Issue 18 News

Manas Petroleum Provides Kyrgyzstan Drilling Update
Manas Petroleum reports that the drilling of the second exploration well at the Huday Nazar SPC-1 (Soh license) prospect by the Kyrgyz joint venture, SPC (South Petroleum Company) is underway. Huday Nazar SPC-1 is to test tertiary-aged (Palaeogene) clastics and carbonate reservoirs between 1680 and 1835m below ground level. Projected total depth of this well is 2400m below ground level and it is expected to take 30 to 40 days to drill. Should drilling be sufficiently encouraging, testing and completion of the wells would be made following the drilling.

The Huday Nazar SPC-1 prospect was generated as a result of the processing of seismic shot in a recent 2D seismic program by SPC.

Gas flows through Ukraine tumble
Gas transit from Central Asia and Russia through Ukraine towards Europe fell 37.1% in the first seven months of this year compared to the same period a year ago. The State Statistics Committee did not give figures for the volume of gas transported through Ukrainian territory but according to last year’s statistics, 74 billion cubic metres of gas was sent through Ukraine. In the full year of 2008, some 120 billion cubic metres of gas was transited through Ukraine. Russia sends 80% of its gas exports to Europe through its southern neighbour.

Gazprom earmarks $300m for exploration work
in KyrgyzstanGazprom is set to invest $ 300m in exploration work in Kyrgyzstan over the next three years. Gazprom owns licenses for the Kugart and Eastern Mailuu-Suu IV blocks, which contain oil and gas deposits. The company signed a 25-year cooperation agreement with the Kyrgyz government in 2003. Drilling will begin in the «near future» Prime Minister Igor Chudinov was quoted as saying on June 10.

Kyrgyzstan is estimated to have gas reserves of 6 bn cm. But «the development of natural gas fields is hindered by the geologic peculiarities and insufficiently developed infrastructure,» Gazprom says.

OPITO Announces New Training Programs Delivered in Kazakhstan
OPITO — The Oil & Gas Academy continues to position itself as a vitally important channel within the international oil and gas supply chain with the graduation of Kazakhstan’s first trainees at international standard.

Courses were carried out by Abiroy Technical Training in Aksai who approached OPITO, the industry’s focal point for skills, learning and workforce development, to help establish technical training programs which meet the specific needs of the country’s oil and gas industry.

OPITO provided comprehensive coaching and practical advice to ensure the course addressed regional needs whilst adhering to international best practice.

A total of 98 trainee technicians have completed the programs which include the Petroleum Open Learning (POL) Petroleum Technology series, an internationally recognized certificate used by individuals and employers in more than 15 countries around the world to enhance technical knowledge and improve skills and performance in the workplace.

TNK-BP Reports 2009 First Half Results
TNK-BP has today reported its results for the six months ended June 30th 2009.

Mikhail Fridman, interim Chief Executive Officer
of TNK-BP, said:
«In the second quarter of 2009, TNK-BP benefited from stronger oil and gas markets with a continuation of the strong performance of the first quarter. In addition, in the first half of this year we generated 3.1% growth in our oil and gas production relative to the first half of 2008, due to first oil from greenfield projects in Verkhnechonskoye, Uvat and Kamennoye. We have also been able to reduce our cost base this year and these factors have contributed to a strong set of financial results for the first half of 2009. We are also pleased to have been able to continue to improve our safety and environmental performance with a cleaner and safer performance year on year. We have managed our cash and debt positions prudently and TNK-BP is well placed for sustained future growth through efficient production operations and focused capital investments.»

Sibir Energy Announces Directorate Changes
Sibir Energy announces the appointment to its board of Messrs Dmitry Bekker, Maxim Viktorov and Andrei Martianov as non-executive directors with immediate effect. Mr Bekker is a representative of both OJSC «The Central Fuel Company» and the Government of Moscow. Messrs Viktorov and Martianov are nominees of OJSC «The Central Fuel Company» and JSC Gazprom Neft respectively. In addition, with immediate effect, Messrs William Guinness and Stuard Detmer have stood down from the board, and Mr. Detmer has stood down from his position as the CEO of the Company.

Effective immediately, Vadim Yakovlev who is currently a non-executive director has become the Chairman of the Company in succession to William Guinness and Igor Tsibelman, previously First Deputy CEO, has become the Chief Executive Officer of Sibir in place of Stuard Detmer.

Russia to start prospecting for oil in Georgia’s Abkhazia
Russia’s intends to prospect for oil and gas off the coast of the separatist territory of Abkhazia.

The deal signed May 27 between Rosneft and de-facto authorities in Sukhumi gives the company the right to prospect for hydrocarbons in the Abkhazian-controlled swathe of the Black Sea. Rosneft is also planning to set up a network of gas stations around Abkhazia.

Rosneft President Sergey Bogdanchikov said that his company will start drilling in 2010.

Some estimates indicate that off-shore Abkhaz fields hold up to 200 mm tons of oil.

Transneft launches construction of second stage of Baltic pipeline
Transneft launched the construction of the second stage of the Baltic Pipeline System, designed to diversify the country’s oil exports.

The official ceremony of welding the first joint of pipeline was held in the Bryansk region in western Russia.

The Baltic Pipeline System-2, with an estimated cost of RUB 120-130 bn ($ 3.9-4.2 bn), will run from the Bryansk Region to the northwest Leningrad Region port of Ust-Luga with a branch going to the Kirishi oil refinery.

TNK-BP to Dry Its Gas
TNK-BP is going to build a gas processing plant in the Pokrovskoe field of the Orenburg Region with a capacity of 450 million cubic meters by 2012. This plant will allow the company to utilize almost 100% of its associated petroleum gas, but its construction will cost the company several hundred million dollars. Experts, however, justify these expenditures because the oil companies failing to meet the associated gas utilization norms will face the risk of losing their field development licenses starting from 2012.

Russian sees shrinking gas production
Gazprom has over the over the last five months produced 58 bn cm less gas than in the same period in 2008. While Gazprom’s production in January was 14 % down year-on-year, the production in May dropped as much as 34.5 % compared with 2008 figures.

Turkey keeps faith with Nabucco
Turkey will stand by its commitments to the Nabucco pipeline project despite signing up for alternative developments, Energy Minister Taner Yildiz recently announced.

Russia’s South Stream and the European Union-backed Nabucco projects could delay each other but they would not obstruct construction of each other, Yildiz told Reuters in an interview.

Moscow aims to build the South Stream pipeline ahead of the European Union-supported Nabucco link from the Caspian, a scheme meant to cut Europe’s reliance on Russian gas.

«No matter which project is signed, including the South Stream, our determination for Nabucco will not be weakened and we stand by our commitments,» Yildiz told the news agency.

$3.3bn Mangistau deal delayed
A $3.3 billion joint acquisition by Kazakh and Chinese state oil players of privately-held MangistauMunaiGaz has been delayed, according to reports. Neither a timeframe nor a reason for the delay was given by Kazakh government sources, Reuters said. The acquisition of MangistauMunaiGaz, part of a $10 billion «loan for oil» deal agreed this year, was due to be completed in July. But Kazakh state oil company KazMunaiGaz said it had yet to be finalised.

PrimeGen Energy Begins Drilling Third Timan-Pechora Well
PrimeGen Energy Corp. advises that as part of the recently announced participation agreement regarding the Company’s oil and gas project in Timan-Pechora, Russia, the operator has notified PrimeGen that drilling of a third well commenced on July 31, 2009.

The third well has been titled as the «Kochmesskoye *3». As part of the accelerated drilling program, preparations are underway on the fourth well site to begin immediate drilling shortly after the completion of the third well. The first well of the project was drilled and completed in the second quarter of 2009 and resulted in setting a new production record for the field of 1,200 barrels of oil per day. The second well’s average production flow has been 920 barrels of oil per day. PrimeGen expects that an additional 4 wells will be drilled during the third quarter of 2009.

KPO Recognised For Green Gas Emissions Strategy
There is little doubt that environmental protection is a central theme occupying public policy agendas across the globe. It is a common issue, not specific to one nation, one industry, one sector or one individual. But rather, it is an important and serious challenge which we all must face in some way.

Businesses operating in different sectors have different challenges, and none are more obvious then in the oil and gas sector. Today there is little doubt that man-made emissions from burning carbon intensive fossil fuels contribute to global warming. However, the global demand for energy continues to grow year on year.

As one of Kazakhstan’s major oil and gas operators, Karachaganak Petroleum Operating BV (KPO) recognises it has a responsibility to minimise its emissions of greenhouse gases. In 2008 the venture, which operates one of the country’s largest oil and gas condensate fields, set itself an ambitious target of one million tonnes of reductions in greenhouse gas emissions by 2012. This is equivalent to the combined emissions of some 83,000 typical households.

Since operations commenced at the giant Karachaganak field in Kazakhstan’s north west in 2005, normalised greenhouse gas emissions have been reduced by some 9 percent. This achievement has been possible in spite of increasing production levels and is the result of concerted efforts year on year to reduce emissions.

More recently KPO has adopted a strategic five year health, safety and environmental programme focused on enhancing operational practices, applying Best Available Techniques to its operations, targeted capital investment and robust and verifiable data collection. KPO has also invested significant resources, both financial and human, in better understanding its impacts.

Commenting on KPO’s performance, Corporate Environment Manager, Louis Jacobs said: «While we are only in our second year of the programme, we have already seen promising results. In 2008, KPO reduced its emissions by over 160,000 tonnes as a result of key projects which were implemented throughout the year. Of this there has been a sustained reduction of over 106,000 tonnes year on year.»

In the programme’s first year and despite the increases in production levels, KPO has already achieved 27 percent of its million tonne reduction target and, in total, has reduced greenhouse gas emissions by over 269,000 tonnes.

This is an outstanding effort and in May was acknowledged at the BG Group Chairman’s Awards hosted in London. KPO received a Highly Commended from BG Group Chairman, Sir Robert Wilson, for its work on greenhouse gas reductions.

Commenting at the award ceremony, Sir Robert Wilson stated: «KPO is pursuing an ambitious greenhouse gas reduction strategy with the aim of achieving a total, cumulative reduction of one million tonnes of CO2 emissions over five years. Results to date have been impressive, indeed last year, KPO alone contributed two-thirds of BG Group’s total annual reduction in greenhouse gases.»

Cut energy consumption by 50% with a Grundfos solution
Being able to efficiently control the speed of a vessel’s cooling pumps according to the temperature of the sea significantly reduces energy consumption and costs below deck. Grundfos’ speed-controlled cooling solutions for marine applications offer savings of up to 50%.

Cooling solutions are designed to cool at a constant seawater temperature of 32 C — regardless whether the vessel is sailing around the Persian Golf or the Baltic Sea in January. Grundfos now breaks with this, offering a variable-speed alternative that is as beneficial to the environment as it is to the ship owner’s economy. Reduced energy consumption equals reduced CO2 emissions and fuel costs — an increasingly important factor in every industry and one that Grundfos takes very seriously.

KBR Awarded FEED Contract by VCNG for Eastern Siberia Oil Project
KBR has been awarded a contract by Verkhnechonskneftegas (VCNG) to provide front-end engineering and design (FEED) services for the VC FFD Project located in the Eastern Siberia region of Russia.

KBR will provide FEED services for a single new build, 140,000 barrels of oil per day facility, which will be tied back via a new 85-kilometer pipeline, to the existing East Siberian Pacific Ocean (ESPO) pipeline.

The VC oil & gas field is planned to produce a plateau production of 140-kbopd from 430 production wells, and there will be 215 water injection wells. The field development will involve total 645 wells distributed over 75 well pads. The reservoir is about 1700m depth and initial reservoir pressure is about 2,250 psia, with a reservoir temperature from 12C to 20C.

GE Oil & Gas Develops Unique -60C Gas Turbine Generators for Rosneft Power Station at Vankor Oil Field
GE Oil & Gas, announces that it has designed unique gas turbine generators that can operate in temperatures up to -60°C for a power plant project at the Vankor oil field (Turukhansky district, Krasnoyarsk region) owned by Rosneft oil company. The 210 MWt gas turbine power station at the Vankor oil field will become the only complete source of power and heat used for life support and oil and gas production, as well as part of the first stage of the oil field’s launch into operation. As part of its continuing cooperation with Rosneft, GE Oil & Gas is supplying eight gas turbine generators based on MS5001PA gas turbines.

ITS opens new office Kazakhastam
ITS Group, a leading supplier of oilfield products and services to the global offshore oil and gas industry, has opened a facility in Kazakhstan to service operators in the Caspian region.

The Aktau-based facility, which opened in February 2009, has already secured work and is well placed to build on its early success and establish a presence in one of the most important oil and gas markets. The facility supplies operators with a wide range of drilling equipment on a rental or sale basis (including, but not limited to, pipe, collars, stabilizers, drilling jars, shock tools) and also offers fishing, tubular running and a variety of machine shop services delivered by highly-skilled personnel.

SMT UNVEILS KINGDOM GEOMODELING
POWERED BY JEWELSUITE™
SMT have announced its partnership with JewelSuite™, allowing SMT to incorporate the patent-pending JewelSuite™ gridding technology as a part of the new KINGDOM Geomodeling solution. With this tool, organizations can now conduct 3D geomodeling within the same application as their initial interpretation. This capability helps upstream exploration and production companies reduce cycle times and improve drilling decisions through more accurate volumetric calculations.

Commenting on the announcement, Arshad Matin, President and CEO of SMT, said, «Today, Interpretation and Modeling exist as separate silos within organizations, managed by separate teams. This dysfunctional process is akin to a sculptor having to write his design on paper and require someone else to build it. With KINGDOM Geomodeling, SMT puts the tools back in the hands of the artist. And because it is so cost effective and easy to use, now everyone can be an artist.»

Commenting on the announcement, Gerard de Jager, President of JOA, said: «This is an important step for our industry. Next to the engineering domain, where the orthogonal Jewel gridding has proven superior, the partnership with SMT will integrate Seismic Interpretation. Due to the true vertical gridding method, seamless workflow integration will be achieved, leading to faster and better asset team decision making».

Launch of Polarcus Naila
The launch of Polarcus Naila took place on the 30 July 2009 at the Drydocks World — Dubai shipyard in the United Arab Emirates.

Polarcus Naila is the second vessel in the Polarcus fleet, purpose built for the high-end 3D marine seismic market and capable of towing up to 12 by 8,000m streamers. The shipbuilding contract for the vessel was signed on the 28 April 2008 and steel cutting commenced on the 8 June 2008. Like her sister ship Polarcus Nadia, launched on the 25 June 2009, Polarcus Naila incorporates many new and innovative design features ranging from the distinctive ULSTEIN X-BOW® hull to the Selective Catalytic Reduction (SCR) system, designed to maximize operational performance and minimize emissions. The sophisticated double hull design also incorporates a range of advanced safety features including a DP 2 dynamic positioning system.

Once in service, Polarcus Naila will be one of the most environmentally friendly and technologically sophisticated marine seismic vessels in the market, providing advanced 3D towed marine seismic services worldwide to the oil and gas industry.

Fit out of the vessel will continue at Drydocks World — Dubai after launch with the naming ceremony and delivery scheduled for Q4 2009. Photographs of the launch are available on the Polarcus website under Project Polarcus.