uganda drilling forecast by tullow

26
INTERIM RESULTS - 06 Drilling and Development Activities

Upload: lnew3909

Post on 22-Jul-2016

11 views

Category:

Documents


2 download

DESCRIPTION

Uganda frontier bassin drilling activity by Tullow Oil

TRANSCRIPT

Page 1: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 1

INTERIM RESULTS - 06

Drilling and Development Activities

Page 2: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 2

Frontier basin in an energy deficient region

Dominant position in the basin• Uganda Block 2 – operated• Uganda Block 1 & 3 – non-operated• DRC Block I & II – awaiting decree

Remote frontier basin• Billion barrel potential• Deep & shallow targets• Onshore & offshore drilling

Local power and product needs• All hydrocarbon products imported• Established power & product market• No local refinery• Potential to further develop regional market

Two stage development• EPS to serve local requirements• Potential export project of >150,000 bpd• All practical export options via Kenya

Page 3: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 3

Kaiso-Tonya – strategic beachhead location

• Good road and air access

• Close to existing road infrastructure

• Relatively flat

• Remote from villages/people

• Secure

• Good drainage

• Common access point for Ugandan and DRC operations

~39km

~11km

Kaiso-Tonya beachhead is a unique location in Block 2 to service all exploration,

development and production activities

Kaiso-Tonya beachhead is a unique location in Block 2 to service all exploration,

development and production activities

Escarpment

Kaiso-Tonya

Page 4: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 4

INTERIM RESULTS - 06

Drilling activities

Page 5: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 5

Supporting exploration - onshore drilling

Challenges• Rig mobilisation to site

• Drilling depth limitations

• Mobilisation times between wells

• Cost effective campaigns

Strategy• Initially targeted shallow horizons with

relatively cheap unsophisticated rigs

• Rig specification upgraded following success

• Requirements change through phases of exploration, appraisal and development

Initial Campaign• Eagledrill – shallow slimhole targets

• Dafora – deeper targets, slow mob/demob

Current Requirement• Nabors – access to deep targets

• Light rig – small & mobile to drill multiple wells

• Rigs for next phase being considered

Page 6: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 6

Supporting exploration - offshore drilling

Challenges• Lake bed soil conditions unknown• Limited metocean data• Remote location – limited in-country

engineering support• Rig mobilisation and launch in lake

Offshore rig requirements• 60m maximum water depth• Barge or jack-up options acceptable• Drilling capability 3,600m vertical wells

Current status• Technical bids received• Tender process ongoing • Commercial bids due end October

Drilling plans• Spud first well offshore Q4 2008

Modular Jack-up

Modular Floater

Page 7: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 7

INTERIM RESULTS - 06

Early Production System

Page 8: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 8

Early production system – project phasing

• EPS rationale and benefits

• Regional demand - products and power

• Field characteristics - subsurface & crude

• Project phasing

• Facilities configuration, location & design

• Commercialisation approach and product/power sales

Page 9: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 9

Rationale for early production system

MOU with government • Target to deliver first oil in 2009• Power generation dependant on

transmission

EPS viewed as “facilitator”• Development while inventorising basin• Early product and power delivery• Revenue for Tullow and Government• Data acquisition

Stages of EPS progressed so far• Appraisal programme• Subsurface understanding• Facilities requirement• Commercial structure

Page 10: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 10

Regional demand - domestic oil products

Current product sources• Mombasa refinery• Imports via Mombasa

Product distribution• White oil - pipeline, rail and road.• Black oil - road only• Significant infrastructure constraints• Frequent shortages

Mombasa refinery• Ageing equipment• Investment required to meet auto fuel spec

Competitive domestic market• No Government price control• Pricing at premium to international pricing• 25+ licensed operators• Competition encouraged

Current Infrastructure• Pipeline Operator 100% owned by Kenya• 2008 expansion funded by Tamoil

COMPANY

Govt. of Kenya 50

Shell/BP 13 20 45

Kobil / Kenoil 21 7

Total 17 15

Chevron 11 14 14

Tamoil ** 13 11

Market total 87 82 81

UgandaMarket

Share (%)

KenyaMarket

Share (%)

MombassaRefinery

Share (%)

-

--

- -

Page 11: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 11

Local demand - power generation

Uganda’s current power emergency• Growth constrained by demand• Delay of Bujagali 200MW hydro (currently 2011)• Regional drought affected existing hydro

Interim solution• 150MW leased generation, fired on imported diesel oil, costing circa 24c/kwhr• Government tariff supporting circa 13c/kwhr

Long term Solution• Existing hydro plus Bujagali• Installation of permanent IPP thermal projects (~100MW)• Incentives to ensure on time delivery by developers• Keep generation supply ahead of demand growth• East African Masterplan for long term development of transmission to allow power

support across borders

Where does the EPS fit?• 50MW of planned 100MW thermal• Generation from indigenous oil, balance of payments• Transmission project provides eastern ring of planned infrastructre

Page 12: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 12

Field characteristics – subsurface analysis progressing

Complex reservoir geometry• Multiple zones• Discontinuous stacked sands• Intra field faulting

Reservoir data compilation underway• Core analysis• PVT properties• Test data integration

Reservoir modelling ongoing• 3D seismic interpretation is key• Appraisal well data being integrated• Petrel model will be constructed• 3D simulation and network model required to

define deliverability

NziziMputa

NziziMputa

Pre-appraisal model

Possible alternative model

Page 13: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 13

Field characteristics - sweet but waxy crude

PVT data collection

• Samples taken from all wells

• Recent samples still undergoing PVT analysis

Crude properties

• Light sweet crude with high wax content

• High Pour Point will require heated transportation

• Yields heavily weighted to vacuum gasoil

• Low yields of light products

Medium~300 scf/stbGOR

Heavily weighted to vacuum gasoilLow yields of light productsYield

Very high+39 deg CPour Point

Medium33-37 deg APIGravity

Very low0.09 wt%Sulphur

CommentResultQuality

Page 14: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 14

Early production system – project phasing

Project Phased• Meet 2009 first oil target• Provide time for

○ Transmission line design and construction○ Secure power purchase agreement

Phase 1 – oil sales 2009• Sanction late 2007• Facility designed for 4,000bopd capacity• Oil production initially limited to ~2,000bopd• Products evacuated by road tanker

Phase 2 - power sales 2010• Sanction 1H 2008• ~50MW of local power generation• Transmission line upgraded• Uninterruptible PPA

Phase 3 – potential facilities upgrade• Need to develop non-spec HFO market• Reservoir delivery potential to be assessed

Page 15: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 15

Early production system – facilities configuration

Topping unit4000 bbls/day

TrucksTransport HFO, naptha, diesel and kerosene (260 km black top road) to Kampala

HoimaHoima

Esca

rpm

entProduct split

• 1800 bbl/day waxy HFO for power

• 1380 bbl/day waxy HFO for market

• 180 bbl/day naptha• 500 bbls/day diesel• 120 bbls/day kerosene • Electricity supply into grid at Nkenda

Equipment

• Topping plant, separators, tanks, loading facilities• Trucks (heated)• 6” flowlines (buried and/or heated)• Downhole pump completion, tree, gensets, controls• Power station• 132kV electric overhead line – 175km

Power station 50 MW HFO Gensets (8 MW)

EarlyProduction

System

132kV270km

transmission line(via Hoima to Nkenda)

Mputa1 padMputa1 pad

Mputa3&4 padsMputa

3&4 pads

Nzizi2

pads

Nzizi2

pads

Road

Flowline

Electric line

Option of heated line

KAMPALAKAMPALA

Production wellscompleted with:

sliding sleeves, gravelpacks, downhole pumps

NkendaNkenda

Page 16: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 16

Early production system – site location

Technical Considerations• High reliability and product quality• Management of waxy product

Safety Considerations• Road upgrade for trucking operations• Plant safety to international standards

Environmental considerations• Several site options screened• Gas effluent emissions to international

standards• Zero liquid effluent discharge with

managed storm water disposal• Minimised plant footprint• Buried flowlines

Mputa 2

Inject D

Inject C

Inject G

Inject A

Inject BProd 2

Prod 3

Prod 6

Mputa 1Mputa 3

Mputa 4

PROP

OSED

JETT

Y

SEBAGORO

AIRS

TRIP

CPFProd 1

Water Supply Line From Lake Albert

Well Production Line

Water Injection Line

High Traffic Route (Existing Road)

High Traffic Route (New Road)

Central Processing FacilityCPF

Page 17: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 17

= Metering

Prod wells

Water injwells

Diesel

Kerosene

prod

wat

er

GAS

OIL

HFO

ToppingUnit

PowerExport

Plant Power

Water Trt Lake Water

Naphtha

Fuel Gasto users

Flowline (c. 1-2km)

Water Trt

Crude

Fuel Gas Sub-Station 11kv-132kV

Emerg + Black Start Gens

UPSTREAM CRUDE PROCESSING PLANT

POWER PLANT

Road Tankerloading

Inst Air

Fire Water

Drains

Flare

Pot WaterChem Inj

Steam

Diesel Laboratory

Sewage Trt

Heating

UTILITIES

Camp

Early production system – design concept

Road Tankerloading

Road Tankerloading

Road Tankerloading

PowerGeneration

Plant

GAS

Separation/Coalescing

HFO

M M

M

M

M

M

M

M

M M

M

M

Page 18: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 18

Commercialisation - commercial concept

Upstream

JVU

pstream JV

Tullow C

rudeProcessing

Tullow C

rudeProcessing

Tullow Pow

erTullow

Power

UETC

LU

ETCL

Oil R

esellersO

il Resellers

Production Sharing Agreement

Crude Supply Agreement

HFO Supply Agreement

Power Purchase Agreement

Oil Product SalesAgreements (many)

Transmission Line Agreement

• Mirrors physical systems

• Simplifies commercial agreements

• Arms length pricing

Page 19: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 19

Commercialisation – product delivery and sales

• Topping plant production○ 79.5% HFO

○ 12.5% Diesel

○ 3.0% Kerosene

○ 4.5% Naptha

○ 0.5% Gas

• Diesel and Kerosene volumes will be readily consumed in the market

• Naphtha volumes could be blended to HFO or sold separately if higher value

• HFO volumes exceed current market○ Will be absorbed by planned generation

• All EPS production likely to be absorbed within Uganda

• Facility expansion will require HFO market to be developed

20Refinery Fuel

4,000Total

1,800HFO for Power

2,180Marketed products

Production (bbls/d)EPS Production

13,6492,180Total1000LPG739120Kerosene6591,380HFO

7,189500Dieseln/a180Naphtha

1,5500Aviation3,4120Petrol

2006 MarketEPSProduct

Page 20: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 20

Commercialisation – power generation and sales

Power Generation• 50MW base case (85MW under review)• Output sold to state transmission

company - UETCL• Supports Government plan to balance

hydro and thermal generation

Transmission Line• 275 km 132kV line required• Tullow supporting design and

implementation• Government obligations

○ securing route ○ EIA approvals○ Resettlement and compensation plan

Power Purchase Agreement• Power purchase agreement to provide

for cost recovery mechanism• HFO fuel price linked to international

prices• Minimum dispatch guarantee critical for

EPS production○ Competitive marginal cost versus

imported fuel

EPS Transmission Expansion• Mputa to Nkenda• 270 km, single line• Capacity 100MW• Target Date 2009

Southern Transmission Expansion• Nkenda to Mbarara• SWECO study completed• Finance process initiated• In service date Q1 2011

Existing Nkenda – Mutundwe32kV line• Old line• Wood pole construction

Future 220kV line

Page 21: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 21

Early production system - Summary

EPS is challenging• Technical - subsurface, physical systems, transport of oil, schedule

BUT the EPS enables us to…• Start development while inventorising the Basin volumes• Gain experience of commercial agreements in Uganda• Improve our understanding of the subsurface and production behaviour• Gain experience in oil transportation• Realise early production and power• Generate early revenue for Uganda and Tullow

In addition to delivering the EPS we remain focused on the big oil export development opportunities

Page 22: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 22

INTERIM RESULTS - 06

Large Scale Export Development

Page 23: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 23

Export project development – general concept

• Threshold for major export ~ 300 mmbbls

• Project will involve a 1,300km pipeline to Mombasa

• Regional power and refining requirements need to be considered

• Upstream development is likely to require onshore and offshore wells in Blocks 1,2 and 3A

• Block 2 is natural gathering point for export from Lake Albert

• Lake development drilling feasibility study and high level development planning underway

• Stabilised crude will be gathered into common export pipeline

Page 24: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 24

Concept for export option

Page 25: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 25

Export project development - challenges

• Remote land-locked location

• Field Development Maturity○ too early to predict what the development spread will look like○ Potential for numerous separate reservoirs & fields

• Infrastructure○ fabrication, construction and operations○ Manpower and materials for process plant construction

• Pipeline○ rights of way/trenching/coating/insulation/heating○ terrain – rivers, swamps, canyons, mountains, towns○ 0wnership, international routes and tariffing arrangements

• Efficient management of PSC and non-PSC costs

• Environment – flora and fauna, wildlife, pollution

• Politics – in-country and regional

• Security – both for facilities and pipelines

Page 26: Uganda Drilling Forecast by TULLOW

SlideTullow Oil plc – Uganda Analyst Visit – October 2007 26

Export project development – Summary

• Development feasibility established and initial concepts prepared

• Main technical and environmental challenges identified

• Engineering studies ongoing○ Onshore/Offshore development challenges and solutions○ Export route options○ Refinery options○ Costs & Schedule

• Significant learnings to be taken from EPS development

• Outline schedule and costs prepared ○ Q4 2008 - start lake offshore drilling○ 2009/10 - project sanction under “all success” case○ 2014/15 - earliest first oil