A top area to explore

Elephants Beckon in North Africa

You can see some camels in northern Africa, but you won’t find a lot of elephants. As in the actual animal, of course.

When it comes to elephants of a hydrocarbon variety, the region is a fertile hunting ground.

In fact, oil companies voted those countries at the top of the list in Fugro Robertson’s International New Ventures Survey last year.

Egypt was number one and Libya tied for second in exploration appeal, according to the annual survey of companies involved in E&P ventures outside the United States.

Tunisia ranked fourth and Algeria ninth, placing all four countries in the industry’s Top Ten wish list.

North Africa might not have much to offer in the way of elephants – but there are still some big critters to be found.

A string of impressive successes, notable for tapping new horizons, put Egypt on the exploration radar in 2008.

Early in the year BP announced its Satis gas discovery offshore the Nile Delta in a joint holding with ENI.

That discovery was big enough to make the IHS top ten discoveries list of 2008.

In October, Apache Corp. reported it had established the westernmost production in Egypt’s Western Desert with a discovery well in the Kalabsha concession. Apache said the well flowed 4,746 barrels of oil and 4.4 million cubic feet of gas per day from the Jurassic­Safa formation.

Then Texas independent IPR Group of Dallas recorded a Jurassic wildcat discovery in the northeast section of the Western Desert. Two drill stem tests showed a combined rate of 5,514 barrels of oil and condensate and 16.1 million cubic feet of gas per day.

A Big Finale

And 2008 ended on a high note for exploration.

In December, Hess Corp. reported good discoveries offshore both in Egypt and Libya.

Then Arabian Gulf Oil Company and Libya’s National Oil Corp. hit big in the Ghadames Basin. Their D1-NC7A discovery 500 kilometers south of Tunis tested more than 70 million cubic feet of gas and 2,400 barrels of oil per day from three levels of the Acacus sandstone formation.

All in all, it was a fine year for explorers in North Africa.

New interest in foreign investment and the lifting of political restrictions has increased industry interest in Libya, including plans for drilling in the Sirte and Ghadames basins.

Intriguing exploration also continues in both northern and southern Tunisia.

Players in the Ghadames Basin in south Tunisia included Pioneer Natural Resources, which has made Tunisia one of its core areas.

Much of Pioneer Natural’s drilling targeted Silurian objectives on the Jenein Nord block, east of the giant El Borma Field.

In northern Tunisia, Cooper Energy Ltd. of Perth, Australia, pushed exploration into its 100 percent-held coastal Bargou Exploration Permit area.

“The Bargou Permit essentially has two distinct plays in it. To the north are the Birsa/Souaf sandstone plays, which produce in the Tazerka, Oudna and Birsa Fields,’ said Conrad Todd, Cooper Energy exploration manager.

“These prospects have recoverable oil estimates in the 20 million barrel range,’ he noted.

To the south, and underlying the northern sandstone structures, are the limestone plays of the Bou Dabbous and the Abiod, he said.

“We have structures in the south with an areal closure of 90 square kilometers to 150 square kilometers. These are potentially very large, with recoverable oil estimates in the hundreds of millions of barrels, as they have potential for stacked reservoirs,’ Todd noted.

This year, Cooper Energy plans to acquire 2-D seismic data onshore Bargou and 3D seismic data offshore Bargou.

“We will try to squeeze an onshore well in at year end, and look to drill our first offshore well after that,’ Todd said.

Cooper Energy also has a 35 percent interest in the adjacent Hammamet Exploration Permit and is processing the 50 million barrel of recoverable oil Fuschia Prospect for drilling.

“An Overlooked Sibling”

Independents have found a hospitable exploration climate in Tunisia, partly because the average field size doesn’t attract attention from the largest companies.

“It’s a very attractive place for mid-size companies to grow their portfolio,’ Todd said.

Companies also are attracted by the compatible reputation of state-owned oil company Enterprise Tunisienne d’Activites Petrolieres (ETAP).

“Overall, I would characterize Tunisia as an overlooked sibling located between the big brothers of Algeria and Libya,’ Todd said.

“It has smaller fields and lower production than the adjacent countries, but the fiscal regime reflects that and the Tunisian authorities are generally very good to work with,’ he added.

OMV is one of the larger explorers active in southern Tunisia. The company has made four consecutive discoveries in the Jenein Sud exploration permit area, where it shares a 50-50 interest with ETAP.

Its most recent discovery well tested at 1,200 barrels of condensate and 58 million cubic feet of gas per day from several layers at about 12,150-13,000 feet. Ongoing exploration is tied to a 3-D survey of the permit area, expected to be complete by the beginning of 2009.

Historically, exploration interest in Tunisia has centered on the Ghadames Basin in the south and the Gulf of Gabes to the northeast.

The Ghadames extends from western Libya across Tunisia and into Algeria, where it is known as the Berkine Basin. Like many other plays in northern Africa, it has a reputation for steady but somewhat slender exploration prospects.

In a presentation at the 2007 AAPG Annual Convention and Exhibition, a group of Anadarko Petroleum geoscientists presented an overview of Ghadames resources. They estimated the basin’s Paleozoic-sourced, Triassic reservoir system contained less than a billion barrels of undiscovered reserves.

Also, they predicted that the reserves will be distributed in fields of less than 200 million barrels.

Allan Driggs, an AAPG member who is Anadarko senior geological adviser, was a co-author for the study. He said an earlier USGS resource assessment of the Ghadames was “rosy.’

“The lower sandy-shaly Triassic unit thins out on the edges and the facies thins out considerably to the northwest, where it’s considerably less prospective,’ he noted.

But “it’s still a very viable province,’ he added. “The fields are really good for their size.’

Higher Profile in Algeria

ENI raised its profile in Algeria substantially in September when it agreed to acquire Calgary-based First Calgary Petroleums. That company held an interest in Algerian fields with reported combined resources of around 1.3 billion barrels of oil equivalent and a large amount of prospective gas production.

The real objective for most European companies operating in northern Africa is a secure and abundant supply of natural gas. Algeria has an estimated 161.2 Tcf of proved gas reserves, according to the U.S. Energy Information Agency.

By comparison, Egypt has an estimated 67.4 Tcf of proved gas reserves and Libya 51.7 Tcf.

BP, StatoilHydro, Total, Repsol, Anadarko and Amerada Hess also have been involved in exploration and production in Algeria.

A mix of large players and medium-sized independents are staying active in North Africa from western Algeria to the Gulf of Suez. While recent successes have focused attention on Egypt and Libya, attractive prospects are available in every country.

Russian company OAO Gazprom might already have found a prize in African production.

Last year it angled to acquire a 33 percent interest in a Libyan oil field producing more than 125,000 barrels per day.

The field name?

Elephant.

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