What do you do in your day to day role?
ETAP ‘s strategy as a NOC of Tunisia, is primarily the satisfaction of energy need and to reduce our actual deficit by promoting the available offshore and onshore open blocks and doing our best to attract investors. We are in the mean time looking to diversify our company assets through the involvement in the E&P activities at the international level.
That's why we are strengthening our relationship with our neighbour countries in the energy domain and especially in the oil & gas sector to share risks on the exploration and in the development in Tunisia and abroad.
This successful model made with NOCs , could be duplicated with others countries and IOCs by sharing the E&P risks with multinational oil companies.
How did you come to be working in the energy industry?
I was born in a city in Tunisia where oil & gas activities are common, I have seen during the 80s seismic crews recording 2D seismic in front of our house, I have seen also representative from the operator asking my father to fill a paper to reimburse the damage caused by the vibrators.
I have seen the smoke from a flare of hydrocarbon from a well, during a production test made a couple of kilometres from my house. Later one, I went to do University to study Geology.
I kept in my mind all these events , so when I obtained my Degree in Geology, I decided to work in the Oil & Gas industry and I had the chance to have a scholarship from ETAP to continue my studies in Petroleum Geology , ended by obtaining a Master Degree in Petroleum Geology in 1986. The year 1986 was a bad time for the oil industry (because oil price was very low – about 10 $/BBL), I did not join ETAP, but I had the chance to start my career with Conoco Inc. in Tunis office, one of the leaders of the oil industry in the world.
What impact do you think the low oil price has had on ETAP and its operations?
The current decline of oil price has materially impact not only the core business of Tunisia on the exploration and production activities but also the economy .
The experts of the O&G industry are thinking that :
– a high commodity price, will boost the exploration activities and eventually leads to more discoveries. But may also encourage the renewable energies.
– a low oil price will kill the exploration activities, because most of the Oil & Gas companies cut spending on E&P activities .
In general, the impact depends on each country's internal consumption, for Tunisia and ETAP the challenge is high because about the half of our energy needs are imported.
Most of the domestic production are used to satisfy the internal consumption despite the relatively low – medium production costs.
Because of the uncertainty over the future oil price scenario, some delay of drilling and seismic acquisition projects , the main tools for exploration are worsening the situation , the break even to produce one barrel in certain fields is almost equal to the commodity price.
Action, however needs to be taken with the operators and partners to survive.
What do you think are the biggest challenges facing the Oil and Gas Industry in the upcoming 12 to 18 months?
The NOCs overall have two material challenges :
Survive the downturn, and continue to support their countries' economies for the long run.
For the next 12 to 18 months, NOCs & IOCs have together big challenges, they both have to work in synergy :
– To reduce the volume of excess of crude oil in available in the market, to allow the oil price increase. The experts do expect to have an oil price around 70 $/b by the 2nd quarter 2018.
– Concerning the gas market, we see an important change in the gas market due to the new big discoveries made in the deep offshore the Eastern Mediterranean sea in Egypt ,with the Zohr discovery made by ENI (30 TCF) . Another huge discovery has been made offshore Mozambique by ENI and Anadarko (85 TCF) , will be able to provide additional gas reserves in the market .
This new situation is in favour of the consumers, this situation is going to push all parties – gas producing countries and the European countries – to review the actual contracts, and negotiate the new terms .
There is probably new negotiations rounds and shorter terms gas contracts rather than the long term contracts.
What do you think are the biggest challenges facing ETAP in the upcoming 12 to 18 months?
ETAP is facing two biggest challenges :
5 – 1 – Starting the production of the Southern Tunisia Nawara Discovery:
The Nawara Gas Project cost will be over a one billion $ project, is expected to become one of the key drivers of economic growth in the barren region of South Tunisia. It is intended to contribute to the country’s development towards energy independence.
The first discovery Warda-1 well, was made in the northern part of the Jenein Sud Exploration Permit operated by OMV with ETAP Tunisia’s state owned energy company as partner , The second discovery Nawara-1 well, discovered large quantities of natural gas in 2006. Nine (9) more additional wells were drilled within the Nawara production Concession.
This, in turn, will mark a significant shift in the way Tunisia meets partially its energy needs, especially since all the gas is to be used domestically. It is therefore often referred to as “The Umbilical of Tunisia” among those working on the project. The project comprises of three main components; a Central Processing Facility (CPF) built in the desert, a 370 km pipeline 24” diameter and a Gas Treatment Plant which will be built on the outskirts of Gabes. The building of the CPF, in particular, poses a great logistical challenge due to its remote location.
Also, when laying down the pipeline, many factors such as the negotiation of roads, railways and areas of habitation need to be considered while paying attention to the environmental and social impact.
5 – 2 – Promoting the Northern Offshore Tunisia open blocks, considered as frontier exploration, is a High Risk – High Reward area. We are looking for the first well to be drilled in this area .
The analogue is the play that has been confirmed in the deep offshore in the Eastern Mediterranean sea – Zohr discovery , made by ENI in 2015.
What are the biggest aims for ETAP in the next 12 to 18 months?
6 – 1 – ETAP is focusing on increasing its exploration activities in the short term and aims for more oil and gas investment especially following the discovery of the deep offshore field in the Egyptian Mediterranean sea in 2015 made by ENI.
-My belief is that Tunisia has considered potential for finding new Oil & Gas reserves, in a sedimentary basin with High Risks – High Reward environment.
6 – 2 – We expect also to rise natural gas as a share of it's production, in phase 1 for about 2/3 from domestic production by the end of 2018, the remaining gas (1/3) will be imported from Algeria.
ETAP is seeking to rise the share of less polluting natural gas, knowing that 97% of the generated electricity is made by using the natural gas.
This objective will be definitely reached when Nawara Gas field will be put on stream.
Right now we are producing 45 thousand BOPD and 7 Millions Cu M/D .
If you had 3 wishes that could change the industry globally, what would they be?
Three (3) wishes :
7 -1 – Research & Development in the field of unconventional exploration and production is crucial, reaching an innovative technology able to reduce water volume used for fracking the unconventional shale gas and oil shale are very important for the future of the oil & gas industry, because saving water will allow to explore large areas like deserts and zones with arid and semi-arid climates.
7 – 2 – The European countries that are buying gas from North Africa gas producer countries, mainly Algeria and Libya. All parties have to meet to negotiate new contracts . These Long Term Contracts , which includes terms called TOP ( Take or Pay) will expire in 2017 and in 2018.
Many experts (see Algerian newspaper EL WATAN dated on March 23, 2017 ) are thinking that these long term contracts will be replaced by new Short Term Contract (5 to 10 years) and probably some Spot Contracts .
We hope that the negotiations will be ended within next year .
7 -3 – Better commodity oil price & Peace in the World
– Having a good settlement and reaching an agreement between the major producing countries to reduce the volume of crude oil in the market, is the best to allow the increase the commodity price.
– To have better commodity price, we must initiate PEACE NEGOCIATIONS in North Africa Region (especially Libya) and in the Middle East.
About Jalel Smaoui
Mr. Jalel SMAOUI, is currently the Director of International Operations of the Tunisian National Oil Company :Entreprise Tunisienne d'Activités Pétrolières – ETAP.
He is graduated with B.S. degree in applied Geology from the University of Sciences & Techniques of Sfax, Tunisia and M.Sc degree in Petroleum Geology in 1986 from IAP Algeria, then started his career as Exploration geologist with several international oil companies during the period 1987 through 1995 with Conoco, Marathon, Maxus Energy and Preussag Energie, working in the mainly exploration & production fields. Mr Jalel has several fields discoveries made in different sedimentary basins in Tunisia.
He joined ETAP in 1995, where he had several responsibilities as Exploration Team Leader , appointed in 2007 as Manager of Exploration Promotion with the task is to organize the data rooms of offshore and onshore open blocks, for investors and international oil companies and as Exploration Manager and as Operating Committee Meeting representative of ETAP's exploration assets in Tunisia.
Mr Jalel was also active representing his organization speaking in various international conferences in Europe and America.
Mr. Jalel is an active member of the AAPG since 1991 and member the SPE Tunisia section.