When the wheel of new explorations slows down, costs become unaffordable, and new investments draw back, then it is time to get back to the old fields and turn on the engine of development. In the shadow of the current global economic crisis, initiating new E&P projects is no longer on the top of list set by the petroleum companies this year, therefore the most suitable alternative to keep an ongoing oil and gas production is summarized in two words; Field Development

This year’s strategy stresses on cost saving, in other word, companies are studying means to maintain the level of their operations as possible and at the same time reduce their costs to avoid the negative effects of the current economic collapse. Presently, to initiate and E&P program in the un-explored area and to start all the process from scratch require a lot of investments. Hence, it is more feasible to get back to the existing fields, develop them once more in order to re-generate production flow and trim down the company’s costs.

Focusing on the Egyptian petroleum sector, there is an intensive plan for field development this year, which covers various areas of the country. This plan is witnessing the participation of numerous petroleum organizations, which are operating locally and internationally.

Western Desert… the core of development
The Western Desert symbolizes the most vital location for E&P in Egypt; it incorporates the largest share of petroleum operations in the whole country. As a result, it can be considered as the main core for the field development programs, which cover 10 focal areas executed by four companies; Vegas Oil & Gas, Apache Egypt, Shell and Sipetrol.
The Alam El Shawish Concession, having Vegas Oil & Gas the operator, witnesses a development program for two fields, Al-Barq and Bahga.  For each one, two wells to be drilled for evaluation. During the early production phase, crude oil will be transported to Badr El-Din, and then moving to the South of Dabaa.
The production phase for the two fields began in fact in December 2007. The Al-Barq and Bahga started their production with a rate of 700 and 500 barrels of oil per day (bpd) respectively.
The second operator in charge of developments in three areas is Apache Egypt. The company has set an approximately $15-million plan for the West Kanayes. Back to April 2002, Apache achieved its first oil and gas production from its Ras Kanayes lease at the rate of 2,130 barrels of oil and condensate in addition to 17.8 million cubic feet (MMcF) of gas per day from the Jurassic Khataba formation. Apache operates Ras Kanayes as part of its Khalda operations. This development lease compromises more than 78 thousand acres in the Matruh Basin, about 230 miles west of Cairo.
In the framework of Matruh development lease, Khalda, a 50-50 joint venture between the Egyptian General Petroleum Corporation (EGPC) and Apache, drilled Jade 5 development well in the Matruh development lease, Northern Egypt Basin, to a depth of 3,803m, in late November 2008. The well was spudded on 21 September 2008 using the L/R “EDC-8” with a PTD of 3,901m and objectives in Lower Cretaceous Alam El Bueib “5”, “6”, “3D” and “3G” units.
On 25 October 2007, Khalda announced that its vertical well Jade 2 in the Matruh development lease, yielded at a rate of 26.7 MMcf/d of gas and 1,325 bc/d. The well was the first test of the Jurassic Alam El Bueib ‘6’ unit reservoirs in the Jade structure along the Matruh Ridge, confirming resource potential identified on well logs in the Jade 1 discovery.
Back to Apache’s program in the Western Desert, its second targets is the South Eastern Baraka area, where a complete development strategy worth $3.148 million is held in association with Qarun Petroleum Company, which will be responsible for the carrying of crude to El-Karama area, to the processing unit of the company. The plan also includes the drilling of seven wells, initiation of a water injection project, supply of production facilities, storage tanker for up to one thousand barrels, pipelines installation, and a possibility of extending pipelines to El-Karama area in case of production increase.
The third area of interest for Apache is the Cygnus-1, where a total of 2.34 million barrels of oil reserves is expected to be extracted. In early June 2007, the company suspended the vertical exploration well Cygnus 1 as an Upper Bahariya oil discovery in the Shushan ‘C’ concession. The objectives were the Cenomanian Bahariya and the Albian Kharita formations. The well was spudded on 18 April 2007, at a location 5 kilometers of Kahraman B-22 gas and condensate discovery.
The company investigated the possible extension of a new Jurassic play confirmed in the Kahraman B-22 discovery made in the Khalda concession in November 2006. Apache Oil Egypt believes it may have opened up a new area for development with both sand quality and pay improving to the north of the Kahraman B-22 discovery. The company is using a new Jurassic exploration model based on the geological and geophysical analysis of the Qasr field, discovered in the Khalda concession in 2003.
On 11 November 2008, Khalda Petroleum Co. (Khalda) completed development well Cygnus 11 in the Shushan ‘C’ concession, Shushan Sub-basin, Western Desert as a Bahariya water injector. The well was spudded on 29 October using L/R ‘EDC-62’ and drilled to TD of 2,134m. The well has a PTD of 2,134m and the Bahariya formations as the objective.
Besides the recognizable programs of Vegas and Apache, Shell Egypt joins the list of companies developing the fields of the Western Desert. With two projects, Shell set plans for the Northeast Abu Gharadig and West Wistra-1. In the first area, the company intends to start production phase for its two wells, Al-Fadl-1 and Al-Kadr-1 in addition to the drilling of three more wells (one in Al-Kadr and two in Al-Fadl). Back to May 2004, Shell Egypt and Badr el-Din Petroleum Company Bapetco (a 50-50 JV between Shell and the EGPC) announced that its Sheiba 18-3 discovery well in the successfully tested up to 1,600 barrels of 36 degree API oil per day and 0.9 million cubic feet of gas per day. Two years later, the two companies announced the first Alam El-Bueib discovery in the Abu-Gharadig Basin in the BED-1 development lease.
Shell’s second area of interest is West Sitra-1, in which it aims at connecting the WS J1-1 well  (WS 1-3) to the production line of BED 2-2 well, through which the produced gas can be inserted to the facilities of Badr-2. The estimated investments of this development plan counts for nearly $6 million. The first Jurassic discovery in the West Sitra concession was achieved in December 2006; the company completed the deep Jurassic exploration well WS J1, reaching a total depth of 5,077 meters in the Khatatba formation. The well encountered 39 meters of gas, in the Upper Safa Sandstone.
The four reaming areas to be developed this year in the Western desert lie in the share of Sipetrol S.A. The company has allocated more than $17 million for the fields of Shahd, Ghard, Rana and Southeast Shahd.
On April 16, 2007, Enap Sipetrol S.A. achieved an oil discovery in the East Ras Qattara block, with the drilling of the Ghard-1 well. It has already made a previous discovery in this area, with the Shahd-1 well in November 2006. The Ghard-ST1 well was drilled to a depth of 3,436 meters and proved the existence of oil in the lower Bahariya formation. A 10-meter thick zone of interest was proven at a depth of 3,341 meters, which produced light oil of 40.5 degrees API, at an initial rate of (2,026 barrels per day, plus 2.6 million cubic feet of gas a day.

Melrose brings West Dikirnes on stream
At the beginning of 2009, Melrose Resources said that it had brought the West Dikirnis-7 horizontal development well, at one of its nine development leases in the onshore Nile Delta, into production at a rate of 3,000 b/d of oil and 4.4mn cfd of gas, as part of its ongoing efforts to maintain production levels. The company expects to produce around 200mn cfd equivalent of oil and gas from its Egyptian assets over the next two-three years, Melrose Chief Executive David Thomas told MEES . Most of this comes from West Khilala, which is producing just over 100mn cfd of gas. The West Dikirnis field is now producing around 7,000 b/d of oil and 16mn cfd of gas, down from 10,000 b/d at the beginning of last year. In addition to the West Dikirnis development well, the East Abu Khadra field was recently brought on stream and is currently flowing at 7.9mn cfd of gas and 125 b/d of condensate.
“We’ve got four new developments coming through,” said Thomas. “Melrose is currently restricting the amount that each well produces in the short term, in order to limit their gas output and prevent the reservoir pressure from falling, which could result in the loss of oil reserves. The Scottish-based company is planning to start re-injecting gas in the middle of this year, in order to raise production from the wells, and for this reason it is commissioning an LPG recovery plant, which is designed to strip propane and butane out of the gas before it is re-injected. When we have installed those [gas re-injection and LPG recovery] facilities and drilled a couple of horizontal wells, we should be able to maintain [liquid production] rates of around 10,000-11,000 b/d”. 

More developments in the Eastern Desert and Suez Gulf
In the 2009 plan for the Eastern Desert area, there are five main fields targeted for development, which are the East Arta, East Hoshia, Northeast October, East Ras Budran and Muzhil. The first two fields are operated by Canada’s TransGlobe Energy, which has acquired the assets of Dublin International Petroleum and Drucker Petroleum, which are assets of Bermuda-registered Tanganyika Oil, in the West Gharib Concession for $59 million in September 2007.
TransGlobe completed a 360+ km2 3-D seismic acquisition program covering the East Hoshia, Hoshia, North Hoshia, Arta and East Arta development areas in October 2008. Mapping and interpretation are underway. Moreover, the company announced last January that the East Hoshia #2 exploration well was drilled to a total depth of 9,038 feet and initially completed as a potential Thebes oil discovery. Testing is ongoing in this well.
The third development project in the Gulf of Suez is carried out by the Arabian Company for oils, which plans to start production from its Southwest October this year at a rate of 1300 bpd that will be gradually increased to 5900 bpd by 2012. The company’s program includes the construction of a production platform to be connected to Southwest Octoober-1, which will be put on production line next May.
Among the companies enjoying more than one-area operations is Apache, which has a recognizable development plan in the Gulf of Suez in addition to its projects previously discussed in the Western desert. The East Ras Budran Concession symbolizes the company’s station in this area. Apache has spudded exploration well ERB-A-1X in mid 2007, which it intends to complete the development of this well, covering 521 square kilometers onshore in the Gulf of Suez, with a $17.5 million investments.
The last project in the list of development occurring in the Gulf of Suez is the Muzhil field, operated by Petzed, a fully owned subsidiary of National Petroleum Company (NPC). The company plans to construct an offshore platform with all required production facilities in order to start the production in the second quarter of this year at a rate of 4000 bpd of oil from the two fields Muzhil-1 and Muzhil-2.
It is worth mentioning that Petzed achieved the first commercial oil discovery in South Abu Zeneima, in Jul 2007. The well tested in Muzhil-1 field, 1900 bopd in aggregate from two different layers. Muzhil-1 is located in the South Abu Zeneima block situated on the Eastern side of the Gulf of Suez. The block covers 151 km2 in area and is surrounded by producing fields such as Rhudeis, October and Tanka. The block is fully covered by 3D seismic data. Petzed acquired 100% stake in the South Abu Zeneima concession in March 2006 with transfer of ownership in December 2006 by a deed of assignment.
Moving to the Eastern Desert, Vegas Oil & Gas is dominating the area with its development program for Al-Amir. Last January, the Greek company emphasized achieving a new discovery in the Eastern Desert in West Gemsa “Al Amir-2 well” after a test on the bottom layers and perforated 20 feet and gave preliminary results with 64/64 inches. The production rate averages 6000 bpd of crude oil and nearly six million cubic feet of natural gas. The company has set a two-year development program, including the drilling of three evaluating wells as an attempt to increase the production.

Sailing in the Mediterranean
Being described as the conductor of the largest gas development program in Egypt, BG Egypt continues its mission in the Mediterranean Sea area, the West Delta Deep Marine (WDDM) concession, Phase V. The delivery of the first gas from WDDM concession Phase IV project (WDDM IV) to the Egyptian domestic market was achieved in February 2008, one month ahead of schedule. Located approximately 120 kilometers offshore Alexandria in the Mediterranean Sea, the upstream development was undertaken through BG Egypt’s joint operating company, Burullus Gas Company, in collaboration with Saipem, the drilling and installation contractor. The project marks the first time that all sub sea structures were fabricated entirely in Egypt by Petrojet, an affiliate of the Egyptian General Petroleum Corporation (EGPC). BG maintains its success in the area with strengthening its development plans for the concession.

By Yomna Bassiouni
Tamer Abdel Aziz

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