EGYPT - The Western Desert & Offshore.

EGPC experts, including geologist Mohammed Sami Shaheen, 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 major interest to foreign companies, including the majors like BP, Shell and Agip.

The Western Desert and its offshore areas already account for a major part of Egypt's gas production of almost 3,000 MCF/day and should more than double by 2017.

Shell, a top gas producer in Egypt and the leading player in the Western Desert, is particularly keen on its North-East Mediterranean Deep Marine (NEMDM) block. One of the biggest exploration blocks in the world and the deepest in offshore Egypt, this is a 41,500-square kilometre tract where water depths range from 800 to 2,800 metres and its exploration costs are estimated at US$230m. Shell has forecast MEMDM reserves at 15 TCF of gas and 4 bn barrels of oil, and has so far drilled two exploration wells. Shell has done a 7,000 sq km 3D seismic survey on the block.

Adjacent to Shell's NEMDM are four big deep water blocks, A1, A2, D1 and D2. These were originally offered in EGPC's 1999 bid round as two larger blocks: the 20,812 sq km Block A (Matruh Deep Water) and the 28,306 sq km Block D (North-West Mediterranean Deep Water). Later in 1999 EGPC decided to suspend their tender pending acquisition of additional data on them to help market the acreage as four blocks. Since then Veritas DGC has done a 8,500 sq km infill 2D seismic survey in two phases to highlight priority areas. The deadline for the bid round for the four blocks, among 32 tracts on offer, has been put back to Feb. 28, 2002.

This part of the Mediterranean and deep areas north of the Nile Delta have also been studied by Wavetech Geophysical of Colorado in a non-exclusive regional seismic survey. Started in mid-1999, the survey has included 2,925 km of high-fold, long-offset seismic data.

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 and the same source is expected in the deep marine areas off the desert. The trapping mechanism onshore is primarily structural but there is also a stratigraphic component involving drape over pre-existing highs. Gas-rich Jurassic formations 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 the recent installation of infrastructure along the northern parts encourages further exploration in nearby areas. Major onshore gas discoveries have been made there in the past five 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 of oil equivalent have been proven and remaining proven reserves by end-1998 were put at 1.04 bn barrels of oil equivalent. Cumulative production there by end-1998 had reached 460m barrels of oil equivalent.

In the Khalda area, 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 formations. The Khalda area 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 Part 2 in 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. One of the latter prospects, Alamein West-1 well, flowed at the rate of 8,277 b/d of oil and about 3.9 MCF/day of gas from three zones: a mid-zone which tested 6,547 b/d of 38o API oil and 3 MCF/day of gas from a high-porosity and fractured Alamein dolomite formation 300 feet thick and at least half of it was believed to contain oil with no water; an upper-most zone which tested 1,066 b/d of oil and 500,000 CF/day of gas from the Dahab formation at depths of 8,832-8,842 feet; and the lowest zone which tested 664 b/d of oil and 400,000 CF/day of gas from an AEB-1 formation at depths of 9,324-9,340 feet.

Mr. Meshref has estimated that the Alamein region contains about 7 bn barrels of oil equivalent of Jurassic oil and gas, of which 500m barrels of oil equivalent 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 Mr. Meshref to contain about 2 bn barrels of recoverable oil and gas reserves in Palaeozoic formations.

North El Mesaha Trough, a frontier area in the far south-west of Egypt, is said to contain hydrocarbons. The whole trough has been allocated as a single tract and has been on offer since 1997. No interest has been expressed in this block so far because it is very far from infrastructure and EGPC has not provided all the necessary data. The block is available to any qualified company willing to carry out geological and geophysical studies on the area in the first phase.