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StatoilHydro Sanctions Deepwater Caesar Tonga Project

StatoilHydro's board of directors has given the green light for its first development in the deepwater Gulf of Mexico (GOM), the Caesar Tonga Project, which is to be operated by Anadarko Petroleum Corp.

Initial development is to consist of four wells, with a combined average production rate of 40,000 boe/d. First production is expected in 2011. Caesar Tonga is spread across the deepwaters of the Green Canyon, in Block 726, where West Tonga was discovered, and in Block 683, where Caesar is. The Caesar prospect was discovered three years ago, and its No. 1 well was drilled to a total depth of 29,721 feet (see NGI, May 22, 2006).

Statoil's Randy Perry, who manages the company's GOM assets, called the development a "promising area" for the explorer, which is based in Norway. It's the first deepwater GOM project to move from exploration to execution, he noted.

Caesar Tonga is south of Chevron Corp.'s Tahiti prospect, which is scheduled to begin ramping up over the next few months (see NGI, March 16). At maximum capacity, Tahiti is expected to produce on average 70 MMcf/d of gas and 127,000 b/d of oil. Estimated recoverable resources are 400-500 million boe.

"We are expecting similar sand qualities, which should give us good recovery rates from the [Caesar Tonga] field," Perry said.

The project overall encompasses three discoveries: Tonga, Tonga West and Caesar, which would be combined into one project and developed as a subsea tieback to the Anadarko-operated Constitution Spar. Field development of Constitution, located in Green Canyon Block 680, was sanctioned in 2004, and the spar is 100% owned by Anadarko. The truss spar first came on stream in 2006 and produces at a rate of 75 MMcf/d and 40,000 b/d.

Statoil's share in the development came through three purchases. It acquired stakes in Tonga and Tonga West four years ago in a $2 billion deal with EnCana Corp. (see NGI, May 2, 2005). A stake in Caesar was acquired from Plains Exploration & Production Co. almost three years ago (see NGI, Sept. 25, 2006).

Anadarko holds about a third working interest in the West Tonga prospect, sharing the discovery with Statoil, which has a quarter stake, Chevron (20.5%) and Shell Exploration (17%) (see NGI, March 31, 2008). Anadarko gained entry to the discovery in 2006 following an asset swap with Chevron, which gave the independent a stake in seven deepwater blocks that encompass the Tonga find (see NGI, Nov. 6, 2006).

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