EGYPT - Geology - The Western Desert & Offshore.

EGPC experts say the deep Mediterranean Sea area off Egypt's Western Desert could potentially overtake the Nile Delta as the most prolific gas province in Egypt. There, trends extending from the Western Desert's Cretaceous and Jurassic are of big interest to foreign firms, including BP, Shell and Agip.

The Western Desert and its offshore areas already account for a major part of the country's 2003 gas production of 24.6 BCM/year and should more than double by 2017. In late 2005 Egypt was producing 4,870 MCF/d (137.9 MCM/d) of gas and the output in 2006 will be higher. In addition, Egypt produces over 120,000 b/d of condensate and NGL.

Shell, a top gas producer in Egypt and leading player in the Western Desert, is very keen on its North-East Mediterranean Deep Marine (NEMDM) block, which it expects to be the source for a major LNG/GTL venture. One of the biggest exploration blocks in the world and the deepest in offshore Egypt, this is a 41,500-sq km tract where water depths range from 800 to 2,800 metres and its exploration costs are estimated at US$230m.

The northern onshore parts of the Western Desert, so far a mainly gas-prone province, are underlain by two east-west trending sub-basins containing thick Palaeozoic to Tertiary sediments. Oil and gas discoveries have been made in both sub-basins. Cretaceous sandstones and carbonates provide the reservoirs.

Oil is sourced mostly from Jurassic shales. A Palaeozoic source similar to those of Algeria and Libya cannot be ruled out. The same source is expected in the deep marine areas off the desert. The trapping mechanism onshore is primarily structural but there is a stratigraphic component involving drape over pre-existing highs. Gas-rich Jurassic Fms include the Ras Qattara and Khatatba.

Gas fields found both onshore and offshore in the Western Desert have proved to be large. Gas production there is rising rapidly, and infrastructure along the northern parts encourages further exploration in nearby areas. Major onshore gas discoveries have been made there in the past nine years by Repsol (taken over by Apache of the US in Khalda concession and other blocks), Shell and others.

The giant Cretaceous/Jurassic Abu al-Gharadiq gas fields have been estimated by Wafik Meshref to contain 10 bn barrels of oil equivalent, of which 1.5 bn barrels oe have been proven and the remaining proven reserves by end-1998 were put at 1.04 bn barrels oe. Cumulative production there by end-1998 had reached 460m barrels oe.

In Khalda, in the north-west of the Western Desert, Apache has made a number of gas discoveries and most of the gas/condensate finds have flowed from Ras Qattara and Khatatba Fms. Khalda - including the 2 TCF Qasr field - has important oilfields which, together with fields in other blocks, have made Apache the biggest oil producer in the Western Desert and the third largest oil producer in Egypt (see next week's Review).

In the Alamein region, south-west of el-Hamra terminal, two trends of oil and gas fields can become important: the Alamein-Razzak trend of fields already discovered, and the parallel Alamein West Structural Ridge, where Apache has identified many prospects. Meshref has estimated that the Alamein region contains about 7 bn barrels oe of Jurassic oil and gas, of which 500m barrels oe have been proven, with the first discovery there having begun production in 1968.

The Faghur Basin, a non-producing region of the Western Desert, is said by Meshref to contain 2 bn barrels oe of recoverable oil and gas in the Palaeozoic.

North el-Mesaha Trough, a frontier area in the far south-west of Egypt, is said to contain hydrocarbons. No interest has been expressed in this area so far as there is no infrastructure and EGPC has not provided all the necessary data. The area is available to any qualified company willing to carry out geological and geophysical studies on the area in the first phase.

On Feb. 17, 2003, the foreign ministers of Egypt and Cyprus signed an agreement delineating their maritime borders in a move likely to boost oil and gas exploration in the offshore area.