Niko future Hazira drilling campaign after 3D seismic

Vol 12, PW 11 (16 Oct 08) Exploration & Production

Niko Resources is preparing a drilling campaign designed to boost oil and gas production following a 3D seismic survey at its declining Hazira gasfield, which it operates with GSPC.

“Next week the seismic company (Geokinetics) is coming over from Singapore to meet our Hazira team,â€‌ reports a source. “All the equipment for the seismic shoot is being assembled in Singapore.

â€‌ Niko confirms that the three-month, 30-sq km â€کtransition’ seismic shoot costing $6m across onland and offshore portions of the 50-sq km field area is on schedule to begin in January next year and likely to last until March. “Interpretation should be completed by July,â€‌ adds a source.

“By then all the new drilling locations will be firmed up.â€‌ Sometime post-monsoon in 2009, most likely in October, Niko will begin a drilling campaign of (an undetermined number) of exploration and development wells to exploit new leads thrown up by the fresh seismic.

“Our goal is to maintain production at present levels or increase it,â€‌ we hear. “If we could stem the decline we’d be very happy.

But if we could increase production we’d be ecstatic!â€‌ So too would Niko’s three customers for Hazira gas: Adani Energy, GSPC and a nearby power plant operated by the Gujarat Electricity Board, which consumes around 80% of Hazira gas output. In the past four years these three companies have witnessed a sharp decline in production from highs of 4.2m cm/d and 4.4m cm/d in 2004, 2005 and 2006 to around 1.5m cm/d today, produced from around 20 wells spread across three groups: onland wells; from a land based development platform (LBDP); and from its offshore based development platform (OBDP).

In January Niko secured operating committee approval to workover three gas wells, which have helped maintain production levels. Two years ago in March 2006, Niko began producing oil from wells OS-7, OS-8 and OS-9.

But oil production is in decline with just one well producing around 500 b/d; another is used as a water injector while one has been abandoned.