11thAfrican Mohamed Zayed

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11th African Oil & Gas Conference & Exhibition

New Frontiers of Exploration Activity

23 - 25 May 2007 1

Optimum Application of Geosciencesin the Search for Hydrocarbon in Frontier Basins,Examples from Sudan

PLAY

NOT AN OFFICIAL UNCTAD RECORD


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23 - 25 May 2007 2

Basement Rocks

Cretaceous & Older Sequences

Tertiary & Older sequences

Basin Boundary

Simplified Geological Map

of Sudan

Muglad

Basin
http://www.maisonradical.ca/Nouveau_Dossier/pure_emu_oil_2.htmhttp://www.maisonradical.ca/Nouveau_Dossier/pure_emu_oil_2.htm


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OpportunitiesWhy has there been so much interest in onshore Sudan?

Success & profitability

High success rates(69%)

Low Exploration Unit Finding Cost($0.90/b)

Improved infrastructureMore than 300-kilometer long pipelines from Heglig,

Palogue & Fula to Bashyer Marine Terminal in the RedSea.

Three refineries of 130,000 b/d capacity (to beexpanded to 200k b/d)

Contractual arrangementsCost recovery & profit sharing basis (PSC)

Encouraging tax & custom exemption

Sudan is providing areas with exciting opportunities forexploration companies of all sizes.


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Engagement of small indigenous companies with smallercapital allows them to partake in oil profits and minimize

capital flight

Localization of projects that facilitated knowledge andtechnology transfer, which were & remain crucial for betterharnessing of local workforce and resources

Nationalization program is focusing on improving thetechnical capability and competence levels of the localworkforce (80% of two major op. co. nationalized within 5yrs.)

For the industry to be beneficial to the Sudanese people, theGovernment formulated policies to ensure localization of allpetroleum projects ..

Developing local content

Developing people for better resource management


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23 - 25 May 2007 7

PETROLEUM RESOURCE

ASSESSMENT IN FRONTIER BASINS

DESPITE THE IMPRESSIVENESS OF FANCY ECONOMIC

AND ENGINEERING ANALYSES, THE BIGGEST FACTOR INTHE POSSIBLE PAYOFF OF A PROSPECT OR A PLAY IS THE

GEOLOGICAL, JUDGMENTAL ESTIMATION OFHYDROCARBON VOLUME AND RISK

-- David A. White (1993)


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Explorationists are not concerned about whether hydrocarbonsare present or not in the prospect, rather they want to know the

chance of findinga sufficient quantities of petroleum to warrantcompletion of the drilled well. They also think of if a well iscompleted, how much profit will it generate?

Risk and Volumetric


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To quantify the unknown (uncertainty)

Why Do Risk Analysis?:

Prerequisites of Risk Analysis:

To forecast or predict events yet to come

To compare alternative investments

Before one goes into risk analysis, it is important to assesspotential outcomes and their values.

Define investment opportunities (outcomes)

Seek expert opinion

Knowledge of principles of probability and statistics

Historical data or analogy


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23 - 25 May 2007 10

EconomicAnalysis

(Cash flowModel & Value

Matrix, NPV, EV;Fiscal terms,Tax)

DECISION

Mean ResourceVolume

(=EV= Revenue)

EngineeringFacility cost,

Production profile,Recover Factor Risk &

SensitivityAnalysis

EconomicAssumptions

Price

Cost Escalation

Inflation

Exchange Rate

EconomicResults

Economic

Indicators

Assessment ofGeol. Elements

Sourcereservoir

Trap/ SealTiming

EVALUATIONPROCESS FLOW


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23 - 25 May 2007 11

HC Resource Assessment in Virgin BasinsLook-alike Approach

Comparison has to be made on basis of examination of the keyfactors that are favorable for the generation and accumulationof commercial quantities of hydrocarbon .

Three main factors have to be considered in searching for

analogy:

1. Tectonic evolution, basin geometry & size,2. Sedimentation style and,3. The Geothermal history

These factors have control on the presence and effectivenessof the petroleum geological elements are processes


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Step-by-Step

Resource Assessment in Virgin BasinsLook-alike Approach

STEP #1: Look for, and choose a mature basin that iscomparable or similar to the virgin basin under investigation,

STEP #2: Generate a frequency, and thereafter a filed sizedistribution diagram from the discovered fields in the maturebasin,

STEP #3: Work out the mean reserves from the field sizedistribution of the analogous mature basin (Muglad Basin)

STEP #4: Use the Prospect Size Distribution Table to find outthe expected mean HC resource from virgin basin underinvestigation,


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EGYPT

CENTRAL AFRICAN RIFT SYSTEM

MUGLAD BASINBLOCK 2A

TALIH

FIELD

UNITY FIELD

May-25

Bamboo

Tayib

RihanLaloba

BarkiHamra

Kanga

ElGhazal

TOMA SOUTH

El Nar

(U6)El Saqr(U7)

El Harr(U8)

Kaikang-1

Kuoc

Nor

Nyang

Amal-1

Jak

BLOCK 4

BLOCK 1A

ELTOOR

TOMAR

Kaikang-2

HEGLIGFIELD

Jidian

FIELD

Jamousse

Sadeeq

ElMahafir

AmalUpdip(K25)

Umm Saqura

(U14)

Malok(K9)

K5

El Majak

BambooSouth

NH12

El Toor N

El Toor E

Munga Cent.WU5

Khairat E

KS1b(Tamur-1)

Shammam-1(Drilling)

KN15

KN20(Timsah-1)

KN23

KN1


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BASIN TECTONICS &PETROLEUM SYSTEM

Rifting

CretaceousSystem

TertiarySystem

RiftCycles

Sagging

Rifting

Sagging

Rifting

Sagging

S R C T M


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Sedimentation Style


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0

5

10

15

20

25

M G M GS K NE MG N UBS ET SE FH ET N K HN K HW ESS ET E PA PD KHE USS PJ UBN Y AR

Example of field size distribution of discovered reservesLook-alike Approach

Typical lognormal distribution


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P90

P1

P10

P50

P99

Muglad Basin Field Size Distribution

1 10 100 1000Potential Reserves (MMBO)

0.1

P80P70

Mean = 54 MMBO


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The overall mean reserves from lognornmal distribution of the analog(Muglad Basin) is 5.4 X 10 million bbl, and our assessment minimum

were 1.0 x 10, we could run down the Mean column of Table aboveuntil we hit the closest number to 5.4, which is 5.39. The selecteddistribution would be (1 - 4.47 20) X 10. Therefore the mean resourcevolume to be used foreconomic assessment & decision analysiswould be 45 million bbl.

Mean HC Resource Assessment in Virgin BasinsLook-alike Approach

Example of estimating future field size of the virgin basin underconsideration using the Muglad Baisn as ANALOG

Minimum ML Maximum Mean Minimum ML Maximum Mean

1 3.16 10.00 3.51 1 21.20 450.00 43.40

1 3.87 15.00 4.50 1 22.40 500.00 46.90

1 4.47 20.00 5.39 1 24.50 600.00 52.40

1 5.00 25.00 6.13 1 26.50 700.00 60.60

1 5.48 30.00 6.91 1 28.30 800.00 65.40

Prospect size distribution for minimum = 1.0 X 10


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EconomicAnalysis

(Cash flowModel & Value

Matrix, NPV, EV;Fiscal terms,

Tax)

DECISION

45 MMBO

EngineeringFacility cost,

Production profile,Recover Factor Risk &

SensitivityAnalysis

Economic

Assumptions

Price

Cost Escalation

Inflation

Exchange Rate

Economic

Results

Economic

Indicators

Assessment ofGeol. Elements

Sourcereservoir

Trap/ SealTiming

EVALUATION PROCESS FLOWIN OIL & GAS PROJECTS


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P90

P1

P10

P50

P99

Muglad Basin Field Size Distribution

1 10 100 1000Potential Reserves (MMBO)

0.1

Small

Fields

Medium

Fields

Large

Fields

P80P70


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Chance node (= nature dictates)

Decision node (= decision maker dictates)

Small Field

Medium Field

Large Field

No Commercial Discovery

POS


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PLAY

SOURCEIs there oil in the

basin?

TRAP/ SEALIs there a place to

collect it?RESERVOIR

Porous rock that

can hold?

TIMINGTrap formation

vs. Generation?

PLAY CONCEPT

Probability of

Success

11thAfrican Mohamed Zayed

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