RE: RE: Drilling in July - Margin500EOIM
Your post indicates that you are knowledgable of the Iraq-Kurd; however, hopefully you realize that if the CS field contains around 30 million recoverable barrels, then this project will be spectacularily uneconomic.
The historical reports do confirm the presence of light gravity oil, but the big question has always been the size of the resource. With new seismic, lfd should have a good grasp on the size of the structure, but only a new drill with modern logs and reliable test data will be able to confirm reservoir quality and hence reserve size.
The Ministry of Oil in Baghdad has always considerd CS as an undeveloped oil field. The lack of development can be attributed to several factors including the lack of Iraqi desire to provide any benefit to the kurds, but also perhaps a realization that the reported tested rate at CS is much smaller than the production from other fields in Iraq and therefore there was no incentive to develop this smaller accumulation.
Fast forward to lfd, operating under the terms of a psc which typically returns 15% to 10% of the production to the oil company or companies who are paying 100% of the costs, and field size becomes a major issue. Certainly if reserve size is near 30 million, the oil companies efforts would not be commercial. LFD has published a most likely reserve size in excess of 100 mmb with the possibility that the field could be much larger if all goes well. WZR recently published gross reserves at their new Sarquala discovery of approx 75 mmb, which likely is the economic cut-off. WZR has several seismically mapped additional structures which could add to their reserve base and hopefully lfd will be able to do the same with additional seismic.
So a realistic prediction would be that oil "discovery" at CS is almost a given. To suggest what the size of the field will be remains pure speculation.