Dana Petroleum
Production
Overall, the Production average for the year was 38,653 boepd on a working interest basis, broadly flat with 2008, with growth from the Bow Valley acquisition being offset by price-related constraints on UK gas production and production difficulties on the East Zeit field in Egypt.
Northern North Sea (NNS) & Norway
Both the Hudson field and Otter field performed strongly
during the year. Production during the early part of the year
on both fields was affected by host facility issues, but as
expected improved reliability later in the year enabled any
early deficit to be recovered. Otter also experienced a problem
with part of the electrical system connected to the downhole
pump on one well. The downhole pumps have a finite life before
they require to be replaced, and it is expected that a workover
will be required during 2010 to remedy this.
As a result of strong field performance, production from the
Jotun field in Norway was ahead of forecast.
Central North Sea (CNS)
The incorporation of Bow Valley’s assets has increased the
importance of the CNS as a core area for Dana, adding production
interests in Ettrick, Blane, Chestnut and Kyle, and increasing
Dana’s existing interest in the Enoch field.
A key milestone during the year was the start up of production
from the Ettrick field in August, via the Aoka Mizu FPSO. Although
the late arrival of the FPSO resulted in delays to first oil,
early field data is encouraging and gives confidence for future
performance. Ongoing commissioning of the water injection and
gas compression systems during the remainder of the year means
that the full production potential of the field will not be
realised until later this year, when production is expected
to normalise around 20,000 boepd. Further infill drilling during
2010 is being undertaken.
The Kyle field, which produces across the same FPSO as the Banff
field, provides Dana with a better balance of production and
commercial position across this facility and has performed strongly
throughout the year, exceeding Dana’s forecast at the time of
acquisition.
The start up of Grouse production in late December 2008 resulted
in a significant increase in GKA production in 2009 compared
to previous years, the facility averaging in excess of 22,000
boepd. Grouse and Goosander, both of which continue to outperform
expectations, contribute the majority of production from the
area. The Mallard field exhibits significant scaling tendencies,
and while this can be treated via periodic scale inhibitor squeezes,
the field requires to be shut in for the duration of the squeezes.
Several infill well and exploration targets in the GKA have
been identified as potential drilling targets, and it is anticipated
that this drilling activity will take place during 2011.
Production from Blane and Chestnut performed in line with expectations.
Chestnut production is dictated to a high degree by water injection
volumes required to maintain reservoir pressure, and a project
is currently being considered which will significantly improve
injection capacity.
Claymore production during 2009 has been disappointing, primarily
as a result of lengthy problems with the gas compressors required
to provide gas lift to the wells. The immediate compressor problems
have been resolved, allowing the field to finish 2009 with daily
rates in excess of 20,000 boepd. The field operator expects
to restart development drilling in 2010 and begin the first
phase of an upgrade project to the Claymore compressors.
Southern North Sea (SNS)
During 2009 the SNS was characterised by low gas prices which
resulted in low demand from gas buyers in fields where “buyer’s
nomination” contracts had contract prices substantially higher
than the prevailing market price. The greatest impact has been
on the Johnston field, where field production was shut in during
May and did not recommence until mid November. Although gas
prices and demand are expected to remain subdued during much
of 2010, the longer term outlook is healthier, and as a result
Dana is evaluating options for further drilling on the field
in late 2010 or early 2011.
Further drilling is also planned on the Cavendish field, which
does not have a buyer’s nomination contract and it therefore
produced throughout the year. Start up of compression service
from the Murdoch host platform in May was later than originally
expected, but improved field deliverability meant that overall
annual production was close to expectations.
Egypt
Production in Egypt was below plan for 2009. The shortfall
was due to earlier than anticipated water breakthrough in one
of the key wells on the East Zeit field, and reduced activity
levels, particularly in the non-operated producing fields in
response to downward pressures on capital budgets.
On East Zeit, Dana participated in a GoS regional seismic re-processing
project being run by BP. Data quality in the GoS is poor and
it is expected that targeting new wells using the new data will
significantly de-risk future activities. A new well is planned
for later in 2010, with redevelopment opportunities being considered
for later years.
Across Dana’s non-operated portfolio in Egypt, three development
wells were drilled along with 15 further well interventions
and a 3D seismic survey was acquired. Seven production wells
had been planned for 2009 in the Qarun concession. These wells
were deferred and replaced by a 3D seismic survey across the
Qarun Ridge area. This survey was optimised to target new play
potential in the Jurassic across the area. The data has been
acquired and is currently being processed, ahead of potential
drilling in 2011.
In the East Beni Suef and East Beni Suef extension concessions,
production was added from the 2008 Sohba discovery, two new
wells in the Yusif field and the Gharibon-3 well. Activity levels
were reduced in this area by the operator, Apache but are expected
to increase significantly in 2010. In West Abu Gharadig, two
wells were deferred into 2010 to allow the operator to review
field performance and optimise the wells.
UK
During 2009 Dana experienced a number of incidents which
resulted in office personnel being injured through slips, trips
and falls. Although no long term or serious injuries were sustained,
the five incidents which occurred were considered serious due
to the high potential consequences. Mitigation measures taken
as a result included ensuring safe access to and from buildings,
especially during winter weather; communication of hazards,
facility tours for all new staff and contractors, and installation
of new signage.
For those high risk operations undertaken in the UKCS, positive
HS&E performance was delivered with no authority reportable
incidents for drilling or dive support intervention campaigns;
and full compliance with all HS&E legal requirements and required
operated permits and consents.
During drilling of South East Rinnes a trial of new innovative
technology for cuttings handling was undertaken, involving close
liaison with drilling rig owners, vendors and DECC. Such onboard
cuttings handling systems have the potential to reduce energy
consumption during drilling operations and to reduce the use
of chemical additives required in processing, resulting in cleaner
discharges significantly below permitted consent levels. It
is hoped this technology will be implemented for future campaigns.
In May 2009, Dana responded to a reported subsea hydrocarbon
release from the Hudson asset. The release occurred while the
field was temporarily shut-in during Tern platform operations.
Following analysis of diagnostic signals the leak was quickly
isolated, minimising losses to sea. Subsequent inspection showed
the leak to be the result of a failed weld. Preventative measures
taken included, revised guidance for shutting in the field,
revised guidelines for monitoring field signals and a review
of onshore response procedures and plans. Full inspection of
the pipework has been conducted during three subsequent inspection
visits to the field. All regulatory authorities and statutory
bodies were informed of the incident in a timely manner and
Dana has worked closely with these to ensure compliance. The
failure was remedied within 15 days, allowing the field to safely
return to production.
Egypt
Despite maintaining the high priority and focus assigned
to vehicle safety, concerns remain given a total of 21 vehicle
incidents reported in 2009. The majority were low impact and
without serious injury. However the more severe of these include
a tanker roll over and a head on collision at moderate speed,
both occurring within the vicinity of the East Zeit Base. Steps
taken to reduce road transportation have been supported with
the re-opening of the base airstrip, now used for crew changes
and Cairo visits to the base. Driver training for all Dana employees
has been increased and a driver policy manual has been developed
locally to communicate Company standards and expectations as
well as advise on safe driving practices.
A significant number of incidents were experienced during the
hydraulic workover campaign on Platform A, East Zeit. In response,
Dana increased supervision on the unit and held a safety time
out to communicate the standards and expectations for the campaign
to all personnel involved.
Norway
In 2009, Dana was only engaged in nonoperated production and drilling activities on the Norwegian Continental Shelf, although as a pre-qualified operator the Company ensured that implementation of the HS&E plans and procedures, as well as required training, was fully undertaken. This included increased liaison during partner operations, relevant safety forums and the execution of several operator audits, Dana is now well positioned to ensure that best practices are implemented in the business. An end of year audit against implementation of Dana’s HS&E Management System was passed without any non-conformity remarks by the audit team.
International
Following the planning and construction project phases started
in 2008, Dana completed onshore drilling of the TAJ-1 well at
Bouanane in Morocco. Pre-planning identified a number of high
risk HS&E activities associated with the location remoteness
and the related transportation, logistics and security issues.
The TAJ-1 well involved significant effort in delivering a positive
HS&E performance resulting in no lost time or environmental
incidents. Unfortunately during the campaign five medical treatment
cases were experienced. As a result contractor interface and
communication of safety priority was increased by on-site client
representatives. This was further reinforced during Dana senior
management visits and through active implementation of safety
observations and inspections.
To manage any associated environmental impact, a thorough site
clean-up operation followed the completion of the well and road
construction. Following identification of unmapped perceived
burial mounds along the route to the well, Dana is maintaining
liaison with archaeological advisories and the State to encourage
that such mounds are mapped and considered as cultural elements
within future environmental impact assessments.
- Production
- Reserves Growth
- Exploration
- Development
- Business Development
- Our People
- H,S & E Performance
The Company continues to benefit from the balance of its diverse portfolio of assets, holding interests in 36 producing oil and gas fields.
