Significant potential seen for carbonate reservoirs in the Middle East
WAFRA, pnz, Chevron executives hosted Saudi Arabian Minister of Petroleum and Mineral Resources His Excellency Ali Al-Naimi and Sheikh Ahmad Al-Abdullah Al-Sabah, minister of Oil and minister of Information in the state of Kuwait, at an event today marking the successful start-up of Chevron's Large-Scale Pilot (LSP) steamflood project at the Wafra field in the onshore Partitioned Neutral Zone (PNZ). Minister Al-Naimi was accompanied by a delegation of high-ranking Saudi petroleum officials. They were welcomed by Chevron's George Kirkland, Executive Vice President for Global Upstream and Gas and newly appointed vice chairman, Guy Hollingsworth, president of Chevron Europe, Eurasia and Middle East, and Ahmed Al-Omer, president of Saudi Arabian Chevron (SAC), a subsidiary of Chevron Corporation.
Following formal remarks by Chevron's executives, the distinguished guests were led on a tour of the project's facilities.
The $340 million LSP, which achieved first-steam injection in June 2009, is the final test in a nearly 10-year staged assessment by SAC to determine the technical and economic viability of thermal-recovery projects in the Eocene heavy-oil carbonate reservoir. The three-year project could potentially lead to full-field steamflooding of the reservoir, marking the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world.
"Chevron is applying new technologies to free-up in commercial quantities the potential of the First Eocene carbonate reservoir. It is a potential in the onshore PNZ and elsewhere measured in billions of barrels of new energy resources," Kirkland said in an address to the distinguished guests.
Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, reducing its viscosity and allowing its extraction through wells. This phase of the project includes 16 injection wells, 25 producing wells and 16 observation wells and installing water treatment and steam generation and distribution facilities.
Chevron has successfully employed steamflooding to produce heavy oil from sandstone reservoirs at Kern River, Calif., for more than 40 years and at Duri in Sumatra, Indonesia, for 25 years.
The company is recognized as the world's leader in steamflood technology.
"We bring four decades of experience in enhanced oil recovery to this project and are pleased with the progress we have made testing the technology in the onshore PNZ's First Eocene carbonate reservoir," Al-Omer shared with those gathered. "It's through our long-standing partnership with the Kingdom and our joint operatorship with Kuwait Gulf Oil Company, that we are able to apply innovative technology expected to grow recoverable reserves in the onshore PNZ, and to create thousands of jobs in the process, as well as provide other benefits for the region."
SAC operates on behalf of the Kingdom of Saudi Arabia the Kingdom's 50 percent undivided interest in the petroleum resources of the onshore PNZ between the Kingdom of Saudi Arabia and the State of Kuwait. SAC's operating agreement with the Kingdom was recently extended and amended, and runs until February 2039.
The operations include four fields in the area - Wafra, South Umm Gudair, South Fuwaris and Humma - that produce mainly heavy crude from 10 reservoirs. In 2004, production of the 3 billionth barrel of oil was reached in the onshore PNZ.
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The LSP is the third in a series of staged tests to validate the feasibility of applying the enhanced oil recovery technology of steamflooding to unlock the producing potential of the heavy Eocene oil of the PNZ's carbonate reservoirs. Previous tests included the Small Scale Test (SST), which was successfully completed in 2008, and simple steam stimulation testing, conducted in the late 1990s.
The LSP will evaluate production response to steaming, variability of response by pattern, recovery efficiency in the reservoir contacted by the injected steam, as well as the potential cost for installation and operation of full-field development. A baseline of the non-steamflood production from the LSP's 25 producing wells has been established, and it will serve as an important basis of comparison for establishing the effectiveness of steamflood production. The LSP also includes 16 wells for injecting steam and 16 observation wells for monitoring reservoir conditions.
The LSP has benefited from the observations and test results recorded for the SST. The SST demonstrated that poor-quality Eocene produced water could be processed to generate high-purity water for steam generation and that the steam could be injected over a long duration in the PNZ's carbonate reservoirs. It also has been employed to test mechanical and chemical strategies for coping with subsurface corrosion and scaling from steamflooding.
As of May 2009, the LSP had recorded more than 3 million worker hours for employees and contractors without any lost time due to accidents, including during several months of complex simultaneous operations involving drilling and workover activities and installation of a range of surface infrastructure.
Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.
Some of the items discussed in this press release are forward-looking statements about Chevron's activities in the PNZ. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "estimates," "budgets" and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are changes in prices of, demand for and supply of crude oil and natural gas; actions of competitors; the potential disruption or interruption of production and development activities due to war, accidents, political events, civil unrest, or severe weather; government-mandated sales, divestitures, recapitalizations and changes in fiscal terms or restrictions on scope of company operations; and general economic and political conditions. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Ken Sniffen,
Kuwait
+965-6638-8519
Tom Watterson,
Dubai
+971 56 605 2854
© Press Release 2009
