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Spain's Oldest and Only Onshore Oilfield

The Ayoluengo field was the first commercial oil discovery in Spain and more than 50 years later remains the only onshore oilfield in the Iberian Peninsula.

The field was discovered in 1964 and is still producing. It is located about 300 kilometers north of Madrid in the southern part of the Basque-Cantabrian Basin, a geological region where natural oil seeps, tar sands and asphalt have been recognized in outcrops since the early 20th century. This region was considered highly promising and most of the hydrocarbon exploration efforts in Spain during the 1940s and 1950s were focused here.

The Compañía Arrendataria del Monopolio de Petróleos Sociedad Anonima (CAMPSA), the Spanish-government petroleum monopoly created in 1927, was in 1946 granted the hydrocarbon exploration rights for a 2,800 square-kilometer area north of Burgos. With light rigs, CAMPSA drilled some shallow stratigraphic wells, all based on surface geological surveys, as no reflection seismic was available then, resulting in many of the outcropping anticlines being pierced.

Later exploration by CAMPSA was focused in the Zamanzas Valley, along the eroded axis of a large surface anticline with outcropping Cretaceous tar sands in its core. The shallow wells typically found heavy black oil while drilling the Cretaceous section; traces of gas and very small amounts of lighter oil (26-28 degree API) along with salt water were occasionally recovered from the Jurassic carbonates, but no commercial flow was established.

Additionally, during the 1940s, rudimentary and experimental underground mining in the Zamanzas Valley was carried out by CAMPSA to exploit the tar sands – a process that was quite primitive. The tar sands were crumbled and dumped into large water tanks heated by wood fire.

Heat favored separation of the bituminous material that floated on the surface and then was manually collected with dippers and poured into barrels. Oil production was marginal – only about one to three barrels per day. Eventually, this exploitation was abandoned because of the uneven distribution of the tar impregnations and the poor economic returns.

After the Spanish Civil War (1936-39), the country faced economic sanctions from the international community. Economic isolation combined with nationalist rhetoric committed the Franco dictatorial regime to pursue self-sufficiency. By the late 1950s, the failure in self-sufficiency planning seemed clear and the regime began modifying economic policy and lowering restrictions to foreign investment.

In December 1958, a new hydrocarbon law was enacted for petroleum exploration and production that sought to encourage foreign companies to explore. As a result, most of the promising Spanish basins were covered with exploration licenses. It allowed companies with as much as 100-percent foreign capital to work in Spain, while favoring the association of national and foreign companies for the exploration of state reserves, with the state keeping a majority of the share.

In 1959, CAMPSA signed an agreement with American Overseas Petroleum Limited whereby CAMPSA assigned a 50-percent interest in their exploration permits: 25 percent went to Standard Oil Company of California (which later became Chevron) and 25 percent to Texaco. In 1960, the company named Amospain (CAMPSA 50 percent, California Oil Company of Spain 25 percent, and Texaco Spain Inc. 25 percent) was awarded the operatorship of the Ubierna Exploration Permit, located within the former state national reserve north of Burgos, previously held by CAMPSA.

Under this new operatorship, the exploration effort was focused on the Ubierna permit, where photogrammetric studies, stratigraphic measurements, detailed surface geological mapping and modern reflection seismic data was acquired during the early 1960s. These studies resulted in the identification of a faulted anticline in the subsurface, below an Upper Cretaceous carbonate flat plateau – an agricultural terrain mostly dedicated to growing potatoes and locally known as “Loras.” Although this faulted anticline was suspected from surface mapping, it was the first properly matured seismic prospect to be tested north of the Burgos area.

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The Ayoluengo field was the first commercial oil discovery in Spain and more than 50 years later remains the only onshore oilfield in the Iberian Peninsula.

The field was discovered in 1964 and is still producing. It is located about 300 kilometers north of Madrid in the southern part of the Basque-Cantabrian Basin, a geological region where natural oil seeps, tar sands and asphalt have been recognized in outcrops since the early 20th century. This region was considered highly promising and most of the hydrocarbon exploration efforts in Spain during the 1940s and 1950s were focused here.

The Compañía Arrendataria del Monopolio de Petróleos Sociedad Anonima (CAMPSA), the Spanish-government petroleum monopoly created in 1927, was in 1946 granted the hydrocarbon exploration rights for a 2,800 square-kilometer area north of Burgos. With light rigs, CAMPSA drilled some shallow stratigraphic wells, all based on surface geological surveys, as no reflection seismic was available then, resulting in many of the outcropping anticlines being pierced.

Later exploration by CAMPSA was focused in the Zamanzas Valley, along the eroded axis of a large surface anticline with outcropping Cretaceous tar sands in its core. The shallow wells typically found heavy black oil while drilling the Cretaceous section; traces of gas and very small amounts of lighter oil (26-28 degree API) along with salt water were occasionally recovered from the Jurassic carbonates, but no commercial flow was established.

Additionally, during the 1940s, rudimentary and experimental underground mining in the Zamanzas Valley was carried out by CAMPSA to exploit the tar sands – a process that was quite primitive. The tar sands were crumbled and dumped into large water tanks heated by wood fire.

Heat favored separation of the bituminous material that floated on the surface and then was manually collected with dippers and poured into barrels. Oil production was marginal – only about one to three barrels per day. Eventually, this exploitation was abandoned because of the uneven distribution of the tar impregnations and the poor economic returns.

After the Spanish Civil War (1936-39), the country faced economic sanctions from the international community. Economic isolation combined with nationalist rhetoric committed the Franco dictatorial regime to pursue self-sufficiency. By the late 1950s, the failure in self-sufficiency planning seemed clear and the regime began modifying economic policy and lowering restrictions to foreign investment.

In December 1958, a new hydrocarbon law was enacted for petroleum exploration and production that sought to encourage foreign companies to explore. As a result, most of the promising Spanish basins were covered with exploration licenses. It allowed companies with as much as 100-percent foreign capital to work in Spain, while favoring the association of national and foreign companies for the exploration of state reserves, with the state keeping a majority of the share.

In 1959, CAMPSA signed an agreement with American Overseas Petroleum Limited whereby CAMPSA assigned a 50-percent interest in their exploration permits: 25 percent went to Standard Oil Company of California (which later became Chevron) and 25 percent to Texaco. In 1960, the company named Amospain (CAMPSA 50 percent, California Oil Company of Spain 25 percent, and Texaco Spain Inc. 25 percent) was awarded the operatorship of the Ubierna Exploration Permit, located within the former state national reserve north of Burgos, previously held by CAMPSA.

Under this new operatorship, the exploration effort was focused on the Ubierna permit, where photogrammetric studies, stratigraphic measurements, detailed surface geological mapping and modern reflection seismic data was acquired during the early 1960s. These studies resulted in the identification of a faulted anticline in the subsurface, below an Upper Cretaceous carbonate flat plateau – an agricultural terrain mostly dedicated to growing potatoes and locally known as “Loras.” Although this faulted anticline was suspected from surface mapping, it was the first properly matured seismic prospect to be tested north of the Burgos area.

The Well at Ayoluengo

The location of the first exploration well was carefully chosen jointly by Amospain and CAMPSA’s engineers and geologists. It was named Ayoluengo-1, as per the small village nearby, and located some 15 kilometers southwest of the Zamanzas Valley, where previous shallow exploration drilling by CAMPSA had been concentrated. The well was designed as a 3,500-meter deep test of the Cretaceous sandstones, the Lower Jurassic marine carbonates, which had commonly recorded oil shows in the old CAMPSA wells, and the Triassic section.

The well was spudded on May 5, 1964. From 990 to 1,346 meters’ depth, numerous poor shows of oil were observed, none worthy of further interest. On June 2, at 1,346 meters, the well penetrated a 5-meter thick sandstone bed of Late Jurassic-Early Cretaceous age with significant oil and gas shows.

The geological personnel assigned permanently to the well at that moment were William “Bill” Thornton Stoeckinger, an American geologist working for Standard Oil Company of California, and Cristobal Racero, a Spanish mining engineer working for CAMPSA. A first drill stem test was run, but the testing tool failed. In order to improve the hole conditions for testing, the well was deepened a few meters and a conventional core was cut over a very hard shaly section, just below the oil-bearing sandstones. Then, a second DST (at 1348-1361 meters) was run on Saturday, June 6, a warm and sunny day.

The tool was opened at 8:55 a.m. with an immediate good blow that rapidly increased to strong. The oil rushed up the hole and flowed up to a height of some 30 meters above the ground, spraying oil across the drilling site, vehicles and a nearby cropland. The flow period was one hour and was estimated at 85 barrels of 36-degree API oil per day.

The well was rapidly controlled and euphoria spread at the rig site, especially among the Spanish technicians from CAMPSA who for the first time had witnessed such an oil flow in their country. The church bells in nearby villages began to ring, and inhabitants came to the well location to witness the oil flow and to celebrate the discovery by toasting with champagne, shooting fireworks and collecting some oil samples as souvenirs.

Meanwhile, CAMPSA employees were carefully planning how to smoothly communicate this exciting news to Ruperto Sanz, the CAMPSA exploration manager. He was a Spanish mining engineer who had been one of the petroleum exploration pioneers in Spain, as well as a strong supporter of foreign investment who was fully persuaded of the commercial oil possibilities in this region.

Spain’s “Oklahoma”

Ayoluengo was the first commercial oil discovered in Spain after more than 100 dry holes. It brought great expectation to the region, presumed to become a prolific “black gold” producer. The oil discovery gained national attention with wide coverage by the media, which attracted many visitors to the well site, as shown in the photograph taken in June 1964.

Rumors and speculations abounded in the national press as debate and discussion about the importance of the discovery, the size of the reserves and the quality of the oil made headlines. An “Oklahoma Oil Boom in Spain” was a ubiquitous headline in some national newspapers.

To avoid speculation, trading of CAMPSA shares on the Madrid Stock Exchange was suspended for several days. The radio, television and the popular “No-Do” (from “Noticiarios y Documentales,” or “News and Documentaries”), a state-controlled series of cinema newsreels that contained servile reporting in favor of the Franco regime, widely broadcasted the good news. News of the discovery of the first oil in Spain being so widespread, well site geologist Bill Stoeckinger became a sort of celebrity in Madrid.

According to Ina Stoeckinger, Bill’s wife, “Bill was often recognized and congratulated on the street by total strangers who had seen him on the television news covering the story.”

CAMPSA’s Ruperto Sanz was also continuously requested by the media to release data related to the Ayoluengo discovery, even directly contacted by some government members to provide them with “original, unfiltered information.”

The two Spanish mining engineers, Sanz and Cristobal Racero, were decorated in May 1965 by the Spanish Government for their “outstanding participation in the Ayoluengo discovery.”

After the well testing, Ayoluengo-1 drilling continued to the top of the Triassic, reaching a total depth of 2,397 meters on July 18, 1964. An oil zone in the Lower Jurassic was tested, flowing a small amount of 41-degree API oil, which was considered as non-commercial. The well was plugged back and completed in the upper sandstone bed.

The Ayoluengo-1 discovery well appeared to have been drilled on the northwestern flank of the anticline and not on the crest. Further appraisal and delineation drilling at higher structural positions resulted in the discovery of additional and thicker oil-bearing sandstones, but also evidenced a high degree of vertical and horizontal compartmentalization, showing that the structure was a complex anticline divided by several normal faults.

The Ayoluengo field, as we know today, consists of a northeast/southwest-oriented salt-cored anticline, related to Triassic salt movements. The field covers an area of 10 square kilometers and the structure has a vertical closure of about 200 meters. The structure is divided into two structural blocks by the Ayoluengo normal fault with 250 meters of vertical throw that affects the Jurassic carbonates up to the surface. The field produces from a series of thin lenticular fluvio-lacustrine sandstones packages of Late Jurassic-Early Cretaceous age.

More than 50 separate oil and gas sandstone beds have been identified. Some beds are as thick as 10 meters, but the average is only two or three meters. Areal extent of these lenticular sandstone bodies varies widely. Some are quite restricted, while others are laterally continuous. The sandstones have mean porosity values of 18 percent and permeabilities up to 1 Darcy. Because of the number of fault blocks and the rapid lateral changes in sand percentage, the thicknesses of the oil columns are also extremely variable.

Most of the individual reservoir layers are isolated by shales and compartmentalized by faults, making the Ayoluengo not a single field but a grouping of more than 100 independent small accumulations. The reservoir drive mechanism is primarily gas expansion and gravity drainage. Oils present different physical properties from well to well and from sand to sand, with gravities ranging from 20 to 39 degrees API, which evidences the complexity of the petroleum system. The organic-rich marls and black shales of Liassic age have been largely considered the only source of the oil, but this is still far from clear.

In 1965, two distinguished persons visited the Ayoluengo field: Juan Carlos and Sophia, then the prince and princess, later king and queen of Spain. The visit caused some nervousness and embarrassment to the American technicians and executives because they did not know the protocol for how to greet and interact with royalty. It is reported by some witnesses that, during the visit, when opening a choke in a well head, some oil sprinkled the Princess’ white mink coat, but that she just shrugged it off.

An exploitation concession named “Lora,” partially derived from the Ubierna exploration permit, was awarded in December 1966. Some discussions were held for laying a 150-kilometer oil pipeline to the port city of Bilbao or even building a refinery in Burgos, as was requested by the local authorities.

Finally, at the end of 1966, a 11-kilometer pipeline was completed from the field’s central facilities to a cargo terminal on the Burgos-Santander highway, 300 meters lower in altitude. The first Ayoluengo oil production started in 1967, reaching the peak production at 5,200 barrels of oil per day in 1969. Since then, production has gradually decreased. The pipeline was dismantled in 1993 and all the production is now transported by tanker trucks.

The Ayoluengo oil is paraffinic with relative high arsenic and vanadium content, which damages catalysts and makes it inadequate for refining. An alternative market was found and production was sold as fuel oil to local users in northern Spain, which continues today. Oil is produced by rod pumps, locally and popularly known in Spanish as “caballitos.” The small amount of produced natural gas is used to power the rod pump motors and to generate the electricity used in the field. Produced water (around 50,000 parts-per-million sodium chloride) is reinjected in one disposal well.

A total number of 52 wells have been drilled in the field, the last in 1990. At present time only 10 wells are active. Many of the infill wells encountered undepleted oil-bearing sandstone beds, indicating the field complexity. A 3-D seismic of 390 square kilometers was acquired in 1988, aimed at identifying undrained reservoir beds and better estimating remaining reserves. Unfortunately, poor results were obtained.

Fifty years later the Ayoluengo field is still active. After several changes in operators and partnerships, the current field operator is Compañía Petrolífera de Sedano S.L. (CPS), a subsidiary of the British company Leni Gas & Oil plc. The current average production is some 150 barrels of oil per day and the accumulated oil production nearly 17 million barrels of oil.

The Oil Museum in Sargentes de la Lora

Deep river erosion in nearby areas allows observation in spectacular geological exposures of most of the elements of the Ayoluengo petroleum system: tar impregnated sandstones, the claimed Liassic source rock and textbook faulted anticlines. Furthermore, the possibility of seeing working rod pumps in the field and of visiting the surface production facilities, together with the large amount of well data and seismic coverage available, has long made the Ayoluengo field an ideal training ground, providing students and non-technical people an excellent demonstration of a working petroleum system.

The region provides an excellent opportunity to initiate people into the oil exploration and production industry, now enhanced by the March 2015 opening of the Oil Museum in Sargentes de la Lora (Burgos). The museum is the first of this category in Spain, and is sponsored by the municipality of the village of Sargentes de la Lora and the Fundación Repsol in collaboration with – among others – the University of Burgos and the AAPG-affiliated Association of Spanish Petroleum Geologists and Geophysicists (AGGEP).

The museum is focused on the upstream, introducing the petroleum system concept and the wide variety of geological, geophysical and engineering techniques used in exploration and production. An important part of the exhibition is dedicated to the Ayoluengo field geology and its history, captured in an excellent collection of photos provided by the villagers and local newspapers, together with press clippings, documentaries of the mid-60s, educative panels, geological 3-D models, drilling and production material and an authentic working rod pump. The museum is located inside Las Loras Geopark project.

A Gordian Puzzle?

The Ayoluengo discovery revitalized seismic and drilling activity in the region, but subsequent exploration wells during the 1970s and ‘80s only tested non-commercial oil flow rates.

After years of intense exploration activity, surprisingly, the Ayoluengo field still remains a unique oil discovery as the only onshore commercial oil field in Spain and also the only one in the entire Iberian Peninsula. This geological singularity has brought recurrent discussions among petroleum geologists because it is difficult to explain why a petroleum system is uniquely working at this particular spot and nowhere else within such a vast territory.

Despite a long history of hydrocarbon exploration, the Basque-Cantabrian Basin is still considered one of the most prospective sedimentary basins in Spain and, at the present time, most of the exploration activity for conventional and non-conventional plays is mainly concentrated in this region.

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