International news for oil and gas professionals For up-to-the- minute news, visit www.ogjonline.com General Interest - Quick Takes

Coup threatens Mauritania's oil, gas industry

Mauritania's nascent oil and gas industry, already under threat from die al- Qaeda terrorist organization, is facing more uncertainty following a bloodless coup staged by Army commanders.

The coup began when President Sidi OuId Cheikh Abdallahi fired the country's top four military officials. According to reports, the officials had been suspected of supporting lawmakers who had accused the president of corruption and disagreed with his efforts to reach out to Islamic hard-liners.

Abdallahi was detained by presidential guard units and held against his will at the presidential palace compound. Meanwhile, a military junta, which took over state radio and television, announced the formation of a new "state council," led by Gen. Mohamed OuId Abdel Aziz, one of the four generals fired earlier in the day.

A US spokesman issued a statement condemning "in the strongest possible terms" the Mauritanians' military's overthrow of the democratically elected government of Mauritania, while European Union Development Commissioner Louis Michel said the president should be quickly released and returned to his post.

In July Malaysia's state-owned Petronas said it obtained positive results from its exploration program in Mauritania when a well drilled 2 km away from its original Banda-1 discovery confirmed the existence of "significant" quantities of oil and gas.

Petronas said further exploratory work will be necessary to determine the overall size of the reservoir, but gas resources could be in excess of 1 tcf Around the same time, al-Qaeda's Nordi Africa network said it planned to attack interests held by the US, which it said was establishing military bases and seeking control of the region's energy sources.

China establishes new energy agency

China's National Development and Reform Commission (NDRC) established a new nine-department government agency, the National Energy Administration (NEA), to secure energy supplies.

Lin Boqiang, an economics professor at Xiamen University, said the consolidation of agencies under NEA signals that China will focus more on energy strategy and planning for sustainable development.

Of the nine merged departments, four were in charge of separate energy sectors, while the other five were involved in policy, development planning, energy conservation, and international cooperation. Responsibility for domestic pricing of energy will be shared by NEA and NDRC. NEA will make proposals concerning price adjustments but will need approval from NDRC and the State Council, while NDRC will consult NEA when it adjusts energy prices.

Apart from pricing, however, NEA will assume NDRC 's responsibilities in several odier key areas to include charting energy strategy and policies as well as managing separate sectors for oil, gas, coal, electricity, nuclear, and renewable energy.

NEA will manage China's strategic oil reserves, including building and releasing such reserves and supervising the management of commercial reserves.

The new agency will have approval of the biggest overseas investments in energy resources and will negotiate and sign energy contracts with foreign governments and institutions.

The Chinese government announced plans in March to create a bureau to integrate energy management, marking the first time it has established a central organization to deal with energy issues since dissolving the ministry of energy in 1993.

Trinidad and Tobago audit shows 30.8 tcf of gas

An audit of Trinidad and Tobago's natural gas reserves for 2007 shows that the country has 30.8 tcf of gas.

The audit, conducted by Ryder Scott Co., was presented to the Caribbean twin- island nation's standing committee on energy. It shows proved reserves as 16.997 tcf, probable reserves at 7.883 tcf, and possible reserves at 5.888 tcf. The audit shows a rate of reserves to production ratio of 13 years.

In presenting the audit, Ryder Scott Senior Petroleum Engineer Larry McHalffey noted that there had been a virtual 100% replacement of reserves for 2007. He said, "What this means is: for the entire [year of] 2007, all the gas used in Trinidad and Tobago was replaced. This is a positive sign for Trinidad and Tobago." Ryder Scott put Trinidad and Tobago's annual gas use at 1.3 tcf.

The audit also places the Caribbean island's exploration potential of an additional 31.253 tcf.

The figures do not take into account the recently announced discoveries made by PetroCanada and Canada Superior. McHalffey said Ryder Scott also did not consider the Trinidad and Tobago offshore ultradeep water in assessing the exploration potential. Trinidad and Tobago's ultradeep has not been explored but is expected to be bid in 2009.

Exploration & Development - Quick Takes

Petrobras to begin Tupi pilot production in 2009

Petroleo Brasileiro SA (Petrobras) plans to start oil production from its giant Tupi field in the Santos basin off Rio de Janeiro state in March 2009, the company's chief executive told reporters Aug. 1 in London.

Jose Sergio Gabrielli said initial output in the pilot project would be 20,000-30,000 b/d. This is expected to rise to 100,000 b/d in 2010.

Tupi, which holds an estimated 5-8 billion bbl of oil reserves, is challenging because it is in a frontier pres alt reservoir deeper at 2,100 m than discoveries in the Campos basin and farther in distance: 300 km vs. 150 km for Campos.

Consequently, Tupi also poses logistical difficulties in accessing the deposit, and Petrobras faces rising costs in a tight services market. Petrobras is keen to focus its personnel on developing the field quickly, which could boost Brazil's current 1 4 billion bbl oil and gas reserves by more than 50%.

The country's president has established a group to investigate whether a separate oil company should develop Brazil's subs alt reserves. It will present its proposal within the next few months, Gabrielli said. He is a member of the group.

Last year, Petrobras announced a business plan of $112.4 billion for 2008-12, but this did not include Tupi. Gabrielli said the company would have to increase its borrowing, and new figures would be unveiled in September or October. Petrobras expects to order 28 new drilling rigs during 2013-17.

Gabrielli told investors the company plans to produce 1.95 million b/d of oil next year, and production will rise to 2.42 million b/d in 2012 and 2.81 million b/d in 2015.

Encore Acquisition drills its first Sanish well

Encore Acquisition Co. recently completed its first well in the Sanish formation of the Bakken shale in the Willis ton basin.

Currendy Encore is drilling a second Sanish well in Charlson field. That well is expected to be completed in the third quarter. The company plans to drill six wells total in the Sanish this year.

The recently completed Charlson 11-16H well, in Williams County, ND, was brought on stream July 23 at an initial production rate of 1,106 boe/d dirough 7-in. casing.

Fort Worth-based Encore has a 96% working interest in the well. The company owns 10,400 net acres in the area.

The company plans to add a third rig to drill Bakken and Sanish wells in August. Upon arrival of the additional rig, Encore plans to drill a Sanish well in its Cherry Creek prospect.