contentsBuru Recruit Loving Thrill Of A Challenge
Ensign Rig No. 32 at Valhalla-2 well. Photo courtesy of Buru Energy.
Ensign Rig No. 32 at Valhalla-2 well. Photo courtesy of Buru Energy.
The silhouette of a tree is seen against a sunset in the Canning Basin. Photo courtesy of Buru Energy.
Blina oil field nodding donkey. Photo courtesy of Buru Energy.Marie Malaxos' arrival at Buru Energy has signalled that the company is now into overdrive: pushing its Canning Basin assets from resources to reserves, and getting them out of the ground to give Western Australia energy security.
However, there's no pressure. In fact, Malaxos, who helped Buru Executive Officer Eric Streitberg develop ARC Energy's Hovea and Eremia oilfields in the Perth Basin, thrives on a good challenge.
Steve Broome, who also worked with Streitberg and Malaxos at ARC, has also come on board as Reservoir Engineering Adviser. Having gained petroleum engineering experience working with Schlumberger Oilfield Services in a number of overseas locations and more recently in onshore WA with ARC and AWE, he will help with ensuring the Ungani oilfield is optimally developed and produced. He will also assess the proof of concept hydraulic stimulation programs for Buru's tight gas accumulations if and when these are undertaken.
Buru's board has also appointed a recruitment firm to identify, assess and appoint an additional non-executive director with particular experience in new field developments. Having also made other new technical, operational and commercial appointments in the past few months, Streitberg said in March that further appointments and management changes will "doubtless be required" as the company grows and faces new challenges.
It certainly is a challenge. There's a big difference between the remote Canning Basin – where there is limited infrastructure save for what Buru and fellow unconventional hunters, New Standard Energy and ConocoPhillips, have installed – and the Perth Basin.
"It's a difficult part of the world to work", Malaxos said of the Canning Basin in a recent interview with PESA News Resources. "There is little infrastructure. Basically, to make all this happen we need to prove up the reserves, and in some respects a lot of success in the region is good for everyone – New Standard Energy and ConocoPhillips are doing their work in the Canning too.
"As they say, 'build it and they will come'", she said, referring to Buru's Great Northern Pipeline that will take any gas they produce down to southwest markets.
"I'm under no illusions (as to the scope of the challenges), but as soon as we put this Great Northern Pipeline (GNP) in, there will be people wanting to put gas into it, and people wanting to take gas out of it. It will take the initial reserves to be proven up for it to actually get built in the first place and the foundation customers to get it going."
Buru's options for developing its gas reserves are to go it alone with Mitsubishi and raise the money, or to bring in a third party, "and we're looking at those options", Malaxos said. "Regarding the Ungani oil development, I don't think we need to bring anyone else in, we'll be able to fund it between ourselves and Mitsubishi."
While Mitsubishi has the right to earn up to a 50% interest in the majority of Buru's exploration permits and has the right to acquire a 50% interest in Buru's production permits in exchange for an additional cash payment, Buru is the operator, as remote area exploration and development is not Mitsubishi's core business.
Amidst all this, Malaxos is juggling several initiatives as part of driving Buru's plans forward – the GNP, which will transform the energy picture in the State, Buru's Ungani oilfield and its Valhalla and Yulleroo gas fields, the success of which would help underpin the GNP.
"I'm in development, that's what I like doing. You get to build things then you see them coming into production. It's quite satisfying. It's really good to see something go from start to finish. I'll get to see Ungani from two well-heads to full field development and see it go to market... there's a lot of satisfaction in that for me", she said.
"I like being part of these mid-cap companies where you can get involved and can see your involvement, and I know the way Eric works. And the funny part is, we talk about what we did last time (at ARC) and how we're going to do it better this time."
In February, Buru was offered two more Canning permits (L11-1 and L11-2) that cover areas that extend the company's position over the proven Ungani oil play (after the Ungani-1 well flowed 1600 bpd in October last year) and the Valhalla wet gas play, as well as over the Goldwyer shale where it is interpreted to lie in the oil window. This was on top of two more permits (L10-7 and L10-8) granted to Buru in September.
Ungani was WA's first significant oil discovery in the Canning Basin since the 1980s. The last onshore oilfields in WA to be developed in WA were ARC's.
Ungani's production was slated to start in late May, with oil initially being trucked to Kwinana for sale to BP's refinery.
Buru hopes to drill two exploration wells in the Acacia Province in the southern part of its permits, targeting conventional structures with the potential to hold in the order of 50 MM bbl of oil, if hydrocarbons are present. These wells will also provide valuable data about the Goldwyer shale play, which is believed to be prospective for oil in this area.
Buru is also considering additional exploration wells this year to test follow ups to the Ungani discovery and new plays identified as part of its ongoing geotechnical evaluation of the Canning.
Streitberg is also excited about the surrounding area. "Our review of the prospects in the area, with the background of the knowledge we have gained from our ongoing technical work at Ungani, gives us confidence that there are likely to be more Unganis in our permits. We plan to drill as many of these as we can during this year", he said.
The weather is one of several challenges that the Canning presents, which is compounded by its remoteness, which also presents logistical challenges.
"One of the issues is roads - there is limited all-weather access", Malaxos said. "You have to build roads to get the rigs in. Every time we drill a well we're building an access track. Getting a four-wheel drive in and out of places is generally ok but getting bigger machinery in and out can be difficult.
"Hopefully the weather won't affect the oilfield too much. It does affect our drilling program, though we drilled through the wet season this year. There are some places that are really remote and are likely to get flooded, so you wouldn't generally drill between October and April in these areas.
"Logistically, if I visit the site - which I love doing – I'll fly out to Broome and drive out to site. For the initial production test stage at Ungani, we have an onsite accommodation camp near the facility."
With Ungani, Malaxos said, "we may only need four to six oil production wells to produce the field, depending on flow rates and recoveries, and we would drill those from pads so our surface footprint will be very modest."
Malaxos said if a gas development proceeds it would need a small gas processing facility on site. "If you're going to put it into the (Great Northern pipeline) it's got to meet Dampier to Bunbury Pipeline spec so will need pre-treatment".
Buru has no links to the any LNG facilities being developed in WA's northwest, and its business plan is to ship all the gas to the southwest – but a future possibility could also be to supply gas to LNG plants in the Pilbara via the GNP when its own supplies run short.
When Valhalla North-1 was drilled early this year, it revealed that the immediate area around the Valhalla wells holds a substantial unconventional gas accumulation with potentially high liquids content "and there is a good chance the accumulation could extend over a much larger area", Buru said.
The results of Valhalla-2 and Valhalla North-1 are making Buru increasingly confident that the immediate Valhalla area could contain several Tcf of recoverable gas and tens of millions of barrels of associated liquids. An independent report suggests there is potentially a much larger basin centred gas accumulation in the Valhalla area.
"We have also been looking very hard at the old wells in the surrounding area and these are telling us that the accumulation almost certainly extends beyond the immediate Valhalla area and could cover up to 6000 km2 or 1.5 MM acres of Buru's acreage", Streitberg added.
All this represents a phased transition of Buru from explorer to producer – a process which, while hectic, is nothing Malaxos isn't used to, having done it at ARC.
"It's a whole different world", Malaxos said of the transition to producer. "We need to take on more staff and it's a different skill set. We'll still have the exploration arm of the company looking at opportunities but there is a big capital investment in the development, so we've got to look at the way to fund that."
Even once the field is built, it's not over.
"Once we start producing we'll be depleting our reservoir, so we'll be back to trying to find some more reserves, because from the first drop we get out it's on its way down", Malaxos said.
"Once a reservoir is discovered it has to be modelled. The best way to produce it? That's what we're looking at now – should we drill horizontal wells and where do we put the wells? How many do we drill, what sort of artificial lift to use, what to do with the associated gas? However, it looks like we've only got small amounts of gas in our oil field, so it shouldn't be an issue.
"At the moment for the production tests we're trucking the oil down to BP Kwinana. Long-term, we're looking at some of the northwest ports for possible tanker export."
As always with the oil and gas industry, local content is critical. Buru has a warehouse and an office in Broome, helping it to employ locals up there where ever it can.
The challenges ahead for Malaxos, Streitberg, Broome and co are clear. It seems that tackling them will be as enjoyable for Malaxos as it will be intriguing.
Add your comment to this story
Marie Malaxos' arrival at Buru Energy has signalled that the company is now into overdrive: pushing its Canning Basin assets from resources to reserves, and getting them out of the ground to give Western Australia energy security.
However, there's no pressure. In fact, Malaxos, who helped Buru Executive Officer Eric Streitberg develop ARC Energy's Hovea and Eremia oilfields in the Perth Basin, thrives on a good challenge.
Steve Broome, who also worked with Streitberg and Malaxos at ARC, has also come on board as Reservoir Engineering Adviser. Having gained petroleum engineering experience working with Schlumberger Oilfield Services in a number of overseas locations and more recently in onshore WA with ARC and AWE, he will help with ensuring the Ungani oilfield is optimally developed and produced. He will also assess the proof of concept hydraulic stimulation programs for Buru's tight gas accumulations if and when these are undertaken.
Buru's board has also appointed a recruitment firm to identify, assess and appoint an additional non-executive director with particular experience in new field developments. Having also made other new technical, operational and commercial appointments in the past few months, Streitberg said in March that further appointments and management changes will "doubtless be required" as the company grows and faces new challenges.
It certainly is a challenge. There's a big difference between the remote Canning Basin – where there is limited infrastructure save for what Buru and fellow unconventional hunters, New Standard Energy and ConocoPhillips, have installed – and the Perth Basin.
"It's a difficult part of the world to work", Malaxos said of the Canning Basin in a recent interview with PESA News Resources. "There is little infrastructure. Basically, to make all this happen we need to prove up the reserves, and in some respects a lot of success in the region is good for everyone – New Standard Energy and ConocoPhillips are doing their work in the Canning too.
"As they say, 'build it and they will come'", she said, referring to Buru's Great Northern Pipeline that will take any gas they produce down to southwest markets.
"I'm under no illusions (as to the scope of the challenges), but as soon as we put this Great Northern Pipeline (GNP) in, there will be people wanting to put gas into it, and people wanting to take gas out of it. It will take the initial reserves to be proven up for it to actually get built in the first place and the foundation customers to get it going."
Buru's options for developing its gas reserves are to go it alone with Mitsubishi and raise the money, or to bring in a third party, "and we're looking at those options", Malaxos said. "Regarding the Ungani oil development, I don't think we need to bring anyone else in, we'll be able to fund it between ourselves and Mitsubishi."
While Mitsubishi has the right to earn up to a 50% interest in the majority of Buru's exploration permits and has the right to acquire a 50% interest in Buru's production permits in exchange for an additional cash payment, Buru is the operator, as remote area exploration and development is not Mitsubishi's core business.
Amidst all this, Malaxos is juggling several initiatives as part of driving Buru's plans forward – the GNP, which will transform the energy picture in the State, Buru's Ungani oilfield and its Valhalla and Yulleroo gas fields, the success of which would help underpin the GNP.
"I'm in development, that's what I like doing. You get to build things then you see them coming into production. It's quite satisfying. It's really good to see something go from start to finish. I'll get to see Ungani from two well-heads to full field development and see it go to market... there's a lot of satisfaction in that for me", she said.
"I like being part of these mid-cap companies where you can get involved and can see your involvement, and I know the way Eric works. And the funny part is, we talk about what we did last time (at ARC) and how we're going to do it better this time."
In February, Buru was offered two more Canning permits (L11-1 and L11-2) that cover areas that extend the company's position over the proven Ungani oil play (after the Ungani-1 well flowed 1600 bpd in October last year) and the Valhalla wet gas play, as well as over the Goldwyer shale where it is interpreted to lie in the oil window. This was on top of two more permits (L10-7 and L10-8) granted to Buru in September.
Ungani was WA's first significant oil discovery in the Canning Basin since the 1980s. The last onshore oilfields in WA to be developed in WA were ARC's.
Ungani's production was slated to start in late May, with oil initially being trucked to Kwinana for sale to BP's refinery.
Buru hopes to drill two exploration wells in the Acacia Province in the southern part of its permits, targeting conventional structures with the potential to hold in the order of 50 MM bbl of oil, if hydrocarbons are present. These wells will also provide valuable data about the Goldwyer shale play, which is believed to be prospective for oil in this area.
Buru is also considering additional exploration wells this year to test follow ups to the Ungani discovery and new plays identified as part of its ongoing geotechnical evaluation of the Canning.
Streitberg is also excited about the surrounding area. "Our review of the prospects in the area, with the background of the knowledge we have gained from our ongoing technical work at Ungani, gives us confidence that there are likely to be more Unganis in our permits. We plan to drill as many of these as we can during this year", he said.
The weather is one of several challenges that the Canning presents, which is compounded by its remoteness, which also presents logistical challenges.
"One of the issues is roads - there is limited all-weather access", Malaxos said. "You have to build roads to get the rigs in. Every time we drill a well we're building an access track. Getting a four-wheel drive in and out of places is generally ok but getting bigger machinery in and out can be difficult.
"Hopefully the weather won't affect the oilfield too much. It does affect our drilling program, though we drilled through the wet season this year. There are some places that are really remote and are likely to get flooded, so you wouldn't generally drill between October and April in these areas.
"Logistically, if I visit the site - which I love doing – I'll fly out to Broome and drive out to site. For the initial production test stage at Ungani, we have an onsite accommodation camp near the facility."
With Ungani, Malaxos said, "we may only need four to six oil production wells to produce the field, depending on flow rates and recoveries, and we would drill those from pads so our surface footprint will be very modest."
Malaxos said if a gas development proceeds it would need a small gas processing facility on site. "If you're going to put it into the (Great Northern pipeline) it's got to meet Dampier to Bunbury Pipeline spec so will need pre-treatment".
Buru has no links to the any LNG facilities being developed in WA's northwest, and its business plan is to ship all the gas to the southwest – but a future possibility could also be to supply gas to LNG plants in the Pilbara via the GNP when its own supplies run short.
When Valhalla North-1 was drilled early this year, it revealed that the immediate area around the Valhalla wells holds a substantial unconventional gas accumulation with potentially high liquids content "and there is a good chance the accumulation could extend over a much larger area", Buru said.
The results of Valhalla-2 and Valhalla North-1 are making Buru increasingly confident that the immediate Valhalla area could contain several Tcf of recoverable gas and tens of millions of barrels of associated liquids. An independent report suggests there is potentially a much larger basin centred gas accumulation in the Valhalla area.
"We have also been looking very hard at the old wells in the surrounding area and these are telling us that the accumulation almost certainly extends beyond the immediate Valhalla area and could cover up to 6000 km2 or 1.5 MM acres of Buru's acreage", Streitberg added.
All this represents a phased transition of Buru from explorer to producer – a process which, while hectic, is nothing Malaxos isn't used to, having done it at ARC.
"It's a whole different world", Malaxos said of the transition to producer. "We need to take on more staff and it's a different skill set. We'll still have the exploration arm of the company looking at opportunities but there is a big capital investment in the development, so we've got to look at the way to fund that."
Even once the field is built, it's not over.
"Once we start producing we'll be depleting our reservoir, so we'll be back to trying to find some more reserves, because from the first drop we get out it's on its way down", Malaxos said.
"Once a reservoir is discovered it has to be modelled. The best way to produce it? That's what we're looking at now – should we drill horizontal wells and where do we put the wells? How many do we drill, what sort of artificial lift to use, what to do with the associated gas? However, it looks like we've only got small amounts of gas in our oil field, so it shouldn't be an issue.
"At the moment for the production tests we're trucking the oil down to BP Kwinana. Long-term, we're looking at some of the northwest ports for possible tanker export."
As always with the oil and gas industry, local content is critical. Buru has a warehouse and an office in Broome, helping it to employ locals up there where ever it can.
The challenges ahead for Malaxos, Streitberg, Broome and co are clear. It seems that tackling them will be as enjoyable for Malaxos as it will be intriguing.
