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The arrival of the experienced US deepwater oil explorer Anadarko Petroleum is likely to mark a major turning point in oil exploration in this country, writes Lindsay Clark.
The big attraction for the two companies is the very large Carrack and Caravel twin prospects about 50 kilomtres due east of Dunedin in about one kilometre deep water on the edge of the continental shelf. The first well is likely to be drilled in 2011. The Carrack/Caravel prospect is a robust structural closure with twin crests that covers an area of some 390 square kilometres – over twice the geographical size of the Maui gas field. Origin says the prospect could potentially hold recoverable resources in excess of 500 million barrels of oil equivalent. Origin earlier estimated the structures could contain about 750 million barrels of recoverable oil if oil charged, or 2.7 trillion cubic feet of recoverable gas and 500 million barrels of condensate if gas charged. These volumes could be doubled if hydrocarbons were trapped in the lower Kawau sandstones. The significant feature of this offshore Otago prospect is that it will be the first deepwater well drilled here into a genuinely large target. And with thousands of square miles of prospective offshore petroleum basins, New Zealand is likely to have other big petroleum targets around its large coastline – such as in the Great South Basin and deepwater Taranaki. The exploration here comes at a time when deepwater oil exploration is growing around the world. Oil production from reserves in waters deeper than 350 metres accounted for about eight percent of global oil output in 2008. With two thirds of the 700 deep discoveries still in the process of development, world deepwater production is likely to grow. While major multinational oil companies are involved in deepwater exploration, Brazil’s state-run oil and gas company Petrobras has become a world leader in discovering massive volumes of oil in ultra deep water. Houston-based Anadarko is the largest independent deepwater producer in the Gulf of Mexico off the US coast. It has levered the experience and know-how developed in the Gulf to explore around the world - off Brazil, West Africa, East Africa, South East Asia and now New Zealand. In 2009 Anadarko announced nine significant deepwater discoveries and achieved a remarkably high 50 percent success rate in wells drilled in its global deepwater exploration programme. This year Anadarko plans 30 deepwater exploration and appraisal wells. It has negotiated a number of long term deepwater drilling rig contracts – a key factor when it comes to finding a rig to drill in New Zealand. The large and expensive rigs are in short supply. The prospects have to be big in deep waters to make exploration economic. Each well costs around $US100 million each throw of the drilling dice. The thorough preparation Anadarko does before considering drilling a prospect is shown by the Houston company carrying out a specialist processing of the 3D seismic survey over the Carrack/Caravel complex last year before signing up to a partnership with Origin. Anadarko obviously liked what it saw, not only agreeing to a 50 percent stake with Origin in the PEP 38262 Canterbury Basin permit, but also agreeing to fund the first US$30 million of joint venture costs of drilling an exploration well. Costs will then be met 50-50 by Anadarko and Origin. Still, Anadarko would have been unlikely to come here without the thorough groundwork put in Origin Energy through its geoscience team. Even though Origin itself has no experience of deepwater exploration it took a calculated gamble of carrying out thorough research over the whole Canterbury Basin as well as the original permit. Origin is better known as the majority owner of Contact Energy and as the operator of the new Kupe gas field than for exploration. However, later this year it plans two wells into gas prospects off the coast of Auckland. In the course of Origin’s extensive 2D seismic surveys over the large PEP 38262 permit and more intensive 3D seismic surveys over Carrack/Caravel, Origin made a major new discovery that sharply upgraded hydrocarbon prospects in parts of the basin. Origin discovered to the east of Carrack/Caravel some new oil ‘kitchens’ containing thick sequences of what appear to be coal measures units from the mid-Cretaceous. This an older and apparently more prolific hydrocarbon source than the previously known Late Cretaceous sources which appear to have only partly charged the Galleon-1 structure nearby where gas and condensate was discovered in the 1980s. Analysis showed that very large amounts of hydrocarbons over millions of years would have been released into the northern smaller Caravel structure. These appear to then have spilled over into the slightly higher but larger Carrack structure. The reservoir sands over both structures appear very similar to the good sands found at Galleon-1. Having a good structure is one thing. Having it adequately charged with enough hydrocarbons is another. But Origin’s research was backed up by applying seismic amplitude techniques which can reflect from hydrocarbon charged rocks. These anomalies substantially coincide with the shape of both the Carrack and Caravel structures giving as good an indication as possible that oil or gas exist in the structures. “Origin has been excited by the petroleum potential of the frontier Canterbury Basin,” says the head of the Origin exploration team, Rob Willink. “Particularly the extension of this basin into deep water, since first commencing evaluation studies in the area in 2005.” Willink says Origin is fortunate to have been joined by a company such as Anadarko with a proven capability of operating in challenging deep water environments. However, no matter how good the prospect looks it will still come down to what is found at the end of the drillbit.
Energy NZ Vol.4 No.3 May-June 2010 |
The combination of the top-performing US explorer with one of Australia’s best performing energy companies Origin Energy, who together will tackle our most promising petroleum prospect in decades, apears to be a match made in heaven – or in this case, deep under water.