Prize Petroleum preparing rig tender for Cluster 7

Vol 10, PW 21 (22 Feb 07) Exploration & Production

Hindustan Petroleum affiliate Prize Petroleum and its Malaysian partner M3nergy are preparing to issue a rig tender for the Cluster 7 set of three marginal fields offshore Mumbai.

“We have several options before us,â€‌ says a consortium source. “One of these is a land drilling rig mounted on a platform and supported by a barge.

â€‌ Prize expects to release the tender before the 2007 monsoon sets in, sometime mid-May. Two weeks ago the consortium received an independent study on the reserves estimate and development plan from UK-based consultant TRAC International.

“We will now discuss the development plan with ONGC and then tender for a FEED study.â€‌ TRAC’s study is generally in line with consortium estimates made during bidding.

Prize and M3nergy assumed a 22% crude oil recovery factor but TRAC assumes a 16% recovery factor. “Consultants are generally more conservative than operators,â€‌ we hear.

“They have agreed about 70% or 80% with our estimates. This is quite normal in our business.

â€‌ Prize and M3nergy estimated that Cluster 7 holds between 130m and 150m in-place oil of which between 35m and 40m is recoverable through primary recovery methods. TRAC estimates that recoverable oil is about 28m barrels, given an 18% recovery factor using primary methods.

“Our initial estimate was based on eight days studying ONGC data,â€‌ we hear. “There’s hardly any difference between our oil in place figures and what they’ve agreed.

The difference is in the recovery rates.â€‌ Prize estimates Cluster 7 holds 23bn cubic feet recoverable gas.

“We would like to increase the oil recovery factor to between 35% and 40%. This is the target for limestone reservoirs like Cluster 7.

â€‌ Prize and M3nergy will soon receive their now-modified reserves figures and development plan, validated by a third party agency such as DeGolyer & McNaughton or Gaffney Cline & Associates.