Tunisian state oil firm ETAP together with OLA Libya Oil Holdings Limited have launched a mini-bid round for acreage straddling the two countries’ maritime border north of Libya’s Eni-operated Bouri and Bahr Essalam fields (see map).
Tunisia & Libya Open Bidding For Border Blocks
Two assets are on offer: an exploration contract for the cross-border Joint Oil Block, and a 100km2 development permit for the previously-discovered Zarat field. Though Zarat lies wholly in Tunisian waters, it straddles the Joint Oil acreage and as such is subject to a unitization agreement between ETAP and Joint Oil, which in turn is equally owned by ETAP and OLA. Previously known as Tamoil, OLA is the brand name for overseas oil assets (mostly African filling stations) of the Libyan Investment Authority (MEES, 15 December).
“Joint Oil and ETAP are seeking investor(s) and operator(s) to pursue further exploration of Joint Oil Block for new plays and prospects under Exploration and Production Sharing Agreement, EPSA and/or development of Zarat Discovery as a unitized discovery of oil and gas under Development and Production Sharing Agreement, DPSA and Unitization Agreement (UA) & Unit Operating Agreement (UOA),” the firms say. Bidding closes on 16 January 2024.
Zarat was discovered by US firm Marathon in 90 metres water depth in 1992 on Tunisia’s block of the same name (MEES, 29 June 1992). The initial Zarat-1 well struck a 75-meter hydrocarbon column including a 15-meter oil rim and tested at 17.5mn cfd and 1,500 b/d of condensate. Marathon followed up with a second successful well, Zarat-2, whilst 2011’s Zarat North-1 confirmed the extension of Zarat onto the Joint Oil block (MEES, 9 April 2012).
The wells demonstrated a condensate-to-gas ratio of 85 barrels per million cubic feet of gas with medium case (2C) recoverable reserves pegged at 0.4tcf gas and 50mn barrels liquids. In addition, there are “potential upsides in deeper Upper Cretaceous Abiod & Douleb/Bireno carbonate reservoirs producing in nearby Miskar Field,” ETAP and Joint Oil say.
However, Zarat’s high CO₂ content is problematic: back in 2012 Tunisia’s DGE upstream regulator highlighted the difficulty in “ensuring that the Zarat development plan is in accordance with Tunisian regulations and with international treaties and commitments, such as the Kyoto Protocol” (MEES, 27 August 2012). Bidders this time around will have access to a previous study on “CO₂ injection and storage” at Tunisia’s depleted Gulf of Gabes gas fields.
Bidding documents suggest a “Zarat development scenario” with early production via a mobile offshore production unit. Phase 1 would see three wells (two targeting the crest of the reservoir and the third the gas-oil contact layer), and Phase 2 an additional three wells (of which one contingency). Membrane technology would separate the acid gas with tie-back 37km to Tunisia’s under-utilized Miskar platform and from there to the onshore Hannibal plant.
Expected development capex of “around $1bn” would deliver “robust NPV and IRR” at oil and gas prices of $50/B and $7/’000 ft3 (≈/mn BTU) respectively, according to the bidding documents.
The much larger, 3,072 km2, Joint Oil Block lies in 90-120ms water depth some 150km northwest of Tripoli. Since 1976 five wells have been drilled, though the only one to strike significant hydrocarbons was 2011’s Zarat North-1 appraisal well. Substantial 2D and 3D seismic is available to bidders, whilst ETAP and Joint Oil say that “proven plays remain untested… and deserve further exploration efforts.” In particular they flag up the Lower Eocene El Gueria nummulitic limestone present in the southern part of the block. This formation has been demonstrated in Tunisia’s Hasdrubal gas field to the west, as well as the prolific Eni-operated Bouri and Total-operated Jurf fields in Libyan waters immediately to the south (MEES, 18 August).
