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Egypt - Eastern Desert Operations.

Oil producers in the ED include Egyptian Petroleum Development Co. (Epedeco), a JV of EGPC and Inpex of Japan (having acquired Teikoku Oil).

Epedeco's output from the onshore West Bakr field averages 4,000 b/d, down from 5,500 b/d in early 2004.

General Petroleum Co. (GPC), a unit of EGPC, was created in 1956 to take over from the then sole concessionaire, Anglo-Egyptian (Shell/BP), whose onshore assets were nationalised in 1964. GPC's fields are onshore on the west coast of the GoS and some are deep within the ED. Nearly all were found by Anglo-Egyptian. They include Ras Gharib (the oldest field in Egypt, found in 1938), Sudr (1946), Asal (1947), Matarma (1948), Karim (1958), Bakr (1978) and Ras al-Bihar (1983). They produce 21,000 b/d of 25 deg. oil, down from 33,000 b/d in late 2003 and 27,000 b/d in late 1995.

GPC has contracted Scimitar of Canada to develop Issaran, a group of fields containing 500m bls of 10.5-18 deg. API oils found in 1981 some 4 km west of the GoS and 140 km south of Suez. Issaran lies in the GoS Rift Basin in three fractured carbonatea of the Miocene, the deepest being 760m. Many wells have been drilled and the field has the potential to eventually produce 20,000 b/d. Scimitar's role was taken up by Calgary-based Rally Energy Corp, which in September 2007 was bought by Citadel Capital of Egypt for C$877m (US$868m). Rally Energy produces 6,500 b/d of heavy oil from Issaran (see gmt2EgyptFieldsJan11-10).

Wadi el-Sahl Petroleum Co., a JV of EGPC and US firms Seagull Energy and Apache of Texas, produces oil in onshore South Hurghada block, where output has averaged 20,000 b/d since 2006. Its first find, Wadi el-Sahl, was put on stream in June 1997 at 1,500 b/d.

In its Beni Suef block, south of Cairo, Seagull later found the Beni Suef field and in early 1998 brought it on stream at 7,000 b/d of 42 deg. oil. Another Beni Suef find in April 1998 flowed at 9,200 b/d of light oil.

Upper Egypt Operations: An increasing number of E&P blocks in Upper Egypt, since the 1990s a virgin area for explorers, have been awarded by the state-owned Ganoub al-Wadi Holding Petroleum Co. (Ganope).

Dana Gas, based in Sharjah which is the Middle East's first private and integrated gas firm, is the sixth largest gas producer in Egypt where it has blocks in Upper Egypt, the GoS, the Nile Delta (ND) and elsewhere, and has made many finds. Its total crude oil and gas output is averaging 47,000 b/doe, up from 34,750 b/doe in 2009 which was 20% higher than the 2008 average. Dana Gas, affiliated to Sharjah-based Crescent Petroleum of Iraqi-born Hamid Ja'far, is expanding fast, having bought Centurion Energy of Canada in 2007 for about $1bn, including its assets in Egypt (see Dana's GoS assets in omt2EgyptFieldsJan9-12).

In 2008 Dana Gas made two oil finds in the Kom-Ombo block in the Aswan region. Al-Baraka well produced the first oil deep in Upper Egypt. Four months from the find, the first crude oil shipment was delivered on Dec. 27, 2007, to Asyut refinery, 320 km away. The crude can be transported by rail or Nile river barges (see gmt2EgyptFieldsJan11-10). Dana Gas in April 2007 signed a 50% farm out deal with Kuwait Int'l Oil & Environment Co. (KIOEC), a unit of Taqat Holding and Gulf Oil Investments, in the 23,000 sq km Kom-Ombo block, about 800 km south of Cairo. Dana Gas is the operator. The Kom-Ombo Basin, a lightly explored area, only had three wells drilled by then. But the results had proven a hydrocarbon system with significant exploration potential.

On Jan. 5, 2010, Dana Gas announced the ninth gas find at the Orchid-1 well. That followed its eight gas finds in Egypt - namely: Salma-1, West Manzala-2, Azhar-1, Tulip-1, Sharabas-1, Sama-1, Faraskur-1 and Marzouk-2. The Orchid-1 well was drilled in the West Manzala block of the ND, 1.3 km to the west of the Azhar-1 well at 1,700m in the Pliocene Kafr el-Shaikh Fm. It found 8.4m of net pay of excellent sand reservoir and tested 12.6 MCF/d of dry gas. Dana is raising is gas production capacity to 120 MCF/d in 2012.

Dana Gas in early October 2011 drilled the South Abou el-Naga-2 development well in the West Manzala Block at 8,000 ft. The Dana said it was raising its production to 67,000 b/doe by mid-2012. Dana's CEO Ahmad Arbeed on Sept. 26, 2011 said the firm's overdue receivables from Cairo for the gas delivered had risen to around $200m from $180m previously and added that it was optimistic payments were coming. He added: "The payments were delayed in the previous months but now we are optimistic they are coming". The delay in payments was a result of disagreements over the interpretation of certain EPSA clauses with respect to the means of calculating profit share splits at different production levels.

Qarun Petroleum Co. (QPC) is a JV of EGPC (50%), operator Apache (37.5% bought in 1996 from Phoenix) and Seagull Energy (12.5% bought from Global Natural Resources). The JV, set up in August 1995, has developed the Qarun field in Upper Egypt to a capacity of over 60,000 b/d.

Qarun (found in 1994) and its extensions lie in Central Egypt on the edge of the WD near the Sumed crude oil pipeline passing towards the Mediterranean terminal of Sidi Kerir. Seagull, operator in the East Beni-Suef block just south of Qarun, has found a field there.

Apache in QPC in late 2011 drilled new development well KNW-3 in the Karama block of Abu al-Gharadiq Basin, in the WD, to 8,280 ft. That was part of QPC's development plan for fiscal 2011/12 to end-June. Apache was to drill eight development wells in the Fayum block south-west of Cairo, where it expected to add 17m bls of oil to its 268m bls of reserves.
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Publication:APS Review Gas Market Trends
Geographic Code:7EGYP
Date:Jan 9, 2012
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