After years of reporting news from concessions and covering companies’ activities, EOG has thought of inviting our esteemed readers to a free virtual tour of the Egyptian concessions.
EOG made its first concession trip to PetroSennan’s area in the Alam El-Shawish East Concession, which covers about 994 square kilometers in the Western Desert.
The new comer to the hydrocarbon industry is believed to have a promising future in Egypt’s petroleum industry.
A journey into the Western Desert
Eng. Al-Kahlawi Al-Naggar, Field Manager at Petrosnan in the Alam Al Shawish Concession highlighted that Petrosnan, a joint venture between the Egyptian General Petroleum Corporation (EGPC) and Ukranian Naftogas, controls four areas within the Alam Al Shawish. The first is the HG, which is the main area for crude oil and natural gas production in the Alam Al Shawish concession. The WHG and the EHG are two new areas in the concession, but they are still subject to the formal approval of the EGPC to be added to the company’s operatorship. Similarly, there are two natural gas production areas, Karima and Maleka, which are also awaiting the EGPC’s consent.
“The company has been proving its high potentials since its establishment. We succeeded to drill 25 wells in addition to placing four wells on production line, which collectively have an average production of 1500 barrels of crude oil per day, all in a short period of time,” said Al-Naggar.
He further added that Naftogas is currently working to create facilities through production operations in four wells (HG341,3,4, and 7) at a rate of 1500 barrels of oil and 1.5 million cubic feet of natural gas per day, in addition to preliminary processing operations, which consist of:
Separating the oil from gases using a high-tech separator
Storing the oil in storage tanks, each with a full-capacity of 1000 barrels
Transporting the oil via containers to the production facilities of the General Petroleum Company (GPC), which by its turn, it extracts water and salts and completes the processing of oil
Transporting the oil to the Abo Al-Gharadeeq area via the General Petroleum Company’s shipping lines
Moreover, Al-Naggar stated that the company is working to complete the drilling plans for the current fiscal year 2011-2012, which aims at drilling five wells, four of which are exploratory and one development, in the same concession area of Alam Al Shawish. The company has so far completed the drilling of two exploratory wells, and drilling of a third one is currently underway. Al-Naggar estimated the costs for drilling operations have reached $75 million. He added, in comparison to the previous fiscal year 2010-2011, the company drilled six exploratory wells and a development well in the same concession in Alam Al-Shawish, at a cost of $43 million.
He added that the company is awaiting the EGPC approval to implement its development plan, in order to add several wells working to the company’s production rates. If the (Karima) area and (SEHG) are merged, Al Naggar expects production rates to hit 5000 barrels per day, in addition to an increase in natural gas production if the gas line is activated rather than burned.
In addition, Al-Naggar revealed that the company plans to conduct a seismic study for natural gas through an engineering study at the production plant, which is currently under review. The company’s best results, he stated, were achieved in the implementation of the previous year’s plan, during which 75% of exploration operations were successful and success rates for development plans reached 100%
In related statements, Al-Naggar said that the biggest challenge presented by working in the Western Desert is the problem of unstable communication networks, adding that the company is in the process of finalizing a deal with one of the leading networks in Egypt to establish a phone network that is expected to cost more than LE20 million.
Drilling the high potentials of the desert
When it comes to drilling, the company has had an outstanding record of drilling achievements over a short period of time. “We succeeded to drill a total of 25 wells, mostly are oil producing ones,” said Al-Kahlawy.
The company’s drilling fleet consists of two rigs; the ST-11 and the NS-3. “The ST-11 is a land rig that is currently drilling the NHG-2/1 well, while the Nile Star rig (NS-3) is a work-over rig that is performing operations at the HG-34/5 well.”
Asked about the average cost of drilling one well, the Field Manager stated that the average cost revolves around $4 million per well.
“The rig is classified as super land rig, 2000 HP, which has a drilling capacity of up to 22,000 feet-depth,” said Eng. Ibrahim Attia, Rig Supervisor. “The rig has already been used to drill a 17,000 feet-deep well.”
Eng. Ahmed El-Hadary clarified that the rig was first rented three years ago and the rig contract was recently extended to a further six months. The daily renting rate of the Sino Tharwa-11 rig counts for 21,800 Egyptian Pounds. “Since the rental of this land rig, a total of 17 exploratory wells were drilled by the ST-11,” he added. “All these wells are oil producing, with the exception of three wells that were dry hole.”
The drilling engineer further highlighted that drilling operations are held under the concept of “Wild Cat”. “You do not know what exactly you will be encountering or the challenges you will be facing while drilling, that is the reason why high precautions have always been taken to prevent any kind of problems.”
The key factors of drilling are how to handle a problem, ensure safety of the staff, save time and money.
Sharing the same comments as of the production team, the drilling engineers emphasized lack of communications and prepared roads as the problems they suffer from the most.
By Shady Ahmed – Yomna Bassiouni