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The purpose of “ZAAB Invest” in oil-and-gas sector is the creation of highly effective oil and gas production resources.
It is common knowledge that ninety percent (90%) of the fuel and energy market in the Russian Federation is controlled by nine vertically integrated companies. It is therefore critical for smaller developing companies to carefully select blocks within which they plan to invest. This requires careful evaluation of risks associated with the industry such as geological, market, operational and legal risks.
«ZAAB Invest» has a strict policy of risk assessment prior to investment and has invested heavily to ensure that it has the resources required to scientifically assess license blocks within which it has an interest and it uses the latest technologies in oil and gas geology and geophysics such as integrated basin analysis and lithofacies analysis of offset sections as well as in the drilling and production processes. “ZAAB Invest” uses the latest models to assess economic and legal risk.
«ZAAB Invest» currently has major investments in Ciscaucasia The company holds the following licenses for the right to use the subsurface resources in this region:
1. Vyselkovsko-Kubanskiy block within the Krasnodar Territory (license KRD 13424 NP for geological study with the purpose of exploration and identification of oil and gas deposits for a five year period; the license was granted on December, 27th, 2005)
.2. Southern-Ermolinskiy block within the Republic of Kalmykia (license ELI 00238 NR for geological study, exploration and production of hydrocarbon resources for a 25 year period; the license was granted on January, 17th, 2006).
3. Evseevskiy block within the Stavropol Territory (license STB 00895 NR for geological study and production of hydrocarbon resources for a 25 year period, the license is received on June, 23rd, 2006).
4. Maryinskiy block within the Stavropol Territory (license STB 00906 NP for geological study with the purpose of prospecting and estimations of deposits of hydrocarbon resources for a 5 year period; the license was received on October, 11th, 2006).
HOT Engineering GmbH have been engaged carry out an audit of the hydrocarbon resources of the first three blocks. Their study has confirmed good prospects for both oil and gas,
Regionally the territory of Ciscaucasia mostly settles down within the Scythian plate which is stretched along southern territory of the East-European platform from the Caspian up to the Azov and Black seas. It is limited by the Rostov ledge of the Ukrainian and the Karpinsky's range from the north. Southern restrictions of the region is the Alpine construction of the big Caucasus.
In a tectonic structure of Ciscaucasia there are the following large tectonic elements: the Azov outshot, Karpinsky's Ridge, Irklievsky deep, Kanevsko-Berezanskaya elevation system, West - Stavropol deep, East Kuban deep, Stavropol anticlinal fold, the Zone of the Manichsky downfolds, East Stavropol deep, the Prikumskaya elevation system, Timashevskaya bench, Nogayskaya bench, the North monocline of Central Caucasus, West Kuban fore deep, Tersko-Caspian fore deep.
(1)
The Viselkovsko-Kubansky block covers the territories of Korenovsky, Viselkovsky and Ust-Labinsky within the Krasnodar Territory. The total block size is 1141 km2 . The block has a well-developed infrastructure. Besides the asphalted autoroads within the block, in its northern and southern parts there are railways, namely Tihoretsk - Krasnodar and Kropotkin – Krasnodar. There is an efficient supply of power through two power supply lines of 110 kW and 220 kW that run through the block. Long-distance pipelines also pass through or are in close proximity to the block, these are CPC (Caspian pipeline consortium), 1020 mm, Tihoretsk - Novorossisk, 530 mm, Tihoretsk - Tuapse, 530 mm and the main gas pipelines of Goluboy potok, 1420 mm, Timashevsk - Maikop, 720 mm,and Berzanskoe - Nekrasovskoe – (one line is 720 mm and another one is 1020 mm). The nearest export port is Novorossisk (180 km).
Tectonically, Vyselkovsko-Kubansky block is confined to the zone of the south closing of Kanevsko-Berezansky swell and the north-west side of the East-Kuban deep. Within the block there are the Ust-Labinskoye and North-Ladozhskoe gas condensate fields, discovered in the 1960’s and 70’s . These fields are no longer productive. Productive deposits here - are the terrigenous deposits of the lower Cretaceous.
It is important to note that at the time prospecting works on the area where limited by the technology available at the time that limited prospecting to low cretaceous deposits. Today’s technology allows accurate prospecting in the Jurassic and Triassic fields.
After the announcement of tender to get the license for geological studying of the Vyselkovsko-Kubanskiy block, the geological department of LLC «ZAAB Invest» had analyzed the geological materials of a considered block and territories adjoining to them. As a result the positive conclusion about oil and gas bearing capacity of Jurassic and Triassic fields, especially in pre-bead part of the East-Kuban deep has been received.
Upon being awarded the license for the geological study of the Vyselkovsko-Kubanskiy block the geological department of “ZAAB Invest” analyzed the geological materials of block and adjoining area. The results where positive in that the oil and gas bearing capacity of Jurassic and Triassic fields, especially in pre-bead part of the East-Kuban deep, had been confirmed.
Prospecting works have not been carried out at the block since the early 90’s.The license agreement provided for the carrying out of 250 linear km of seismic works by the MOGT 2D method in 2006. These works, in fact more as 750 linear km of seismic data, was carried out together with the reinterpretation of historic data for the identification of features within the block that show structures of high priority for geological exploration . The basic target objects were rocks of the precretaceous period.
As a result of the work carried out, new data on a structure of Jurassic and Triassic formation on the block has been obtained.
The basic characteristics of the structures revealed after the studies at the block as well as the value of the hydrocarbon resources are listed in Table 1.
Table 1
The characteristic of structures of Vyselkovsko-Kubanskiy license block
On the northeast part of the license block (the north-east side of East-Kuban deep) the East-Buzinovskiy reef structure of Triassic formation has been discovered, which is shown up reliably enough with regards to characteristic features on the time seismic sections.
Close to the considered reef construction of Jurassic-Triassic formation the Businovskiy anticlinal structure was set up. According to seismic data, within the license block on the north-west side of East-Kuban deep there are large breaks and structural-tectonic traps in the Jurassic-Triassic formation - Southern-Buzinovskiy I, Southern-Buzinovskiy and Irinovskiy structures are connected with breaks.
We can single out the South-Kirpilskiy trap in the Eocene – lower cretaceous formation, following reinterpretation is it most likely filled with gas.
In the south-west part of the licensed block, on the time seismic sections in the lower cretaceous formation traces back the area to clinoform formations, which can represent highly permeable reservoirs. The identification and selection of relevant traps in this formation, modern seismic investigations with sufficient density need to be carried out.
It is necessary to note, that, according to the results achieved from the reinterpretation of seismic data, in the central and the north-west part of the licensed block (the area of Kanevskiy and Berezanskiiy reef) in the terrigenous deposits of the Lower Cretaceous 5 new small structures were identified, representing traps of an anticlinal type, most likely saturated with gas.
The hydrocarbon resources were not counted up.
According to the results of detailed analysis of seismic data available in the beloglinnaja unit formation of the upper Eocene the large lithologic trap saturated with gas has been selected, it was named Central lithological trap.
It should also be noted that in 2006, high-resolution electric prospecting [SSN-SSE - sounding by standing electromagnetic field in the zone with use of secondary seismo-electric effect , induced polarization (SSN- IP) and induced polarization (IP)] , that affirmed the gas saturation of set trap was carried out .
The processing of old data using new technologies have shown that whereas the official data in the tender documentation has shown the hydrocarbon resources of the Vyselkovsko-Kubanskiy block were estimated at 20 mln tones of oil (equivalent D1 category) the new results show an estimate of recoverable resources are 70.7 mln tones (equivalent C3). The hydrocarbons resources in the upper and lower Cretaceous fields are not included in these estimates
Detailed seismic work (MOGT-2D 500 linear km) has commenced on theViselkovsko-Kubansky block. The works are being carried our by JSC “Krasnodarneftegeophysica” under the supervision of LLC “Rusgeophysica”.
(2)
The other hydrocarbon resources of “ZAAB Invest” are connected with the licensed area of the Southern Ermolinskiy prospective block (block size is 65.2 km2), located in the southern part of the Republic of Kalmykia (Chernozemelsky district). Komsomolsky city is situated 52 km south-east of the block . The road network is made up of dirt and country roads. Twenty two and a half km to the north of the block there is an asphalted road leading to Komsomol - Ulan-Holl - Lagan. Ten km to the east there is a railway line to Astrakhan - Kizlyar, and 10 km to the northwest the Kamish – Burun - Astrakhan main gas pipeline. The CPC oil pipeline (the Caspian pipeline consortium) (1020 mm) is 15 km from the block, and 5 km from the block there is the "Transneft" oil pipeline. (219 mm)
Tectonically, the Southern-Ermolinskiy block is confined to the area north of the zone of the Manichsky downfolds and to the south flank of the Karpinsky ridge. On the background of the monoclinal deep some positive structured zones of subCaucasian orientation can be found: Shahmetsko-Rybachiya, Maily-Haranskogo, Northern Komsomolskiy, Kamishansko-Ermolinskaya, Chernozemelsko-Caspian.
In 2006 at this licensed block there has been completed the high resolution seismic prospecting MOGT-2D-HRS (101,4 linear km). (the contractor - JSC "Stavropolneftegeophysica", supervisor - LLC" Rusgeophysica"). As a result of detailed analytic re-interpretation of previous seismic data (179,2 linear km), and MOGT-2D-HRS and geophysical well logging studying the structure of Paleozoic, Jurassic-Cretaceous and Eocene deposits of the Southern-Ermolinskiy block (the structure passport has been obtained). In the bottom layer of the sedimentary section and Paleozoic deposits (reflections A) the presence of the Southern Ermolinskiy uplift has been affirmed. These are indicated as A.B.C, D,E. Paleozoic deposits within the uplift – A, B and E, and in Middle Jurassic deposits (V assise) within the uplift A and B has revealed combined and tectonically screened trap.
The structure of hydrocarbon resources of the Southern Ermolinskiy block C3 category is listed in Table 2.
Table 2
The characteristic of reserves of Southern-Ermolinskiy license block
According to official figures, on the State balance of reserves of mineral deposits as of 01.01.2005 oil resources (geological/recoverable) of the Southern-Ermolinskiy license block of С3 category are 1200/360 thousand of tones.
The results of a new high resolution seismic prospecting MOGT-2D-HRS has shown that the hydrocarbon resources at the Southern-Ermolinskiy license block are much more than thought,.
The drilling project of the first exploration well №1 Southern-Ermolinskiy is prepared, and the development works for drilling of this well has begun. Drilling shall commence in 2007.
(3)
The Evseevskiy license block is located in the Kirovskiy and Kurskiy districts of the Stavropol Territory, 33 km to the east of the Novopavlovsk railway station and bordering with the village of Sovetskaya.
The Baku - Novorossisk (720 mm) long-distance pipeline is situated fifty km from the block whilst the Nevinomissk – Maikop gas pipeline (720 mm) is 180 km from the block. The export ports for oil for the Evseevskiy license block are potentially: Novorossiysk (600 km) and Makhachkala.
Tectonically the block is confined to the north-west part of the northern side of the Tersko-Caspian fore deep (TCFD), to its Sizovsko-Mozdokskaya structured zone.
In the geological structure of the Evseevskiy license block there are terrigenous deposits of lower and Middle Jurassic superposing at the Paleozoic folded basement (~360-450 m), Upper Jurassic deposits, represented by subsalt carbon-bearing reef deposits (~200 m), covered by the two salt bearing sections (~500m), separated by intersalt carbonate formation with organogenic construction (up to 100 m), Lower Cretaceous deposits represented by the carbonate complex of Berriasian- Valanginian rocks(~200 m) and Terrigenous complex Goteriv Alba (~290 m), Paleocene-Eocene malm argillaceous deposits (~113 m), Oligocene malmargillaceous deposits of hadum and batalapshin suits (up to 363 m).
It is important to note that on the State oil balance there are 819 thousand of tones of oil resources C3 category of two organogenic constructions of Upper Jurassic of Evseevskiy license block.
The expert evaluations made in 2006, have shown, that total recoverable reserves of oil on Evseevskiy license block are much more, than it was previously estimated.
The structure of oil resources (C3 category) of the Evseevskiy license block are listed in Table 3.
Table 3
The characteristic of reserves of Evseevskiy license block
This estimate is considered as conservative since there are evaluations of oil recoverable resources С3 category made by known geologists of the Stavropol Territory indicating 45 mln tones only in subsalt reef constructions of the Jurassic deposits.
(4)
The Maryinskiy license block is located in the southern part of the Stavropol Territory, in the Kirov district, not far from the Evseevskiy license block (30 km) and 15 km from the Novopavlovsk railway station. Novopavlovsk is the administrative centre of Kirov district.
The block size is 47,8 sq km.
Tectonically the block is confined to the Baksan monocline complicating the west part of Tersko-Caspian foredeep. Here it is assumed to be the extension of the barrier reef system stretching from Mineralovodskiy bowing and complicated with fragmentary reef lifted blocks. At the level of Cretaceous horizons they appear in the form of structural noses and in the Jurassic deposits in the form of conical anomalies of wave fields (within the Baksan monocline), being interpreted as single bioherm structures (conical reefs). The natural Maryinskiy uplift is located in the west part of the said monocline and is transparent in the Jurassic reflecting horizons; and tapers out at the Cretaceous level.
The oil and gas bearing prospects are connected with the Jurassic intersalt deposits that were proven by drilling and testing of well №5, where an oil inflow 200 t per day was achieved at interval depths of 3830-3835 meters; this oil inflow has been seen for three days.
According to the State balance of mineral reserves of Russian Federation as of 01.01.2005. there are 710 thousand of tones of recoverable oil resources under C3 category in the Maryinskaya area .
The project of exploration works for the Maryinskiy license block is presently underway .It is expected that the modern technology used to carry out works will allow bringing the block into development in a relatively short period of time.
At the present time the total recoverable resources C3 category of “ZAAB Invest” are 97.3 mln of tones of oil equivalent.
These hydrocarbons resources (assets) of “ZAAB Invest” are defined as of the date of presentation of this report and are not final. “ZAAB Invest” is constantly working on reserves increment in the regions of the Russia Federation and abroad.
The present report is neither a proposal to buy nor an offer to sell said assets or shares of “ZAAB Invest”; it is provide as information for present and potential partners of the ZAAB Group. This report does not reveal all the risks of the license blocks of “ZAAB Invest” due to its geological informative character. Nevertheless, all the statements and conclusions of the report are reliably supported by the results of work carried out by independent external geological-geophysical service contracting organizations.
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Address: 107140 Moscow, Verhnaya Krasnoselskaya St, 3 "G", Business Center “Triangle House”
Tel: (495) 787-37-27; fax: (495) 787-37-28
e-mail: mosoffice@zaabgroup.com
Tel: (495) 787-37-27; fax: (495) 787-37-28
e-mail: mosoffice@zaabgroup.com