Deep Water Drilling… A New Horizon to Magnetize More Investments

With recent developments in the market it appears that Egyptian crude oil production has the potential to rise. In fact, the ratio of crude oil recovery at the various wells in the Gulf of Suez has the ability to increase to more than 40%, compared to 20% currently. This increase in production, in general for all of Egypt, can be achieved through the intensification of upstream works, particularly in the Mediterranean deep water as well as the Western Desert and the utilization of updated technologies along with enhanced oil recovery methods.

Eng. Sameh Fahmy, Egyptian Minister of Petroleum pointed out that the last period has witnessed the achievement of many successes in the Western Desert due to the intensification of exploration works which have led to drilling levels reaching new records of depth. In some locations this depth has exceeded 5000 meters. This is coupled with the successes achieved in the Mediterranean deep water as well; these depths are seen as an apt alternative in opportunities for global companies.
Recently, the British BG, the Malaysian Petronas and the Italian Edison unveiled their plan to invest US $4 billion over the next three years to cooperate in a number of mega projects in upstream activities. These projects will be focusing on natural gas production in the offshore fields of the Mediterranean area.
This was not the first deal for BG in terms of deep water activities in Egypt. Last summer, BG along with Petronas and the German RWE Dea Egypt and in association with the Egyptian Natural Gas Holding Co. (Egas) signed two petroleum agreements for gas crude oil and exploration in deep water in the Mediterranean Sea.
According to the terms of the first agreement, BG and Petronas were licensed to conduct deep water drilling in North Sidi Krier, at an area of 1950 km2 with total expenditures of $80.6 million, a drilling commitment of three wells during eight years, and signature bonuses of about $3.5 million.
As for the second agreement, RWE was licensed to carry out deep water drilling in the region of North Ameryia at the Mediterranean, in an area of 2066 Km2 with total spending of about $25 million and a drilling commitment of four wells during nine years as well as signature bonuses of about $2 million.
Among the foreign companies which had previously achieved major success in deep water drilling in Egypt is Shell Egypt. With co-ventures with Petronas Carigali Overseas Sdn. Bhd. and Egas, Shell succeeded in making two hydrocarbon discoveries in their offshore concession in the Mediterranean in February 2004. The ultra-deepwater drilling conducted by this partnership included the drilling of three wells in the North East Mediterranean Deepwater Concession. Through this campaign, a new record of water depth for Egypt and the Mediterranean were accomplished, with drilling depths reaching over 2400m of water.
“The drilling results have demonstrated that this ultra-deepwater area is a rich hydrocarbon province. The priorities now are to commercialize the discoveries as rapidly as possible and to ensure that an optimal follow up appraisal and exploration program is designed within this large concession,” commented Matthias Bichsel, Shell’s Global Exploration Director during that time.
In a recent report issued by Rashid Petroleum Co. (RASHPETCO), Sherif Sousa, the company Chairman attributed the reason behind “pumping new investments” into deep sea drilling to the success accomplished by these companies over the past six years. Their discovery of natural gas in shallow and deep waters in the Mediterranean led to a total investment of approximately $7 billion in the upstream activities.

Sousa also highlighted a list of new plans consisting of the initiation of four projects for developing gas fields in deep water and another project for establishing a station for ice formation phenomenon treatment inside the marine pipelines that transfers gas in Idku.

By Yomna Bassiouni


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