RAK Petroleum PCL, Dubai, has temporarily suspended drilling the Saleh-5 well off Ras Al Khaimah after consultations with partner RAK Gas LLC, which exercised its 30% back-in option to the field redevelopment project by agreeing to pay its prorata share of past and forward costs.
Saleh-5 drilling costs, including suspension and rig move, are estimated at $35 million. Favorable contract terms allow recovery of all drilling and other capital and operating costs from revenues from Saleh field or adjacent RAK B field, also planned for development, before any tax and royalty payments are made to the state.
The Noble Roy Rhodes jackup will move to nearby RAK Petroleum-operated Block 8 off Oman, where the company is committed to drill three development wells. The Saleh-5 wellbore will be left in a condition that allows reentry, and the rig is available to return to Saleh field at end-2012 even though a search is under way for an alternate rig to accelerate the multiwell redevelopment program.
Separately, RAK Petroleum is in discussions with an undisclosed company that has proposed to pay 100% of the costs of a first exploratory well on the Saleh license to earn partial rights to participate with RAK Petroleum and RAK Gas in acreage that surrounds and excludes Saleh field.
The government of Ras Al Khaimah notified RAK Petroleum that Norwegian company Petrolia ASA through its chairman Berge Gerdt Larsen made a written proposal that the Saleh and RAK B licenses be repurchased from DNO International ASA by RAK Petroleum for a “nominal amount.” RAK Petroleum considers the proposal inappropriate.
The Saleh-5 well was spud on July 3, 2011, as part of a RAK Petroleum multiwell initiative to redevelop Saleh gas-condensate field in 320 ft of water. Difficulties and delays have been encountered while drilling through depleted zones in an attempt to reach the Lower Cretaceous Thamama formation, a proven, producing reservoir that remains largely untapped.
Further technical studies will be conducted before drilling resumes. The eventual outcome of Saleh-5 does not affect RAK Petroleum’s perception of the value of the field given plans to reenter, deepen, and test other wells.
Saleh field, started up in the mid-1980s, has cumulative production of 106 bcf of gas and 14 million bbl of condensate from the Middle Cretaceous Wasia limestone at 14,500-800 ft through seven wells on six wellhead platforms. The field has continued to produce small volumes of gas through an 18-in. pipeline to shore.