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SOMALIA

Somalia 51-101 Report
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Kilimanjaro Capital Ltd. obtained a 5% interest in the Amsas Coriole-Afgoye (ACA) Block, which is owned by Australian based Amsas Consulting. The ACA Block is in the Coriole Basin and the Block flowed oil at Coriole-1 in 1961 at around 700 barrels of oil. The oil was paraffinic and light with an API of 44-47API.The Afgoyee-1 well flowed gas and the enclosure had an estimate of 200BCF of gas of proven Reserves (1P). The total recoverable reserves are estimated to be around 10TCF though more and proper reserve estimates need to be conducted. Although the reserve estimates of the block were very much criticized, the Good news is that all the above eight wells either flowed oil and gas and some had strong shows. The Cariole basin is one of the most underexplored basins in the world that has proven petroleum system presence.

BACKGROUND

The Afgoye-Coriole area was explored in the early sixties by Sinclair Oil as part of a large concession area. Among the wells drilled in this area, Coriole-l (1961) tested minor amounts of oil and gas, and Afgoye-l (1966), located some 30 km from Mogadishu, flowed fairly good gas at a stabilized flow of 6.4-9.0 MMCFD under a surface pressure of 5,600 psi.

The gas discovery was deemed partly-commercial for Sinclair, and the well was plugged and abandoned and the area relinquished. The oil companies which took acreage in Somalia in 1979-81 did not show interest in the Afgoye-Coriole area, mainly because the area was considered gas prone. The Government and IDA (International Development Agency a branch of the World Bank) agreed that the area had a higher potential for gas than for oil.

A seismic survey of the Afgoye-Coriole area was financed under World Bank Credit 1043-SO. This survey identified several interesting features and confirmed that the Afgoye-l well is located on the flank of a promising structure. A detailed seismic survey was then carried out over this structure, financed by a US$1 million advance under the Project Preparation Facility (PPF). In all, 810 line-km were shot under the two surveys, with results of good quality. On this basis, several alternatives were considered for the development of the Afgoye gas resources, including the possibility of promoting the whole Afgoye-Coriole block for a combined oil exploration/gas delineation package in 1990 just before the onset of Somalia's civil war. However, in discussions with several major oil companies operating in Somalia it was found that, while the results of the seismic survey showed several interesting leads, the area would not be so attractive under present market conditions ( of low gas prices and oil being around $15/barrel) as to interest any serious companies in the gas project. As a result, it was decided that the area around the Afgoye feature be separated from the Afgoye-Coriole block for development by the Somali Government, while the rest of the block will be promoted shortly to the international oil industry for exploration in 1990, using the interesting results of the seismic survey as a promotional tool.

RECENT FINDINGS

The newly acquired seismic data in mid 1980's as well as the data from the Afgoye-l well have been analyzed by the Government's technical consultants (Keplinger McCord Lewis) in 1988. Their interpretation indicates that the structure has a horizontal closure of about 10 km2 (3.8 sq mi) and a vertical closure of about 500 ft. It is an east-west elongated anticline about 5 km long and 2 km wide at the Tertiary/Cretaceous boundary (about 12,500 ft), and separated from nearby features by a clearly indicated fault. The structure is estimated to contain about 50 ft of producible sands within a 600 ft gross section with more than 200 BCF of recoverable gas. With proper stimulation techniques, the sands should be able to produce about 5MMCFD per well. These conclusions have been verified by IDA staff and independent consultants employed by IDA.

The development of the Afgoye gas resources would be undertaken in two phases in order to minimize financial exposure. The first phase, to be financed under the proposed project, would be to delineate sufficient gas reserves through two step-out wells from the Afgoye-1 well, which would also re-entered to provide a back-up producer well at low cost. The productive capacity and deliverability of these wells would be confirmed through production testing. The subsequent phase would then consist of the installation of surface facilities, a pipeline to Mogadishu, and retrofitting investments to convert major potential customers to natural gas.

The Geophysical Survey over the Afgoy-Coriole area in Block 9 (IBRD20037 and 20062) consisted of seismic acquisition and processing along approximately 810 line-km. The field work started in August 1982 and was completed in March 1983 without encountering major problems. Data processing was done in Houston, Texas with quality control supervision carried out by the exploration consulting team. The data processing covered the period from August 1982 through June 1983 utilizing an IBM 4341 and Petty-Ray software.

All the state-of-the-art techniques were used, and the processed lines were made available for interpretation as soon as each line was completed. The interpretation phase of the survey was undertaken by the exploration consultant who also used the help of the Somali trainees during part of the work. The interpretation phase ended in early September 1983. The survey indicated that the Coriole structure was on a different trend from the Afgoy prospect, and that there is another separate trend referred to as the coastal structural trend. Faulting is abundant throughout the surveyed area and creates interpretation difficulties.

Seven prospects were identified in the surveyed area, and the exploration consultants recommended to the CMWR that a well be drilled at a location corresponding to their interpretation apex.

PROSPECTS

Contingent Gas Reserves Estimates (Afgoye Area, Millions of Standard Cubic Feet)

Most Likely: 120,603 MMscf

Low: 71,722 MMscf

High: 197,238 MMScf

Contigent Oil Reserves Estimates (Coriole Area, Millions of Stock Tank Barrels of Oil)

Most Likely: 17,348 MSTB

Low: 9279 MSTB

High: 35,915 MSTB

Distance Oil Zone Coriole (1) to Gas Zone Afgoye (1) = 80 Km

* All estimates provided by Chapman Petroleum Engineering Ltd.

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