Zag BasinZag Exploration Reconnaisance Licence
*Island’s interest reduces to 15% if ONHYM, the State oil company, exercises its right to back-in in the event of a commercial discovery The current work programme includes reviewing existing studies; conducting geological field studies and a geochemical study; acquisition, processing and The Zag Exploration Reconnaissance Licence lies within the Zag-Tindouf Basin of Southern Morocco and Western Algeria and is the westernmost of the prolific hydrocarbon-producing Palaeozoic Basins of North Africa. The Palaeozoic and Triassic reservoirs contain some 43% of known oil and 84% of the known gas resources of the entire North African region, with more than 460 billion barrels of oil equivalent of recoverable hydrocarbons discovered in 350 separate accumulations. The Zag-Tindouf Basin is predominantly a gas-prone hydrocarbon system. As a result of this the basin is poorly explored because historically it was considered remote and lacking production and transportation facilities. Large gas discoveries in Algeria and Libya, planned export gas pipelines to the European market together with the potential to transport gas to Morocco’s Atlantic Margin for conversion to LNG and export to the United States market, the lack of a strategic gas reserve and gas storage facilities in Morocco, the renewed political focus on security of supply issues, have revitalised industry interest in the Zag-Tindouf Basin, as demonstrated by the fact that Petro-Canada holds acreage immediately to the north of and adjoining Island’s licence interest. The Zag-Tindouf Basin contains in excess of 8,000 metres of sediments and therefore the central parts of the basin have the potential to contain mature hydrocarbon source rocks. Despite this only eight exploration wells have been drilled in the Zag Basin, between 1961 and 1965. There is no indication that seismic data were ever acquired in this basin. Two wells encountered gas shows in the Palaeozoic. The Morcba-1 well, drilled in 1965, was classified as a gas discovery after testing 0.3 million cubic feet of gas per day (‘mm cfgpd’) from Silurian reservoirs at 650 metres. The Zag-Tindouf Basin extends into Western Algeria and shares a common tectonic and sedimentary history with the Reggane Basin of South-Central Algeria. The Reggane Basin has been more extensively explored between 1957 and 2005. Gas has been tested from Ordovician, Lower Devonian and Carboniferous reservoirs, at depths between 1,500 and 4,500 metres subsea, at rates varying from 1.17 to 33 mm cfgpd. B.P. made two gas discoveries in 1980 and Sonatrach drilled ten exploration wells from 1995 to 2005 in the Reggane Basin. Estimates of discovered gas-in-place up until 2003 are 1.4 tcf (Petroconsultants). Repsol is reported to have drilled 13 exploration wells since 2003 in the Reggane Basin and to have made 5 gas discoveries with proved and probable resources in the order of several tcf. From the available well data and surface rock outcrops, the Zag-Tindouf Basin is interpreted to contain the same prolific Silurian source rocks that are present in the Algerian and Libyan hydrocarbon-producing basins and to have sourced the gas discovered to date in the Morcba-1 well drilled in 1965. The Zag Basin is in the earliest stages of exploration with drilling prospects yet to be identified. Initial geological studies by the Operator, San Leon Energy Ltd, have been completed and have demonstrated the presence of an active petroleum system. A 19,750 line-kilometre aeromagnetic survey will be acquired, processed and interpreted during the latter part of 2008. The objective will be to delineate deep basin structures over which 2D seismic will be acquired, subject to converting the Reconnaissance Licence into an Exploration Licence, to further assess the potential for the presence of fault block and folded anticlinal traps similar to those containing the hydrocarbons in the Palaeozoic oil and gas fields of Algeria and Libya. The Zag Basin in Southern Morocco has the potential to be a significant source of gas in North-West Africa, close to the European Market, in future years. Post year end, (October 2008) Fugro Robertson has completed for the Zag licensees a scoping economic analysis and feasibility study for a potential gas development in the Zag Basin. The results are positive and support the potential for the Zag Basin to make a significant contribution to the development of indigenous gas resources in Morocco in the event that future exploration drilling proves successful. | ||||
