Australian oil company Carnarvon Petroleum is gearing up to start drilling at its Buffalo oil field project, in the Timor Sea, offshore East Timor.
The company has awarded the drilling management services to Petrofac, which will include completion of detailed well design, procurement of long-lead items, and contracting the drilling rig and associated services, including the shore base location for the project.
The objective is to drill the Buffalo-10 well in the second half of 2021, which will be the first step towards the redevelopment of the Buffalo oil field. The well is targeting the crest of the proven Buffalo oil field and will be suspended as a future production well. Further details and updates on timing will be provided once Petrofac and Carnarvon have secured a drilling rig and long lead items, Carnarvon said.
In December 2020, Carnarvon announced a binding agreement with Advance, where Advance would acquire up to a 50% interest in the Buffalo project by funding the drilling of the Buffalo-10 well up to US$20m on a free carry basis. In addition to this, the newly formed joint venture will acquire development funding from third-party lenders and any additional funding requirements will be provided by Advance as an interest-free loan, Carnarvon said.
"Carnarvon and Advance have made material progress in satisfying the conditions in relation to the farm-out and we look forward to completing the transaction at the end of this quarter," Carnarvon said.
Carnarvon Managing Director and CEO, Adrian Cook, said: “I am pleased to see substantial progress on the Buffalo project since announcing the farm-out to Advance Energy in December 2020. Petrofac is an established and highly experienced global energy services provider and is well suited to ensure the success in the Buffalo project. They have already made encouraging progress in assessing our well plans, reviewing drilling rig alternatives, and assessing the necessary long lead items for drilling.
"The Buffalo redevelopment opportunity is well placed for success given its known production capability and low development cost and will be greatly enhanced as oil prices continue their recovery. We look forward to an exciting year with drilling at the Buffalo Project as well as our Dorado FEED activities and the Apus-1 and Pavo-1 exploration drilling campaign."
Carnarvon is targeting the FID for Buffalo in 2022 with first oil targeted for late 2023.
Buffalo background
Carnarvon was awarded the WA-523-P permit, which included the previously developed Buffalo field, in May 2016 for an initial six-year term. The field was discovered by BHP in 1996 and subsequently developed using four wells drilled from a small, unmanned wellhead platform installed in 25 meters water depth, tied back to an FPSO.
Production started in December 1999 at production rates up to approximately 50,000 stb/d and terminated in November 2004 after the production of 20.5 MMstb of highly-undersaturated, light oil (53°API) from the Jurassic-age Elang Formation. All existing facilities and wells were decommissioned and removed prior to Carnarvon being awarded the permit.
Carnarvon initially focussed its technical work on reprocessing of the 3D seismic dataset using full waveform inversion (FWI) technology.
"This work supports the interpretation of a significant attic oil accumulation remaining after the original development, based on sub-optimal positioning of early wells using poorly processed seismic data. Reservoir modelling has been conducted using the latest structural interpretation and available well data, including an extensive history-matching effort to calibrate model/well performance to production rates and water-cut development (governed by strong aquifer drive) observed during the original production period," the company said.
According to Carnarvon, independently audited volumetric estimates of contingent resources in the Buffalo oil field are 31.1 million barrels (2C) with low estimates of 15.3 million barrels (1C) and high estimates of 47.8 million barrels (3C).
The Buffalo project was originally located in Australian water, however, the governments of Australia and Timor-Leste signed a deal on maritime boundaries in 2018, that altered the maritime boundary between the two countries affecting the WA-523-P permit containing the Buffalo project. The WA-523-P exploration permit has now been split in two with a portion including the Buffalo oil field changing from from its Australian jurisdiction to being exclusively in the Timor-Leste jurisdiction.