Dutch Shell is preparing oil and gas exploration work in Egypt as part of its first seismic surveys in its newest concession area in the Abyad region, North Matrouh. It is currently increasing its activities through Badr El Din Petroleum Company (Bapetco) to gain approvals and permits in preparation for the start of E&P.
Emad Eddin Hamdy, Bapetco chairman and the man responsible for Shell’s operations in Egypt, said that the company’s investment target is $516 million by the close of current fiscal year 2015/2014.
Shell recently signed two new agreements with the Ministry of Petroleum to exploit the regions of Sitra and Badr 3 in the Western Desert with a minimum total investment of $200 million, and an initial investment worth $100 million.
Hamdy told El-Mal newspaper that the investments allocated for this ambitious drilling program for the current year are meant to increase overall production rates for the company from its sites in the Western Desert concession area.
He added that the company’s business plan for the current fiscal year includes 18 development wells and 4 exploration wells; along with about 13 water injection wells.
He added that the foreign partner, Shell, is studying the expected size of the investment budget to be spent over the next fiscal year (2015/2016).
El-Mal also learned that the Dutch company is aiming to invest between $500 and $550 million over the next year on research as well as E&P.
Hamdy said that Bapetco’s total production rates increased from 105,000 boe/d in the middle of last year to the current figure of 130,000 boe/d, an increase of 25,000 daily.
He went on to say that the company has discovered a new layer in the concession area, adding that the first well had already been placed there on the G7 production map with a daily production rate of 20 mct, as well as 1,500 barrels of condensate.
He explained that this new discovery will increase the company’s total reserves in its concession area and help offset the natural decline in production rates, adding that the company is gearing up for a second well in this new find for the current period, with a targeted production of approximately 3,000 boe/d.
As soon as Bapetco completes the process of licensing and obtaining approvals for the new concession area, it will begin its seismic survey program to explore the area and to identify the most promising sites to start operations and a targeted drilling program.
The Egyptian government, represented by the Ministry of Petroleum, is paying off its latest round of debts owed to foreign oil companies to motivate companies and encourage them to invest and expand, Hamdy said, denying that the debts remaining had any effect on companies operations or investments in Egypt.
Bapetco also conducted a series of studies recently to explore the possibility of drilling for shale gas in the Western Desert, recently signing the first new project for the production of unconventional gas in the northeastern Abu El-Gradik region of the Western Desert.
The project aims to reach the geological layers which require horizontal drilling and hydraulic fracturing, the same methods employed for shale gas production in the United States. Three horizontal wells are being drilled in cooperation with Apache and the EGPC at a cost of between $30 and $40 million.
Hamdy stressed that the decline in global oil prices was the most significant factor influencing companies at the moment, explaining that this decline will force individual firms to be more efficient and lower operating costs, but claiming that it will not affect of the size of investments or productivity.
He noted that Bapetco is stepping up its negotiations to reduce drilling and service costs by negotiating with the companies that provide these services, adding that the company hopes to attain a 25% discounted rate to adjust to the current global price for oil.
Source: El-Mal Newspaper
