Far East & Australia


 

DIRECTOR’S REPORT ON ACTIVITIES

KUFPEC’s FEAR, one of the three regions of the Operations Directorate, has continued to progress oil and gas development projects and new interest purchases while managing the declining production in existing fields within the Region. Overall net production within FEAR has decreased from 15,936 boepd during 2014 to 12,874 boepd during 2015. The decrease in FEAR net production over the year was mainly dominated by several reasons, namely: Mutineer/Exeter shutdown due to Floating Production Storage and Offloading (FPSO) dry docking (back on production mid-July), lower Balnaves production due to various facility and subsurface factors, as well as the Linda platform incident which led to a complete shutdown in the Gas production of Harriet Joint Venture late 2015.


The highlights of 2015 include the progress made on the Wheatstone liquefied natural gas (LNG) project in Australia, both in the upstream and downstream sectors. Examples of this progress consist of the installation of the Steel Gravity Structure (SGS) and Platform topside, along with the continued construction of the onshore plant and facilities. Most of the Phase One Julimar/Brunello wells were drilled and completed, with the seabed flowline installed. KUFPEC farmed into a new exploration block (WA-483-P) covering promising prospects and with an upcoming exploration well to be drilled. In block WA-481-P, three exploration wells were drilled within budget and without any HSE incidents, KUFPEC also made the decision to relinquish (license expiry) its fully operated block in WA-427-P after extensive technical and commercial assessment showed that renewal with a required drilling commitment could not be supported. KUFPEC China Inc. (KCI) opened a new office in Shekou, China on the first of December 2015 and commenced hiring Chinese national staff.
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WA-49-L KUFPEC 35%
The Production License WA-49-L contains the Balnaves Oil Project and the Julimar/Brunello Gas Development Project. The Julimar/Brunello gas fields (35% KUFPEC) will be produced to the Chevron Wheatstone LNG Platform for which KUFPEC holds 7% foundation equity (13.4% in total). Gas production is scheduled to start up in second half of 2017 from the Brunello field. The JV drilled, completed and tested the majority of the development wells (four out of five wells) including the commencement of drilling the final well (BruA-Six). Hook-up and commissioning of these wells will follow in 2016.
Oil production at the Balnaves field, averaged 4,010 boepd net to KUFPEC. The JV continued to work with FPSO contractor to resolve commissioning and contract requirements in order to move into full operation phase.


WA-46-L, 47-L, 48-L KUFPEC 8%
The Production Licenses WA-46-L, 47-L, 48-L contain the Wheatstone/ Iago Gas Development Project. The Wheatstone/Iago gas field (8% KUFPEC) will be produced to the Chevron Wheatstone LNG Platform for which KUFPEC holds a 6.4% foundation equity (13.4% in total with the Julimar/Brunello, WA-49-L license). Gas production is scheduled to start up in late 2016 from the fields. The JV is in the process of drilling the wells with completions and hook-up, commissioning and testing scheduled for 2016.


Wheatstone LNG KUFPEC 13.4%
The cumulative overall project construction has progressed well in both the upstream and downstream projects. Overall, the new schedule for first LNG cargo shifted to mid-2017. Major project milestones achieved during 2015 included installation of the massive offshore Steel Gravity Structure (SGS), loadout/sailaway and installation of the platform topsides, completion of the SGS to platform permanent connections, and the completion and population of the permanent living quarters. In addition to this, all remaining modules required for Train One startup, as well as the first Train Two module were delivered to the Ashburton North site.


WA-26/27-L and WA-54-L ( KUFPEC Mutineer/Exeter 37.5% / Fletcher 50% / Finucane 37.5% )
Oil production during 2015 averaged for M/E 847 boepd, Finucane 1,119 boepd and Fletcher 688 boepd (net to KUFPEC). The MV11 FPSO and its facilities experienced issues with vessel systems that required the FPSO to go to dry dock in Singapore for rectification and re-certification. These activities were undertaken from 15 January 2015 till 14 July 2015. As a result, overall MEFF production was less than forecast.

WA-191-P KUFPEC 37.5%
Renewal of the WA-191-P Exploration Permit for a new five-year term including the licensing of the marine broadband Davros Multi-Client 3D in equity and non-equity areas as part of Year One (2015) renewal program.

Harriet Joint Venture KUFPEC 19.28%
The Harriet Joint Venture is a mature asset and maintains a unique position as a processor of gas from other joint ventures. The fields have been producing in excess of 20 years and are currently in decline with net production averaging 791 boepd. Ongoing offshore abandonment activities continued throughout 2015.

WA-427-P KUFPEC 100%
WA-427-P Exploration Permit expired on the second of October 2015. Prior to the permit expiry, an extensive evaluation was undertaken to assess the prospectivity in the block. No exploration prospect could be matured, nor any extensions of the adjacent hydrocarbon accumulations identified on-block. The permit was not renewed. A number of key learnings and technology transfer initiatives have stemmed from the activities undertaken in WA-427-P.

WA-481-P KUFPEC 30%
3 exploration wells were drilled within budget and without any HSE incidents. Unfortunately, all three wells were plugged and abandoned. A 12-month extension of Permit Year Three was approved to allow completion of post well studies prior to a decision to proceed into the secondary period of the permit.

WA-483-P KUFPEC 40%
This new Exploration Permit was added to KUFPEC’s portfolio with the completion of a farm-in with Woodside Energy. The WA-483-P 2015 work program consisted of G and G studies aiming at maturing the prospectivity for drilling.


WA-335-P KUFPEC 18.9%
Following the Location Declaration approved by the regulator over the Bunyip gas discovery, the JV submitted a Retention Lease application. The permit was suspended pending the grant of the Retention License.


WA-41-R KUFPEC 33.3%
Approval was granted in 2015 for increased funding to evaluate the development concept for Corowa with the intention of progressing a final investment decision during 2016.


WA-46-R KUFPEC 20%
Development of the small Tusk oil field is currently not commercial due to current oil prices.


WA-45-R KUFPEC 20 %
Undertook additional subsurface, engineering, economical evaluation
studies in order to assess commerciality. The Retention lease will be up for renewal in November 2016.


WA-8-L KUFPEC 42.63%
Approved additional five-year funding for the WA-8-L License including the licensing of the marine broadband Davros Multi-Client 3D seismic which is anticipated to evaluate potential development options for the Amulet oil discovery.

WA-356-P KUFPEC 35%
Approval has been granted from the regulator for replacing Year Five exploration drilling commitment with marine broadband Davros Multi-Client 3D and G and G studies. This will allow the JVs to further evaluate prospectivity ahead of a renewal decision, with permit renewal due in March 2017. Equity Davros Multi-Client 3D seismic data will be acquired in 2016.

13-1 Yacheng Field KUFPEC 30%
Yacheng field produced net average 4,058 boepd for KUFPEC during 2015, compared to net average 4,611 boepd reported in 2014, due to natural decline in this mature gas field. The Heads of Agreement (HoA) for Wenchang gas field tie-in was signed on August. To optimize the gas production, a gas ejector was installed in offshore facilities and as a result successfully increased gas delivery from low-pressure gas wells. The JV has identified cost savings initiatives to enhance asset value.


Block 63-13 KUFPEC 30%
w/ exploration commitment 80%
2 exploration wells were drilled ahead of schedule and under budget. The first well was a dry hole and the second well found sub-commercial gas.


Block 52-26 KUFPEC 30%
w/ exploration commitment 80%
Completed purchase and acquisition of 1,220km2 3D seismic within schedule
and budget. Maturing prospects for exploration drilling in 2016.


Block 52-22 KUFPEC 30%
w/ exploration commitment 80%
Completed acquisition and processing of 1,441km2 3D seismic within schedule and budget. Maturing prospects for exploration drilling in 2016.
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SC14C Galoc Field KUFPEC 26.84 %
Galoc Field produced net 1,441 boepd in average during 2015, compared to 1,997 boepd during 2014. The production was steady during 2015 with all wells up running and producing at zero days shut down for the year. The JV matured the Galoc-Seven exploration/appraisal well during the year.