Initial wildcat leaves explorers empty handed in Empty Quarter
Shell has had disappointment with its first wildcat, Isharat-1, in Saudi Arabia's Empty Quarter, casting a shadow over a costly drilling campaign in some of the most hostile environments in the world.
"Shell found nothing with Isharat-1. It encountered no oil or gas," an industry source said. However, Shell and partners are still upbeat about the prospectivity of the area, saying Isharat-1 has not been a complete failure since it provided them with useful data for the drilling of subsequent probes.
"This is only the beginning. The first well has provided interesting results that can guide exploration efforts," a well-placed industry source told Upstream.
The supermajor is therefore spudding its second well in the north-west of the 210,000 square-kilometre concession in the hope of finding gas.
The Shell-led South Rub Al Khali Company Ltd (Srak) spudded Isharat-1 in July with a planned total depth of 13,000 feet. It was completed at the end of December.
Srak is now drilling Almirtan, the second of a seven-well drilling campaign that will move into higher gear in the second half of 2007 when a second rig arrives to boost the exploration efforts.
Almirtan will test a different area of the basin in the Rub Al Khali and as such there is no link in terms of dependency between the first two wells.
Despite the initial setback, Srak's partners Shell, Total and Saudi Aramco are determined to complete the full seven-well programme during the initial exploration phase.
Saudi Aramco's senior vice-president for exploration&production Abd Allah al-Saif said that foreign companies looking for gas in the Saudi desert were evaluating the results from their first wells.
"They are still evaluating them. They have not finished the testing and appraisal of their wells," Saif said. "Any well you drill you find out a lot. Every well they have drilled has helped them a lot."
The Srak joint venture actually has the right to exit after three wells if they are dry or non-commercial.
Srak says based on seismic and aerial survey data, its acreage has an estimated 1.5 billion barrels of oil equivalent of gas in place. But only the planned comprehensive drilling plan will establish if it can find commercial quantities of non-associated gas. Major oil discoveries from the concession area will go to the Saudi government although the Shell-led group will be entitled to condensate.
Shell and Total, however, may only go ahead with a full field development if they find commercial quantities of condensate to justify development costs since they are obliged to sell the gas to the domesitc market at 75 cents per million British thermal units. Apart from Srak, Russian and Chinese companies are also pressing ahead with the drilling of new wells.
Lukoil's foreign operations subsidiary Lukoil Overseas said recently it discovered hydrocarbons with its first exploration well on Block A in Saudi Arabia. It gave no details.
A Chinese-led consortium has also finished testing its first two exploration wells in the Empty Quarter.
Sino Saudi Gas (SSG), a joint venture between China's Sinopec and Saudi Aramco, was the first of the four foreign consortia to complete the drilling of its first wells.
SSG spudded Sheeh-2 in 2005 in Area B and completed it last August. Khalidah-2 followed in January 2006 and reached its intended target last October.
An Eni-led group is also drilling in the Empty Quarter.
© Upstream 2007
