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EGYPT - Profiles Of The Eastern Ventures.

The most important oil producing ventures are in the Gulf of Suez (GOS) and Sinai, followed by the relatively newer producers in the Western Desert and the Eastern Province.

The Gulf of Suez Petroleum Co. (GUPCO), a 50-50 JV between EGPC and BP with the latter being the operator, is Egypt's biggest oil producer. But its GOS output has fallen to 215,000 b/d, compared to 280,000 b/d in early 2000, 310,000 b/d in early 1998, 430,000 b/d in 1992 and 500,000 b/d in the 1980s. GUPCO's crude oils make up the Suez Blend, 32 deg. API which is Egypt's main export crude oil. Its output in the Western Desert (see Gas Market Trends) has declined to 20,000 b/d. But GUPCO's GOS output is to rise in the coming months with the development of oilfields found in the past two years.

However, GUPCO's production of natural gas has been rising rapidly in recent years. BP has said its gas production in 2004 should reach 1,200 MCF/day and all this has been locked into the domestic market. In recent years, BP and its partners have discovered very large reserves of natural gas in the Nile Delta and in its offshore Mediterranean extensions. BP's gas exploration programme for 2005-2010 is aimed to find and develop 20 TCF of new reserves, which will enable the company to produce gas for export in LNG form in partnership with ENI group of Italy (see Part 3).

On March 16, 1999, BP (which took over after its acquisition of Amoco) and EGPC signed a new agreement which converted their JV to a PSA. It was then agreed that BP should raise GUPCO's oil production to 300,000 b/d and maintain it over six-year period, during which the UK/US super-major was to invest $450m to extend the life of its GOS and Western Desert fields. But many of GUPCO's fields in the GOS have since declined at a more rapid rate than both BP and EGPC had anticipated.

BP is the biggest foreign investor in Egypt, where it has spent nearly $10 bn, with Amoco of the US having operated in Egypt since the early 1960s. Amoco's first oil discovery in the GOS was in 1965. GUPCO's production system relies mainly on a rapid development of newly discovered reservoirs, with the pace of re-exploration accelerated since 1995. This will be accelerated further in the coming years.

GUPCO has more than 38 offshore fields in the GOS, which include Morgan, July, October, Ramadan, Ras Shukheir, Sidki, Shoab Ali, Badri and East Tanka Asl. From 1990, Amoco acquired additional blocks in the GOS, because its fields then were 25-37 years old and most of them were declining. Since its absorption of Amoco, BP has acquired several other blocks in the region. The latest were four blocks which BP got in April 2003, three in the GOS - East Morgan Block 2, North Ghara Block 4 and East Warda Block 35 - and one in the northern Red Sea covering Blocks 12/13.

Morgan, a giant and Amoco's first oil find in 1965, has been in decline since the late 1980s. Despite the tie-in of small fields later found nearby, Morgan's capacity now is less than 40,000 b/d, compared to 120,000 b/d in late 1995, producing 27-32 deg. API oils from Miocene formations at depths of 5,100-6,400 ft. Morgan's life was extended by 30 years, but at a relatively low capacity, with the completion of a water injection system in May 1997. The field's remaining recoverable reserves were thus doubled to 230m bls. Before work on the $450m modernisation programme began in late 1999, the field had 160 production and water injection wells hooked up to 24 platforms. July, Amoco's second major find in 1973, produces 25,000 b/d of 31-34.6 deg. oils from Lower Cretaceous formations at depths of 8,100-10,000 ft, down from 80,000 b/d. A part of its production comes from satellite fields found in more recent years. July has a water injection system.

October, found in 1978, is BP's biggest field with extensions discovered in recent years, including one in 1994. October and its satellites, including major northern extensions developed in the late 1980s and early 1990s, now produce 85,000 b/d of 28-30 deg. oils mainly from the Lower Cretaceous at an average depth of 11,000 ft and 38 deg. oil from a Miocene formation - compared to 118,000 b/d in early 2000, over 150,000 b/d in 1990 and 180,000 b/d in late 1995. Ramadan, Amoco's third major discovery in 1974, and satellite fields produce 20,000 b/d of 30-31.7 deg. oils from the Lower Cretaceous at a depth of 11,400 ft, down from 40,000 b/d in early 1998. Ramadan has a water injection system. Ras Shukheir, one of the fields tied to the major oil producers, is a gas gathering/processing centre for GOS associated gas.

GUPCO's other GOS fields include East Tanka (found in 1996 in Miocene Fm), the 12-16m bls East Tanka Asl (found in 1997 in faulty Miocene Fm, producing oil and gas tied up to a new production platform in late 1998; a 25m bls field 1.8 km west of July in the South Gharib block (found in 1998 as its biggest oil discovery since 1989); Esma (E. Shukheir block) on stream since late 1997; E. Shukheir Marine on stream since early 1998 and hooked up to Morgan; Edfu, a 30m field found in 2001 off the east Sinai and on stream since Nov. 28, 2002, now producing 25,000 b/d; Luli, a 20m field found in 2001 and producing a small volume; and Saqqara, the largest GOS discovery in 14 years, made in May 2003 during exploration around Morgan, producing a small volume but having the potential for a 45,000 b/d plateau.

Suez Petroleum Co. & Deminex West Gulf Co. (Suco/DEOCO) - with Suco being a JV of EGPC and Deminex, and DEOCO operating GOS leases - also have seen their output decline. Their production averages about 45,000 b/d, compared to 66,000 b/d in mid-1998 and 150,000 b/d in the 1980s. Suco and DEOCO have failed to reverse the fall and expand to 145,000 b/d - despite completion of a major programme begun in 1991 and the coming on stream of small discoveries near their fields.

Deminex in DEOCO is responsible for its finds in the west of the GOS and these are operated by and hooked up to Suco's production system. Suco's main fields are Ras Budran, Ras Fanar and Zait Bay. DEOCO's main fields are LL87/1 and LL87/2, which are very small. Crude oils from Ras Budran and Zait Bay are pumped to Suco's onshore facilities. Ras Fanar oil is processed at GPC's Ras Gharib field facilities. Ras Budran, found in 1978 in a Cretaceous Fm 12,500 ft deep, produces 20,000 b/d of 24 deg. oil, down from 40,000 b/d in mid-1998. Zait Bay, found in 1981, has fallen to 10,000 b/d of 34.5 deg. oil, from 25,000 b/d in mid-1998. Ras Fanar, found in 1978, has fallen to 12,000 b/d of 30 deg. oil, from 20,000 b/d in mid-1998. The DEOCO fields, found in recent years, produce about 2,000 b/d, plus some condensates and LPG. To boost reserves, work has included a gas lift, drilling of six wells at Ras Budran and four at Ras Fanar, a revamp of Zait Bay facilities, an additional GOSP, increasing the gas re-injection capacity from 27 to 36 MCF/d and two 12-inch, 10-km marine pipelines. Suco has a gas plant in Zeit Bay that can produce 350 t/y of LPG and 1,600 b/d of condensate, which also receives associated gas from Suesso (see below). Some of the assoc. gas is re-injected into the fields to boost their oil recovery. In Nov. 1997, Deminex got the offshore Block 1, North Idku, in the Nile Delta, which is now operated by RWE-DEA of Germany.

Ashrafi Petroleum Co. (Ashpetco), a JV between EGPC and Agip (known locally as IEOC), produces almost 20,000 b/d of 30 deg. oil from the Ashrafi field in the south of the GOS, operated by Agip through a Western Desert JV called Agiba Petroleum Co. (Agypetco). Marathon of the US, which had a stake in Agypetco, in 1999 sold its Egypt holdings and left the country. Ashrafi was found in 1988 as a small field. Ashrafi SW-1 was found in 1992 and tested 4,000 b/d. The whole structure was brought on stream in Sept. 1992. In May 1997 Agip found Ashrafi SW-2, which flowed at 3,490 b/d of oil and 1.8 MCF/d of gas. This was developed quickly. The oil is pumped to Suco's processing plant at Zeit Bay.

Geisum Oil Co. (GOC), a state-owned unit of EGPC, operates the Geisum group of fields in the GOS which came on stream in 1991 with a proven reserve of 28m barrels and a capacity of 10,000 b/d. But output fell to less than 1,500 b/d in early 1993 and operations were suspended. Extensions to the first Geisum field and a Tawila structure were developed by mid-1994 and production was resumed at 10,000 b/d. North Geisum and West Tawila were found in 1995 and were developed quickly. But work on expanding all the fields to 30,000 b/d by late 1997 was delayed. Now GOC is producing less than 10,000 b/d, down from 16,500 b/d in mid-1998.

Zaafarana Oil Co. (Zafco), a JV of EGPC (50%), British Gas (25% & operator), Yukong of S. Korea (12.5%) and Union Pacific of the US (12.5%). Output at Zaafarana fields, on stream in early Nov. 1994, rose from 10,000 b/d, to 24,000 b/d of 21 deg. oil by late 1995. But it fell later and and now it is averaging 10,000 b/d. The Warda field was the first discovery in late 1990. After extensions to this were found later the group was called Zafco. BG has blocks very rich in gas elsewhere (see Gas Market Trends).

Esso Suez (Suesso), a JV of EGPC and ExxonMobil, produces very little oil, down from 15,000 b/d in late 1995 and over 21,000 b/d in 1991, from small fields on its East Zeit block. Suesso produces associated gas - with capacity of 38 MCF/d - carried by an 11 km pipeline to a central gathering system, which also serves the nearby Zeit Bay and Ras Al Bihar fields, and then pumped to Suco's gas processing plant.

Offshore Shukheir Oil Co. (OSOKO), a JV of EGPC, Agip (operator) and Swiss-based Racebrook (Agip & Racebrook have bought the equity of Total), is a small producer with output falling from over 4,000 b/d in 1991 to 1,000 b/d. Its fields include Shukheir Bay, found in 1978 and on stream since 1981, which produces 34.5 deg. oil rich in associated gas - as in the case of the other OSOKO fields. Shukheir Marine (1988) produces 42-43 deg. oil. Shukheir Gamma (1989) produces similar oil. Ras Shukheir is the centre for gathering/processing of associated gas produced by GOS firms. Racebrook produces some oil from a South Ramadan field in another venture.

Amal Petroleum Co. (AMAPETCO), a JV of EGPC (50%), Total (25%) and KUFPEC of Kuwait (25%). Its Amal field, discovered in 1985 by Total, went on stream in late 1988 at 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. The field, at the southern end of the GOS, has a deep reservoir with 34 deg. gas-rich oil, found after use of new seismic methods.

Other operators in the GOS include Devon Energy of the US which in March 2001 began producing 5,500 b/d of oil and 3 MCF/d of gas in its North July field. In 2001 Devon also made a discovery on its S-W Gebel El-Zeit block in the south of the GOS, and SWGEZ-2 well flowed at 6,700 b/d of 33-34.3 deg. API oils and 2.4 MCF/d of gas at depths of 2,373-2,382 metres. The field include a platform and a marine pipeline. SWGEZ is held 43.75% by Devon (operator), 43.75% by Ocean Energy (now part of Devon), and 12.5% by Forum Exploration. Ocean Energy (now part of Devon) at end-Oct. 2001 began producing 8,000 b/d of 38 deg. API oil in its 60-80m East Zeit field about 70 km north of Hurghada, which it found in late Sept.. A further development in 2002 raised its output to 11,000 b/d and in 2004 this will reach 22,000 b/d, rising later to 45,000 b/d.

Gemsa Petroleum Co., EGPC-Shell, as developed the East Gemsa field with reserves originally est. at 25m barrels of 30 deg. oil and a capacity of 7,000 b/d. But this has fallen to about 1,500 b/d.

Cabre Exploration of Canada in Oct. 2001 raised production from 833 b/d to 4,133 b/d at its onshore West Esh El Mallaha (WEEM) block about 7 km west of Hurghada, after finding the 33m bls Rabeh West field in Sept. which tested 3,300 b/d of 38.2 deg. API oil.

GOS/South Sinai - Belayim Petroleum Co. (Petrobel), EGPC-Agip (locally known as Int'l Egyptian Oil Co. - IEOC), is Egypt's second largest oil producer and for many years has been the biggest gas producer operating both in Sinai and the GOS. Its main gas production is in the Nile Delta and the Mediterranean (see Gas Market Trends).

Petrobel's oil output has fallen to less than 190,000 b/d, compared to 210,000 b/d in early 1998 and a peak of 240,000 b/d in 1993. Its GOS and Sinai crudes are mixed into a Belayim Blend, 27 deg. API.

(IEOC had a bad experience in April 1993 as parliament moved against a deal to consolidate its 14 development licences in Sinai, the GOS and the Nile Delta - with each having separate terms & expiry dates - and extend their validity to 2020. The government finally got parliament to approve it. IEOC invested over $2.3 bn in 1994-97).

Petrobel has several fields, including the onshore/offshore Belayim system 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 deg. oil from a Miocene Fm at 7,000 ft. Belayim Marine was its second find in 1961, producing 29 deg. oil from a Miocene Fm at 8,500 ft.

After an agreement in early May 2000 with EGPC, IEOC launched a $450m programme to stabilise its oil production at 200,000 b/d over a five-year period. But since then the fields have declined at a rapid rate and Petrobel's production fell, despite several discoveries (see Vol. 58, No. 2).
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Publication:APS Review Oil Market Trends
Date:Jan 12, 2004
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Previous Article:EGYPT - Part 2 - Profiles Of The Oilfields.
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