Wintershall talking to ADNOC over Shuwaihat field
German E&P firm hoping to secure long-term production agreement with ADNOC
German Exploration & Production (E&P) firm Wintershall is holding talks with the Abu Dhabi National oil Company (ADNOC) to secure a long-term production agreement at the Shuwaihat sour gas and condensates field located 25km west of Ruwais, Abu Dhabi.
“We are having very good discussions with ADNOC and we are very positive about it,” Martin Bachmann, head of exploration and production for Europe and the Middle East and board member of Wintershall told arabianoilandgas.com on the sidelines of the company's annual press conference, which took place in Kassel, Germany on Thursday.
Wintershall is hoping to secure a 35 to 40 year contract to develop the field, with Bachmann saying a production agreement could be struck as early as next year.
“It depends on what the next well shows. If the data is enough data for the development, we will immediately start discussions with ADNOC and subsequently with the Supreme Petroleum Council on how we develop the field," he said.
"The contract that we have allows us to go into developing and operating the field so that’s been discussed already. Wether it is going to be done in a big development in the region that we will have to see. I think we’ve made a good first step to demonstrate that we can drill complicated oil and gas wells. I think the next step is to come up with a field development plan and create a concept for developing the field,” he added.
Wintershall signed an agreement with ADNOC in 2012 to become the main operator in the technical appraisal of the Shuwaihat field and together with ADNOC and Austria’s OMV has been studying rock samples from the reservoirs and running pilot schemes to determine the right approach to a production project.
The company drilled its first onshore well last year. Further two wells, this time off the coast of Abu Dhabi, are being planned over the coming years but Bachman is hopeful drilling a second well won’t be necessary as preliminary results on the feasibility of the project have so far proved positive.
"In Shuwaihat we’ve drilled the first well and we are now planning the second well which we hope to spud this year. So far we are seeing nothing that indicates it won’t be possible to develop the field so we will now go for the second well,” he said.
Shuwaihat is known for its high concentration of sulphur and challenging geology meaning enhanced oil recovery will be required to develop its reserves.
As an expert in the field of Enhanced Oil Recovery (EOR) and Improved Oil Recovery (IOR), Wintershall is well positioned to provide ADNOC with the technical know how on EOR, while its access to special chemicals through its parent company BASF will prove essential in selecting or developing a tailor made product that tackles the geological challenges at stake.
"We looked at the whole portfolio of BASF and said okay if we take this rock which of the chemicals actually works under the given temperature, pressure, salinity, etc. On the one hand we are looking at the fields in Abu Dhabi, on the other hand here in Germany at BASF we are looking at which chemicals will be the right chemicals for the special conditions there,” said Bachmann.
"One of the challenges that we have in the Middle East and I think this is why nobody is doing [EOR] yet on a big scale is that the reservoir rocks are mainly carbonates, it’s not sand; often there is [high content of] sulphur in the reservoir and the temperature is quite high. These three things make it quite challenging to find the right chemicals and I think that’s the first challenge we have."
"The second challenge is — and we know that from [our experience in] Germany — how you apply it in the field. What sounds simple — I take the chemical, inject it in the reservoir and produce oil — is much more complex is practice so that you actually achieve the desired results in the end. But once we have selected a pilot, that would be the next step.”
Further to Shuwaihat, Wintershall is hoping to get involved in other EOR projects in Abu Dhabi, which last year announced plans to increase the recovery rate of its oilfields from 50% currently to 70%.
"I think this is where our strength is and that’s why ADNOC was very interested in working with us,” Bachman concluded.