Case Study - Sarqala Field (Kurdistan)
Change of thinking, change of outcome

Situation

‘Western Zagros (WZ) contracted an Advance member in early 2012 as Operations & Development Manager to address WZ’s desire to further develop their single well Sarqala discovery (S-1, 2008) in southwestern Kurdistan. The S-1 well was producing at rate of 5 Mstb/d and 10 MMscf/d through a simple Extended Well Test (EWT) production system. The oil rate had been limited by the regulator (MNR) because of the large volume of gas being flared. WZ was also a non-operating partner in the Kurdamir gas discovery (2009) with an oil rim in the same region. Upon arrival in Kurdistan the Advance member familiarised himself with both fields and locations and reviewed the current appraisal and development plans accordingly.

Solution #1 - Eliminating gas flaring & increasing oil production

The operations base for the Sarqala and Kurdamir fields was located in the southern Kurdish city of Sulaimaniya. The driving time to each field was 3-4 hours depending on the season, however, the ‘as the crow flies’ distance between the fields was in fact only 40 km. Inspection of topographical radar mapping available from the WZ exploration team indicated that there was a relatively straight, viable route to lay a gas pipeline, which was confirmed after a survey by the Advance member’s Engineering Manager. Hence, there was an option to stop flaring the Sarqala produced gas by exporting and re-injecting it for storage in the Kurdamir gascap. Later, it would then be possible to reverse the flow to re-produce this gas to supply the MNR’s planned power plant at Sarqala town.

Solution #2 - Increasing Sarqala-1 oil deliverability

The Jeribi fractured carbonate reservoir was highly over-pressured (11,000 psi) with light, sweet crude and high GOR. WZ’s intended development plan before the Advance member was appointed, called for a 3-well, 15 Mstb/d production facility. However, the Advance member’s review of the S-1 well revealed that the well was severely impaired and had the potential to have at least a 10-fold increase in deliverability, meaning the S-1 well alone would be capable of producing up to 20 Mstb/d. Further, the well’s completion was significantly constraining the S-1 oil deliverability potential. After further detailed technical evaluation, initiated by the Advance member, a transformed, fast-track development plan was proposed with the following key elements: 

  • S-1 workover to increase production potential to 20 Mstb/d (deep stimulation + larger bore completion)
  • Leased 20 Mstb/d production facility
  • Leased, modular power generation installed locally, and
  • 40 km gas pipeline to Kurdamir connecting the two fields

The total Capex to achieve a single well 20 Mstb/d production system was only $15 MM.

Result

These potential solutions were initially presented to WZ’s management within the first 6 weeks of the Advance member being appointed as Operations & Development Manager.

The concept of connecting the Sarqala and Kurdamir field was presented to the Minister for Natural Resources (MNR) in Erbil in early 2012 after the proposal had been approved by WZ’s management. The MNR endorsed and adopted this novel approach and plan immediately.

In late 2012 WZ decided not to proceed with the proposed fast-track development plan for the S-1 well, or any further work on the well, and instead embarked on a $200 MM exploration drilling campaign for 2013 and 2014. This exploration campaign failed and WZ's market capitalisation of $500 million at the start of 2013 had fallen to a low of $25 million by mid-2016.

Gazprom then assumed operatorship of the Sarqala field and carried out the planned workover of the S-1 well, as well as drilling an S-2 well in 2017. The S-1 & S-2 wells came on production through a new production facility in Q1 2018 at an initial combined rate of >30 Mstb/d.