“Notwithstanding the current schedule of repairs, the production of first oil is independent of the Basker Spirit, as the Crystal Ocean (FPSO) has its own storage capacity of 40,000 barrels,” Anzon company secretary Tony J Strasser said in a statement to the ASX yesterday.

“The repairs to the Bow Loading System on the Basker Spirit are progressing well, with the vessel expected to be offshore at the Basker-Manta Single Point Mooring at the end of this week.”

Strasser also said the offshore pre-commissioning work on the Crystal Ocean had progressed well during the past week.

Initial flow from the Basker-2 well during the extended production test is expected to be about 8000 barrels of oil per day. This is forecast to increase to 20,000 barrels per day, following completion of the full field development in mid-2006, the company said.

Last week, Anzon’s partner Beach Petroleum reported mechanical failure of the Basker Spirit’s bow loading system had delayed first production until this week, instead of last week.

At the time, Beach said the installation of the export line from the Crystal Ocean FPSO to the single point mooring system (SPM) had been completed. But the bearings failed on the Basker Spirit's Bow Loading System when it tried to connect to the SPM. The Basker Spirit returned to Port Phillip Bay for repairs, which at the time, were expected to take seven to 10 days.

In other project-related news, Anzon has completed a financing arrangement to cover its 62.5% interest in the development.

On Friday, Anzon executed a multi-option facility agreement for US$62.5 million with BOS International (a wholly owned subsidiary of HBOS Australia) and Westpac Banking Corporation.

Total project development costs, including contingencies, for the extended production test and the full field development are estimated to be about A$280 million, Anzon said.

Joint venture partners in the BMG project are: Anzon Australia Limited (62.5% and operator) and Beach Petroleum Ltd (37.5%).