Tuesday, April 04, 2006

Chevron Well Results In Block 1 Unlikely Before April's End Due To Size, Source Tells Daily independent

Nigeria's Daily Independent reports in Tuesday's editions that Chevron may not release the test results from its Obo-1 Well in Block 1 of the Nigeria-Sao Tome and Principe "until the end of April," but rumors of its size trumpeted on Investor's Hub throughout the day have ranged between 1 billion and 8 billion barrels, some of it believed to underlie the ERHC Energy/Sinopec equity in Block 2.

The newspaper cites a Chevron official saying the same thing the company has said all along: it may take four wells to determine the size of the field, as the nearby Akpo field did. That field proved to have a billion barrels of crude undersea.

The article was published today but appears to have been rewritten from others published last week, as it references a meting last Tuesday, when ExxonMobil and ChevronTexaco officials discussed their next moves.

Here is the report:

Chevron Completes First Exploration Well In JDZ

Chevron Nigeria Limited has completed an exploration well in the Joint Development Zone (JDZ) jointly owned by Nigeria and Sao Tome and Principe.

The oil bloc is reputed to hold about one billion barrels of oil and gas reserves.

A Chevron official said the company had started evaluating the results of the drilling completed last March 15.

Geological studies of the prospectivity of the bloc suggest it could hold even more oil and gas resources than the Akpo field in Nigerian waters to the north, thought to have recoverable hydrocarbon reserves of more than a billion barrels.

Chevron, which acquired rights to explore the bloc in October 2004, began drilling Obo-1, the location of the well, last January.

The company has a 51 per cent stake as operator of the acreage, which also has ExxonMobil with 40 per cent equity holding, while the rest is owned by Dangote Energy Equity Resources, a jointly owned Nigerian-British company.

The Chevron official, who saw the results of the Obo-1 well said: “It is an encouraging result. Everyone is pleased.”

He disclosed that Chevron and one of co-American partner, ExxonMobil, would meet today to plan their next moves, stressing that Chevron is yet to decide when it would drill more wells to determine its exact proven recovery reserve size.

He attributed the high cost of drilling operations in the field to the acute shortage of oilrigs off West Africa since it was discovered, saying this has made it extremely expensive to drill further short notice.

The partner companies, he said, would not be able to confirm the full extent of the discovery until they had drilled more wells, explaining that it took the drilling of four development wells to ascertain the full extent of the Akpo field.

Another source hinted that the consortium was still examining the data from the field and was unlikely to agree on how to release the result before the end of April.

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