NJSC Naftogaz Ukrainy is to boost crude oil production in Egypt by 41.5% by the year 2014, to 7,500 barrels per day, up from 5,300 barrels per day, according to Naftogaz Deputy CEO Vadym Chuprun.
“As of today we produce 5,300 barrels of crude oil per day. This is the level we got to in March, and prior to that, production was 3,700 barrels [of crude oil per day]. The period when we start producing 7,500 barrels is not far away,” he told reporters in Kyiv on Monday.
Naftogaz’s crude oil production in that country is limited by legislation, which bans the burning of over 2,000 cubic meters of associated gas per day. Yet, he said, a gas pipeline that will feed associated gas into the existing main pipeline is to be built by the end of the current year.
“We use only seven out of 28 productive wells. Their laws ban burning over 2,000 cubic meters of gas per day. By the end of the year we won’t only build a pipeline to feed that gas into the main pipeline, but will also deploy measuring stations and purification plants,” he said.
According to Chuprun, since the launch of its operations in Egypt, Naftogaz has produced about 400,000 tonnes of crude oil, which is sold in that country.
As reported, Naftogaz has been commercially producing oil at the Alam El Shawish Еаst concession zone in western Egypt since April 2010 through its subsidiary Zarubizhnaftogaz.
The concession agreement for exploring and developing the Alam El Shawish East concession zone – a total area of 994 square kilometers – was signed in December 2006. The combined hydrocarbon resources of the three deposits that the company is developing under the Alam El Shawish East concession are estimated at 10 million tonnes.
This February, Naftogaz, Egyptian state-owned company Ganoub El-Wadi Petroleum Holding Со (GANOPE) and the Egyptian Oil Ministry signed a concession agreement on developing and subsequently operating two hydrocarbon blocks, Wadi Mahareeth N8 and N9, located in the Eastern Desert of Upper Egypt. The territory covers an area of over 20,000 square kilometers.
The concession agreements are valid for 28 years. The original exploration period lasts about three years, and project payback is expected to take eight years. The otal recoverable oil resources at the two blocks are estimated at no less than 363.82 million tonnes.
If hydrocarbons are found at the fields, Zarubizhnaftogaz and GANOPE will form an Egyptian operator company on a parity basis. Ukraine will own 21-24.7% of total production depending on total output.
Both sides hope to see initial commercial production at the Wadi El Mahareeth and South Wadi El Mahareeth during the sixth year of the project’s implementation at 1.71 million tonnes annually. Peak oil production is expected during the eighth and ninth year of development, forecast at 31.5 million tonnes a year.
According to the Energy and Coal Industry Ministry of Ukraine, in 2012 Naftogaz Ukrainy produced and shipped almost one million barrels of oil in Egypt. Since April 2010 until December 31, 2012 the holding shipped over 1.614 million barrels of oil. During the time of its operations in Egypt as of December 2012 the holding finished drilling of 28 wells and discovered seven oil and gas fields.
Naftogaz Ukrainy unites Ukraine’s largest oil and gas production enterprises. The company has a monopoly on the transit and underground storage of natural gas, as well as the transport of oil via pipelines in Ukraine.