A development decision awaits tests of Anadarko's fifth discovery well on a 3.8 million acre, multitract exploration area in the Ghadames and Illizi basins, about 400 miles south of Algiers.
Anadarko Algeria Corp. and partners are working with Algerian state oil company Sonatrach to frame a development plan for the acreage. The plan is to emphasize early, limited production from Hassi Berkine (HBN) and Berkine East (BKE) fields on Block 404 (see map, OGJ, Aug. 29, 1994, p. 29).
Sonatrach within the next month is expected to file a commerciality report with Algeria's energy ministry proposing development.
The Anadarko group expects to begin producing about 30,000 b/d of oil about 1 year after the energy ministry issues an exploitation license. Production is to ramp up considerably from several fields 2 years later.
Operator Anadarko Algeria holds a 50% interest in the exploration and development project under a 1989 production sharing agreement (PSA) with Sonatrach. Lasmo Oil (Algeria) Ltd. unit of Lasmo plc and Maersk Olie Algeriat AS unit of Maersk Olie Og Gas AS each have a 25% interest in the pact. Sonatrach owns 10.2% of Anadarko's common stock.
CUMULATIVE RESULTS
Based on tests of its three discoveries on Block 404 and two on Block 208 to the southeast, the Anadarko Algeria group has increased estimates of combined recoverable reserves to 850 million-1.25 billion bbl. More drilling is planned to better determine reserves.
Combined tests of Anadarko Algeria's wells amount to about 65,500 b/d of oil and condensate and 174.5 MMcfd of gas.
The group's most recent well test, of 1-B Hassi Berkine South (HBN-S), flowed 16,000 b/d of 42 gravity oil and 17.8 MMcfd of gas through a 90/64 in. choke with 1,190 psi flowing tubing pressure from 85 ft of net Triassic pay above total depth 11,155 ft. The well is on Block 404 in the Ghadames basin, 6.8 miles southwest of the 1 HBN wildcat and 2 HBN delineation well.
In earlier Block 404 tests:
On Block 208, the 1 El Merck (EMK) discovery in February 1993 flowed a combined 1,972 b/d of oil, 1,750 b/d of condensate, and 17.3 MMcfd of gas on drillstem tests of Triassic sandstone above 12,300 ft (OGJ, Feb. 22, 1993, p. 38). A year later, 1 El Merck East (EME) flowed more than 8,100 b/d of oil and condensate and 82.5 MMcfd of gas on tests of 230 ft of net Triassic and Devonian pays above 14,859 ft (OGJ, Feb. 28, 1994, p. 25).
PSA FINANCIAL TERMS
Anadarko approved spending of $33.8 million in Algeria in its 1995 budget, compared with outlays of about $33.2 million in 1994.
The company and partners in the 1989 PSA agreed to spend $100 million on the project during 10 years, an obligation that is expected to be met this year. Anadarko's net investment in Algeria at yearend 1994 amounted to $105.6 million.
Results of its exploratory and delineation drilling has prompted Anadarko to capitalize expenditures on the Ghadames-Illizi project, with no provision for loss or impairment. In addition to sharing with Sonatrach hydrocarbons discovered, developed, and produced under the PSA, Anadarko and partners are allowed to recover exploration costs from production.
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