Egypt Stands Out in 'Interesting Year' of Discovery

A number of interesting stories came out of international exploration in 2015.

Let’s get to the big one right away:

Everybody – everybody – was talking about the Eni SpA discovery of a supergiant gas accumulation offshore Egypt. It became the year’s mind-blower.

In August, Eni announced that its discovery well Zohr 1X NFW found a huge natural gas field on the Sharouk Block under 4,757 feet of water in the Mediterranean. Seismic indicated the Zohr Prospect could hold 30 trillion cubic feet (Tcf) of gas, or 5.5 billion barrels of oil equivalent in place, the company said.

That important discovery also could point toward future large hydrocarbon finds, said Bob Fryklund, chief upstream strategist for IHS in Houston.

“It’s a carbonate play. It’s not a clastic play, so it’s more significant in that way. A majority of the mega-plays over time have been carbonate plays,” he said.

The Other Top Wells

The second area in the IHS Top Ten international wells list for 2015 was no surprise. Kosmos Energy said its Tortue-1 well on the Tortue West Prospect in Block C-8 offshore Mauritania made a significant, play-opening gas find.

The discovery intersected 351 feet of net hydrocarbon pay in Lower and Upper Cenomanian targets, the company reported. A confirmation well, Marsouin-1, in 7,874 feet of water encountered 230 feet of Cenomanian pay.

Earlier, Cairn Energy had opened a major new oil exploration play to the south in waters offshore Senegal with its FAN-1 and SNE-1 wells finding crude in Cretaceous sands, targeting the Shelf Edge Prospect in the Sangomar Offshore Block.

Confirmation well SNE-2, drilled late in 2015, appeared to validate an accumulation in the billions of barrels on the West Africa prospect.

Third on the list, and somewhat unexpected, was a major gas discovery in Turkmenistan. According to reports, a Bagly-1 prospect discovery in the Karakum Desert of the country’s Mary province flowed 53 million cubic feet per day (Mmcfd). The find came near the established, giant Galkynysh field.

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A number of interesting stories came out of international exploration in 2015.

Let’s get to the big one right away:

Everybody – everybody – was talking about the Eni SpA discovery of a supergiant gas accumulation offshore Egypt. It became the year’s mind-blower.

In August, Eni announced that its discovery well Zohr 1X NFW found a huge natural gas field on the Sharouk Block under 4,757 feet of water in the Mediterranean. Seismic indicated the Zohr Prospect could hold 30 trillion cubic feet (Tcf) of gas, or 5.5 billion barrels of oil equivalent in place, the company said.

That important discovery also could point toward future large hydrocarbon finds, said Bob Fryklund, chief upstream strategist for IHS in Houston.

“It’s a carbonate play. It’s not a clastic play, so it’s more significant in that way. A majority of the mega-plays over time have been carbonate plays,” he said.

The Other Top Wells

The second area in the IHS Top Ten international wells list for 2015 was no surprise. Kosmos Energy said its Tortue-1 well on the Tortue West Prospect in Block C-8 offshore Mauritania made a significant, play-opening gas find.

The discovery intersected 351 feet of net hydrocarbon pay in Lower and Upper Cenomanian targets, the company reported. A confirmation well, Marsouin-1, in 7,874 feet of water encountered 230 feet of Cenomanian pay.

Earlier, Cairn Energy had opened a major new oil exploration play to the south in waters offshore Senegal with its FAN-1 and SNE-1 wells finding crude in Cretaceous sands, targeting the Shelf Edge Prospect in the Sangomar Offshore Block.

Confirmation well SNE-2, drilled late in 2015, appeared to validate an accumulation in the billions of barrels on the West Africa prospect.

Third on the list, and somewhat unexpected, was a major gas discovery in Turkmenistan. According to reports, a Bagly-1 prospect discovery in the Karakum Desert of the country’s Mary province flowed 53 million cubic feet per day (Mmcfd). The find came near the established, giant Galkynysh field.

“It’s giant gas reserves and they’re continuing to add to it,” Fryklund said. “A lot of basins we thought were mature are still delivering, like the Gulf of Mexico and western Africa.”

ExxonMobil’s Liza-1 discovery offshore Guyana in South America placed fourth on the list. The well, drilled by Esso Exploration and Production Guyana Ltd., went to 17,825 feet in 5,719 feet of water on the Stabroek Block and encountered more than 295 feet of high-quality oil sands.

A Major Comeback

Fryklund said the exploration year in review was notable for the size of some discoveries, the number of deepwater successes and its oil-gas balance.

“There’s a couple of interesting things that stand out. Of the Top Ten wells, 80 percent of those were in deep water. The other thing is that we have two discoveries above 1 billion barrels” oil equivalent, Fryklund observed.

“It’s a little more balanced, so it’s 50-50 gas and oil. Some of that is helped by the Gulf of Mexico having a few entries in here this time,” he said.

The majors have been largely missing from the big discoveries list in recent years, edged out by independents. Last year the majors came back, in a different mixture of successful explorers, Fryklund noted.

“It’s interesting who those folks are, the mix of companies. This time it’s NOCs that are making a lot of large discoveries. It’s 50 percent national oil companies,” he said.

Other Discoveries

Three discovery wells in the Gulf of Mexico also made the 2015 IHS Top Ten wells list, in a good year for GOM exploration.

Chevron’s Sicily well in Keathley Canyon Block 814 about 180 miles offshore Louisiana was drilled to 33,749 feet and made a significant find, with reported gross resource potential of 300-400 million barrels of oil equivalent.

BP made a closely guarded discovery with its Hopkins well in the Green Canyon area and decided to fast track development, with rumors of a 60,000 barrel-per-day production facility.

And Statoil announced a major subsalt Miocene oil discovery on its Yeti Prospect in Walker Ridge Block 160, about 220 miles south of New Orleans and less than 10 miles south of the Big Foot field.

Statoil claimed an additional spot on the Top Ten list with yet another big gas find offshore Tanzania, bringing total discovered volumes in the East Africa Block 2 area to about 22 Tcf, the company said.

Rounding out the list were a China National Offshore Oil Corp. (CNOOC) discovery and a significant find by Kuwait Oil Company (KOC).

CNOOC’s Lingshui 25-1 deepwater well in Qiongdongnan Basin in the South China Sea tested at about 35.6 million MMcfd and 395 Bopd from 239 feet of pay.

Later in the year, CNOOC announced a shallow-water oil discovery on the Shijutuo Uplift in China’s western Bohai exploration area. Its Caofeidian 6-4-1 well tested at 5,750 barrels per day of light crude from a 180-meter pay zone in Paleogene clastics.

And KOC established Kuwait’s first commercial, high-grade, light-oil production with its Umm Ruaiss North 1 discovery and other successes at the northern Al Rawdhatain and western Al Manageesh fields.

Expectations for 2016

A fruitful year for exploration advanced the industry around the world, but with a good-news, bad-news aspect, Fryklund said.

“When you look at the past five years, when you put on a map where those discoveries are, it’s pretty impressive the number of new basins we’ve opened up,” he noted.

There’s a catch, however. Recent discoveries have tended to be more compact, smaller plays with secondary discoveries of diminishing size, Fryklund said. It isn’t winner-takes-all, but often it seems like first-takes-most.

Fryklund said he’s keeping his eyes on several intriguing play areas and wells in 2016.

“I would look, for the future, to the Kara Sea. That’s where Rosneft made the Universitetskaya discovery last year. There’s probably another 10 structures of that size up in there,” he said.

Heritage Oil International plans to explore on the Caravaggio Prospect in Area 7 offshore southeast Malta, seeking commercial production from carbonate reef targets in Lower Eocene and Cretaceous, he noted.

“That’s an interesting one. Another one coming up in 2016 is the Total well in Uraguayan waters. There’s an area where we haven’t seen activity in 20 years,” he said.

“One of the things that strikes you over the past five years is that Asia has been slow going,” Fryklund observed.

“China onshore still has some running room. It’s dominated, obviously, by the national oil companies. The Chinese focus has really shifted – they have a focus of trying to get gas from shale,” he said.

While exploratory drilling offshore Colombia has already shown progress, it’s unclear whether the size and potential of the play will produce significant successes and ongoing development, Fryklund noted.

“Whether we get enough scale there is going to be interesting,” he said.

Finally, a tantalizing and highly prospective offshore area in the United States lies close at hand, but probably will remain out of bounds.

“The one that still begs more modern exploration is the west coast of the U.S.,” he said.

Fryklund said the oil price collapse presents a danger for international exploration, where a loss of momentum would delay future supply coming onstream, with an ultimate negative affect on global energy sourcing.

“If we aren’t drilling wells and finding stuff, we’re going to be pushing things further out,” he said. “One of the things that worries people is, ‘What’s the first thing that goes away in one of these downturns?’ It’s exploration.”

“When you look at the past five years, when you put on a map where those discoveries are, it’s pretty impressive the number of new basins we’ve opened up.”

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