Forty six companies joined the race of the bid launched by the Egyptian General Petroleum Corporation (EGPC) to develop the offshore Abu Qir gas field in 2007. The EGPC, which is seeking partners (Contractors) to farm into or contribute to the Abu Qir gas field, is expected to decide on the proposals by next June.
The basic terms of participation will be similar to other concessions in the region with the contractor recovering costs and receiving a share of production. The asset will be operated by the contractor through a joint venture with EGAS. Moreover, alternative structures proposed by prospective partners may also be considered.
The number of competitors highlights the growing interest among energy groups in the gas field thought to be flush with reserves .
Sources close to the deal said companies would probably form alliances as fierce competition could push up the deal value to nearly $1 billion for the largest gas field in the Gulf of Suez region.
Citadel (Al Qalaa) Group and PICO Petroleum are among the most prominent local bidders for the deal, according to sources. This marks a return of intense competition between both companies in the Egyptian energy market after PICO won an earlier field development deal thanks to its cooperation with Kuwait Petroleum Corporation.
Abu Qir was the first gas field developed in the Egyptian Mediterranean and since 1979; it has served the domestic market’s growing demand for gas.
Currently, the Abu Qir field is 100% owned by EGPC and enjoys a production rate of 155MMcfd of gas which is fed to the local market in addition to LPG and condensate.
There is a development plan for the Abu Qir fields that includes drilling new wells and working over the existing wells targeting almost doubling this production rate in the next few years. The asset includes significant infrastructure and is ideally suited to act as a transportation hub for the fast developing Western Mediterranean area .
The contest over Abu Qir Gas Field is part of a plan developed by the Ministry of Petroleum to rehabilitate the state-owned old fields to keep up production rates.
The Abu Qir Concession now spans three fields; Abu Qir, North Abu Qir and West Abu Qir. Cumulatively, these fields currently produce 155MMcfd but following the identification of a number of additional reserves and sizeable resource potential, EGPC is seeking Partners to take the Contractor’s role in the Concession and further its development.
The original Abu Qir field has 18 wells of which 12 are currently producing, three have mechanical problems which will be repaired and three wells will be re-completed to produce in the near future.
North Abu Qir has six producing wells and the most recent platform, West Abu Qir has two producing wells.
North Abu Qir and West Abu Qir are tied back to Abu Qir from where gas is piped to the Meadia Gas Plant for separation into sales gas, LPG and condensate. After providing power and separation of condensate/LPG, sales gas is 95% of raw gas.
The calorific value of Abu Qir gas is 1,042BTU/scf.
A program of production enhancements is underway and includes stage two completions, repairs, the tie back of an appraisal well and drilling three development wells on North Abu Qir. This will increase the current production to 270MMcfd. The field infrastructure has an overall capacity of 385MMcfd allowing additional wells to be comfortably accommodated. Current condensate production is 3,700bpd.
The Western Desert Petroleum Company (Wepco) operates Abu Qir on behalf of the EGPC and key employees will be transferred to the new entity set upon completion of a transaction (or if preferred by the Contractor, their existing joint venture company in Egypt).
By Ashraf SaidDownload