Deep gas search

Historically, the Middle East play has been an onshore story, with one notable exception: the South Pars/North Field offshore Iran and Qatar. That looks to be a changing trend as operators pursue the offshore gas potential. Jennifer Pallanich reports.

As Joseph Stanislaw, independent senior advisor on energy and resources for Deloitte, points out, there’s not much activity offshore the Middle East because there’s ‘so much onshore that’s easy’. The offshore star has been the Pars field, he says. And it may be that the Pars/North field is paving the way for the rest of the region to get in on the gas potential.

According to Schlumberger’s Worldwide Rig Count by area, about 10% of the world’s 552 active offshore drilling rigs were working in the Middle East region as of September 2009. The 53 rigs were located offshore Saudi Arabia, Qatar, Abu Dhabi, Iran and Dubai. According to the Schlumberger information, Middle East offshore activity is most prevalent off Saudi Arabia, where 15 rigs were working in September 2009 (down from 17 in 2008); Qatar, where 14 rigs were drilling (down from 16 in 2008); Abu Dhabi, where 12 rigs were working (down from 13 a year before); and Iran, where 11 rigs were working (up from 9 the year before). Dubai had only one rig working as of September 2009, down from two, while Oman had gone from one active rig in 2008 to no rigs.

‘Opportunities exist to bring the technology which has been developed elsewhere into the region.’ Stuart Lewis, IHS

‘It’s only in the last 10 years or so where gas has emerged as an exploratory objective,’ says Stuart Lewis, regional teams director at IHS. He says the industry began recognizing that it needed access to non-associated gas in the late 1990s when oil was about $10/bbl and oil production numbers were dropping. ‘The most interesting thing, within the Central Gulf itself, is really a return to exploration in terms of deep gas objectives.’

‘What’s happening now may impact their thought processes on when to have a new licensing round.’ Joseph Stanislaw, Deloitte

The exploration is aimed after deeper formations and includes deep wildcats beneath existing fields, touched off by a Saudi Aramco drilling program that began in 2005 and located the Karan 6 deep pool wildcat that was declared a discovery in 2006. Later discoveries included the Karan 7 find and the Jana 6 deep pool success. Earlier this year came the report of the Hasbah 16 deep pool gas discovery, which flowed at over 60mmcf/d of gas.

While the country has had plenty of onshore exploration going on, ‘they’ve had a great deal more success offshore, particularly the eastern province’, Lewis says.

Extensive 3D seismic has been acquired off the country’s coast in the nearshore, transition areas and further out into the Gulf, he notes. Additionally seismic is being shot in the Red Sea in the offshore and nearshore zones, following a 15-month Red Sea transition zone 2D program awarded in July to BHP Arabia, a Rafid Group and BHP International JV. Saudi Aramco also completed 2D seismic in the Red Sea in a program that wrapped up in 1Q 2009. Lewis says he expects a return to exploration in the Red Sea, in terms of drilling, within the next year or two.

Stanislaw notes that Qatar, home to the North field portion of the South Pars field, does not anticipate awarding any offshore licences in the next few years. Rather, he says, the country anticipates revisiting the moratorium in 2011. Given the current low market for gas, with more supply available and declining demand, Stanislaw says, ‘what’s happening now may impact their thought processes on when to have a new licensing round’.

Drilling deeper

Off Iran, Lewis says, the most notable recent discovery has been at the Kish field, where reserves have increased from 48tcf to over 70tcf. There are ‘some pretty significant discoveries being made in the offshore at the moment’, Lewis adds. Additional exploration efforts are under way, and attention is moving to the Southern Caspian as well. After delays during the construction phase, the Alborz semi was slated to begin drilling for the National Iranian Oil Company in early 2010. As Lewis notes, the region has seen some nearshore activity, but not deepwater. It should be, he adds, quite interesting to see how those wells progress.

So far this year, Noble Energy has reported two deepwater discoveries offshore Israel – Tamar in the Matan licence in 5500ft of water and Dalit in the Michal licence in 4500ft of water. Lewis calls these discoveries ‘quite significant’, saying they are ‘pretty much a play-opener’.

Noble Energy had pinned the pre-drill gross mean resource potential for Tamar at 3.1tcf. The flow test nudged that number up to 5tcf, and the appraisal well drove that number up to 6.3tcf. Dalit holds estimated gross mean resources of 500bcf. Based on the results of the discovery and appraisal wells, Noble Energy plans to move forward to bring the first phase of production online by 2012.

Petrobras is expected to begin drilling in the Black Sea off Turkey next year. The Brazilian NOC signed a three-year contract with Ocean Rig for the Leiv Eiriksson semi, expected to begin drilling the Petrobrasoperated Sinop 1 well in 1Q 2010, Lewis says. ‘That will be the first drilling in the deepwater in the Turkish section in the Black Sea,’ he says.

In addition, Petrobras has granted access to the country’s Turkiye Petrolleri Anonim Ortakligt (TPAO) for the drilling of a well in the Black Sea, he notes.

Yemen is still working to put its offshore acreage to bid. The country has indicated it will re-offer 11 blocks that were part of the last offshore round. Lewis says it is understood these blocks could be offered in 2010.

‘Gas developments are going to be increasingly significant,’ Lewis says. He notes an issue may be having to deal with different types of gas and handling non-hydrocarbon components. As the region hasn’t seen too many gas developments, Lewis says, ‘opportunities exist to bring the technology which has been developed elsewhere into the region’. OE