Conoco Continues Success in Southeast Asia
Conoco made a discovery offshore Vietnam and announced a field extension offshore Indonesia, both located near structures recently declared commercial or under development. It is estimated the combined future gross reserves resulting from the discovery and field extension will be between 130 to 440 million barrels of oil equivalent (mmboe), with 33 to 103 mmboe net to Conoco.
This builds on Conoco's continuing success in Southeast Asia, which became the company's fourth significant global business area after the July acquisition of Gulf Canada Resources Ltd. and its majority interest in Gulf Indonesia Resources Ltd. (NYSE:GRL). Combined acquired assets more than doubled Conoco's proved reserves in Southeast Asia and tripled the previous year's total net production from the region.
The Sutu Vang (Golden Lion) discovery in Block 15-1 is in the shallow waters of Vietnam's oil-prone Cuu Long Basin, 120 miles southeast of Ho Chi Minh City. The Sutu Vang 1X well tested a stabilized rate of 11,388 barrels of oil per day (bpd) with 48/64 inch choke. Oil gravity tested 37-degree API crude.
Conoco believes Sutu Vang's estimated gross future production to be between 100 and 400 mmbo, with 24 to 95 mmbo net to Conoco. Current well results are being further analyzed to refine the estimate of future potential.
The Sutu Vang discovery is approximately 4 miles southwest of Sutu Den (Black Lion), Block 15-1's original discovery made last year, and considered by industry sources to be one of the largest oil finds to date in Southeast Asia. Both discoveries produce from fractured basement. Conoco and its partners declared Sutu Den commercial in August, with estimated future gross production of at least 200 mmbo, and potential to exceed 400 mmbo. A third prospect in the block, Sutu Trang (White Lion), is scheduled to be drilled in 2002.
Conoco holds a 23.25-percent interest in Block 15-1, which is operated by the Cuu Long Joint Operating Company. Partners are PetroVietnam (50 percent), Korean National Oil Corporation (14.25 percent), SK Corp (9 percent) and Geopetrol (3.5 percent).
Offshore Indonesia in the South Natuna Sea Block B's Kerisi field, operator Conoco Indonesia Inc. Ltd., a wholly owned subsidiary of Conoco, announced a successful test of the Kerisi-3 well. The well flowed oil at a rate of 2,580 bpd and encountered 130 feet of oil bearing zones in multiple reservoirs. Results confirmed the existence of an oil leg, down dip from two successfully tested natural gas wells.
The Kerisi-3 well increases potential gross recoverable oil in the Kerisi field by 30 mmbo, to a total 42 mmbo, with approximately 10 mmbo net to Conoco. The field's estimated gross recoverable natural gas volume is 90 billion cubic feet (bcf), with approximately 32 bcf net to Conoco.
The Kerisi field is 15 miles north of Block B's Belanak field, which has gross recoverable reserves estimated at 530 bcf of natural gas and close to 100 million barrels of oil, condensate and LPG. The company expects to cost-effectively fast-track development of the Kerisi field and produce it through the Belanak infrastructure, currently under development.
Once completed, the Belanak infrastructure will be a central production, gathering and processing hub for at least six surrounding Block B fields, including Kerisi. Parallel development through shared facilities results in significant cost-efficiencies and faster field developments. Conoco estimates more than 1.4 trillion cubic feet (tcf) of natural gas and 150 million barrels of oil, condensate and LPG will be produced from satellite field developments through the Belanak floating production, storage and off-take (FPSO) unit.
The South Natuna Sea Block B is operated under a production sharing contract (PSC) with Pertamina, Indonesia's state oil company. Conoco is operator with a 40-percent working interest. Other interest holders in the block are Inpex (35 percent) and ChevronTexaco (25 percent).