Surveying Mediterranean prospects

Jerry Lee

November 1, 2015

Jerry Lee reports on all the exploration and production activity currently ongoing in the Mediterranean and North Africa.

The Maersk Discoverer drilling in Egypt’s East Mediterranean Sea. Photos from BP.

While much of the Mediterranean and North Africa’s offshore is largely dormant due to geopolitical issues, there is still plenty of exploration activity ongoing in the region. OE takes a look at exploration efforts in Tunisia, Croatia, Libya, Italy, Albania, Cyprus, and Egypt.

Croatia

Earlier this year, Croatia awarded its first licenses for the exploration and exploitation of hydrocarbons in the Adriatic Sea. Five companies were awarded 10 licenses covering 10 exploration blocks in the Adriatic.

The awards were preceded by Croatia’s first offshore bid round on 3 November 2014, which offered 29 blocks in the eastern Adriatic Sea covering a total of 36,822sq km. Bids were received from six companies for 15 exploration areas.

The Marathon Oil and OMV consortium was granted a license for seven exploration blocks: North Adriatic 8, Central Adriatic 10, Central Adriatic 11, Central Adriatic 22, Central Adriatic 23, South Adriatic 27 and South Adriatic 28.

In addition, INA (Industrija nafte d.d.) was granted a license for South Adriatic 25 and South Adriatic 26, while an ENI and MEDOILGAS consortium was granted a license for Central Adriatic 9.

The majority of the blocks offered fall within the Dinaric basin, however the most northerly blocks offered span part of the Po basin, whilst the western parts of the shallow and medium water blocks enter the Northern Apennine basin.

Offshore Croatia is underexplored with known plays including the Pliocene gas plays of the northern and central Adriatic, and Pre-Tertiary oil plays of the southern Adriatic, according to Deloitte Petroleum Services.

The estimated value of investment plans in the exploration activities for which the companies were competing amounts to US$592.6 million (HRK 4 billion).

Libya

Exploration offshore Libya has proved fruitful for Eni with two new gas and condensate discovery made offshore Libya in Area D.

The first discovery was made through the B1-16/4 well in the Bahr Essalam South exploration prospect, 82km from the coast and 22km from the Bahr Essalam producing field. The well encountered gas and condensates in the Metlaoui Formation of Eocene age. During the production test the well produced 29 MMscf/d and above 600 b/d of condensate. In a producing configuration the well is estimated to deliver over 50 MMscf/d and 1000 b/d of condensate.

The second discovery was made through the Bouri North A1-1/1 exploration well, 140km from the coast and 20km north of the Bouri production field. 

The well also encountered gas and condensate in the Metlaoui Formation of Eocene age. During the production test, the well flowed at 1340 boe/d. In production configuration, the well is estimated to deliver in excess of 3000 boe/d.

Two operators on the Ramadan production platform bridge, located in the Gulf of Suez off the coast of Egypt.

Tunisia

Development activities for the Zarat field offshore Tunisia has seen progress with the submission of an updated plan of development by PA Resources to Tunisian authorities.

The updated plan, developed by PA and partner, state oil company, L’Entreprise Tunisienne d’Activités Pétrolières (ETAP) will see a two phase development, with the first phase comprising four production wells and production facilities to process and export 20,000 b/d and 100 MMscf/d gas. Phase two would see a further four development wells and expanded facilities to increase capacity to 40,000 b/d and 200 MMscf/d.

Following acceptance of the Zarat plan of development, the project will enter a front-end engineering design phase with project sanction during 2017. First oil would be expected in 2020.

The Zarat field is a large, shallow water, gas condensate and oil field containing estimated recoverable reserves of 147 MMboe, according to PA.

Albania

Following offshore oil discoveries made in Albania by Petromanas and Shell, the country began seeking bids for seven offshore and onshore blocks in mid-May. Offshore offering included the Ionian 5, located in the Ionian Sea and the Rodoni blocks, located in the Adriatic Sea.

In June, however, the bids for the offshore blocks were delayed indefinitely.

“The deadline for the handover of the applications for the sea blocks, due to the consolidation of the seismic data, will be postponed for another deadline,” said Damian Gjiknuri, Albanian Minister of Energy and Industry.

According to Reuters, part of the Ionian 5 block offered in the bid round overlaps with an area where Greece is searching for oil. Due to the territorial disputes between Albania and Greece over their territorial waters, the bidding process may be delayed till the dispute is resolved.

Italy

Italy has the fifth largest proved reserves of crude oil in Europe with 560 MMbbl as of 1 January 2014, and it is sitting on the sixth largest gas reserves in continental Europe (at 2.1 Tcf), according to the US Energy Information Administration. However, no exploration wells have been drilled in Italy’s offshore since 2008, but this may be set to change as Italy now seems eager to open up and exploit the country’s own resources.

Rockhopper Exploration has taken a step forward in its plans to develop an offshore Italy oil field with the approval of its environmental impact assessment, for the Ombrina Mare field, by Italy’s Minister for the Environment and countersigned by the Ministry of Cultural Heritage.

Italy’s Ministry of Economic Development will now have to complete the process to award the Ombrina Mare production concession.

Rockhopper plans to drill and test an appraisal well to extend existing resource estimates and to optimize plans for the development of the asset prior to project sanction.

“We are delighted to report progress on the Ombrina Mare project. While additional approvals are still required before we move into the production concession, we consider this to be a significant milestone towards unlocking the project,” said Sam Moody, Rockhopper’s CEO.

In addition to Rockhopper, Global Petroleum says it is seeing progress on its bid to gain blocks in the Adriatic Sea. Global’s permit applications in Italy cover four contiguous blocks in the southern Adriatic offshore Puglia, adjoining the median line with Albanian waters. The applications are currently progressing towards approval of the environmental impact assessment (EIA) documentation.

Cyprus

Noble Energy’s Aphrodite reservoir in the Eastern Mediterranean has been deemed commercial, according its partner the Delek Group. Located in block 12 offshore Cyprus, Aphrodite has estimated gross mean resources of 5 Tcf of natural gas, with multiple high-quality pays in Miocene sand intervals.

The partners intend to submit a proposed outline for Aphrodite’s to the government of Cyprus, Delek said.

Egypt

Egypt has increased its offshore activities starting the year off by signing six agreements, out of 20 new petroleum expected, for exploration in the Gulf of Suez and the Western Desert.

Following the summer months three offshore blocks were awarded from the delayed 2014 exploration bid round. Emirati Pacific Oil was awarded the offshore Block 2 (South East Ras El Ush) in the northwest of the Suez Gulf. Block 2 covers 68sq km in up to 75m water depth and includes the West Ashrafi field which has already tested for commercial oil and gas.

Furthermore, Magawish Petroleum won Block 4 (North Magawish), a site in the north zone of the southern Gulf of Suez covering 194sq km, and Egyptian Trident Petroleum won Block 6 (North West Sea Bird), north-west of the Gulf of Suez covering 191sq km.

Also, last month, Egypt’s state gas company EGAS announced the result of the 2015 international exploration Mediterranean bid round, with blocks awarded to BP, Eni, Edison and Total.

In total, four blocks were awarded, with a total investment of U$306 million and a signing bonus of $10.5 million to drill eight wells, and conduct 3D seismic survey, according to Egypt Oil & Gas.

In an official statement, EGAS chairman Khalid Abd Al-Badie said Block 4 North Ras El Esh was awarded to BP and Eni affiliate International Egyptian Oil Company (IEOC).

In addition, IEOC, BP, and Total were awarded Block 7, in the North El Hammad area. Italy’s Edison was awarded Block 12, Northeast Hapi, and BP was awarded Block 12, North El Tabia.

Last month also saw two new exploration licenses in the Mediterranean Sea awarded to Eni. The two blocks, North El Hammad and North Ras El Esh which cover areas of 1389sq km and 1927sq km respectively, are in the shallow waters of the Mediterranean Sea, facing the Nile Delta and located southwest of the Temsah area and west of the Baltim area.

Eni and BP also had earlier success offshore Egypt this year.

BP started the year by signing an agreement to develop the $12 billion West Nile Delta (WND) gas fields, then made a 5 Tcf gas discovery at its North Damietta offshore concession in the East Nile Delta.

The discovery was made at the Atoll-1 deepwater exploration well located about 80km north of Damietta city, 15km north of Salamat and only 45km to the northwest of Temsah offshore facilities.

Following the discovery, BP increases its WND stake as their Partner DEA farmed down. The WND fields will develop 5 Tcf of gas resources and 55 MMbbl of condensates, with production set at reaching up to 1.2 Bcf/d.

Eni began the year signing two concession agreements to explore Blocks 8 and 9 located near the boundary of Cypriot’s waters. North Leil is located in Block 9, which covers 5105sq km and is in 2100-2800m water depth. Karawan is located in Block 8, which covers 4565sq km and is in water depths ranging from 2000-2500m.

The agreements were followed later by two recent discoveries. A potential 15 Bcf of gas in place with upside, plus associated condensates, was discovered at the Nooros exploration prospect in the Abu Madi West license, in the Nile Delta, offshore Egypt. The discovery will be put into production and tied-in to the existing Abu Madi gas treatment plant, located 25km southeast.

The Nooros discovery was then trumped by the discovery of the deepwater Zohr field, which could hold up to 30 Tcf of lean gas in place (or 5.5 billion boe) over some 100sq km. and could become one of the world’s largest natural gas finds. The discovery well, Zohr 1X NFW, is in 4757ft (1450m) water depth, was drilled in the Shorouk Block (Block 9), deep offshore and close to Cypriot waters, which was awarded to Eni in 2014.

These discoveries followed Eni’s signing of a new $2 billion deal for exploration and development activities offshore Egypt.