BP 2009 Annual Report Download - page 33

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BP Annual Report and Accounts 2009
Business review
Business review
Business review
Rest of Europe
Our activities in the Rest of Europe are in Norway.
• Development expenditure (excluding midstream) in the Rest of
Europe was $1,054 million, compared with $695 million in 2008 and
$443 million in 2007. Progress continued on the Skarv and Valhall
redevelopment projects.
Africa
Angola
BP is present in four major deepwater licences offshore Angola (Blocks
15, 17, 18 and 31) and is operator in Blocks 18 and 31. In addition, BP
holds a 13.6% equity share in the first Angolan LNG project. Technical
skills developed in similar deepwater basins around the world have been
applied extensively in BP’s operations in Angola.
• On 29 December 2008, BP began a comprehensive seismic survey
on Block 31 (BP 26.67% and operator) using a wide azimuth towed
streamer (WATS) to gain improved imaging quality of sub-salt strata.
WATS seismic is an acquisition configuration developed by BP to
image areas of complex geology below salt. The WATS survey will
significantly improve the imaging and understanding of the fields, and
more significantly, the data acquired will also support the definition of
hubs which will form part of BP’s development programme. This is
the first such survey to be conducted by BP outside the Gulf of
Mexico, and is the first WATS survey conducted in Angola.
• In 2009, BP announced its seventeenth through nineteenth
discoveries in the ultra deepwater Block 31. On 3 March 2009, BP
announced the discovery of the Leda field. Leda was drilled in a water
depth of 2,070 metres and reached a total depth of nearly 6
kilometres below sea level. It is located in the central northern portion
of Block 31, some 415 kilometres north-west of Luanda. This is the
fifth discovery in Block 31 in which the exploration well has been
drilled through salt to access the oil-bearing sandstone reservoir
beneath. On 27 May 2009, BP announced the Oberon oil discovery.
Oberon-1 was drilled in a water depth of 1,624 metres and reached a
total depth of 3,622 metres below sea level. On 1 October 2009, BP
announced the Tebe oil discovery. The Tebe well was drilled in a water
depth of 1,752 metres and a total depth of 3,325 metres below sea
level.
Algeria
BP is a partner with Sonatrach and Statoil in the In Salah (BP 33.15%)
and In Amenas (BP 45.89%) projects, which supply gas to the domestic
and European markets. BP is also in partnership with Sonatrach in the
Rhourde El Baguel (REB) oilfield (BP 60%), an enhanced oil recovery
project 75 kilometres east of the Hassi Messaoud oilfield. In addition, BP
is in partnership with Sonatrach in the Bourarhet Sud block, located to the
south-west of In Amenas.
• In 2008, Sonatrach and BP announced a discovery with the Tin
Zaouatene-1 (TZN-1) exploration well. BP is currently in the second
prospecting period, which runs until September 2010. Seismic
operations started in February 2009 and were completed in October
2009. Drilling activities commenced in December 2009.
Libya
In Libya, BP is in partnership with the Libyan Investment Corporation
(LIC) to explore the onshore Ghadames and offshore Sirt basins.
• In 2009, BP continued the onshore and offshore seismic operations
started in 2008 on the acreage covered under the exploration and
production sharing agreement ratified in December 2007 (BP 85%).
• In October 2009, BP completed a large offshore 3D survey in the
deepwaters of the Libyan Gulf of Sirt. The programme, started in
September 2008, was conducted by the seismic vessel Geowave
Endeavour (operated by CGGV-Wavefield Inseis), and covered 17,000
square kilometres, 60% of BP’s Sirt exploration acreage.
• BP is also progressing its onshore seismic operations in the deserts
of Libya’s Ghadames basin. This is the first full application of a new,
cutting-edge seismic technique developed by BP, known as
Independent Simultaneous Sweeping (ISS): the technology allows
greater acquisition (in excess of 10,000 vibration points per day
compared with conventional technology of 1,500 per day) and cost
efficiency. Exploration drilling is scheduled to commence during 2010
in both onshore and offshore blocks.
Egypt
BP is the single largest foreign investor in Egypt, with investments close
to $15 billion to date. With its partners, BP has produced almost 40% of
Egypt’s entire oil production and close to 30% of its gas production. The
Gulf of Suez Petroleum Company (GUPCO), BP’s joint venture with the
Egyptian General Petroleum Corporation, has been an industry leader in
Egypt and the entire region and covers operations in the Gulf of Suez and
the Western Desert.
• During the second quarter of 2009, BP was awarded two blocks in
the Egyptian Offshore Nile Delta. BP has a 100% working interest
and is the operator of Block 2, North Tineh, which is in a deepwater
area of the Eastern Nile Delta. BP will also be the operator of Block 3,
North Damietta Offshore, which is adjacent to Block 2, with Shell and
Petronas as partners with a one-third working interest each. These
awards build on the existing portfolio in Egypt, providing an additional
platform for growth. BP’s expertise in exploring deepwater, high-
pressure and high-temperature deep targets maximizes the chances
of unlocking the potential in this area.
• During the third quarter of 2009, the Egyptian parliament approved
the amendments to two Gulf of Suez (GOS) concessions: South
Belayim (BP 100%) and South Ghara (BP 75%). The amendments
provide BP with enhanced commercial structure and extend the term
of both concessions by 20 years in return for increased investment
levels. This marks a significant step in the development of the
Southern GOS assets.
Asia
Western Indonesia
BP has a joint interest in Virginia Indonesia Company LLC (VICO), the
operator of the Sanga-Sanga PSA (BP 38%) supplying gas to Indonesia’s
largest LNG export facility, the Bontang LNG plant in Kalimantan.
• During 2009, VICO successfully completed a joint evaluation of the
coalbed methane (CBM) opportunities in the Sanga-Sanga area. In
November, VICO signed a PSA with the Government of Indonesia, for
the exploration and development of these CBM resources.
• On 1 July 2009, BP divested its entire 46% holding in the Offshore
Northwest Java (ONWJ) PSA to Indonesia’s national oil company,
Pertamina.
Vietnam
Our upstream business in Vietnam is concentrated on the Block 6.1
offshore gas field. BP participates in one of the country’s largest foreign
investment projects, the Nam Con Son gas project. This is an integrated
resource and infrastructure project, which includes offshore gas
production, a pipeline transportation system and a power plant.
• BP Block 6.1 Lan Do development project was sanctioned in
December 2009, with first gas scheduled in 2012.
• BP’s withdrawal from Blocks 5.2 (BP 55.9% and operator) and 5.3
(BP 75% and operator) was completed in December 2009.
China
BP’s upstream asset in the country is the Yacheng offshore gas field (BP
34.3%) in the South China Sea, one of the biggest offshore gas fields in
China. Yacheng supplies the Castle Peak Power Company gas for up to
70% of Hong Kong’s gas-fired electricity generation. Additional gas is
also sold to the Hainan Holdings Fuel & Chemical Corporation Limited.