Black Sea Primps for Spotlight

Texas Independent Hits 13 of 15

The talk among in-the-know industry players is that the Black Sea is on the brink of becoming one of the world’s hot spots for oil and gas drilling.

Big sums of money already are being earmarked for E&P action in this inland sea, which is an important conduit for the passage of energy to Europe from Russia and western Asia.

Turkey has announced it is poised to spend as much as $8 billion over the next decade to develop oil and gas deposits in the Black Sea.

Successful drilling programs could have considerable impact on the half-dozen countries surrounding this water body, which currently must import most of the oil and gas required to meet the needs of their fast-growing economies.

Opportunity clearly is knocking – and one company that answered the door early on was at least one group of … Texans.

“We started drilling offshore Turkey in 2004 and have drilled 15 wells so far, with 13 of these being successes,” said AAPG member Mike FitzGerald, executive vice president of exploration and production at Dallas-headquartered Toreador Resources Corp. “We had our first gas sales from the offshore area on May 21.”

He noted that prior to 2004, there had been only six wells drilled in the Turkish Black Sea – four in the far western area and two in the west central area.

“In fact, there are very few wells on a per acre basis in the Black Sea overall,” he added, “meaning it’s virtually un-drilled.

“It’s becoming a hot thing.”

Image Caption

It's off to work they go: The Southern Cross begins the journey to its Black Sea target, cruising past Istanbul's Rumeli Fortress, built by Mehmet the Conqueror in 1452.
Photos courtesy of Mike FitzGerald

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The talk among in-the-know industry players is that the Black Sea is on the brink of becoming one of the world’s hot spots for oil and gas drilling.

Big sums of money already are being earmarked for E&P action in this inland sea, which is an important conduit for the passage of energy to Europe from Russia and western Asia.

Turkey has announced it is poised to spend as much as $8 billion over the next decade to develop oil and gas deposits in the Black Sea.

Successful drilling programs could have considerable impact on the half-dozen countries surrounding this water body, which currently must import most of the oil and gas required to meet the needs of their fast-growing economies.

Opportunity clearly is knocking – and one company that answered the door early on was at least one group of … Texans.

“We started drilling offshore Turkey in 2004 and have drilled 15 wells so far, with 13 of these being successes,” said AAPG member Mike FitzGerald, executive vice president of exploration and production at Dallas-headquartered Toreador Resources Corp. “We had our first gas sales from the offshore area on May 21.”

He noted that prior to 2004, there had been only six wells drilled in the Turkish Black Sea – four in the far western area and two in the west central area.

“In fact, there are very few wells on a per acre basis in the Black Sea overall,” he added, “meaning it’s virtually un-drilled.

“It’s becoming a hot thing.”

International Experience

Toreador’s success in the region no doubt can be attributed in large part to the prior overseas experience of a number of the participants, who were formerly employed with internationally focused Triton Exploration in Dallas.

In the early 1990s, some of the Triton folks exited to form other entities, and FitzGerald hooked up with a couple of guys to create Madison Oil, an international exploration company.

“In 1999, we did a reverse merger with a little Canadian company, which had a small subsidiary in Turkey,” FitzGerald said. “We realized Turkey fit the country criteria for what we had been looking at in countries we went into.”

These criteria included:

  • Being an energy importer.
  • Oil and gas already having been discovered.
  • Hydrocarbon deposits not being pursued by the majors for the most part.
  • Stable government, good fiscal system.

When looking for production to purchase, Madison talked to BP, which was intending to sell Arco Turkey with its inventory of close to a million acres in the Black Sea.

“During the evaluation, we noticed the two wells drilled earlier in the’70s by the state oil company (Turkiye Petrolleri AO) to test Mesozoic and Cenozoic sediments,” FitzGerald said, “and there was some scattered regional seismic out there which showed structuring.

“We talked to BP quite frankly and said it looks like some prospectivity out there,” he added. “They said their internal studies showed the pay was only about one TCF of gas, which they said was too small for them.

“So we purchased Arco Turkey at a good price, and it paid out in 10 months to us; shortly after, Madison merged with Toreador.”

The Kick Off

The company initiated a 1,200-kilometer 2-D survey in the area to tie to one of the wells drilled in the 1970s.

“The structures became very apparent, and we did some AVO work and could see the gas zones encountered in the initial well,” FitzGerald said.

But that well was in water too deep to drill with a jackup, and that was all that was available. In addition, Toreador had a time limit to drill the first well.

“We hopped one fault trend closer to shore from the original well and drilled the Ayazli #1 well for the same objective section but shallower formation-wise and water depth-wise,” he said.

“We found the same section, which was gas-bearing and tested 12-plus million a day from four Eocene age sands, and that kicked off our drilling program.”

Success Story

Toreador has focused its efforts thus far on a 50,000-acre patch out of the almost one million acres it originally purchased. This particular patch has been shot with 2-D and 3-D as well as another high-resolution 2-D survey.

It is noteworthy that every well drilled in the immediate area of the fault trend where there are AVO anomalies has been successful. The real kicker is that Toreador has only drilled about 40 percent of the anomalies thus far.

“Just in this 50,000 acres, we see more potential than what we’ve already found,” FitzGerald noted.

Out beyond the relatively shallow coastal waters, the scene changes rather dramatically in the deep water where the hydrocarbon regime and the geology become especially intriguing.

Nearshore, the current Toreador producers are kicking out gas that is basically 98 percent methane, and FitzGerald noted the generally accepted conventional wisdom is that the accumulation is basically biogenic.

Further to the north in deeper water, however, there are excellent source rocks at a depth that should make them mature – and they’re organically rich.

“In the deeper water area, you should be in an oil and gas province that’s more thermogenic as opposed to biogenic,” FitzGerald said, “so if you go into deeper water, then you have a chance of both gas and oil.

“There are some fairly large structures well known in the industry to exist out in the deeper water area,” he added. Maximum depth is about 2,200 meters.

C’mon In

A big welcome mat adds to the allure of the virtually unexplored Black Sea.

“Any of the countries that are major importers of oil and gas are very encouraging to outside contractors to explore and develop,” FitzGerald said. “Right now a large part of the natural gas comes from either Iran or Russia, and this dependence is not in the best long-term interest.

“We have a good relationship with the Turkish state oil company,” FitzGerald noted, “and working in Turkey has been a very positive experience for us – personally, professionally, technically and financially.”

To put the potential for Black Sea production into better perspective, FitzGerald noted that someone who looked at their data several years ago commented that it was reminiscent of the Gulf of Mexico in the 1950s, i.e., huge potential waiting to be tapped.

If the nearshore Turkish Black Sea area sounds like your thing, be prepared to wait your turn – or switch your sights to other somewhat active hydrocarbon locales nearby, such as Romania or Bulgaria.

“There’s no open acreage along the Turkish coastline,” FitzGerald said. “It’s almost like federal waters versus state waters in the U.S. In the equivalent of state waters, there’s not an acre available.”

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