Offshore Week

PanCanadian Petroleum Ltd., Canada's No. 2 oil company, could soon be on track to develop an East Coast offshore gas project to rival the huge Sable Island project, its chief executive said.

PanCanadian, the oil and gas arm of conglomerate Canadian Pacific Ltd., plans to drill two appraisal wells this year near its recent Deep Panuke gas discoveries, made at the site of the exhausted Copan oil project off Nova Scotia.

The wells will give the company the geological data it needs to decide whether to pursue more drilling or full development, PanCanadian CEO David Tuer said. Two recent wells drilled into the gas formation beneath the old oil reservoir tested at more than 50 million cubic feet a day each.

"This discovery is potentially the most significant discovery in PanCanadian's history - but I emphasize potentially," Tuer said in a presentation to reporters at PanCanadian's Calgary headquarters.

He declined to venture a guess at the size of the reserves, but the company has run the numbers on a project to develop, for example, a one-trillion-cubic-foot prospect producing 400 million cubic feet of gas a day, which would be shipped to the high-demand U.S. northeast.

That is on par with the $1.4-billion Sable Offshore Energy Project, which began pumping gas at the end of last year. Sable is owned by a consortium that includes such major oil companies as Shell Canada Ltd., Exxon Mobil Corp. and Imperial Oil Ltd.

Using the scenario, PanCanadian expects it would spend $444.5 million on the project, bringing it to production by the third quarter of 2003. The prospect is located on the Scotia Shelf, 155 miles (250 km) southeast of Halifax.

Tuer said PanCanadian was examining options for a pipeline to transport gas if the development goes ahead, including building its own or using the new Maritimes & Northeast pipeline, which moves Sable gas to New England via Nova Scotia and New Brunswick.

PanCanadian chief financial officer Mackenzie Kwan said the capacity of the Maritimes & Northeast line could be expanded by adding new compression power.

Meanwhile, PanCanadian, which is also active in Western Canada, the North Sea, the Gulf of Mexico and Libya, was projected to post record profits this year of $279 million, up from $242 million, Tuer said.

Iran Reports An Offshore Drilling Increase of 21%

Iran recently reported its offshore oil production had reached 190 million barrels in the year to March, a 21 percent increase over the previous year.

Abolqassem Hassani, director of Iranian Offshore Oil Company (IOOC), said his company was aiming at an annual production capacity of 1.1 million by 2005. He said IOOC was moving fast to develop oil fields which Iran shares with other countries across the Gulf, including Salman, partly owned by Abu Dhabi, in the United Arab Emirates.

Salman's output capacity reached 90,000 barrels a day in the Iranian year which ended on March 19, from 80,000 barrels a day the year before, the official said. He said total crude production in Salman and two other shared fields - Nosrat and Foroozan - had stood at 47 million barrels last year. Exploration is underway in other offshore fields, including Esfandyar, he added.

Hassani said his company had signed two major deals last year, including one with Royal Dutch/Shell for $1.45 billion.

Iran signed an $800 million deal with Shell last November to develop two Gulf offshore oil fields - Soroush and Nowruz - on a buy-back basis.

Iranian Oil Minister Bijan Zanganeh said later that Shell would earn a total of $1.455 billion from the deal within a ten-year period after the two fields start pumping oil.

Hassani said the other deal had been signed with an Iranian company for $185 million.

He said about 4.5 billion barrels of crude had so far been extracted from an estimated total offshore reserves of 20 billion barrels.

Iran said last month it was preparing to sign deals to develop six offshore gas fields it shares with other countries across the Gulf.

Deputy Oil Minister Mehdi Hosseini said the projects included the next five stages of Iran's massive South Pars gas field, which Iran shares with Qatar, as well as the Salman, Farzam, Esfandiar and Foroozan fields. - (Reuters)

Aker Wins Preset Mooring Contract

Aker Marine Contractors (AMC) and Chevron Overseas Petroleum Azerbaijan Limited (COPAL) have agreed to provide a preset mooring system to support COPAL's drilling program off Azerbaijan in the Caspian Sea. AMC's contract encompasses the transportation of the preset mooring system to Baku in Azerbaijan, the lease of the system for two years, and storage and installation.

AMC designed the mooring system to be used in conjunction with either the Istigal or Dada Gorgud - the only two semisubmersibles in the Caspian Sea - to extend their mooring capabilities to a water depth of 2,460 ft. (750 m).

Schlumberger Awarded Seismic Data Duo

Schlumberger Oilfield Services received two multi-million dollar contracts from BHP Petroleum for seismic data processing services. BHP selected Schlumberger based on the company's differentiating capabilities in depth imaging provided by Seismos, Schlumberger's seismic data processing software.

Assisting in the evaluation process are Schlumberger geophysicists. Present at BHP's office, the geophysicists are directly linked to the Schlumberger Megacenter Data Processing facility in Houston.

Since its development in 1994, following more than 400 man-years in the development of the system, the Seismos software is currently deployed in 19 Schlumberger onshore data processing centers, and 30 onshore and offshore crews with more than 600 worldwide users.

Chevron To Invest $45M In China

Chevron plans to invest $45 million in China this year, company officials said. The money would be spent on offshore exploration and development, said Wes Lohec, managing director of Chevron Overseas Petroleum Inc.'s Asia Business Unit.

Chevron has cooperated with Agip SpA, Texaco Inc. and the China National Offshore Oil Corp. (CNOOC) in the Huizhou oilfield of the South China Sea, officials said. The crude output of the four major fields in Huizhou is 120,000 bpd.

FGH Teams For Brazil Deepwater Projects

Friede Goldman Halter, Inc.'s Friede Goldman Offshore division has signed a memorandum of understanding with Brazilian shipyard Estaleiro Ilha S.A. (EISA) of Rio de Janeiro. Under the memorandum, Friede Goldman Offshore and EISA intend to form a joint venture that will actively pursue offshore energy projects in Brazil and other parts of the world with Friede Goldman Offshore serving as prime contractor and EISA providing fabrication services.

EISA has long been known as Brazil's leading shipyard, with the capabilities of building any size vessel or offshore structure. Friede Goldman Offshore is North America's leading builder of semisubmersibles, with six deepwater drilling rigs either delivered or under construction.