Essar to drill two exploration wells at Myanmar block

Vol 11, PW 5 (12 Jul 07) Exploration & Production

Essar Oil is drawing up plans to drill two exploration wells at onshore Myanmar block L in the Sitwe Basin.

Under its contract with Myanmar authorities, Essar is obliged to drill only one exploration well, but has chosen to drill two. “We will drill two because the block is very promising,â€‌ a senior Essar executive tells us.

Essar’s confidence is based on hard evidence of significant “oil seepagesâ€‌ on the block. When collected, these tested a light 48-degrees API.

Essar is excited by the fact that the oil is rising up from just 30 metres below surface. By July 15th, Essar will decide whether to use an imported Chinese drilling rig or one of its own three â€کNational 1320’ 2000-hp rigs, which are being refurbished at the Jebel Ali tax free industrial zone in Dubai.

“If we don’t get a rig from the market by July 15th we’ll use our own rig,â€‌ he adds. Essar is hiring contractors for logging, cementing, and other services and also buying the casings and wellheads needed to drill at the 10,000-sq km block L.

Essar completed acquisition of 600-sq km 3D and 400-km 2D seismic at block L in May this year. “Data is being interpreted in China and the results should be available by the end of August,â€‌ we hear.

Work is also proceeding at Essar’s 2000-sq km offshore block A2, which lies adjacent to block L, in 50 metres water depth. PGS completed acquisition of 700-sq km 3D at A2 in March and is processing and interpreting the data in Singapore.

“We are looking for a 250-feet jack-up to drill one commitment well,â€‌ says Essar. Two prospects have been identified but drilling will begin only after a second opinion from the Singapore office of Gaffney Cline & Associates.

“We have time till February 2008 to begin drilling,â€‌ says Essar. “This block lies between A1 and A3, both with gas discoveries.

â€‌ OVL and GAIL together hold 30% of A1 and A3.