Abu Dhabi (Platts)--13Nov2012/545 am EST/1045 GMT

Abu Dhabi National Oil Company (ADNOC) has conducted its first well-test aimed at determining whether the hydraulic fracturing technology behind the US shale gas boom could also unlock hitherto inaccessible gas supplies in the UAE, the project's team leader said Tuesday.

The results are encouraging, Fahad al-Ameri told delegates attending a technical session at the Abu Dhabi Petroleum Exhibition and Conference in the UAE capital.

The tests were conducted in partnership with 60%-owned ADNOC unit Abu Dhabi Company for Onshore Operations, which is a joint venture between the state-owned petroleum company and international partners BP, ExxonMobil, Royal Dutch Shell, Total and Partex.

The partners used multi-stage acidic fracturing to coax potentially commercial gas flows from the almost impermeable limestone and dolomite of Abu Dhabi's Diyab formation, believed to be the source rock from which oil and gas migrated into the emirate's biggest oil fields. The treatment was successful in physically and chemically opening channels in the dense rock through which gas could flow at a sustained rate into the well bore.

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Previously, conventional drilling had failed to produce any hydrocarbons from the "tight carbonate" formation, despite geological evidence that it contained large volumes of sweet (low-sulfur) gas rich in condensate.

"The good news: it is a very extensive formation. We have it almost everywhere. It is the source rock feeding our conventional reservoirs," Ameri said.

"We are going to go ahead and produce it in the near future," he added.

The early tests of Diyab gas production, however, were not conducted under ideal circumstances because they made use of an exploration well drilled to test a different primary geological target. Following the initial encouraging results, ADNOC is considering a plan for a three- to six-well pilot study specifically targeting Diyab tight gas. An announcement is expected soon, Ameri said.

The proposed pilot would be among the first in the Persian Gulf region to study in detail whether drilling technology with a proven track record from North American gas shales could also unlock gas from substantially different non-conventional reservoirs, especially carbonate formations.

Simulation studies of a reservoir model calibrated to data from the initial Diyab well-test suggest it should be possible to establish commercial production from Diyab source rock, Ameri said.

"This is similar to what the US is doing with shale gas, but in this case we have carbonate. We believe the non-conventional [reservoirs] could have a huge impact on Abu Dhabi's hydrocarbon sector in the next few years," he added.

"This technology has been used in the US for the past 10 years," Ameri pointed out. "The technology is proved and available in the market."

During the same conference session, Hamoud al-Anazi, presenting a paper on behalf of Saudi Aramco, said the Saudi national oil company was conducting tests to determine how best to apply multi-stage horizontal fracturing technology to enhance output from tight gas and condensate reservoirs in the kingdom.

Like all Persian Gulf states except Qatar, the UAE and Saudi Arabia have failed in recent years to develop enough indigenous gas production to keep pace with growing domestic demand for natural gas to fuel power generation and industry and to inject into aging oil fields to maintain crude output.

The UAE started importing Qatari gas by undersea pipeline in late 2007. Starting in 2010, it has also imported LNG each summer at a floating terminal in Dubai. Another LNG import terminal is being built for the UAE outside the Persian Gulf, at the port of Fujairah on the country's Arabian Sea coast.

Saudi Arabia, which burns substantial volumes of its own crude for power generation in summer, when regional demand for air-conditioning peaks, is said to be considering building LNG import facilities.

--Tamsin Carlisle, tamsin_carlisle@platts.com
--Edited by Alisdair Bowles, alisdair_bowles@platts.com

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