Interview With Mr. Maximilian Feller, General Manager of RWE Dea, Egypt

Could you briefly tell us a bit about yourself and your journey in the oil and gas industry before becoming the General Manager of RWE Dea Egypt?

By profession I am a Petroleum engineer. I have been engaged in various positions in companies operating in the oil and gas industry, including countries like Kazakhstan, Romania, Pakistan, and Libya. In 2008 I have been appointed as General Manager for the Suez Oil Company (SUCO), the joint venture of RWE Dea and the Egyptian General Petroleum Company (EGPC).

In November 2012 I became RWE Dea General Manager. At the time our main goal was to produce Gas from our Disouq Project.

What countries/regions does RWE Dea operate in?

RWE Dea AG is an international exploration and production company for oil and gas with headquarters in Hamburg, Germany. Dea is active in the core regions Europe, North Africa, the Caspian Region, the Southern Caribbean and the Equatorial Region of South America and obtains concessions, facilities and offices in 17 countries around the world.

Could you tell us about RWE Dea’s activities in Egypt?

This year, we completed 30 years of successful oil production operations as an operator in the Gulf of Suez. We are pleased to look back upon a very fruitful production phase together with SUCO, our long-term reliable joint venture company with EGPC.

We have produced over 640 million barrels of crude during these three decades.

Recently, we completed activities in the Zeit Bay field to optimize the gas lift system to increase oil production.

At the Ras Fanar field, RWE Dea plans to drill two additional wells and add these to production by 2015. In the Ras Budran field, we currently are conducting a test of shallow reservoirs which so far has been very encouraging.

In addition to oil production we commenced with first gas from the Central Production Plant (CTP) of the Disouq Development project in the Nile Delta August 2014. For this own operated project we again rely on our well established joint venture SUCO (DISOUCO) with our partner EGAS.

Furthermore, we have plans for additional exploration in the Gulf of Suez. RWE Dea was granted a 100% share and the operation of the East Ras Budran Offshore concession last year, which is situated adjacent to our oil producing field Ras Budran. RWE Dea plans to commence 3D seismic acquisition early 2015, which would take about 4 weeks. However, this is still subject to tender evaluation. Currently, one exploration well is planned to be spudded early 2016. Potential follow-up drilling will depend on the results of the first well.

Furthermore RWE Dea is partner in gas projects in the Nile Delta as well as in an oil project in the Western Desert.

Where does Egypt rank within RWE Dea’s worldwide activities?

North Africa is one of Dea’s core regions and we are active in Egypt for more than four decades. Dea’s Oil and gas production currently comes from four countries, namely Germany, Norway, the UK and Egypt. Recently, we have concluded the first phase of the Disouq gas development project, which has enabled us to more than double our production in Egypt from last year. Let me conclude, Egypt plays an important role for Dea.

What is RWE Dea’s biggest discovery in Egypt?

We are partners in a capital intensive project in the offshore Nile Delta (North Alex & West Med) that might contribute to increasing Egypt’s gas production by more than 20%. We have plans for significant investments in our Onshore Nile Delta license to increase production.

What challenges has RWE Dea faced throughout its operations in Egypt?

In 2011, we started the development of the Disouq project and we had to build up the whole infrastructure for the project. We found ourselves in a country, where the political as well as the security situation was marked by challenges over months and even years.

We managed to build-up complex operations, with one drilling rig permanently on mission, the construction of a gas treatment plant and the installation of about 90 km onshore pipeline.

What is RWE Dea’s share in oil and gas production in Egypt?

Currently, we achieved a production level of approximately 45000 BOED from operated and non-operated concessions. This is the production we have from our Gulf of Suez and Nile Delta areas, and we are discussing with our partner EGAS an aggressive plan to increase it in the near future through our Disouq production.

How is the Disouq Development Project coming along, and what have been the outcomes of it thus far?

The Disouq project was implemented during a critical time for Egypt, but we were successful to achieve first gas production from the Rented Treatment Plant (RTP) in September 2013 and from the Central Treatment Plant (CTP) in August 2014. Both facilities are now operated by our Joint Venture SUCO.

To date we have drilled 18 successful wells which have matured prospects into gas discoveries. We still have an ambitious drilling program ahead and are quite confident that we will make further discoveries.

Do you see potential for unconventional resources in Egypt? If so, will we see RWE Dea investing more in Egypt?

Initial evaluation of Dea and reports of organizations such as the US Energy Information Administration (EIA) indicate the potential for unconventional oil and gas resources in Egypt, mainly in the Western Desert. Currently Dea is focusing on near field exploration of oil and gas resources in the Nile Delta and Gulf of Suez and is not pursuing specific projects for unconventional exploration for the time being.

Since the Petroleum Ministry is in the process of paying its debt to foreign investors, what do you foresee for Egypt? Do you believe Egypt will see more investors now that their confidence is beSince the Petroleum Ministry is in the process of paying its debt to foreign investors, what do you forsee for Egypt? Do you believe Egypt will see more investors now that their confidence is being restored?

Of course paying the overdue receivables owed to the IOC’s is one of the most important aspects of our business in Egypt. Investors are willing to invest in a country subject to knowing as when they will be able to be repaid. We believe that the gap between supply and demand of gas that Egypt had faced lately was due to the debts incurred over time; which forced the investors to reduce investment in exploration and development projects and hence did not allow to increase the production to meet such increasing demand. Having said that, the Ministry of Petroleum and the Egyptian government are currently trying to overcome such problems by introducing scheduled repayments that if continued successfully, will have a great positive impact on the oil and gas Industry and will help in narrowing the gap between the supply and demand of gas and will therefore increase the confidence of the investors to invest in the Egyptian market.

What would your personal message be to incoming investors in order to succeed in Egypt?

We believe that Egypt has high potential in the oil & gas sector. The country has highly qualified and skilled staff working in the petroleum sector and the infrastructure in Egypt is well developed.

On the whole, what are the main difficulties the petroleum sector faces in Egypt?

The deferred payment topic is one of the main challenges. The ramp-up of overdues is a significant problem in Egypt, which we share with the other operators of the Oil & Gas industry in the country. This is a serious issue for us and threatens our investments in Egypt.

We are working on a solution how to mitigate this negative effect, together with the Egyptian authorities.

Again, this is necessary in order to lift the full potential that we see in our concessions.


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