With Egypt progressing towards its goal of becoming a regional energy hub, investments and production have become more essential than ever to realizing this dream. As the biggest US investor and oil producer in the country, Apache plays a pivotal role in helping Egypt achieve this objective. Egypt Oil & Gas had the opportunity to meet with Apache CEO John Christmann to learn more about the company’s role in Egypt and the region.
Apache’s presence in Egypt has proven successful over 25 years. What has made you successful and what do you look forward to?
Apache has been a committed partner to Egypt and Egyptians for more than 25 years and we continue to see tremendous future opportunity here. We have relied on innovation, technology, and our talented team to improve efficiency as we explore for and develop oil and gas, maximize Egypt’s energy resources, and help modernize Egypt’s energy industry.
The modernized Production Sharing Contract (PSC) we recently signed with the Ministry of Petroleum and Mineral Resources is a win-win for Egypt and Apache; it incentivizes increased investment and production growth and places Egypt at the top of many attractive investment opportunities in our global portfolio. The PSC also reinforces Egypt’s commitment to responsible economic development and public-private partnerships and will accelerate impactful ESG initiatives aligned with our focus areas of air, water, communities and people.
In addition to Apache’s investments in oil and gas, we are committed to continue our investments in Egypt’s future in other ways by supporting education, healthcare, and the most vulnerable communities. We are very pleased to have founded Springboard Girls Schools more than 15 years ago to provide educational opportunities to girls living in rural areas of Egypt. Springboard’s 201 schools have helped approximately 15,000 girls learn to read and write. We also know that teachers bring school buildings to life, so we fund a teacher training program that aims to empower teachers with the essential knowledge and skills to provide quality education to students in community schools.
What are Apache’s future global investment plans? Do you plan to tap into new markets?
We continue to advance robust oil and gas developments in Egypt, the U.S., and the North Sea. Our parent company, APA Corporation, has subsidiaries with exploration activities offshore Suriname and some very early work offshore the Dominican Republic. Suriname is particularly exciting for us. We have made a number of discoveries already, and there is much to look forward to on two large offshore blocks there.
We see Egypt as one of the most attractive global investment opportunities in our portfolio. In anticipation of the new PSC agreement, we increased activity from five to 11 drilling rigs in Egypt since the start of 2021 and plan to further increase to 15 in 2022. We also expect to increase gross capital investment in Egypt by approximately $235 million in 2022, including Sinopec’s minority interest.
What are your views on the shift to a lower carbon future?
The oil and gas industry anchors the global economy and will for many years to come. The affordable, abundant, reliable energy we produce helps facilitate access to better healthcare, education, and higher standards of living. It can help the billions of people around the world who presently lack access to modern energy.
Some people describe what is taking place as an energy transition. We think of it more as energy expansion. We will continue to innovate to meet that future demand while minimizing environmental impacts – and a big part of that will be by minimizing emissions. Our team is working on some specific initiatives for our operations in Egypt, and we look forward to announcing those soon.
How does Apache plan to boost efficiency and enhance production from the Egyptian fields?
The key to long-term success is the continuous replenishment of opportunity inventory, and this has been a focus for Apache. We have completed the acquisition portion of a multi-year, multi-million acres state-of-the-art new broadband 3-D seismic project in the Western Desert and have also reprocessed a large amount of vintage seismic data. We have used that subsurface picture to high-grade existing targets and identify new ones. With that information, we have achieved a drilling success rate of 93% and look forward to continued success. One specific example of our success is in the Matruh Basin, where we discovered a record 555 feet net pay at Herunefer E-2.
Of course, we also continued to optimize the efficiency of our operations. Lowering our cost per barrel not only improves margins and allows for increased reinvestment, it also turns more resources into economic reserves, which is critical for the sustainability of the business.
What are Apache’s insights for Egypt’s vision to become a regional energy hub?
Egypt is in a great place – in terms of resources, location, and leadership – to provide the energy that helps elevate lives across the globe. Egypt’s leadership role in MENA and the Mediterranean region makes it well-suited to serve in the capacity of an energy hub and meet long-term demand in the Mediterranean, Africa, and other markets such as Europe. And the benefit will go beyond economic. Egypt serving as an energy hub in the region will bring nations together and should provide greater political stability.
How does Apache promote U.S.-Egypt economic cooperation?
As the largest oil producer and American investor in Egypt, Apache serves as a bridge between our two countries and promotes U.S.-Egypt business relations and economic cooperation. I’ve been privileged to chair the U.S. Egypt Business Council, an organization that plays an important role in advancing the bilateral economic relationship of our two great nations. Since its launch, the council has been a steadfast partner –working together with the government and private sector to grow the economy and expand our trade and investment ties that have put Egypt on a path of sustained economic progress and prosperity. We are honored to contribute to the country’s ambitious economic growth plans and look forward to a bright future together.
Apache supported the Hall of Ancient Egypt at the Houston Museum of Natural Science. Can you share why this important?
The newly remodeled Hall of Ancient Egypt at the Houston Museum of Natural Science opened in Nov. 2021, in conjunction with the world premiere of the touring Ramses the Great and the Gold of the Pharaohs exhibition. We were thrilled to support the exhibit and promote Egypt’s vast, rich cultural heritage and the significant historical wonders of Egypt’s ancient civilization for the American public.
Recently, I had the opportunity to visit the Hall of Ancient Egypt with the Minister of Petroleum and Mineral Resources H.E. Tarek El Molla. I was in awe of the rich history showcased throughout the exhibit and enjoyed learning more about the diverse aspects of ancient Egyptian life.
What do you look forward to during your trip to Egypt and EGYPS 2022?
I always enjoy visiting Egypt. I look forward to meeting with Apache employees and thanking them for all they do for Egypt, our company, and others around the world.
The EGYPS Petroleum show is an exciting opportunity to hear from other companies and leaders and discuss the future of the energy industry in Egypt.
At this year’s show, we’re excited to highlight two areas that are very important to us – safe operations and the advantages of a diverse team – by sponsoring the HSE Best Project of the Year award and the Nex-Gen Female of the Year award. I look forward to seeing everyone at the show and sharing my optimism for the future of the energy industry in Egypt.