EGYPT expects to boost its oil production from 705,000 barrels per day (bpd) to 735,000 bpd within three months, the state-run Middle East News Agency (Mena) quotes oil minister Sameh Fahmy as saying.

Fahmy also says the ministry was seeking to review the prices of natural gas exports to secure more revenues.
Fahmy says the country plans to increase its oil output by 100,000 bpd to 800,000 bpd in 2008 by developing recent discoveries in the Gulf of Suez and the Western Desert.
Production has declined from peak levels of close to one million bpd in the mid-1990s.
Egypt has become a significant exporter of natural gas, both by pipeline through Jordan and in liquefied form by ship.
The most important oil producing ventures are in the Gulf of Suez (GoS), an area accounting for 65 per cent of Egypt’s oil and condensate output, followed by Sinai and the Eastern Province, and the relatively newer producers in the Western Desert. GoS output is to rise from 422,500 bpd in 2007 to 482,500 bpd in 2008. The Nile Delta and the Mediterranean are mostly gas-producing areas.
However, the GoS is the most mature petroleum province in Egypt where crude oil production has declined steadily since the 1990s. By contrast, new gas-producing regions have emerged, such as the offshore Mediterranean fields which now account for 60 per cent of the country’s proven 72.3 trillion cubic feet (tcf) of reserves. This is followed by the Western Desert, the GoS, and the Nile Delta.
ONGC Videsh (OVL), the overseas arm of India’s state-owned E&P giant ONGC, in April 2007 announced it had found an oilfield in the GoS said to hold at least 200 million barrels.
The petroleum ministry has recently offered a number of incentives to boost oil E&P investment, which has remained in the shadow of the lucrative gas sector in recent years. But Egypt has made just enough discoveries to meet domestic consumption without having to import large volumes of crude oil.
The Gulf of Suez Petroleum Co (Gupco), a 50-50 joint venture between EGPC and BP with the latter being the operator, is Egypt’s biggest oil producer. But its production has fallen to 160,000 bpd, down from 220,000 bpd in late 2003, 280,000 bpd in early 2000, 310,000 bpd in early 1998, 430,000 bpd in 1992 and 500,000 bpd in the 1980s. Gupco’s crude oils make up the Suez Blend, 30 (degrees) API which is Egypt’s main export crude oil. Its crude oil output in the Western Desert has declined to less than 10,000 bpd, down from 20,000 bpd in late 2003. But Gupco’s output in the GoS is to rise shortly with the coming on stream later this month of the Saqqara oilfield, the JV’s biggest find since 1998, and completion of EOR systems, horizontal drilling and development of other fields.
Saqqara, an offshore field at Ras Shukair, is due soon to begin production of 20,000 bpd of crude oil and 20 million cubic feet (mcf/d) of gas. By end-March, this will rise to 30,000 bpd of oil and 27 mcf/d of gas. The field will plateau at 50,000 bpd of oil and 45-50 mcf/d of gas.
In November 2007, Minister Fahmi toured the oilfields in the GoS and South Sinai, where he followed up the implementation stages of putting Saqqara on stream. Gupco chairman geologist Ref’at Khafaga then said total project investments reached about $366 million, spent by BP which is committed to invest $600 million in the GoS for five years. On March 16, 1999, BP (which took over after its acquisition of Amoco) and EGPC signed an agreement which converted their JV to a PSA. The accord was called Merged Concession Agreement (MCA), which extended two oil concessions, the GoS and Ras Gharib – with the latter block’s period being shorter. It was agreed that BP should raise oil production capacity to 300,000 bpd and maintain it over a six-year period.BP Egypt, however, has done better in Egyptian gas, an area in which its production has reached 1,000 mcf/d. It is aiming to be involved in the LNG export business.
On May 9, 2005, minister Fahmi and BP Egypt president Hesham Mekawi signed accords which extended the MCA by 20 years for the GoS and the South Gharib concession by 10 years. The modified terms allowed BP to push ahead with plans to invest about $615 million over seven years in exploration and development. Since then, BP has made several oil and gas discoveries in the GoS, the Nile Delta, the Mediterranean and the Western Desert. BP is the biggest foreign investor in Egypt, where it has spent more than $12 billion, with Amoco of the US having operated in Egypt since the early 1960s. Amoco’s first oil discovery in the GoS was in 1965. In recent years, BP and its partners have discovered very large reserves of natural gas in the Nile Delta and in its offshore Mediterranean extensions.
Gupco’s oil production system relies mainly on rapid development of newly discovered reservoirs, with the pace of re-exploration accelerated since 1995. This will be accelerated further in the coming years. Gupco has more than 35 offshore fields in the GoS, which include Morgan, July, October, Ramadan, Ras Shukheir, Sidki, Sho’ab Ali, Badri and East Tanka Asl. Since 1990, Amoco had acquired additional blocks in the GoS. Gupco’s fields now are 29-42 years old and all of them are declining, with Qattara and other new fields making up for some of the decline.
Morgan, a giant and Amoco’s first oil find in 1965, has been in decline since the late 1980s. Despite development of small fields later found nearby, this area’s capacity is less than 35,000 bpd, compared to 120,000 bpd in late 1995, producing 27-32 (degrees) API oils from Miocene formations (Fms) at depths of 5,100-6,400 ft. Morgan’s life was extended by 30 years, but at a relatively low capacity, with the completion of a water injection system in May 1997. The field’s remaining recoverable reserves were thus doubled to 230 million bls. Its output is about 30,000 bpd, down 40,000 bpd in early 2004. Before work on a $450 million modernisation programme was launched in late 1999, the field had 160 production and water injection wells hooked up to 24 platforms.
July, Amoco’s second major find in 1973, produces 25,000 bpd of 31-34.6 (degrees) oils from Lower Cretaceous Fms at depths of 8,100-10,000 ft, down from 80,000 bpd. A part of its production comes from satellite fields found in more recent years. July has a water injection system.
October, found in 1978, is BP’s biggest field with extensions discovered in recent years. October and its satellites, including major northern extensions developed in the late 1980s and early 1990s, now produce about 70,000 bpd of 28-30 (degrees) oils mainly from the Lower Cretaceous at an average depth of 11,000 ft and 38 (degrees) oil from a Miocene Fm - down from 90,000 bpd in late 2003, 118,000 bpd in 2000, over 150,000 bpd in 1990 and 180,000 bpd in late 1995. Ramadan, the third major find in 1974, and nearby fields produce 20,000 bpd of 30-31.7 (degrees) oils from the Lower Cretaceous at a depth of 11,400 ft, down from 40,000 bpd in early 1998. Ramadan has a water injection system. Ras Shukheir, one of the fields tied to the major oil producers, is a gas gathering/processing centre for GoS associated gas.
Gupco’s other GoS fields include East Tanka (found in 1996 in Miocene Fm), East Tanka Asl (found in 1997 in faulty Miocene Fm, producing oil and gas tied up to a platform in late 1998; a 25m bls field 1.8 km west of July in the South Gharib block (found in 1998 as its biggest oil discovery since 1989); Esma (E. Shukheir block) on stream since late 1997; East Shukheir Marine on stream since early 1998 and hooked up to Morgan.
Saqqara, adjacent to Morgan, was struck in May 2003 by BP as the largest oil find in Egypt since 1998. The field has been developed for a peak rate of 50,000 bpd. Its first phase is to be on stream later this month.
Suco/DEOCO – with Suco being a JV of EGPC and RWE of Germany, and DEOCO operating GoS leases – have seen their output decline. Their production averages 17,000 bpd, down from 50,000 bpd in late 2003, about 66,000 bpd in 1998 and 150,000 bpd in the 1980s. Suco and DEOCO have failed to reverse the fall and expand to a target of 145,000 bpd – despite completion of a major programme begun in 1991 and the coming on stream of small discoveries near their fields.
RWE has three blocks in the GoS and interests in gas-rich blocks the Nile Delta and the Mediterranean. It is interested in setting up LNG export trains in Damietta and Idku. RWE is likely to get a concession to prospect for oil in Tanta, in the Nile Delta.
Ashrafi Petroleum (Ashpetco), a JV of EGPC and ENI (known locally as IEOC), produces almost 12,000 bpd of 30 (degrees) oil (down from 20,000 bpd in late 2003) from the Ashrafi field in the south of the GoS, operated by Eni’s E&P arm Agip through a Western Desert JV called Agiba Petroleum (Agypetco). Marathon of the US, which had a stake in Agypetco, in 1999 sold its Egypt holdings and left the country. Ashrafi was found in 1988 as a small field. Ashrafi SW-1 was found in 1992 and tested 4,000 bpd. The whole structure was brought on stream in September 1992. In May 1997 Agip found Ashrafi SW-2, which tested 3,490 bpd of oil and 1.8 mcf/d of gas. This was developed quickly. The oil is pumped to Suco’s processing plant at Zeit Bay.
Geisum Oil (GOC), a state-owned unit of EGPC, operates the Geisum group of fields in the GoS which came on stream in 1991 with a proven reserve of 28 million barrels and a capacity of 10,000 bpd. But output fell to less than 1,500 bpd in early 1993 and operations were suspended. Extensions to the first Geisum field and a Tawila structure were developed by mid-1994 and production was resumed at 10,000 bpd, but now this is less than 4,000 bpd. North Geisum and West Tawila were found in 1995 and were developed quickly. But work on expanding all the fields to 30,000 bpd by late 1997 was delayed. Now GOC is producing less than 6,000 bpd, compared with 16,500 bpd in mid-1998.
The Warda field was the first discovery in late 1990. After extensions to this were found later, the group was called Zafco. BG has blocks very rich in gas elsewhere.
Esso Suez (Suesso), a JV of EGPC and ExxonMobil, produces little oil (15,000 bpd in late 1995 and over 21,000 bpd in 1991) from small fields on its East Zeit block. In its South Hurghada block on the west coast of the GoS, a Suesso find in 1994 tested 1,030 bpd of 30 (degrees) oil.
Suesso produces associated gas – with an original of capacity 38 mcf/d, but the actual output is much less than that – carried by an 11 km pipeline to a central gathering system, which also serves the nearby Zeit Bay and Ras al-Bihar fields, and then pumped to Suco’s gas processing plant.
Offshore Shukheir Oil  (Osoko), a JV of EGPC, Agip (operator) and Swiss-based Racebrook (Agip & Racebrook have bought the equity of Total), is a small producer with output having fallen from over 4,000 bpd in 1991 to less than 1,000 bpd. Its fields include Shukheir Bay, found in 1978 and on stream since 1981, which produces 34.5 (degrees) oil rich in associated gas - as in the case of the other Osoko fields. Shukheir Marine (1988) produces 42-43 (degrees) oil. Shukheir Gamma (1989) produces similar oil.
Amal Petroleum (Amapetco), a JV of EGPC (50 per cent), Total (25 per cent) and Kufpec of Kuwait (25 per cent). Its Amal field, found by Total in 1985, went on stream in late 1988 at 3,500 bpd. It reached 7,000 bpd in 1991 but fell to 5,000 bpd later. Now it is less than 1,000 bpd, compared to 4,000 bpd in early 1998.The field, at the southern end of the GoS, has a deep reservoir with 34 (degrees) gas-rich oil, found after use of new seismic methods.
Dana Petroleum, a UK firm different from Sharjah-based Dana Gas which is one of Egypt’s major gas and oil producers, announced in early October 2007 that its wholly owned unit Dana Petroleum (E&P) Ltd had completed the acquisition of the US firm Devon Energy’s entire E&P interests in Egypt spanning eight companies and eight EPSAs. The purchase price at the effective date of January 1, 2007, was $375million. In addition to receiving the oil and gas E&P assets of Devon Egypt, Dana gained about $67 million of working capital in Devon Egypt. Dana CEO Tom Cross says: “This deal delivers a significant reserves and production growth step for Dana and strategically the acquisition fits closely with our previous Egyptian transactions. The new portfolio contains a good balance of producing oil fields with numerous attractive drilling opportunities, both on existing fields and within large exploration concessions”. Dana now holds assets positioned across the major petroleum provinces in Egypt, namely the GoS, the Nile Delta, and the Western Desert.
Dana Petroleum in late 2005 signed an agreement with Compania Espanola de Petroleos ( Cepsa) to acquire a stake in the offshore South Feiran concession in the GoS. The company said the deal built on a “recently announced agreement” with Gaz de France (GdF) to acquire an interest in the West el-Burullus area of the offshore Nile Delta region of Egypt.
After completion of the transaction, which was subject to normal regulatory and partner approvals, the South Feiran partners were to be Dana 20 per cent, IEOC Exploration (Agip, a unit of Eni) 50 per cent and operator, and Phoenix Redux 30 per cent.
Cabre Exploration of Canada in October 2001 raised oil production from 833 bpd to 4,133 bpd at its onshore West Esh el-Mallaha (WEEM) block about 7 km west of Hurghada, after finding the 33m bls Rabeh West field in September of that year which tested 3,300 bpd of 38.2 (degrees) API oil. But the production has since fallen to less than 2,000 bpd.
TransGlobe Energy of Canada, having bought the assets of Tanganyika (another Canadian firm) in the West Gharib region and other areas, produced about 7,000 bpd of crude oil during the fourth quarter of 2007 due to the addition of the West Gharib assets. TransGlobe’s output in Egypt is 85 per cent crude oil and gas liquids and 15 per cent natural gas, mitigating the company’s sensitivity to the country’s gas pricing.
TransGlobe Energy is to drill 30 new targets in West Gharib over the next two years, following the $59 million acquisition of an interest in eight development leases announced in September 2007. TransGlobe will operate seven fields, with 24 producing wells and current production of 1,500 bpd. The acreage has proven and probable reserves of 6.3million barrels.
Dana Gas, based in Sharjah, is leading a consortium to build, own and operate a gas liquids plant in Ras Shukheir through its Bahrain-based unit, Danagaz Bahrain. The project is a JV of Danagaz Bahrain (40 per cent), Egas (40 per cent) and OAPEC’s Apicorp (20 per cent). The plant, to be on stream in 2009, will process 55,000 mcf/y of natural gas to produce 120,000 tpy of LPG.
EGPC will supply associated gas for the plant under a long-term contract. Danagaz and its partners have signed the land and sea berth agreements for LPG exports. Civil engineering and construction/installation will be done by local contractors.