Niko announces good oil potential at KG-DWN-98/3

Vol 9, PW 22 (23 Feb 06) Exploration & Production

Niko Resources of Canada has confirmed what we first reported several months ago: Reliance-operated block KG-DWN-98/3 (otherwise known as D6) could contain sizeable quantities of oil, not just gas.

In an operational update on 14th February, Niko, which holds 10% of D6, says: Reliance has indicated to Niko that hydrocarbons have been found at (exploration well) MA-1 in the Cretaceous section, which could open a significant new play in the D6 block, including an oil bearing zone in particular, which could have a material impact on the future exploration potential of the D6 Block. Adds Niko: MA-1 is the first well drilled in the D6 block where the older rocks of the Cretaceous section are the primary targets.

The Cretaceous section has the potential for both oil and gas. Drilling, mud logging, wire-line logging and testing have yielded encouraging results.

Niko says Gaffney Cline & Associates will carry out an estimation of hydrocarbon in place volumes within the Cretaceous sequences based on results obtained from the drilling and testing of well MA-1. Niko describes MA-1 as the sixteenth consecutive successful exploration well drilled in D6 and the first Cretaceous discovery.

More will be known, says Niko, when two deepwater rigs reach the block in September and November to drill new targets and results come in from fresh seismic. Continues Niko: A 2550-sq km 3D seismic programme is scheduled in the fourth quarter of 2006 in the area to the south of the existing 3D seismic area.

Niko also announces good news from two development wells on the block: A-10A and B-7. Preliminary results reveal there is more hydrocarbons than previously estimated using log analysis, writes Niko.

Based on these results the production facilities are being redesigned to initially accommodate 2.8bn cf/d (80m cm/d) and ramping up to 4.2bn cf/d (120m cm/d). This is double original planned capacity and indicates the new view of the reserve and production potential of the gasfield.

Good news indeed!

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