BHP Billiton announced that oil production has commenced from the Genghis Khan development in the Gulf of Mexico.
BHP Billiton and its partners acquired the Genghis Khan development in February 2007 from Anadarko Petroleum Corporation for U.S. $1.33 billion. Net share went to BHP Billiton at $583 million.
Connected to a subsea manifold, one well in Green Canyon Block 652 has begun oil production.
Initially drilled by Anadarko in April of 2005, BHP and its partners completed the well, named K1-1. Noble’s Paul Romano semisub initiated the completion, while Luigs finished the completion.
Three more wells are planned to test the area, two of which are in block 652, and one of which is set for Block 608. Luigs is currently drilling one of these wells and is slated to drill the next two producers.
Production will be transported to the Marco Polo TLP, a third-party facility operated by Anadarko, where it will then be processed. Production will then be transported via pipeline to Ship Shoal 332 and ultimately to Texas and Louisiana markets. This oil will be sold as a blend with crude oils from other pipeline shippers.
Together, these projects comprise a six-block development area in Green Canyon (Blocks 608, 609, 610, 652, 653 and 654) for which BHP Billiton serves as operator, with 44 percent. Other partners in the conjoined projects are Hess and Repsol YPF with 28 percent each.
“The development and production of Genghis Khan provides early learnings and synergy with our Shenzi project and expands our ownership of operated infrastructure in this region,” said BHP Billiton Petroleum Chief Executive J. Michael Yeager.
“This project allows us to optimize the development of the reserves at Shenzi-Genghis Khan, providing flexibility in selecting well locations, production facilities and the pace of development to capture the most value possible over the expected 25- to 30-year life of the field,” Yeager added.
BHP Billiton holds interest in more than a dozen other blocks in the direct vicinity of the Shenzi/Genghis Khan projects and is reported to hold interest in more than 400 blocks in the entire Gulf of Mexico.
Estimates Soar for BHP Billiton
Now, production estimates for BHP Billiton’s Gulf of Mexico interests are expected to top 100,000 boe/d. A huge increase, in June 2007, BHP Billiton’s production level was measured at about 12,000 boe/d.
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