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Hydrocarbon Reserves in Iraq

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Hydrocarbon Reserves in Iraq

Unread postby Stillw8n » Fri Oct 21, 2011 8:13 am

Hydrocarbon Reserves in Iraq
Posted on 19 October 2011
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Pages: 1 2 3 4 5
By Dr Thamir Uqaili

Dr Uqaili is E&P Consultant and CEO of Petroconsult Canada & Associates. He has BSc in Oil Technology and PhD in Petroleum Engineering form the Imperial College in addition to MSc in Water Resources Technology from Birmingham University. Dr Uqaili worked in over ten countries including some 35 years in Iraq, in the hydrocarbon upstream sector and has been concentrating on Iraq during the last 10 years

Background

The ministry of oil, last year declared that Iraq has about 142 Billion B recoverable oil reserves (P1) compared to the old official figure of 112 BB, without giving details where the increase came from. Information obtained from personal source in the Ministry suggested that the increase was due to upgrading oil in place in W Qurna and possibly Zubair fields.

Such increase should be based on new seismic data acquisition and reservoir delineation by wells that were not achieved by then.

This article discusses what increase of the reserves is likely to be according to a detailed reassessment done by the author, noting that more reserves are expected as outcome of Bid Round-4 in addition to the likely revision of reserves in the known fields and discoveries.

A review is also made on the optimum production plateaus of the Iraqi Fields taking into consideration the reservoir limits and achievable size of work on ground.

Sources of reserves upgrade

The main sources for the extra reserves are from the increase in:

1.Oil in place of W Qurna-2 whether in the producing reservoirs or discovered but undeveloped reservoirs
2.Oil in place in Majnoon Field due to delineation of the northern extension
3.Hydrocarbon in place in other discovered reservoirs but not delineated yet. These are awarded fields of Bid Rounds-1, 2 and 3; and those still with the national operators
4.Hydrocarbon in place as result of Bid Round-4
5.Recoverable reserves of the known fields and discoveries by revising the Recovery Factors ‘RFs’ as result of better reservoir management and applying EOR techniques
6.Hydrocarbon in place as result of deep drilling especially in the southern part of Iraq
7.Discoveries in new blocks or exploration by Iraq’s Oil Exploration Company ‘OEC’

Items 1 to 5 will depend on the results of assessment by the operators that will probably take at least two years of data acquisition including 3D seismic, drilling and testing.

Deep drilling, slightly touched on by the Minister of Oil in the road show of BR-4 in Amman on the 11th Sept 11, remains a dream for a while due to its cost. The main target here is the equivalent of the Khuff Formation that is gas prone in the Gulf Area.

New exploration in a fifth Round or by OEC looks limited noting absence of strategy. Following a request from the DG of OEC to the author, condensed strategy guidelines in 5 pages ware presented to him over a year ago, nevertheless Bid Round-4 came out unsupported by any strategy apart from the motive of increased production.

In this article the increase of reserves as result of re-evaluation of Recovery Factor will be discussed and the production capacity of Iraq, based on realistic optimum production plateau targets (PPTs) will be suggested.

Revising the RFs and PPTs

The first estimate of the RF is made on field’s discovery based on:

◦Drilling results Well testing
◦Reservoir geology
◦Reservoir and fluid properties
◦Presence or absence of water drive
◦Performance of similar fields
Initial estimate is subject to continuous revision when the field/ reservoir is put into production following further testing, monitoring and studies. Static reservoir data alone is the beginning but as more dynamic data becomes available the better reserve estimate is derived.
In Iraq, the large number of wells and the long production history of Kirkuk, Bai Hassan, Jambur, Rumaila (S & North) and Zubair Fields allowed better control of reservoir performance. The results of repeated reservoir simulation studies enabled refined and higher estimate of the RFs. In contrast to that, the reservoirs in those fields that were discovered and either not put into production or had short production periods retained conservative estimate of the recovery factor.
Further reservoir modeling should be based on new 3D detailed seismic and other data acquisition that would decide more supported reserve estimates than the current official reserved figures.

In the case of the discovered fields that were not connected or put on limited pilot production:

◦Some fields/ reservoirs were not fully delineated that means the estimate of OOIP and eventually the recoverable reserves (P1) is conservative
◦The number of wells was small imposing a restriction on knowledge of reservoir geology and reservoir characteristics in addition to insufficient well and reservoir testing
◦No or limited possibility of monitoring and reservoir modeling
In those fields, 3D detailed seismic drilling, well testing and may be selective Pilot Production for at least one to two years is a pre-requisite to reservoir studies. All is required to assess the reserves and assist achieving full development.
Independent analysis of the RFs of the 63 fields containing 84 reservoirs (Figure-1) showed that there is definitely appreciable margin of justifiable increase. The low RFs were upgraded to 35%-45% ( well achievable) assuming future enhancement techniques to be carried out after obtaining further specific data and performing reservoir studies of almost all the fields/ reservoirs of Iraq. The recoverable total reserve P1 from the study (146 BB, Annex-1) is very close to last official figure of 142BB MoO announced last year
The western Desert and Jezira Area would probably add 20TCF gas (2 BSCFD) within 5-7 years, from Blocks 1 to 5 and possibly part of Block-6 in addition to some condensate. Other blocks are expected to add more reserves, probably in the region of about 500 million B. The current estimate of P1 in Kurdistan of 1.45 BB is likely to increase by 50%-70% in the next few years following extra delineation of the new discoveries and further well and reservoir testing.

However if the increase of some 30 BB reported by MoO is genuine then the overall P1 reserves are over 175 BB. The author in a study for CGES entitled ‘Hydrocarbon Exploration and field development in Iraq’ issued early 2009 estimated the reserves as 130-150 BB in seven year time.

Production Plateau Targets


Contracted oil PPTs of Rounds 1 and 2 as compared to those revised by the author are shown in Annex-2. The planned targets are much higher than the revised in the first three fields.
The fields are multi reservoirs some of which are not developed and little is known about their behavior so it is too early to assign high PPTs for them.

The independent study by the author estimates that the Peak Potential PPT (million B/D) of Iraq is as shown below. However it is not feasible to assume possibility of developing all the reservoirs of Iraq to arrive to this figure. The estimate of potential should be looked at as a positive sign to quote high but practically achievable targets.The overall reserve potential can aid in offsetting the production decline hence prolonging the plateau period.

A modest increase in the reservoir depletion rate, compared to what has been practiced in Iraq pre-2003, was assumed comprising two options:

Option 1: 5%-7% depletion rate hopefully maintaining a plateau for 5-7 years

Option 2: 4%-5% depletion rate hopefully maintaining a plateau for 7-10 years

Plateau level and period are subject to observation of reservoir performance in the first two years

In the light of the current speed of progress in implementing the field development, production and export plans and the limitation of local capabilities, the following two scenarios of production capacity are suggested:

Option 1: Sustained production 8 MMBD, Surplus of 2 MMBD

Option 2: Sustained production 10 MMBD, Surplus of 2 MMBD

An average GOR of 700cft/B gives 5.6 and 7.0 Billion SCFD sustained gas production for the 2 options. New gas reserve from the 12 Blocks of BR-4 may be around 20TCF supporting an extra 2000 mmscfd. Deep drilling in south of Iraq will most probably increase the gas amountsthat can be exported outside Iraq whether through Nabucco pipeline or Arab pipeline.
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Even with the proposed PPTs compared to the contracted, there are the following main challenges:

1.Overall management of Iraq Oil sector
2.Absence of effective Federal Hydrocarbon Law
3.Implementation of the Iraqi Hydrocarbon Conservation Law
4.Transparency in contracts and subcontracts awards and monitoring especially quality and cost issues
5.Coordination of field, transportation and export of Oil and Gas
6.The water Injection project
7.Gas gathering, processing, transportation and utilization
8.Strong army, security forces and government to maintain reasonable stability and security enough to coupe up with the level of coming hydrocarbon activities
http://www.iraq-businessnews.com/2011/1 ... s-in-iraq/
~The opinions expressed in the above article do not necessarily reflect the views of the person posting~
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