Oil production has commenced at Apache's Van Gogh development in Production License WA-35-L in the Exmouth Basin, offshore Western Australia.
Apache, the Van Gogh field operator, owns a 52.5-percent interest in the Van Gogh field with INPEX owning the remaining interest. Van Gogh is located 32 miles (53 km) north-northwest of Exmouth.
"Production from Van Gogh is projected to ramp up during the first half of the year, making a significant contribution to Apache's growth in 2010," said Rod Eichler, co-chief operating officer and president - International.
Van Gogh, discovered in 2003, is Apache's first field development utilizing a floating production, storage and offloading (FPSO) vessel. The field was developed with 19 horizontal production laterals, two water injection wells and one gas injection well. The total horizontal interval drilled for all of the production wells exceeds 106,000 feet (32 km). The Ningaloo Vision FPSO has capacity to process 150,000 barrels of liquids per day, including 63,000 barrels of oil per day, and store 540,000 barrels of oil.
Initial production from Van Gogh highlights Australia's role in Apache's worldwide production growth. Pyrenees, another Apache Exmouth Basin oil development, operated by BHP Billiton Petroleum, is scheduled to come on line during the first half of 2010. The two projects are expected to add combined peak production of 40,000 barrels per day net to Apache.
In 2011, Apache expects to commence production from the Reindeer Field discovery through the Devil Creek processing plant - Western Australia's first new domestic natural gas processing hub in Western Australia in more than 15 years. Devil Creek is forecasted to increase Western Australia's domestic natural gas production capacity by up to 20 percent.
Apache also has agreed to supply gas from its Julimar and Brunello discoveries to Chevron's Wheatstone liquefied natural gas (LNG) hub and become a foundation equity partner in the project, unlocking an estimated 2.1 trillion cubic feet of gross gas reserves from two of Apache's largest discoveries. Apache holds a 65-percent interest in the discoveries. A final investment decision on the first phase of the Wheatstone project is slated for 2011.
"The Van Gogh development highlights the increasing profile of the Exmouth Basin as one of Australia's emerging oil production areas; it will have a positive impact on Australia's oil production capacity and enhance the nation's energy security," Eichler said.
Since 1992, Apache has invested $3.3 billion in exploration and development activities in Australia. During that period, Apache has drilled more than one quarter of all offshore oil and gas wells in Australia and currently supplies more than 35 percent of Western Australia's domestic natural gas.
Apache plans to invest nearly $1 billion in Australia during 2010, funding exploration and a range of projects that includes Van Gogh, Pyrenees, Julimar/Wheatstone and Reindeer/Devil Creek.
Apache currently employs about 500 people in Western Australia.
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