Tunisias oil and gas potential is very modest compared with that of its North African neighbors. Natural decline at some of the countrys more mature fields saw total crude output fall to just 65,000 b/d last year. But soaring oil prices have recently made the development of some old and new discoveries, offshore and in the far south, economically feasible. Officials are hoping that bringing these on-stream will help raise production dramatically in 2008. In addition to which, Tunisia is seriously considering exporting its gas for the first time, either by pipeline to Italy or as LNG, with the completion of two large projects led by BG and due in 2009. Simon Martelli reports.

Tunisias favorable investment climate, extensive oil and gas infrastructure and geographical location have attracted numerous small foreign companies to the country in recent years. But only this year has their contribution made a noticeable difference. We are now producing around 100,000 b/d, a source at the state-owned oil company Entreprise Tunisienne dActivites Petrolieres (ETAP) told MEES . We hope that we will reach something like 150,000 b/d, but it is a big challenge. Official figures published by ETAP indicate that Tunisias total production in September was just over 80,000 b/d. Dwindling production at ageing fields like El Borma and Ashtart (see Table 1) has intensified the challenge facing ETAP.  

Two Swedish firms helped to raise Tunisian oil production significantly since bringing two fields on-stream at the end of 2006. Oudna lies in the Gulf of Hammamet and typifies the kind of change in circumstances that Tunisias oil sector has witnessed. Lundin Petroleum, operator with a 50% stake, brought the field on-stream in November 2006 and it quickly reached its 20,000 b/d capacity (MEES , 25 December 2006). The offshore field was discovered in 1978, and contains proven and probable reserves of only 11.5mn barrels of crude oil. Although of good quality (41.5 API), it was previously considered too expensive to develop. Oil output has already fallen to 14,000 b/d and continues to decline, but production will last for another two-to-three years, giving Lundin time to develop its neighboring Birsa field. Before you needed 3mn barrels of recoverable oil to drill an extra well, Lundins Tunisian manager Sherif Ben Khelifa told MEES . Now it becomes worthwhile with just 1.5mn barrels. The infield drilling is becoming more attractive at these high oil prices.

Infield drilling has boosted output at Didon, which straddles the Libyan border in the Gulf of Gabes and has been producing since 1998. Late last year, a new oil platform was installed at the field, which is operated with a 100% working interest by another Swedish oil firm, PA Resources, and the production well Didon-5 was brought on-stream (MEES , 11 December). After Didon-6 was drilled earlier this year, the fields output peaked at 20,000 b/d in March. PA Resources says it plans to start a development drilling campaign in January to extend the fields production plateau.

But most of the new production is expected to come from the southern desert region. Ongoing work at the Adam field, in the Eni-operated Borj al-Khadra permit, has already seen output rise to 18,400 b/d this year. And ETAP is very optimistic about the nearby Shurouq field, in the Jenein Nord concession, which is operated by US firm Pioneer Natural Resources. Shurouq is due on-stream before the end of the year, and Pioneer says gross production will gradually ramp up during 2008 to reach 15,000-20,000 b/d by year-end (MEES , 29 October).

Gas Exports On The Table

Growing domestic gas consumption, combined with an awareness of diminishing oil supplies, has spurred the authorities to concentrate on exploiting the countrys natural gas reserves. Tunisias gas sector is dominated by BG, which has established a major presence in the upstream and is developing Tunisias two main fields, Miskar and Hasdrubal, in the Gulf of Gabes. ETAP has also succeeded in recruiting Shell, another world leader in the gas industry, to examine ways of utilizing and marketing the countrys gas resources. The two companies signed a memorandum of understanding (MOU) to that effect in May, and Shell also acquired a two-year prospecting license in the 5,140 sq km Metouia block in July. 

ETAP produces around 1.3mn cu ms/day (0.5 bcm/year) of gas, while the Miskar concession, operated by BG, produces 5mn cu ms/day (1.8 bcm/y) of gas and supplies around 50% of the Tunisian market. The head of ETAP Khalid Becheikh said in July that this, together with the gas received as royalties from the TransMed pipeline connecting Algeria and Italy, which transits Tunisia, is insufficient to meet the countrys needs (see Table 2). But MEES learns that the new Adam and Shurouq fields in southern Tunisia will have the potential to produce another 4mn cu ms/d (1.5 bcm/y), which will help to saturate the local gas market, raising the possibility of exporting future supplies.

Table 1

Crude Oil Production By Field: 2002-06

(000 Tons)

2006/2005

% Change

2002

2003

2004

2005

2006

Adam-Hawa-Dalia

-

144

452

763

795

4.2

El Borma

683

616

580

520

469

-9.8

Ashtart

669

644

577

530

444

-16.2

Other fields (Didon, Cercina, Franig, etc)

2,134

1,762

1,733

1,591

1,553

-2.4

Total

3,486

3,166

3,342

3,404

3,261

-4.2

Source : National Energy Observatory at the Industry, Energy and SMEs Ministry, and ETAP. 

Table 2

Natural Gas Production and Consumption: 2002-06

(BCM)

2006/2005

% Change

2002

2003

2004

2005

2006

Production

2.149

2.166

2.298

2.343

2.149

-8.3

Of Which: Miskar

1.739

1.763

1.858

1.899

1.719

-9.5

Royalties

1.047

1.082

1.197

1.294

1.277

-1.3

Purchases

0.533

0.629

0.628

0.567

0.503

-11.3

Total Available

3.729

3.877

4.123

4.204

3.929

-6.5

Consumption

3.208

3.381

3.520

3.629

3.651

0.6

- Electricity producers

2.515

2.617

2.668

2.781

2.734

-1.7

? STEG

2.109

2.139

2.141

2.233

2.175

-2.6

? IPP

0.406

0.478

0.527

0.548

0.559

2.0

- Other

0.693

0.764

0.852

0.848

0.917

8.1

Exports

0.521

0.496

0.603

0.575

0.278

-51.7

Source : National Energy Observatory at the Industry, Energy and SMEs Ministry, and STEG.

Meanwhile, BG intends to bring the Hasdrubal field on-stream in 2009, and is carrying out an infill drilling campaign to shore up production at the Miskar field. The company announced in June that it would spend $1.3bn on boosting Tunisian gas production. Of this, $800mn would go towards developing Hasdrubal, in which BG has a 50% stake, and which will commercialize estimated reserves of 78mn barrels of oil equivalent, with an expected gas output of 9mn cu ms/day (3.3 bcm/y). Another $500mn will be spent on extending Miskars production plateau, with six wells being drilled in 2007-09 (MEES , 1 July).

There appears to be some progress on importing gas from Libya. Discussions between the Chairman of Libyas NOC Shukri Ghanem and Tunisian Prime Minister Muhammad al-Ghanoushi about the construction of a pipeline with an expected capacity of 2 bcm/y were held in Tunis on 29 June. But since then, Libya has signed a major gas export deal with Eni, which may limit the availability of Libyan gas.

For Tunisia, the expansion of the 27 bcm/y TransMed pipeline, which will increase its total gas transport capacity by 6.5 bcm/y, could provide an export route to Europe. The first phase of the expansion will boost capacity by 3.2 bcm/y and is due for completion next year, with the second phase to be finalized by 2012 (MEES , 26 February). The other alternative, which ETAP is studying with Shell as a part of its efforts to develop a strategy for what to do with the gas, is the construction of an LNG facility. But the source at ETAP said it was far too early to know when any decisions would be made on exports. For the time being, he added, we are concentrating on developing these gas fields.

Copyright MEES 2007.