10210SP is second commitment exploration well in Blocks 10210 10610 drilled by PetroVietnam Exploration Production Corporation (PVEP) after the first well 10610HRN1X spudded on 26th November 2013. There are 07 offset wells in the Blocks 102 106 with 03 discovery of oil and gas, such as Ham Rong oil field, Thai Binh gas field and Yen Tu oil discovery. The Sapa prospect is located in the middle and the same trend with 2 gas discoveries which are Thai binh and Bach Long discovery. It is an elongate in NWSE direction, faulted anticlinal closure at Middle Lower Miocene and Upper Oligocene (Figure 1). The targets of the 10210SPwell are to explore the hydrocarbon presence in Middle Miocene (U220), Lower Miocene (U240, U260) sandstone (as primary targets), and Upper Oligocene (U300) sandstone (as secondary target). At the proposed location, the well will be drilled vertically to the final well total depth inside Oligocene. Sapa is first ranking prospect in gasbearing clastics play, with the estimated GIIP about 1320 Bscf. Total depth (TD) of the 10210SPwell is planned at 2420mTVDss2450 mMD. The final TD, however, will be determined based on the well TD criterion which is mentioned in detail in section 4.7. Two DSTs are planned to test the primary targets as Middle Miocene and Lower Miocene sandstone formations. Ultimately, the well will be plugged and abandoned. Exploration activities in the area began in 1978 with analog seismic acquisition. After that, PETROVIETNAM acquired additional regional 2D seismic surveys. In 1988, TOTAL entered a PSC over the area covering Block 106, parts of 102, 103 and 107. During this exploration stages, TOTAL acquired about 9200 km 2D seismic data with 60 fold full coverage. The grid spacing this 2D survey are 4 x 4km in the NE part and 2 x 2km in the central part of Block 106. TOTAL relinquished this area in 1991 without drilling any well in Blocks 102 106. IDEMITSU signed the PSC for Block 102 in June 1992 and conducted about 2270 km 2D seismic data. In 1994, they drilled two wells, 102CQ1X and 102HD1X. Both wells were unsuccessful and they relinquished the PSC in September 1995. PCOSB farmedin into the Blocks in Feb. 2003 and subsequently acquired 450 sq.km of new 3D seismic over the Yen Tu Ha Long structural complex area. Based on the 3D seismic data, the first exploration well, 106Yen Tu1X, drilled in September 2004 by PCOSB to test the preTertiary fractured karstified carbonate rock play and MioceneOligocene stratigraphic plays. The result was about 2.9m net oil sand encountered in Middle Miocene U210 sand with average porosity of 18.0% and average SW of 57.0%. The 106Yen Tu1X was the first oil discovery in offshore northern Vietnam and has proven the existing of petroleum system (oil) in Song Hong basin. The DST1 in carbonate basement revealed the presence of gas but is inconclusive with regards to hydrocarbon properties due to an immature test. The test was abandoned early due to the high level of H2S to surface during lifting. In 2005, PCOSB conducted two additional new 3D seismic surveys with 284 sq.km in block 106 and 320 sq km in block 102. In 2001, PCOSB drilled the first exploration well (106Ha Long 1X) in Block 106, to explore the PreTertiary fractured and karstified carbonate play and MioceneOligocene clastic play. The well was PA with oil and gas shows in both objectives. In 2004, PCOSB drilled the second exploration well (106YT1X) was spudded to explore the HC of the fractured and karstified carbonate basement and Miocene sandstone. As a result, 2.59 m oil net pay in U210 (oil sample confirmed by MDT) and oil show in basement, but the DST1 perforated in basement was terminated due to excessive level of H2S (2200ppm). The well was plugged and abandoned. In 2006, 102TB1X was the first well in block 102 drilled by PCOSB to explore hydrocarbon in Miocene and Oligocene sandstones. The well was spudded on 30th September 2006 and finished on 28th November 2006. It is a gas discovery in Miocene sandstone. A total of 43 m and 27 m net hydrocarbon zones were encountered in the Middle Miocene (U220) and in the Lower Miocene (U250) sand packages respectively. Two production tests were carried out in these sands. DST1 in U250 resulted 23 MMscfd of gas with 0.5% CO2 no H2S in 12864” choke size. DST2 which was commingled with 1 addon (from 2 sand intervals) resulted 24 MMscfd of gas with 0.5% CO2 no H2S in 12864” choke size. In 2008, 106HR1X (Ham Rong) was spudded on 2nd June with the primary objective was to explore the hydrocarbon potential in the PreTertiary fractured and karstified carbonate basement and clastic reservoirs of the Middle Miocene channel. After 169 executing days with four sidetracks to be drilled, the well was PA with oil discovery in Carbonate reservoir. One production test was performed with flow of 4859 bpd and 7 mmscfpd at choke size 4064”, together with 6.0% CO2 and 18 ppm H2S. In 2009, well 106YT2X was spudded to appraise the up dip potential of the discovered U210A and to explore the undiscovered U210B Miocene clastic reservoirs, and to test the prospectively of the fractured and karstified carbonate basement structure. As a result, the well was plugged and abandoned without HC show in Carbonate reservoir and high water saturation in Miocene sandstone. In 2009, another well to be drilled to explore the PreTertiary Carbonate on Do Son structure, 106DS1X well, from 28th August 2009 to 27th October 2009. Ultimately, dry hole was concluded by 100% water of testing result. In 2009, to explore and appraise the pretertiary carbonate of Ham Rong structure, 106HR2X was drilled on 26th November. The well successfully achieved the well objective through penetrating the PreTertiary carbonate, acquiring wireline electric logs and conducted open hole well test with a natural flow (post acidizing) of 3401.0 bblsday oil, and 4.47 mmscfd gas (6.0% CO2 and 18 ppm H2S) from 3264” choke. In 2010, PCOSB retained two developing areas as Ham Rong and Thai Binh, relinquished to PVN an area of 10,020 sq.km as named as Blocks 1021010610. In October 2011, a PSC between PVN and PVEP was signed, and PVEP is current operator of Blocks 10210 and 10610. In 2012, PVEP carried out a new 3D seismic survey with a volume of 1170 sq.km covered Chi Linh, Vam Co Dong, Sapa and Bach Long Bac prospects. In 2013, PVEP drilled 10610HRN1X to test the HC in PreTertiary fractured carbonate basement. The well was spudded on 26th November 2013 and keep drilling up to date. Table 1 Seismic data and well result summary in Blocks 1021010610
WELL PROPOSAL REPORT 102/10-SP Blocks 102/10&106/10 PSC, Offshore Vietnam EXECUTIVE SUMMARY 102/10-SP is second commitment exploration well in Blocks 102/10 & 106/10 drilled by PetroVietnam Exploration Production Corporation (PVEP) after the first well 106/10th HRN-1X spudded on 26 November 2013 There are 07 offset wells in the Blocks 102 & 106 with 03 discovery of oil and gas, such as Ham Rong oil field, Thai Binh gas field and Yen Tu oil discovery The Sapa prospect is located in the middle and the same trend with gas discoveries which are Thai binh and Bach Long discovery It is an elongate in NWSE direction, faulted anticlinal closure at Middle & Lower Miocene and Upper Oligocene (Figure 1) The targets of the 102/10-SPwell are to explore the hydrocarbon presence in Middle Miocene (U220), Lower Miocene (U240, U260) sandstone (as primary targets), and Upper Oligocene (U300) sandstone (as secondary target) At the proposed location, the well will be drilled vertically to the final well total depth inside Oligocene Sapa is first ranking prospect in gas-bearing clastics play, with the estimated GIIP about 1320 Bscf Total depth (TD) of the 102/10-SPwell is planned at 2420mTVDss/2450 mMD The final TD, however, will be determined based on the well TD criterion which is mentioned in detail in section 4.7 Two DSTs are planned to test the primary targets as Middle Miocene and Lower Miocene sandstone formations Ultimately, the well will be plugged and abandoned Exploration activities in the area began in 1978 with analog seismic acquisition After that, PETROVIETNAM acquired additional regional 2D seismic surveys In 1988, TOTAL entered a PSC over the area covering Block 106, parts of 102, 103 and 107 During this exploration stages, TOTAL acquired about 9200 km 2D seismic data with 60 fold full coverage The grid spacing this 2D survey are x 4km in the NE part and x 2km in the central part of Block 106 TOTAL relinquished this area in 1991 without drilling any well in Blocks 102 & 106 IDEMITSU signed the PSC for Block 102 in June 1992 and conducted about 2270 km 2D seismic data In 1994, they drilled two wells, 102-CQ-1X and 102-HD-1X Both wells were unsuccessful and they relinquished the PSC in September 1995 PCOSB farmed-in into the Blocks in Feb 2003 and subsequently acquired 450 sq.km of new 3D seismic over the Yen Tu - Ha Long structural complex area Based on the 3D seismic data, the first exploration well, 106-Yen Tu-1X, drilled in September 2004 by PCOSB to test the pre-Tertiary fractured karstified carbonate rock play and Miocene/Oligocene stratigraphic plays The result was about 2.9m net oil sand encountered in Middle Miocene U210 sand with average porosity of 18.0% and average SW of 57.0% The 106-Yen Tu-1X was the first oil discovery in offshore northern Vietnam and has proven the existing of petroleum system (oil) in Song Hong basin The DST#1 in carbonate basement revealed the presence of gas but is inconclusive with regards to hydrocarbon properties due to an immature test The test was abandoned early due to the high level of H2S to surface during lifting In 2005, PCOSB conducted two additional new 3D seismic surveys with 284 sq.km in block 106 and 320 sq km in block 102 In 2001, PCOSB drilled the first exploration well (106-Ha Long -1X) in Block 106, to explore the Pre-Tertiary fractured and karstified carbonate play and Miocene-Oligocene clastic play The well was P&A with oil and gas shows in both objectives In 2004, PCOSB drilled the second exploration well (106-YT-1X) was spudded to explore the HC of the fractured and karstified carbonate basement and Miocene sandstone As a result, 2.59 m oil net pay in U210 (oil sample confirmed by MDT) and oil show in basement, but the DST#1 perforated in basement was terminated due to excessive level of H2S (2200ppm) The well was plugged and abandoned In 2006, 102-TB-1X was the first well in block 102 drilled by PCOSB to explore th hydrocarbon in Miocene and Oligocene sandstones The well was spudded on 30 th September 2006 and finished on 28 November 2006 It is a gas discovery in Miocene sandstone A total of 43 m and 27 m net hydrocarbon zones were encountered in the Middle Miocene (U220) and in the Lower Miocene (U250) sand packages respectively Two production tests were carried out in these sands DST#1 in U250 resulted 23 MMscf/d of gas with 0.5% CO2 & no H2S in 128/64” choke size DST#2 which was commingled with add-on (from sand intervals) resulted 24 MMscf/d of gas with 0.5% CO2 & no H2S in 128/64” choke size nd In 2008, 106-HR-1X (Ham Rong) was spudded on June with the primary objective was to explore the hydrocarbon potential in the Pre-Tertiary fractured and karstified carbonate basement and clastic reservoirs of the Middle Miocene channel After 169 executing days with four sidetracks to be drilled, the well was P&A with oil discovery in Carbonate reservoir One production test was performed with flow of 4859 bpd and mmscfpd at choke size 40/64”, together with 6.0% CO2 and 18 ppm H2S In 2009, well 106-YT-2X was spudded to appraise the up dip potential of the discovered U210-A and to explore the undiscovered U210-B Miocene clastic reservoirs, and to test the prospectively of the fractured and karstified carbonate basement structure As a result, the well was plugged and abandoned without HC show in Carbonate reservoir and high water saturation in Miocene sandstone In 2009, another well to be drilled to explore the Pre-Tertiary Carbonate on Do Son th th structure, 106-DS-1X well, from 28 August 2009 to 27 October 2009 Ultimately, dry hole was concluded by 100% water of testing result In 2009, to explore and appraise the pre-tertiary carbonate of Ham Rong structure, 106th HR-2X was drilled on 26 November The well successfully achieved the well objective through penetrating the Pre-Tertiary carbonate, acquiring wireline electric logs and conducted open hole well test with a natural flow (post acidizing) of 3401.0 bbls/day oil, and 4.47 mmscf/d gas (6.0% CO2 and 18 ppm H2S) from 32/64” choke In 2010, PCOSB retained two developing areas as Ham Rong and Thai Binh, relinquished to PVN an area of 10,020 sq.km as named as Blocks 102/10&106/10 In October 2011, a PSC between PVN and PVEP was signed, and PVEP is current operator of Blocks 102/10 and 106/10 In 2012, PVEP carried out a new 3D seismic survey with a volume of 1170 sq.km covered Chi Linh, Vam Co Dong, Sapa and Bach Long Bac prospects In 2013, PVEP drilled 106/10-HRN-1X to test the HC in Pre-Tertiary fractured carbonate th basement The well was spudded on 26 November 2013 and keep drilling up to date Table Seismic data and well result summary in Blocks 102/10&106/10 Page of 49 Operator PVN (1983-1987) Total (1989-1991) Idemitsu (1993-1995) Anzoi PVN PCOSB (2003-2009) PVEP Total Year 1983-1984 1989-1990 1993 1994 1994 1995 1998 2001 2003 2004 2005 2005 2006 2007 2008 2009 2009 2009 2012 Seismic 3D (km ) 2D (km) Block 1475.6 Block 102 7040.8 Block 102-106 1664.9 Block 102 92.5 68.7 Well result 102-CQ-1X 102-HD-1X Oil show in Mio.&Oli Oil show in Mio.&Oli 106-HL-1X Oil show in Mio & Carbonate 106-YT-1X Oil Discovery in Mio 102-TB-1X Gas Discovery in Mio 106-HR-1X 106-YT-2X 106-DS-1X 106-HR-2X Oil Discovery in Carbonate Oil Show in Mio Oil show in Mio.&Oli Oil Discovery in Carbonate Block 102 Block 106 450 Block 106 250 270 Block 106 Block 102 2206 Block 102-106 Block 106 12548.5 Well 1170 2140 Block 102-106 Page 10 of 49 REGIONAL GEOLOGICAL SETTINGS AND HYDROCARBON PLAYS 2.1 REGIONAL GEOLOGICAL SETTINGS 2.1.1 TECTONIC ACTIVITIES Blocks 102/10 & 106/10 with an areas of 10,022 sq.km, are located in the northwest part of Song Hong Basin, offshore Northern Vietnam (Figure 1) with 650-km long and 150 km wide, sedimentary thickness exceeding 10 km in the basin center Figure Location map of Blocks 102/10&106/10 and 102/10-SPwell The Song Hong basin is a Kainozoic sedimentary basin was formed as a NW-SE pullapart graben and controlled by lateral motion faults such as Song Lo, Song Chay faults It is believed that the collision between Indochina and Eurasion plates caused clockwise rotation and pull-apart activities in Eocene – Early Oligocene were main tectonic reason to create the Song Hong basin Then, Song Hong basin had been undergoing tectonic inversion in through Middle-Late Miocene and continuously undergoing thermal subduction until present (Nguyen Manh Huyen, 2007) It is a complicated basin in a historical development from Paleogene time to now, Song Hong basin had been taking tensional-compressional phase, inversion, erosion-truncation, and thermal subduction Page 11 of 49 Therefore, the Song Hong basin has many structural units but it is divided into main zones in block 102/10-106/10 (Figure 2) as following: - The South West marginal zone: located on the southwest of song Chay fault and belongs to Thanh Nghe Monocline with complexes of Protenozic metasedimnets and predominantly Mesozoic carbonate, Mesozoic clastics and approximately 2,000m in thickness of Kainozoic sediments - The Central zone: Located in between Song Lo fault and Song Chay fault and it should be concerned as Miocene inversion zone This area was inversion from Middle Miocene to Late Miocene, even some parts in the early Pliocene Origins of this inversion due to right lateral motion of Song Hong fault so that Miocene sediments were compressed, lifted and truncated several hundred meters to thousand meters - The North East Marginal Zone: located in the Northeast of the Song Lo fault with and divided into Ha Long shelf and Bach Long Vi Zone Ha Long shelf is a Paleozoic basement covered by approximately 2000m of Kainozoic sediment and characterized by block to fissle carbonate, sericite, quartzitic sandstone in basement, fine to medium sandstone in clastics, Ha long shelf has narrow grabens along Song Lo fault with carbonate buried hills inside and basement highs such as Yen tu- Chi Linh In addition, Bach Long Vi zone was affected by tectonic inversion from Late Oligocene to Early Miocene to create prospects in Oligocene to Miocene which distribute in narrow grabens Sapa prospect is placed in the Central zone Figure Three main structural units in Blocks 102/10&106/10 Page 12 of 49 2.1.2 STRATIGRAPHY The general stratigraphy of Block 102/10&106/10 includes Pre-Tertiary Basement and Cenozoic sediments PRE-TERTIARY BASEMENT (Figure 3) Pre –Tertiary Basement lithology consists of few components as: - Clastic sedimentary rocks in late diagenetic to easliest metamorphic sequences: Quartzitic sandstones (Orthquartzite), (encountered in 106-DS-1X, 106-HR-1X, 106YT-1X) - Clastic sedimentary rocks are dark brown to red brown siltstones and claystone, (encountered in the bottom part of 106-HR-2X) - Limestone: bedded limestones (encountered in HR-2X), thick bed to massive limestone (encounterd in 106-HL-1X, 106-YT-1X, 106-DS-1X, 106-HR-1X/2X), dolomitic limestone (encounterd in 106-YT-2X, 106-DS-1X) Based on the studied results in onshore, it is prognostic that the Pre-Tertiary basement able to consist of clastic sediments with the age of Mesozoic or older Figure General Pre-Tertiary Stratigraphic Column of Block 102/10&106/10 CENOZOIC SEDIMENT (Figure 4) Base of Cenozoic (U500) to Base of Miocene/Top of Oligocene (U300) Phu Tien formation (Eocene) The rifting of the Pre Tertiary rocks due to transtensional strike slip movement in the late Eocene time has caused the Pre Tertiary rocks to form horsts and grabens During the initial rifting stage most of the area was exposed to subareal erosion and only small isolated fault depressions received fluvial and shallow lacustrine sediments Locally Page 13 of 49 derived coarse clastics such as conglomerate or carbonate talus accumulated near major fault scarps as graben continued to deepen Alluvial fans developed along the northern fault boundaries Some of these fans were later evolved into fan deltas as regional subsidence continues Lacustrine shale is believed to be the main source rock that generate and expel hydrocarbon in the Song Hong basin and surroundings Dinh Cao Formation (Oligocene) As the subsidence continues and the basin deepen, the isolated lakes opened out or evolved into marginal marine or shallow marine environments This section is the transition from lacustrine to shallow marine environments The deposition is dominated by the fluvial, deltas to shallow marine This sequence has been uplifted and inverted by compressional force released in conjunction with the opening of East Vietnam Sea during the Late Oligocene time As a result, many structures for hydrocarbon traps are formed and a significant amount of the section has been eroded and truncated to leave major angular unconformity U300 Oligocene sediment unconformably overlies the Eocene PhuTien formation Oligocene sediments were encountered in 102-CQ, 102-TB, 106-HR-1X, 106-YT-2X Lithologically, the Oligocene sediment composes of grey to dark grey siltstone and lacustrine claystone intercalated with sandstone and occasional alluvial conglomerates Spores and pollen including Cicatricosisporitesdorogensis and FlorschuetsiaTrilobatadefines the Oligocene age and Viviparuspresence is an indicator for fresh water lake conditions The Oligocene shale is a prolific source rock Base of Miocene/ Top of Oligocene (U300) to Top of Lower Miocene (U240) Phong Chau Formation (Lower Miocene) In Early Miocene, the left-lateral movement of the Song Hong Faults entered the terminative period Concurrently, in the margin of Vietnam-China Plate, the rifting and subsidence movement was also weakened to terminate the rifting phase The rapid rise of the sea level completely changed the environment from lacustrine to shallow marine The Lower Miocene sediment consists of fine-grained, rippled and mottled bedded sandstone intercalated with dark-darkgrey claystone and siltstone Glauconite has been found in many thin sections in this sequence Spores and pollen are represented by BentulaAlnipollenites, FlorschuetziaLevipoli, and UlmusUndolosus Top of Lower Miocene (U240) to Top of Middle Miocene (U200) Phu Cu Formation Middle Miocene was started with the post-rifting phase, the basin was subsided and the sea level dropped significantly during Middle Miocene, lead to the rate of sediment supply outpaced the rate of creation of new accommodation space When the rate of relative sea level fall is greater than rate of subsidence part of the shelf will exposed and Page 14 of 49 active erosion taken place on the shelf The eroded sediment will be deposited in the deeper part of the basin Lithological, The formation consists of grey sandstones, claystones and siltstones The sand is fine-to-medium grained litharenites with a high content of quartz Glauconite is common in distal areas It is considered as a relatively good reservoir Overall good porosity is obtained from the log interpretation results, varying from 13% to 19% In general, the reservoir quality drops significantly with increasing depth This sequence provided main productive reservoirs in Blocks 102/10&106/10 (TB-1X, YT-1X) as well as surrounding area Top of Middle Miocene (U200) to Top of Upper Miocene (U100) (or Base Pliocene Unconformity) Tien Hung Formation (Upper Miocene) The Late Miocene inversion initiated by the strike slip activity along Song Hong fault system caused this section had been uplifted, eroded and formation of significant unconformity (Base Pliocene Unconformity U100) The main characteristic of Tien Hung sediment is containing a considerable number of coal seams, varying from 0.5m to more than 10m thick The lithological components consist of sandstone, minor pebbly sandstone and gravelite (upper part) interbedded with siltstone, coal, coaly shale and shale (lower part) The sandstone is weakly consolidated, medium to very coarse grained, moderately to well sorted and with fair to very good reservoir quality Spores and pollen are represented by Dacrydium Ilex, Quercus, Fl.Trilobata; among the foraminifera are Pseudorotalia, and Ammonia Top of Upper Miocene (U100) to Present The Vinh Bao, Kien Xuong, Hai Duong formation The sediment consists of unconsolidated, moderately well-sorted, fine-medium grained sands and silts interbedded with soft, plastic clays It deposited in a coastal plain to shallow marine environment because it contains an abundance of marine forams (Globorotaliahumerosaof N18-N19 zone), nannofossils, molluscs and other fossils as well as Glauconite Page 15 of 49 Figure General stratigraphic column of Cenozoic sediments in Central Zone of Northwest Song Hong Basin, Blocks 102/10&106/10 2.2 HYDROCARBON PLAYS Two main hydrocarbon plays can be recognized in Blocks 102/10&106/10, namely: - Oligocene and Miocene Inversion Sandstones Play (Table 2) - Pre-Tertiary karstified and fractured Carbonate Basement Play (Table 3) The play schematic and elements of the Tertiary inversion play and the Pre-Tertiary play are shown in Figure Page 16 of 49 8.5ppg (Figure 23), and Anticipated Temperature Gradient from seabed to TD is about 3.5 to 3.9 C/100m (Figure 24) Figure 23 Formation pressures prediction for 102/10-SPwell Figure 24 Formation temperature prediction for 102/10-SPwell Page 33 of 49 HYDROCARBON RESOURCE AND RISK ASSSESMENT 5.1 HYDROCARBON RESEOURCE The volumetric method is applied to calculate Gas Initial In-places (GIIP) for Middle – Lower Miocene (U220, U240 & U260) and Oligocene (U300) horizons, the formula as below: GIIP = 35.3147*BRV* NTG* Ø* Sg*CF* 1/FVF gross rock volume net rock volume avalaible pore space HCs in‐place HCs at surface conditions Bulk rock volume (BRV) was estimated by software from ‘maximum structural spill point’ to the crest The other parameters namely porosity (PHI), net to gross (NTG), gas saturation (Sg), charge factor (CF), gas formation volume factor (1/FVF) are interpreted by PVEP’s G&G team and in reference from offset wells TB-1X and BAL-1X As a result, the GIIP (Most likely case) of Sapa prospect is estimated about 1320 bscf (table 8) Table The input parameters and OIIP calculation for Sapa Prospect Sapa Horizon Crest SPP U220 U240 U260 U300 m 500 650 900 1800 m 1500 1350 2600 3000 Relief S BRV NTG PHI Sg CF m 1000 700 1700 1200 km2 63.00 29.00 53.00 28.00 (km3) 7.00 9.70 30.00 12.64 0.37 0.25 0.12 0.09 0.16 0.14 0.12 0.12 0.60 0.55 0.50 0.50 0.40 0.40 0.40 0.35 SUM: 1/FVF GIIPBscf 110 140 145 145 386.35 369.27 442.42 122.33 1320 5.2 RISK ASSSESMENT The geological risk assessment for the Sapa as discussed below SOURCE ROCKS Early-Middle Miocene coaly shale mainly contents the kerogen type III to be able to generate gas Otherwise, Oligocene lacustrine sediments cover overall Song Hong basin with the kerogen type II and III to generate both oil and gas MIGRATION The existing of deep faults to form grabens and sub grabens, and SW-NE, sub-latitude in direction to provide a good way for hydrocarbon migration to accumulate in upper traps The main risk is up to the formation of trap is around 5-10 M.A and HC generation and Page 34 of 49 migration would have been prior to the time of trap formation and mostly former traps also destroyed as the inversion tectonic RESERVOIR Based on the correlation with seismic and offset wells The distribution reservoirs in Miocene and Oligocene are the most concern because of being seen the facial deformation in seismic section In addition, Sapa prospect is located higher than Thai Binh and Bach Long prospect after inversion activities so the formation had eroded and truncated strongly to reduce quality and quantity of reservoirs The AVO analysis study in 2013 (conducted by JV Fairfield VN & Blackgold) concluded that no AVO anomaly in the South-West of the Song Lo fault meaning very low chance of gas presence However, the study also proved that AVO responses may be strongly affected by interbeded coal layer and tectonics activities STRUCTURE Sapa structure is identified by new 3D seismic survey acquired in 2012 Based on this data, the structure closures are delimitated clearly The main risk in structure is at the anticline closures were departmentalized by the faults, it results in the 2-way and 3-way dip closures From the fault seal analysis for these fault system, its capacity of sealing is moderate likely to likely SEAL For the top seal, potential reservoirs in U240 to U300 are very likely to certain owed by the claystone/shale layers in Middle Miocene to Oligocene Based on the latest fault seal capacity study in 2013 by VPI shows there are good sealing for U220 to U260 and leaking for U300 However, there are some gas chimneys appear in upper formation that caused by faults Average probability of success (POS): Consistent with above risk analysis, each factor of hydrocarbon system is marked and the average POS is calculated, result of probability of success is summarized as Table Table Probability of success for Sapa prospect Prospect Sapa Horizon U220 U240 U260 U300 Source Resevoir Structure 1.00 1.00 1.00 1.00 0.75 0.80 0.80 0.65 0.85 0.90 0.90 0.90 Seal Migration POS 0.55 0.65 0.65 0.60 0.80 0.80 0.80 0.75 % 28.1 37.4 37.4 26.3 POS avr % 31 Page 35 of 49 FORMATION EVALUATION PROGRAM Based on the stratigraphy prognosis, a formation evaluation program has been prepared with the focus on Middle & Lower Miocene sandstone reservoirs (primary targets) and Oligocene sandstone reservoir (secondary target) 6.1 WELLSITE GEOLOGICAL SUPERVISION The first requirement for an effective evaluation program is to have proper supervision at the wellsite Wellsite Geologist will be employed during 17 ½” and 12 ¼” drilling sections for the geological supervision and reporting Wellsite Geologist shall be responsible for the following: - Supervise mud-logging personnel assigned to perform the services outlined in the Mud Logging Section 6.2 - Prepare and submit complete morning geological reports covering the previous twenty four (24) hour period of operations; to be transmitted to “PVEP” and designated recipients by 07:00 each morning An updated afternoon report will be transmitted in a similar manner at 15:00 each day - Evaluate drilling breaks and shows, and report the results promptly - Analyze and describe all cutting and core samples for lithology, hydrocarbons and unusual conditions, and maintain results on a current sample log - Keep aware of the importance of 102/10-SPwell for PVEP and recommend to Drilling Supervisor that he exercise controlled drilling whenever primary objectives are going to be penetrated - Supervise (witnessing and quality control) wireline logging operations to ensure compliance with instructions set forth in the Wireline Logging Section 6.3; describe sidewall cores and ensure that all data are transmitted in a timely manner - Correlate with key offset wells and perform quick-look analysis of wireline data and advise “PVEP” of opinions and recommendations in a timely manner - Following consultation with “PVEP”, select sidewall coring intervals and RCI zones - Liaise with PVEP Drilling Supervisor to ensure up-to-date knowledge of rig operations and procedures - Ensure that all cuttings, fluid samples, sidewall cores, conventional cores, wireline data and test data are properly labelled and dispatched to the proper destination in a timely manner as described in the Reporting and Address Section - Ensure the compilation of all data to be included in the Final Report including Composite Logs All geological and drilling data are strictly confidential The Wellsite Geologist will ensure that all those under his supervision will be aware of this fact and act appropriately He will ensure that only authorized personnel have access to mud logging and wireline trailers Page 36 of 49 Wellsite Geologist should send all geological or related data by himself, and his PC should be password-protected on the screen saver 6.2 MUD LOGGING Complete mud logging services will be employed from surface casing through evaluation at TD These services shall include: - Continuous collections, washing, drying and bagging of cutting samples as directed by the PVEP Wellsite Geologist - The samples are carefully washed with water to remove contaminants but not the oil as over-washing of samples can remove the Fluorescence and cutting Fluorescence - Continuous analysis and description of cutting and core samples for lithology and hydrocarbons - Continuous monitoring of mud stream gassed for the determination of total hydrocarbon gasses and chromatographic analysis of gasses from methane (nC1) through pentane (nC5) - Continuous monitoring, evaluation, and reporting of hydrocarbon shows in cutting samples and cores: especially mud loss in the Basement section - Continuous monitoring, display, and recording of standard drilling parameters - Continuous evaluation and prediction of formation pressure Standard Instructions: The mud logging unit will be manned by at least one mud logger and one data engineer at all times during drilling, casing, and wireline operations Always take the sample at the end of circulation prior to POOH Try to collect samples from the bit and stabilizers when appropriate Mud samples should be collected from the flow line: - Prior to coring and after coring - Prior to logging - If formation oil is observed at the shakers Any hydrocarbon shows above normal background levels will be reported immediately to the PVEP Wellsite Geologist Any abnormal reading outside of pre-determined acceptable levels in any of the monitored drilling parameters shall be reported immediately to the Driller, Tool Pusher, PVEP Drilling Supervisor and PVEP Wellsite Geologist Gas detectors and chromatography will be calibrated daily The gas trap shall be checked daily and at any time that there is a significant change in the level of apparent background gas, to ensure proper operation Page 37 of 49 Calcimetry shall be performed when or at intervals specified by the PVEP Wellsite Geologist A constant record of lag time will be maintained and calculated times will be calibrated against introduced material on a daily basis A stable amount of mud tracer such as Iodine Tracer will be mixed in drilling fluid to determine the degree of mud filtrate contamination of the formation water samples A daily report including supplemental portions of maintained logs and comments relating to significant events will be prepared each morning for the previous twenty four (24) hour period and presented to the PVEP Wellsite Geologist by 06:00 each morning to permit inclusion with his own morning report PVEP’s Wellsite Geologist will prepare an evaluation report prior to each mud logging crew change including equipment performance, mud logging crew performance and any other pertinent items of interest or concern A copy will be retained at the wellsite and the original forwarded to “PVEP” Sampling: Cutting samples are to be collected and examined as specified in below table Table 10 Cutting sampling program Drilling Section 20” Interval, mMD 0-510 Geological Sequence Sample Descripti And Sample Type Sampling Every 5m sampling and 12 ¼” 510-1580 1580-2450 (TD) Amount Container Sample Set Sea bed-U200 No sampling Unwashed 17 ½” Sample U200-~U260 description Samples 500g/sample Plastic + Washed & Dried Samples 200g/sample Linen bags Paper Envelope Unwashed Plastic + Samples 500g/sample ~U260-U300- Every 5m sampling and TD description Washed & Dried Samples 200g/sample Linen bags Paper Envelope 3 3 Sample cuttings should be described from 510mMD to TD At any time, while drilling in a potentially significant show, samples will be caught and examined every meter upon the instruction of PVEP Wellsite Geologist Then PVEP Wellsite Geologist has to report it to the PVEP Exploration Manager Knowledge of drilling fluid properties is generally necessary in order to evaluate shows, wireline responses or drilling characteristics properly Therefore, drilling fluid samples will be collected each time if there is a significant change in fluid characteristics A sample must also be collected (in addition to any collected by the wireline contractor) just prior to stopping circulation for wireline logging Samples of all drilling fluid Page 38 of 49 additives will be collected with the date, time, and depth at which they were added to the mud system carefully noted on the container Master Log: The exact log format(s) will be determined separately At a minimum, logged and recorded information will include depth, GR, ROP, mud properties and bit information, significant engineering items, cuttings and interpreted lithology, cutting shows, total gas, component gas through nC5 and selected gas ratios Sample Examination: All samples will be examined and logged by both the mudlogging contractor and by PVEP’s wellsite geologist Sample examination will include complete, standardized descriptions of lithology, porosity, fluorescence and cut and any special or unusual conditions Sample Collection and Labelled: It is important that samples be collected properly: at the proper interval; in the proper volume and stored and labelled in the proper manner Samples must serve several different parties and several different purposes This will result in some variation in volume and packaging requirements (Table 4) Regardless of container, all samples must be properly labelled, including Operator, Well Name, Depth Interval, Type Sample, and Destination Note: - PVEP samples to be utilized and retained at rig site until completion of well - All the addresses and attentions of Contractors are noted in section - Wellsite Geologist will label all samples with proper destination as above and send to “PVEP” “PVEP” should distribute the samples as labeled with proper documentation 6.3 MWD/LWD and WIRELINE LOGGING PROGRAM MWD/LWD will be run for 17 ẵ and 12 ẳ hole sections MWD/LWD program is presented in the below table: Table 11 MWD/LWD program Drilling Interval Sequence MWD/LWD 17 ½” Section M Miocene-Lower Miocene Directional, GR, Resistivity 12 ¼” Section L Miocene - Oligocene Directional, GR, Resistivity WIRELINE LOGGING In order to evaluate hydrocarbon-bearing reservoirs appropriately and to have enough data for further exploration, the following points were considered in making the wireline log program Running of optional log runs will be decided if good hydrocarbon indication occurs Table 12 Wireline logging program for Well 102/10-SP Page 39 of 49 Suite/ Section Run Run #1 Suite#1 17 ½” Run #2 (Optional) Run #3 (Optional) Log Method RTEX-MLL-ZDL-CNXMAC-ORIT-WGI-GRTTRM-Swivel RCI-GR (30 points, samples) SWC-GR (30 samples) Run#4 (Optional) SBT-VDL-CCL-GR Suite#2 12 ¼” Log Interval, mMD Target, Sequence 510-1580 Selected points Selected points Middle Miocene, Lower Miocene Inside 13 3/8” casing, subject to testing decision Run#1 RTEX-MLL-ZDL-CNXMAC-ORIT-WGI-GRTTRM-Swivel 1580-TD Run #2 (Optional) RCI-GR (30 points, samples) Selected points Lower Miocene, Selected points TD-0 Inside 5/8” Oligocene Run #3 (Optional) SWC-GR (30 samples) Run#4 VSP Run#5 (Optional) SBT-VDL-CCL-GR Casing, subject to testing decision Note: - Logging Program could subject to change - Optional logs will be run if there are good HC shows - Formation pressure pre-test, sampling points will be run if needed for further reservoir evaluation VSP design will be given separately by PVEP Geophysicist - All depths are tentative and subjected to PVEP-POD’s decision Abbreviation CN: Compensated Neutron Log DAL: Digital Acoustilog GR: Gamm Ray MLL: Micro Laterolog RCI Reservoir Characterisation Instrument Page 40 of 49 RTEX: Rt Explorer (Focused Laterolog) SBT: Segmented Bond Tool WGI: Well Geometry Instrument (6-arm caliper) XMAC: Cross Multipole Array Acoustilog(compressional & shear, Stoneley) ZDL: Compensated Z-Densilog ORIT: Orientation Log CCL: Casing Collar Locator VDL: Variable Density Log TTRM: Temperature/ Total tension/ Mud Resistivity SWC: Sidewall core *Measurement units are to be in metric units, unless otherwise indicated GammaRay: 0-200 (API) Caliper: (inch) Resistivity: 0.2- 2000 (ohm-m), plus back up Sonic: 140 - 40 (us/ft) Neutron: 0.45 -0.15 (V/v) Density: 1.95 - 2.95 (g/cc) All other units shall be reported in the system they are acquired Instructions and Guidelines Care will be taken to ensure that the following requirements are met as well as those specified within the Contract: Pre-logging Preparations: The PVEP Wellsite Geologist will provide the Wireline Engineer with a work sheet including required logs and specifications, well coordinates and elevations and such other information as may be required to obtain satisfactory results All depth measurements on logs will be metric; sonic readings in microseconds/ft Log scales in 1:500 and 1:200, and noted on each log Temperature and salinity measurements of Rm, Rmc, and Rmf will be made prior to stopping circulation for logging and should be put on the log heading Maximum recording thermometers will be included on each logging run Neutron logs should be recorded on a limestone scale A tension indicator log will be recorded on all runs and displayed as required Page 41 of 49 Ensure that sufficient rathole is drilled to obtain near TD readings which may be required Logging Operations: The PVEP Wellsite Geologist will coordinate all wireline-logging operations He should ensure that the wireline engineer has calibrated all tools properly and that the tolerances are within acceptable limits, that logging runs are overlapped, and that logs are of good quality Calibration responses and respect intervals are to be displayed on the films At least a 60m repeat section should be included on the 1:200 film of each survey; especially over zones of interest and abnormal or poor log recordings Poor quality logs will be re-run if hole conditions permit The Wireline Engineer will keep a log of wireline operations; including time drilling ceased, time circulation ceased prior to logging, type and sequence of logging tools, tool sketch, serial numbers of tools, time tools came off bottom and time logging completed These data and the BHT reading will then be used to calculate true BHT The PVEP Wellsite Geologist will advise the Tool Pusher and Drilling Supervisor as to hole conditions during or after each log run as appropriate Runs marked as optional items shall be authorized by the PVEP Wellsite Geologist following consultation with “PVEP HCM” Logging speed should be adjusted to the “slowest” device in the tool string Make sure that there is a minimum of 30m of gamma ray overlap for calibration check Record calipers for a minimum of 10m inside casing A tension indicator curve should be recorded on all runs and displayed as required Post-logging: The PVEP Wellsite Geologist is responsible for making a “quick look” interpretation of the logs using recommended petrophysical parameters and transmitting his interpretation to “PVEP” via facsimile as soon as possible Following each log suite the PVEP Wellsite Geologist will prepare a report on the wireline operations including: performed logging methods and logging intervals, tool performance, any mechanical problems or irregularities, wireline crew personnel and performance, and any other pertinent comments A copy will be retained at the wellsite and the original forwarded to “PVEP” The log heading must be completed fully and accurately It will be the joint responsibility of the Wireline Engineer and PVEP’s Wellsite Geologist to ensure that this is done All log anomalies, abnormal conditions or logging difficulties shall be noted and explained Disposition of Data: Page 42 of 49 After completion of each logging suite, the wireline engineer will provide PVEP Wellsite Geologist with one (1) set of prints and one (1) set of electrical data in LAS & PDS format with all depth corrected for quick look interpretation and data transmission Each log run data shall be transmitted to PVEP HCM in realtime Six (6) sets of CD-ROM containing field data files in LAS, DLIS and PDS format, and Six (6) sets of prints will be hand-carried to PVEP HCM Six (6) sets of CD-ROM containing processed data files in LAS, DLIS and PDS format, and six (6) sets of prints will be hand-carried to PVEP HCM 6.4 SIDEWALL CORES The anticipated uses of rotary sidewall cores include providing known-depth material for show evaluation, petrographic analysis, calibration of wireline data, geochemical studies and palynological studies They might also be utilized for more precise age dating, determination of parameters in water saturation equations Approximate 30 samples are going to be taken in Middle and Lower Miocene sandstone reservoirs which shall be booked exactly after the wire-line log interpretation conducted The actual sampling points and actual number of samples will be decided by PVEP-POD during the operation Coring Operations: The number of sidewall cores will be determined by PVEP-POD in consultation with the Wellsite Geologist The positioning of sidewall cores will be determined by Wellsite Geologist using guidelines established in consultation with PVEP-POD Basically cores should be taken within interested reservoir zones Occasional sand cores, regardless of shows, and shale cores are desired to assist in calibration of wireline data, provide clues regarding depositional environments and provide samples at accurate depths for spot geochemical and palynological analyses Other geologically interested zones may be cored The Wellsite Geologist will review the caliper log for each selected core interval to ensure that recovery will not be jeopardized by poor hole conditions Core Handling: The Core Engineer will label glass jars in advance with operator, well name, depth, and sample number Cores will be extracted by the Core Engineer and immediately placed within the appropriate glass jar, and with the lid tightly sealed The complete set of recovered samples will then be delivered to the Wellsite Geologist, or held for him in custody of the Mudlogging Geologist Sample jars are not to be opened by anyone other than the Wellsite Geologist Page 43 of 49 The Wellsite Geologist will examine a chip from each core in sufficient detail to note lithology, shows, porosity, and any other features or notes He must care not to break the cores because they are for further poro-perm analyses The small chip(s) will be retained by the Wellsite Geologist in the mudlogging trailer Core Distribution: All cores will be delivered to PVEP’s office for further distribution to the appropriate analyses 6.5 WELL SEISMIC SURVEY (VSP) VSP in 12 ¼” section will be recorded from well TD to the surface with an air-gun of 2000psi gun pressure The basic proposal of VSP for this well will be a zero offset survey The VSP program is detailed in wire-line logging program VSP at end of 12 ¼” hole to the surface Zero offset acquisition 15m geophone spacing, with at least three acquisition stations The detailed specification on the acquisition/processing/display parameters of the VSP survey will be delivered by PVEP Geophysicist, before survey The contractor should be aware that the time/depth and interval velocity data are required urgently Copies of all velocity survey data are to be sent to “PVEP HCM” when velocity processing is completed 6.6 WELL TESTING Well testing will be conducted if available analysis indicates the likelihood of hydrocarbon accumulations The well testing interval will be decided by the PVEP/PVN through consultation with the Well Test Supervisor Two cased-hole DSTs are being planned for the in Middle Miocene and Lower Miocene sandstone reservoirs which will be booked exactly after the wire-line log interpretation conducted The prognosed depth interval of two DSTs as below: DST No Formation Depth interval: mMD DST#2 Middle Miocene 510 - 1580 DST#1 Lower Miocene 1580-2250 A complete well test program will be prepared and submitted independently from this Proposal to Management Committee Members and PVN for their review and approval 6.7 SAMPLES DISTRIBUTION PVEP Wellsite Geologist is required to label the acquired samples including cuttings, cores, sidewall cores, fluid samples… and to send them to PVEP’S BASE Page 44 of 49 DRILLING PROGRAM 7.1 EXPECTED DRILLING HAZARDS Geological factors which able to hurt the drilling operation as described as below: CO2 There is a moderate possibility that CO will be encountered in the Miocene and Oligocene formation of 106/10-SPwell as analog from offset wells (almost wells have CO2 content from 0.5-7%, excepting Middle Miocene reservoir of BAL-1X which have content of 32% - stand-out of popular level) It is essential to prepare and manage the CO2 equipment, procedure, personal training, PPE and pre-mobilization inspection check list before and during the drilling operations of 102/10-SP Relating to the shallow gas and pore pressure & temperature hazards, some statements as below: SHALLOW GAS From the site survey result, there are not shallow gas events at the 102/10-SPwell location PORE PRESSURE & TEMPERATURE From seabed to well TD, formation pressure is close to the hydrostatic pressure The formation temperature is also under the normal trend 7.2 WELL TRAJECTORY Figure 27 and Figure 28 show the vertical well diagram and time estimation of 102/10SPwell (See Drilling Program Report for more detail) Page 45 of 49 Figure 25 Well diagram of 102/10-SP Page 46 of 49 7.3 ESTIMATED DRILLING TIME Figure 26 Estimated time of well 102/10-SP (See Drilling Program Report for detail) ... 2009 2009 2012 Seismic 3D (km ) 2D (km) Block 1475.6 Block 102 7040.8 Block 102- 106 1664.9 Block 102 92.5 68.7 Well result 102- CQ-1X 102- HD-1X Oil show in Mio.&Oli Oil show in Mio.&Oli 106-HL-1X... Carbonate Block 102 Block 106 450 Block 106 250 270 Block 106 Block 102 2206 Block 102- 106 Block 106 12548.5 Well 1170 2140 Block 102- 106 Page 10 of 49 REGIONAL GEOLOGICAL SETTINGS AND HYDROCARBON... of 102/ 10SPwell (See Drilling Program Report for more detail) Page 45 of 49 Figure 25 Well diagram of 102/ 10-SP Page 46 of 49 7.3 ESTIMATED DRILLING TIME Figure 26 Estimated time of well 102/ 10-SP