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 EGYPT
North Africa
Oil exploration began in Egypt in the 19th century and
the first field, Gemsa, was discovered in 1869 on the west coast of the
southern Gulf of Suez although BP and Shell did not bring it into
production until 1910.
 In subsequent years many further fields were discovered
here and further north on both sides of the Gulf. The first offshore
discovery, an extension to the Belayim field, was in 1961 in the central
part of the Gulf.
The Egyptian General Petroleum Corporation (EGPC) used to
represent the state and regularly released new areas for exploration but
a new company, Petroleum Resources Company (PRC), was formed in 2003
combining EGPC with the Egyptian Natural Gas Company (and another
company, Ganope).
Gulf of Suez: The Gulf of Suez basin stretches
from Suez in the north to the coastal resort of Hurghada in the south.
It is an early Tertiary rift basin and most reservoirs lie below Miocene
salt. Onshore production began in 1910 but it was not until 1955, when
Agip discovered the Belayim field on the eastern seaboard of the Gulf,
that offshore exploration of the shallow water sea began.
 The company drilled the first offshore oil in Egypt, the
800 mm Bbl Belayim Marine field, in 1961. Subsequently in 1965, the
giant 1.5 Bn Bbl Morgan field was discovered by Amoco (now BP). The
joint venture company, Gulf of Suez Petroleum (Gupco), which was set up
with EGPC to exploit the field, went on to find the 750 mm Bbl July
field in 1973 and then the 500 mm Bbl Ramadan field in 1974.
There are around 45 offshore fields producing but nearly
all are much smaller than the early fields. The Gulf of Suez is very
mature and the giant fields are in decline. Modern seismic data should
reveal more small fields under the salt, however these are unlikely to
have a great impact on the declining production rates. The new oil
fields and extensions discovered each year are too small to offset the
depleting mature giant fields.
Nevertheless in 2003 BP made the largest oil discovery in
14 years. Called Saqqara it has estimated reserves of 80 mm Bbls and is
located approximately 7 km west of the El Morgan field facilities.
For environmental reasons the area around the tourist
resort of Hurghada has been closed to exploration since 1991. South of
Hurghada, Egypt borders the Red Sea. There have been no discoveries in
this entire region due to unfavourable geology. The area close to Sudan
in the south is also the subject of a border dispute.
Western Desert: The western desert overlies
Jurassic source rocks which have charged Cretaceous reservoirs in
easterly trending rifts. Exploration began in 1939 although the first
field, El Alamein, was discovered in 1966 by Phillips, which was
followed by the Abu Gharadig field by Amoco in 1969.
Around 50 fields have now been discovered producing
around 20% of Egyptian oil. The area, although less explored than the
Gulf of Suez, is likely only to contain small subtle undiscovered
fields.
Gas: The first gas gathering network in the Gulf
of Suez was built to feed associated gas to a processing plant at Ras
Shukeir. Coming onstream in 1983 it has been progressively expanded, the
last time in 1998 when a system serving oilfields in the south was
installed. A newer Ras Bakr plant was also built to take gas from the
Trans Gulf gas system, which connects fields in the central and southern
Gulf. One other gas plant exists at Zeit Bay but this removes liquids
and then sends the gas for re-injection or use in oil field operations.
The substantial increase in Egypt’s gas production has
come from the Nile delta/West Mediterranean area since 1993, at first
driven by new gas price formulas in contracts that linked the gas price
to the oil price.
Many companies have explored the offshore area
successfully and gas production has been achieved from deep waters,
adding to growth in output from areas nearer to the coast. British Gas
(BG), BP, Shell and ENI are the main operators.
Offshore gas has been produced in the area, along with a
little condensate and NGLs, since the mid-1970s from two large fields in
shallow waters. Abu Madi in the west Nile Delta and Abu Qir in the west
Mediterranean, both lie about 30 km from the coast. They are in decline
but several new fields have been brought onstream since 1996 including
Port Fouad, Wakar, Darfeel, Qarus, Ha’py and Temsah, which have
increased shallow water output considerably.
Deep water operations began with a series of gas finds by
BG during the late 1990s in water depths of around 500 m. The first
discoveries were the 120 Bcm Scarab and Saffron fields in 1998 within
the West Delta Deep Marine (WDDM) Concession, awarded in 1995. The
fields are 120 km north of Alexandria and the largest gas field
development in Egypt. They were brought onstream in March 2003
delivering gas to the domestic market, initially with 8 subsea wells and
a pipeline to shore.
Additional pipeline capacity has been installed to allow
subsequent field developments to tie into the Scarab/Saffron facilities.
Other gas finds in water depths of around 500m to 700m point to
significant further growth in output from deep waters.
Six discoveries, Simian, Sienna, Sapphire, Serpent, North
Sequoia and Saurus, discovered between 1999 and 2001, are being
commercialised by export through a new LNG plant. The offshore gathering
network consists of two pipelines which are capable of providing
sufficient gas to supply two 3.6 million tons per annum LNG trains
requiring 10 Bcm per year.
Since 2002 BP has made three gas discoveries in the West
Delta Deep Water (WMDW) concession at slightly deeper water depths. The
Ruby discovery was made in 2002 and was successfully appraised in 2003
when the Raven field was discovered. Polaris, discovered in August 2004,
lies 75 km off the coast in a water depth of 1,162m. In addition to the
LNG plant, the country plans to eventually export pipeline gas to
Israel/Palestine, Jordan, Lebanon and Syria. The main outlet for gas in
the country are power stations, fertiliser plants and industrial users
such as the iron and steel sector and cement works.
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