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Ethiopian Energy Authority

DRILLING DRICTIVE FOR GRADE ONE GEOTHERMAL

RESOURCE DEVELOPMENT

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1. This directive is General Standards Applicable to Drilling Operations including drilling

plan, drilling program, and well design and drilling, conducting drilling operation and well

abandonment for geothermal resource development.

PART ONE

1. GENERAL

1.1. Short title

2. This directive may be cited as the “Geothermal Resource Development Grade I drilling

directive No.______/2019.”

1.2 Definitions

3. For purposes of this Directive:

It is the purpose of this Directive to set forth the Proclamation No. 981/2016 and Regulation No.

453/2019 governing the geothermal resource development program of the Ethiopian Energy

Authority (EEA).

Anchor CSG / the production casing means the cemented casing on which the permanent

wellhead is mounted.

Byproducts are minerals (exclusive of oil, hydrocarbon gas, and helium), found in solution or in

association with geothermal fluids, that no person would extract and produce by themselves

because they are worth less than 75 percent of the value of the geothermal steam or because

extraction and production would be too difficult.

Direct Use means as defined in the proclamation for Grade II geothermal resource, utilization of

geothermal resources for commercial, residential, agricultural, public facilities, or other energy

needs other than the commercial production or generation of electricity. Direct use may occur

under either a Grade I geothermal license or a Grade II license.

Exploration operations mean any activity relating to the search for evidence of geothermal

resources, where you are physically present on the land and your activities may cause damage to

those lands. Exploration operations include, but are not limited to, geological, geophysical &

geochemical operations, drilling temperature gradient wells, drilling holes used for explosive

charges for seismic exploration, core drilling or any other drilling method, provided the well is

not used for geothermal resource production. It also includes related construction of roads and

trails, and cross-country transit by vehicles over public land. Exploration operations do not

include the direct testing of geothermal resources or the production or utilization of geothermal

resources.

Geothermal resources operational order means a formal, written, numbered order issued by

The Licensing Authority that implement or enforces the regulations or this directive.

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Licensee means a natural or juridical person holding certain rights and responsibilities granted

under a geothermal license issued by Licensing Authority.

Operating rights (working interest) means any interest held in a license with the right to

explore for, develop and produce.

Operating rights owner means a person who holds operating rights in a license. A lessee is an

operating rights owner if the licensee did not transfer all of its operating rights. An operator may

or may not own operating rights.

Operator means any person who has taken responsibility in writing for the operations conducted

on licensed lands.

Produced or utilized in commercial quantities means the completion of a well that:

(1) Produces geothermal fluids in commercial quantities; or

(2) Is capable of producing geothermal fluids in commercial quantities so long as

Licensing Authority determines that diligent efforts are being made toward the utilization of the

geothermal resource.

Stipulation means additional conditions Licensing Authority attaches to a license or permit.

Subsequent well operations are those operations done to a well after it has been drilled.

Examples of subsequent well operations include: cleaning the well out, surveying it, performing

well tests, chemical stimulation, running a liner or another casing string, repairing existing

casing, or converting the well from a production well to an injection well or vice versa.

Surface management agency means any government agency, other than the Licensing

Authority, that is responsible for managing the surface overlying government-owned minerals.

Temperature gradient well means a well authorized under a geothermal exploration permit

drilled in order to obtain information on the change in temperature over the depth of the well.

Unit agreement means an agreement to explore for, produce and utilize separately-owned

interests in geothermal resources as a single consolidated unit. A unit agreement defines how

costs and benefits will be allocated among the holders of interest in the unit area.

1.3 Purpose

It is the purpose of this Directive to set forth the rules and regulations governing the geothermal

program of the Ethiopian Energy Authority (EEA).

1.4 Scope and Exemptions

This directive shall apply throughout the Federal Democratic Republic of Ethiopia, with the

following exceptions.

1.4.1 Pre-existing Wells Exemption

The Licensing Authority, after inspecting a pre-existing geothermal well and finding it to be in

good working condition, may “grandfather”, i.e. exempt, that well from the provisions of this

directive.

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1.4.2 Small Non-commercial Direct Use Exemption

The Licensing Authority may exempt any shallow (less than 200 meters total depth) geothermal

well from this directive if the resource is used in a residential or in a non-commercial manner.

The Licensing Authority may, in its discretion, approve Tempreture Gradient Wells (TGWs)

greater than 150 meters in depth. Drilling prognosis for drilling any TGWs will include criteria

to recognize and prevent direct contact with the geothermal resource. Exploration operations do

not include resource assessment or confirmation activities such as direct testing of the

geothermal resource. The Licensing Authority may approve the drilling of TGWs at any location

the Licensing Authority deems advisable, so long as no part of the well is drilled within 5 (200)

meters of the outer boundary of the parcel of land on which the well is situated or within 5 (200)

meters of a public road prior to the commencement of drilling.

PART TWO

2. ACTIONS THAT NEED THE LICENSING AUTHORITY NOTICE

Prior to engaging the following activities, license holder needs to inform/notice the Licensing

Authority. Activities that need the notice include, but not limited to the following.

2.1 Intension to drill

Before a Licensee or Operator can commence drilling a well, a Notice must be filed on a

prescribed form attached in Appendex-1 and submitted to the Licensing Authority, accompanied

by the appropriate fee and bond. The Operator shall not commence drilling until the Licensing

Authority approves and give drilling permit to the Notice. The Notice shall include drilling Plan,

drilling program, well design plan and, all information required on prescribed form, geothermal

regulation and the following:

A drilling program describes all the operational aspects of your proposal to drill, complete, and

logging & tests a well and must include the following;

a) General scope of work including a detailed description of the equipment, materials, and

procedures to be used;

b) The proposed/anticipated depth of the well(s);

c) The proposed bottom hole location and distances from the nearest license boundary;

For deviated wells also provide the kick-off point; the direction of deviation, the angle

of build-up and maximum angle and plan and cross section maps indicating the surface

and bottom hole locations.

d) Site preparation description and access road alignment;

e) Mobilization scope and duration;

f) Measurements for each well segment including casing and cementing programs;

g) Drilling fluid program for each well segment including the circulation media (mud, air,

foam, etc.);

h) Electric logging program and a description of the logs to be run;

i) Casing program;

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j) Cementing program;

k) Well control methods with a description and diagram of the blowout prevention

equipment you will use during each phase of drilling;

l) The expected depth and thickness of fresh water zones;

m) Anticipated lost circulation zones;

n) Anticipated reservoir temperature and pressure;

o) Anticipated temperature distribution vs depth in the area;

p) Anticipated formation pressure distribution;

q) A plat certified by a licensed surveyor showing the surveyed surface location and

distances from the nearest section or tract lines;

r) Procedures and durations of well logging & testing before rig release and after;

s) All environmental documentation for the proposed well(s), the name and address of the

agency or a copy of the final environmental documents. If operations on an exploratory

well(s) or observation well(s) for which the Licensing Authority is required to prepare

environmental documents have not commenced within two years from the date the

drilling permit to Drill was approved, the Licensing Authority shall cancel the notice

unless, prior to the expiration date, the Operator requests an extension on a

Rework/Supplementary Notice. If operations on a development well(s), exploratory

well(s), or observation well(s) for which the Licensing Authority is not required to

prepare environmental documents have not commenced one year from the date the

notice is approved, the Licensing Authority shall cancel the notice unless, prior to the

expiration date, the Operator requests a time extension on a Rework/Supplementary

Notice. The Licensing Authority may extend these time limits at its discretion.

t) Any other information the Licensing Authority may require.

2.2 Notice for drilling Temperature Gradient Well (TGW)

A Licensee or Operator may submit for the Licensing Authority for approval a written program

to drill a shallow well or wells for temperature-gradient monitoring purposes. In order to qualify

under this section, a program shall not contain more than 25 wells and the maximum total depth

of each of these wells shall not exceed 200 meters. The scope of exploration operations does not

include the direct testing of geothermal resources (e.g., flow tests or injection tests) or the

production or utilization of geothermal resources. The definition of exploration operations

excludes any well that makes contact with or penetrates the geothermal resource. Each program

submitted for approval shall include:

Well designation.

Well locations and elevations.

Geologic interpretation of the area under investigation, including any known or inferred

temperature data.

Such other data as may be required by the Licensing Authority.

The drilling application for a TGW must contain enough geologic, geophysical and other data to

demonstrate the expected depth to the top of the geothermal resource. The data must detail the

geologic information and provide an interpretation of that data that supports the operator’s

estimation of the depth to the top of the geothermal resource. The Licensing Authority may

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require temperature monitoring and reporting, possibly combined with pressure monitoring, so

that the Licensing Authority can determine when the drilling activity nears direct contact with

the geothermal resource and will require that drilling operations cease when contact with the

geothermal resource occurs or is deemed imminent. The Licensing Authority may impose

monitoring requirements that reflect local drilling practices and expected characteristics of the

geothermal resources that may be present in the area described in the operator’s Drilling Permit.

Other restrictions may include increasing the technical capabilities of the proposed drilling

equipment to control pressures and the disclosure of temperature, pressure, and other data that

may indicate that the geothermal resource is near. To accomplish these tasks:-

The Licensing Authority may oblige the immediate transmission of logging results to the

Licensing Authority for evaluation but not reasonable with respect to the actual

performance of drilling operations. To conduct the intended monitoring, the Licensing

Authority person may be present full time at the site.

2.3 Workover/ Supplementary notice

If there is any change in the original Drilling Permit, or if the Operator plans to deepen, re-drill,

expand, plug and abandon, or perform any operation that will permanently alter the well casing,

a Workover/Supplementary Notice must be filed with the Licensing Authority. A fee and/or

bond may be required if, for example, the proposal concerns entering a plugged and abandoned

or suspended well. If the drilling operations the Licensing Authority approved on a

Rework/Supplementary Notice have not commenced one year from the date the notice is

approved, the Licensing Authority shall cancel the notice unless, prior to the expiration date, and

the Operator requests a time extension on a Rework/Supplementary Notice. The Licensing

Authority may extend this time limit at its discretion.

If a modification of the original program might be necessary during drilling operations is

on-going because of unexpected conditions or operating needs the original well program

to be performed on well, since the operator cannot wait with the highly expensive drilling

rig on site for the Licensing Authority processing of its notice, the changes should be

communicated but the workover can continue while the licensing authority evaluate the

notice. The licensing Authority may stop if it is not satisfied on the notice at any point

and require the operator for more justification.

If those planned modification well already drilled and completed by bringing a new rig at

the site, in such a case a notice of workover is necessary and should be approved by the

Licensing Authority before any field operation is started.

2.4 Notice to convert to Injection

An Operator or a Licensee planning to convert an existing well to an injection or disposal well

during the field operation phase, even if there will be no change in mechanical condition, must

file a Workover/Supplementary Notice with the Licensing Authority must approve the notice

before injection is commenced.

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2.5 Approval of notices

Written approval of the Licensing Authority is required prior to commencing drilling, deepening,

re-drilling, or plugging and abandonment operations. The written approval shall list any and all

requirements of the Licensing Authority. In an emergency, the Licensing Authority or a designee

may give verbal approval to the Operator to start any operations covered by this directive,

provided the Licensee sends the Licensing Authority a written notice of the emergency

operations conducted within 5 days after receiving the verbal approval. The Licensing Authority

may issue conditional approvals based on Operator performing works they may deem necessary

to be completed prior to issuing the final permit. The Licensing Authority supervisor may grant

approval for the Operator to build necessary infrastructure such as access roads and well sites

while waiting on final approval.

PART THREE

3 GRADE ONE GEOTHERMAL WELL DESIGN

3.1 Design review

Well design should be prepared by engineers competent in geothermal well design, and familiar

with the Ethiopian Geothermal proclamation, regulation, this directive and African Union Code

of Geothermal Drilling Practices (AUC of GDP), and shall be peer reviewed by an appropriately

qualified and experienced person.

3.2 Subsurface condition

Prior to the well design, an assessment shall be made of the subsurface conditions anticipated

throughout the well path. To do this, use information from nearby wells and from relevant

scientific and engineering appraisals. The assessment should include expected temperatures,

fluid types, fluid compositions, and pressures as well as the relevant geological information

listed below:

a) Lithology of geological formations including the location of any specific stratigraphic

marker beds;

b) Intensity and nature of rock alteration;

c) Compressive strength, or at least the degree of rock consolidation;

d) Faulting, fracturing, and gross permeability;

e) Potential for unstable formations, such as unconsolidated breccias or volcano-

sedimentary sequences, or lithologies that might contain water-sensitive swelling clays;

and

f) Fracture pressures obtained from FLOTs on nearby wells or from similar formations.

In exploratory wells, sometimes temperature and pressure profiles versus depth cannot be

inferred using data from nearby wells or from surface investigations. In this case, information to

be used for well design shall be determined as follows:

a) Unless there is a suspicion of artesian conditions, subsurface fluid pressures shall be the

hydrostatic values for a column of cold water below the general groundwater level of the

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area. If the groundwater hydrology, local topography, or natural thermal features suggest

artesian conditions, design fluid pressures shall be increased to the extent implied by such

indications; and

b) Subsurface temperature values shall be assumed to follow saturation conditions for a

column of boiling water below the same level defied by (a).

3.3 Casing requirement

All wells shall be cased in such a manner as to protect or minimize damage to the environment,

ground waters and surface waters (if any), geothermal resources, life, health and property. Well

casing designs should consider:

a) the intended purpose;

b) the design lifetime;

c) ongoing operation and maintenance; and,

d) The nature of the resource (fluid, vapor, or combination), and whether the well is a

flowing well or a pumped well.

The permanent well-head completion equipment shall be attached to the production casing or to

the intermediate casing if production casing does not reach to the surface.

Division specifications for casing strings shall be determined on a well-to-well basis. All casing

strings reaching the surface shall provide adequate anchorage for blowout-prevention equipment

(BOP), hole pressure control, and protection for all-natural resources. The following casing

requirements are general but should be used as guidelines in submitting proposals to drill.

A. Conductor Pipe

Conductor pipe shall be cemented with sufficient cement to fill the annular space from the shoe

to the surface. An annular blowout preventer, or its equivalent, approved by the Licensing

Authority, shall be installed on conductor pipe for exploratory wells and development wells

when deemed necessary by the Licensing Authority. THE LICENSING AUTHORITY may

waive this requirement for low-temperature geothermal wells.

B. Surface Casing

Surface casing shall provide for control of formation fluids, for protection of shallow usable

groundwater, and for adequate anchorage for blowout prevention equipment. All surface casing

shall be cemented with sufficient cement to fill the annular space from the shoe to the surface.

The surface casing shall not be used as production casing unless otherwise authorized by the the

Licensing Authority supervisor to meet special well conditions. The following requirements may

be modified or waived by the Licensing Authority for low-temperature geothermal wells.

1. Length of Surface Casing

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a) In areas where subsurface geological conditions are variable or unknown, surface casing

in general shall be set at a depth equal to or exceeding 10 percent of the proposed total

depth of wells drilled in such areas. The surface casing depth selection procedure must

be designed to avoid underground blowouts so that chosen a depth that can competently

withstand the pressures of reasonable kick conditions.

b) In areas of known high formation pressure (high temperatures at shallow depth, or

because of pressure exceeding the hydrostatic gradient), surface casing shall be set at a

depth determined by the Licensing Authority after a careful study of geological

conditions.

c) Within the confines of designated geothermal fields, the depth at which surface casing

shall be approved by the Licensing Authority on the basis of known field conditions

utilizing a procedure that has been proved in field applications described below or

equivalent.

2. Cementing Point for Surface Casing

Surface casing shall be cemented through a sufficient series of low permeability, competent

lithologic units (such as claystone or siltstone) to ensure a solid anchor for blowout prevention

equipment and to protect usable groundwater and surface water from contamination. A second

string of surface casing may be required if the first string has not been cemented through a

sufficient series of low permeability, competent lithologic units, and either a rapidly increasing

thermal gradient or rapidly increasing formation pressures are encountered.

C. Intermediate Casing

Intermediate casing shall be required for protection against anomalous pressure zones, uncased

fresh water aquifers, cave-ins, and washouts, abnormal temperature zones, rapidly increasing

thermal gradients, uncontrollable lost circulation zones or other drilling hazards. Intermediate

casing strings shall be, cemented solid to the surface. If a liner is used and an intermediate string,

the lap shall be tested by a fluid entry of pressure test to determine whether a seal between the

liner top and the next larger casing string has been achieved. The liner overlap shall be a

minimum of 50 meters. The test shall be recorded on the driller’s log and may be witnessed by

the Licensing Authority Supervisor. In the event of lap or casing failure during the test, the lap or

casing must be repaired or re-cemented and successfully re-tested as required by the Supervisor.

D. Production Casing

Production casing may be set above or through the producing or injection zone and cemented

above the objective zones. Sufficient cement shall be used to exclude overlying formation fluids

from the zone, to segregate zones, and to prevent movement of fluids behind the casing into

zones that contain usable groundwater.

Production casing shall either be cemented with sufficient cement to fill the annular space from

the shoe to the surface or lapped into intermediate casing, if run. This cement shall be a high-

temperature-resistant admix, unless waived by the Supervisor. Production casing lapped into an

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intermediate string shall overlap at least 50 meters; the lap shall be cemented solidly; and shall

be pressure-tested to ensure its integrity. Cold water is recommended as the testing fluid.

Pressure declines of 10% or less in 30 minutes shall be considered satisfactory.

3.4 Review and Modification of well design during drilling

During well construction, the well design shall be reviewed for safety and modified if required if

any of the following conditions are encountered during drilling:

a) Downhole fluid conditions such as temperature, pressure or gas that may create pressures

greater than the Maximum Design Pressure as calculated for the initial well design.

b) Downhole formation conditions such as faults or weak formations that may indicate the

Effective Containment Pressure is less than the values used for the initial well design; and

c) Casing setting depths are materially changed from the depths used for the well design (for

instance, if a casing hangs up and must be cemented shallower than the design depth).

PART FOUR

4 GEOTHREMAL WELL SITE SELECTION AND PREPARATION

4.1 Field Designation

EEA may designate geothermal fields for administrative purposes that contain at least one well

capable of producing geothermal resources graphically constructing each well circle of 200-

metre-radius around the well field. Each such well shall be at the center of a circle and no

producing interval of any well shall be located within 30 meters of the outer boundaries of the

field except where approved by EEA.

The Licensing Authority may notify a well field site to public if it is needed. The public shall

have free and unrestricted access to geothermal license area, excepting however, where

restrictions are necessary to protect public health and safety or where such public access would

unduly interfere with the Licensee's operations or the security thereof. The Licensee shall

provide warning signs, fencing, flagment, barricades, or other safety measures deemed necessary

by the Supervisor to protect the public, wildlife, and livestock from hazardous geothermal or

related activities.

4.2 Amending field rule

When sufficient geologic and engineering information is available, the Licensing Authority may

adopt or amend existing field rules for any geothermal resource field or area. Before adopting or

amending field rules, the Licensing Authority shall notify affected persons, including but not

limited to operators, inhabitant, and any utilities or other commercial users, and allow at least 30

days for them to comment on the proposed rules. The Supervisor shall notify affected persons in

writing of the adoption of the rules.

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4.3 Well site access

Roding, bridges, and culverts shall be provided and maintained to enable continuous access to

the site for the drilling rig and associated equipment at all times during the drilling of the well.

Following well completion, and until the well is abandoned, site access shall be maintained to a

standard that:

a) Allows safe access for normal well logging and maintenance activities by light vehicles;

and

b) Can be readily reinstated to a condition allowing for the access of a rig or other

equipment to work over the well

Consideration in well site design and construction, the site shall be designed and constructed to:

a) Support all loads imposed by the drilling equipment and associated plant (such as

cranes);

b) Control run-off and contain drilling fluids during drilling operations;

c) Review the geotechnical assessment during site preparation and carry out additional

remedial work as required;

d) Consider consolidation grouting, where subsurface conditions warrant have finished

grades in the site area covered by the drilling rig within tolerances specified in the rig

equipment OEM documentation. Outside this area, the surface of the site should be

finished to grades that provide controlled drainage

4.4 Unstable terrain

If the construction of drilling sites, roads, sumps, steam transmission lines, and other

construction attendant to geothermal operations could cause or could be affected by slumping,

landslides, or unstable earth conditions, the Licensing Authority shall require that the Licensee

submit a written analysis of the proposed work prior to the commencement of any construction

and prior to approving a permit to drill. At the request of the Licensing Authority, the report shall

be prepared by a civil engineer, with the appropriate competency certificate in Ethiopia and

experienced in soils engineering; if slumping or land-sliding could be involved, the requested

report shall also be prepared by an engineering geologist, the appropriate competency certificate

in Ethiopia and experienced in slope stability and related problems. No permit to drill shall be

approved unless the report indicates that the work is planned in such a manner as to avoid or

mitigate the problem throughout the life of the project. Upon completion of any construction

authorized by the Supervisor pursuant to this section, the Operator shall certify in writing to the

Supervisor that the work was carried out according to the approved plans subject only to changes

approved by the Supervisor.

4.5 Compliance

Well sites and associated works shall be built and operated to comply with requirements of the

applicable environmental consents and permits of the country as well as all applicable

occupational health and safety statures.

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4.6 Consideration for waste sump

Consider the following when designing and using waste sumps:

a) Waste sumps are constructed to contain cuttings and liquid drilling and cementing

wastes and all other contaminated fluids generated by the drilling operations;

b) The sump is usually designed to allow isolation of part of the volume for primary

settlement of solids, with any necessary secondary settlement and treatment occurring in

the remaining volume. Alternatively, two separate sumps can be used;

c) Operating procedures should ensure that the maximum fluid level in the sump will

remain below the cellar floor level;

d) The sump design and construction should ensure that there will be no erosion or collapse

of the sump walls during operations;

e) Where two waste sumps are constructed close together, the design shall prevent leakage,

erosion or collapse of the material separating the two sumps when the upstream sump is

full and the downstream sump is empty;

f) The design of the upstream sump should allow for a holding capacity of at least five

times the total volume of the solid material expected to be drilled from the well;

g) The volume necessary to contain all drilled solids, waste mud and cement will be

determined by the following:

i. Hole volumes – when brought to the surface, drill cuttings will occupy

approximately twice the in-situ volume downhole;

ii. Formations to be drilled – erodible formations can result in over-gauge hole and

excess cuttings;

h) Waste sump volume requirements can be reduced where:

i. Cuttings are removed directly from the shale shaker

ii. Solids-removal equipment with the drilling rig results in drilling wastes with a

low water content and minimal mud waste;

i) Waste sumps should be periodically monitored in accordance with relevant environment

consents and permits.

4.7 Water supply

An adequate supply of water shall be available to the site during all drilling operations. The

quantity of water available shall be adequate to meet maximum projected requirements for

quenching, drilling (including drilling without returns of circulation) and cementing operations;

and equipment and infrastructure shall be placed and fully operational to provide the volume and

rate of flow needed in emergencies as well as under normal operating conditions. All applicable

statues as well as rules and regulations related to water rights of the country shall be adhered to.

4.8 Storage facility

Storage facilities for hazardous substances used in the drilling operation be designed and

operated to prevent adverse impact to human health and safety and the environment.

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Fuel storage tanks shall be designed and located to minimize potential hazards and shall comply

with relevant national and/or local/regional statues and regulation.

4.9 Security

Appropriate security shall be maintained to allow only authorized personnel access to the site

during drilling operations.

4.10 Fencing and signage

Appropriate fencing and signage shall be erected and maintained. Signage shall be located at the

site entrance advising of:

a) Hazards, constraints on entry, and requirements for personal protection equipment;

b) Waste sumps that constitute hazards; and

c) Areas where hazardous gases may be discharged or can accumulate.

All safety-related signage shall include recognized international safety and hazard symbols to

ensure maximum safety for workers, local residents and visitors. Symbols for Flammable, Crane

Overhead, Danger of Suffocation, Watch for Falling Objects, Watch Your Step, High Voltage

and Hard Hat Area are among those highly suggested, along with any other signs deemed

necessary.

PART FIVE

5 GEOTERMAL WELL DRILLING EQUIPMENT AND TOOLS

5.1 Suitability of equipment

Equipment associated with drilling works shall be assessed for suitability and wherever

applicable, should comply with national, international, and API standards.

5.2 Mast guy Anchor

Where the drilling rig requires the installation of mast guy line anchors in the ground around the

well site, the design and construction of these anchors shall comply with the original equipment

manufacturers (OEM’s) documentation.

5.3 Rig and Hoisting capacity

On completion of the well design all loads to be imposed from drilling operations, including the

running and cementing of casings, shall be assessed, and a margin of safety shall be added to

establish the minimum hoisting capacity required. The capacities of all components of the

equipment specified and selected for the drilling shall exceed the minimum capacities estimated

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to be required to meet the loadings. Assessment of the capacities of separate components of the

drilling rig equipment certifications should be presented to the Licensing Authority.

5.4 Generator, electrical systems and lighting

5.5 Gas detection

An appropriate gas detector system comprising at least four sensors with the capability of

detecting both H2S and CO2 shall be on site and functioning at all times while the rig is

operating. Gas detectors shall be maintained in accordance with the manufacturer’s OEM

documentation, and shall activate both audible and visual alarms.

A gas hazard abatement plan shall be prepared and all rig crew and support personnel shall be

familiar with its application.

Gas hazard escape equipment shall be provided at appropriate locations and available for use at

all times when the rig is operational. All rig and support personnel shall be trained and

competent in the use of Emergency Life Support Apparatus (ELSA) or equivalent escape

equipment. At least one Self-Contained Breathing Apparatus (SCBA) shall be onsite, and at least

two of the rig crew on every shift shall be trained and competent in its use. There should also be

at least two muster points and wind sock on the drilling rig.

5.6 Rig instrumentation

Minimum requirements for rig instrumentation shall be:

a) Total weight indicator;

b) Tank volume and gain-loss indicators;

c) Standpipe pressure gauge;

d) Wellhead pressure gauge; and

e) Indicators for temperatures of rig pump suction fluids and returning fluids (drilling fluid

going in and coming out of the well).

Other instrumentation shall include:

a) Pump speed indicators;

b) Rotary torque indicator;

c) Drilling fluid flow rate indicator (including air flow if appropriate) for downhole flow,

return flow, or both;

d) Kelly height and rate of penetration indicators;

e) Drilling fluid density;

f) Recorders which record any or all of these parameters;

g) Rotary speed indicator; and

h) Makeup torque indicator.

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Rig instrumentation shall be inspected, maintained and recalibrated as necessary at the start of

each well, and at intervals specified in the OEM standards during drilling operations.

5.7 Blow out preventer and gas accumulator

Blowout-Prevention Equipment (BOP) installations shall include high temperature-rated packing

units and ram rubbers, if available, and shall have a minimum working-pressure rating equal to

or greater than the lesser of:

a) A pressure equal to the product of the depth of the BOP anchor string in meters times 0.2

bar per meter;

b) A pressure equal to the rated burst pressure of the BOP anchor string;

c) A pressure equal to 138 bars (13.8 megapascals).

Specific inspections and tests of the BOP shall be made by the Licensing Authority or assigned

advisor. The requirements for such tests will be included in the Licensing Authority's answer to

the notice of intention to drill maintained and function tested in accordance with API STD 53

5.8 Blowout Prevention Equipment and Procedures

All necessary cautions shall be taken to keep all wells under control at all times, utilize trained

and competent personnel, and utilize properly maintained equipment and materials. Blowout

preventers and related well control equipment shall be installed, tested immediately thereafter

and maintained ready for use until drilling operations are completed. Certain components, such

as packing elements and ram rubbers, shall be of high temperature resistant material as

necessary. All kill lines, blow down lines, manifolds and fittings shall be steel and shall have a

temperature rated minimum working pressure rating equivalent to the maximum anticipated

wellhead surface pressure. Dual control stations shall be installed with a high-pressure backup

system. One control panel shall be located at the driller’s station and one control panel shall be

located on the ground at least 15 meters away from the wellhead. Air or other gaseous fluid

drilling systems shall have blowout prevention assemblies. Such assemblies may include, but are

not limited to, a rotating head, a double ram blowout preventer or the equivalent, a banjo-box or

an approved substitute and a blind ram blowout preventer or gate view, respectively. Exceptions

to the requirements of this section will be considered by the the Licensing Authority Supervisor

only for certain geologic and well conditions such as stable surface areas with known low

subsurface formation pressures and temperatures.

a) Conductor Casing. Before drilling below this string, at least one remotely controlled

hydraulically- operated expansion type preventer or an acceptable alternative, approved

by the Licensing Authority Supervisor, including a drilling spool with side outlets or

equivalent shall be installed. A kill line and blow down line with appropriate fittings

shall be connected to the drilling spool. This requirement may be eliminated by

approval of the Licensing Authority Supervisor.

b) Surface, Intermediate, and Production Casing. Before drilling below any of these

strings, the blowout prevention equipment shall include a minimum of:

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i. One expansion-type preventer and accumulator (Annular Preventer) or a rotating

head;

ii. A {Non-Return Valve (NRV)} on the drilling string - to prevent inflow of annular

fluids or formation into the bottom of the drill string. NRVs should also be used in

the upper sections of the drill string to minimize the volume of aerated fluid to be

vented from the drill string when making a connection;

iii. A manual and remotely controlled hydraulically-operated double ram blowout

preventer or equivalent having a temperature rated minimum working pressure

rating which exceeds the maximum anticipated surface pressure at the

anticipated reservoir fluid temperatures;

iv. A drilling spool with side outlets or equivalent;

v. A fill-up line;

vi. A kill line equipped with at least one valve; and,

vii. A blowdown line equipped with at least two valves and securely anchored at all

bends and at the end.

c) Testing and Maintenance. Ram-type blowout preventers and auxiliary equipment shall

be tested to a minimum of 138 bars or to the working pressure of the casing or

assembly, whichever is lesser. Expansion-type blowout preventers shall be tested to 70

percent of the above testing requirements.

i. The blowout prevention equipment shall be pressure tested:

(a) When installed;

(b) Prior to drilling out plugs and/or casing shoes;

(c) Not less than once each week, alternating the control stations; and,

(d) Following repairs that require disconnecting a pressure seal in the assembly.

ii. During drilling operations, blowout prevention equipment shall be actuated to test

proper functioning as follows:

(a) Once each trip for blind and pipe rams, but not less than once each day for

pipe rams; and,

(b) At least once each week on the drill pipe for expansion-type preventers

(Annular BOP).

All flange bolts shall be inspected at least weekly and re-tightened as necessary during drilling

operations. The auxiliary control systems shall be inspected daily to check the mechanical

condition and effectiveness and to ensure personnel acquaintance with the method of operation.

Blowout prevention and auxiliary control equipment shall be cleaned, inspected, and repaired, if

necessary, prior to installation to assure proper functioning. Blowout prevention controls shall be

plainly labeled, and all crew members shall be instructed on the function and operation of such

equipment. A blowout prevention test shall be conducted weekly for each drilling crew. All

blowout prevention tests and crew drills shall be recorded on the driller’s log.

d) Related Well Control Equipment. A full opening drill string safety valve in the open

position shall be maintained on the rig floor at all times while drilling operations are

being conducted. A Kelly cock shall be installed between the Kelly and the swivel.

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PART SIX

6 GEOTHERMAL WELL DRILLING AND TESTING

Prior to drilling a well and during the drilling, in addition to requirements mentioned under the

Geothermal Resource Development Proclamation No. 981/2016 and the Geothermal Regulation

No. 453/2019 Part 6 and the Licensee must follow the following operational requirements for

drilling.

6.1 Competence and supervision of personnel

Personnel in immediate control of any drilling or workover operations shall be trained and

competent in blowout prevention and control of geothermal wells and should be certified, and

one such person shall be directly in control of the rig while it is operational.

6.2 Unstable area

Drilling any wells, including water wells, is prohibited in areas containing fumaroles, geysers,

hot springs, mud pots, etc. (unstable areas), unless the Licensing Authority determines in

consultation with appropriate water law and agency, after a thorough geological investigation,

that drilling in an unstable area is feasible. In this case, a special permit may be issued. The

following may be required for a well drilled in an unstable area:

a) The Licensing Authority engineer or witness shall be present at the well at all times

during the initial phases of drilling until the surface casing has been cemented and the

BOP has been pressure-tested satisfactorily. The Licensing Authority engineer may

observe all drilling operations at the well and if, in his or her opinion, conditions

warrant, may order a second or third string of surface casing to be run.

b) The Licensee, while drilling the surface casing hole or for any well and well section,

shall continuously monitor and record the following:

i. Drilling fluid temperature (in and out),

ii. Drilling fluid pit level,

iii. Drilling fluid pump volume,

iv. Drilling fluid weight, and,

v. Drilling rate.

6.3 Subsidence and seismic activity

With responsible organ for the detection and abatement of subsidence like GSE and other

government organ, the Licensing Authority will follow the geothermal areas:-

a) Surveys and Bench Marks

i. Subsidence bench marks, at well sites, tied to existing first- and/or second-order

networks, are required for all wells that will be tested or produced. These bench

marks shall be the responsibility of and at the expense of the Operator. Surveys

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shall precede extensive production testing of the well {which could be located in a

new prospect or in a field already under exploitation}

{For the purpose of monitoring ground movements due to production/reinjection activities,

satellite surveys, such as inSarcan be used comparing radar images captured by satellites over

time. Deformation can be measured with millimetre accuracy and 25 years back in time. As,

InSAR Monitoring generates up to 100,000 measurement points per km², this approach is

obviously much more powerful than a traditional one. It is the state-of-the-art approach for

ground movement monitoring (subsidence & rebound) related to O&G operations.}

ii. All survey work shall be identified with the GPS coordinates by Provincial

Surveyor.

iii. All work shall be done under the direct supervision of a Registered Civil Engineer

or Licensed Land Surveyor.

iv. An adequate series of bench marks shall be set as required by the Licensing

Authority and shall be tied to existing survey nets.

v. All field work, computations, etc., shall conform to GCS_Adindan or other

Ethiopian equivalent standards.

vi. All surveys shall be second-order or better.

vii. All single-point tie-ins shall be double-run. Survey loops between two points on

existing surveys may be single-run.

viii. Equipment shall be equal to or better than that accepted by the GCS_Adindan or

other Ethiopian equivalent standards for second-order surveys.

ix. Types of acceptable bench marks are:

(a) Brass rod driven to refusal or 10 meters and fitted with an acceptable brass

plate; and,

(b) Permanent structure (head walls, bridges, etc.) with installed plate.

x. Bench marks at well sites shall be situated so as to minimize the possibility of

being destroyed during any subsequent work-over activity at the wells. Each

bench mark shall be well marked so as to be plainly visible to work-over crews.

xi. Between the wellsite and the network, bench marks shall be set at one-kilometer

intervals or as specified by the Licensing Authority.

xii. Surveys shall be run annually by and at the expense of the Operator while well(s)

are being produced unless otherwise specified by the Licensing Authority.

xiii. The adjusted data from all surveys shall be submitted to the Licensing Authority

within 60 days after leveling is completed.

xiv. Resurveys of the first- and second-order networks shall be coordinated by the

Licensing Authority.

b) Reservoir Engineering.

i. Initial bottom-hole pressures and temperatures (allowing a minimum of one-

month static time) shall be submitted to the Licensing Authority within thirty (30)

days of completion of work.

ii. All preliminary test data shall be submitted to the Licensing Authority within 30

days of completion of the tests.

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iii. Monthly surface recordings of production, injection, temperature, and pressure

shall be reported to the Licensing Authority on the appropriate forms.

iv. Periodic development and review meetings between Operators and the Licensing

Authority shall be required (at least one per year).

6.4 Drilling fluid

The properties, use, and testing of drilling fluids and the conduct of related drilling procedures

shall be such as are necessary to prevent the blowout of any well, or the uncontrolled flow of

fluid from any well. Sufficient drilling fluid materials to ensure well control shall be maintained

in the field area and readily accessible for immediate use at all times.

a) Drilling Fluid Return Temperatures

The temperature of the return drilling fluid shall be monitored continuously during the drilling of

any boreholes section. Either a continuous temperature monitoring device shall be installed and

maintained in working condition, or the temperature shall be read manually. In either case, return

drilling fluid temperatures shall be entered into the log book after each joint of pipe has been

drilled down every 10 meters.

b) Drilling Fluid Control

Before pulling drill pipe, the drilling fluid shall be properly conditioned or displaced. The hole

shall be kept reasonably full at all times; however; in no event shall the annular mud level be

deeper than 30 meters from the rotary table when coming out of the hole with drill pipe. Mud

cooling techniques shall be utilized when necessary to maintain mud characteristics for proper

well control and hole conditioning.

c) Drilling Fluid Testing

Mud testing and treatment consistent with good operating practice shall be performed daily or

more frequently as conditions warrant. Mud testing equipment shall be maintained on the drilling

rig at all times. The following drilling fluid system monitoring or recording devices shall be

installed and operated continuously during drilling operations, with mud, occurring below the

shoe of the conductor casing:

i. High-low level mud pit indicator including a visual and audio-warning device, if

applicable.

ii. De-gassers, de-silters, and de-sanders.

iii. A mechanical, electrical, or manual surface drilling fluid temperature monitoring

device. The temperature of the drilling fluid going into and coming out of the hole

shall be monitored, read, and recorded on the driller’s or mud log for a minimum

of every 10 meters of hole drilled below the conductor casing.

iv. A hydrogen sulfide indicator and alarm shall be installed in areas suspected or

known to contain hydrogen sulfide gas which may reach levels considered to be

dangerous to the health and safety of personnel in the area.

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No exceptions to these requirements will be allowed without the specific prior permission of the

Supervisor.

d) Monitoring

For surveillance purposes, from the time drilling operations are initiated and until the well is

completed or abandoned, personnel(s) of the drilling crew shall monitor on the rig floor at all

times unless or until the well is secured with blowout preventers or cement plugs.

6.5 Geothermal Wastes and Refuse

Wastes and refuse attendant to geothermal operations, including but not limited to water, oil,

chemicals, mud, and cement, shall be disposed of in such a manner as not to cause damage to

life, health, property, freshwater aquifers or surface waters, or natural resources, or be a menace

to public safety. Disposal sites for geothermal wastes shall also conform to the Laws of Federal

Democratic Republic of Ethiopia. Dumping harmful chemicals where subsequent meteoric

waters might wash significant quantities into freshwaters shall be prohibited. Drilling mud shall

not be permanently disposed of into open pits. Cement slurry or dry cement shall not be disposed

of on the surface. Unused equipment and scrap attendant to geothermal operations shall be

removed from a production or injection operations site and/or stored in such a manner as to not

cause damage to life, health, or property, or become a public nuisance or a menace to public

safety. Trash and other solid waste materials attendant to for geothermal operations shall be

removed and disposed consistent with applicable laws and regulations. Use of hazardous

chemicals shall be minimized. If such chemicals are used, their transport, handling and disposal

shall be in conformity with the laws of Ethiopia and international environmental standards.

6.6 Directional drilling

On completion of the well, the casing condition shall be monitored for any damage, where:

a) The kick-off point and interval of hole where the hole angle is built up are inside casing;

kick off can be in open hole too and

b) The section of hole below the casing subjects the casing to potential wear from

subsequent drilling.

Any indicated casing damage shall be assessed. If it is likely to diminish the safety or integrity of

the well then it shall be repaired.

6.7 Installation, Testing and Inspection of permanent wellhead and BOP

All permanent wellhead components shall be pressure tested prior to installation on the well.

Where possible, pre-assembled components should also be pressure tested as an assembled unit

prior to installation.

6.8 Security of wellhead valve

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Upon completion of works, the wellhead equipment shall be secured against operation by

unauthorized personnel.

6.9 Specified operating range

Following well completion and before the well is put in service, the range of conditions under

which the well can be safely operated shall be specified and documented. This specified

operating range shall be reviewed throughout the lifetime of the well to ensure it reflects any

changes in reservoir or well condition.

6.10 Well logging

The operator has to do at least one wells per exploration prospect, except observation wells and

low-temperature thermal wells, shall be logged with an induction electrical log, or equivalent,

from total depth to the bottom of the conductor pipe, except in the case where air is used as the

drilling medium.

6.11 Post well stimulation (Acidificatio, thermal fracturation, hydraulic fracturation)

a) Within 60 days after the cessation of a well stimulation treatment, the Operator shall

submit a report to the Licensing Authority describing:

i. The pressures (downhole or wellhead pressures) recorded during monitoring

during the well stimulation treatment;

ii. The pressures recorded during the first 30 days of production pressure

monitoring;

iii. The date and time that each stage of the well stimulation treatment was

performed;

iv. How the actual well stimulation treatment differs from what was anticipated in the

well stimulation treatment design;

v. How the actual location of the well stimulation treatment differs from what was

indicated in the permit application; and,

vi. A description of hazardous wastes generated during the well stimulation activities

and their disposition, including copies of all hazardous waste manifests used to

transport the hazardous wastes offsite to an authorized facility.

6.12 Hydraulic fracturing operation

While conducting stimulation work on wells, especially for hydraulic fracturing, the following

procedures should be followed by the licensee

a) A Licensee must not conduct a hydraulic fracturing operation at depth less than 600 m

below ground level.

b) During fracturing, injection or disposal {injection is defined in the proclamation but if

need, disposal can be defined in this directive} operations on a well, a well

authorization holder must immediately report to the commission any seismic event

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within a 3km radius of the drilling pad that is recorded by the well permit holder or

reported to the well permit holder by any source available if;

i. The seismic event has a magnitude of 2.5 or greater, or

ii. A ground motion is felt on the surface by any individual within the 3 km radius of

the drilling pad.

c) If a well is identified by the well permit holder or the commission as being responsible

for a seismic event under subsection (a), must suspend fracturing, injection and disposal

operation on the well immediately.

d) Fracturing and disposal operation suspended under subsection (B) may continue once

the well permit holder has implemented operational changes satisfactory to the

Licensing Authority to reduce or eliminate the initiation of additional induced seismic

events.

PART SEVEN

7 GEOTHERMAL WELL OPERATION AND MAINTENANCE

7.1 Well Completion

A well is considered to be completed upon the earlier occurring of the following dates: 30 days

after drilling operations have ceased and the well is capable of producing a geothermal resource,

or 30 days after the well has commenced to produce a geothermal resource, unless drilling

operations are resumed before the end of the 30-day period For the purpose of filing drilling

records, the 60-day time limit for filing such records shall begin when the Licensing Authority

determines that a well is completed, idle, or plugged and abandoned.

7.2 Well integrity monitoring plans

A Well Integrity Monitoring Plan can cover multiple wells or even reservoirs. Where this is the

case:

a) The scope of the Well Integrity Monitoring Plan shall be stated, along with any

individual wells or groups of wells that are specifically excluded from that plan; and

copies forwarded to the Licensing Authority (EEA) which is responsible for the granting

of geothermal drilling licenses and/or maintaining geological data.

b) Processes shall be put in place to record any variation to the Well Integrity Monitoring

Plan for individual wells or groups of wells.

The Well Integrity Monitoring Plan shall be designed to indicate the presence of any of the

following defects or impairments:

a) External, near surface, corrosion or leakage of the anchor casing;

b) Any corrosion leakage of the wellhead components;

c) Broken or perforated casing;

d) Failed casing connections (for example, by pullout, compressive telescoping, or fracture);

e) Leaks into or out of the casing;

f) Buckled or distorted casing;

g) Collapsed casing;

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h) Corroded casing;

i) Annular flow outside the casings; and

j) Chemical deposition or scale.

The Well Integrity Monitoring Plan shall provide for observation of the following types of

change, all of which can be observed at the surface:

a) Changes in discharged fluid chemistry, enthalpy, pressures or flow rates of production

wells;

b) Changes in surface manifestations of geothermal flow, and particularly the development

of new hot areas on or near the well site;

c) Any indication of fluids entering into a cemented casing annulus at surface and any

deterioration of that cement near surface (such as may arise from rain water draining into

a cellar);

d) Alternatively, any variation in flow from casing annuli; and

e) Loss of pressure measured at a side valve when the well is otherwise known to be under

pressure.

7.3 Wellhead inspection and maintenance

In addition to the Well Integrity Monitoring Plan, or alternatively, as part of it, each wellhead

shall have a documented annual inspection, and at least the following information shall be

recorded by the well owner and copies forwarded to the Licensing Authority (EEA) which is

responsible for the granting of geothermal drilling licenses and/or maintaining geological data.

a) Wellhead pressure;

b) Well Status (for example, shut-in, bleed, production, injection);

c) Operating condition of wellhead valves;

d) Leakage from valve gate or valve stem seals;

e) Condition of protective paint systems;

f) Condition of the anchor casing;

g) Condition of the site and cellar drainage; and

h) Changes in the vertical position of the wellhead measured relative to other casings and to

the cellar and the position of the CHF measured relative to the cellar datum.

7.4 Well tests and remedial works

a) Requirements. The Licensing Authority Supervisor shall require such tests or remedial

work as in his or her judgment are necessary to prevent damage to life, health, property,

and natural resources, to protect geothermal reservoirs from damage or to prevent the

infiltration of detrimental substances into underground or surface water suitable for

agricultural, industrial, municipal, or domestic purposes, to the best interest of the

neighboring property owners and the public.

b) Type of Tests.

i. Casing Tests

(a) Spinner surveys;

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(b) Wall thickness;

(c) Pressure; and,

(d) Radioactive tracer surveys.

ii. Cementing Tests

(a) Cementing of casing;

(b) Pumping of plugs;

(c) Hardness of plugs; and,

(d) Depth of plugs.

iii. Equipment Tests

(a) Gauges;

(b) Thermometers;

(c) Surface facilities, lines, and vessels; an

(d) Blowout-prevention equipment.

BOP inspections and/or tests are normally performed on all drilling wells.

Any remedial works identified by the inspection program shall be completed as soon as

practicable. Where there is a potential for further deterioration that threatens personnel safety,

immediate steps shall be taken to eliminate that risk or to reduce the risk of harm to a level as

low as is reasonably practicable.

7.5 Suspended wells

When a well is suspended, the following apply:

a) A cement plug or plugs shall be placed to provide not less than 100 m of continuous

sound cement inside the production casing;

b) The cement plug should be placed on a bridge plug or packer located at or near the

production casing shoe and not less than 10 m above the top of any liner;

c) The cement plug should also be placed in a manner that minimizes dilution of the cement

slurry by fluids in the well;

d) The cement materials should be selected to withstand ambient fluids and temperatures,

and to develop a limited compressive strength to avoid casing damage when the cement is

subsequently drilled out;

e) The casing above the sound cement should be filed to the surface with a weak bentonite

and cement type of filer; and

f) The cement plug shall be pressure tested to a sufficient test pressure and duration to

confirm the cement plug is sound and provides sufficient integrity for the duration of the

well suspension.

PART EIGHT

8 INJECTION WELLS

Injection wells are those used for the disposal of waste fluids, the augmentation of reservoir

fluids, pressure maintenance of reservoirs or for any other purpose authorized by the Licensing

Authority Supervisor provided that, disposal of hazardous material shall be consistent with

25

requirements for storage handling and use of those chemicals under Ethiopian Law and

International environmental standards. New wells may be drilled and/or old wells may be

converted for water injection or disposal service. An Operator planning to convert an existing

well to an injection or disposal well, even if there will be no change in mechanical condition,

must file a Workover /Supplementary Notice with the Licensing Authority and the Licensing

Authority must approve the notice before injection is commenced. Injection wells shall conform

to the licensing Authority spacing regulation and African code of Practice.

There are two types of fluids that can be injected in the subsurface using a geothermal well

which are Reservoir fluids (such as separated brine, condensate, or NCG) and fluids of other

origin. The Reservoir fluids are allowed to be re-injected, provided that they will not impair

groundwater resources, etc.

On the other hand, injection of water from other sources should be allowed, providing it will not

impair groundwater or surface water resources, etc., and is compatible with the availability of

water resources in the area. This will allow increasing the water recharge where a low amount

of brine is produced, like in two-phase vapor dominated reservoirs. For instance, waste water

from municipal treatment plants should be allowed to be injected. But, some fluids like injected

harmful wastes such as solutions contaminated by organic compounds or radioactive species

cannot be injected in the subsurface in accordance with other applicable laws of the country.

8.1 Projects

For short term injection operations performed during an exploration drilling project the

application and approval processor will be quickly facilitated than prolonged injection

operations performed during the exploitation of the geothermal field.

Following is an outline which sets forth the requirements for initiating an injection project. Data

and exhibits need only extend or cover the injection zone and zones which will possibly be

affected by an injection project:

a) Letter setting forth the entire plan of operations, which should include:

i. Reservoir conditions;

ii. Method of injection: through casing, tubing, or tubing with a packer;

iii. Source of injection fluid; and,

iv. Estimates of daily amount of water to be injected.

b) Map showing contours on a geologic marker at or near the intended zone of injection.

c) One or more cross sections showing the wells involved.

d) Analyses of fluid to be injected and of fluid from intended zone of injection.

e) Copies of letter or notification sent to neighboring operators.

8.2 Project Approval

A written approval of a project will be sent to the Operator and such approval will contain those

provisions specified by the Licensing Authority as necessary for safe operations as fast as

26

possible. Injection shall not commence until approval has been obtained from the Licensing

Authority.

8.3 Notice to Drill New Well or Convert Existing Well

Prior to the Operator doing work on a well, the appropriate notices must be approved by the

Licensing Authority. Proposals to drill new wells for injection purposes shall be filed with the

Licensing Authority by the Licensee on the form entitled Notice of Intention to Drill New Well

(designation to be determined). Proposals to convert existing wells shall be filed on the form

titled Workover/Supplementary Notice (designation to be determined).

Bonds and fees are required for all proposed wells in accordance to the geothermal regulation.

The bonds and fees for an injection well are the same as those required for a development well.

Injection wells shall conform to the Licensing Authority's spacing directives to be issued.

8.4 Subsequent Work

A Workover/Supplementary Notice is required for any subsequent work that alters the well

casing(s) or changes the use of the well as provided in Section 8.6(6).

8.5 Surveillance

a) Surveillance of waste water disposal or injection projects is necessary on a continuing

basis to establish to the satisfaction of the Supervisor that all water is confined to the

intended zone of injection.

b) When an Operator proposes to drill an injection well, convert a producing or idle well to

an injection well, or workover an injection well and return it to injection service, the

Operator shall be required to demonstrate complete casing integrity to the Licensing

Authority by means of a specific test.

c) To establish the integrity of the casing and the annular cement above the shoe of the

casing, within 30 days after injection is started into a well, the Operator shall make

sufficient surveys to demonstrate that all the injected fluid is confined to the intended

zone of injection. Thereafter, such surveys shall be made at least every two years or more

often if ordered by the Supervisor or his or her representative. All such surveys shall be

witnessed by a Division engineer.

d) After the well has been placed on injection, a Division inspector shall visit the well site

periodically. At these times, surface conditions shall be noted and, if any unsatisfactory

conditions exist, the Operator shall be notified of required remedial work. If this required

work is not performed within 90 days, the approval issued by the Licensing Authority

shall be rescinded. The Supervisor may order that the repair work be done immediately if

it is determined that damage is occurring at a rapid rate.

e) Injection pressures shall be recorded and compared with the pressures reported on the

monthly injection reports. Any discrepancies shall be rectified immediately by the

Operator. A graph of pressures and rates versus time shall be maintained by the Operator.

Reasons for anomalies shall be promptly ascertained. If these reasons are such that it

27

appears damage is being done, approval by the Licensing Authority may be rescinded,

and injection shall cease.

f) When an injection well has been idle for two years, the Licensing Authority may inform

the Operator, by letter, that approval for use of the well for injection purposes is

rescinded. If the Operator intends to reclaim the well for injection purposes, a

Rework/Supplementary Notice shall be filed proposing to demonstrate by specified tests

that the injected fluid will be confined to the intended zone of injection.

PART NINE

9 GEOTHERMAL WELL PLUGING AND ABANDONMENT.

9.1 Objective

The objectives of abandonment plugging are to block interzonal migration of fluids so as to:

a) Protect life, health, environment, and property

b) Prevent contamination of the fresh waters or other natural resources

c) Prevent contamination of ground waters (potable and irrigation waters)

d) Prevent damage to geothermal reservoirs

e) Prevent loss of reservoir energy

f) Protect integrity of reservoirs

9.2 Purpose and requirements for abandonment

The following are general requirements which are subject to review and modification for

individual wells or field conditions. The Licensing Authority may require the witnessing of any

or all of the field operations listed below:

a) General requirements

i. Any well that the Licensee does not intend to use or that is no longer active shall

be properly decommissioned by the Licensee.

ii. Notice to plug and abandon Geothermal Resources Well is required for all wells.

iii. History of Geothermal Resources Well shall be filed within 60 days after

completion of the plugging and abandonment.

iv. The Licensing Authority's Report of Well Plugging and Abandonment will not be

issued until all records have been filed and the site inspected for final clean-up by

a Division engineer.

v. Subsequent to the plugging and abandonment of the hole, all casings shall be cut

off at least 2 meters below the surface of the ground. All concrete cellars and

other structures shall be removed, and the surface location restored, as near as

practicable, to original conditions when all the wells of the cluster are abandoned.

vi. Good quality, heavy drilling fluid approved by the Licensing Authority

Supervisor shall be used to replace any water or geothermal fluids in the hole and

to fill all portions of the hole not plugged with cement.

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vii. All cement plugs, with the possible exception of the surface plug, shall be

pumped into the hole through drill pipe or tubing.

viii. All open annuli shall be filled solid with cement to the surface.

b) Exploratory Well Requirements and ( Production Casing)

i. Base of fresh waters: a minimum of 30 meters cement straddling the interface or

transition zone whether behind casing or uncased. {Rewrite}

ii. Shoe plug (all casing, including conductor pipe) straddle with 30 meters of

cement.

iii. Where the well has been drilled with air, a bridge plug shall be placed at the shoe

of the surface casing and the bridge plug shall be capped with at least 60 meters of

cement.

iv. Surface plug: 15 meters minimum. May be either neat cement or concrete mix.

c) Cased Wells

Cased exploratory, uncompleted development, former producing and injection wells:

i. Geothermal zones (uncased or perforated). Cement plugs shall extend from the

bottom of the zone or perforations to 30 meters over the top of the zone or

perforations.

ii. Liners. Cement plugs shall be placed from 15 meters below to 15 meters above

liner tops.

iii. Casing may be salvaged within protection, if first approved by the Licensing

Authority. A minimum overlap of 15 meters is required.

iv. Casing stubs and laps. Cement plugs shall be placed, if possible, from 15 meters

below to 15 meters above top of casing. If unable to enter stub or lap, 30 meters

of cement shall be placed on the top of the stub or lap.

v. Fish, collapsed pipe, etc. Cement plugs shall be squeezed, with the use of a

retainer or Braden head, with sufficient cement to fill across the production zone

or perforations and to 30 meters above the zone or perforations.

vi. Base of fresh waters: a minimum of 30 meters of cement straddling the interface

or transition zone, whether behind casing or uncased.

vii. Shoes plug (all casing, including conductor pipe): straddle with 30 meters of

cement.

viii. Where the well has been drilled with air, a bridge plug shall be placed at the shoe

of the surface casing and the bridge plug shall be capped with at least 60 meters of

cement.

ix. Surface plug: 15 meters minimum. May be either neat cement or concrete mix.