BHP Billiton and its partners have lost millions of US dollars due to an almost two-week delay in drilling an exploration well in their Block 2(c) off the east coast. The Business Guardian has learnt that the consortium has been negatively impacted by bad ocean currents that have not allowed the rig to be jacked up in the spot it needs to be in order to drill the well. A well-placed company source said: "It is frustrating to everyone because the cost of renting a rig is tremendous. It has delayed our drilling programme and its timeline and the cost to us is not just the rig, but the boat and all the ancillary services. So it is running us into millions of US dollars at a time when the seas are usually calm around T&T."
BHP Billiton (45 per cent, operator) and its partners Total (30 per cent) and Chaoyang (25 per cent) want to drill a well, Canteen North 1, which is situated eight kilometres north off its Canteen oil discovery, which forms part of its greater Angostura discovery. The well comes mere months after the company started producing natural gas from its facilities and as it tries desperately to keep its oil business going amidst low production.
BHP Billiton and its partners operate the Angostura field in Block 2(c) 24 miles east of Trinidad near Toco. Oil and gas resources were discovered within a large faulted structure known as the Greater Angostura structure. Angostura-1, drilled in 1999, was the discovery well for the field, intersecting some 950 feet (gross) of gas pay within Early Oligocene sands. Gross recoverable oil reserves are estimated at 90 to 300 million barrels of oil in place, with recoverable reserves of up to 160 million barrels in place.
The range of gross recoverable gas volumes is 1 and 2.3 trillion cubic feet, with a mid-case recoverable volume of 1.75 trillion cubic feet, with the mid-case resource estimated at 450 million barrels of oil equivalent. Since BHP and its partners started production from Angostura, its crude production has fallen from 60,000 barrels of oil per day to around 13,000 barrels of oil per day. BHP has been plagued by the extent of faulting in the Angostura discovery, which has made it difficult to produce because the oil is captured in small faults and an extensive amount of wells will have to be drilled to maximise its production. The consortium has designated the well a tight hole because there are a couple open blocks close to Block 2(c) and would only say that "it has brought the Vigilant rig into the country to conduct drilling operations on our offshore acreage."
Company sources said that the well is expected to encounter oil rather than gas.
The Business Guardian has learnt that the intended structure is relatively small and a best case scenario suggest that a discovery will only add a few million barrels of reserves, but could add an additional 4,000 bo/d to BHP's production. With crude prices well above US$90 a barrel, the partners feel they can make money from any discovery. In addition, if a discovery is made, there will not be need for the company to spend any money to put in additional facilities as the plan is to produce any discovery from its canteen platform by drilling deviated wells. The present well is to be drilled to a depth of just over 5,000 feet and is also slightly deviated. The partners say the decision to drill an exploration well had to do with the strong oil prices and also because the company finally got its hands on improved seismic data, which it was able to reprocess and could now see clearly what it feels is an oil structure.
The Business Guardian was told that the consortium is convinced there is oil in the formation and not gas, because it found that as it moved from west to east in the block, the discoveries moved from natural gas to oil and condensate.
Energy reporter