Govt okays $100m Santos dev plan for block 16
Monday, 20 December 2010
The government has approved Australian oil giant Santos's US$100 million development plan for block 16 under which the company will drill three wells in the offshore block in shallow water in the Bay of Bengal, senior officials said Saturday.
Santos, which acquired Scottish Cairn Energy's entire stakes in Bangladesh in November this year, has already initiated preliminary works to conduct drilling in next winter.
"We approved Santos's development plan immediately after its acquisition of Cairn's stake," a senior Petrobangla official told the FE.
He said the Australian company would conduct drilling in three gas structures - Sangu 11, South Sangu and Magnama - and is set to complete drilling by April 2012.
Santos also shared the output of the three-dimension (3D) seismic surveys with Petrobangla which it conducted along with its partner Cairn Energy last year at the cost of $18 million in and around the Sangu field and on the Magnama exploration prospect.
The gas structures where Santos would drill are located over 8,621 square kilometres in the Bay of Bengal.
Santos's predecessor Cairn earlier announced that it had discovered gas in all the structures, where drilling has been planned, but did not declare the size of reserve.
As per the development plan, Santos will spend $45 million to drill a deviated well from the offshore Sangu platform to hit new small gas reserves known as Sangu-11 well.
It will drill another well in south Sangu, some six km off the Sangu platform. A pipe will be connected to the main platform to produce gas.
Drilling of well in Magnama structure will be completed subsequently.
"We can ensure how much gas is available there once we conduct drilling," a company insider said.
The company's future business in Bangladesh depends on the success of the three wells, he said.
Development of these wells would take around two years if the drilling becomes successful.
Gas production from there would start after that, said the company insider.
Santos would be able to sell gas to private users at market price from all the three gas structures.
Prior to Santos' acquisition Cairn had obtained Bangladesh government's approval of right to sell gas from new structures to private buyers.
It also signed an amendment to the production sharing contract (PSC) under which the operator would be able to negotiate with buyers besides Petrobangla for sale of gas, a company official said.
The PSC amendment has allowed Santos as the first foreign company operating in Bangladesh to sell gas directly to private sector.
Following the take-over Santos has full ownership of offshore Magnama and Hatiya structures under block 16 in the Bay of Bengal.
Santos, which acquired Scottish Cairn Energy's entire stakes in Bangladesh in November this year, has already initiated preliminary works to conduct drilling in next winter.
"We approved Santos's development plan immediately after its acquisition of Cairn's stake," a senior Petrobangla official told the FE.
He said the Australian company would conduct drilling in three gas structures - Sangu 11, South Sangu and Magnama - and is set to complete drilling by April 2012.
Santos also shared the output of the three-dimension (3D) seismic surveys with Petrobangla which it conducted along with its partner Cairn Energy last year at the cost of $18 million in and around the Sangu field and on the Magnama exploration prospect.
The gas structures where Santos would drill are located over 8,621 square kilometres in the Bay of Bengal.
Santos's predecessor Cairn earlier announced that it had discovered gas in all the structures, where drilling has been planned, but did not declare the size of reserve.
As per the development plan, Santos will spend $45 million to drill a deviated well from the offshore Sangu platform to hit new small gas reserves known as Sangu-11 well.
It will drill another well in south Sangu, some six km off the Sangu platform. A pipe will be connected to the main platform to produce gas.
Drilling of well in Magnama structure will be completed subsequently.
"We can ensure how much gas is available there once we conduct drilling," a company insider said.
The company's future business in Bangladesh depends on the success of the three wells, he said.
Development of these wells would take around two years if the drilling becomes successful.
Gas production from there would start after that, said the company insider.
Santos would be able to sell gas to private users at market price from all the three gas structures.
Prior to Santos' acquisition Cairn had obtained Bangladesh government's approval of right to sell gas from new structures to private buyers.
It also signed an amendment to the production sharing contract (PSC) under which the operator would be able to negotiate with buyers besides Petrobangla for sale of gas, a company official said.
The PSC amendment has allowed Santos as the first foreign company operating in Bangladesh to sell gas directly to private sector.
Following the take-over Santos has full ownership of offshore Magnama and Hatiya structures under block 16 in the Bay of Bengal.