Dr. Mark Walker Fenton – General Manager of Dana Gas-Egypt

Dr. Fenton completed Ph.D in Geology and Bachelor of Science in Geology from the University of Melbourne. He started his career with Shell Australia in 1985 and was involved in several onshore and offshore exploration ventures. He served Shell International in The Hague for five years and also served for Shell in exploration, production and development projects in Australia, Netherlands, Vietnam, Myanmar, and Oman. In Oman he was involved in field development planning and drilling of the giant Yibal oil field. Dr. Fenton served as Petroleum Engineering Team Leader of Central Oman and was responsible for the development and production of some 13 oil fields. He joined Woodside in 2000 as Business Manager for the Offshore Enfield Development and was responsible for all development work and environmental approvals. He served as a Director of Kairiki Energy Limited from December 1, 2009 to February 2013.

Can you tell me a bit about yourself and your role at Dana Gas Egypt?
I have 28 years of international experience in the oil and gas industry. I am a geologist by training with a Ph.D from the University of Melbourne in geology. I have spent my career in exploration, development, and production projects both onshore and offshore around the world. My role as General Manager of Dana Gas Egypt is to take responsibility for Dana Gas’ Egyptian business and grow the business in line with Dana Gas’ strategic plans in an environmental, social and safe way.

Do you consider Dana Gas operations in Egypt a success story?
Yes by all means. We have made 26 new gas discoveries in the West Manzala and West Qantara blocks. We had the first commercial oil discovery in upper Egypt and have produced a cumulative production of BOE 115 million, in addition to Komombo cumulative of BOE 965 thousand in Egypt. We still have new gas discoveries to develop and have significant upside within our operating acreages.

What is the company’s market capitalization in Egypt?
Dana Gas is not listed in Egypt, it is listed in the Abu Dhabi Stock Exchange with a market capitalization of around AED 5.8 billion (approx. $ 1.6 billion).

Dr. Patrick Allman-Ward, CEO of Dana Gas, stated that even though Egypt has been going through major political and economic difficulties, Dana Gas was able to reach 30% growth from 2012-2013, do you think that Dana Gas will be able to maintain its growth patterns, or there might be challenges especially in light of the new constitution and potentially a new elected government?
The Petroleum Ministry has always been supportive of operating companies to increase production. The challenges are mainly shortage of funds and civil unrest which affects new projects. I believe Dana Gas will achieve 2014 production target. However, long-term production growth requires immediate government support, mainly payment of overdue receivables.

To what extent, if any, is the cash liquidity problem affecting your business in Egypt?
It affects the company growth plans more than the daily operations and production.

After seeing growth in the last year, how would do you rank Dana Gas compared to other gas companies in Egypt?
Dana Gas is the sixth gas producer in Egypt and has high potential for growth to be in a better competitor level.

After receiving $ 53 million from the Egyptian government, are there any changes or new news concerning your production plans for 2014 or is the debt still too high for any changes?
We are managing expenditures to maintain safe operations and production targets. As I said, new projects are affected.

Recently, there have been talks about changes in standard terms and conditions of agreements to attract new investments; are there any practical steps or changes that have been taken by the government?
Not to my knowledge. The Ministry of Petroleum is interested however in the unconventional hydrocarbons such as oil shale and gas shale. They’re encouraging operating companies to submit suggestions for new terms and conditions and investment models.

Do you have any promises or news from the government concerning the rest of the payments that the government owes you?
We have continuous negotiations with EGPC and EGAS in this regard. There are signs of payment process improvement in the second half of 2014.

What do you think the new government should do to improve investment in Egypt over the fiscal year of 2014?
Find a way to pay the overdue receivables of operating companies.

Do you face any difficulties attaining exploration and production permits in Egypt?
We suffer from some prolonged procedures and governmental routine.

Do you think the government needs to provide incentives for companies in order to explore and spend money in high-risk areas? If yes, what type of incentives do you think the government should offer?
For high risk exploration areas, the government can offer higher production percentage for the operator, higher cost recovery pool, longer duration of the exploration phase and better gas prices for gas discoveries.

How do you explain Dana Gas’ increased production rate in light of the current economic and political instabilities?
Dana Gas Egypt has dedicated staff and management team who are committed to company growth. The company has good relations with the Egyptian authorities and is confident it will receive the overdues.

After your success in the Komombo Concession in Southern Egypt, do you feel more optimistic about exploring in Southwest Egypt? And are there future steps in that direction on behalf of Dana Gas?
Dana Gas plans to focus on its core business which is gas exploration and production. We have recently been awarded block 6 (North El Arish) offshore Mediterranean. Dana Gas is in the process of farming out its working interest in Komombo block.


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