Occidental Petroleum 2002 Annual Report Download - page 14

the ultimate recovery of reserves from the field.
Occidental recently entered into an agreement, which is awaiting government
approval, to sell an estimated 120 - 130 million cubic feet of natural gas per
day from Block 9 operations to the Omani government, beginning in early 2004 and
extending through 2007. The Occidental-Omani agreement is expected to open up a
market for previously stranded gas that is associated with oil production from
the Safah field. Occidental also continues its exploration program in the
adjacent Block 27.
YEMEN
In Yemen, Occidental owns direct working interests in the Masila field in
Block 14 (38 percent) and the East Shabwa field in Block 10 (28.6 percent). In
addition, Occidental has interests in seven exploration blocks encompassing
nearly 15 million acres. Of these, Occidental is the operator of Blocks 44 and
20, with working interests of 75 percent and 50 percent, respectively, and has a
40-percent working interest in each of five blocks -- Blocks 11, 12, 36, 54 and
59 -- on the border with Saudi Arabia. Occidental's net production averaged
38,000 barrels of oil per day in 2002, with 32,000 coming from the Masila field
and the remainder from East Shabwa. A series of step-out wells at Masila in 2002
added 5 million barrels of new reserves.
Occidental drilled and completed two exploratory wells in Block 20 in late
2002 and completed a 2-D seismic program in the third quarter of 2002 in Block
44.
QATAR
In Qatar, Occidental successfully reversed 25 years of declining production
in the Idd El Shargi North Dome (ISND) field. By introducing advanced drilling
systems and by applying new waterflooding and reservoir characterization
techniques, Occidental is increasing production and recoverable reserves from
the field's 4 billion barrels of remaining oil in place.
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Occidental is moving forward under a new agreement with a second phase in
the development of ISND. The new phase is targeting the development and recovery
of 145 million gross barrels of additional reserves from ISND.
Occidental is also engaged in full-field development of the Idd El Shargi
South Dome (ISSD) field which, as a satellite to the North Dome, reduces the
overall capital requirement of the two projects.
Combined production from the two fields averaged 42,000 barrels per day,
net to Occidental, in 2002.
When the second phase of ISND and the full-field development of ISSD are
fully completed, Occidental expects its total net production from Qatar to
increase to approximately 76,000 barrels per day in 2006. Reserves, net to
Occidental, related to these projects are expected to total 94 million barrels.
Also, see the Dolphin Project discussed above.
SAUDI ARABIA
In Saudi Arabia, Occidental has a 20-percent interest in the Core Venture
Two consortium, which is proposing to invest in the Red Sea area to help the
Kingdom identify and develop new natural gas reserves for the domestic market.
An initial agreement was signed with the Kingdom on June 3, 2001.
OTHER EASTERN HEMISPHERE
PAKISTAN
Occidental holds oil and gas working interests, that vary from 25 to 50
percent, in four Badin Blocks in Pakistan. BP is the operator. In 2002,
Occidental purchased additional interests in two of these blocks from the
government of Pakistan for approximately $72 million. Current gross production
is 65,000 BOE per day, while Occidental's net share is approximately 25,000 BOE
per day.
Current plans call for drilling 13 to 15 wells per year to develop new and
existing fields. Additionally, Occidental continues to evaluate various
exploration opportunities.