Fletcher poised for Brunei challenge

By FIONA ROTHERHAM

Fletcher Challenge Energy is about to start drilling the first of five exploration wells in Brunei, the most comprehensive offshore oil drilling programme undertaken there in 10 years.

From April 15, Fletcher Energy and its partner Unocal will drill the first of five exploration wells in an area of around 2400 sq km, known as Blocks A and CD.

The five were selected from a portfolio of 20 prospects where most are estimated to have potential reserves of up to 80 million barrels of oil equivalent.

The first three wells will be drilled at the highest-ranking prospects: Bendahara Selatan, Laksamana Utara and East Egret.

Drilling by the Japanese Hakuryu-3 semi-submersible rig is expected to take between 90 and 150 days.

The net dry-hole cost of the five-well campaign to Fletcher Energy is around $US12.1 million ($24 million). In its latest interim review, Fletcher Energy said under the terms of the 1997 farm-out, Unocal will fund the first of these wells along with the first $US3 million of the two subsequent ones.

Fletcher Energy has a 26.95 per cent share in the licence, Unocal holds a further 26.95 per cent, with the remainder owned by Brunei partners.

Fletcher Energy entered Brunei in 1994 and also holds a 35 per cent non-operating interest in Block B where the Maharaja Lela gas field has been developed.

In New Zealand, Fletcher Energy said it was encouraged by flow rates achieved from the second of two drill stem tests at its Pohokura-1 natural gas well off Taranaki.