May 2007
Issue 5
Published by Egypt Oil and Gas S.A.E
28 pages
Master plans: Tapping global economy
Turning brown into gold, making new out of old
Nurturing innovation by providing opportunities
An interview with HE Eng. Sameh Fahmy, Minister of The Red End Petroleum, reveals the ambitions page 16 of the sector and recent Meeting Deepwater Drilling Challenges implementations of master plans with Invert Emulsion Fluids page 20 page 10
This feature explores the potential gains of optimzing production from mature wells
An interview with Dr. Abdel Alim Hashem, professor of Petroleum Engineering tackles drilling engineering and well completion
page 8
page 12
End of the Petrodollar Era? page 14
EGYPTIAN Minister of Petroleum Eng. Sameh Fahmy said during the general assembly of the Middle East Oil Refining Co (MIDOR) that oil refineries in Egypt should meet the environmental protection regulations, at the same time, ameliorating the economics of operating oil refineries with the goal of better utilizing production capabilities, increasing added values and enhancing revenues. Eng. Mahmoud Nazeem, MIDOR Chairman & CEO, pointed out that the company was ranked sixth in the Mediterranean Sea area based on the classification of Merrell Lynch International Association, which was issued last January. This ranking was due to the company’s possession of high technical conversion units and its ability to confront the instabilities of the international oil market while achieving the highest profit compared to other oil refining companies.
By Rasha Yehia AFTER the fire that caused the death of five and severe injuries of seven workers, the fuel tanks center in Fayyoum, operated by the Petroleum Cooperatives Co. (Co-op) has intensified its safety procedures to avoid any further dramatic disasters. Upon the direct command of Eng. Sameh Fahmy, Minister of Petroleum, investigations have been held to determine the causes which led to this disaster, however, the preliminary reason, as stated by officials, is due to the eruption of a spark from oxygen welding used by a Petrojet technician to install a cooling line for one of the tanks filled with approximately 140 tons of benzene 90. Fahmy issued a decree to form three committees for investigation; one committee from Co-op, one from Petrojet and one from the Egyptian General Petroleum Corporation (EGPC). The committees are responsible for giving a final report during this month about the accident, the reasons behind it and their recommendations. Since last November, Petrojet has been carrying a
MIDOR succeeded to market all its products, internally and externally, which is 1.8 million tons of oil, petroleum coke and jet fuel with a total cost of $953 million; 742,000 tons of high octane benzene worth $454 million were exported to England, USA, Italy, Turkey, Saudi Arabia and United Arab Emirates (UAE) in addition to 772,000 tons of jet fuel worth $484 million which were exported to Italy, Turkey, France, Holland, Spain, England, Greece, West Africa and Tunisia. MIDOR also exported 345,000 tons of petroleum coke with an estimated cost of $15 million to the American Expo Inc. The company supplied the domestic market with approximately 2.7 million tons of petroleum products worth $1.5 billion, which included 2.2 million tons of solar, 117,000 tons of butagas, 48,000 tons of sulfur and 135,000 tons of high octane benzene, 275,000 mazot and 10,000 tons of jet fuel.
MIDOR refined around 4.5 million tons during 2006 and achieved $1.4 billion as total operational revenue, scoring a 21.5% increase compared to the previous year. The company’s net profit counted for $162.5 million, equating to a 59% increase. Moreover, the company refined for others 2.4 million tons of crude oil costing $134 million, which highlighted an increase of $9 per barrel. Continued on page 6
UK explorer Dana Petroleum plc announced that its wholly owned subsidiary, Dana Petroleum has signed an agreement with Devon Energy Corporation to acquire Devon’s entire upstream petroleum business interests in Egypt. In a statement, Dana’s Chief Executive Officer Tom Cross said, “This deal will deliver significant reserves and a production growth step for Dana and strategically, the acquisition fits closely with our previous Egyptian transactions.” The deal comprises interests in eight production sharing contracts with 13 producing fields, adding around 12,500 barrels of oil per day to Dana’s output. According to the terms of this $375 million deal, Dana is to receive approximately $67 million in working capital in Devon Egypt from the effective date of 1 January 2007, and will pay the net consideration of $308 million in cash via a newly arranged banking facility with ABN AMRO Bank. Devon announced last November its plan to sell its Egyptian oil and gas assets, which produce about 5,000 barrels of oil equivalent per day. The reason behind this decision, as stated by the company, is to focus “on regions that can better provide meaningful growth.” “Although we have established a solid production base and hold a sizable suite of exploration opportunities in Egypt, we believe we can redeploy our resources from Egypt to projects in and outside North America that better fit our focused growth strategy,” said Stephen J. Hadden, senior exploration and production vice president, in a statement last November. During 2006, Devon Egypt had working interest production of approximately 12,300 barrels per day, and USGAAP operating profits of approximately $53 million. At the end of 2006 gross assets were approximately $242 million. (Oil Egypt, Upstream Online and Daily Star Egypt)
huge project to install new fire and cooling systems in the Fayyom tanks. The company was about to finalize its cooling system for the six tanks in the center, however, the fire took place in the seventh tank. This accident is considered the first since the establishment of Al-Fayyoum tank center in 1984. The establishment of this center was authorized in 1982. From its part, EGPC said in a statement that this accident will have no affect on the flow and delivery of fuel to and from the governorate of Fayyoum. Eng. Abdel Alim Taha, EGPC Chairman, stated that the coordination between the different organizations was a key factor in controlling this disaster and diminishing the damages it caused. Fire fighting systems and equipments were provided instantly from neighboring companies, such as GUPCO, Cairo for Oil Refining, Qarun and SUMED. Eng. Abdel Rahman Abo Seada, Co-op Chairman said that Abdel Alim facilitated the process of providing high medical care for the injuries and paying out all financial rights for dead workers.
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