Kulczyk Oil Ventures to Test First Brunei Exploration Well

Thursday, Jun 24, 2010

Kulczyk Oil Ventures (WARSAW:KOV) ("KOV", "Kulczyk Oil" or the "Company") announces that preliminary results from analysis of drilling data and interpretation of wire line logs from the Lukut-1 well on Brunei Block L indicates a number of potential hydrocarbon-bearing zones. Consequently, KOV and its joint venture partners (the "JV Partners") have decided to proceed with a testing program.

HIGHLIGHTS

--  hydrocarbons intersected over several intervals; 

--  a testing program is expected to begin in July dependent upon the

    availability of a service rig; 

--  the drilling rig will move to Lempuyang-1, approximately 15 kilometres

    to the southwest, after it has been released from Lukut-1.

The Lukut-1 well, which commenced drilling on May 2, 2010, had an initial target depth of 2,150 metres. The well was designed to test the hydrocarbon potential of a structural feature defined by 3D seismic shot by KOV and its joint venture partners in 2009.

The well reached the target depth of 2,150 metres on May 31, 2010 and, as elevated gas readings were reported in the drilling mud, the JV Partners elected to deepen the well to 2,230 metres to facilitate assessment of a zone of interest between 2,130 metres and 2,210 metres before carrying out the wire line logging program.

Preliminary analysis of data acquired from the gas logs which evaluated the hydrocarbon content of the drilling fluid during the drilling operation showed a continual increase in gas content with indications of C1 to C5 over the interval from 1,745 metres to 2,230 metres. Gas shows were noted at 1,745 metres, 1,945 metres and from 2,150 metres to 2,185 metres. Elevated gas readings at 2,230 metres led the JV Partners to further extend drilling to 2,366 metres after running a liner to 2,230 metres.

During the drilling of the additional section elevated gas readings were also recorded from 2,295 metres to 2,317 metres but due to hole and drilling conditions this section of the wellbore was not able to be effectively cased. The well was plugged back to 2,230 metres. During the plugging back of the well the cement set up prematurely resulting in a section of tubing being left in the hole. Operations are underway to remove this impediment to the testing of the well. The Nabors 503 drilling rig will be moved off of the location and relocated to the Lempuyang-1 location once the tubing has been removed from the wellbore to allow for the testing of the zones below 2,066 metres.

Further interpretation of drilling results and a petrophysical evaluation of the wire line logs for the entire hole is progressing and will be factored in to the final design of the testing program. A smaller service rig will be sourced to undertake the testing of the well and the testing program is expected to commence in July, 2010.

The partners in Brunei Block L and in the Lukut-1 well are Kulczyk Oil (40%), AED South East Asia Limited (50%) and QAF Brunei Sdn Bhd (10%). The Lukut-1 exploratory well is the first well in a program of a minimum of four wells to be drilled in Brunei by Kulczyk Oil and its joint venture partners in 2010. Two of the wells, Lukut-1 and Lempuyang-1, are located on Block L (KOV 40%) and the two additional wells will be drilled on Block M (KOV 36%) to the south. All four of the wells will evaluate prospects identified by newly-acquired 3D seismic.

Assets of Kulczyk Oil

Kulczyk Oil is an international upstream oil and gas exploration company with a diversified portfolio of projects in Brunei, Syria and Ukraine and with a risk profile ranging from exploration in Brunei and Syria to production and development in Ukraine.

In Brunei, KOV owns working interests in two production sharing agreements which gives the Company the right to explore for and produce oil and natural gas from Block L and Block M. KOV owns a 40% working interest in Block L, a 2,220 square kilometre (550,000 acre) area covering onshore and offshore areas in northern Brunei and a 36% working interest in Block M, a 3,011 square kilometre (744,000 acre) area onshore in southern Brunei.

In Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The gas producing assets of KUB-Gas consist of 100% interests in four licenses near to the City of Lugansk in the northeast part of Ukraine.

In Syria, KOV holds a direct 75% interest in a production sharing agreement that gives it the right to explore for and produce oil and natural gas from Block 9, a 10,032 square kilometre area in northwest Syria.

The main shareholder of the Company, Kulczyk Investments S.A., increased its holdings in the Company through participation in the initial public offering of the Company on the Warsaw Stock Exchange in May 2010 and the partial conversion of a debenture (the "KI Debenture") and owns approximately 48.55% of the issued common shares as of the date of this news release. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.

Source :

1. http://www.youroilandgasnews.com/kulczyk+oil+ventures+to+test+first+brunei+exploration+well_50952.html

Methanol plant: to stay green

Saturday, July 10, 2010

SINCE the first exported shipment of methanol in late May this year, Brunei has been exporting methanol to the rest of the world once every three days.

But even as these industrial developments take place, the Brunei government continues to maintain its pro-sustainability stance on the environment with projects like the Heart of Borneo.

Brunei Methanol Company Sdn Bhd Deputy Chief Executive Officer Mohd Reduan Mohd Hj Yusof however, assures that Brunei Methanol is striving hard to obtain an ISO 14001:2400 certification for their environment management system by the first quarter of 2011.

Mohd Reduan talks to The Brunei Times about how BMC prevents the negative side effects of methanol production on the environment.

BT: How does BMC protect the environment from methanol production?

Mohd Redzuan: We protect the environment with two fronts, first is through compliance. BMC is an international project financed, financed by a consortium of banks, led by the conventional bank. One of the conditions is we must adhere to the World Bank Environmental Protection Guidelines.

These guidelines are used by the World Bank for use by any country. We have these guidelines we have to comply with.

And the second front?

We have to comply with the vessel convention. Why we comply with vessel convention is because we export through sea.

Also, Brunei has its own regulations and on top of that we are also striving to certify ourselves with the ISO 14001:2400 for environmental management system.

We try to comply with all of this and at the same time, the physical needs of the environment.

In our methanol plant here we have a water treatment facility. There are standards as to how we treat our waste water.

We treat it before we release it and according to the standards of river water, which is much more stringent and severe as compared to the quality of sea water.

There are only two standards, sea or river. We follow standards in accordance to river water, meaning we can drink the treated water directly. That shows how clean it is.

What other plans does BMC have in place for water treatment?

We also have a water treatment cooling tower. This obligation is set in our land lease in agreement with Sungai Liang, that whatever water we use, we treat.

Unlike oil and gas, we don't flare, because the gas is used to convert into methanol.

We only flare if there is a plant shut down, in order to protect the plant so it doesn't explode.

Otherwise, everything is sucked into the plant and converted into methanol. We need natural gas to convert to methanol so we don't flare.

At night, the smoke in the air that you see if you drive pass our facility it's not really smoke, it's just steam.

The steam is put into a plant and imposed as methanol CH3OH.

We use the steam reaction with the gas and make liquid methanol, making our samples look exactly like water with a spirit smell. There are many grades that supply to different industries. Brunei's is a higher grade and demanded in pharmaceuticals mainly because it's so pure.

In the pharmaceutical industry, they don't want any pollutants inside the methanol.

So the use of methanol in products is actually quite environmentally friendly then?

European countries are driving the use of methanol now even. This is mainly because they want to reduce pollution from materials which were derived from petroleum.

The problem is, materials with petroleum burns with a black smoke, so now they are switching to methanol. If the product burns, it's just a white smoke which is less pollution. Thus, reducing atmospheric pollution as it's all about turning the global industry into a clean industry.

What about BMC's Corporate Social Responsibility towards the community?

BMC has been involved in a number of community activities in the past. We had dialogue sessions with the residents in this area about the construction works and so on.

Now that BMC is a finished projected, our community service programme is to help recover the recreation area at Sungai Liang.

This project cost a total of $160,000 and besides that we have a few other activities, for example Japanese culture events targeted at residents living in Sungai Liang.

Other events for the community which is in our planning stages, to hold a charity project for Lumut-Liang, where we will provide help for the preparation of Hari Raya.

The Brunei Times

Total To Drill One More Well In Offshore Block B

andar Seri Begawan - Total E&P Borneo B V (TEPB) will drill another well in Block B Maharajalela field, its general manager said yesterday, following an announcement that it has completed drilling ML-5 well.

Drilling of the exploration well, which is TEPB's deepest yet at its production field in Block B some 50km off Brunei shores, began in January and completed on May 26. It is 5,700 metres in depth measured from sea level.

The exploration well, numbered Maharajalela 5 (ML-5), was drilled southeast of the Maharajalela field, with the objective to explore separate structures of the field.

"We expect to collect information which will validate the extension of the Maharajalela field. We are now in the analysis stage, where we are collecting data and information for potential hydrocarbons," said Yves Grosjean, general manager of TEPB.

"We have some additional operations which will be carried out at the well until the end of this month. After these operations, then we will have a better view of what we have found," he added.

Grosjean said another well will be drilled after data collection is complete on ML-5. "We will need more information in order to define the overall future development. This well will be named Maharajalela 6 (ML-6) and will start immediately after we complete our operations at ML-5, which will eventually be abandoned and cemented," he added.

Grosjean said that the well is considered as state of the art due to its depth and the high pressures and high temperatures encountered downhole.

Total, one of the world leaders in operating under high pressure, high temperature (HPHT) conditions, has put all its expertise on the project.

"We are reaching extremely high pressures in these wells, and Total has a particular expertise in HPHT reservoirs. The knowledge and the technologies are directly inspired from the famous Elgin Franklin field in the North Sea in the United Kingdom," he stated.

"We are not alone to drill this particular well and to bring the financing and to engage into this adventure. We have partnered with Shell Deepwater Borneo Ltd (SDBL). Shell is very supportive of what we are doing and we are very pleased with their support," Grosjean said, noting that the cost of the project was estimated at $100 million.

In 2008, TEPB drilled its longest production well, the MLJ2-06, in Block B, some 50km off Brunei shores, with a depth of 7,000 metres. In a statement, the company said this achievement demonstrated that Total has adequate technology to develop HPHT fields in Brunei, which will open up many opportunities for future oil and gas development in the country.

The ML-4 well, drilled to a final depth of 5,227 metres, uncovered a new gas-bearing pocket in the Maharajalela/Jamalulalam field where a gas column of over 400 metres was struck in reservoirs.-- Courtesy of The Brunei Times

Rosy Future With Black Gold

Brunei heading for oil & gas boom

Bandar Seri Begawan - There seems no way for Brunei to go now but down, down, down. Deep down, in fact.

And down, into the bowels of the earth is where the oil-rich sultanate appears heading for with all haste at the moment.

There is good reason because that is where black gold - oil and gas - the nation's lifeblood, wait to be explored.

According to the increasing number of international oil and gas people now making a beeline for the Sultanate, there could soon be an oil boom in the offing here soon.

Local businessmen welcome the prospect of injecting much needed fresh life into the current general slump.

As part of the oil activity, various seismic surveys have been conducted in various parts of the country and drilling taken place.

Optimism rides high among oil circles as millions of dollars are poured into the various concessions.

AED Oil has confirmed that the onshore exploration well, Lukut-1 in Block L, Brunei, has been successfully spudded recently.

The Lukut-1 well is part of the first phase of an exploration programme in Brunei and is the first well to be drilled for Brunei National Petroleum Company (PetroleumBRUNEI).

It is also the first well to be drilled onshore in Brunei's Block L in over 24 years.

A number of other companies have lined up to do likewise.

Economists have praised Brunei's vision and the subsequent effort to diversify its economy.

However they also suggest the need to look for oil and gas. That will ensure the country's immediate survival. Meanwhile they are encouraged that a strong economic foundation is built with the oil surplus.

But oil and gas could run out one day and disaster would loom, they warn.

However they recognise that developing other sustainable industries would take time. But the dilemma here is that there are no immediate industries to fall back on for now, economists say. Therefore producing more oil is vital for the moment.

So to be realistic, world financial bodies and others have urged intensive search for mineral fuels to build Brunei's infrastructure, to educate its people and to grow its 350,000 population to tidy things over.

With this in mind Brunei seems to have begun an oil search of unprecedented proportions, observers here noted.

Prospects seem encouraging and wells sunk offshore and on land indicate new discoveries, oil businessmen here say.

The International Monetary Fund (IMF) in a recent report on Brunei's longer term growth said that it would depend on the country's hydrocarbon reserves expansion.

The recovery of the global economy and oil prices, and success in diversifying the economic base, are other factors. -- Courtesy of Brudirect's News

Hi-Tea treat for PCEians by Australian High Commission today

Bandar Seri Begawan - The Australian High Commission is hosting a hi-tea for 15 Bruneian students who are about to embark on a three-year articulation at the University of New South Wales (UNSW), a Group of 8 university in Australia today, a press release stated.

HRD Services, as the local representative of the University of New South Wales in Brunei, established-dialogue between the UNSW and Institut Teknologi Brunei (ITB).

This dialogue resulted in the signing of a Memorandum of Understanding whereby students complete the first of a four-year degree programme at ITB, before heading off to the University of New South Wales, in Australia, for the remaining three years of study.

Over time, it is anticipated that the programmes will become more localised, with a greater amount of time spent studying in Brunei.

The 15 students comprise BSP scholars, Ministry of Education scholars and privately funded students and will leave Brunei between July 7 and July 11 to begin their studies at mid-year entry. -- Courtesy of Borneo Bulletin