UAE Survey - Other Concessions.

In 1974, Dubai granted Texas Pacific an offshore concession of 1,954 sq km near the Mubarak oilfield off the coast of Sharjah. Exploration gave no encouraging results. In 1987, South Eastern Drilling Co. (SEDCO) and Houston Oil & Minerals got a 35-year concession covering a 6,075 sq km. Offshore drilling by SEDCO was interrupted in 1979 at a depth of 14,670 feet. In June 1980 SEDCO suspended work on its second well (onshore) because of technical difficulties. Drilling reached a record depth of 16,760 feet. This was the first onshore well to be drilled in Dubai since 1968.

In June 1980, Arco Int'l Oil & Gas, a unit of Atlantic Richfield, got a 3,078 sq km onshore block in the Margham area, with a 35-year E&P agreement based on a deal first signed on Feb. 26, 1980, by Shaikh Rashid. The deal provided for a first well to be drilled as soon as a preliminary geophysical study was done.

The operating company, Arco Dubai, did the work accordingly. In March 1981, the state-owned British National Oil Co. (BNOC) acquired a one third interest in the acreage and was to invest $1m in geophysical operations and $5m in each well to be drilled. A few years later BNOC was bought by BP and its stake in the Margham gas/condensate field, which Arco found in 1982, was transferred to BP Exploration.

Later BP withdrew from the venture and Arco sold a 25% interest in the field to Gulfstream Resources Canada. In September 1998 Gulfstream sold its interest back to Arco in what the Canadian company then called "a comprehensive strategic agreement" which also involved its share in a gas venture in Qatar led by the US major. In late 1999 Arco became part of BP, as in the case of Amoco.

In late 2000, the government took over the Margham area from BP and set up a wholly-owned company, Margham Dubai Establishment (MDE), to operate the field. Margham produces about 25,000 b/d of condensate (up from 20,000 b/d in 2002) and 420 MCF/d of natural gas (up from 230 MCF/d in 2002, compared to 450 MCF/d in 1994). The condensate is processed by Dubai's refinery at Jebel Ali. Run by the state-owned Emirates National Oil Co. (ENOC) the refinery has a capacity of 120,000 b/d. The gas from Margham and nearby fields is being processed by a plant expanded in 2003 and operated by Dubai Natural Gas Co. (Dugas). The gas is then pumped by pipeline to Jebel Ali where it is consumed by power plants.

In a restructuring of the petroleum sector in late 2000, ENOC acquired ownership of Dugas. Dugas also runs a 500,000 t/y MTBE plant at Jebel Ali.

MDE in 2002/03 found and quickly developed Khubai, about 20 km from Margham, and South-West Margham fields under a programme which should eventually raise the system's gas production capacity to 500 MCF/d. With VECO Engineering Corp. of Canada acting as a project management consultant and Worley of Australia having done the FEED work, a $45m EPC contract for this was awarded in late January 2002 to Solar Turbines Int'l Co. of the US. A 20-km pipeline was built from Khubai to the Margham production centre. Western Geophysical has done a 3D seismic survey over a large onshore area including the three fields.

The Margham development programme has involved new facilities to maintain condensate production and increase the gas output of natural gas, an upgrade and a new control system for the gas-processing plant, the pipeline from Khubai, a new inlet gas compressor, along with an additional slug catcher and process cooler. Work also involved modifications to the gas plant.

The recoverable oil reserves of DUMA-DPC's four offshore fields have been put about 3-4 bn barrels. Independent experts say they are less than 1.6 bn barrels. Proven reserves of natural gas are estimated at 4.1 TCF, compared to 196.1 TCF in Abu Dhabi, 10.7 TCF in Sharjah, and 1.1 TCF in Ras Al Khaimah.