Our Exploration and Production efforts are focused
on creating value for shareholders by advancing our current development
projects, appraising our recent discoveries and growing our proved
reserve base.
In 2003, Amerada Hess produced 373,000 barrels
of oil equivalent per day. Production is expected to
average 325,000 barrels of oil equivalent per day in
2004, reflecting asset sales and swaps transacted in 2003.
In the Garden Banks area of the deepwater Gulf
of Mexico, total production exceeded 33,000
barrels of oil equivalent per day in 2003. Conger
(AHC 37.5%) and Baldpate (AHC 50%) are key
operated assets in the area.
Onshore, Amerada Hess is the leading oil producer
in North Dakota. Through a combination of horizontal
and infill drilling and stimulation technology,
production levels have been maintained at approximately
22,000 barrels of oil equivalent per day, for
the last five years.
In the Seminole San Andres unit in West Texas,
Amerada Hess is an industry leader in using carbon
dioxide injection technology to increase oil recovery.
The carbon dioxide tertiary recovery project
that commenced in 1983 is one of the most successful
recovery projects in the region.
In the North Sea, Amerada Hess has a large
production base including the Valhall Field
(AHC 28.09%) in Norway, the South Arne Field
(AHC 57.48%) in Denmark, and the Beryl (AHC
22.22%) and the Schiehallion (AHC 15.67%) fields
in the United Kingdom. In 2003, 55% of global oil
and gas production was from the North Sea. The Ceiba Field (AHC 85%), located in Block G in
Equatorial Guinea, is responding favorably to water
injection and is expected to produce approximately
25,000 net barrels per day in 2004 compared to
22,000 barrels per day in 2003.
Amerada Hess is developing 12 new oil and gas
fields with new production starting over the next
three years. These developments are expected
to add more than 100,000 barrels of oil equivalent
production per day by 2006.
First production from the Llano Field (AHC 50%)
on Garden Banks Blocks 385 and 386 in the Gulf
of Mexico is scheduled for mid-2004, with initial
net production expected to reach12,000 barrels
of oil equivalent per day by year end.
In Block A-18 (AHC 50%) of the Joint Development
Area between Malaysia and Thailand, final approval
of the buyer’s pipeline and gas plant was secured
and construction commenced in the second half
of 2003. First production from the field is expected
during the second half of 2005.
In Algeria, net production from the Gassi El Agreb
redevelopment project operated by SonaHess, a
joint operating company between Amerada Hess
and Sonatrach, was approximately 20,000 barrels
per day in 2003, an increase of more than 30%
from 2002. In the United Kingdom, first production from
the Clair Field (AHC 9.29%) is expected in 2005
and from the Atlantic (AHC 25%) and Cromarty
(AHC 90%) gas fields in 2006. Combined net
production from these three fields is expected
to exceed 25,000 barrels of oil equivalent per
day in 2006.
In the Norwegian North Sea, enhanced recovery
from the Valhall Field (AHC 28.09%) has begun with
flank development wells coming onstream in 2003
and water injection commencing in the first quarter
of 2004. The Snohvit project (AHC 3.26%), in the
Barents Sea offshore Norway, will be Europe’s first
LNG export facility when gas production and liquefaction
begin by 2006.
In Equatorial Guinea, the results of an extended
appraisal drilling program are being incorporated
into the development plan for the Northern Block
G discoveries (AHC 85%). It is anticipated that the
development plan will be submitted for government
approval in the second quarter of 2004.
Development of the giant Azeri, Chirag and
Guneshli fields (AHC 2.72%), in Azerbaijan, is
on schedule. Net production is currently 2,000
barrels of oil equivalent per day, and is expected to
increase to over 25,000 barrels per day by 2009.
Exploration is a key component of future growth.
Amerada Hess has a strong position in the deepwater
Gulf of Mexico, with leasehold interests in
291 blocks and over 4,000 blocks of 3D seismic
coverage. In 2003, two key discoveries were made
in this area:
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Successful appraisal drilling
was conducted at the 2002 Shenzi discovery (AHC 28%),
on Green Canyon Block 654. The Shenzi-2 well, located
in 4,238 feet of water, encountered about 500 feet
of net pay. Further appraisal drilling is planned
in 2004. |
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The Tubular Bells discovery
well (AHC 20%) in Mississippi Canyon Block 725, located
in 4,300 feet of water, was drilled to a depth of
31,131 feet. The well encountered 190 feet of net
oil pay. Further appraisal drilling is planned in
late 2004. |
In northeastern Thailand, a successful appraisal
well was drilled on Phu Horm Block E5N (AHC
35%). A flow test was completed with a stabilized
gas rate of 31.5 million cubic feet per day.
Additional appraisal drilling is planned in 2004.
Amerada Hess made a new discovery on Block
401c (AHC 60%), in Algeria. An extensive seismic
program is underway, with more drilling scheduled
for the second half of 2004.
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