As 2012 is around the corner, the team of Egypt Oil & Gas newspaper attempts to review the performance of the various hydrocarbon producers operating in Egypt, during this historic and eventful year. After examining several quarterly reports, there seems to be a positive trend that is moving counter to the country’s political instability. In fact, the majority of petroleum companies have declared an increase in production and revenues in their reports, while the official production rates showed some sort of decline.
Most plans of 2011 were determined before the eruption of January 25th Revolution, this contributed to avoid major negative impacts to some extent. However, it is predictable that the shadow of these political and economic instabilities will be glorified during the coming year, as new plans will be set in accordance with the local conditions of the petroleum industry. Anyway, at the end of the third quarter of this year, most companies revealed positive outcomes.
One of the major oil and gas operators, Apache Corporation indicated in its 2011 third quarterly report that production levels have risen to 752 thousand barrels of equivalent oil per day, compared to 667 thousand during the same period of last year. In terms of revenues, the company netted $983 million during the third quarter of this year as opposed to the $765 million earned during the same quarter in 2010. Apache’s oil and gas profits for the same quarter in 2011 were $4.3 billion, increasing 41% from last year’s $3.0 billion.
“Apache had a very productive quarter, both in operations and commercial activity,” said G. Steven Farris, Chairman and CEO. “For the sixth consecutive quarter, we achieved record daily production on an equivalent basis. We have commenced development of the Balnaves oil field offshore Western Australia. We have extended the productive range of our holdings in Egypt’s remote Western Desert with new producers in the Faghur Basin.”
On different note, Dana Gas’ reported that revenues of oil and gas sales in the third quarter have reached $175.6 million, with gross profit of $85.8 million. This significant increase from last year’s earnings of the same period, 58% and 67% respectively, can be attributed to the aggregate 20% growth across the board in addition to the rise of oil prices. The company currently owns 12 producing fields in Egypt, located in the Nile Delta and Upper Egypt, of which approximately 40,400 barrels of oil equivalent are produced daily, according to the company’s 2011 third quarterly report.
Despite the political instability, Dana Gas has not suspended production in Egypt, and development activities are still on schedule. The company also plans on continuing its exploration program to increase the wealth of its reserves.
“Dana Gas continues to deliver strong performance and increases in profits driven by our successful operations, in spite of a globally challenging environment. We have and will continue to respond to challenges successfully and with confidence, ensuring that we maintain our operations uninterrupted while we manage our expenditures prudently. As a regional company committed to the long term benefit of our region and its stakeholders, we are committed to operating our assets with a view to creating sustainable value for our shareholders,” commented Ahmed Al-Arbeed, Dana Gas CEO on the company’s quarterly performance.
As for TransGlobe Energy, the company’s third quarter report indicates an increase in total production, reaching 13,406 barrels of oil per day. This is considered as a remarkable rise when compared to the production levels of the 2010 third quarter, in which the output was 10,138 barrels per day. The company announced its earnings to be $26.1 million, as opposed to $19.5 million in 2010 Q3.
During the same period in 2011, TransGlobe has drilled 14 wells in West Gharib, 11 of which were oil wells, one water source well and two dry wells. Moreover, the company acquired 50% interest in the South Alamein concession in the Western Desert, which cost approximately $3 million.
Eng. Abd Al-Khaliq Al-Tahawy, PetroSenan Chairman, stated that the company is working towards fulfilling its plans for production and development during the current fiscal year 2011/2012. Currently, it is focusing on increasing its production of oil and natural gas in the concession of Alam Al-Shawish aiming to reach 5000 barrels of crude oil per day. Al-Tahawy also declared that the company has succeeded in realizing 75% and a 100% of its drilling and development plans respectively in its Western Desert concession.
In an exclusive statement to Egypt Oil & Gas Newspaper, a credible source from PetroZeit acknowledged that the company initially intended on implementing its 2011 plans. However, certain circumstances led to the suspension of drilling operations and the initiation of a general bidding round; notwithstanding the existence of crude oil in the area according tot the seismic studies. The company also plans on discovering more exploratory and development wells through setting future plans that correlate with the company’s fiscal status.
On the other side, Eng. Hany Abd Al-Haleem, Chairman Ptrographics emphasized the company’s plan for the coming period, which is to expand its operations in both the African and Asian continents. Petrographics has achieved a considerable success during 2010, contributing more than 80% of its production to the Egyptian market. Due to the political instability in Egypt, Libya and Syria, the company is looking for new investment opportunities in other countries until a stable environment for investment is secured in the abovementioned states, added Abd Al-Haleem. Furthermore, he explained that all the companies are working towards finding new markets that would benefit the Egyptian national economy and significantly increase the company’s profits.
According to a high profile official, North Bahariya Petroleum Company (Norpetco) accomplished 90% of its scheduled plans for 2010. However, a major part of this year’s plan has been deferred to next fiscal year as to the political instability in Egypt. PetroShahd, a subsidiary of North Bahariya Petroleum, is said to have overcome the problem associated with the transportation of output to area where production facilities for processing and delivering crude oil.
Eng. Ezz El-Din Mohamed, Chairman and CEO of Wadi El-Sahl, announced the company’s accomplishment of 50% of its drilling plans for the present fiscal year, while the rest of the plan is currently being implemented and is expected to continue until the end of 2012.
Ezz El-Din has expressed his delight over the positive results the current period has yielded, considering the current turbulent events in Egypt. In the midst of such times, the company has succeeded in increasing the production of crude oil, reaching 4574 barrel of oil per day last October.
Production rates swing ups and downs
At the beginning of 2011, no one could ever imagine the occurrence of such political changes, which are considered the first in the Egyptian Modern History. The political and social unrests during the first quarter of 2011 had its shadow on the exploration and production activities of the companies. The petroleum industry, like other sectors, was affected by the turbulences that took place. In terms of production rates, the first two months of January and February witnessed a lower crude oil production volume compared to the same period a year earlier. The 2011 production during the two months averaged 15.5 million barrels, which is approximately 8% lower than the 2010’s rate that averaged 16.8 million barrels.
As shown in figure 1, the only exception took place in March 2011, as the oil production counted for 17.5 million barrels, reflecting a 6% increase compared to the same month a year earlier.
Figure 1- Oil Production
Similarly, the condensate production went through major decline during the months of January and February before a recovery status took place in March. The first two months of 2011 had an average production of condensate worth 3.2 million barrels, compared to 3.5 million barrels during the same period in 2010. There was a decline of approximately 8.5%.
The end of the first quarter of 2011 enjoyed a production recovery as the condensate total output was 3.6 million barrels, which was even higher than March 2010’s production (3.5 million barrels), as shown in figure 2.
Figure 2- Condensate Production (barrels)
As for the volumes of sold gas, the cases of drop and increase apply as well. There was a 40% drop during January and Febrary 2011 compared to the same months of 2010. The volume of sold gas went from 280,862 Mcf in 2010 down to 168,233 Mcf in 2011. But, by reaching the end of Q1 2011, both years shared close rates of sold gas; 184,886 Mcf and 189,928 in March 2010 and 2011 respectively.
Figure 3- Sold Gas (Mcf)
Figure 4- Total Q1 Production Comparison 2010 vs. 2011(barrels)
Analysis: Six months after the January 25th Revolution
After six months of the Revolution, experts were hoping that the petroleum industry would enjoy some sort of stability during the third quarter of 2011. However, according to the latest reports, the production rates have been still swinging. Focusing on the oil production, the production rates of 2011 Q3 were not even close to the ones of the same period in 2010. For instance, the oil production in July 2011 went as low as 17.3 million barrels, compared to 17.5 million barrels in July 2010.
As shown in figure 5, the lowest production output was during the month of September, which concluded the third quarter with 17.1 million barrels, which is lower compared to 17.7 million barrels produced in the same month of 2010.
Figure 5- Oil Production six month after Revolution (barrels)
The condensate production reached its lowest rate at the end of 2011 Q3 with 3.4 million barrels, compared to 3.7 million barrels at the end of 2010 Q3.
Figure 6- Condensate Production (barrels)
In terms of sold gas, the third quarter of 2011 continued its decline at the end of September. During last year of 2010, the third quarter concluded a 190,345 Mcf of sold gas, while the same period of 2011 had a sold gas of 175,469 Mcf, which reflects an 8% decline.
Figure 7- Sold Gas (Mcf)
Figure 8- Total Q3 Production Comparison (barrels)
By EOG TeamDownload