Calgary-based firm WesternZagros Resources Ltd. discovers homegrown roots in Iraq
An Alberta firm revives exploration in the Kurdish cradle of Middle East oil
He recalls beginning to look around Iraq for Turcotte in 1995. Hatfield’s professional travel diary shows 56 trips to the troubled country. But Turcotte’s first firm, Chauvco Resources, was barred from doing any deals by global economic sanctions enforced after the ’91 Gulf War against the late Saddam Hussein’s dictatorship.
The hunt resumed, this time for Western Oil Sands, after the 2003 invasion of Iraq by the United States. The Albertans went to the Kurdistan region as the most secure drilling target. “We’ve never had one terrorist incident or threat,” Hatfield reports. But as a precaution, WesternZagros crews and equipment travel in convoys with military escorts.
Apart from the armed guards, Hatfield calls the Iraq venture “similar to Western’s entry into the oil sands. We’re going after a big resource play with an entrepreneurial spirit and an inside track,” Hatfield says.
If WesternZagros succeeds in its drilling, the rewards are liable to be enormous. The prospects enticed Talisman Energy Inc., a former BP subsidiary that kept its zest for international exploration under Canadian ownership, into signing up as a 40 per cent supporting partner in the Kurdistan exploration campaign.
“We have the potential of billions of barrels of oil in the ground. We have potential that is orders of magnitude bigger than any conventional reserves ever found in Alberta,” Hatfield says. “In this area, it’s easier to find petroleum than water. There are seeps. Oil flows into water wells.”
As little as 10 kilometers away on other drilling concessions, black gold has flowed out since the 1930s in the fabled low-cost style of the Middle East industry’s founding fields. Finding, developing and operating expenses of discoveries made in the last exploration wave during the 1950s and ’60s are still among the lowest on the planet at a combined total of less than US$1 a barrel when spread over huge production volumes from long-lived wells. “We won’t be able to do it for $1 or $2. But it’ll definitely be less than $5,” Hatfield predicts.
His one regret is a loss of industry archives that occurred when Iraqi museums were looted following the 2003 military liberation of Baghdad. The old records might have helped his firm’s crews of Canadian and American experts at drilling in the foothills of the Rocky Mountains. They encountered technical surprises that disrupted D’Arcy’s first efforts in the Zagros region 108 years ago.
The Alberta firm’s first Kurdistan well hit numerous shows of clean light oil in multiple geological formations on its way down to a depth of 4,357 meters. But exceptionally high underground pressures made the drilling slow and then an obstruction broke equipment, preventing evaluation or completion of the discovery.
“The old-timers drilled pretty well. Records of what they did might have given us a heads-up. We encountered conditions more challenging than any other well we’ve seen. [Oil and gas] really wanted to come out at one point. We had some nervous guys out on the rig,” Hatfield reveals.
That is dramatic talk for a master of British understatement. He describes Zagros summer storms – infernos of blistering 60 C heat and sand – as simply hot, dusty versions of Alberta winter Chinooks. “It’s nothing the industry doesn’t handle elsewhere,” he says.
The WesternZagros oil safari, packed into 300 truckloads, trekked to a new well location this spring. Along its way, the expedition is hiring locally, drilling water wells, supporting education and health care and generally introducing Alberta safety and environmental standards without being asked. “It’s very good community relations,” Hatfield says – and nor does it hurt his firm back home to report doing three million man-hours of work in Iraq without a lost-time accident.
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