We can manage the challenges since our goal is to be successful in developing our position in the offshore of Egypt, Anders Kullerud, General Manager of Statoil Egypt, emphasized.
1. Evaluate Statoil’s investments in the Mediterranean Sea?
We have two offshore licenses in the Mediterranean of Egypt, Ras El Hekma Offshore (Block 10) and El Dabaa Offshore (Block 9). We also have one drilling commitment in El Dabaa concession. Besides, we have fulfilled the 2D and 3D seismic commitments. So, we are getting closer to start operation. And we hope to start operation at the very end of this year.
2. Are there any new acquisitions in the near future?
We are looking for business opportunities in Egypt and constantly looking into what are the options. We believe that there are potentials in the offshore of the Mediterranean; we certainly would like to be a part of this competition for the new resources in that area. So, we do have an active monitoring of the situation and also to pursue opportunities if we can see great opportunity for our business.
3. What is your impression about the Egyptian Petroleum sector? What are the main obstacles or what are the major motivations behind encouraging you to invest more?
I’ve been here for only three months so I’m still in the process of familiarizing myself. At least in this part of time, I think my impression regarding the business environment is very good and the commercial environment is good. I feel that there is a good communication between the IOCs and the government; of course there are challenges as far as I’ve experienced like in the gas pricing. For us, we are in a very early phase, the exploration phase, and we have not met any major obstacles. Our business communication with the ministry and EGAS has been very good. Besides, there is a good understanding over challenges and there were flexibilities on both sides. But again, we are still in a very early stage. So, we have not gone in this development phase.
4. What are the most important conditions in the agreement between Statoil and EGAS or EGPC?
At the moment, there are not any. We’ve signed this contract in 2007 and it was an exploration and production sharing contract. At the present time, we don’t see any need to make any amendments. However, in 2011 we have to decide if we want to implement to the next phase of the contract pr make any ammendements.
5. How do you evaluate the production facilities in the Mediterranean?
It’s too early for us to decide or start assessing the production facilities as we are still in the exploration phase and especially we are remote in the western side of the Mediterranean. But after this phase, we will certainly have some challenges if we are going to develop. Awing to drilling in deep water, deeper than 1000 to 2000 meters, any development in this depth is considered a challenge. We have the experience and this is a part of core competence to explore, develop and produce in deep water. But it is too early to discuss any development concepts and it depends on the discovery and the resources. There are a lot of options and we have to consider the local situation.
6. Is the high cost of the deep drilling in the Mediterranean considered the main reason behind the poor production facilities or had a bad effect on the production facilities?
No, I don’t think so. I think deep-water’s production facilities or assets do have a really good return. So, the cost level is high but the reward is also high but you need big discoveries. The drilling of this deep water well will be quite expensive but it’ll pay back because we will strike resources that are big enough to pay.
7. Regarding the joint operation, what are the facilities that the ministry provides?
We are in many partnerships around the world. I think we can provide our experience and our technology, and the government can provide us with the local knowledge and this is very important. So, I think by working together we have a mutual interest as it is difficult to be successful unless we have a joint-operation.
8. What are the main obstacles facing Statoil in drilling in the Mediterranean?
The challenges are the deep water and experiencing the high pressure. So, it might be complex to drill and we have to make a very careful planning. It’s not a straight forward drilling operation. In other places, we may be drilling in a very normal drilling regimes or temperature regimes. Nevertheless, they are not obstacles as we can manage it but they are challenges and we have to be careful.
9. What are the latest technologies Statoil using in drilling in the Mediterranean?
The really new technology comes in when there is a discovery or when we want to start developing the field. And we are now one of the major players in deepwater drilling worldwide. When we make a discovery, we can apply a lot of technologies that we have a lot of experience of, that’s why we have a focus on deep water. So, we believe that we are able to handle it in a very efficient way.
10. Is your company interested in any specific coming bids offered by EGPC or EGAS?
Sure, we are considering participating in future bids in the Nile Delta. Of course, we have to evaluate each round and see if there is a potential. So, we can never guarantee anything, but what we can guarantee is that we have an active group of geo-scientists working on this. We’d like to develop our position in Egypt, but again, we may be successful or may be not. But, our goal is to be successful in developing our position in the offshore of Egypt.