Bond Offering Memorandum 23 July 2014 - page 318

Kuwait Energy
EL-12-211107
55
Pending the results of the initial wells and definition of a development plan, Contingent
Resources have been estimated (Tables 0.9 and 0.11) by applying low, best and high
recovery factors of 15%, 20% and 25% for the Mishrif reservoir and 25%, 30% and 35%
for the Yamama reservoir. These represent estimates of the ultimate recovery that might
be achieved with a development plan involving water and/or gas injection for pressure
maintenance.
Finally, the Nahr Umr Field lies to the west of Block 9 and probably extends into Block 9,
although this is not certain (Figure 3.1). An open-hole test conducted in the Nahr Umr-10
well in the Yamama Formation flowed 5,680 bopd. KE’s mapping of the Top Yamama
shows an area of the field extending into Block 9, where it is provisionally named B9W.
Contingent Resources have therefore been attributed to B9W (Table 0.9), although the
1C value has been set to zero because of uncertainties in the ODT, in depth mapping and
reservoir continuity. There may also be potential in the Mauddud, Zubair and Nahr Umr
Formations, but this has not yet been quantified. An appraisal well is clearly needed to
determine the extent of the field, and the question of unitisation may arise.
4.
OMAN
4.1
Karim Small Fields (KSF)
Kuwait Energy Company (KE) holds a 20% interest in Medco LLC, a subsidiary of Medco
International Enterprise Ltd. Medco LLC holds a 75% interest in and operates a Service
Agreement for KSF, a group of about 18 oil fields in southern Oman (Figure 4.1). The
agreement runs for 10 years starting on 8
th
August, 2006, and is for the provision of the
technical services required for the operation of KSF on behalf of Petroleum Development
Oman (PDO), the license holder. Under the terms of the Service Agreement, Medco LLC
and KE have no direct rights to any volumes of oil, either in situ or produced.
In April, 2014, the average overall production rate from KSF was 16,300 bopd from
approximately 200 active wells. The most significant fields are Simsim, Irad, Basma,
Warad, Zahra and Jadeer, which together account for more than 80% of the area’s
STOIIP (based on the Operator’s estimates, which GCA has not audited). The other
fields with current or past production are Anuq, Arnab, Al Rodha, Ilham, Naseem,
Yasmeen, Salwa, and Wazer North.
KSF lies on the eastern flank of the South Oman Salt Basin, a prolific oil and gas
province. The main reservoirs in the area are the Palaeozoic (Cambro-Ordovician)
Karim, Haradh and Mahwis sandstones. These are typically good quality homogeneous
sandstones that are laterally extensive with permeability of the order of 200-500 mD.
Other reservoirs include the thin Al-Khalata glacial sandstone and the Gharif sandstone of
Permian age. A representative stratigraphic column is shown in Figure 4.2. The depths
of the productive formations vary from 2,450 ft (750 m) to 5,750 ft (1,750 m), generally
being shallower in the south-west and deeper in the north-east.
The oil is typically under-saturated with API gravity in the range of 20–30° which results in
viscosities ranging up to more than 400 cP. The high oil viscosity results in relatively low
oil production rates despite the reservoir quality being generally good, and also to early
breakthrough of water from the underlying aquifers. Recovery factors to date are
estimated to be 15-20% (again based on Operator’s estimates of STOIIP).
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