New law, seismic information smooth Nicaragua licensing

Feb. 14, 2000
A licensing round is to commence early this year in Nicaragua.
NICARAGUA-2

A licensing round is to commence early this year in Nicaragua. This article and the previous introduction regarding the geology of the Pacific and Caribbean areas are meant to provide advance information on petroleum prospectivity.

Pacific side, Sandino basin

Two different source rocks were recognized in the regional geological study conducted in 1993:

  • On the Santa Elena Peninsula, (Fig. 2), six outcrop samples of Cretaceous shales were analyzed, indicating excellent, oil prone source rock. TOC values varied from 4.41% to 54.8%, with dominantly sapropelic, marine kerogen types I and II. Visual kerogen concurred with the pyrolysis data, with sapropel dominating in five out of six samples. The shales occur interbedded with volcanics in the upper part of the Nicoya Complex, and their accumulated thickness locally reaches more than 100 m.
  • Black shale intervals of Eocene age were analyzed at several localities in the Rivas Isthmus. The TOC values ranged from 0.29% to 0.95% in weathered samples, and higher values are indicated in unweathered samples. Pyrolysis data and Ro indicated a mature source rock.

A number of prominent structures and play models have been identified, some of which are shown in Fig. 4.

  1. On the structural highs of the northwestern part of the Outer Arc, hydrocarbons in the Cretaceous section may have been trapped in fault blocks or against truncated packages of fractured cherts and siliceous limestone.
  2. Eocene and Oligocene carbonate buildups have been seismically delineated in the offshore region (Fig. 4). The dimensions of these features are approximately 135 sq km and 85 sq km, respectively.
  3. Large structural closures occur on the Miocene anticline features in the central part of the basin.
  4. Pinch-outs against broad, deeply eroded folds developed along the outer arc during the Late Eocene are considered potential stratigraphic and structural traps.

Caribbean side, Miskito basin

Hydrocarbon generation in the Caribbean margin of Nicaragua is proved both by the oil and gas recovered from well testing, as well as from geochemical analyses undertaken in well cuttings and outcrop samples. The Cretaceous and Lower Eocene are expected to provide the main sources for oil and gas in the basin:

  • A Cretaceous black shale sample from an outcrop in the Siuna county of northeastern Nicaragua (Fig. 2) was analyzed and the results indicates an overmature source rock.10 This might be due to the regional intrusive and volcanic activity in the northern Nicaraguan sector. The analysis indicates that, originally, the sapropelic part of the kerogen was as high as 77%. This implies that Cretaceous shales may act as excellent source rocks in the Miskito basin, under a normal geothermal regime. It is known that the geo- thermal gradient in the Miskito basin varies from more than 3.5° C. in the northwest to about 3.0° C. in the central part and decreases to about 2.5° C. in the south.
  • In the Huani-1 well in the north, oil was tested in the Eocene, but no source rocks were identified in the analyzed wells of the northern area. It is an unresolved question whether the source is Eocene or possibly older, perhaps equivalent to the Siuna sample.
  • Production tests carried out in Lower Eocene carbonates in the well Perlas-1 recovered 350 b/d of 26° gravity oil. Geochemical data also proved the presence of a good oil-prone source rock in an interval more than 500 m thick (Table 1). This Eocene interval is expected to be present over large parts of the platform area.

Reservoirs and plays

Reservoir rocks are developed both in the clastic sections and in the carbonates.

  • Oligocene-Miocene sandstone beds show an average of 25% porosity in a 600-1,000 m thick series. Also Miocene carbonates exhibit 20% average porosity, decreasing to 10% for Oligocene carbonates.
  • The Eocene reservoirs are mostly carbonates, which tend to have better porosity in the northern area. The thickness ranges from 200-300 m.
  • The Cretaceous carbonates have a regional extent in Northern Central America and southern Mexico. They are present in the central and northern Nicaragua, where they reach 1,000 m in thickness. Also Cretaceous rudistic limestones are exposed in the Pacific of Costa Rica, and their equivalents may be looked for in the uplifted blocks of the Caribbean platform of Nicaragua.
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Profile C-1 (Fig. 5) shows a seismic line obtained in the 1970s by Union Oil Co. of California that depicts Eocene reef development in the north. The quality of this seismic is not sufficiently good to unravel the sedimentary and tectonic development. In contrast, profile C-2 (Fig. 5), which is a preliminary section of the 1999 Fugro-Geoteam survey, is of very good quality. The particular profile shows the structure of the Providencia graben, which was formed since early Tertiary. The new nonexclusive 2D seismic acquired this year will certainly bring out many other options for hydrocarbon exploration in the Caribbean margin.

Exploration opportunities

A new attractive hydrocarbon law was approved by the legislature in 1998. The aim of the law is to set out the general legal scheme in sufficient detail and at the same time preserve the necessary flexibility for negotiation of petroleum exploration and exploitation contracts by the international oil companies.

Legal, economic, and administrative infrastructure is being established to warrant a successful accomplishment of the first bidding round for exploration rights, including both margins, early in 2000.

Concession or production-sharing contracts or any other type of agreement can be negotiated under the approval of the Executive Power.

The maximum contract area will be up to 4,000 sq km, joined at least in one point.

All specific information regarding the first bidding round, including the Hydrocarbon Law, the Bylaw, fiscal regime, and bidding terms is available at http://www.ine.gob.ni, INE's website.

Acknowledgment

This study was supported by NORAD-INE (Norwegian Agency for Development Cooperation & Nicar- aguan Energy Institute). We want to express our gratitude to Gregorio Escalante, Fridfjof Riis, and Einar Bandlien for their suggestions in the final details of this work.

References

Barboza G., Astorga A., Bottazzi G. Barrientos J., Mu

The Authors

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Mauricio Darce Rivera is director of INE's Oil Development Directorate. He has participated in minerals and petroleum exploration in Nicaragua for more than 20 years. He obtained BA and LSc degrees in geology from the University of Costa Rica, an MSc degree in geology from the Autonomous National University of Mexico, and PhD degree in geology from the University of Stockholm.

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Dania Baca Rodríguez is the head of the exploration department of the Petroleum Development Directorate of INE. Since 1987, she has been working as an exploration geophysicist and has been involved in the promotion project of hydrocarbon exploration in Nicaragua. She holds a post degree in petroleum exploration from IKU Institute, Trondheim, Norway, and a degree in physics from the National University of Nicaragua.

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Manuel Duarte Morales has worked as an explorationist since 1988 and has been involved in several seismic interpretation projects of the Pacific and Caribbean margins of Nicaragua. He graduated as a civil engineer from National University of Nicaragua and holds a degree in seismology.

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Guillermo Barboza Guitierrez has been involved in seismic interpretation of the Costa Rica and Nicaragua Pacific and Atlantic margins for well over a decade. From 1992-94 he was also project manager for both countries' Pacific coast exploration. He obtained a BA degree in geology from the University of Costa Rica and did postgraduate study at Continental Shelf Institute, University of Trondheim, Norway. E-mail: [email protected]

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Alberto Fernández is associate director of the Hydrocarbons Directorate of Costa Rica. He has worked in Recope since 1980 as an exploration geologist, later as manager of the geology department (1988-92), and until now as executive coordinator. He obtained BA and BS degrees in geology from the University of Costa Rica and a master's degree in business administration from Universidad Interamericana of Costa Rica.