By Fatma Mohamed and Lobna Hefny
There is an undeniable growing tendency from the government, international companies, and geoscientists to the Western Desert in Egypt. Accelerating trends of Western Desert represent an unprecedented global consensus in the oil and gas industry. This is actually quite typical as conventional oil and gas fields in the Gulf of Suez are nearing maturity and becoming brownfields. Consequently, market players in oil and gas industry have shifted their focus toward the potential of the Western Desert due to its favorable geographical location which covers two-thirds of Egypt.
Fostering the direction toward the Western Desert has greatly increased in recent years from the government and in the coming period, the competition is expected to very high for developing its productive potential.
In this regards, President Abdel Fattah Al-Sisi has shown a desire to expand the exploration and production in the Western Desert to serve Egypt’s objective to be an oil and gas regional hub, which paved the way to several investments from International oil companies (IOCs) and National oil companies (NOCs).
During the fiscal year (FY) 2021/22, Khalda Petroleum Company and Qarun Petroleum Company are expected to invest about $1 billion in the western desert, with Khalda aiming to invest $830 million and Qarun $252 million on oil and gas E&P activities. Khalda intends to drill 87 new wells including 52 for development and 35 for exploration, targeting 130,000 barrels per day (bbl/d) of oil and condensates, as well as, 630 million cubic feet per day (mmcf/d) of natural gas. Per Qarun, it plans to drill 24 developing wells and five exploring wells, with a production target of nine million barrels (mmbbl).
Additionally, the government managed in February 2021 to launch the first digital international bid round for petroleum E&P covering 12 blocks in the Western Desert, which will attract new investments from international and national investors. Egypt launched two international bid rounds during 2018 for E&P activities in 27 concessions; five of which were located in the Western Desert.
A New Hope
The Western Desert covers a total area of 680,650 km² from Egypt. However, the oil and gas production from this region only represented 37% and 32.4% of Egypt’s total production during Fiscal years (FY) 2017/2018 and 2018/2019, respectively, according to data released by the Egyptian General Petroleum Corporation (EGPC) and Egyptian Natural Gas Holding Company (EGAS). In addition, the data stated that the Western Desert produced 34.18% of Egypt’s hydrocarbon production. This reflects that the Western Desert still have a large volume of undiscovered potentials.
A document issued by the Egypt Upstream Gateway (EUG) cited that more than 1 billion barrels of oil and gas can be produced from Abu El Gharadig basin. The Western Desert is enriched with more capabilities since it has two main source rocks including the Cenomanian Abu Roash limestone and the middle Jurassic khatatba shales. According to the report, Paleozoic, undifferentiated Paleozoic/Mesozoic (Bahrein and Khatatba Fm) are three plays which have potential to produce huge amounts of hydrocarbons. It also has Alam El Bueib, Kharita Fms, Bahariya, and Abu Roash Fms Plays that have a substantial reservoir. Lower Tertiary Apollonia carbonate Play is one of the new plays in the Western Desert Basin.
Among the potential blocks in the Western Desert being expected to leverage the Egyptian oil and gas production so that they were offered in the bid round 2021 areSouth Wadi El Rayan, Southeast Bahariya, South Sitra, Southwest Badr El Din, South Bir El Nus, East Siwa, East Bir El Nus, West El Moghra, El Moghra, West Wadi El Natrun, Wadi El Natrun. On the other hand, the Western Desert has many discovered oil &gas fields Meleiha, Qarun and Badr El Din are some of the most important and old oil fields. While Abu El Gharadig, Obaiyed, and Abu Sennan are the most significant natural gas fields there.
During the last few years, the Western Dessert witnessed many remarkable oil discoveries and production development. United Oil and Gas company achieved a remarkable production in Abu Sennan Concession in April 2021, with at least 22million net oil pay interpreted across a number of reservoirs including the Abu Roash C (“AR-C”), Abu Roash E (“AR-E”), Lower Bahariya and Kharita Formations. What’s more, Apex Company achieved a discovery in January 2021 in the Southeast Meleiha Concession.
In December 2020, Eni announced a discovery in Meleiha Concession adding 10,000 bbl/d to the concession production. Moreover, in July 2019, Eni made another discovery in the South West Meleiha Concession and its production ramped up to 12,000 barrels of oil. Eni also achieved a discovery in South West Meleiha during May 2018. All the previous can tell that Western Desert is going to be the destination for more oil and gas E&P in near future.