Upper Egypt started a new phase in the history of the Egyptian petroleum industry

Wasco, a joint venture company comprised of Dana Gas, the Middle East’s first and largest regional private-sector natural gas company (50%), and the Egyptian General Petroleum Corporation (50%), announced a new discovery from a new oil zone in the Komombo exploration block, located in Upper Egypt.
For Dana Gas, this achievement represents the first discovery in the company’s US$ 170 million drilling campaign for 2008.  The El Baraka-2 exploration well confirmed the first discovery, El Baraka-1, in the Abu Ballas formation, and proved a new pool in the underlying Six Hills formation.  The partnership will perform hydraulic fracturing of the producing reservoirs in El Baraka-1 and El Baraka-2 to enhance their productivity.
Completed in September 2007, El Baraka-1 was described as the first ever commercial oil discovery in Southern Egypt.  The Block 2 well reached a total depth of 2,655m and penetrated several oil-bearing zones. Testing of the Lower Cretaceous Abu Ballas Formation produced approximately 150 b/d of 37° API oil from a 12m perforated interval and the reserves were estimated to 8 MMbo.  Three additional intervals were also encountered in the deeper Lower Cretaceous section and recovered various oil volumes on test.
Eng Sameh Fahmi, Minister of Petroleum stated that the discovery of oil in the area of Komombo in Upper Egypt has become a strong start and a new phase in the history of the Egyptian petroleum industry, where Southern Egypt is a promising area on the map of Egyptian oil production.
Fahmi also said that this discovery will have a positive contribution to the continued expansion and intensification of the search for oil and gas in other regions in Upper Egypt will attract more international companies through a global bid to be raised in order to continue the flow of oil discoveries, will urge more development and raise the living standards of people in Southern Egypt.
“In addition to this discovery, we have commenced drilling of the West Baraka-1 exploration well in a new prospect in the Komombo concession, with completion expected before the end of this month, and are in advanced stages of drilling deeper gas exploration wells in our Nile Delta acreage, with results expected soon,” said Hany El Sharkawi, Dana Gas Egypt Country Director.
“The recent oil discoveries made by Dana Gas in Upper Egypt, are of great importance as they prove the presence of a hydrocarbon system for the first time in the history of the area,” El Sharkawi explained. “It certainly enhances the chances of proving large oil reserves in this part of the country which will positively impact the prosperity and the well being of the region and its residents, for the benefit of the Egyptian economy as a whole.”
The El Baraka-1 well was drilled by Dana Gas’ Upstream Division, Centurion Petroleum Corporation, to a total depth of 8,712 feet and the well penetrated several oil bearing zones. Testing of the Early Cretaceous Abu Ballas Formation produced approximately 150 barrels of oil per day from a 39 foot perforated interval. The recovered oil has a specific gravity of 37° API with wax content similar to the crude oil currently being produced and exported in large quantities to Sudan. Three additional intervals were also encountered in the deeper Early Cretaceous section and recovered various oil volumes on test. Oil reserve estimates of the various zones of this discovery are currently being evaluated.
The Komombo concession is located 700 km from Cairo and 320 km from the closest refinery at Assiut. It is currently envisaged that the early production scheme from this discovery will include transportation of the crude oil by rail road or River Nile barges to the Assiut refinery to the North.
On the other hand, Fahmy explained that for producers and consumers to reach realistic solutions to achieve the lowest rate of stability especially with the ongoing rises in the prices, many other economic fields can get affected. In addition, he confirmed that the expectations ensure that, with matters going with the same rate, the energy subsidy next year will be more than 90 billion LE. Hence, he added that the most important issue which the oil sector currently focuses on is intensifying the development of producing wells and escalating the exploration in crude oil and natural gas to maximize production.
Fahmy received a report from the Chairman of Ganope on the results of drilling the new well Baraka 2, which is located Northwest of Baraka 1, in the concession area of Centurion Petroleum Corporation on behalf of the UAE Company Dana Gas. And the report explained that the drilling of the well Baraka 2 started in early last May and went deep to about 4000ft.
The reservoir of the well will be added to the reservoir calculated for the Baraka 1, as it is from a new layer and different from what had been penetrated in Baraka 1 (at a distance of 9.5 kilometers South-west of El Baraka-1) to assess the extensions aquifer crude oil. After the completion of drilling, the El Baraka-2 well, the rig will be moved to the discoveries sites in order to perform the hydraulic breakers aimed at increasing the productivity of the field Baraka.
The report also noted also that the results achieved by the discovery and production of crude oil from the Baraka field are a byproduct of the great efforts made over the four years of searching for oil in the concession area of Komombo.  In addition, the discovery of oil for the first time in Upper Egypt of El Baraka 1 and 2 in Komombo would pave the way for international companies to intensify the search for oil in this pristine region.
Dana Gas is the sixth largest natural gas producer in Egypt today.  A report by the Middle East Economic Survey (MEES) confirmed that Dana Gas was the only private company from the region to make new Middle East oil and gas discoveries in 2007. The company announced earlier this year that it would embark on a US$ 170 million drilling program covering 15 exploration wells and four development wells in 2008.
In addition to its current projects, Dana Gas will be expanding its activities in all elements of the natural gas value-chain, including upstream exploration and production; through the midstream transmission and distribution of gas including LNG trading; and downstream into gas-related industries and petrochemicals.

By: Ahmed Morsy

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