Kuwait Energy
EL-12-211107
7
The GDPSCs for the Siba (with KE as Operator) and Mansuriya gas-condensate fields in
Iraq were signed in July, 2011. Progress since signing the GDPSCs has been slow,
largely because of permitting issues at Siba and the security situation at Mansuriya. KE
is still planning to meet the contractual requirement of first gas production from Siba by
July, 2015; although this is technically possible, there is a risk of further delays. GCA
notes also that the data available for Siba are of poor quality and the opportunity to
reduce subsurface uncertainties before committing to the construction of the processing
facilities has largely disappeared. First gas production from Mansuriya is not now
expected until 2017.
KE’s acquisition in October, 2012, of Jannah Hunt Oil Company, Operator of Block 5 in
Yemen with a 15% WI, was a significant step for KE’s operations. Some 244 MMBbl of
oil have been produced from the Block since 1996 and the production rate in early June,
2014 exceeded 32,000 bopd, from three main fields. The fields appear to have been well
managed to date, with gas and water injection, and there is potential for additional
recovery (three in-fill wells were drilled in late 2013 and eight more are planned over the
next two years). The challenges appear to be more related to the political and security
situation in Yemen. The PSC expires on 8
th
June, 2015, but 541 days of production have
been lost since mid-2011 due to export pipeline closures. A corresponding extension of
the PSC has been claimed on grounds of Force Majeure: Reserves are reported herein
on the basis of this extended license period. Also, the original PSC includes a possible
5-year extension but there have been two high profile examples in Yemen in recent years
where similar extensions have been refused, so potential production associated with such
a 5-year extension is classified herein as Contingent Resources.
The EDPSC for Block 9 in Iraq was signed in January, 2013, with KE as Operator.
Although officially an exploration block (no wells have yet been drilled in the Block), it is
considered highly likely from seismic and other data that part of the multi-billion barrel
Yadavaran field extends across the border from Iran into Block 9, where it is provisionally
named B9NE. Yadavaran produces (on the Iranian side) from two large but complex
carbonate reservoirs. KE spudded the first well in Block 9 on 25
th
March, 2014; drilling
and data acquisition in this well are expected to take 6-7 months. KE plans to acquire 3D
seismic data once de-mining of the area is complete.
Along with Mansuriya, KE’s principal non-operated assets are East Ras Qattara (ERQ) in
Egypt and Block 43 (Nabrajah Field) in Yemen. In ERQ, a string of oil discoveries have
been made in the past few years, most notably the Al Zahraa and Shahd SE fields;
production from the license at the end of May, 2014 was 23,750 bopd. In Yemen, the
Nabrajah field started production in 2003 and was still producing 1,400 bopd in April,
2014, albeit at 98% water cut; however, high operating costs mean that only one or two
more years of production are currently expected. Additionally, KE derives revenue from
the Service Agreement for operation of KSF in Oman.
Reserves Summary
The oil, condensate and gas Reserves in the fields in which KE holds an interest are
shown in Tables 0.2, 0.3 and 0.4 respectively. Both Gross Field Reserves, i.e. 100% of
the estimated future commercial production from the fields, and KE’s Net Entitlement
Reserves are shown, as well as the split between Developed (Dev) and Undeveloped
(Undev) Reserves. KE’s Net Entitlement Reserves represent volumes equivalent to KE’s
net economic entitlement under the terms of the PSC/PSA or Service Contract governing
the asset.
