Wafa oil/gas field. After reaching a total depth of 1042 m, wireline logs were acquired which indicated that the well had encountered several separate hydrocarbon bearing zones.”

Kantsler said a production test of the deepest zone confirmed the presence of a gas column and flowed 5.5 MMscfd through a 52/64 inch choke. “The Absolute Open Flow is calculated to be 19.9 MMscfd. The hydrocarbon intersections and flows in our first two onshore Libyan wells are very encouraging of themselves and for the rest of the drill programme.”

The first of our four offshore wells is planned to be drilled in late 2006 or early 2007, depending on drill rig schedules. “Target sizes for our offshore wells are in the 100s of MMbbl range”, Kantsler said. “It is likely that at various stages of our sizeable Libyan drilling campaign we will have three rigs working at the same time in onshore and offshore areas.”

An offshore seismic programme involving 7,740 km of 2D and 1,690 km2 of 3D data has been completed and identified several large structures in the preliminary stages of interpretation, Kantsler said. “Our onshore seismic acquisition programme, which was the largest in north Africa, was completed in early June 2006, with a total of 8,400 km of 2D and 2,800 km2 of 3D data acquired across the six onshore blocks. We continue to interpret the surveys acquired over the past 20 months.”

Kantsler said Woodside has been encouraged by its progress in Libya. “Of all the companies involved in that country, Woodside holds the third largest exploration acreage position with nearly 60,000 km2”, he said. “In the onshore areas, Woodside picked up five blocks in the Sirte Basin and one block plus one study area in the Murzuq Basin. These blocks were awarded under the Exploration Production Sharing Agreement III (known as EPSA III) in 2003, with Woodside (as operator) holding 45%, Repsol 35% and Hellenic 20%.”

“In the offshore areas, Woodside was awarded four blocks under the first bidding round of EPSA IV in 2005. The offshore joint venture consists of Woodside (operator) with 55%, Occidental with 35% and Liwa Energy of Abu Dhabi with 10%.”

Kantsler said Libya has a rich oil and gas history that spans more than 50 years. “The first concessions were taken up in the mid-1950s by major international oil companies such as Exxon, BP, Marathon and Conoco, with the first significant discovery being made in 1958.”

Production began in the early 1960s and Libya joined OPEC in 1962. By 1970, Libya was producing more than 3 MMbopd, a target the current government would like to again reach by the end of this decade, given that production now is down to about 1.5 MMbopd.

He said Libya became one of the world’s first LNG producers through its Marsa el Brega plant in the early 1970s. The plant remains in production at about 500,000 t a year with most exports historically and currently going to Spain. In the past couple of years, Libya has begun exporting gas to Europe through a major pipeline across the Mediterranean to Italy. The first exploration and production sharing agreements, known as EPSAs, were introduced in 1974.

“Since then they have had EPSA II in 1980, EPSA III in 1988 and EPSA IV in 2004. Each EPSA can have several bid rounds, of course, and take several years to conclude. In 1986, the US imposed sanctions and US companies withdrew from Libya. In 2002 Libya re-entered the global community when the UN lifted sanctions. The US lifted sanctions in 2004.

“At last count, Libya had about 21 international oil companies active in its oil and gas industry. Woodside was awarded its onshore Libyan exploration blocks in late 2003, just ahead of this latest wave of renewed interest.

“Libya has discovered to date about 40 Bbbbl oil and 40 Tcf gas, with an expected similar volume of hydrocarbons yet to be found. In summary, Woodside is attracted to Libya as it is considered to be highly prospective with reasonable fiscal terms managed by an experienced host government that is keen to strengthen its oil and gas industry in order to increase production.”

Kantsler said the Libyan oil industry started in 1955, over 50 years ago. “The country has much experience in exploration and production and has well-established infrastructure”, he said. “Given the maturity of the industry and the existence of proven processes within the oil industry, the business environment in Libya is conducive to business growth.

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Onshore drilling rig, Sahara Desert, Libya
Two drill rigs will be used in Woodside’s onshore areas, sometimes working simultaneously, over the next 18 months.

Seismic survey vehicles, Sahara Desert, Libya
Woodside’s onshore seismic acquisition programme, which was the largest in north Africa, was completed in early June 2006, with a total of 8,400 km of 2D and 2,800 km2 of 3D data acquired across six onshore blocks.

Seismic survey team, Sahara Desert, Libya