Baku, Azerbaijan, March 24
By Leman Zeynalova – Trend:
One of the primary factors contributing to lower than expected production at Azerbaijan’s Bahar- Gum Deniz block of oil and gas fields in 2017 was the slower pace of executing scheduled workovers, reflecting, in part, limited access to heavy lift vessels, said a message from US Greenfields Petroleum Corporation.
Other reasons are the lower than expected post-workover production rates; and the slow pace of south Gum Deniz Electric Submersible Pumps (ESP) installations as workovers in old wellbores required additional cleaning and scraping runs, said the message.
The Corporation plans to address the limited access to heavy lift vessels through the acquisition of a heavier rig that is better suited to deal with the challenges imposed by the old wells and difficult workovers.
Additionally, Bahar Energy Operating Company Limited elected to defer both capital and operating expenditures until the development plan and reservoir studies were completed which would further facilitate the delineation and selection of the best projects going forward.
“The reservoir studies were initially expected to be completed by April of 2017, in respect of the gas field, and by midyear 2017, in respect of the oil field. However, the studies were not completed until Q1 2018 as a result of the identification of development opportunities (particularly waterfloods), additional evaluation work requested by the reserve auditors (GLJ Petroleum Consultants and ERCE), and data inconsistencies resulting from scribed logs and well files that required clarification and further delineation,” said the message.
In light of lower than expected production, the Company revised its 2017 budget, resulting in downward adjustments to capital expenditures to $9.7 million (from guidance of $21 million) and operating expenses to $23 million (from guidance of $28 million).
The contract for exploration, rehabilitation, development and production at Bahar and Gum Deniz block of offshore fields was signed by Azerbaijan’s state oil company SOCAR (20 percent) and Bahar Energy (80 percent) in 2009. Bahar field, developed since 1969, is located in 40 kilometers south-east from Baku.
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