Kurdamir Block (WesternZagros 40% working interest)

The Kurdamir structure now has evidence that supports that Kurdamir is part of a giant structure that extends into the neighbouring exploration block to the north, which is also operated by WesternZagros’s co-venturer, Repsol.

The Kurdamir Block is located north of the Garmian Block. Audited resource estimates of the Kurdamir Oligocene unrisked Contingent Resources total 366 MMbbl of oil, 1.8 Tcf of natural gas and 55 MMbbl of condensate and unrisked Prospective Resource of 1 billion barrels of oil and 1 Tcf of natural gas (all Gross Block P50 estimates).

WesternZagros and its co-venturer, Repsol, submitted a revised FDP to the KRG on May 27, 2016 to develop the significant oil and gas resources discovered on the Kurdamir Block.

The Kurdamir FDP is a phased development that will be executed over a period of several years. Phase 1 is focused on the development of the Oligocene oil and gas discovery and includes a central processing facility shared equally between the Kurdamir Block and Repsol’s adjacent Topkhana Block. The facility will have a capacity of 150 million standard cubic feet of gas per day with liquids handling for condensate and oil. Repsol is the operator of both the Topkhana and Kurdamir blocks. The Phase 1 development plan also includes two deviated gas production wells (existing Kurdamir-2 well plus one new well) and a new dedicated oil leg production well.

It is anticipated that a range of seven to nine production wells will be needed to support the full development and recovery of the current estimates of contingent oil and gas resources on the Kurdamir structure, although the number of wells will ultimately depend on the performance of the reservoir.

Significant unrisked Prospective Resources of 1 Bbbl and 1 Tcf of natural gas (Gross Block P50 estimates) have been assessed associated with the extension of the oil leg in the Oligocene reservoir. The upside associated with these additional resources will be further delineated as part of the phased development approach and they will be incorporated into an expanded development plan as appropriate. The increase in Contingent Resources through additional drilling over the coming years and the structural location of the regional oil water contact for the Oligocene reservoir (no regional water leg has been identified to date) will be significant factors in defining the ultimate size of the Kurdamir development project.

Based on the reservoir performance from the Phase 1 wells a decision will be made on facilities expansion for additional development phases which could include either:

  • Up to two additional gas trains with an additional 150 MMscf/d capacity each (shared between Kurdamir and Topkhana);
  • Full-field oil development with additional oil facilities and no additional gas trains; or
  • Hybrid of the first two scenarios.

The co-venturers and the KRG continue to negotiate a gas sales agreement to provide Phase 1 gas from the Kurdamir and Topkhana blocks to the domestic market. In addition, the KRG is responsible for the construction of a gas pipeline from the Kurdamir/Topkhana block boundary to a tie in point at Chemchemal. A final investment decision to advance the project is anticipated upon completion of the gas sales negotiations, the pipeline engineering, procurement and construction award and approval of the FDP.