Oman Observer ABB Press Release

By September 29, 2014OOCEP News

OOCEP Block 60 operations herald new era of unconventional tight gas production
Oman’s first tight gas project set to come on stream

MUSCAT – In a landmark development for the Sultanate’s pivotal hydrocarbon sector, Oman Oil Company Exploration and Production LLC (OOCEP), the upstream subsidiary of the Sultanate’s energy investment arm, Oman Oil Company, is preparing to bring its Abu Butabul tight gas field in Block 60 into commercial production, thereby becoming the first Omani operator to add unconventional tight gas to the nation’s expanding gas base. Last week, the company began commissioning its newly built Gas Processing Plant at the start of a long exercise that will culminate in the production, processing and export of unconventional tight gas into the Government Gas System – for the first time in the country’s modern history.
Full commercial operations are slated around October-end with the state-of-the-art processing plant – the centrepiece of an estimated $1 billion investment made thus far in the project – expected to reach a plateau production of 70 million standard cubic feet per day (mmscfd) by the end of this year. Along with gas, the facility will also produce condensates averaging 6,000 barrels per day (bpd) around the same timeframe.
Path Breaking Feat
The groundbreaking achievement, comes in a record three years since Abu Butabul was acquired by OOCEP and progressed through exploration, appraisal and development. That feat is a testament to the Omani operator’s resolve in staying the course against all odds, says the company’s Chief Corporate Officer.
“When we were awarded the Block in late 2010, Oman Oil Company Exploration and Production was considered a new player in the industry but we took on board one of the most challenging unconventional gas projects in Oman and arguably globally. We are currently acknowledging our success as our team stepped up to the challenge and refused to look back. It was definitely a rollercoaster, but in the end, we succeeded in seeing it through,” Sulaiman al Zakwani, who is also Project Director, stated.
Block 60, a roughly 1,580 sq kilometre concession encompassing the wilayats of Ibri and Haima, is 100 per cent owned and operated by OOCEP. The concession was acquired by OOCEP in December 2010 after the previous operator, relinquished the block. Exploration, appraisal and development efforts commenced immediately to avoid any interruption in the timeline of the project.
With the imminent start of commercial production, OOCEP joins Petroleum Development Oman (PDO), Occidental of Oman, and PTTEP, as producers of a valuable resource that is increasingly the mainstay of the country’s rapidly diversifying economy.

Laudable achievement
Harnessing the potential of an unconventional tight gas field, where the gas is trapped in microscopic pores in rock at depths approaching 4.5 kilometres, is no mean feat. The 40-odd wells drilled so far by OOCEP target the Barik reservoir characterised by tight rock with low porosity and permeability. The reservoir rock must be hydraulically fracced to enhance the productivity of the wells – an exercise that requires a sound understanding of the reservoir and its properties, says the Project Director.
The resulting experience has endowed OOCEP’s engineers with a capability that is both unique and homegrown, Al Zakwani explains. “Block 60 is quite unlike most other unconventional gas fields in Oman. The reservoir parameters are far more complex than some of the discovered tight gas fields in the country. Therefore, the knowhow that OOCEP has mastered in developing Abu Butabul is unique. In addition, we are improving the productivity of our wells, increasing the reserves’ potential and reducing associated cost. Combining both the knowhow and capabilities provided us with an unrivalled advantage when it comes to unconventional tight gas development.”
Buoyed by its success, OOCEP says it wants to leverage the gained expertise in exploiting unconventional oil and gas fields that have defied previous attempts to unlock their potential. “OOCEP’s success in Block 60 has whetted our appetites to accomplish more. We want to position ourselves as pioneers in the development of unconventional fields, such as tight gas, tight oil, shale gas and heavy oil. The journey from a start-up to a full-fledged operator of one of Oman’s most challenging and complex gas field developments – in three short years – has been nothing short of extraordinary, says the Chief Corporate Officer (CCO).
“When we inherited Block 60 three years ago, we acquired a green-field project with only seven wellheads in the desert. But by the time a Gas Sales Agreement (GSA) and Field Development Plan (FDP) were signed with the Ministry of Oil and Gas, we had an energetic tendering programme underway. Today, we have a capital project worth around $1 billion and ready to commence commercial production – a feat that was accomplished in under three years.”
Already in place is a major gas processing plant with a capacity to process up to 100 mmscfd of natural gas and condensates. A Gathering and Export System, complete with a pair of 80km long pipelines, carries the natural gas and condensates to a metering station at Barik. While the condensates are received by PDO’s facilities, the gas is exported into the government gas system operated by Oman Gas Company (OGC).
As part of the commissioning phase that began last week, small volumes of gas were introduced into the Gas Processing Plant and associated facilities – an exercise expected to last for several weeks. The process will allow for plant systems to be progressively fired up and assessed for their performance. The gas and condensates will then be conditioned to meet the exacting specs set by OGC and PDO.
Plateau production will be maintained at 70 mmscfd for a period of six years representing Phase 1 of the Abu Butabul field development. During this period, the drilling campaign will continue adding few wells per year to sustain this output, with total investment in this phase projected to reach $2.5 billion, says Al Zakwani.

New exploration drive
While Phase 1 is in operation, OOCEP plans to undertake a detailed study and comprehensive appraisal of the entire block. The aim, the CCO explains, is to gain a better insight of the complexities of every part of the field.
“No two areas of the field are similar in terms of characteristics. The fluid distribution varies from place to place, which causes many challenges for our engineers. Nevertheless, our team has developed a very good feel for this block, and is able to make predictions that come very close to the data that is yielded once the field is drilled, fracced and tested.”
While Phase 1 has primarily targeted the centre of the Block where the reservoir quality is generally good, new exploration efforts will focus on the north and south of the concession. The entire field will be mapped to assess any prospects for exploratory drilling.
In fact, last week’s commissioning activities also coincided with another equally significant milestone. OOCEP announced the spudding of its first exploration well in Block 60 since it acquired the concession. A second exploratory well is proposed to be drilled in the south of the block sometime in 2015.