Perenco’s Innovative Approaches to Egypt’s Gas Fields

In 1975 Perenco was founded as a marine services company but spread into upstream operations in 1985. The independent oil and gas company’s strategy “evolved rapidly towards increasing production and reserves, renewing licenses and securing additional acreage for exploration and development opportunities.”  Perenco now spans onshore and offshore across the globe, with headquarters in Paris and London. The company has 18 subsidiaries, 14 of which are production and 4 are in exploration. Perenco currently has projects in 16 countries. The company’s portfolio features operations across the continent, in Cameroon, Democratic Republic of Congo (DRC), Gabon, Republic of Congo, Tunisia, and Egypt. Perenco currently produces approximately 375,00 boepd, with a production rate of 10,000 boepd here in Egypt.

One of the striking features of Perenco is the company’s dedication to corporate social responsibility. The company also emphasizes health and safety, the environment, and business integrity. Perenco has committed itself to environmental, as well as transparency initiatives to achieve the highest standards of operations. Through partnerships with local communities and the public sector, Perenco continuously demonstrates its dedication to sustainable development of host communities.

Perenco first entered the Egyptian sector in 2004 when it acquired a 50% interest of the offshore North Sinai gas assets but has since expanded to hold 100% of the assets. Under the contract, Perenco leases offshore sites in the Mediterranean, north of Port Said. Perenco’s leases include: Tao, Kamose, and Seti-Plio. Wadjiri Abdoulaye, Perenco Egypt’s Exploration Manager explained, “Our Seti-Plio Field is purely exploration right now. In this field we are gathering seismic data and well data, from surrounding fields. A seismic re-interpretation is ongoing focusing on the Pre-Messinian reservoirs.”

Perenco has a gas-producing platform on the Tao Field. From the platform the gas is transferred onshore via a 50km, 22’ pipeline. General Manager of Perenco Egypt, Pierre Capo explained how Perenco’s onshore gas plant between Port Said and El Arish allows for the company to send the gas directly to the national grid following the separation of the gas and water. Traditionally, once separated from the gas, the water would be trucked to a disposal site, in accordance with the strict environmental legislation. However, Perenco sticking to their environmental commitment, sought a more environmentally sound means of disposing the water. NOSPCO, Perenco’s joint venture operations company, has improved the way to handle the disposal of the water. A new water pit was built, which can receive up to 40,000 bwpd. Additionally, Perenco implemented an innovative disposal system by installing eight floating evaporators, where the produced water is evaporated instead of being disposed in possible bad area. The company holds permits from the environment department in EGAS for both of these operations. 

Perenco is also working to “increase production by finding new innovative solutions,” informed Mr. Capo. The company recently installed a new jet pump on their Tao platform. The jet pump reduces wellhead pressure on the wells, allowing for more gas production. Mr. Pierre Capo explained that the jet pump also allows for higher production out of older wells. The gains from the jet pump are estimated at 300 mmscf.

In speaking on the challenges Perenco has faced with operations in Egypt, Mr. Abdoulaye Wadjiri said, “fortunately, we do not have any big technical challenges working in the Mediterranean.” Both representatives from Perenco agreed that there are social and economic challenges unique to Egypt. As the company operates in Egypt’s gas sector, they must deal with two heads EGPC and EGAS, which “can make things a bit complicated.”

Like other oil and gas producers in Egypt, Perenco must also deal with the issue of delayed payments. Mr. Pierre Capo explained, “We want to increase our investment in order to fight against the production decline but it is hard without complete payment.” The aim of our joint venture is to fund new projects with the payments we receive. That is difficult to run now as we are only paid in EGP and its difficult to translate EGP into foreign currencies. This is not a problem specific to us; I think every joint venture in Egypt has this problem right now.” He wishes that EGPC will soon respect the deferral agreement signed in 2012, which would allow the company to fund future projects.

Current insecurity in the Sinai presents a serious challenge to Perenco, at the company’s gas plant located in the city of Rommana, between El Arish and Port Said. According to Mr. Pierre Capo, the company is “facing a lot of problems out there,” noting, “The threats from the Bedouin regularly impact our operations. We had to request a military presence around our plant because of the problems.” The army responded favorably to Perenco’s request and is now protecting the gas plant.

Despite the challenges, the company has expressed interest in future bid rounds, especially if new blocks are located close to their existing operations. Perenco’s innovative technologies and approach are valuable assets to Egypt’s gas sector. The company is certainly an asset to Egypt as they continue to provide vital services despite the difficulties.



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