Anzon Achieves Objectives with Basker Production Test

The scheduled six-month term of the Basker Extended Production Test (EPT) was concluded on May 14, 2006 and has achieved its major objectives and as a consequence of this experience the Basker Manta Project is substantially de-risked.

Preparations are well advanced to take the Basker Manta Project up to full field production levels of 25,000 bopd in the second half of this year. The key issues addressed during the EPT were:

1. Reservoir and well performance
2. Suitability of equipment and performance

The EPT began on November 14, 2005 approximately 11 months after the initial Joint Venture meeting to start the project. During that time;

  • A Production License was obtained within 8 months,
  • Three major pieces of equipment were mobilized to the Basker location. The Ocean Patriot drilling unit, the Floating Production Storage and Offloading Vessel (FPSO) Crystal Ocean and the shuttle tanker Basker Spirit.
  • The first well in the Basker field, Basker-2, was drilled, and tested, and a subsea completion was installed, including an Australian-built Xmas tree.
  • A flowline and a control line were installed on the sea floor between the well head and the location of the, Crystal Ocean, and an export flowline was installed between the Crystal Ocean and the Single Point Mooring (SPM) for the Basker Spirit. The flowline, export line and the control line were all installed by the CSO, Venturer.
The Basker-2 well had initial flush production rates in excess of 10,000 bopd achieved from approximately 11 meters of perforated interval. The same interval was produced for the full six months with production rates stabilising at around 6 7,000 bopd with the rate being varied significantly for such things as flow assurance testing. During the six-month period a total of 868,000 barrels of oil has been produced.

Two cargoes of crude oil have been sold previously and currently the Basker Spirit has a cargo in excess of 160,000 barrels of crude oil which will be delivered to a major refinery on the east coast of Australia, on the passage to Singapore for a routine Marine inspection and Certification. The total revenue of A$61.7 million generated by the sale of the initial two cargoes has been received previously. The third cargo is expected to be sold for of the order of A$15 million.

As scheduled, the Crystal Ocean will also depart for Singapore at then end of the month, where a compressor will be installed for handling of associated gas produced with the crude oil. During the EPT the gas has been flared, as approved by the Authorities. During the Full Field Production, expected to begin in the second half of 2006, the compressor will be used to compress the associated gas and reinject it into selected intervals in the Basker-3 well. The reinjection is forecast to continue until some time next year when export and sale of that associated gas is expected to start. (The Manta and Gummy gas fields are still expected to be brought on line in 2008.)

Apart from the routine work to be done on the Basker Spirit in Singapore the vessel will undergo some modifications to the bow loading system; during the EPT the Basker Spirit connected and disconnected from the SPM several times and the enhancements that will be implemented are as a consequence of the valuable experience gained during these operations.

The key benefits of the EPT are as follows:

Reservoir and Well Performance

  • The Basker reservoir characteristics indicate that the oil bearing sands are connected to the basin aquifer and pressure maintenance in the oil reservoirs is by virtue of a water drive mechanism;
  • The original plan for gas injection for pressure maintenance is not required, hence marketing of the solution gas can begin;
  • The original concerns regarding the pour point of the Basker crude were found to be non-existent between the reservoir and the FPSO. No pour point depressant will be required during normal operations throughout the life of the field;
  • No water production of any significance was recorded during the six months (in fact the water handling system on the FPSO could not be commissioned due to insufficient produced water).
  • Suitability of Equipment and Performance

    • The performance of the Crystal Ocean exceeded all expectations. The vessel remained on station for the full six months of the EPT without having to disconnect at any time because of weather. (At the beginning of the EPT the disconnect procedure was successfully tested for safety reasons.);
    • The station-keeping characteristics of the dynamic positioning system were fully tested in severe storms in seas up to 9 meters and winds of 50 knots. The excursion from the desired location was always maintained within the safe operating radius;
    • The process equipment has performed as per design;
    • The SPM, after initial difficulties, was used throughout the EPT with several connect and disconnect operations conducted by the shuttle tanker, Basker Spirit. The experience gained during these procedures has been used to make improvements to the SPM and Basker Spirit, which will be implemented while it is in Singapore;
    • The Basker Spirit with its own dynamic positioning system was maintained at the SPM for extended periods;
    • The Basker Spirit has discharged cargos to a major refinery in Southern Australia as well as performing the first ship-to-ship transfer of a cargo of crude oil in Western Port Bay. As a consequence of this experience the Basker Spirit has demonstrated its flexibility to discharge its cargo in different circumstances to maximize marketing options.

    Full Field Development

    Drilling of the development wells continues with the final well, Basker-4, currently drilling through the pay zone. The three new Basker wells will be completed once the Basker-4 is drilled to total depth and all three new Basker wells will be flow tested. It should be noted that Basker-3 will be completed as a gas injection/oil producer. As indicated above, initially it will be used for gas injection and subsequently for oil production.

    Between now and late September 2006 when the two vessels are expected to return from Singapore it is planned that the CSO, Venturer, the same construction vessel successfully used last year for the EPT installation, will return to tie in the Manta-2A well with a flowline and control line. The four Basker wells will have their production/injection fluids passed through a subsea manifold to be positioned by the CSO, Venturer. The existing flowline and control line will be used for the manifold and the four Basker wells. The Crystal Ocean with the compressor installed is designed to have a daily production capacity of 35,000 bopd. Once commissioning is completed it is anticipated that from October 2006 average rates of 25,000 bopd will be maintained allowing for scheduled cut backs for the departures by the Basker Spirit for delivery of crude cargoes, to local refineries and/or for ship-to-ship transfer, estimated to take 3-4 days of each month. (The storage capacity of the Basker Spirit is of the order of 680,000 barrels.)

    As a consequence of the positive results achieved to date by the development wells and the confirmation of the excellent recovery potential from the reservoir with the presence of the water drive mechanism the reserves update scheduled to be conducted in July/August 2006 is expected to yield an improvement to the currently stated initial proved and probable oil reserves of 30.1 MMBbls. Any increase in reserves is not forecast to contribute to increased daily production rates, however, it will extend the life of the oil project beyond the current forecast 6 years with the period of production without decline to beyond 2007.

    The above results confirm the prudent judgment of conducting the EPT to ensure the capability and efficiency of the innovative production system used for the first time in Bass Strait. Furthermore, it provided a low cost, low risk method of determining reservoir characteristics while at the same time generating significant revenue to assist with the funding of the Full Field Development. The BMG Joint Venture is well satisfied with the achievements of the EPT and now looks forward with confidence to the start of Full Field Production at average rates of 25,000 bopd later this year.

    The participants in the BMG Joint Venture are Anzon Australia as operator with 50% and Beach Petroleum with 50%.

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