Sheberghan Gas Generation Activity (SGGA) Monthly Report for September 1 – September 30, 2015

The project is funded by the United States Agency for International Development (USAID) and is being implemented by Advanced Engineering Associates International, Afghanistan. The SGGA project has been actively engaged in drilling contract management support, with a focus on obtaining payment of TPAO's invoice for mobilization. Despite efforts by SGGA to provide descriptions of the payment process, copies of drilling contract tax exemption documents, and copies of the drilling contract language related to financing charges on late payments, the Ministry of Finance continues to delay payment. The delay is attributed to an objection that the extension of the drilling contract was not approved by the Special Procurement Commission, despite the fact that the Minister of Finance signed the USAID Implementation Letter approving the extension. SGGA has also been working on capacity development, providing recommendations to the Ministry of Mines and Petroleum (MoMP) on adjusting the scheduled work on the Bashikurd No. 3 and 9 wells in view of the unexpected results from the Juma No. 2A well. The well showed low porosity, meaning little available space for hydrocarbons in the rock, and was likely to be non-commercial. SGGA engineers prepared reports and provided recommendations to MoMP and USAID on further work, including obtaining sidewall cores for more detailed analysis and conducting acid stimulation to try to achieve improved production prospects. SGGA has also been involved in meetings with various stakeholders, including APA's Zabi Sarwari, USAID, and the Ministry of Mines and Petroleum. The meetings focused on discussing project status, plans for data evaluation and reserve estimates, and plans for completion of the Juma No. 2A well. SGGA has also been working on preparing a draft "Variation Notice" (change order) for the drilling contract, cancelling the re-entry of Bashikurd No. 9, but retaining the re-entry and deepening operations for Bashikurd No. 3. The project has faced several challenges, including MoMP's inability to respond effectively or promptly to issues that have arisen during the course of the drilling contract. MoMP's response to the log and test results showing non-commerciality of the Juma 2A well was limited to appointing a "commission" to determine whether to plug the well, and MoMP did not initiate any review of operational plans after learning of the porosity problems in the well. SGGA has been working to advise MoMP on change order implementation for TPAO drilling contract and to provide recommendations on adjusting the scheduled work on the Bashikurd No. 3 and 9 wells. The project is expected to continue working on drilling contract management support, capacity development, and meetings with stakeholders. SGGA will continue to provide recommendations to MoMP on adjusting the scheduled work on the Bashikurd No. 3 and 9 wells and will work on preparing a draft "Variation Notice" (change order) for the drilling contract. The project will also continue to face challenges, including MoMP's inability to respond effectively or promptly to issues that have arisen during the course of the drilling contract.