CHEVRON N.SEA FIND MAY HOLD 300 MLN BBLS -ANALYSTS
A North Sea oil find announced by Chevron
Corp's <CHV> Chevron Exploration North Sea Ltd may indicate a
new field with recoverable crude oil reserves of 300 mln
barrels, industry analysts said.
    Chevron said a sidetrack well on block 16/26 on the U.K.
Continental shelf tested 9,000 barrels per day (bpd) of 20 API
crude oil from the tertiary "Alba" sand through a three-inch
surface choke.
    "The estimated amount of oil at the Alba field is around 320
mln barrels," Paul Spedding of stockbroker Kleinwort Grieveson
and Co told Reuters.
    He said industry estimates put the total reserves at the
field at over one billion barrels, but given the low gravity of
oil, the recovery rate would be expected to be around 20-25
pct.
    Analysts said the results were encouraging, but the
potential difficulty of operating and recovering oil in the
field was shown by the fact that the first well had to be
plugged and a sidetrack drilled.
    "The field seems to be shallow and widespread, which will
require a multi-platform development in recovery, pushing costs
up," Christopher Osborne of stockbroker Hoare Govett said.
    Most analysts said that although the low gravity of the oil
found would require additional costs in recovery, the test well
showed that it flows well.
    "Although the gravity of oil at the field seems to be low,
it seems to flow quite well and around 300 mln barrels could be
recovered," Carol Bell of Phillips and Drew told Reuters.
    However, Chevron officials declined to comment on the
analysts' reserve estimates. They said that without further
research and drilling in the area this summer, they would not
disclose any reserve figures.
    Analysts said that if the field were declared commercial
and developed, there would be a ready local market for the
heavy crude it produced.
    "Most refineries are now upgraded to refine heavy oils and
the price differentials between heavy and light crudes are a
lot narrower today," Osborne said.
    Chevron operates the block on behalf of 16 companies which
include British Petroleum Development Ltd, DSM Hydrocarbons
(UK) Ltd, Enterprise Oil (TNS) Ltd, Marathon Int. Pet. (GB) Ltd
and Phillips Petroleum Co U.K. Ltd.
 Reuter
