Three major Gulf of Mexico deepwater announcements were unveiled Wednesday, partially discounting reports by analysts recently that offshore production is tapering off based on rig counts. Confirming ramp ups following discoveries in deepwater were Dominion Exploration & Production Inc., and two involving Texaco, one with BP and another with Agip SpA.

New Orleans-based Dominion E&P, a subsidiary of Dominion, said it has approval to go forward in developing the Devils Tower field, using a spar that will produce up to 60,000 bbl/d from its discovery in Mississippi Canyon Block 773. First production is expected by mid-2003.

“Effective planning by our development team will allow us to go from discovery to first production in about three years,” said Duane Radtke, CEO of Dominion E&P. “This could be one of the fastest cycle times for a deepwater floating production platform.”

The company, which has participated in other deepwater projects but is beginning its first as operator, is completing the drilling and evaluation of the final two appraisal wells, and field reserves are in the range of 50-75 MMboe, said Dominion.

SparTEC Inc., an affiliate of J. Ray McDermott, will construct the spar in 5,610 feet of water and will be the world’s deepest dry tree platform, said Dominion. Dominion owns 75% working interest and Pioneer Natural Resources Co. has the remaining 25%.

In one Texaco-related announcement, BP and Texaco reported they had an oil discovery in 7,000-foot-deep water in the Mississippi Canyon. The discovery well, on a prospect called Blind Faith, was drilled by BP, which has 77.5% interest. Texaco owns the rest.

The BP well was drilled to a total depth of more than 25,000 feet from the water line. Blind Faith is the first well drilled by the dynamically positioned semi-submersible drilling rig called Ocean Confidence, owned by Diamond Offshore Drilling Co.

The discovery was made on Mississippi Canyon Block 696, about 175 miles southeast of New Orleans. The reservoir covers parts of two blocks, 696 and 695, about 20 miles east of BP’s Crazy Horse discovery. Crazy Horse is considered the largest field ever in the Gulf of Mexico (see Daily GPI, July 16, 1999).

Texaco and 50-50 partner Agip SpA also said Wednesday that a second well has confirmed the “significant potential” of their Champlain discovery, which is located in the Atwater Valley Block 63. The find is more than 4,000 feet deep, about 160 miles south of New Orleans.

Texaco said the Champlain delineation well reached a total depth of 25,367 feet in early June, indicating the presence of high quality reservoir sands with total net pay of more than 400 feet that extends the proven oil accumulation both laterally and downdip. More delineation drilling is scheduled for the fourth quarter 2001.

Texaco and Agip also own the adjacent Block 64 50-50, and Agip is operator of the sidetrack well. Texaco is the prospect operator for Blocks 63 and 64.

In a research report this week, Salomon Smith Barney analysts wrote that while onshore rig demand was up, “offshore rig demand is taking a breather” because operators are rethinking their drilling plans or trying to obtain more funds for ramp ups.

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