Bond Offering Memorandum 23 July 2014 - page 283

Kuwait Energy
EL-12-211107
20
1.1
Burg El Arab (BEA)
KE holds a 75% WI in BEA. The remaining 25% interest is held by Gharib Oil. BEA is
operated by a JV between EGPC and the Contractor Group, all decisions requiring
approval from both parties. KE took over from Gharib Oil as the Contractor Group’s
representative in the JV in 2009. BEA comprises two separate areas (the main block and
the Marina block) in the Western Desert. The BEA oil field lies within the main block.
The 20-year development phase for the BEA field expires in December, 2016 but there is
a possible 5-year extension.
The BEA field was first drilled in 1990 (well BEA-1) but the first successful production test
did not occur until 1996 (BEA-2). Commercial production started in June, 1997. The
structural architecture of the field is dominated by a number of northwest to southeast
trending normal faults (Figure 1.3). The productive reservoirs are the Abu Roash and
Bahariya Formations of Middle to Upper Cretaceous (Cenomanian) age at depths of
approximately 7,400-8,000 ft. The underlying Early Cretaceous (Aptian) Alamein
Dolomite Formation produced oil during a short production test in the BEA-1 well but was
dry in BEA-2. These are all established reservoirs in the Western Desert area.
The reservoirs comprise a succession of interbedded clastic and carbonate deposits.
Although the poor borehole integrity in the six oldest wells (drilled by the previous
Operator) makes it difficult to identify net pay from the log data, the principal oil-bearing
zones can be correlated across the existing wells. Reservoir quality varies, however, and
individual sand bodies in the Bahariya Formation, particularly the upper part, are unlikely
to extend across the whole field.
A total of 6 wells were drilled up to 1999 and another (BEA-7) commenced production in
March, 2008. All these wells are located in the main part of the BEA field and produce
from the Abu Roash G (AR-G) Dolomite and/or the Upper and Middle Bahariya
Formations. The BEA-N-1X well was drilled in late 2009 into the previously un-drilled
northern fault block, discovering oil in the Middle Bahariya Formation. It came on
production at the end of 2009 at 200 bopd, but declined rapidly and ceased production in
September, 2011. The BEA-W-1X well was drilled in 2010 into the previously un-drilled
western fault block, discovering oil in the Abu Roash D (AR-D), AR-G Dolomite, Upper
and Middle Bahariya Formations. It was put on production from the AR-G Dolomite in
2011, but achieved only 100 bopd. By December, 2010, the average production rate for
the whole field had fallen to just 217 bopd.
Mechanical problems that plagued operations throughout the field life have been
significantly reduced since 2011. Four new wells (BEA-8 to BEA-11) were drilled and put
into production in the second half of 2011. BEA-9 found oil in the Lower Bahariya
Formation (a new discovery) and produced at an initial peak rate of 750 bopd; BEA-11
subsequently came on production from this same formation at 1,000 bopd. No new wells
were drilled in 2012 but BEA-W-1X was re-perforated in the AR-D Formation from which it
produced at more than 1,000 bopd.
A new drilling campaign began in late 2013 and has had mixed results to date: BEA-17
came into production from the AR-G Dolomite in March, 2014 at a rate of 350 bopd,
which was higher than expected; BEA-W-2 unexpectedly found the AR-D to be water-
bearing, though it was put into production from the Middle Bahariya at approximately
275 bopd, also in March; BEA-18 found oil in the AR-G but was water-bearing in the
Middle Bahariya, despite its high structural location; and BEA-NW-1X found oil in the
AR-G and Upper and Middle Bahariya.
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