Sharjah to drill more wells at Mahani gas field

MEED    22 January 2021 (Last Updated January 22nd, 2021 15:45)

While state energy firm Sharjah National Oil Corporation is pressing ahead with drilling activity in the emirate’s concession area B, its partner Eni has yet to make a commercial discovery in areas A and C.

Sharjah to drill more wells at Mahani gas field
After the completion of the transaction, Equinor and YPF will hold 35% each, with Shell holding the remaining 30% interest in the CAN 100 block. Credit: drpepperscott230 / Pixabay.

While state energy firm Sharjah National Oil Corporation is pressing ahead with drilling activity in the emirate’s concession area B, its partner Eni has yet to make a commercial discovery in areas A and C.

Government-owned Sharjah National Oil Corporation (SNOC) is planning to drill at least two more production wells at the Mahani gas field, as part of an extended commercial well-testing programme to determine the extent of reserves.

SNOC plans to drill a second production well at the Mahani field, located in concession area B in the emirate of Sharjah, in the second half of this year, and a third well in 2022, CEO Hatem al-Mosa told MEED.

SNOC announced the start-up of the Mahani-1 gas well on 4 January, along with its partner Italian energy major Eni, marking the commencement of gas production from the Mahani field. The well is now connected to an existing 23 kilometre-long pipeline, ready to produce gas and liquids for processing at the Sajaa gas processing plant owned and operated by SNOC.

The announcement came within one year of the discovery of gas at the Mahani field, the first such onshore hydrocarbons discovery made in Sharjah in 37 years.

“[The] Mahani-1 well tested at 50 [million standard cubic feet a day] and its current production capacity is at least that much.  However, SNOC will be producing at variable rates for testing purposes for the next 12 months, as part of an extended well-test programme,” Al-Mosa told MEED.

“Any rate we produce from the well is of commercial value,” he added.

Further exploration

SNOC and Eni each hold a 50 per cent stake in the Mahani field, with SNOC being the operator of area B, as part of the concession agreements that were signed in 2019 following Sharjah’s hydrocarbons upstream licensing round.

Eni won Sharjah’s first upstream licensing round, conducted by SNOC, in January 2019 by taking stakes in the three concession areas offered in the exercise. Eni won 75 per cent, 50 per cent and 75 per cent stakes in areas A, B and C, respectively, with SNOC holding the remaining stakes in those concessions, making Eni the sole foreign firm Sharjah partnered with for its upstream exploration drive.

Eni, as the operator, “is fulfilling its obligations under the concession agreement in areas A and C,” Al-Mosa told MEED. SNOC said in its 4 January press release that Eni is “actively progressing with exploration” in those areas.

However, commercial gas production from concession areas A and C “will be contingent on [Eni] making a commercial discovery, which has not happened yet,” Al-Mosa added.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here