EASTERN MEDITERRANEAN Ionian, Aegean Sea prospects enhanced by new petroleum legislation

Primos North in relation to existing Primos Facilites. Greece is set to issue a new Hydrocarbons Law in an attempt to revitalize exploration and production activity. Since the early 1980s this has been somewhat patchy, and focused mainly on Greece's only producing offshore oilfield, Prinos.

Greece is set to issue a new Hydrocarbons Law in an attempt to revitalize exploration and production activity. Since the early 1980s this has been somewhat patchy, and focused mainly on Greece's only producing offshore oilfield, Prinos.

Expectations are higher, however, following Agip's recent successes in the deep waters of the Ionian Sea with oil finds such as Aquila. At the Greek end of the sea, the knock-on effect should be development at last of the West Katakolon oil and gas structure. Greece also wants to kick-start exploitation of Prinos North in the Aegean Sea, to offset declining oil production in the Prinos concession area.

Under the new law, which has to be ratified by the Greek parliament, exploration and development rights can still be assigned directly to the state-owned company DEO-EKY, but third parties can also be brought in. There will be two types of contract: licence agreement (royalty tax) and production sharing agreement.

Terms for offshore exploration areas are seven years maximum. However, an extension of up to 50% of this period could be granted to delineate a discovered field.

Each development permit will be up to 100 sq km, extendable to 200 sq km if the find extends beyond the permit area. Twenty-five years will be the normal permit period, unless a find is reported in water depths beyond 500 meters. Royalty payments will be open to bidding, possibly escalating depending on incremental daily production, geology of the area and profit to cost ratio.

As for the two potential new field schemes, DEP-EKY intends to award development and production of West Katakolon to third parties. Prinos North, however, will be subject to the 1988 Law, with DEP-EKY retaining 15% of this and surrounding development areas.

West Katakolon

This field is located 3.5 km from the Katakolon peninsula offshore west Peloponessus. The first well of DEP's drilling program here in 1980-82 was spudded in 75m water depth, deviating to deeper waters to where the Tertiary sequence contacted the Mesozoic carbonates, at around 2,500m depth. Slight amounts of oil were recovered.

The well was then side-tracked with a higher angle hole directed to the top of the carbonate series. It intersected the same carbonate sequence as the first well, testing gas at intervals 50 meters apart. Flow rates from the highly fractured Eocene limestone at the first interval were 20-25 mcf/d. A third test was performed 50m below the second, upper Cretaceous strike: here oil in mud was recovered using reverse circulation.

A second well was drilled to the north, and tested at five different levels. The upper two flowed oil at 1,000-1,500b/d and at wellhead pressures of 800-1,000 psi. DEP's conclusion was that the oil zone was 80-100 meters thick. Three years later, a 3D seismic survey was performed over West Katakolon which led to the reservoir's bulk volume being upgraded by 15%.

Reservoir depth over the field is 200-300 meters. To define the most productive areas of the fractured network pattern, a long production test would first be needed. According to DEP, there are three feasible ways of re-entering the reservoir:

A deviated well from the Katakolon peninsula 3 km away, which would combine the lower costs of operating from an onshore site with extra production achievable through drilling in a high angle or horizontal mode

Use of a platform or jack-up at a shallow depth close to shore to drill a moderately deviated well. This would minimize disturbance of villages by the shore.

Re-entering the field at the location of the second well where a corrosion cap was installed on the wellhead, using a jack-up or drillship to test the two known oil zones. However, this would be less informative than doing the test from a new drilling location.

Prinos North

This field was discovered in 1976 when a delineation well two km north of Prinos flowed oil from two intervals in the D zone at up to 1,200 b/d. This was sweet oil, unlike Prinos' sour crude. The reservoir rock was a Miocene sandstone, like Prinos, and in similar depths (2,500-1,600m), but the sand/shales sequence was different.

A second exploration well in the `D' zone in 1982 uncovered worse quality oil. After an 11-year gap, a 3D seismic survey was performed over the whole Prinos area, followed by a new well in the Prinos North area. This encountered oil in two zones in the upper Miocene evaporate salt section, at rates higher than the initial discovery. The upper zone, in 2,150m depth, flowed at 3,200b/d: 5,000b/d is considered realistic using acceptable wellhead pressures.

A factor in Prinos North's favor is the short distance of this new discovery - just 2.7 km - from the Prinos platforms. An extended reach well could be drilled from one of these installations to cut production costs. Separation, gas dehydration and pumping facilities on the Prinos production platform could also be used for early processing of Prinos North crude.

Alternatively, a vertical well could be drilled through a self-supporting caisson, connected to the production platform via a pipeline. This would be a less risky option and could be done quickly, with the option of drilling a further well through the caisson. This could be targeted horizontally through the pay section if findings from the first well prove positive. Oil from a production test could be used to pay for the drilling operation.

However, a jack-up acting as a drilling/production platform might also be a quick, not-too-costly solution, and this could also be used to drill in-fill wells in the Prinos oil field.

Reference: S.Xenopoulos, D.Evgenios, E.Conophagos, and P.Karagiannis, Public Petroleum Corporation of Greece, from a paper delivered at this year's OMC conference in Ravenna, Italy.

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