Nexen Announces First Oil from East Al Hajr (Block 51) in Yemen

Source: www.gulfoilandgas.com 11/23/2004, Location: Middle East

CALGARY, Nov 23, 2004 - Nexen Inc. has commenced production of approximately 4,000 barrels of oil per day from the Bashir al Khair-A field (BAK-A) on Block 51 in Yemen. We have an 87.5% working interest in this block.

Early production from several development wells is handled through temporary production facilities and a new 22 km sales oil pipeline that connects to the existing Masila export pipeline. Full production of approximately 25,000 bbls/d is expected to commence late in the second quarter of 2005, after completion of the permanent processing facilities.

A second smaller field, BAK-B, is expected to start production in late 2005. This additional capacity is expected to sustain approximately 25,000 bbls/d of production from Block 51 through 2007.

"It is an excellent accomplishment for our team to have taken this from commercial declaration to initial production in less than a year, and to full production in 18 months" said Charlie Fischer, Nexen's President and CEO.

The BAK-I exploration well in the northern area of Block 51 has encountered oil shows and will be production tested in early 2005 after sourcing the necessary testing equipment. Drilling of a fourth exploration well on the block is underway, with plans for spudding a fifth well before year-end. The fourth and fifth wells are testing independent structures. We plan to acquire additional seismic on the block in early 2005.

"We designed spare capacity into the central processing facility and pipeline tie-back to the Masila export pipeline in anticipation of future success," commented Fischer.




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