MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, JANUARY 22, 1998 (6)
INTERNATIONAL
COMPANIES IN THE NEWS
PACALTA RESOURCES LTD. announced that new apportionment rates have been set for deliveries into the SOTE/OTA pipeline system. Effective January 21, 1998, City Investing (100% subsidiary) has been granted an increase of approximately 45% in its apportioned allowable to 19,553 BOPD. Due to ongoing capacity restrictions on the SOTE system and a recent Ministerial Decree which reserves an allocation of 300,000 BOPD for PetroProduccion (the operating arm of the state oil company, PetroEcuador) all other producers in Ecuador experienced a decline, of between 8% and 41% in production levels. These apportioned production volumes do not include any production from the Dorine, Anne and Aleluya discoveries which, to date, have not been assigned production allowables.
During the fourth quarter of 1997, City Investing drilled two new field exploration discoveries. The first, Aleluya 1, encountered 20 degree API oil in the middle U zone and tested at 500 BOPD. The second discovery, Anne 1, tested at rates of up to 1,000 BOPD of 24 degree API oil from the M-I zone. As a result of prematurely high water-cuts, the current plan is to develop the Anne discovery with a horizontal re-entry well. City Investing has now completed the drilling of the remaining development wells on the Fanny 6 pad, as well as drilled an additional two development wells on the new Dorine discovery. The two most recent delineation wells on the Dorine discovery have confirmed the significant areal extent of the pool and have increased the Company's estimate of total sand thickness
To date on the City Block, the Company has drilled a total of 19 wells including one water injector well. Of the 18 wells, all have encountered oil, and three new field discoveries have been made. Pacalta is currently in the process of updating its
independent reserve report for the City Block to include the recent delineation of the Fanny and Mariann pools, as well as the new discoveries at Dorine, Aleluya, and Anne.
MANTAUR PETROLEUM CORPORATION expects that its East Brighton offshore well, Gulf of Paria, Trinidad will be drilled in July, 1998. Enron Gas & Oil Trinidad Limited has agreed to farm-in to Mantaur's 70% interest in the East Brighton project which is held through Mantaur's wholly owned Eastern Petroleum subsidiary. Enron will drill the initial exploratory well at its sole cost to earn a 50% interest. The Cliffs Drilling jackup Rig 202 will move to Trinidad on June 8 to begin a one year contract to Enron in the region and the East Brighton test is presently scheduled as the first well in the contract.
The East Brighton block is directly offsetting the Brighton Marine oil field which has produced 73 million barrels of 30 degrees to 36 degrees API oil from the Nariva formation. The main objective of the Enron/Mantaur well is the 100 to 600 feet thick blanket sandstone formation at the base of the Nariva.
A new 3D seismic survey over the western one third of the 82 square kilometer East Brighton offshore block has defined the drilling target. The well is expected to encounter the Nariva oil sands at approximately 3500 feet subsea depth.
Enron has contracted to earn 50% of the East Brighton property by drilling the initial well. Petrotrin, the Trinidadian State oil company holds a 30% interest which is carried through the exploratory phase. In the development phase Mantaur/Eastern will have a 20% participating interest.
COUNTRIES IN THE NEWS
CASPIAN SEA
A visit to Tokyo by Azeri President Haydar Aliyev in February could lock up a key agreement for four Japanese firms aiming to tap the rich oil reserves of the Caspian Sea, company sources said on Friday.
Aliyev, who last August came away from a visit to the United States with $10 billion worth of new oil deals for the fledgling ex-Soviet republic, plans to visit Tokyo for top level meetings from February 24 to 27, Japan's Foreign Ministry said.
The Azeri president's visit will be preceded next week by an entourage including Azerbaijan's Prime Minister Artur Rasizade, who will be in Tokyo for The World Bank Consultative Group Meeting for Azerbaijan as well as talks with Japanese oil company executives.
Last March, a Japanese oil consortium signed a memorandum of understanding with the State Oil Co of the Azerbaijan Republic (SOCAR) to carry out exploration in the Yanan-Tava, Atashgah and Mugandeniz fields in the south Caspian Sea, about 120 kilometers southwest of Baku.
The consortium, comprised of Itochu Oil Exploration Co Ltd, Indonesia Petroleum Ltd (INPEX), Japan Petroleum Exploration Co Ltd (JAPEX) and Teikoku Oil Co Ltd, hopes to ink a production sharing agreement with Aliyev during his February visit to Tokyo, a Teikoku Oil spokesman told Reuters on Friday.
The agreement would represent the first time for an all-Japanese consortium to explore for oil in the Caspian Sea.
State-run Japan National Oil Corporation (JNOC) has been acting as a facilitator in the talks.
The fields, occupying a zone about 500 square kilometers in size and about 30 to 40 kilometers offshore, are thought to possess some 650 million barrels of oil. Water depths in the area are 100 to 120 meters.
Azerbaijan's offshore oilfields are among the new crown jewels of the global oil industry.
Senior SOCAR officials estimate overall Azeri reserves at about two billion tonnes of crude, in addition to seven trillion cubic metres of natural gas.
As a member of the Azerbaijan International Operating Consortium (AIOC), Itochu Oil Exploration Corp already has a 3.92 percent stake in a key Caspian project.
AIOC, which also includes British Petroleum, SOCAR, Amoco Corp [NYSE:AN], Unocal Corp [NYSE:UCL], Exxon Corp [NYSE:XOL], Ramco Energy Plc, Saudi Arabia's Delta Nimir, Turkish Petroleum Corp and Russia's LUKoil, signed in 1994 what was hailed as the ''contract of the century.''
The three AIOC fields are thought to contain at least 650 million tonnes (five billion barrels) of recoverable reserves.
The fields, expected to reach output of 700,000 to 800,000 barrels per day (bpd) by 2007-10, pumped their first oil last November 7.
Last August, during a trip which included talks with the U.S. Clinton administration, Azerbaijan's Aliyev signed oil deals with U.S. oil producers Exxon Corp, Mobil Corp [NYSE:MOB] and Chevron Corp [NYSE:CHV] said to be worth $10 billion.
Aliyev, who ruled Azerbaijan for Moscow during the Soviet era and was a Soviet Politburo member under Leonid Brezhnev, has maintained that Azerbaijan's economic future rests squarely on the development of its oil sector in the 21st century.
Deals already signed between Azerbaijan and world oil majors to tap nine areas in the republic's sector of the Caspian are worth $30 billion.
SERVICE SECTOR COMPANIES IN THE NEWS
REQUEST SEISMIC SURVEYS LTD. and Strata Web Systems Ltd. announced the launch of an Internet-based seismic data quality inspection system. The system brings together Strata Web's advanced Web based mapping technology with Request's proprietary, managed and public coverage seismic databases. Management of Request believes that the launch of the Internet based seismic data quality inspection system will allow it to better serve its customers, by providing them with easier access to its seismic data bases.
CIRCA ENTERPRISES announced today that it is negotiating a disposition of its Tri-Ener-Tech Petroleum Services Ltd. subsidiary to a United States based organization. Completion of the disposition transaction is subject to the execution and delivery of the definitive purchase and sale agreement.
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