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ALGERIA - Zarzaitine & Sinopec.

Sinopec of China in September 2002 got the contract to boost the oil recovery rate at Zarzaitine, which is near Hassi Messaoud, from 40% to 50%. Sinopec is contributing 75% of the $525m upgrade cost, with Sonatrach providing the balance. Sinopec was chosen ahead of competition from Repsol-YPF of Spain. Zarzaitine, found in 1957, produces 42.5o API oil from a Devonian Fm at a depth of 4,700 ft. The reservoir of Zarzaitine, near the Tunisian border, extends to Tunisia where it is called El Borma. Agip found the extension on the Tunisian side in 1964 (see survey of Tunisia in Vol. 58, No. 22). Rhourde El Baguel & BP: This field (REB) was found in 1962, with 40.2o API oil produced from a complex Cambrian Fm at a depth of 9,850 ft. The second largest oil producer, REB's recovery rate declined to 18% by 1995. In 1996, it was producing less than 25,000 b/d.

On Feb. 15, 1996, Arco of the US (now part of BP) signed a $1.3 bn, 25-year PSA with Sonatrach for the field. In 1995 it paid a signature bonus of $225m and agreed to pay a $300m entrance fee. It was to instal an EOR system and further develop the field, with 38 new wells to be drilled. The goal was to raise REB's capacity to a sustainable level of 120,000 b/d for many years. But BP could only raise the output to 36,500 b/d, as a miscible gas injection system failed to bring about the contracted result.

It was reported in November 2002 that BP had taken a $230m charge against the REB project because of the failure. In early 2000 BP tried but failed to sell a 40% stake in its PSA to Elf before the latter was absorbed by TotalFina. Sonatrach exercised its legal right of pre-emption and took the equity itself, paying BP in 2001-04 instalments.

REB has about 3 bn barrels of oil in place, having produced less than 450m barrels since 1963. In its PSA, Arco was to extract over 500m barrels, but if had to find enough gas for reinjection (see background in Vol. 56).

Arco had since 1992 explored several blocks in Hassi Bir Mekaiz (Ghadames basin east of Hassi Messaoud), where its partners are TPAO of Turkey (25%) and Lundin Oil unit Santa Catalina (25%), under a separate deal with Sonatrach. It and BP have made commercial discoveries in these areas and BP continues to explore. In late 1998 Arco relinquished the Guerrara block east of Hassi R'Mel.

Since 2000 BP has been trying to sell its 50% stake in these blocks, where proven and probable sweet oil reserves have been estimated at 100m barrels. Its operating unit is called Arco Ghadames.

BP is Sonatrach's partner in the huge sets of In Salah and In Amenas gas fields (see Gas Market Trends).

El Gassi & Amerada Hess: Under a JV deal with Sonatrach signed in May 2000, the US independent Amerada Hess 2000 got the EOR and re-development projects in three oil producing fields: the El Gassi oil and gas unit, found in 1972, which produces from a Triassic Fm; the nearby El Agreb, a small field found in 1970 producing oil from an Ordovician/Pre-Triassic Fm; and Zotti, another small field. Close to these is El Agreb Ouest field, south of El Gassi, developed by Total.

SonaHess (49% AH & 51% Sonatrach) has doubled their output to 30,000 b/d. It should bring their combined capacity to 50,000 b/d by end-2003. SonaHess began work on them in the third quarter of 2000, with its programme including 250 km 2D seismic, 1,000 km 3D seismic, 36 new wells, workover of 30 existing wells, and installation of water and gas injection and gas compression facilities and a 75-km gas pipeline.

Amerada Hess has a 100% working interest in the Rhourde Errouni area, Block 401c, under a licence signed in April 2000. Committed to a five-year programme with 900 sq km seismic work and the drilling of four wells.

Guellala & Ben Kahla: Guellala was found in 1969 and has produced 42.2o API oil from a Triassic Fm at 11,320 ft. Ben Kahla was discovered in 1965 and has produced 43.6o API oil from a Triassic Fm at 11,000 ft. Ben Kahla is connected to Haoud Berkaoui, another structure which is on offer in the first category of PSAs. The two fields have EOR systems but need further investment, without which their output would remain below 10,000 b/d each. Oued Noumer, an oil and gas field found in 1969, is to be developed further. It is about 30 km west of Ghardaia. It can produce 9,000 CM/d of stabilised oil, 9 MCM/d of dry gas and 800 t/d of condensates. The gas is pumped to Hassi R'Mel through the Alrar-Hassi R'Mel pipeline. On stream since December 1985, the field has a system recovering gas, a 50 km gas gathering pipeline and a three-train compression plant with processing lines for dehydration and gas-oil separation.

Other Fields: Sonatrach's plan has been to raise the rates of recovery at these and other fields' from 20-30% in 1988 to 65% through gas and water injection, in addition to those already in place. Other fields include Tiguentourine (found in 1956, producing 44.4o API oil from a Devonian Fm); Stah (found in 1971, producing 41.7o oil at a depth of 9,515 ft); Rhourde Nouss (found in 1980, producing 39.7o oil from a Triassic Fm at a depth of 9,850 ft, which is also a gas field); and Rhourde Chegga (found in 1985).
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Publication:APS Review Oil Market Trends
Date:Feb 10, 2003
Previous Article:ALGERIA - Sonatrach E&P Background.
Next Article:ALGERIA - Part 3 - Exports Are Increasing, With Improved Logistics.

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