Phillips plans extra well in Timor Gap oil field<\/p>\n
DARWIN, Australia (Bloomberg): Phillips Petroleum Co. said it
\nplans to drill an extra well to extend the life of the Elang-
\nKakatua oil fields in the Timor Sea after original estimates of
\nreserves fell by half to 15.7 million barrels.<\/p>\n
The extra well, to be drilled in mid-January, could extend the
\nlife of the field into 2001. Elang-Kakatua began producing in
\nJuly 1998, at a development cost of US$105 million.<\/p>\n
Phillips partners, including Petroz NL and Santos Ltd., plan
\nto re-enter one of the wells and drill a \"side-track\" well which
\ntests a section of reservoir that isn't connected to the
\nproducing areas.<\/p>\n
\"If this is successful, it will extend the life of the field
\nwell into 2001,'' said Jim Godlove, Phillips' area manager for
\nDarwin, the Northern Territory capital 500 kilometers southeast
\nof the offshore fields. Godlove said Elang-Kakatua will become
\nuneconomic by the end of next year if no more oil is found.<\/p>\n
Santos shares rose as much as 2 cents, or 0.5 percent, to
\nA$4.13. Petroz shares fell as much as 0.5 cents, or 1.6 percent,
\nto 31.5 Australian cents.<\/p>\n
Elang-Kakatua is the first oil development in the Zone of
\nCooperation in the Timor Gap between Australia and East Timor. A
\ntreaty that governs oil production in the coffin-shaped zone was
\nagreed 10 years ago between Australia and Indonesia. Now that
\nEast Timor is independent, the new country will become
\nAustralia's partner.<\/p>\n
As recently as February, Petroz was saying the proven and
\nprobably reserves of the fields were 29 million barrels, with
\npotential for a further 25 million barrels.<\/p>\n
Later in the year, though, output started declining rapidly,
\nand in August Petroz warned shareholders the reserves would be
\nreduced.<\/p>\n
The new well would tap further deposits, indicated on seismic
\nsurveys of the area, which aren't directly connected with the oil
\nnow being pumped.<\/p>\n
The field was developed by BHP Petroleum, a unit of Broken
\nHill Proprietary Co., which early this year sold its 42.4 percent
\nstake to Phillips. Santos Ltd., the third-largest Australian-
\nbased oil and gas company, and Inpex Sahul Ltd. Each own just
\nover 21 percent and Australian oil company Petroz NL holds 15
\npercent.<\/p>",
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