Despite its limited production compared to other companies, the Offshore Shukheir Oil Company (OSOCO) is currently classified as one of the most vital companies operating in the area of Gulf of Suez. Eng. Mostafa Shehata, OSOCO President sheds light on the company’s outstanding attainments in 2010 and prioritizes the 2011 targets
What are the OSOSCO main projects over the last period of time?
We achieved several discoveries over the past few years, on top of which comes the Upper Rudeis Sandstone discovery, from the Shukheir Bay-5 in August 2006. The well was put on stream; with daily production rates averaged 1200 barrels of crude oil. In addition, the company completed the 3D seismic surveys for the Shukheir Bay and Gamma fields in June 2007. The implementation and analysis of these studies contributed to the attainment of more discoveries, such as the successful completion of drilling the Shukheir Bay-6 well (SHB-6) to the Kareem reservoir in November 2010. Production tests of two intervals totaling 15m of perforations in the virgin reservoir pressured Kareem sandstone has resulted in flow rates of 1,700 BOPD at a 0.5-inch choke size of 41 API crude with GOR of 750 SCF/BO.
What is your strategy to increase production rates?
Various assessments were conducted to evaluate the production capacities of the Gamma field and Shukheir Bay, as an attempt to study the volume of oil reservoirs. Depending on the previously held 3D seismic surveys, we are studying the possible drilling depths to penetrate the layers containing whether oil, natural gas and water in order to determine the wells to be developed and repaired and the other new wells that can be drilled in this area.
What is OSOCO’s 2010-2011 plan?
Our prime focus is to maintain the current production rate intact and fully implement our production strategy. Moreover, we will probably drill a development well in the Shukheir Bay and another exploratory well in the Gamma field. The execution and timing of both wells drilling depend on the findings of studies that will be conducted to evaluate this plan.
What is the current production volume?
Presently, OSOSCO produces 1700 barrels of oil per day in addition to 3 million cubic feet of gas.
Operating in the Gulf of Cities is full of challenges. How do you overcome these challenges?
First of all, we have to admit that there are several positive aspects of operating in the Gulf of Suez. For instance, we can receive the needed services on time, as there are many companies operating in this area and the wheel of E&P is ongoing.
On the other side, the negative aspect can be represented in the difficulties of marine navigation due to the wind speed and high waves during several periods of time throughout the year, which slow down our offshore operations. We work hard to overcome this obstacle through the utilization of specific equipped ships.
What is the budget share allocated for developing the production facilities?
There is an ongoing study to define techniques to develop the production facilities of the Shukheir Bay, which match the environmental requirements in this area and the production rates. As a matter of fact, there are annual maintenance programs and throughout the past 20 years, OSOSCO conducted a large number of maintenances that led to considerable production increases. Last year, we completed a rehabilitation plan for production facilities, worth $500 thousand, however, this year, the spending increased to $1.2 million. In 2011, we are planning to spend another $500 thousand for fields’ rehabilitation, yet the budget is subject to the formal approval of the EGPC.
In the context of the 2010 budget, a total of $500 thousand were spent for the Shukheir Bay field and another $750 thousand will be paid to replace the current diesel engines to be run by the gas produced from wells, which would cut down the operating costs.
Throughout the past five years, all land and offshore facilities were tested and evaluated and succeeded to receive credits from reputable organizations, such as Zeta.
Can you tell us more about the company’s concessions?
All our concessions are located in the Gulf of Suez. The first, Gamma, includes six wells, only one out of which produces at a rate of 100 barrels. The second area, Shukheir Bay, holds as well six wells, three out of which have an average production rate of 1600 barrels. The three producing wells are Shukheir-1, Shukheir-5 and Shukheir-6.
What is the volume of OSOCO’s investments?
This year, the total investments counted for $16 million, which is $1 million higher compared to last year’s.
What is the actual cost for well drilling?
As commonly known, the drilling of offshore wells is way costly compared to the land one. For our company, the total cost of drilling offshore wells totals $15 million, while the drilling of land wells is one-third this sum as it costs around $5 million.
Are you releasing any bid round soon?
The bid rounds are an elementary factor in the petroleum industry, through which we can select the high quality offers, whether technically or financially. There is a bid for supplying spare parts of specific equipments, however, we are still in the negotiations phase.
What are the main service companies you are dealing with?
We are not limiting our business to a precise service company. Actually, we deal with numerous service companies, which can ensure the supply of high-quality services at the finest prices.
What are the rigs utilized in your operations?
Most of the rigs we utilized have an average 1500 HP, at a daily renting cost of $14 thousand. Among the rigs we rent, we can list EDC, ECDC, NAFTA, Mercury, Bennivis…etc.
What are your QHSE precautions applied by OSOCO?
We finalized a complete scheme of fire fighting in the oil and gas separation station in the Gamma field, in addition to the implementation of latest technologies. Also, we awarded the tasks of getting rid of the drilling left overs to Green Valley Company.
Besides, HSE trainings are given to all our employees in order to ensure their safety during the daily working routines and certify that they can deal in the best way during any type of emergencies.
What are OSOCO’s main goals in 2011?
Discovering new reservoirs, developing the current existing ones and boosting production top the list of our priorities over the coming period of time.