By Astrid Wynne, Contributing Editor
Vestigo Petroleum, a wholly owned subsidiary of Malaysian NOC Petronas Carigali, is about to put a tender out for its first rig on a drilling program offshore Peninsular Malaysia. “We’ll be going out to the market within the next three weeks for a tender for a jackup for six months plus a six-month option,” Vestigo CEO Keith Collins said.
Because the field reservoirs are between 1,500-2,500 m below sea level in water depths ranging from 30 m to 75 m, with normal pressure and temperatures, the company is looking for a standard-specification 10,000-psi jackup. However, Vestigo is also seeking significant offline capability to facilitate a “manufacturing approach” to drilling and completions.
“We look at what’s been achieved in Thailand with Chevron’s approach and the way they drill their wells. We’d like to emulate that level of performance in the fields we are developing offshore Malaysia. We obviously very keen to see the industry go into that type of model, where you’ve got lots of offline and online work happening at the same time,” Mr Collins said.
Vestigo, which was established in July 2013, focuses exclusively on small and marginal fields – both in Malaysia and in other parts of Southeast Asia. The company currently has two risk service contracts (RSCs), which were established by Petronas in 2011 to harvest stranded reserves. Under an RSC, rather than payment by the barrel, operating companies like Vestigo submit invoices to Petronas for work carried out. The hope is that reduced risk will lead more companies to take on this work.
Both of Vestigo’s current RSCs are for fields located offshore Terengganu, Peninsular Malaysia. The first is the Tembikai Chenang RSC, for which they are about to source a rig. Drilling is expected to begin by March 2015 and production by mid-2015. The second, for Ophirheld, is part of a consortium with Australian independent Octanex and Malaysian independent Scomi D&P.
With a production target of over 30,000 bbl of oil equivalent per day by 2016, Vestigo will require a “conveyor belt” of projects to ensure production, along with a repeatable development plan to keep costs down. “We’re looking to secure another four fields by the end of the year, and our objective is to develop five fields per year from 2016 onwards,” Mr Collins said. “We’re talking about five fields per year because these fields might only last three to four years. We’ve got to keep the activity going to be able to get the production rate up. Typically the number of wells we will need to do this per field will be between two to four. So over a year with our five field development program, we’d be looking at 12 to 16 wells.”
To reduce drilling costs, the company will look to standardized hole sizes and directional well profiles. Logging while drilling will be used to try to eliminate wirelines. Vestigo also envisions single-trip completions with simultaneous insertion of perforating guns and tubing, finished with a downhole gauge and subsurface safety valve.
“Our main activity is going to really kick off in 2016. That’s when we might be able to make a bigger commitment to the market in terms of the time that we need a rig for,” Mr Collins said. “A reasonable estimate is that we will be drilling and completing these wells in less than 15 days.”