Since the end of last year, Vegas Oil & Gas has been impressing the petroleum sector with its exploration hits in the North West Gemsa, which are the first of their kind in this area. The series of successful achievements over a short period of time have grabbed the attention towards the Greek company. Mr. Adam Vavourakis, General Manager of Vegas Oil & Gas shares his views and plans with Egypt Oil & Gas
You are operating in Egypt through two divisions; Kriti & Vegas, how do you assess your market share?
We are still at the beginning of the development phase in two of our concessions. I believe that after the fields in these concessions are fully developed, our market share will increase substantially.
Kriti Oil & Gas, was founded in 1989 and acquired the Horus Field in 1990. Thus, we have been producing in Egypt since 1990. Kriti is the operator with 65% participating interest, while operations are being carried out by the Joint Venture Alamein Petroleum Company (APC). This field is currently producing approximately 2,300 barrels of oil per day (bopd). I believe that this is a success because when we got it, the production was approximately one thousand bopd only.
Concerning Vegas Oil & Gas, the first area where it has started its operations was the North West Gemsa Concession in the Eastern Desert, acquired after a bid round in 2003. In 2005 Vegas was awarded the Alam El Shawish West Concession in the Western Desert. Both concessions are in the early stages of production. In addition, Vegas operates with a 100% participating interest the East Ghazalat Concession in the Western Desert, which was acquired at a bid round in 2006 and a 450 Km2 3D seismic survey was acquired in 2008. We are currently in the evaluation phase. We plan to drill the first exploration well within the second half of this year.
Is it more feasible to focus on field development due to the dramatic oil price fall?
Our company is planning to drill both exploration and development wells. Currently, we have under contract four drilling rigs, three of them in Alam Al Shawish West and the fourth in the North West Gemsa. Since we are still in the exploration phase, we would like to drill all prospects before the expiration of the exploration phase. And, talking about the dramatic fall of oil prices due to the recent economic crisis, we have not altered any of our plans and we maintain our commitment to fully evaluate/develop both concessions.
Do you consider any expansions for the company in Egypt and/or MENA region in the near future?
I am sure that if we find the right opportunity to expand then we will definitely give it a very strong consideration to seize it. Egypt has always been of a high priority to our group.
Some say that the offshore drilling is the future, do you consider moving to this type of drilling besides your onshore specialization?
I agree, especially with the ongoing technological developments designed for this type of drilling. We have searched for offshore opportunities in Egypt, but we have not participated in any until now. However, we did participate in the 80’s in some offshore drilling in the U.S. I believe that the offshore exploration is very important here; especially that it has led to very large discoveries of mostly natural gas, which is of a great interest to Egypt.
What were the company’s major achievements last year?
Probably our North West Gemsa recent discoveries in Al Amir field.
During the second half of 2008, Vegas made a significant discovery in Al Amir field. Al Amir SE-1ST well tested 3,370 bopd and 4.2 MMSCFD and Al Amir SE-2 tested 5,812 bopd and 7.9 MMSCFD. Al Amir-1 has also tested successfully 700 bopd.
Operating in Egypt, what are the challenges you face?
Every oil and gas company faces multiple challenges not only in Egypt but everywhere in the world. For us, we have not really faced such a problem that would hinder our plans. The key lies in how you deal with obstacles and your ability to reach an acceptable solution.
What is your 2009 plan?
Starting with the Horus Field, in the Alamein Concession, Western Desert, the plan for 2009 is to complete a reservoir simulation model and use its findings for the introduction of infill drilling and water injection in order to yield additional oil recovery.
In the Alam Al-Shawish West concession, Vegas will undertake through PetroAlam Joint Venture, a large-scale development plan with three rigs drilling exploratory and development wells, construction of oil and gas facilities and with first natural gas production anticipated by September 2009.
Presently it produces approximately 4,500 bopd. By the end of 2009, the production is expected to reach 11,000 bopd and 100 MMSCFD of gas and there are even more ambitious plans for the next five years.
Also, the company’s two new wells in the North West Gemsa concession started the production phase in last February at a level of 3,000 bopd. One exploratory well is currently being drilled, the Geyad-1. For the remaining of 2009, Vegas plans to drill two development wells and two water injection wells at Al Amir field.
Finally, in the East Ghazalat Concession, in the Western Desert, the company is processing the 3D and plans to drill the first exploration well within the second half of 2009.
What are your expectations for the oil and gas market?
I believe that the oil and gas will be the first commodities to recover very fast compared with any other commodity, when this crisis is over.
By Yomna Bassiouni