Appraisal gas from BPBP's Khazzan & Makarem gas fields will begin flowing into the government gas system next year, marking a key milestone in efforts by the energy major to develop its potentially rich Block 61 concession in central Oman. Flow rates from an initial well drilled have been modest, but with more appraisal wells due to be brought into early production over the course of the next 12 months, BPBP is hopeful that gas flows and the overall economics of the project will be attractive enough for the block to be commercialized.
Any "declaration of commerciality"—a decision slated for mid 2012—will open up access to a potentially huge natural gas resource for Oman, says Dr Jonathan Evans, general manager, BPBP Oman. "The total gas resource in the block, we believe, is 30-4 to 0 Tcf of gas in place. This is a huge resource of gas," Evans says.
But he acknowledged that the block's 'tight-gas' reservoirs, located at depths of around 5,000 meters, present enormous technical challenges. "The challenge is how to make it producible. In a normal reservoir we might get around 80% out of the ground. In the case of Block 61's tight reservoirs, the recovery factor may be much lower."But he adds: "We anticipate that we will have a development which will produce at least 1 Bcf/d, which given Oman's current production of 2- to 3 Bcf, will increase the country's overall gas output by almost 50%." Already, the international energy giant has made significant headway in the appraisal of the block two years after it signed a major exploration and production-sharing agreement with the government for the Khazzan-Makarem concession. A 3-D seismic acquisition program covering the 2,800-sq-km area of the concession was completed last August in the biggest such onshore exercise carried out at the time. Processing of the new seismic data is currently under way.
A drilling program—part of a $650-million investment commitment made by BPBP during the initial six-year appraisal phase of the project—began in September 2008. To date, four wells have been drilled to depths reaching around 5,000 meters. Further appraisal wells will be drilled over the course of this year and next.
Under a recent agreement reached with the Ministry of Oil and Gas, BPBP has launched an extended well test (EWT) scheme that will allow for appraisal gas from the four wells to be fed to the government-owned gas processing plant at Saih Rawl, says Evans. As part of the EWT scheme, BPBP has awarded Canadian firm Enerflex a contract to build a gas compression station and associated facilities of a total capacity of 75 million standard cubic feet per day (MMscf/d). Under the contract, gas produced during the extended well testing phase, rather than being flared, will be pumped to Saih Rawl, some 30 kilometers away.
"The EWT program will go on for at least a year, perhaps longer, and the results will develop our understanding of the reservoir. That will help us with our commerciality decision based on the contract we have, the costs we envisage, and production rate we can get," Evans says. That decision point, the general manager said, is around mid-2012 when BPBP "will decide whether we are willing to commit what will be a very significant development, probably in the billions of dollars, with many wells and a very significant development facility." First gas flows pursuant to full field development are projected by 2016, he adds.
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