3D Oil commenced Front End Engineering and Design for the West Seahorse oil field development in Bass Strait, and the company expects to reach a final investment decision in the second half of 2010. West Seahorse has 2P reserves of 5.3 MMBbl with an additional 3.4 MMbbl of contingent resources, and the objective of the FEED is to ensure the oil reserves are developed in a cost effective and timely manner. A field development option is to tie a subsea well to shore via a production pipeline, then either feed production to a new crude oil stabilization plant or link it to existing third-party facilities. 3D Oil believes this development option offers the lowest capital and operating costs while also maximizing ultimate recovery from the field.
The FEED process will be undertaken in three phases: concept finalization will be performed by WorleyParsons to review the pipeline-to-shore option, including an innovative flexible steel pipeline to be installed by a work boat, which doesn't require the mobilization of a pipe-lay barge. Then a full FEED of the finalized concept and further development of the engineering definition will commence; and finally, an extended FEED will be performed to further develop the project so that a feasibility study is generated to ensure bank financing can be obtained.
First oil from the field is planned in 2012. A full review of the neighboring Sea Lion prospect, located 4 miles (7 kilometers) to the northwest of West Seahorse, is being reviewed. If successful, the prospect may be tied-in to Seahorse's development.
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