Unocal blames disappointing production on West Seno

U.S. independent oil company Unocal Corporation said production at the West Seno field offshore East Kalimantan was the main factor behind its failure to reach its global production target in the fourth quarter of last year.

?Worldwide (Unocal) production volumes in the fourth quarter were about 420,000 barrels of oil equivalent per day (BOEPD), which is 10,000 BOEPD below the low end of our estimate on the third-quarter call," Unocal vice president Robert Wright said in a recent conference call.

Wright said the ramp-up of West Seno was the most important element in Unocal?s plan to bring its consolidated production back to the 2003 full-year level of around 450,000 BOEPD.

West Seno?s oil production averaged 9,300 barrels per day (BPD) in the fourth quarter with a year-end index rate of 18,500 BOEPD. Previously, the company planned to ramp up the field?s gross production to 30,000 - 35,000 BOEPD by year-end.

"Premature equipment failures on the floating production unit and emulsion treating problems have continued to affect us over the fourth quarter, but started improving by year-end," Wright said, adding that the firm shut down its floating production unit at the field from Jan. 12 through Feb. 1 to correct construction deficiencies.

He also said development drilling continues on the tension leg platform. Eight wells were completed at year-end, including a high-rate horizontal well, which produced 4,600 BPD by year-end.

"A ninth well has been completed and will be perforated soon," he added.

Wright also said the remaining construction and commissioning activities were expected to continue through at least the first quarter 2004, while completion of 20 additional development wells is planned by the end of 2004.

West Seno is the first deepwater oil and gas project in Indonesia. The field is situated about 190 kilometers northeast of East Kalimantan?s oil town of Balikpapan in water depths of approximately 975 meters.

Unocal is developing the field in two phases with two tension leg platforms (TLP) and a floating production unit. Phase 1 includes the development of the first TLP and 28 wells to recover resources in the northern section of the West Seno field.

Meanwhile, Phase 2 will include the development of the second TLP and up to 24 additional wells on the field's southern section. Production from Phase 2 is expected to begin in 2005. Daily production is expected to peak at 60,000 BPD and 150 million cubic feet of gas per day by year-end 2005.

West Seno is located in the Makassar Strait production sharing contract (PSC) area, which is operated and 90 percent owned by Unocal. Indonesia?s state-owned oil and gas company PT Pertamina, holds the remaining interest. (Robert)