Lukoil # 9 (October 2017)

23 September 2017 a Special Chamber of the International Tribunal for the Law of the Sea (ITLOS) has determined the maritime boundary between Ghana and Côte d’Ivoire, adopting the boundary line claimed by Ghana and rejecting that proposed by Côte d’Ivoire. Over 9,000 square nautical miles of sea and seabed were disputed. All were awarded to Ghana. These include the oil Ghana won the border dispute and gas fields known as TEN (Tweneboa, Enyenra and Ntomme) which are estimated to hold 2 billion barrels of oil and 1.2 trillion cubic feet of natural gas. LUKOIL and Hess are working on the Ghana Tano offshore block which has its western boundary on the border with Cote d’Ivoire. As future plans are being evaluated, it is helpful to have resolution on the boundary dispute. On September 25, representatives of Mexico’s National Hydrocarbons Commission signed 10 exploration and production contracts for the Tempico Misantla (Block 2) and Cuencas del Sureste (Blocks 6-12, 14 and 15) Basins. 9DJLW $OHNSHURY /8.2,/ 3UHVLGHQW ?/8.2,/ plans to create a joint YHQWXUH ZLWK (1, IRU ZRUN LQ WKH *XOI RI 0H[LFR 7KH\ ZLOO OLNHO\ MRLQ RXU EORFN DQG ZH ZLOO MRLQ WKHLUV :H KDYH UHDFKHG D SUHOLPLQDU\ DJUHHPHQW RQ WKLV ? MEXICO SIGNS 10 NEW CONTRACTS T he contracts span 30 years with the possibility of a five year extension. The companies involved have 180 days to present exploration plans for their respective blocks. The total hydrocarbon potential of all of the territories combined consists of 2.42 billion barrels of oil equivalent. Mexico's Minister of Energy Pedro Joaquín Coldwell said that his country planned to attract $8 billion in investments through the deals and increase its daily hydrocarbon production by 170 thousand barrels of oil equivalent. Pedro Joaquín Coldwell, Mexican Ene r g y Mi n i s t e r : “ [Me x i c o’s] government will continue toreform is energy sector as long as President Enrique Peña Nieto is in power.” (In Mexico, the President is elected for a six year termwithout the possibility of reelection. The next presidential elections are scheduled for July 2018, and the new President will assume office on December 1, 2018.) Î n September 25, 2017, LUKOIL was being awarded the contract for the Block 12 in the Sureste Basin offshore Campeche, one ofMexico’s regions, with state participation in profits of 75% and a one well commitment. LUKOIL won Block 12 early this summer, when Mexico’s National Hydrocarbons Commission (CNH) held its second shallow water licensing round for 15 offshore blocks located in that country’s portion of the Gulf of Mexico. IOCs had demonstrated considerable interest in the opportunities therein after recent discoveries by ENI on the Amoca Block. The successful bid marked months of tireless efforts Houston-based LUKOIL from the seismic data generally referred to as “Sweetness.” Subsequent wells drilled in these areas indicated that the “Sweetness” attribute had successfully identified the presence of reservoir sands. Using the “Sweetness” attribute, we were able to identify potential reservoirs in the Pliocene andUpperMiocene geological time periods over some of the structures in Block 12.” Teamwork LIUW’s geoscientists continued to refine this concept and produced a series of structure maps to better define the extent of prospective reservoirs. Senior Reserves Geologist Nikolai Raevski used a Monte Carlo model, familiar to any math scholar, to capture the distribution of potential oil resources that could be trapped in Block 12’s 12BWest and East sections. This was used to create so-called Productivity Indices (PIs) for all reservoirs identified on the maps. Senior Reservoir Engineer Charlene Chuang and Development Engineer Dmitry Krivobokov, used the PIs to build production profiles and the number of wells required for each reservoir. Complete development designs, well designs and cost analysis were developed as inputs for the final economic calculations, in collaboration with LIUW’s Drilling and Development teams. Those were completed by Development Drilling Engineer Andrey Zdvizhkov, and Principal Facilities Engineer Michael Brannan, who provided drilling estimates and facilities costs and design, respectively. Geoffrey Slater - Director for Business Development in Western Hemisphere, LIUW Dmitry Krivobokov - Development Engineer, LIUW Michael Brannan - Principal Facilities Engineer, LIUW *HRIIUH\ Slater: “This VXFFHVV WR ZLQ %ORFN FDPH DV WKH UHVXOW RI SURIHVVLRQDO H[SHULHQFH ORQJ KRXUV RI GHGLFDWHGZRUN DQG WHDPFROODERUDWLRQ 7KH XOWLPDWH WHVW KRZHYHU ZLOO FRPH ZLWK WKH GULOOLQJ RI /8.2,/?V ILUVW H[SORUDWRU\ ZHOO RIIVKRUH 0H[LFR LQ :H ZLOO WKHQ ILQG RXW LI RXU JHRORJLFDO GHWHFWLYH ZRUN ZDV DFFXUDWH 7KH UHFHQW GLVFRYHU\ E\ 7DORV VRXWK ZHVW RI %ORFN LQ D VLPLODU WUDS LV HYLGHQFH WKDW ZH DUH ORRNLQJ LQ WKH ULJKW SODFH :H ZDQW WR EULQJ D JUHDW VXFFHVV WR /8.2,/? LUKOIL WINS A SPOT OFFSHORE MEXICO International Upstream West (LIUW) “geolog y detec t ives ,” who ana ly z ed geological, geophysical and engineering data purchased from the CNH as a part their entry qualification, to form an idea of what mysteries lie hidden below the ocean surface. This is their story. Why Block 12? Members of Business development team of LIUWhave extensive experience in oil and gas exploration in the US portion of the Gulf of Mexico. It helps that the newly opened basins inMexico’s section of the Gulf, fromPerdido to Campeche, share the same petroleum system as up north. Based on the experts’ experience, Block 12 in the Sureste basin stood out as having the same prospects as discoveries made 40 years ago in the shallowwaters of Texas and Louisiana. Block 12 is 521 sq. km. and has a water depth of between 100 and 500 meters. LUKOIL’s geologists had the advantage of a reliable 3D seismic dataset due to the fact that the Block has no overlying salt, meaning the area was easier to map and also an easier target for exploration drilling. By the time LUKOIL won the bid, state- owned Pemex had already drilled two exploratory wells in search of deep carbonate reservoirs from the Cretaceous Period. By helping scientists peer back into the time of the dinosaurs, both wells had confirmed that source rock existed in the Block and that oil and gas had migrated into the overlying Tertiary sandstone deposits of the later Pliocene and Miocene ages. Pemex had identified a layer of sand from the Pliocene period and determined it to be oil bearing. This evidence, combined with structural similarities to similar reservoirs discovered offshore the US decades earlier, convinced the Houston team that Block 12 was where they should search for oil. But this was only the beginning. The Sweetness Cube LIUW’s geoscientists understood that the risk of not finding sufficient quantity of sand reservoirs was high. Senior Geophysicist Ron Barrow created a 3D seismic model that enhanced seismic amplitudes to help better understand sand deposition in the area. “We recognized there were several closures in Block 12 with good potential. The weak point in the analysis, as we started refining our work, was demonstrating the potential of reservoir quality sands within these structures,” said Barrow. “In previous areas I had worked, we had generated an attribute *HRIIUH\ 6ODWHU 'PLWU\ .ULYRERNRY 0LFKDHO %UDQQDQ +RXVWRQ 5 Business