PetroSA begins gas field appraisal

State-owned oil and gas company, the Petroleum, Oil and Gas Corporation of South Africa (PetroSA), has begun appraisal of a previously discovered gas field of moderate size and has successfully intersected a targeted sweet spot off the southern coast of South Africa as part of its R 5-bn drilling programme to drill the E-M West and F-O gas wells and the E-AR5 oil well.
In 2008, PetroSA announced the R 5-bn drilling programme, which was aimed at appraising existing gas and oil fields south of Mossel Bay to provide domestic feedstock for PetroSA's gas-to-liquids (GTL) refinery in Mossel Bay, which has experienced lower production level last year as a result of lower-than-usual supply from the offshore gas fields.

Drilling is planned at eight exploration or appraisal wells about 100 km off the southern coast, targeting four separate opportunities. In the first opportunity, in the E-M field area, a gas field extension has been evaluated as commercially viable. The well, situated 95 km south-south-west of Mossel Bay was drilled to a total depth of 2,856 m, with 40 m of the upper shallow marine section being penetrated with 28,4 m of gas pay.
"Drilling commenced in March 2008 with the E-M8 well, situated 2 km to the west of the currently producing E-M gas field. This well was a successful gas discovery and work is in progress to install a sub sea pipeline tie-back to the existing PetroSA infrastructure to produce gas," reports PetroSA vice-president of new ventures: upstream Everton September, in the PetroSA annual report 2008.

The gas is to be tied back through a new 3-km pipeline to the existing E-M pipeline for onward transportation through the existing F-A platform to PetroSA's GTL plant.
The second opportunity targeted the upside oil in the E-AR oil field. The aim was to test the E-AR5 well in the Oryx field for an accumulation of oil not produced from existing wells. It was hoped that it could be tied back to the Orca floating production platform. The well was found to be dry and was therefore plugged and abandoned.

PetroSA, however, continues to produce about 4,000 bpd of oil from the E-AR field through the existing producing wells. Oil from this field is processed on the Orca floating production semisubmersible and transported to markets through a shuttle tanker.
The third opportunity involved the appraisal of the previously discovered F-O gas field, which lies about 40 km to the east of the F-A platform. The F-O gas field consists of an upper shallow marine sandstone reservoir similar to the F-A field but with a lower average porosity and permeability. The aim of the two-well appraisal programme is to confirm the range of gas in place and the factors affecting recovery.

The first of the two wells drilled successfully intersected a reservoir and was flow tested for a period of seven days at 764,570 mm cmpd. The drilling of the second well has reached a depth of 3,300 m below sea level, with the final target depth set to be at 4,100 m below sea level. Engineering and sub-surface studies for the design and installation of subsea infrastructure for the gas field are under way with a view to completing an accurate cost estimate for the development requirements to meet a potential first gas date in 2011/2012.
Following the testing of this second well, PetroSA will assess various development plans that will include well stimulation techniques to improve recovery, as well as commercial assessment, taking into account updated projected product prices and development costs.

The conceptual development of the field includes stimulating the reservoir through hydraulic fracturing to enhance production.
"This technique will be a first for South Africa and has the potential to unlock the value of other tight gas discoveries on the South African coast," says September. A decision on whether to proceed with the FO-field development or not, still needs to be made, however, PetroSA realises the commerciality of the F-O project, is dependant on the prevailing market conditions at the time the decision whether to develop the field or not.

The fourth opportunity involves the workover of an existing E-M gas well with the aim of sealing off a lower water producing zone, thereby allowing the continued production of a higher gas bearing zone. This workover is expected to begin within the next two months, with gas production expected within the next four months. This well is already connected through a flow line to the main E-M line. It is anticipated that gas will flow to the F-A platform and onward to the GTL plant.
PetroSA owns, operates and manages South Africa's commercial assets in the petroleum industry, and it is vigorously pursuing exploration opportunities in South Africa and on the African continent.

There are a number of smaller previously discovered gas and oil fields in the Bredasdorp basin, which are all technically viable but historically have not been economically viable owing to market conditions. The recent collapse in the oil price and high drilling costs is still making it difficult for these fields to meet the necessary economic hurdles in order to be developed.
PetroSA was the first company in the world, since 1992, to produce liquids such as petrol and diesel from gas with its GTL refinery in Mossel Bay on a large commercial scale. The company has now, as a world first, integrated oil field improved oil recovery, gas storage and gas recovery with GTL. This has been developed in the following stages.

Since 1992, the F-A and E-M gas fields have provided feedstock (gas and condensate) for the Mossel Bay GTL refinery through the FA offshore Platform. Between August 2003 and September 2008, PetroSA produced 24-mm barrels oil from the Sable field located 90 km from the F-A gas platform, and improved recovery by re-injecting the associated gas into one of the oil reservoirs for pressure maintenance and storage for future use.
Between 2007 and 2008 PetroSA installed a 90-km subsea pipeline connecting five relatively small individual gas reservoirs in a so-called daisy chain back to the F-A platform. This South Coast Gas (SCG) project has supplemented the gas feedstock required for the Mossel Bay GTL refinery.

After the Sable field had produced oil its commercial limit, the gas injection well was reversed, converted into a production well, and successfully connected via the 90 km SCG pipeline to the F-A offshore Platform in October 2008, further supplementing the gas feedstock required for the Mossel Bay GTL refinery.
PetroSA has a number of prospects on the south coast and west coast of South Africa and, as a result, is actively pursuing the acquisition and interpretation of seismic data to better define exploration well targets. PetroSA is committed to a sustainable offshore oil and gas business in South Africa, however, the current oil price, high drilling and service costs and the credit crisis, present a significant challenge. PetroSA hopes that the current economic climate, which has not been conducive to exploration activities, will improve in the next two years.