PREMIEROIL - Chim Sao-Dua Oil Field Development

Project Status

UK-based Premier Oil became operator of Blocks 12E and 12W in September 2004 and has undertaken 2D and 3D seismic acquisition, processing and interpretation. The results have identified the Dua and Blackbird prospects in offshore Vietnam as having high impact potential.

It announced on 26 April 2006 that an agreement with Australia-based Santos on an upcoming programme to drill two exploration wells at the Dua and Blackbird prospects in Block 12E. Both prospects are located in shallow waters about 21 kilometres (km) apart in Block 12 in the Nam Con Son basin Nam Con Son Basin around 400km southeast of Ho Chi Minh City.

The agreement includes a funding arrangement for Premier Oil's 75-percent share of the drilling costs.  Upon completion, Premier Oil and Santos will each hold a 37.5-percent interest in the Block 12E and Block 12W Production Sharing Contracts (PSC), with the balance 25-percent held by Delek Energy. The wells will be drilled using the Diamond Offshore semi-submersible drilling unit "Ocean General", with spud date anticipated early in May 2006. On 30 June 2006, the operator found oil and gas in well Dua-4X on Block 12E.

Premier Oil followed up with drilling of the Dua-5X well in Block 12E and it announced on 21 September 2006 the successful intersection of the primary reservoir in the southern fault block of the Dua structure. It added on 11 October 2006 that it will now commence the resource assessment and preparation of a reservoir evaluation report, the first step in the commercialisation process.

On 16 November 2006, Premier Oil said the drilling of the Blackbird discovery well (12E-CS-1X) on Block 12E had good oil shows, with encouraging potential for the commerciality of the Blackbird structure and will help the partners de-risk follow-up prospects on Blocks 12E and 12W including Peacock, Falcon and Quit.  Work will begin as soon as possible on appraisal and conceptual pre-development studies for the Blackbird (now renamed Chim Sao) and Dua discoveries, together with new exploration on this acreage. The Chim Sao oil field is estimated to have around 80 million barrels reserves potential.

It was reported on 19 July 2007 that Premier Oil has invited expressions of interest (EOI) for a floating production storage offloading (FPSO) with a storage capacity of between 600,000 and one million barrels of oil for the Chim Sao-Dua development.

The operator announced on 17 September 2007 that first oil is being planned for 2010 although 2009 may be possible. It has completed a market survey of FPSOs and a development team is in place in Ho Chi Minh. Meantime, reservoir studies and development cost estimating are ongoing, while gas options are under review. Apart from the FPSO, other facilities for the project include wellhead platforms at the Chim Sao-Dua fields and a subsea element. (Topco)