London Traded Company targeting deeper horizons in a developed Pre-Caspian Basin Licence, Russia

London Traded Company targeting deeper horizons in a developed Pre-Caspian Basin Licence, Russia

Russia Overview

During my internship at MapStand, as one of my tasks I was challenged to research and collect geospatial open source data for Russia, with an emphasis on the oil and gas industry. However, while quality checking the data, the Bortovoy Licence in the Pre-Caspian basin peaked my interest. Although, this is a developed licence, that has been producing for a number of years, there is still some significant exploration potential in the east of licence and the deeper reservoir targets in the west.

The holders of the licence, Zoltav Resources Limited, are an AIM listed company on the London Stock Exchange. Currently, there’s an ongoing project in evaluating the production potential of deeper horizons within the licence, by interpreting the new seismic data acquired in 2017/2018. Based on these results the first exploration well is scheduled to be drilled in Q1 2019.

Zoltav Resources Limited are the holders of the Bortovoy Licence; a 3,125 km2 licence in the Saratov Region, at the northern margin of the Pre-Caspian Basin. The licence holds nine known oil and gas fields, with proved reserves of 131.2 mmboe (plus 7.14 mmboe probable).

Bortovoy Area

Overview of Bortovoy Licence (Source:MapStand Limited)

Brief History

During the Soviet times, there was extensive geological exploration work carried out across the entire region including the Bortovoy Licence. Nevertheless, after the first gas discoveries in the early 1940s, it was overshadowed by its larger hydrocarbon bearing neighbouring regions.

Diall Alliance acquired Bortovoy Licence area in 1999 through a government auction. The commercial production of oil/condensate commenced in 2003, after initial exploration. In 2007, Diall Alliance conducted a trial of oil production at three Western Fields (Karpenskoye, Zhdanovskoye and Mokrousovskoye) in order to ascertain the long-term productivity of the existing wells; achieving 300 bbl/d compared to the previous 50 bbl/d.

The increasing demand in Russia for gas and the government’s stated commitment to liberalising industrial gas prices, resulted in a continued increase in Russia’s domestic gas prices. This resulted in the gas, previously being flared, becoming of significant economic value and leading Diall Alliance to shift its focus from oil/ condensate to gas production. A gas processing plant was acquired from Chevron in 2007 and oil/condensate production was suspended in 2008 until the Western Gas Processing Plant facilities were installed. The gas processing plant began producing gas and condensate commercially in January 2011, meanwhile oil production and sale recommenced in May 2011.

Diall Alliance became a subsidiary of Zoltav Resources Limited in 2014. The new focus is on restoring the plant to its full production capacity and in 2015 the plant turned profitable.

Geology

Pre-Caspian basin depression occupies the northern portion of Caspian sea and the large plain to the north of the sea. This is formed by Riphean- Middle Devonian rifting and ocean spreading.

At the northern margin of the basin (near Bortovoy Licence) the sedimentary succession can be separated into three packages: subsalt (Devonian-Lower Permian carbonates and clastics); thick salt deposits (Lower Permian (Kungurian)) and suprasalt (Middle Permian-Quaternary carbonates and clastics).

Pre-Caspian Stratigraphy


The Pre-Caspian basin is bound by an east/ west trending escarpment in the subsalt Paleozoic strata. The southern flank of the escarpment plunges thousands of meters towards the centre of the Pre-Caspian basin. In the subsalt Palaeozoic strata, there are three thick shallow water carbonate formations, which were deposited from the Upper Devonian- Lower Permian, and are interbedded with clastic sequences. These carbonate formations all have a barrier reef trend, grading basinward into deep water organic rich shales (contributing source rocks). The barrier reefs are good reservoir rocks, containing porosities around 10-11% and are overlain by an effective seal in the form of a Kungurian thick salt sequence. The top of the three barrier reefs (Lower Permian in age) act as the primary reservoirs of oil and gas in the area. Nonetheless, the deeper Devonian carbonate reefs hold significant potential for commercial oil and gas production, that Zoltav is looking to exploit.

Unprocessed (a) and processed (b) seismic line of the Pre-Caspian basin structure in Kazakhstan

Unprocessed (a) and processed (b) seismic line of the Pre-Caspian basin structure in Kazakhstan, which is similar to that of the Bortovoy Licence (source: Okere and Toothill, 2012)


A combination of thick salt deposits and intensive subsidence of the basement has created two structural packages; suprasalt and subsalt. The distinct geometrical differences are due to the suprasalt having a large salt tectonics influence, while the subsalt structure directly relating to the movement of the basement and its relief.

Current Production

accumulations and infrastructure in the west of the Bortovoy

The accumulations and infrastructure in the west of the Bortovoy Licence (Source: MapStand Limited)

The Western area of the Bortovoy Licence is more developed than the east and has four established fields. However, production is limited to only two oil/gas fields: Karpenskoye and Zhdanovskoye, both targeting the Lower Permian carbonate horizons. These fields have a combined eleven gas and two oil wells, which are all connected to the Western Gas Processing Plant and are working via artificial lift.

Zoltav Western Gas Processing Plant Production

Western Gas Processing Plant Production (Source: Zoltav Resources Limited)



The wells are now in natural production decline (the 2015 increase in gas production is due to Zhdanovskoye wells 19 and 103 being put into early production). The significant drop in production over the past year is due to:

1) Underperformance of new Zhdanovskoye Well 108 and Karpenskoye Well 117, owing to both having high water cuts, ultimately leading to the shutdown of Karpenskoye Well 117

2) New sidetrack Zhdanovskoye Well 30 provided lower than anticipated rates of production

3) The shutdown of Zhdanovskoye Well 8 due to a water influx

Operation Highlights

Zhdanovskoye Well 108 and Karpenskoye Well 117 were drilled, with the aim to restore the gas plant to full operational capacity and reduce the production decline. The failure of the wells is attributed to the complexity and significant variation of the reservoir thickness in the Permian basin, hence drilling has ceased until seismic data has been reinterpreted.

In 2017, Zoltav decided to transition its focus from production to exploration. The intention was to keep the Permian fields operating, while exploring the potential reserves from the Devonian, Carboniferous and other Permian horizons. From 2017-2018, a 341 km2 3D seismic survey was carried out in the North Mokrous area in the Mokrousovskoye block to assess the deeper Devonian and Carboniferous structures at a depth of up to 3,500 – 5,000 m. Zoltav is looking to commercialise these deeper structures, as they could have transformational impact on the size and production profile of the Bortovoy asset. Following the interpretation of the seismic there should be sufficient information to position the first Devonian well, which is scheduled to be drilled in Q1 2019. They are also looking at re-entering into Krasnokutskoye Well 14 (Soviet Devonian Well) to further evaluate the development potential of the Devonian structures.

East Development

Although, the western area of the Bortovoy Licence is quite developed, there is still much exploration to be done in the east, with currently only five oil/gas fields discovered.

Prospects and Accumulations in the Bortovoy Licence

Prospects and Accumulations in the Bortovoy Licence (Source: MapStand Limited)



Ivan Antonov is a phd student who undertook a 10 week internship at mapstand.
The original of this blog is posted on LinkedIn.

This blog represents the personal opinions and views of the author and does not necessarily reflect the views of MapStand.

blog comments powered by Disqus