The year of challenges! This is how Geologist Mohamed Refaat Khafagy, Chairman and Managing Director of the Gulf of Suez Petroleum Company (GUPCO), described the company’s plan in 2009, where the main focus revolves around field development and production optimization to achieve production forecast
What are the challenges facing GUPCO in 2009?
Secured production, this is what we consider the most challenging issue; many of our production facilities have no longer the same efficiency due to aging, as well as most of our fields. The necessity for Rehab and integrity assurance is mandatory to guarantee the safe of oil and gas production operations .In addition, the lack of enough technical calibers is another hindering point; yet we managed to solve this problem by recruiting and training the top graduates of the faculty of engineering to gain the required skills and knowledge and be qualified to join the company’s team.
Can you list the most important projects led by GUPCO last year?
We have finished the Saqqara Field development project, in the Gulf of Suez, which is the most important project lately. This field is producing 30 thousand barrels per day (bpd). Moreover, we finalized another development project the Taurt Field, in the Mediterranean Sea, which produce 220 million standard cubic feet of gas per day.
Why did GUPCO come second in the list of 2008 top operators?
Gupco always the first, but as all GUPCO’s fields are offshore, and old unlike other companies, which needs big investments as well as time for integrity and Rehab projects to arest the production profile. In order to compensate for this decrease, GUPCO succeed to achieve several big discoveries, such as Morgan Ramadan, October, July and Shoab Ali,——.But today discoveries are not like the past now we discovered Saqqara , GS 327 and North Shadwan and we are focusing on developing of this new fields so that we can increase our production.
What is GUPCO’s plan for 2009?
First of all, we are continuing our operations to rehab the petroleum offshore platforms in the Gulf of Suez and replace the old main pipelines of crude oil and water injection in association with our partner BP. This plan illustrates the second phase of a complete project to rehabilitate our production facilities. The first phase was fully executed with a total spending of $600 million and currently, the second phase is worth $240 million, which will serve the company’s target to develop and producing the remaining reserves in the old fields and generate more safe production.
This year’s budget for development drilling operations counts for $150 million; total of 22 wells will be drilled in the undeveloped areas of the Gulf of Suez and will be contributed to production.
Are there any new projects?
We have already started a development project at the North Shadwan discovery; the two fields of North Shadwan 1 and 2 will be connected to Ras Ghara, where we can use the facilities of Petrobel Company and thus reducing the total cost of the project in addition to Western Desert new concessions and development projects.
Does any Egyptian company have a role in GUPCO’s field development plan?
In fact, there are several Egyptian companies that contribute to our development plan, such as Enppi, (engeneering , studies), Petrojet (manufactures the needed equipments and constructions), and Petroleum Marine Services PMS (provides the pipelines laying and installation of platforms).
What is your production plan for 2009?
Along with Ministry of Petroleum of Petroleum and our partner BP, we have technically studied all the factors affecting our production, such as the development and workover activities, the need for E&P activity and new facilities. We are working now to optimize our production in the context of personnel availability, current production facilities and the budget availability.
What is your average daily production?
Around 130,000 thousand barrel of oil per day and 640 Million Standard Cubic feet Per day.
Has the current global economic crisis affected your E&P plans?
Actually uptill now! Nothing was changed, on the contrary, GUPCO’s budget for this year counts for $725 million. I believe that most of the Oil business still good business even during the financial crisis. For instance, ExxonMobil, when oil prices exceeded the $140 edge, the company succeeded to lift up the edge of its revenues, which it is now using it to secure its operations, during this critical time.
In my opinion, there is always a good side in any crisis. For example, there is no longer a high demand for rigs and drilling equipments as before, which used to cause a delay in the delivery of the required equipments and postpone the implementation of our projects. But at the present, it is easier and faster to have the rigs, and needed all equipments…etc, especially that many petroleum companies have canceled or postponed some projects due to the unaffordable high costs and the unprecedented fall of market prices.
Has the fall of oil prices led to an amendment of already signed contracts?
As a matter of fact, we are now in the process of negotiating and retender all the contracts with contractors to match the current market prices.
What is your opinion concerning the debate over establishing an independent entity for the oil and gas?
The idea of establishing a new entity for the oil and gas to have the Egyptian General Petroleum Company (EGPC) as partner in all petroleum agreements and would focus its role as organizer and regulator. This system is implemented all over the world .
Is there any new discovery to reveal to Egypt Oil & Gas?
Currently, drilling operations are conducted in a number of wells in the Western Desert, which led to an 80% increase compared to last year and a new discovery will be announced soon.
By Tamer Abdel Aziz