Hard on the heels of Woodside’s successful exploration drilling off the west coast of Myanmar last year is a bigger campaign for 2017. And future campaigns will get underway even faster, thanks to some innovative contract and procurement work undertaken by Woodside.
Woodside announced in the first quarter of 2016 that the two exploration wells drilled in the Rakhine Basin off Myanmar’s west coast both struck gas. That prompted our office in Myanmar to immediately set about planning an expanded campaign for this year, with a whole-of-team effort back in Perth. And the emphasis has been on speedy resolutions. “This campaign has been very much accelerated,” says Myanmar-based well delivery manager David Moon. “We only finished drilling the first two wells in the beginning of 2016 but we started this latest campaign on March 1 the same year. “There’s a big incentive for us to maintain our early mover advantage and stay ahead of our competition. Innovation and acceleration goals are alive and well and we’re happy with the progress made in a short time.”
Myanmar country manager Dan Clery notes that this accelerated push for an expanded drilling campaign has coincided with new environmental legislation in the country, but that the challenges have been overcome by working closely with the relevant stakeholders. “There’s been a lot of collaboration with MOGE (Myanmar Oil and Gas Enterprise) and also with the Myanmar Government’s environment department,” he says. “Plus, there’s been a lot of co-operation to ensure all participants in the joint ventures are aligned.” Woodside has interests in six blocks totalling 47,000 km2 in the Rakhine Basin.
In Block A-6, Woodside holds a 40% interest, with Total owning the same proportion and Myanmar Petroleum Resources Limited the remaining 20%. In AD-7, the company has a 40% interest and is the operator of deepwater drilling. The other 60% is held by Posco Daewoo, which is the operator for all other operations.
For this year’s drilling campaign, Woodside has leased the Transocean DDKG2 rig ship – a modern highperforming drill ship previously used by the company. Drilling started in February this year and is expected to continue to at least Q4 2017, with potential extension into mid- 2018 given successful 2017 outcomes. At least four wells are firm for 2017 with joint venture approvals in place. There is contract flexibility for another three wells, for which the Woodside teams are maturing drilling candidates and approvals to increase the scope of the campaign.
As part of the expedited drilling campaign, efforts have concentrated on accelerating the often-lengthy tender process. “A big tender might take eight or nine months work, but we’ve employed some innovative strategies to develop contracts,” says David. “We’ve created outline contracts for services we can pull down and hopefully use in future years.”
Lee-Ann Roberts, the Myanmar campaign lead in contracting, says the contracts have taken only three months from tender to be “award ready”, not including the process of approval from government. “We decided to go out with outline contracts for rigs and services which could be used again if more wells were to be drilled in the future,” she says. “This has been a new concept for the Myanmar Government but they’ve accommodated our needs to be able to execute commitments in a really short time frame. “Our desire is to be able to draw down from the outline contracts again and this will ensure we’re a lot faster for future work. “We did a lot more work to set ourselves up for the future while we tendered the scopes with an aim to protect ourselves from future price hikes as much as possible.”
To get there, says Lee-Ann, the work load has been intense. For the 2017 drilling campaign, more than 100 agreements have been reached, 57 of which had to go to the Myanmar Government for approval. Back in Yangon, Myanmar’s largest city and home of Woodside’s office, some 40 Myanmar nationals have undergone a skills training program and will be working on the rig.
The Myanmar office comprises another five local staff for logistics, finance and administrative support and Dan says their local knowledge and contacts have provided a tremendous boost to Woodside’s presence in Yangon. “They’ve become enthusiastic additions to the company and have quickly adapted to the Woodside way of working,” says Dan. And David notes that Woodside has worked closely with Myanmar businesses by locating a local fuel supplier plus developing an acceptable way to locally dispose of the drilling waste in a safe and secure manner. “The government of Myanmar has been very supportive as well as complimentary about the work we’ve done,” he says. “We put on our ‘A game’, established our bona fides as a world-class oil and gas company and this has stood us in good stead as we’ve worked through the various levels of regulation in the country to go forward.”
Trunkline Q1 2017