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EGYPT - BP-Beach Petroleum JV.

BP in November 2009 plugged and abandoned the Burtocal North-1 exploration well in the GoS' North Shadwan concession. The well was drilled to 3,659m, but failed to encounter significant hydrocarbons. BP's partner in this is Beach Petroleum of Australia. BP previously found oil in the NS 377-3 well. Production from this began at the Ras Ghara facility in 2010 and hit a plateau at 10,000 b/d. Beach in 2008 bought its 20% stake in this 1,174 sq-km block from Egypt Kuwait Holding (a unit of the Kharafi group). The third partner in this is the local Commercial International Bank.

Suez Petroleum Co. & RWE. Suco/DEOCO - with Suco being a JV of EGPC and RWE of Germany, and DEOCO operating GoS leases - have seen their output fall to about 9,000 b/d, from 50,000 b/d in late 2003, 66,000 b/d in 1998 and 150,000 b/d in the 1980s. Suco and DEOCO have failed to reverse the fall and expand to a target of 145,000 b/d - despite a major programme begun in 1991 and the coming on stream of small discoveries near their fields.

RWE, a partner of BP and major gas fields in the ND, has blocks in the GoS and interests in gas-rich blocks the ND and the Mediterranean. RWE in DEOCO is responsible for its finds in the west of the GoS and these are operated by it and hooked up to Suco's production system. Suco's main fields are Ras Budran, Ras Fanar and Zait Bay. DEOCO's LL87/1 and LL87/2 fields are very small. Crude oils from Ras Budran and Zait Bay are pumped to Suco's own onshore facilities. Ras Fanar oil is processed at GPC's Ras Gharib field facilities.

Ashrafi Petroleum Co. (Ashpetco), a JV of EGPC and IEOC, produces 5,000 b/d of 30[degrees] oil (down from 20,000 b/d in late 2003) from the Ashrafi field in the south of the GoS, run by IEOC through a WD JV called Agiba Petroleum Co. (Agypetco). Ashrafi was found in 1988 as a small field. Ashrafi SW-1, found in 1992, tested 4,000 b/d. The structure was brought on stream in September 1992.

In May 1997 IEOC found Ashrafi SW-2, which tested 3,490 b/d of oil and 1.8 MCF/d of gas. This was developed quickly. The oil is pumped to Suco's plant at Zeit Bay.

Offshore Shukheir Oil Co. (OSOKO), a JV of EGPC and National Petroleum Co. (NPC), is a small producer with output averaging about 1,500 b/d. NPC is the petroleum E&P arm of the private Egyptian firm Citadel Capital which is a major investor in the refining business (see down2EgyptRef8-17Jan18). OSOKO produces from the Shukheir Bay field of the Shuhkeir Marine GoS block out of a Lower Rudeis Fm. Together with its Shukheir Bay-5 ST well, which was drilled in June 2006, this raised NPC production in that block to a current average of 2,800 b/d.

Among its E&P holdings, NPC has rights on a 40-sq-km development lease 125 km north of Hurghada on the west coast of the Red Sea. Offshore Shukheir Petroleum is the operator. NPC was set up in mid-2006 with a capital of $300m, and has six oil concessions in Egypt producing a total of around 1,900 b/d.

Amal Petroleum Co. (AMAPETCO) is a JV of EGPC (50%), Total (25%) and KUFPEC of Kuwait (25%). Its Amal field, found by Total in 1985, went on stream in late 1988 at the rate of 3,500 b/d. It reached 7,000 b/d in 1991 but fell to 5,000 b/d later. Now it is less than 1,000 b/d, compared to 4,000 b/d in early 1998.

The field, at the southern end of the GoS, has a deep reservoir with 34[degrees] gas-rich oil, found after use of new seismic methods.

Petro Kareem, a JV of Dana Petroleum Egypt of the UK and EGPC, has developed oil and gas fields in the onshore North Zeit Bay (NZB) block. Its production is below 10,000 b/d of crude oil and has the capacity to extract over 10 MCF/d of gas. Dana is different from Sharjah-based Dana Gas. Dana in 2011 had several finds in Egypt.

Petro Kareem, formed in late 2011, has tried but failed to boost production from these finds, which include high quality crude oil, natural gas and condensate in the NZB block. It had two oil finds in the onshore East Bani-Suef block, where it was committed to drill seven exploration and appraisal wells in the Lorcan field.

Dana in early October 2007 acquired the US firm Devon Energy's entire E&P interests in Egypt spanning eight EPSAs. The purchase price effective to Jan. 1, 2007, was $375m. Devon in March 2001 had begun producing 5,500 b/d of oil and 3 MCF/d of gas in its North July field. In 2001 it had a find in its S-W Gebel el-Zeit (SWGEZ) block in the south of the GoS, and SWGEZ-2 well flowed at 6,700 b/d of 33-34.3[degrees] API oils and 2.4 MCF/d of gas at 2,373-2,382m. But production later fell sharply.

Development of the field included a platform and a marine pipeline. SWGEZ was then held 43.75% by Devon (operator), 43.75% by Ocean Energy of the US (later part of Devon), and 12.5% by Forum Exploration. At end-October 2001 it began producing 8,000 b/d of 38[degrees] API oil in its 60-80m East Zeit field about 70 km north of Hurghada, which it had found in late September 2001. Devon developed the block further in 2002/03, but the output has since fallen to a negligible level.

Dana in May 2008 bought 40% in the South-East July EPSA in the GoS from Santos Egypt. Dana said it thus secured attractive new prospects for drilling in a core area and built on five transactions it had completed in Egypt. Dana now is operating in this block. Dana has also drilled at West el-Burullus in the ND and at West Gihan in the GoS in JV with GdF-Suez of France.

TransGlobe Energy of Canada, having bought the assets of Tanganyika (another Canadian firm) in the West Gharib region and other areas, produced about 7,000 b/d of crude oil during the fourth quarter of 2007 - up 34% over the third quarter of 2007 - due to addition of the West Gharib assets. TransGlobe's output in Egypt now is below 9,000 b/doe - consisting of 85% of crude oil and gas liquids and 15% natural gas.

West Gharib block has five small oilfields in production - Hana, Hoshia, West Hoshia, Fadl and South Ramhi. TransGlobe has followed on some finds in West Gharib: Hana-11 in late 2007 encountered oil in the main zone of the Hana field and was later drilled to 9,000+ ft to evaluate deeper targets. Hana-13 was drilled to evaluate deeper horizons. The wells were put on stream in mid-2008 but their output has since fallen to a negligible volume.

Dana Gas, based in Sharjah, leads a BOO consortium which has built a gas liquids plant in Ras Shukheir through its Bahrain-based unit, Danagaz Bahrain. This is a JV of Danagaz Bahrain (40%), Egas (40%) and OAPEC's Apicorp (20%). The plant, on stream in 2009, has the capacity to process 55,000 MCF/d of natural gas and produce 120,000 t/y of LPG.

EGPC supplies associated gas for the plant under a long-term contract. The plant can produce up to 110,000 t/y of propane for export. The butane, 10,000 t/y, is sold locally. Dana Gas has producing concessions elsewhere in Egypt (see gmt2EgyptFields8-15Jan18).

GoS/South Sinai - Belayim Petroleum Co. (Petrobel), a 50-50 JV of EGPC and IEOC, is one of Egypt's large oil producers and for many years had been the biggest gas producer operating in Sinai and the GoS, with offshore Belayim being its first and biggest field. IEOC's oil output has fallen below 50,000 b/d, from 200,000 b/d in 2003, 210,000 b/d in 1998 and a peak of 240,000 b/d in 1993. Its GoS and Sinai crudes are mixed into a Belayim Blend, 27[degrees] API. But its gas output has risen. Ieoc in Egypt has produced 2,020 MCF/d of gas in Egypt; but now the output is lower. ENI units have been in Egypt since 1955.

Petrobel in November 2011 had an oil find which tested 2,270 b/d 40 km south of Abu Rudais city in south Sinai. The well was put on stream. Petrobel implemented a 2011/12 plan by the drilling of two development wells and another exploratory one in Sinai and the Mediterranean. Two development wells 112-141 H and 112-140 H were in 2011 drilled to 9,243 and 10,427 feet, respectively.

Petrobel operations in the GoS and South Sinai are tied to its Abu Rudeis centre. It has the 65MW Belayim power plant meeting the needs of its fields and water injection. Ieoc also has a JV with EGPC to extract oil from the WD in the Meleiha and West Razzaq blocks in the Qattara depression. Together with Union Fenosa of Spain, ENI is a major shareholder in Egypt's Damietta LNG export venture.

ENI had a bad experience in April 1993 as the Cairo parliament moved against a deal to consolidate Ieoc's 14 development licences in Sinai, the GoS and the ND - with each having separate terms and expiry dates. It extended their validity to 2020. Cairo got the parliament to approve this. Iooc had spent over $10bn in then.

Petrobel has several fields, including the onshore/offshore Belayim consisting of Belayim Marine and Belayim Land in Sinai and Ras Gharrah in the GoS. Belayim Land was Ieoc's first discovery in 1954, producing 22.5[degrees] oil from a Miocene Fm at 7,000 ft. Belayim Marine was its second find in 1961, pumping 29[degrees] oil from a Miocene Fm at 8,500 ft. After a May 2000 deal with EGPC, Ieoc spent $450m to stabilise its oil production at 200,000 b/d over a five-year period, by developing new discoveries and increasing exploration. But actual output has fallen far short of that target.

Kuwait Energy Co. (KEC), a private firm, is a partner in five producing blocks. The World Bank's IFC signed the deal with KEC in 2009 giving the firm a loan. KEC also has interests in the WD, where al-Zahra' oilfield in the East Ras Qattara block has been developed in JV with Oil Search of Australia and Sipetrol of Chile's state-owned ENAP. Al-Zahra' now produces 1,900 b/d. KEC also produces natural gas.

KEC in April 2012 found oil at its Area A concession near Shukheir N-W Field. The find was the fourth at Area A and pushed the number of successful explorations in Egypt to 17 from 2008. The well had a flow rate of 1,250 b/d.

KEC has E&P assets in Iraq, Oman, Russia, Ukraine and Yemen.
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Publication:APS Review Oil Market Trends
Geographic Code:7EGYP
Date:Jan 8, 2018
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