Starting the third quarter (Q3) of 2008, petroleum mega players have revealed the bag of their achievements accomplished during the first two quarters of this year. Some confirm they are on track as scheduled, while others assert they are ahead their plans; both are rigidly competing to hold the title of best achiever of the year. However, the current figures and numbers are the only measurement units which would roughly locate the positions of competitors in the mid race of 2008 top achiever for the time being.
This article provides a simple presentation and analysis of the production/operation achievements announced by several companies operating in Egypt, such as Apache, BG, Eni, TransGlobe, Schlumberger, Halliburton, BG, Dana Petroleum, Baker Hughes, RWE, Dana Gas…etc.
With a production averaging a record 7,845 barrels of oil equivalent per day (Boepd), TransGlobe celebrates its Q1 achievement, in addition to the acquisition of approximately 900 barrels of oil per day (Bopd) in the West Gharib area was completed on February 5, adding to the approximately 1,600 Bopd acquired on September 25, 2007. The Company has further increased production from the West Gharib fields by approximately 900 Bopd to approximately 3,400 Bopd since assuming operatorship. Based on the initial drilling success and the planned extensive development program, the production guidance for 2008 has now been increased to 7,300 to 7,500 Boepd (previous guidance: 6,900-7,100 Boepd).
Focusing on TransGlobe’s operations in West Gharib, on February 5, 2008, the company succeeded to acquire all of the shares of GHP for US$40.2 million, plus working capital adjustments with an effective date of September 30, 2007. GHP held a 30% working interest in the West Gharib Production Sharing Concession (PSC).
Following the acquisition of GHP, TransGlobe holds a 100% working interest in the West Gharib PSC, which consists of nine development leases, including the East Hoshia development lease which was approved in January 2008. Three wells have been drilled to date in 2008, resulting in three oil wells (two at Hana and one at Hoshia). The drilling rig is currently drilling at South Rahmi and is scheduled to drill continuously in West Gharib through 2009. In addition, a new 1,200 hp drilling rig has been contracted, which was scheduled to arrive from China in June. It is expected that the new rig will be drilling at West Gharib by mid-July.
Besides West Gharib, TransGlobe is the operator of Nuqra Block 1 and holds a 50% working interest. Existing seismic data was remapped and several Cretaceous targets were identified for a future drilling program. One exploration well has been budgeted for 2008, on a contingency basis. The Company has discussed rig sharing possibilities with the adjacent operators to facilitate a potential 2008/2009 drilling program.
“Apache delivered strong financial results for the first quarter and, just as important, significant exploration results in each of our ‘ACE’ core growth areas of Australia, Canada and Egypt,” commented G. Steven Farris, Apache’s President and CEO on the company’s first two-quarter achievements.
Apache Corporation reported first-quarter net income of US$1.02 billion, or US$3.03 per diluted common share, the company’s second consecutive quarter with earnings over US$1 billion and a 108-percent increase from earnings of US$492 million or US$1.47 per share in the prior-year period.
First-quarter production increased 4 percent from the year-earlier period to 557,631 barrels of oil equivalent (BOE) per day, driven by higher oil output in the United States, the North Sea and Egypt.
“We expect production to accelerate into the second half of 2008 with increased activity in the United States, Argentina and Canada along with first production through the Salam gas plant expansion project in Egypt,” highlighted Farris.
In Egypt, Apache received approval to build a third gas-processing train with capacity of 100 MMcf per day. “We now project that our inventory of development projects will add 135,000 Boepd net to Apache’s interests by the end of 2012,” explained Farris.
Apache’s discoveries included the Brulimar-1, Julimar Southeast-1 and the Halyard-1 in Australia; the Hydra-1X in Egypt, and three wells in the Muskwa Shale in the Ootla area of British Columbia.
Oil and natural gas production for Italian Eni during the first quarter averaged 1.796 mmboe/d, an increase of 3.6% compared with the first quarter of 2007 mainly due to the benefit of the assets acquired in 2007 in the Gulf of Mexico and Congo, as well as of Burren Energy from January 1, 2008 (for an overall increase of 118 kboe/d). Start-ups in Egypt and Angola, and field performance in Kazakhstan also supported production growth.
“Eni has delivered an excellent set of results… achieved despite the impact of adverse currency movements and an unfavorable trading environment in our downstream activities. We are delivering on our strategic objectives, generating value from our 2007 acquisitions and remain focused on continued improvement in all our businesses,” said Paolo Scaroni, Eni CEO.
Currently, Dana Petroleum is drilling two wells offshore Egypt, at West El Burullus in the Nile Delta, in which it holds 50% interest share, and at West Gihan in the Gulf of Suez with 20% share.
Dana Petroleum’s average production from 1 January to 30 April 2008 is approximately 44,650 Boepd after impact of Forties Pipeline System shutdown. The company has attained an excellent performance from the Egyptian oil fields, including additional production from the re-instated C1 well on East Zeit and the newly drilled South-West Qarun-12 well. Rig is currently on location at East Zeit oil field, offshore Gulf of Suez, to undertake workover and infill drilling campaign, to be followed by drilling of Dana exploration prospects in Gulf of Suez.
“We look forward to Dana’s continued progress throughout the rest of the year from further exploration drilling, new license applications in the UK, Norway and Egypt, an active work program on existing fields and emerging commercial opportunities,” said Tom Cross, Dana CEO.
BG Group has witnessed a 57%-revenue and other operating income increase, which amounted to £3 106 million. Capital investment in the quarter of £647 million comprised investment in Africa, Middle East and Asia (£307 million), Americas and Global LNG (£161 million) and Europe and Central Asia (£179 million).
Capital investment of £582 million included expenditure in Tunisia (£148 million), Egypt (£105 million), UK (£102 million), Trinidad and Tobago (£53 million), Kazakhstan (£47 million), India (£24 million), Canada (£18 million) and Brazil (£17 million).
During the quarter, BG Group announced the successful delivery of first gas from the West Delta Deep Marine Phase IV and the Rosetta Phase III projects in Egypt. The gas will be used to supply Egyptian domestic and export market commitments.
Schlumberger Limited reported first-quarter revenue of US$6.29 billion versus US$6.25 billion in the fourth quarter of 2007, and US$5.46 billion in the first quarter of 2007.
Schlumberger Chairman and CEO Andrew Gould commented, “Seasonal factors and weather-related events, as well as lower product and software sales following the exceptional levels in the fourth quarter, had a general dampening effect on sequential revenue gains with a consequent effect on margins.
The company’s income from continuing operations before charges and credits was US$1.30 billion; a decrease of 5% sequentially, but an increase of 10% year-on-year. Oilfield Services revenue of US$5.60 billion increased 3% sequentially and 18% year-on-year.
In Europe, Africa, Russia and Caspian region, Baker Hughes announced an 8% increase in its revenue in the Q1 2008 compared to Q1 2007. Africa revenue was down 8% in the Q1 2008 compared to the Q1 2007 and compared to a 1% decrease in the rig count and up 1% compared to the Q4 2007 and compared to an 8% decrease in the rig count. The change in revenue from a year ago reflects a change in the product/service mix on a significant West African project.
As mentioned earlier, all petroleum companies are still in the mid way to accomplish their 2008 plans. Thus, it is too early to determine the top achiever of the year, especially in the shadow of an “unstable” market and conditions worldwide.
By Yomna Bassiouni