ZOHR: The Making of a Mega discovery - Africa’s premier report on the oil, gas and energy landscape.

ZOHR: The Making of a Mega discovery

By Marco Alfieri, ENIDAY

The backstory of the largest hydrocarbon field in the Mediterraean

The story of Zohr began in mid-2012 when EGAS, the Egyptian state exploration agency for the offshore Nile Delta, announced a competitive bid, or “bid round” to use the technical term, in the Mediterranean offshore, with the offer to oil companies of 15 blocks to be evaluated.

Politically the period was full of uncertainty, it was the post-Arab Spring. In Cairo in June the Muslim Brotherhood came to power, and the major oil companies were having difficulty in collecting the arrears due to them. ENI decided to keep a regional base in Egypt and continue to study, from a geological point of view, the area of the Levantine basin.

For as long as possible, the first rule of an energy company is that contingent and geopolitical factors should never make you stop searching (and trying to understand). Oil is a long-term business; tomorrow things can be different, maybe even better.

But there is a second factor. The IEOC, historically the driver of exploration activities in Egypt, for the first time in forty years was about to run out of areas to explore. Uncertainty, as Mao Tse Tung would have said, is an excellent opportunity to try to reconstruct the portfolio with more or less limited investment (the competition would be low), pending an improvement in the conditions for investing in the country.

Ok, but how? Exploration of the Mediterranean in the last twenty years had not produced very exciting results for the oil industry; many wells drilled have proved to be “dry” or with few hydrocarbons. The view from San Dona to was that new permits with good prospects were needed and to find them there had to be a paradigm shift.You have to imagine a different “game”, less costly and associated with large volumes. A circle that is not easy to square!
But it was in this context and against this background that the story of Zohr actually began.

At the announcement of the tender, the IEOC made a preliminary screening with the available data of all 15 blocks (for experts on the subject this means examining the regional gravimetric and magnetometric data and old seismic lines) and information on the Levantine basin where Texans and Israelis were making interesting findings offshore Israel and Cyprus. At that point the decision was made by ENI to buy the government’s “data packages” for 10 of the 15 blocks in order to extend the technical evaluation. This was in September 2012, and there were just a few months to decide whether to participate in the bid. We had to hurry.

At the end of the monitoring period the exploration team brought three of the 15 blocks to the technical and economic assessment stage; and of these only Block 9 (Shorouk) ended up on the desks of ENI’s senior management.

Why Shorouk? Initially, the goal was to search in Egyptian waters for the geological model tested by the recent giant gas discoveries (Leviathan, Tamar and Aphrodite) made by the Delek-Noble Energy consortium in offshore Israel and Cyprus. ENI explorers looked for similar structures with the same “play concept”, on the assumption that the oil system discovered in the Eastern Mediterranean might also extend to Egypt.

However, on the basis of the evaluation work made by the IEOC team in Egypt, and with the lack of available seismic data, what emerged was an area in Block 9 where there appeared to be a “high regional” situation: not the classic theme in Miocene sands like Leviathan, Tamar and Aphrodite or the Nile Delta, but a huge bio-structure. A “reef”, as geologists would call it.

To have an idea of just how big, you have to think of a large massif in the Dolomites, such as the Sella-Pordoi , but buried under three thousand metres of sediment and 1,500 metres of water.

Could there be geological objects like this in the Eastern Mediterranean? How old are they? And might it not be a volcano or a crystalline basement rather than a bio-structure? These were all questions ENI had to answer quickly.

The search was extended to Egypt’s neighbouring countries. All of the data from the scientific drilling carried out in Cypriot waters on the top of Eratosthenes, a large submerged carbonate platform, were re-examined.

To take a closer look, the team acquired two regional 2D seismic lines that were not included in the government “data package” that enabled them to connect the Egyptian area of interest with the Israeli-Cypriot area and better define the shape of the bio-structure identified. In addition, the explorers decided to reinterpret internally, using sophisticated Egyptian “imaging” technology, the old seismic data: the results were surprising!

This is another fascinating aspect. One thinks that geologists are all numbers and formulae, but the creative mind of a geologist is full of 3D images, enlargements of coloured rocks and seismic lines. In fact, geologists are more inventive than one might think, and they can even compose an authentic “digital picture” of an exploration.

In the new geological model, the “lead”, or the potential object of exploration, is actually described as a bio-structure of the Miocene age (about 10 million years ago) that has grown on a pre-existing plain of the Cretaceous period.

The interesting thing is that the “big potato” (for geologists the bio-structure is simply the “big potato”) is covered with evaporite rock (rock salt) of Rosetta formation (the equivalent of the chalky-sulphurous Apennines and Sicily), notoriously good for sealing the reservoir (hence the “big potato”). Moreover, we know from the fields discovered in Cypriot and Israeli waters, that the hydrocarbon system of migration of biogenic gas should be active in the area.

This means that Block 9 has all three of the basic conditions for a potential accumulation: a reservoir, a cap that seals, the source rock. But time is running out and it will not be easy to get the green light for the project from the top floor. What’s more, the Shorouk area was held by another operator (a big major) for ten years, during which nine wells were drilled without commercial results. How is it possible that they didn’t see the “big potato”? The explanation of ENI’s explorers is that they were looking for a different geological game, a classic of the Nile Delta (Miocene sands), not the sea-mount carbonate variety that seems to be the case with the “big potato”, and currently the only one of its kind.

At the headquarters of ENI Corporation in San Donato, the explanation was deemed convincing and in February 2013 the IEOC sent an offer to the Egyptian government. During the summer ENI informally learned that it had won the bid, even though the official signing came only in January 2014 when 100% of Block 9 was assigned to the IEOC. As expected competition was limited; the majors had held their positions without exposing themselves, waiting for better times.

Meanwhile in Egypt the political conditions were changing. With the fall of the Muslim Brotherhood, the new government of President Sisi started to pay the old debts. In a few months they renegotiated gas contracts. Production in the country was falling, and new resources would have to be found from exploration.

In this new context, ENI considered it important to show signs of a recovery in its activities to Cairo, firstly in the Nile Delta and in the deep offshore. It awarded contracts for 3D acquisition in the Shorouk block and evaluated the exploration of Zohr ahead of the contract schedule (fixed for the second exploratory phase), and bringing the Saipem 10000 drilling rig to Egypt.

For some this was a premature, even risky, step. “We still don’t have the seismic 3D, how can we optimise the location of such an important well…?”

It should be noted that in Egypt, where the six-legged dog has been present for decades, the classic exploratory activity is for gas in the sands of the Nile Delta. The Zohr model would be sensationally new. It is not easy to convince yourself about something that is out of the ordinary, but when a team believes passionately in a project, and is able to present it to management, they will defend it vigorously.

But I’ll tell you one thing to give you an idea of the climate of those hectic days. One evening in April (2015) in San Donato all the geologists and geophysicists of the team were called to a meeting. The questions were few but clear:

“Are we confident that the structure exists?” The answer was yes.
“Are we confident that we have a controlled structural closure with the existing seismic2D?”The same unanimous answer.

Ok, let’s go for it.

“And if we really do find something really, the 3D will be useful later, but not to decide whether to drill such a large object …,” my explorer friend explained.
However, the well will be expensive and risky. Insiders call such prospects “high risk/high reward”. The company started to look for partners willing to take a minority stake to reduce the risk and the investment. Several oil companies visited the “data room”, but they all considered Zohr too uncertain; the model was not proven and might turn out to be totally wrong.

So ENI decided to go it alone. It believed in it. The timing was tight, and everything was still to be organised: acquiring permits and authorisation from Cairo, organising the logistics, preparing the drilling programme. The Egyptian system was extremely cooperative and everything was set up in just a few months.

On 25 June, 2015, the huge Saipem 10000 was located in Block 9 and work on the well physically started on 3 July. Fingers crossed.

The moment of truth is always the well

Operations progressed quickly but at that depth it takes thirty days to arrive at potential reservoir rock. On 18 July, 2015 the well emerges comes from the evaporite (salt) of the Rosetta formation and there were immediate signs of gas.

Fingers still crossed.

Very cautiously and carefully drilling begins. The first carbonate rocks are reached.
“Just think, when we arrived at that point it was like cutting through butter…” my explorer friend says.

The indications of gas continue. Fingers crossed again …
For many days and nights no one sleeps. Explorers, drillers and top management are in constant contact, the meetings are endless. “You have to understand where we had got to from a stratigraphic point of view, it is very important! And what geological age the rocks we were cutting through are.”

After feverishly analysing the drill cuttings, the first reports were prepared: we were, in fact, in the presence of Miocene carbonates. The team’s model really seemed to work!
Drilling continues and they continued to find gas. One hundred, two hundred, three hundred metres into the reservoir. The time was right to start collecting data and securing what had already been drilled.

From the ship’s log of those days:

“Electric logs were acquired, fluids sampled, formational gradients were measured. Rock samples were taken for stratigraphic analysis, the seismic model was calibrated with seismic acquisitions from the well … “

Meanwhile, the first confirmations arrive: the well is mineralized natural gas and carbonate reservoir rocks are of excellent quality.

Drilling begins again. Four hundred, five hundred, six hundred metres in gas! The numbers start to get big, very big, and we began to be aware of the scale of the Zohr discovery.
“600 metres of gas permeated rock with pressure points so aligned has never been seen before…” It’s like the famous four pyramids of Cheops one on top of the other.

You know the rest already. Everyone has been talking about Zohr but giving an account of the discovery is first of all to describe a way of working that is typical of ENI. We could cut and paste for the fields discovered in Congo, Angola and Mozambique.

Throughout the four corners of the globe there is always a time when we Italians are able to change the game by combining a capacity for synthesis and inventiveness. We are able to do different things working on traditional territory, even in mature areas already worked in the past (such as Egypt), looking at things from another viewpoint.

The intuition of trying something other than the typical game used in the Nile Delta; of applying the discoveries of offshore Israel to Egypt; not stopping at the “data package” as it was, but going beyond; following the regional paths of gas migration and using geological references already tested in other countries (Libya, Venezuela and Kazakhstan), these are typically Italian attitudes and the result of ENI’s worldwide experience worldwide. Our competitors are perhaps more organised, with richer and more numerous teams, but they don’t know how to discard as we do …

“From a professional point of view – my explorer friend concludes – I can say that there is nothing more exciting than seeing what was only a model built from a puzzle of little information being confirmed. It is even more exciting to discover that others before you did not see the potential or declined the invitation to join the game believing it was worthless or too risky. This is exploration, the best job in the world.”

A three-year journey – together with an extraordinary team of geologists, geophysicists, drilling engineers and logistics specialists, experts in IT and economic evaluations – that it was was to tell from the inside.

PS It is said that fortune favours the brave, right? Right. If ENI had not decided to bring forward the exploration of Zohr, we would not be here talking about it …
Marco Alfieri, an Italian journalist, is content strategy and Newsroom manager at ENI’s Daily newsletter at Il Foglio. He was Editor in chief at Linkiesta.it and hasworked at Il Sole 24 Ore and La Stampa.

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