If you are looking for house in Dar es Salaam hurry up. With the recent discovery of massive natural gas reserves affordable houses will soon become rarity.
Those proved and potential reserves can be game changer for Tanzania
The Ministry of Energy & Mineral Development has announced that
the “Uganda International Oil & Gas Summit” (UIOGS) will be held in
Kampala on 16-17 September 2015.
With a first-class conference programme led by Government, Public
Sector and Private Sector industry leaders; the Summit marks an
important point on the global calendar.
UIOGS is held under the Patronage of Eng. Irene Muloni,Minister of
Energy and Mineral Development; and will be used by the Ministry as its
official platform for meeting international companies and presentation
of the multitude of energy projects presently ongoing or planned for in
Uganda.
Uganda has much to offer the global oil and gas community and 2015 is
an exciting year as the country moves towards commercial production.
Uganda is blessed with its natural resources and now has an estimated
6.5 billion barrels of oil in place, a high drilling success rate of
85%, advanced refinery plans, vast acreage of underexplored areas rich
in hydrocarbons and much to look forward to with the new licensing
rounds.
The UOGS programme will provide an invaluable insight into all the major issues, challenges and opportunities including:
The Ministry of Energy & Mineral Development will be using the
UIOGS platform to actively engage with allits partners and suppliers
from around the world. The services of the renowned market leaders for
oil & gas conferences; Global Event Partners have been engaged to
work alongside domestic experts Image Care to ensure that UIOGS is a
first-class event that puts Uganda firmly on the global map.
UIOGS is a two day conference that will be held at the Kampala Serena
Hotel on 16-17 September 2015. The programme will be opened by Hon. Eng
Irene Muloni and will feature more than 30 Government officials,
Company leaders and Industry experts gathered from Uganda, the region
and throughout the world to give Uganda a truly global platform.
Now, during this lesson, we will see how to drill them.
1. First of all, let’s see how to describe the subsurface characteristics, in order to plan the design of the future well and to define the phases of the drilling job.
2. Then, we’ll describe the drilling system, and how the driller can manage the drilling process safely.
During the exploration phase a well is needed to confirm the presence of oil or gas in the reservoir.
Some appraisal wells are needed for the delineation process.
Moreover, at the end of the reservoir strategy study, a reservoir model defines how to develop the field, and, more particularly, where to drill the wells and the contribution of each of them to the production plateau.
The role of the driller is to build these wells required for the field development.
A well is an expensive item. It must be carefully studied and planned before being drilled. The well preparation phase involves coordinated work between geoscience engineers and drilling/completion engineers.
How to design a well?
In order to set up the drilling program, the driller needs to know the location of the rig, where the well has to enter the reservoir, the trajectory of the well in the reservoir for a good connection between the well and the reservoir, and the formations to be drilled. Let’s detail the description of the subsurface.
For each formation to be drilled, there are 2 characteristics that need to be known accurately:
1. the pore pressure
2. and the fracture pressure.
The pore pressure is the pressure of the fluid within the grains of the rock. It depends on the depth of the formation and on its nature (sandstone, shale, …).
The fracture pressure corresponds to the minimum pressure to be applied on the rock to generate a fracture.
When the formation is drilled, the well is full of a fluid: the drilling mud, which is directly in contact with the rock, and applies a pressure on it: Pmud.
The mud pressure depends on the depth. One of the roles of the mud is to maintain the interstitial fluid within the rock, in order to avoid a kick.
During the drilling process, the mud is in contact with the rock, which contains a fluid within the grains.
A fluid always flows from high pressure to a lower pressure. If the mud pressure is higher than the pore pressure, the formation fluid cannot enter the well. It remains in the formation and there is no risk of blowout.
During the drilling process, the mud is in contact with the rock, which contains a fluid within the grains.
The mud pressure has to be lower than the frac pressure, in order to avoid the rock being fractured. To conclude, keep in mind that the mud has to be designed so that the mud pressure belongs to the interval between the pore pressure and the frac pressure. This interval is called the mud window.
Both Ppore, in red, and Pfrac, in blue, can be plotted on a (pressure/depth) graph.
The mud pressure has to be in the yellow zone, which is called the mud window. For each lithology to be drilled, the mud has to be well adapted to its characteristics. The well is therefore drilled in different phases, each phase corresponding to a new mud to be used.
At the end of a phase, a casing is installed and cemented to protect the well from the formation already drilled and to finalize the well walls.
The definition of each of these phases is called the well design.
A typical well design is as follows:
1. The first tubular is the conductor pipe installed by the civil engineer before the rig
arrives on site.
2. The next phases are drilled using the rotary drilling technique.
3. The surface casing maintains the unconsolidated surface formations and protects the groundwater.
4. The intermediate casing protects the well from the formations or fluid which could prevent the drilling process from continuing.
5. The last casing is the production casing which allows the reservoir to be isolated.
6. During the last phase the well enters the reservoir.
When a well is an exploration well, designing is much more difficult , due to a lack of measurements and information to describe the subsurface. The mud window is not accurately known. Such uncertainties have to be taken into consideration in the drilling process.
When a well has to be drilled in a new region, there are many uncertainties about the data, including that related to the pore and frac pressure profiles. On the contrary, when a development well is planned, it benefits from data from the surrounding wells already drilled. In this case, the pressure profiles are well known, and the uncertainties are lower.
Let’s mention that the trajectory of a well can be vertical, deviated, or horizontal. The choice of the trajectory depends on the location of the rig, the location of the target of the well when it enters the reservoir, and the trajectory of the drain in the reservoir itself. These two last data are defined and given by the reservoir engineer to the driller.
How a well is drilled in practice? Mechanically, a vertical force applied on the drilling bit (the weight on bit), together with a movement of rotation, generates down to the bit the power necessary to destroy the rock. A hook hangs up the drill string, which is composed of several tubulars screwed together, and, at the bottom, there is a drilling bit.
Both the weight on bit and the rotation per minute, which is given by the rotary table located at the rig floor, are controlled by the driller to maximize the rate of penetration of the bit.
Their optimization depends on several parameters, including the kind of rock to be drilled: the regulation of the hook height controls the part of the total weight of the drillstring applied on the bit, the rotation is often given by a rotary table located at the rig floor.
The mud circuit is combined to the mechanical part of the system.
Firstly, the pump sends the mud at high pressure through the discharge line, the stand pipe, the rotary hose and the top drive, into the pipes.
The mud flows in the drill string down to the bit and catches the small pieces of broken rock, the cuttings, to transport them up to the surface in the space between the drill string and the well walls.
At the surface, the cuttings, the sand and the silt are removed from the mud through shale shakers and other systems.
The mud can be sent to the tanks in order to be re-injected.
In order to control the well in case of blowout, a Blow Out Preventer is installed between the top of the well and the rig floor. This BOP stack is composed of an annular BOP and different rams able to close the well in case of emergency. The size of the BOP is adapted to the maximum pressure that can be encountered during the drilling process.
Wentworth Resources has announced that it has successfully raised
gross proceeds of USD 7.6 million (GBP 4.9 million, NOK 59.7 million)
with institutional investors and certain Directors and members of the
Executive Management through a private placement of 15,412,269 new
shares.
The private placement saw no discount to market price with the new
funds set to provide the Company with sufficient working capital beyond
its projected receipt of first cash flow for gas sales from its Mnazi
Bay concession.
This comes at a time when construction of the Government owned and
operated Mtwara to Dar es Salaam pipeline is complete and the
accompanying processing facilities are nearing completion with
pre-commissioning activities ongoing with delivery of first gas into the
new pipeline continues to be on track to commence in Q3 2015.
According to Wentworth Resources significant progress has been made
in recent weeks on advancing payment guarantee arrangements and the
Company is confident these will be completed prior to the delivery of
first gas to the pipeline.
The company said it had preferred the Private Placement as it
represented a quick and cost-effective method of raising funds necessary
to give the Company sufficient working capital until projected cash
flow from gas sales at Mnazi Bay commences.
FirstEnergy Capital and Stifel have been appointed as Joint Bookrunners in respect of the Placement.
According to Wentworth executive Chairman Bob McBean the Company
expects to start receiving cash flow from gas sales to the new pipeline
in Q4 2015.
“We are very pleased with the successful outcome of this raise which
provides the working capital we need prior to delivery of first gas. We
are confident that, with the support of our Partners and the commitment
shown by the Government, gas will be on stream in the coming months and
will be fully supported by an agreed payment guarantee arrangement. I
and the Board would like to thank our existing shareholders for their
continued support and welcome our new shareholders at an exciting period
ahead for Wentworth,” says McBean.
In March
Wentworth Resources announced that the Company has subsequently drawn
an amount of $5.6 million on an existing $20 million credit facility
with a Tanzania-based bank, TIB Development Bank Limited to finance
Mnazi bay concession developments including drilling of the MB-4 development well.
As per the last evaluation gas reserves within the Mnazi Bay
Concession in Tanzania, carried out by RPS Energy Canada Ltd put the value at $152.9 million after tax.
Marel et Prom is the operator at the Concession with 60.075 percent
interest through exploration and 48.06 percent through production while
the Tanzania Petroleum Development Corporation holds the remaining 20
percent.
Wentworth Resources says it estimates that monthly gas sales in
Tanzania into new government owned pipeline Q3 2015 could reach an
estimated $3.5m monthly.
Initially Mnazi Bay will be the only supplier of gas in Tanzania into
new pipeline from 5 wells which will be producing in the field by Q3
2015 at initial volumes of 80 mmscf/d escalating to 130mmscf/d in 2016
Wentworth adds that the substantial cash flow generation is expected
to commence in Q4 with the plan being to reinvest cash flows into Mnazi
Bay and grow the business by maximizing production from existing
discovered gas fields to meet the growing demand for gas in Tanzania and
examining more drill exploration prospects.
Already the company has identified six exploration targets with 1.5
Tscf (614 Bscf Wentworth’s share) unrisked P50 Prospective Resources
with all costs recoverable against existing and future production within
the Concession
On the way forward Wentworth says it will continue to focus on East
Africa onshore and near shore, pursue acreage along pipeline route in
Tanzania, evaluate Tembo-1 discovery Onshore Rovuma for potential
appraisal and Expand operations in East Africa.
As per the 17 year term gas sales agreement with the government the
government is responsible for transportation and processing costs and
payment guarantees are nearing finalization.
As per the last independent evaluation
of its gas reserves within the Mnazi Bay Concession in Tanzania,
carried out by RPS Energy Canada Ltd the value of Wentworth Resources at
Mnazi Bay is set at$152.9 million after tax. RPS Energy also placed the
value of the entire field at 443Bscf (2P) equivalent to 73.8MMboe.
Wentworth holds a substantial 31.94 percent withholding interest in production equivalent to 141.5Bscf (2P) gross reserves.
In October 2014
Wentworth Resources estimated its projects in Tanzania would make $20
million for first full year and $140 million over first 5 years of
production net of operating and on-going development costs according to
the October 2014 presentation.
Wentworth holds 31.94% in the production stage down from 39.925%
while the operator and Mnazi Bay Partner Maurel et Prom holds 48.06%
down from 60.075% after the Tanzania Petroleum Development Corporation
backed in to take 20% of production interests.
Four East Africa countries among them Mozambique, Tanzania, Uganda
and Kenya are headed to the development phase as they draw closer to
exploit their oil and natural gas reserves providing an opportunity for
investors to dive in and benefit from the projects worth billions of
dollars.
According to George Wachira working with Petroleum Focus Consultants
this phase provides opportunity for players in various fields including
engineering, logistics and field services, financial services, materials
supply amongst others.
On the engineering and construction field Wachira sees the greatest
opportunity for local large mature contractors who can bid directly and
participate in the projects independently.
“Some experience has been achieved through the ongoing exploration activities,” says wachira.
For smaller engineering and construction firms the opportunity is in
forging partnerships especially with oversees firms who can transfer
their expertise and technology.
Wachira says that whereas various contracts will fall to
international firms with years of experience in this sector there will
be increased use of local subcontractors even as he urges local firms to
seek training and certification.
The sheer amount of materials needed will drive up demand for logistics and field services even as there is expected to be the commencement of development drilling.
Total Uganda which is awaiting a production license for example
estimates that it will need to move over 800000 tonnes of equipment as
it starts development at Hoima which would mean about 1000 trucks a day
during the period in both Kenyan and Ugandan road.
Already a number of local companies have already dominated this space including the first listing by an oil and gas company on the Nairobi bourse.
There is also hope especially by local companies that they will receive government protection in the supply of materials that are readily available locally the a local content legislation.
“The early enactment of local content regulations shall empower local businesses,” he says.
Other opportunities are in the financial services segment where
banks, insurance and guarantees with various local institutions having
already entered this space.
Last week Chase bank announced that it would be providing $50 million
to small and medium enterprises wishing to venture into the oil and gas
sector.
The financing of SMEs to venture into what has so far been viewed as
an closed society has for long being identified as a major barrier to local participation alongside the enactment and operationalization of the local content legislation.