Hungarian oil and gas company MOL sees big opportunities in the Akri-Bijeel and Shaikan blocks in the Kurdistan region of Iraq: several exploration wells have been drilled successfully and test production could start at one of the wells as soon as next year.
Hungarian oil and gas company MOL sees big opportunities in the Akri-Bijeel and Shaikan blocks in the Kurdistan region of Iraq: several exploration wells have been drilled successfully and test production could start in the Akri-Bijeel block next year.
The Akri-Bijeel block has about 2.5 billion barrels of oil equivalent (BOE) of which at least 20-30% can be extracted.
If the field were to produce 50 million barrels it would be a success, according to experts. In Hungary, production of 1m barrels is already excellent.
The find in the Shaikan block is also outstanding and could prove to be even bigger than that in the Akri-Bijeel block.
Drilling in the blocks is expensive: the cost of a single well can reach USD 20 million-40 million. Three exploration wells will be drilled in the Akri-Bijeel block by the third quarter of 2012, and at least six more wells are planned.
For MOL, the Akri-Bijeel block bears more importance as the company owns a bigger share in it than in the Shaikan block. MOL is also directing the drilling in the Akri-Bijeel block.
MOL decided to acquire the two blocks in 2007, after long negotiations with the Kurdistan Regional Government.
MOL owns rights to 80% of the 889-sqkmAkri-Bijeel block and Gulf Keystone Petroleum International holds 20%. It completed the first exploration well there at the end of 2010. In the last phase of the test, the well produced 3,743 barrels of oil per day (BOPD) and 99 BOE of gas.
On average, just one in every seven exploration wells drilled by oil industry companies is successful.
MOL started drilling the second exploration well in the Akri-Bijeel block at the end of March and it plans more exploration wells this year and next. The wells cost USD 30 m-40 million apiece.
MOL owns a 20% stake of the 283-square-kilometre Shaikan block. Its partners are Gulf Keystone Petroleum, the block's operator, and Texas Keystone.
The Shaikan-1 well, drilled last November, produced more than 4,600 BOPD. The Shaikan-2 well, drilled in March of this year, produced more than 8,000 BOPD and a daily 393 BOE, but MOL expects output to be higher in the production phase. The Shaikan-3 well produced 9,800 BOPD.
Output of wells in the two blocks is expected to come to about 70,000 BOPD when production reaches full capacity. Good wells are usually operated for 20-50 years in the oil industry, but some can be operated for as long as 70.
MOL is spending USD 100m on exploration and related investments in the Akri-Bijeel and Shaikan blocks this year, Majdi Ahmad, managing director of MOL's wholly-owned unit Kalegran, told MTI in the Iraqi city of Erbil. By the end of this year, MOL will have spent USD 200m in the area since 2008, he added.
Further spending will depend on the success of activity in the blocks, said Majdi Ahmad.
MOL also owns a 10% stake in Pearl Petroleum, a project company that has exploration and production rights for two other blocks in the Kurdistan region of Iraq: the 299-sqkmKhor Mor block and the 1,169-square-kilometre Chemchemal block. Production of gas and condensate as well as exploration are underway at the Khor Mor block. Exploration work is ongoing at the Chemchemal block. MOL's partners in Pearl are OMV (10%), Crescent Petroleum (40%) and Dana Gas (40%). MOL acquired its stake in the venture two years ago.