PROMISING OIL AND GAS DISCOVERIES IN NORTH KUWAIT

UNCLAS KUWAIT 000676 SIPDIS SENSITIVE SIPDIS LONDON FOR TSOU DEPARTMENT OF ENERGY FOR IE EB/ESC/IEC FOR GALLOGLY, DOWDY E.O. 12958: N/A TAGS: ENRG EPET ECON BEXP KU OIL SECTOR SUBJECT: PROMISING OIL AND GAS DISCOVERIES IN NORTH KUWAIT This cable is sensitive but unclassified; please protect accordingly. Not for Internet distribution. ¶1. (U) On February 28, local newspapers reported a "major onshore gas discovery" with "commercial potential" in north Kuwait. The discovery, at the well named Umm Niqa 1, is reported to be in the Middle Jurassic Najmah-Sargela formation. Earlier light oil discoveries in late 2005 prompted engineers to look for gas in the same layer, according to the news reports. "Major quantities of natural gas" were reported to be found in this formation, at a depth of about 14,300 feet. ¶3. (SBU) An American oil engineer with insider knowledge of the new discovery told Econ Officer on March 1 that "the gas is really there" and that the Ministry and KOC were "very excited" and that "the excitement is real." He said that the Energy Minister had that morning ordered KOC to move all of its deep rigs to the north of Kuwait to maximize the potential for testing in this and other nearby wells. He added that the condensate is of "high quality" but that it was coming out of fractured rocks, and there are still many unknowns. ¶4. (SBU) The engineer explained that it could now take anywhere from ten months to a year to properly drill and test to see how much gas was available. This timeline, he added, would be based on the availability of proper equipment. He said that it could take KOC up to two months to reposition the necessary equipment, and that some drilling operations elsewhere may have to be shut down. He said that two wells would be put on long term tests for now. Once the testing is complete, then KOC would determine how many wells are needed in the area, and the infrastructure could be planned to make use of the gas. Part of that process would be the conversion of existing power plants to handle the new gas. The engineer estimated that the entire process, from the beginning of testing to production of usable gas, could be three to five years. "But since it's Kuwait," he sighed, "better to estimate five years." ¶5. (SBU) According to this engineer and other sources within the Kuwait oil sector, KOC is also attempting to drill down to the Khuff formation, which is the same formation that contains the major gas reserves in Qatar. In Qatar this layer is found at 14,000 feet, but in Kuwait it is at 19,000 feet, and may have "some associated salt and water problems," according to the engineer. It is unknown whether the Khuff formation within Kuwait can produce any significant gas reserves. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * LEBARON