Japan AOC: politics may delay Egypt oil block output

Political instability in Egypt may delay the first crude output from the offshore Northwest October block in the northern Gulf of Suez, a top executive from operator AOC Holdings said.

“The drilling of two wells has been finished, and we are considering whether to move on to the next stage,” said Kazutoshi Hoyano, a vice president at Japan’s AOC.

“We will likely see a delay (in production) under the current circumstances.”

AOC will monitor the political situation in Egypt as elections take place, he added. Elections for the country’s lower house are due to start on Nov. 28 and for the upper house on Jan. 22, with each vote being held in three stages.

The company has not yet revised its scheduled start date of May 2012 for the field, a company spokesman said.

The elections are the next stage in transition from fragile military rule to civilian government in Egypt after an uprising unseated Hosni Mubarak in February. The uprising drove away investors and put business plans on hold.

Clashes between the army and Coptic Christian demonstrators in Cairo on Oct. 9, the deadliest since Mubarak stood down, underscored an unstable social backdrop as the country gears up for the elections.

AOC and the Egyptian General Petroleum Corporation (EGPC) each have a 50 percent interest in the block, which they expect to pump around 6,000 barrels per day (bpd) at its peak.

AOC last year delayed the production from the previous target of April-September 2010.

Source: Reuters


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