US Apache’s joint venture in Egypt, Khalda Petroleum, reduced the cost of oil produced from its concession located in the Egypt’s Western Desert from $5 to $4.5 per barrel during the first quarter of fiscal 2016/2017, reported Daily News Egypt.
Khalda Petroleum’s CEO, Mohamed Abdel Azim, stated that the company was able to decrease production costs by $0.5 per barrel by obtaining discounts on the contracts of services and equipment used to carry out drilling operations, reported Al Borsa.
Additionally, the company saved $155,000 per day on crude oil production costs in fiscal year 2015/2016, as the cost per barrel was also decreased in 2015/2016 from $6 to $5. Thus, Khlada saved total of $22m in 2015/2016 via up to 30% discounts on services and equipment. The company had further saved $3.7m per year through reducing the transportation time of equipment before its use.
Moreover, Abdel Azim added that Khalda had agreed with the Egyptian drilling companies to decrease the lease value of the drilling equipment by 7% to 20% after the drop in global oil prices. This helped the company save an additional $7m.
Khalda Petroleum planned to follow the same strategy in other fields in the western desert to save on more expenses.