SGGA Monthly Drilling Operations Progress Report

The project aims to develop the Juma-Bashikurd Field in Jawzjan Province, with a focus on drilling new wells and re-entering existing ones. The Turkish Petroleum Corporation (TPAO) was awarded a contract worth USD 36,757,766 to drill one new well, Juma No. 2A, and re-enter two wells, Bashikurd No. 3 and Bashikurd No. 9. The project's progress is monitored by the Sheberghan Gas Generation Activity (SGGA), which is responsible for reporting on the project's activities and milestones. The SGGA Monthly Drilling Operations Progress Report for November 1-30, 2015, provides an update on the project's progress during this period. During the reporting period, TPAO completed the rig-up at Bashikurd No. 3 and started the re-entry and deepening operation to test the lower Kugitan Formation. However, collapsed casing was encountered at a depth of approximately 2989 meters, and TPAO was able to mill out the obstruction and drill through the cement plug at 2950 meters to 3030 meters. The well was drilled to a depth of 3442 meters, where gas flow was encountered. A full suite of well logs was obtained, and it was determined that two prospective intervals should be perforated and flow tests performed. However, new casing and tubing installed in the well was damaged at 2829 meters by movement of salt in the Gourdak Formation, preventing perforation of the prospective intervals in the Kugitan Formation. TPAO reported that the options for proceeding were to again mill out the collapsed casing and tubing and install heavy casing, "side tracking" the well to bypass the obstruction, or to permanently abandon the well. Abandonment is recommended by TPAO. On November 23, MoMP delivered a contract change order to TPAO cancelling plans to re-enter Bashikurd Well No. 9, nearly two months after being informed that USAID declined to participate in the funding of the re-entry. TPAO has submitted invoices for mobilization, drilling, and completion of Juma Well No. 2A, and rig up on Bashikurd Well No. 3, for a total of $25,728,750. However, MoMP has been unable to obtain payment of even the initial $1,400,000 mobilization invoice submitted by TPAO on June 27, 2015. The project's progress is subject to various challenges, including the need for specialist services to "side track" the well, which are not available in Afghanistan. The only practical solution is to abandon the well, which would result in substantial additional expense and delay. The project's future is uncertain, and further consultation with the Minister is required to determine the next course of action.