WEST RUSTAVI AND KUMISI  


The West Rustavi Field is located approximately 25 miles (40 Km) southeast of the Ninotsminda Field within the Ninotsminda, Manavi and West Rustavi Production Sharing Contract, covering Block XI^E, (Ninotsminda PSC). Prior to Ninotsminda Oil Company Limited (NOC), a wholly owned subsidiary of CanArgo, gaining the Ninotsminda PSC, Georgian Oil (the State Oil Company) drilled ten wells in the West Rustavi Field area, two of which produced oil. This is a Middle Eocene oil accumulation, like Ninotsminda and Samgori, but with the reservoir being thinner and less productive in this area than at the Ninotsminda Field and only limited production has taken place from the West Rustavi Field. However, NOC has carried out only very limited workover activity on West Rustavi, and potential may yet exist for further oil production from the Middle Eocene dependant on technical and economic factors. Horizontal drilling may also be appropriate for this deposit.

One of the ten wells drilled in the West Rustavi Field by Georgian Oil was deepened to test the deeper Cretaceous and Paleocene horizons. This well, named WR16, was tested and produced over 1 million cubic feet (35 MCM) of gas and 3,500 barrels of water per day, thus demonstrating the ability of the Cretaceous to produce at good rates. This well is interpreted to have tested the down dip extent of a Cretaceous gas deposit named Kumisi. Following the signature of the Nazvrevi and Block XIII Production Sharing Contract (Nazvrevi PSC) which lies to the west and south of the West Rustavi Field, CanArgo acquired and interpreted additional seismic data over this structure and identified a potentially large prospect extending across the Nazvrevi PSC area with the crestal part of the structure located in the Block XI^G which was subsequently secured by CanArgo as part of the Tbilisi PSC area. The prospect is potentially very significant with the principal risk being closure on the structure to the north and west which is dependent on a downthrown fault seal.

Following an undertaking by the government to purchase any gas produced from the Kumisi prospect on agreed commercial terms, CanArgo drilled a well to appraise this prospect in 2007. The Kumisi #1 well is located within the Nazvrevi PSC area and is approximately 7.5 miles (12 Km) southeast of Tbilisi. It is close to the domestic gas transportation grid and the route of the new South Caucasus gas trunkline from Azerbaijan to Turkey. The well commenced drilling in February 2007 and reached a total depth of 11,841 feet (3,609 metres) in June in the Cretaceous.

An extensive testing program was conducted over the Cretaceous section where six separate intervals totalling 482 feet (147 metres) were perforated and tested. These tests resulted in no discernable flow and without any hydrocarbons being detected. It is, therefore, reasonable to assume that the Cretaceous reservoir at this location is tight and lacks permeability unlike the rocks encountered in other wells in the area.

Further tests were carried out of potential reservoir units in the overlying Middle and Lower Eocene sequences. Three separate tests were conducted with a total of 79 feet (24 metres) of sandstones being perforated and flow tested. These tests produced water with gas flow to surface in flareable quantities, but non commercial volumes. Each interval was flow tested for a number of days over which there was no increase in the amount of gas produced and the testing was subsequently terminated.

The Kumisi #1 well is currently being plugged and abandoned. The well results, particularly for the Cretaceous interval, will be reviewed over the months ahead in order to fully understand the remaining potential of the Kumisi area, it being possible that potential for a large gas prospect still exists within this very large structure given better reservoir quality.