CNOO
affiliate takes 50% stake in huge Caribbean exploration tract
PLATTS
NEW YORK
Petroleumworld.com
10 27 05
Shanghai Offshore Oil Group, an affiliate of state China National
Offshore Oil Corp, emerged Wednesday as the 50% owner and operator
of 31.4-mil acres of Caribbean exploration territory, in what
could be one of China's largest foreign upstream exploration ventures.
The farm-in of the five concessions, stretching from Grenada,
just north
of Trinidad, to St. Vincent and the Grenadines, Saint Lucia, Martinique
and
Guadeloupe, could be one of China's largest foreign upstream exploration
ventures. The positions had been assembled by maverick Denver
wildcatter Jack Grynberg and his private RSM Production. Grynberg
signed the farmout documents late Wednesday local time in Shanghai.
Estimated outlays to explore the mostly undrilled acreage, covering
127,000 sq miles, are upwards of $2-bil, said a source close to
the deal. RSM is believed to be "carried" for part of
its 50% share, with the rest to be funded with cash flow from
RSM's current 25,000 boe/d of net US onshore oil and gas production,
rising next year to 35,000 boe/d, he said.
Grynberg is to operate the concessions through further seismic
acquisition, due to resume soon using a Chinese vessel, the companies
said.
SOOG will nominally operate during the drilling phase. But with
its limited
track record in upstream operations, speculation is that the Shanghai
refining
and product marketing company will turn over effective control
to CNOOC.
RSM has already accumulated 9,512 km of 2-D seismic and will run
another
12,000 to 14,000 km by mid 2006, to be followed by an electromagnetic
survey
of eight to 12 "specific and most prolific prospects."
Drilling by SOOG is
slated to start in the second half of 2006.
Grynberg told Platts he also has talks scheduled with CNOOC, Sinopec
and
possibly CNPC to farm out a 25% operator stake in a 55,500 sq
km exploration
concession in the Central African Republic, where RSM has already
farmed out
up to 25% to Canadian independent United Reef Ltd.
The CAR track is adjacent to Chad's Doba basin production and
stretches
to within 100 km of Sudan, where CNPC is a major producer.
Grynberg, noted for promoting initial Western oil ventures in
Kazakhstan
in the late 1980s and for waging massive litigation against US
pipelines over
natural gas pricing, began assembling his Caribbean acreage in
1996 with a
first-ever offshore concession for Grenada. To resolve stalled
boundary
disputes with Venezuela and Trinidad, he launched his own legal
actions. RSM
also holds an exploration tract in Belize.
Now in his mid-70s, Grynberg seems determined to see production
from his
large acreage position. "I don't want to wait forever,"
he told Platts
in 2003.
-James Norman; jim_norman@platts.com
For
more information, take a trial to Platts Oilgram News at
http://oilgramnews.platts.com.
Platts
10/26/05
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