Najwat Najem dilemma for ONGC Videsh in Qatar

Vol 11, PW 23 (03 Apr 08) Exploration & Production

Unconfirmed it might be but all the signs suggest ONGC Videsh wants to exit the shallow water Najwat Najem block in Qatar, where it is operator with 100%, and has completed its two-well commitment.

Efforts by this report for a confirmation from OVL proved fruitless. “No one will confirm or deny it,â€‌ reports a source.

“It is a very sensitive matter. OVL is yet to take a formal decision about relinquishing the block.

But I think they will opt out.â€‌ An industry observer adds: “There is no point spending money if there is nothing in the block.

â€‌ Another says: “I think OVL has spent close to $150m on Najwat Najem. All that money has gone to waste.

â€‌ OVL’s disappointment with Najwat Najem is reflected in its inability to decide whether to retain the Aban-VII jack-up, operated by Chennai-based Aban Offshore. “The contract between OVL and Aban was for two firm wells only,â€‌ we hear.

“Both wells have been drilled and completed.â€‌ OVL and Aban met several weeks ago to discuss a contract extension but talks were inconclusive.

“OVL is yet to get back to Aban,â€‌ we hear. “Only when OVL confirms its decision can Aban decide whether to send the rig to the yard for maintenance.

â€‌ Any decision by OVL to exit Najwat Najem would be acutely embarrassing. Sitting in water depths of 50 metres, the block is located in one of the most prolific petroleum systems in the Middle East.

When discovered in 1976, one of two wells flowed 2000 b/d of 29-degree API oil. On March 2, 2005, OVL signed an Appraisal, Development and Production Sharing Agreement with Qatar General Petroleum Corporation after winning the block against 12 others.

Since then results have been disappointing. OVL’s first well NN-3, spud on July 3 last year to TD of 1940 metres, was completed in November and showed oil and gas.

No flow rates were disclosed but we understand results “were not encouragingâ€‌. OVL’s second well NN-4 was spud on December 19 last year and drilled to TD of 2300 metres.

Completed on February 27 this year, gas was encountered, but again no flow rates were disclosed.

LNG Summit