Dana Gas Kicks Off Development at Sharjah Offshore Concession

Dana Gas, the Middle East's first and largest regional private-sector natural gas company, is moving ahead with plans for the exploration and development of the Western Offshore concession in Sharjah.

This follows the signing of a 25-year concession agreement between Dana Gas and the government of Sharjah in March 2008, giving the firm a 50% working interest in the project. The agreement covers a total offshore area of over 1,000 square kilometers (386 square miles), and includes the Zora gas field in Sharjah, which was discovered in 1979.

Under the agreement, the work program carried out by Dana Gas will include the drilling of 3,000 feet of horizontal section in each of the two wells originally drilled by Crescent Petroleum, testing and completing both wells, the installation of offshore platform for immediate processing and production, and the transportation of the processed gas via 25 kilometers (15 miles) of offshore pipeline. The agreement also provides for important exploration works within the concession area, including geological evaluation studies, followed by seismic surveys and the drilling of exploration wells.

According to Ahmed Rashid Al Arbeed, Executive Director of Upstream at Dana Gas, preparations for work on the concession area are well underway, and reservoir-related studies on the Zora gas field have already been carried out.

"We have retained the services of world-class reservoir specialists to conduct further detailed studies on the potential of the field, and generate the optimum development options," said Al Arbeed. "We are in the process of placing orders for the equipment and materials necessary for the pipeline and production facilities, and are currently involved in negotiations with three major offshore rig contractors to supply a jackup rig that will be used for tie-back, horizontal drilling, testing, and completion of the two wells."

The Company is currently finalizing selection of a major construction yard for fabrication of the wellhead platform jacket. The budgeted costs of the development phase of the Zora field are estimated at US $70 million, while costs for further exploration studies and work on one well are estimated at US $65 million from 2010 onwards.

This represents the latest achievement for Dana Gas, which has been expanding in all areas of the natural gas industry across the Middle East and North Africa region, including the upstream exploration and production of natural gas. The company is the 6th largest gas producer in Egypt, out of 64 companies operating there, and has recently doubled its reserves in Egypt after an extensive drilling program in 2008 that resulted in several hydrocarbon discoveries. Dana Gas is also undertaking projects in the Kurdistan region of Iraq. Following the production of first gas in the Kurdistan region of Iraq earlier this year, in a record time of 15 months, Dana Gas' overall operated gas production has increased by over 50 percent.


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