Operators chasing further reserves in established/emerging offshore Middle East plays

Jeremy Beckman
Editor, Europe

Deepwater drilling is set to dominate coming activity offshoreTurkey. In January, the Ocean Rig semisubmersible Leiv Eiriksson arrived at the port of Sinop, ahead of a three-year, $630-million deepwater campaign in the Black Sea for Petrobras. Preparatory works were performed at the Westcon shipyard in Olen, Norway, including dismantling of the upper part of the derrick to allow the rig to pass under two suspension bridges crossing the Bosporus Strait.

The exploration program covers the Sinop, Ayancik, and Carsamba sub-blocks of the AR/TPO/3922 license. State-owned company TPAO and ExxonMobil are partners in the program, and this duo also will explore jointly the Samsun block in the same license, and the eastern portion of the 3921 block, where water depths reach 2,000 m (6,500 ft). ExxonMobil, as operator, expects to drill the first well on these permits, in the first half of 2011, using Transocean's new drillshipDeepwaterChampion, currently under construction at the Hyundai yard in Ulsan, South Korea.

In the shallow water Akcakoca sub-basin of the Black Sea, TPAO discovered further gas last fall via a well on the West Ayazli structure, west of the producing Ayazli gas field. This summer, a new platform and pipeline are due to be added under the South Akcakoca Phase 2 development, with first gas due late this year.

Elsewhere, local company Extrem Energy has won an extension through October 2012 for its Candarli Bay license in the Aegean Sea, near the Aliaga refinery in southwest Turkey. Exploration drilling must start by next April. Prospective resources in the license area are estimated at up to 780 MMbbl.

In the western portion of the Caspian Sea, offshoreAzerbaijan, the BP-led ACG partnership has agreed to expand development of the Azeri-Chirag-Gunashli fields with a sixth production platform, this one capable of handling 185,000 b/d of oil. The facility will be in the Chirag-Deep Water Gunashli Area. BP and Azeri state company SOCAR also have signed a Memorandum of Understanding (MOU) to jointly explore and develop the Shafag and Asiman structures, 78 mi (125 km) southeast of Baku. The deepwater concession, in 650-800 m (2,132-2,624 ft) has not been drilled.

Total expanded its presence in the area by signing a development and production-sharing agreement with SOCAR for the Absheron offshore block in 500 m (1,640 ft) of water 100 km (62 mi) from Baku. More recently, Germany's RWE Dea – a newcomer to the Azeri sector – drew up an MOU for exploration and development of the Nakhichevan prospect, 50 km (31 mi) offshore.

Progress on the giant Kashagan field offshoreKazakhstan remains slow. According to analysts Wood Mackenzie, the first phase development program, operated by ENI, is unlikely to deliver first oil before 2013. The ultra shallow water field, with reserves of over 10 BBoe, will be exploited via artificial drilling islands. Close to the maritime median line with Russia, Lukoil may develop the Khvalynskoye gas-condensate field in 25 m (82 ft) water depth. This follows the signing last October of a Heads of Agreement, forming the basis for a development partnership with Kazakh company KazMunaiGas, Total, and GdF-Suez. Produced gas would be exported to Russia market.

OffshoreTurkmenistan, Dragon Oil's overhaul of the Cheleken Contract Area fields has lifted production to over 50,000 b/d. The company plans to add two further wellhead and production platforms over the next two to three years, and also hopes to finally harness the fields' associated gas via a multi-phase pipeline for commercial use at a new onshore processing plant. In January, Dragon decided to expand its drilling program by commissioning a new jackup from a consortium headed by Yantai Raffles Offshore, due to be delivered in late-2011. The all-weather rig is a Friede & Goldman Super M2 design.

RWE Dea also targets gas from its newly awarded license for Turkmen block 23, adjacent to the coast. The company aims to transfer shallow water drilling expertise from its long-standing operations on the Mittelplatte field in the tidal waters around northern Germany.

Last summer,Iran inaugurated its first deepwater drilling semisubmersible, NIOC's Iran-Alborz, designed to operate in water depths of up to 1,030 m (3,379 ft) in the Iranian sector of the Caspian Sea. The rig was scheduled to drill its first deepwater well in southern block 6. Iranian news service Shana also reported that Petronas Carigali was interested in acquiring seismic over various Iranian Caspian blocks.

In the Persian Gulf, Iranian contractor Kish Global Petrotec Co. was due to start development drilling recently on the South Pars Phase 16 project. Reportedly, work is also under way or about to start on phases 20, 21, 27, and 28, although the future of the contentious Phase 11 remains unclear. According to Shana, original development operator Total has been supplanted by China National Petroleum Corp, but the French company may still have a role to play.

Iran has also approached its neighbors for joint offshore development projects. Among these are NIOC's $10-billion program for the giant gas/condensate Kish field in the Persian Gulf, which could deliver 3 bcf/d of gas in two phases, some for use as LNG in Oman. Further gas cooperation discussions are under way with Qatar.

The Al-Basrah oil terminal, 40 km (25 mi) off the coast ofIraq, exports three-quarters of the country's daily production, at 1.5 MMb/d. Foster-Wheeler is performing basic engineering to increase this capacity by 1.8 MMb/d, via an offshore manifold platform, two 48-in. pipelines, and three single-point moorings.

Last October, construction started of the four main contract packages for Karan, the first non-associated gas field development offshoreSaudiArabia. Saudi Aramco's project is designed to produce 1.8 bcf/d, and will involve extracting raw sour gas via four production platforms connected to a tie-in platform, around 100 km (62 mi) northeast of Jubail. Produced gas will head through a 110-km (68.3-mi) subsea pipeline to new facilities at Khusaniyah, 160 km (99.4 mi) north of Dhahran. The main contractors are J. Ray McDermott, Hyundai Engineering and Construction Co, Petrofac, and GS Engineering. J. Ray is also building the new STP-20 tie-in platform for a crude upgrade/power supply program on Aramco's Safaniya field.

Expansion of the Al Shaheen field continues offQatar. In its 2009 annual report, operator Maersk Oil said that 95% of the 2005 development plan had been completed, including 15 new platforms, as had 126 out of 160 planned wells. Investments in this program through 2011 should exceed $5.6 billion. Last summer, another European company, GDF Suez, became operator of Qatar's prospective offshore block 4, after buying out Anadarko's 60% equity stake. Germany's Wintershall plans to start exploration drilling this year on block 4N, close to the giant North field.

In the UAE, National Petroleum Construction Co. is working on a $402-million EPC program for ADNOC's Integrated Gas Development project, designed to satisfy growing gas needs inAbuDhabi. The contract was awarded last year by Abu Dhabi Marine Operating Co. (ADMA-OPCO), and involves drilling additional wells and installing a new processing platform at Umm Shaif. Following dehydration, the gas will go to Das Island via a new 38-km (23.6-mi), 46-in. (117-cm) pipeline.

In neighboringDubai, the government has reported discovery of a new offshore oil field, Al Jalila. The location is said to be east of the small Rashid field 70 km (43 mi) offshore. Dubai's Oil Affairs Department was quoted as stating that Al Jalila could be in production within a year.

UAE company Dana Gas says it has completed detailed engineering design for a gas platform for its Western Offshore Concession inSharjah. It is preparing to issue management, engineering, procurement, construction, and installation contracts.

Last year, RAK Petroleum increased its interest in block 8 offshoreOman to 50%, following its acquisition of Eagle Energy (Oman). The block includes the West Bukha field which came onstream in February 2009, and which currently produces around 10,000 b/d of oil and 25 MMcf/d of associated gas. The nearby Bukha gas/condensate field, however, has been temporarily shut in.

UK-based Circle Oil recently issued tender documents for the acquisition of 5,000 km (3,107 mi) of commitment 2D marine seismic for Omani offshore block 52. The areas to be surveyed are aimed at forming up leads mapped from first-phase 2D seismic acquired by TGS in 2007.

The major breakthrough in the eastern part of the Mediterranean last year was Noble Energy's deepwater Tamar and Dalit gas discoveries in the Levantine basin offshoreIsrael. Noble estimates Tamar's gross mean resources at 6.3 tcf, and targets first production in 2012. The company and its partners have signed letters of intent with interested purchasers in Israel. Dalit has resources rated at around 500 bcf. Late last year, Noble acquired further 3D seismic over 1,600 sq km (618 sq mi) in the region where it has identified numerous other leads. It plans to resume exploration drilling later this year, prior to development drilling at Tamar.

Last November, Toronto-based Bontan Corp acquired control of two drilling licenses and one exploration permit near the two discoveries. The company has completed 2D and 3D seismic acquisition over its concessions. Closer to the Israeli mainland, AMG Oil, another Canadian company, picked up the shallow water Yitzhak license, where oil was discovered in 1970 at the Delta-1 well.

In the Gulf of Suez offshoreEgypt, BP is progressing its development of the NS377 and NS385 oil fields via extended wells drilled from the shore. Production is due to start by June. Last year, Egypt General Petroleum Corp. invited bids for eight exploration blocks in the Gulf of Suez sedimentary basin. Recently, Greek company Aegean Energy acquired operatorship of the East Magawish block in this area from previous owner Thani Egypt East Magawish. A first exploratory well should be drilled on the license later this year.

Also in the Gulf of Suez, Eni was granted a further 10-year extension to its license through 2030 for the giant Belayim oil field in the Sinai area. It has committed to a $1.5-billion investment program spread over five years to sustain and optimize production.

GDF Suez recently achieved its second discovery in the West El Burullus concession in Egypt's shallow water offshore Nile Delta region. The Papyrus-1X well flowed gas at up to 3 MMcf/d and associated condensate. The partners are reviewing combined development concepts with the nearby WEB-1X find.

In the deepwater sector, 95 km (59 mi) offshore the Mediterranean coast, Burullus Gas Co. has contracted Technip for an EPIC program for its West Delta Deep Marine Phase VII development. The work, to be performed late this year, will include installation of a tie-in structure between a new 36-in. (91.4-cm) gas export pipeline and two existing pipelines.

Late last year, Hess confirmed a successful test of a deepwater gas/condensate discovery well offshoreLibya. Well A1-54/01 had originally been drilled into the Arous Al-Bahar prospect in 2008 in area 54, 35 mi (56.3 km) offshore in the Sirte basin, in 2,807 ft (855 m) of water. Hess later re-entered and perforated the well over a 300-ft (91.4-m) carbonate interval, using the DP drillship StenaForth. The company planned further appraisal drilling 7 mi (11.3 km) to the northwest. ExxonMobil also has drilled its first deepwater exploration well in the Sirte basin in Contract Area 20, northeast of the port of Misrata, using the Noble Homer Ferrington.

In the Gulf of Hammamet offshoreTunisia, Australian company Cooper Energy continues its evaluation of the 1967 oil discovery Hammamet West. The company's latest review suggests the field contains over 200 MMbbl of in-place oil, with contingent resources of 49 MMbbl.

Following processing of newly acquired 3D seismic, Cooper aims to drill an appraisal well to delineate the Birsa and Abiod formations. Development would likely involve a small, normally unmanned platform exporting oil and gas onshore via a multi-phase pipeline, a similar concept to ENI's Maamoura field development 10 km (6.2 mi) to the southwest, which also produces oil from the Abiod formation.

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