KUFPEC still seeks partner for Seram PSC

Kuwait Foreign Petroleum Exploration Company (KUFPEC) said Friday it had appointed divestment advisory company Waterous & Co. to seek a partner to participate in the Phase II development of its Seram (Non-Bula) production sharing contract (PSC) on Seram Island, Maluku province.

?This joint venture represents an opportunity to acquire a ground floor position in a proven oil discovery with significant development, appraisal and exploration potential,? said KUFPEC in a statement.

KUFPEC owns and operates a 97.5 percent interest in the PSC, which includes the Oseil oil field. Meanwhile, Australian-based junior oil producer Lion Energy Limited (former Kalrez Energy Limited) holds the remaining 2.5 percent.

The PSC was initially awarded in 1969 and, following relinquishments thereafter, currently comprises an area of 7,620 square kilometers. The block also has been extended for a period of 20 years as of October 31, 1999. In September last year, KUFPEC tried to farm-out its working interest up to 40 percent in the area.

KUFPEC has planned to develop the block in two phases. The Phase I development of Oseil included the successful drilling of three oil wells and the field was brought on stream in December 2002. Some 986,000 barrels of crude oil was produced from January to May 2003, through a temporary production facility (TPF). Average production during June 2003 was 1,645 barrels of oil per day (BOPD).

According a report from Lion Energy, no production was recorded during July 2003. A Hazard & Operability (HAZOP) study of the new plant has revealed several design faults that the operator KUFPEC and the contractor are now addressing. KUFPEC is anticipated that the correction of the faults will enable production to recommence in early October 2003.

KUFPEC also developed a model of the Oseil reservoir utilizing recently acquired 3-D seismic data during the summer of 2003. Lion Energy said that the 3D seismic had identified extensions of the existing proven oil accumulations in the Oseil field and reserves have been revised upwards to 62.7MMBO in the second phase of field development.

KUFPEC is anticipated that the Phase II development drilling will begin in early 2004. KUFPEC had presented that the phase would involve the drilling of up to 15 new wells, beginning with 5 wells in 2004, Lion Energy said.

?Forecast production levels have the field producing at a rate near 18,000 BOPD by end 2004, with ongoing field development drilling maintaining this production rate through the following 5 years, before field decline commences,? said Lion Energy.

Waterous is a Canadian based firm. Earlier, the company was appointed to sell several of ConocoPhillips?s assets in Indonesia. (robert)