Technology may open doors

Middle East Region – A New Frontier?

If you’re inclined to think the Middle East is drilled up for the most part, and it’s only a matter of time before the conglomeration of mega-productive fields run out of gas, so to speak, think again.

Many of the giant fields harbor reservoirs that have not received so much as a nod because the long-producing horizons continue to kick out the oil full speed ahead.

The stage is set for much more action in the Middle East, particularly since the recent attention-grabbing bid rounds in Iraq, which included some of the largest fields in the world.

“They not only offered some of the super giants, they offered some smaller fields in the ‘paltry’ 1 to 3 billion barrel range,” said one veteran geologist who has worked the region, is familiar with its trends and potential and who sees “lots of promise.”

He added that “there were not just the super majors there who bid, there were some below super major and also the national oil companies.”

In Iraq itself there have been discoveries by smaller companies working with the Kurdistan regional government (in the north) with very impressive initial flows and first estimates of reserves.

“We all know you need more than one well to tell you what’s in a field,” he said, “yet in this land of giants they probably are really nice fields.”

In fact, the U.S. Geological Survey’s most recent study of Iraq came up with hundreds and hundreds of prospects.

Kuwait, Saudi Arabia and others may be at a more mature level of exploration, yet they still haven’t gone through the kinds of filters used in the United States. Consequently, most people feel there’s more to do there as well.

“My friends at Saudi Aramco see lots of work remaining in Saudi Arabia,” one veteran geologist there noted.

The recent Tamar natural gas discovery offshore Israel is a Big Deal in the Middle East region, triggering even more interest and enthusiasm. Operator Noble Energy announced the Tamar discovery potential is five Tcf based on initial flow testing.

While the Iraqis generally get kudos for their geological, geophysical and engineering expertise, their technology is 20 to 30 years behind the times – there’s lots to be done to get up to speed, but that’s easier today thanks to the various service companies.

Learning how to use it appropriately is a whole other deal that requires the knowledge available in companies who have dealt successfully with particular situations in the field.

For example, handling all of the hydrogen sulfide in a very sour gas field requires a specific expertise that transcends having the proper equipment.

In general, an oil company needs to stay in the host country only as long as it continues to be critical to field development by developing new technologies and new ways of doing things.

Besides the sometimes thorny challenges of politics and remote locations, the region’s geology adds to the complexity of the scene overall. Fractured and often high-pressure reservoirs are common, as well as heavy crude, sour crude and sour gas.

Some of the fields put up in the second bid round in Iraq have heavy oil in them, according to sources familiar with the region – up to a billion barrels haven’t been produced effectively because they haven’t been subjected to all the new heavy oil technology.

“There’s heavy oil throughout the Middle East,” one source said, “so that’s seen as a frontier to be exploited.”

Activity currently is robust throughout the region. Experts expect action in Iraq, in particular, to expand dramatically especially with the political climate improving.

There are concerns: Where will the drilling rigs come from – to say nothing of the needed pipelines and other infrastructure. And, hey, where are all the roughnecks?

Still, as one expert said, “There’s a whole lot more to be done in the Middle East.”

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