A Rising Star in A World of Giants

PetroSenan, a new comer to the hydrocarbon industry, is believed to have a promising future in Egypt’s petroleum industry.  Since its foundation in October 2010, PetroSenan has demonstrated a strong dedication to significantly raise its production rates. Despite its relatively small size in comparison to veteran operators in the country, the company has cleverly wiggled its way into Egypt’s competitive petroleum market

PetroSenan, the joint venture between the EGPC and the Ukrainian operator Naftogaz, aims to increase its production to reach 5000 barrels per day from its concession in the Alam Al-Shawish area, which is located in the Western Desert. To reach the aforementioned rates, the company initiated a punctilious implementation of vigorous drilling plans, in spite of the extant political climate that detriments the stability of the Egyptian investment milieu. In addition, the company intends on technically examining its production stations located in the concession area to facilitate and increase natural gas output.

Through the adoption of aggressive development campaigns and fastidious maintenance to health and safety regulations, PetroSenan has managed to place itself among the top environmentally considerate operators in the Egyptian petroleum sector. Mr. Abd Al-Khaliq Al-Tahawy, Chariman of PetroSenan, sheds light on the company’s latest activities and the upcoming plans.

What is the company’s development plan for the current fiscal year?
During the coming period, the company will focus on maintaining a successful fulfillment of its 2011 drilling, exploratory and development plans, in addition to assessing several of the development wells located in the Alam Al-Shawish that have yet to start production.

Moreover, PetroSenan endeavors to realize its production plan of crude oil, which currently awaits the approval of both the EGPC and Naftogaz, to begin the implementation of its development plan for the new fiscal year (2011/2012). The collective aim of these various efforts is the achievement of a considerable increase in production rates, given that several development wells have yet to be commercialized. Last but not least, the company is conducting a feasibility study based on the findings of 3D seismic scans to examine the potential of drilling more wells in the concession area.

Can you elaborate more on the main areas of operation in the Alam Al-Shawish Concession?
The working interests of Alam Al-Shawish concession are held by PetroSenan, which is divided into four areas. The first is labeled HG, and it is the primary location for the crude oil and natural gas production in the concession. The second area, WHG, is a new location currently pending to be green lit by the EGPC to be officially included to PetroSenan’s concession. EHC is the third area, and is presently under negotiation to be incorporated into the concession as well. The last location, named Karima – Malika, is a natural gas producing area and has yet to be approved by the EGPC.

What is the company’s current production rate?
The current production rates are 1500 barrels of oil and 1.5 million cubic feet of natural gas per day and the company is working on incorporating the areas of EHG and Karema to the concession in order to reach intended target of 5000 barrels of oil per day.

What is the company’s drilling plan for the current 2011/2012 fiscal year?
PetroSenan has conducted a drilling study for the current fiscal year of 2011/2012, in which the political status quo is being carefully considered, before presenting its roadmap to the international partner. In accordance, Naftogaz approved the drilling of five development wells to commence in January 2012, in addition to four new exploratory wells in the Alam Al-Shawish concession in the Western Desert.

What is the company’s budget for the current fiscal year in comparison to that of last year’s?
The company set a drilling budget of $57 million for the current fiscal year, which is higher compared to previous year’s $43 million. During the previous fiscal year, PetroSenan conducted 3D seismic scans of seven wells in the concession area. After examining the results of the scans, the company drilled six exploratory wells in addition to one development well.

What are some of the challenges associated with your operations in the Western Desert?
Firstly, counter to popular belief, operating in the Western Desert is not challenging. On the contrary, it is an enjoyable experience as to the abundance of petroleum resources whether in the concession area that we own or elsewhere in Western Desert. Secondly, I believe that most petroleum companies operating in the Western Desert encounter little to no obstacles at all. In fact, the various required services are always on schedule. Yet, the present political situation definitely affects our transportation process, and could on the long run result in significant problems.

What about the studies being done to facilitate production?
We are currently researching the most efficient and feasible methods to facilities production in the Alam Al-Shawish Area. This issue in specific is major impediment as it forces the company to transport its output to the existing production facilities of the General Petroleum Company.

What is the average cost of well drilling by PetroSenan?
The cost of drilling a well is relatively dependent on the depth of well. PetroSenan owns several deep wells and the cost of drilling a well that is 5300 feet deep, for instance, could reach $4 million. However, some development wells cost up to $9 million to drill as their depth could reach 17000 ft.

Is the company offering any tenders in the near future?
Indeed, there will be several rounds of tenders during the year as we proceed with our drilling schedule for the current fiscal year. For example, there will be a tender for a 1500 horsepower drill designed to reach up to 12000 feet. Generally, tenders are very common in the petroleum sector as they allow companies to find the most feasible and technically suitable offers.

What are the types of rigs used by PetroSenan?
The company has employed a variety of rigs since the commencement of its operations. In July 2010, the company finished its contract with EDC 17 and currently uses the Sino Tharwa 11.

Are the HSE regulations strictly monitored in the Western Desert?
The company is in the process of considering a comprehensive safety system to lower the risk of fires, and more importantly to contain such fires, whenever they occur. Apart from employing state of the art safety systems, we heed the guidelines set by the Environmental Protection Agency. In addition, the company sets emergency plans prior to the initiation of operations, which is done through the practice of various emergency scenarios designed to simulate every possible emergency situation.

What is the most important goal for PetroSenan at the moment?
Currently, our primary goal is working towards concluding a suitable plan to facilitate production in the concession area; doing so would alleviate the difficulties we encounter in transporting our output to the facilities of the General Petroleum Company.


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