Noble Energy announced that the Plan of Development for the Aseng oil project has been sanctioned by the Company, its partners, and the Ministry of Mines, Industry, and Energy of the Republic of Equatorial Guinea. Noble Energy serves as technical operator of the development with a 40 percent working interest.
Formerly known as Benita, Aseng was originally discovered in 2007 as a gas-condensate field in Block "I" offshore Equatorial Guinea. Subsequently, two appraisal wells were drilled in the structure, with the first identifying the oil resources and the second determining downdip reservoir limits.
Charles D. Davidson, Noble Energy's Chairman and CEO, said, "The sanctioning of the Aseng project is a very important milestone for our Company. This stand-alone project is a key component of our long-term growth strategy in West Africa and will provide critical infrastructure for our various other discoveries in the area. In addition, Aseng will be the first operated development in the region for Noble Energy, and we look forward to bringing this project online with our partners and the Republic of Equatorial Guinea."
The Minister of Mines, Industry, and Energy, H.E Marcelino Owono Edu, stated, "My Ministry is pleased to be able to approve the Aseng Plan of Development in Block I, as it represents the first oil development in the Equatorial Guinea part of the Douala Basin. My Ministry looks forward to the development and monetization of gas resources already discovered in Blocks I and O and to continued exploration activity in this area. The approval of the Aseng Plan of Development will help Equatorial Guinea to accelerate its plans for the regional utilization of gas and oil. The Ministry recognizes the important part the Noble Aseng Plan of Development will play in the development of a regional gas hub."
Initial development of the field will include five subsea wells flowing to a floating production, storage, and offloading vessel (FPSO) where the production stream will be separated. The oil will be stored on the vessel until sold, while the natural gas and water will be reinjected back into the reservoir to maintain pressure and maximize oil recoveries. The FPSO, to be located in approximately 3,100 feet of water, will be designed with capacity to handle 120,000 barrels of liquids per day, including 80,000 barrels of oil per day. In addition, the vessel will be capable of reinjecting 170 million cubic feet per day of natural gas. Storage on the vessel will be approximately 1.5 million barrels of oil and condensate.
Total cost of development, excluding the cost of the FPSO, which will be leased, is estimated at $1.3 billion ($530 million net). The majority of this capital is to be invested in 2010 and 2011. First production from the field is estimated to commence by mid-year 2012 at 50,000 barrels of oil per day gross (16,500 barrels per day net). Over the life of the project, the Company expects to recover gross hydrocarbon liquids of approximately 100 to 120 million barrels, with initial reserve bookings beginning in 2009. In addition, there is an estimated 450 to 550 billion cubic feet of gas resources at Aseng that will be produced as part of an integrated gas monetization project once the pressure maintenance phase is completed.
Extensive engineering and design work has been done over the past year, the project team is in place, and all long lead items have been secured. The tender process for the FPSO and subsea equipment has been completed, and the Company is preparing to award most of the major contracts.
Noble Energy has secured two rigs to support the development work at Aseng. The Atwood Hunter semisubmersible, which has been working for Noble Energy offshore Israel, is estimated to arrive in Equatorial Guinea for development activities in mid-2010. A letter of intent has been signed on a second rig, which is expected to be delivered to Noble Energy in the first quarter 2010.
The next development objectives for Noble Energy in West Africa will be to accelerate and maximize condensate production at Belinda through gas-cycling, as well as advance an integrated gas monetization project. Exploration activities are also expected to resume in 2010 on the 1.5 million gross acres the Company holds in the under-explored Douala basin.
David L. Stover, Noble Energy's President and COO, said, "Aseng represents the first sanctioned project in our extensive lineup of major developments set to transform Noble Energy over the next few years. Our disciplined investment approach, strong balance sheet, and the phased-in project timing puts us in a very good position to execute these projects on schedule and bring significant growth to our business. We are excited about the path ahead and our ability to continue delivering strong value for Noble Energy and our shareholders."
Noble Energy's partners on Block "I" include Atlas Petroleum International Limited (the Administrative Operator) with a 29 percent participating interest, Glencore Exploration EG Ltd. with a 25 percent participating interest and Osborne Resources Limited, a company within the PA Resources Group with a six percent participating interest. GEPetrol (the national oil company of the Republic of Equatorial Guinea) has a five percent carried interest.
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