The Mediterranean Sea has slipped under the radar of many oil and gas companies, some of which have decided the region is unlikely to hold sufficient reserves worth the long-term effort and investment, despite its proximity to the huge southern European markets.

Recent events have challenged that perception. The sudden and prolific emergence of the Eastern Mediterranean has, with Israel as its catalyst, now got the industry’s attention.

Mediterranean bright spot

The scale of the subsalt gas fields found offshore Israel in the last couple of years by US-based independent Noble Energy Inc. and its partners was unexpected, even by the consortium itself.

The giant Tamar and Leviathan discoveries in the Levantine basin have opened up a new deepwater province – and one that will require a combination of innovative offshore technologies and billions of dollars of investment.

The conservative estimate by Infield Systems places spending offshore Israel over the next five years at more than US $2 billion compared to just $272 million over the 2006-2010 period.

Noble has been working in the Mediterranean Sea since 1998 and operates approximately 3 million gross acres. The company also holds a 47% interest in Mari-B, Israel’s first offshore gas production facility, which came onstream in 2004.

But it is the Tamar field in the Matan license and the Leviathan field in the Rachel license that have grabbed the headlines. Tamar, with gross mean resources of 8.4 Tcf of gas, was the largest deepwater gas discovery in 2009. Leviathan discovered in June 2010 and represents Noble’s largest exploration success in its history, with an estimated 16 Tcf of gross mean resources.

Tamar

Sanctioned in September 2010, Tamar is expected to flow first gas by the end of 2012. Transocean’s Sedco Express semisubmersible is carrying out a development drilling program in approximately 1,686 m (5,530 ft) water depth.

The initial Tamar South development phase will see five subsea well completions, with each expected to produce between 200 and 250 MMcf/d of gas. The gas will flow via two 16-in. flowlines to a newbuild shallow-water platform – currently under construction – which will be adjacent to the existing Mari-B facility. An existing 30-in. pipeline will transport the gas to the Ashdod onshore receiving terminal in Israel. The terminal’s processing capacity will be 1 Bcf/d of gas. The project design and connectivity to Mari-B also is providing for gas injection and withdrawal in the Mari-B reservoir.

Noble estimates gross capital cost for Tamar alone at $3 billion.

Leviathan

Leviathan also is the subject of multiple export studies, with options including both LNG and pipeline scenarios. Further appraisal drilling on the Leviathan field is due to begin shortly. With the field covering 125 sq miles (320 sq km) with several high-quality Miocene reservoirs, Noble already is evaluating development scenarios, including a floating liquefied natural gas (FLNG) solution.

More will be known when two appraisal wells are drilled to further define the resource, with the operator also planning to drill deeper to evaluate additional targets in 2H 2011. Drilling on Leviathan-2, the first appraisal well, had to be ended when water was discovered flowing to the sea floor from the wellbore. The source was a water sand that flowed behind the surface casing. Fortunately, wellbore monitoring indicated no hydrocarbons in the produced water, but drilling had not reached the depth of the targeted gas intervals discovered in the Leviathan-1 well.

Dalit, Shimshon

The smaller nearby Dalit gas discovery at 500 Bcf likely will be tied into the existing infrastructure at a later stage. Noble believes there is significant upside in the area, and it has four exploration and appraisal wells planned for drilling by the end of this year.

Noble’s success has led other players to take an active interest in the region. One of the early “second movers” behind Noble is fellow US independent ATP Oil & Gas Corp.

The company, via wholly owned subsidiary ATP East Med BV, recently acquired the deepwater Shimshon, Daniel East, and Daniel West licenses in the Levantine basin. ATP anticipates spending between $3 and $5 million this year on acquisition costs, seismic, and preliminary exploration plans.

ATP East Med, as operator of the licenses, also has assumed a drilling contract with Transocean Drilling Israel Ltd. for the Sedco Express on Shimshon, where it anticipates initial drilling by 2Q 2012. The operator expects to spend up to $29 million drilling an initial well on the license. An independent reservoir engineering evaluation from Lockwood & Associates estimates gross potential natural gas reserves at Shimshon between 1.5 Tcf and 3.4 Tcf of gas.

ATP East Med is participating in two other licenses that are awaiting approval by the Israeli Ministry of National Infrastructures.

According to ATP, the cost of acquiring the five licences was “an extremely small cost for extremely large potential, with the ability to enter a world-class area during the early stages of exploration and development.”

Transocean’s Sedco Express semisubmersible is carrying out a development drilling program in the Mediterranean Sea on Noble Energy’s Tamar field. (Image courtesy of Transocean Ltd.)

Other areas

Both Cyprus and Lebanon are gearing up for offshore licensing rounds, and it is no surprise to find that Noble Energy already holds acreage offshore Cyprus – Block 12, awarded in the republic’s first licensing round in 2007.

The second license round is scheduled to open before the end of this year and will include all remaining open exploration blocks. Petroleum Geo-Services (PGS) already has provided the Cyprus Commerce, Industry, & Tourism Ministry with 2-D seismic coverage over the blocks as well as one 3-D survey. The data covers an offshore area of more than 50,000 sq km (19,300 sq miles).

In Lebanon, meanwhile, the Ministry of Energy is planning to launch its first licensing round in 4Q 2011.

More than 25,000 sq km (9,700 sq miles) of acreage will be on offer north of the oil and gas producing areas of Gaza and Israel. The offshore area is covered by extensive 2-D – an extension of a recent 2-D dual-sensor (GeoStreamer) survey offshore Cyprus – as well as 3-D seismic data.

The data reveal several attractive hydrocarbon plays where the primary focus would be in the Miocene subsalt plays, the Jurassic/Cretaceous horst blocks, and Miocene stratigraphic pinch-outs.

The major successes offshore Israel have stoked industry interest in the Levantine basin, with analogues to the drilled structures there anticipated offshore both Cyprus and Lebanon. Both countries are expected to offer attractive fiscal terms.

New reserves could give stakeholder nations a vital and stable source of domestic energy supply.

Subsea hot tap intervention off Egypt

Egypt has for a decade been a world-class province in terms of subsea development taking place in its Mediterranean Sea acreage.

Majors such as BG Group, Shell, and BP, and more recent arrivals such as Germany’s RWE-Dea, are investing billions of dollars in the exploration and development of both shallow-water and deepwater areas, mainly in the West Nile Delta in concessions such as North Alexandria and West Mediterranean Deep Water. This has required the use of innovative subsea technologies and long-distance remote tiebacks of more than 100 km (60 miles) in some cases. Concessions such as North Alexandria will see nearly $9 billion invested in the first phase of its development alone.

The need, therefore, to be able to successfully carry out operations such as the tie-ins of new satellite fields is vital.

A recent example involved a subsea hot tap intervention operation to facilitate the successful tie-in of a new 36-in line to an existing deepwater 26-in gas export pipeline.

The new pipeline formed part of Burullus Gas’ West Delta Deep Marine (WDDM) Phase VII development project. The operation was carried out by T.D. Williamson SA (TDW) for Technip on behalf of Burullus Gas.

TDW’s primary objective was to facilitate the tie-in program without shutting down production. After completing two traditional 16-in. hot tap operations on the 26-in. gas export pipeline, the company executed an innovative 20-in. hot tap on the 36-in. line on a blind weld-neck “tappable flange” made of duplex stainless steel.

To prepare for the hot tap operations that would take place in up to 95 m (300 ft) water depth, TDW carried out extensive engineering, design, and preliminary testing at its facility in Nivelles, Belgium.

A special hot tap tool known as a “cutter” that would effectively cut the duplex plate was customized for the operation. This special cutter, which is more rigid than the standard tool, is vibration-free and features a specially manufactured removable cutting teeth system for use on specific duplex tools.

For approximately three weeks TDW worked from Technip’s dive support vessel Wellservicer to carry out all three hot taps. The innovative hot tap on the duplex tappable flange required just six days to complete. Throughout the process, a prevailing pressure of 1,450 psi was successfully maintained in the 26-in. gas export pipeline.

Offshore