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This page has been adapted from La'o Hamutuk's Oilweb CD-ROM.
For more information on the Kitan project, click here.

Eni Strikes Oil at Kitan in JPDA 06-105

Articles from January - June 2008

ENI spuds Kitan 1, seeks commercial project on Timor Sea JPDA 06-105

International Oil Letter, Vol 24 issue 4, 28 January 2008.

On its JPDA 06-105 license, Eni is currently drilling the Kitan 1 exploration well using the Songa Offshore "Songa Venus" S/S. It has a planned total depth of 3,500m and is located 3km south-west of the Kuda Tasi 3 appraisal and 8km north-east of Buffalo 2. Eni completed a deal with Woodside Petroleum under which it acquired Woodside's entire 40% stake and operatorship in this 1,225 sq km permit in September 2007. The block contains the Kuda Tasi and Jahal discoveries and under the terms of the remaining work commitments, the joint venture must drill one well prior to September 2011. At discovery it appeared that Kuda Tasi was unlikely to be commercial on a stand-alone basis, even taking into account Jahal 1ST1, another sub commercial discovery in the vicinity. The possibility of tying the discovery back to the Laminaria production facilities has been speculated, although it would involve complex unitization discussions as it would entail crossing the Australia East Timor boundary. Present interests in the permit are Eni International BV (operator 40%), Inpex Timor Sea Ltd (35%) and Talisman Resources (JPDA 03-01) Pty Ltd (25%).

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Italian giant makes find near Kuda-Tasi and Jahal prospects

Eni notches up Timor Sea oil hit

By Russell Searancke, Upstream Online 07 March 2008

Eni of Italy has struck oil close to the marginal Kuda Tasi and Jahal fields in the offshore area shared by East Timor and Australia.

The Kitan-1 exploration well flowed at 6100 barrels of oil per day during intermittent testing, according to sources, and the probe has the potential to flow at rates in excess of those already achieved.

The well was drilled using the Norwegian semi-submersible drilling rig Songa Venus.

It is early days yet but the find will boost the prospects of a joint development with Kuda-Tasi and Jahal.

Eni has already spudded the Kitan-2 appraisal well, which is 1.7 kilometres east of the discovery well.

The Italian giant and the Japanese operator Inpex are sharing the Songa Venus until late October at a cost of $225,500 per day.

They have both been using the 1500-foot water depth rig since the middle of November 2006.

The Kitan field and the existing Kuda-Tasi and Jahal finds are located in the joint petroleum development area, Block 06-105.

Eni bought Woodside Petroleum's 40% operating stake in the block in late 2007. Woodside made a A$16 million ($14.76 million) gain on the sale.

Woodside tried for several years to make Kuda-Tasi and Jahal a commercial opportunity, but was let down by an appraisal well in late 2006.

The contingent resource or potentially recoverable oil volume at Kuda-Tasi and Jahal at the end of December 2004 was 19 million barrels, according to Woodside.

Sources said Eni bought the acreage with the clear ambition to commercialise Kuda-Tasi and Jahal, and to drill wells.

Eni's co-venturers in the block are Japan's Inpex (35%) and Talisman Energy (25%).

A new oilfield discovery will be well received by impoverished East Timor, which receives 90% of all petroleum production taxation revenue in the joint area. Australia receives 10%. Eni is growing its business in Australia and in the Timor Sea, where it has built up a large exploration portfolio in recent years.

It has a 12% non-operating stake in the producing Bayu-Undan gas and condensate field and the Darwin LNG project, which liquefies gas from Bayu-Undan. Eni's only other production in the southern hemisphere is from the 65%-operated Woollybutt oilfield.

In addition, Eni owns 100% of the Blacktip gas field, which is under development, near the north Australian coast, and several undeveloped fields, including Polkadot-Penguin, Rubicon and Prometheus.

The Italian giant has five exploration blocks in East Timor's exclusive waters north of the joint area.

When awarded that acreage in late 2006, Eni said it had "achieved the objective of increasing its presence in the North West Australian Shelf".

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Eni flags up Kitan-1 find

Upstream online, 10 March 2008

Italian giant Eni has confirmed that the Kitan-1 exploration probe, drilled in Block 06-105 in the joint petroleum development area between East Timor and Australia, hit oil.

Upstream broke the news of the find last week.

The semi-submersible drilling rig Songa Venus drilled Kitan-1 to a total depth of 3568 metres, with Eni saying in a release that the well "highlighted a significant presence of hydrocarbons".

The well flowed 6100 barrels of oil per day in initial tests, but sources told Upstream last week that Kitan-1 has the potential to flow at higher rates.

Eni said in a release that well data is being analysed to assess the size of the Kitan-1 find.

Eni has already spudded the Kitan-2 appraisal well, which lies 1.7 kilometres east of the discovery well.

The Italian player operates Block 06-105 with a 40% stake. Its partners are Japan's Inpex (35%) and Canadian player (25%).

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Italian oil major Eni makes new oil discovery in the Timor Sea

By Giada Zampano, Marketwatch, March 10, 2008

MILAN -- Eni SpA said Monday it has made a new oil discovery in the Timor Sea, in an area jointly administered by Timor-Leste and Australia.

The exploration well Kitan-1, located in the permit Joint Petroleum Development Area, JPDA 06-105 some 500 kilometers off the Australian coast, was drilled to a total depth of 3,568 meters and highlighted a significant presence of hydrocarbons, the company said.

Eni is the operator in the permit JPDA 06-105 with a 40% stake, with Inpex (35%) and Talisman Resources (JPDA 06-105) Pty Ltd. (25%) as joint venture partners.

The company said initial test results indicate a flow rate of 6,100 barrels of oil a day. The data will now be interpreted to assess the potential dimension of the discovery, it added.

This discovery reinforces Eni's presence and growth potential in the region. The company already has a 10.99% stake in the producing Bayu-Undan gas-condensate field and related LNG facilities; a 100% stake of the Blacktip gas field, which is currently under development and an 80% stake in five exploration blocks administered by Timor-Leste, located between the southern coast line of Timor-Leste and the northern boundary of the JPDA.

Eni has been operating in Australia since 2000 and in Timor-Leste since 2006.

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Kitan in spotlight for East Timor

By Russell Searancke, Upstream, May 1, 2008

Eni oil discovery raises spirits in joint development zone with Australia as exploration work rate set to dramatically increase in next two years

Eni's recent Kitan oil discovery in the shared offshore zone between East Timor and Australia has rejuvenated the area, and drawn attention to other exploration efforts in the same area and in East Timor's sovereign frontier waters.

Eni is still analysing the results of its Kitan-1 and Kitan-2 wells drilled this year in Block 06-105.

East Timor sources say the Italian company is looking at the economics of a small standalone liquids project with a floating production, storage and offloading vessel.

The oil in-place volume in Kitan is estimated at about 80 million barrels, of which 30 million barrels could be recoverable under a 40% recovery rate, say sources.

"This discovery reinforces Eni's presence and growth potential in the region," says Eni.

Kitan is a huge boost for the shared zone - the 35,000 square-kilometre joint petroleum development area - which has seen very little exploration drilling in recent years.

That work rate will increase dramatically with Eni and several other operators committed to drilling exploration wells in their joint petroleum development area blocks over a two-year period, starting in about the fourth quarter.

This activity is a requirement on the blocks, which were awarded in the 2006 licensing round.

There are four active exploration permits in the joint petroleum development area.

Block 06-105 is owned by Eni and its joint-venture partners, Block 06-102 by a Petronas Carigali-led consortium, Block 06-103 by an Oilex-led alliance and Block 06-101 by privately-owned Minza Oil & Gas.

Australia's Oilex has a commitment to drill a total of four exploration wells in 2008 and 2009, while Malaysia's Petronas has a work programme of three wells in the same years.

Eni is keen to drill more wells in Block 06-105, where Eni has spotted seven or eight more leads based on a new geological model, according to sources.

Oilex is about to start the Maura 3D seismic acquisition with Wavefield Inseis vessel Geowave Champion.

The Perth-based company hopes to drill two exploration wells in the fourth quarter, and says it has leads with the potential to hold 200 million to 300 million barrels of oil in place.

Oilex's block is right next to Eni's permit, and sources say there is a chance that the Kitan geological trend extends into Oilex's block.

Oilex managing director Bruce McCarthy says his company's block was rated the most prospective of the permits on offer in the 2006 bid round due to its proximity to other joint petroleum development area fields and oilfields just outside the zone, including Laminaria, Corallina and Buffalo. Channel Islands-based Minza's work programme has no commitment well in the first three years, but rather a requirement to acquire a minimum 500 kilometres of 2D marine seismic in 2008.

Minza will be looking for a farm-in partner to help fund the drilling obligation in the secondary work programme, say sources.

The joint petroleum development area contains just one producing field - Conoco-Phillips' Bayu-Undan gas and condensate project - following the abandonment last July of the Elang-Kakatua oilfields.

There are two other licences in the joint petroleum development area, but both relate to the proposed Sunrise gas project led by Woodside Petroleum.

Sources say it is likely Conoco-Phillips and Woodside will bring in drilling rigs for development and appraisal wells at Bayu-Undan and Sunrise, respectively, in the coming years.

Meanwhile, in East Timor's exclusive frontier waters, Eni and India's Reliance Industries are making good progress with their exploration work programmes.

Eni made a big play in the 2006 licensing round by winning five permits, all of which lie between the joint petroleum development area and East Timor's south coast.

Blocks A, B, C, E and H cover more than 12,000 square kilo-metres off East Timor's south coast in water depths reaching 3000 metres.

Eni has farmed out 20% of the permits and retains an 80% operating stake. It has already acquired 10,300 square kilometres of 3D seismic, and is planning to drill two wells in 2009.

Reliance won Block K, and must drill one exploration well in 2009. The Indian energy giant will soon begin 3D seismic acquisition in Block K, which is directly north of the Sunrise fields.

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TIMOR SEA DESIGNATED AUTHORITY MEDIA RELEASE
19 May 2008

ENI finds oil in Kitan-1

The Timor Sea Designated Authority is pleased to announce an important oil discovery in the Joint Petroleum Development Area under Production Sharing Contract 06-105, operated by ENI.

Kitan-1 is an exploration well located in 310 metres of water near the centre of PSC area 06-105. The well was spudded on 8 January 2008 and drilled to a depth of 3568 metres by the semi-submersible drilling rig, Songa Venus.

Oil shows were recorded during drilling and coring, and logs have indicated the presence of an oil accumulation. Initial test results confirm the discovery of an oil accumulation. The flow rate on the initial clean-up reached 6,100 BOPD on a 32/64 choke. The flow was limited by the surface testing equipment technical specifications. The data will now be interpreted to assess the potential dimension of the discovery.

Kitan-1 has been suspended as an oil discovery and the Songa Venus will move to the Kitan-2 location to test the eastern extent of this newly discovered reservoir.

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TSDA approves Kitan development area

By Matthew Donovan, Energy Current. 9 June 2008

TIMOR-LESTE: The Timor Sea Designated Authority (TSDA) has approved the development area for the Kitan oil field, following Italian company Eni's commercial discovery in the area. The Kitan discovery is in permit 06-105 of the joint petroleum development area (JPDA) in the Timor Sea, jointly administered by Timor-Leste and Australia, around 170 kilometers (105.6 miles) off the Timor-Leste coast and 500 kilometers (310.6 miles) off the Australian coast.

Kitan was discovered by exploration activity by Eni through the well Kitan-1. Following the discovery, Eni drilled the well Kitan-2, completed March 30, confirming the presence of potentially commercial oil reserves. The wells were drilled using Songa Offshore semisubmersible Songa Venus, in water depths of around 1,017 feet (309.9 m).

Eni will now prepare a development plan to present to the TSDA, to be delivered within the next 12 months.

Eni is the operator of permit JPDA 06-105 with a 40 percent working interest. Joint venture partners Inpex holds a 35 percent interest while Talisman Resources holds 25 percent.

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