Horizon Oil - Oil and Gas Exploration Production
Activities Operations
China
Block 22/12 - Beibu Gulf (30.00%)*
Background:
The Petroleum Contract for Block 22/12 was awarded to Bligh Oil and Minerals (later Horizon Oil Limited) in 2001 for an initial 4 years and has been extended twice so far to a total of 8 years. Roc Oil farmed into the Block in 2002 to drill the Wei 6-12-1 well and also undertook operatorship.
Block 22/12 is a 364 sq km permit located in the Beibu Gulf offshore China in approximately 40 metres of water. The block is located near several known oil fields, with the nearest productive field being Wei 12-1, located 1,800 meters from the Block 22/12 boundary. Several discoveries have been made in the block; Wei 12-8-1 and Wei 12-3-1 by Total in the 1980’’s, Wei 12-8-2 and Wei 12-2-2 by CNOOC in the 1990’s and Wei 12-8-1 and Wei 6-12 South-1 in 2002 and 2006 respectively by the current joint venture. None of these fields have been developed. The block contains 58 mmbbls of oil in the Wei 6-12 and Wei 12-8 areas, with around 8 mmbbls in resources contingent on successful appraisal of the Wei 12-2 discovery.
Following the discoveries at Wei 6-12 and more significantly, Wei 6-12 South in 2006, Horizon Oil and its co-venturers commenced formulating appropriate development concepts in consultation with the China National Offshore Oil Corporation (‘CNOOC’). This process has culminated so far in the approval by CNOOC of the field reserves report, and completion of various metocean and environmental impact studies.
* Pre-CNOOC back-in:-
HZN 30%
ROC 40% (Operator)
Petsce 25%
Majuko Corp 5%
* Post-CNOOC backin:-
HZN 14.7%
CNOOC 51%
ROC 19.6% (Operator)
Petsce 12.3%
Majuko Corp 2.4%
Current activities:
The technical section of the Overall Development Plan (ODP) for the
Wei 6-12 and 12-8W combined development was completed as
scheduled on 20 December 2009. Importantly, this embodies the
agreement reached between the China National Offshore Oil Corporation
(CNOOC) and the Block 22/12 joint venturers to adopt the integrated
development concept utilising an auxiliary platform (PUQB) to the existing
CNOOC platforms (see schematic below). This should provide
advantages in reduced risk, cost and accelerated timing to first production.
First oil is anticipated in H1 2012.
A number of development studies were undertaken during the quarter.
These included pipeline route surveys, autumn environmental survey,
major hazard evaluation, navigation safety, marine pollutants forecast and
occupational hazards evaluation.
Commercial negotiations with CNOOC regarding the shared used of
existing processing facilities, pipeline, storage and shiploading facilities are
in the final stages, with the majority of commercial terms agreed.
Completion of the economic section of the ODP, incorporating these
commercial arrangements, is expected in Q1 2010, to be followed by
formal Chinese Government approvals and Financial Investment Decision.
* CNOOC has a back in entitlement of up to 51% total equity in the field development.