Chinese state-controlled CNOOC Limited has elected to back-in for the maximum 51% of the Beibu Gulf project. Petsec holds 12.25% of the joint venture,
Manganese Powder Manufacturers, alongside fellow Australian juniors Roc Oil (19.6%), Horizon Oil (14.7%) and Oil Australia (2.45%).
The development plan for the fields was approved in January and the partners took a final investment decision in February. The planned development would comprise the drilling of 11 wells from two unmanned wellhead platforms at the fields, to be connected by pipelines to a new CNOOC processing platform.
The project will have access to 20,000 b/d of processing capacity,
manganese powder, from which crude oil will be transported through CNOOCs pipeline 32 km (20 miles) to a storage and export terminal on Weizhou Island. First oil production is expected in the fourth quarter of 2012.
Previously, Petsecs business plan was focused on exploration and production from small gas fields in the shallow waters of the Gulf of Mexico. But the model has become uneconomic in the wake of the global financial crisis,
magnesium powder, a halving of US natural gas prices and the impact of Hurricane Ike and the consequences of the Macondo oil spill, Fern told the meeting.
US gas prices have fallen from around $8/Mcf to less than $4/Mcf over the past two years due to the emergence of new supply from the development of the domestic shale gas industry.
We take the view that gas is unlikely to move much above the $4 to $5/Mcf price range within the next three years so we are directing our attention more to oil, Fern said.
At its conventional gas plays in the US, Petsec has relinquished all its exploration prospects with a target size of less than 20 Bcf of gas equivalent, reducing its lease inventory from 60 to 18. The companys remaining 10 prospects, which are rich in liquids and have mapped potential of between 400 Bcfe and 750 Bcfe, are scheduled to be tested over the next three years. Source: www.mhcmp.com
