RES E A RC H & A N A LYS I S
INVESTIGATING EGYPT’S
NATURAL GAS EXPLORATION & DRILLING ACTIVITIES STATUSIN FYS (2018/19-2019/20) BY AMINA HUSSEIN, REHAM GAMAL, AND TASNEEM MADI
T
hrough the path to become a regional natural gas hub, Egypt was able to balance its performance in natural gas Exploration and Product of the most tragic periods facing the global petroleum market. While the international oil and gas markets suffered from the COVID-19 ne Natural Gas Holding Company (EGAS), in the latest annual report of fiscal year (FY) 2019/20, remarked an annual increase of 53.3% in th discoveries in Egypt. This is in addition to keeping a significant production rate of approximately 6.6 billion cubic feet per day (bcf/d).
This report highlights the development of the natural gas upstream activities between FYs 2018/19-2019/20, in addition to the main achievem FY 2019/20.
1. EXPLORATION ACTIVITIES
In FY 2018/19, 2D seismic survey program (SPEC Project) was acquired i Mediterranean Sea with an area of about 21,328 km, completing the seco I. SEISMIC SURVEYS of the project with a total area of about 21,904 km. Also, a 2D seismic acq 116.6 km in the Mediterranean Sea and the Nile Delta have been complet A key part of natural gas exploration is seismic surveying, which aims to create in addition to conducting a 3D seismic survey in the Nile Delta with a tota detailed images of basic geological formations. Hence, before drilling, seismic km2. In FY 2019/20, the 2D seismic survey program (SPEC Project) in Medit investigation must first be completed to define the potential drill location. was ongoing, while a 3D seismic survey in the Mediterranean was carried 2 a total area of 321 , explained km in EGAS’s Annual Reports 2018/19 and 2019/
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II. MAIN AREAS OF EXPLORATION ACTIVITIES
NATURAL GAS DISCOVERIES PER COMPANY IN FY 2019/20
The Egyptian petroleum sector’s stakeholders succeeded in increasing the number of natural gas discoveries, in spite of the unstable international conditions. As in FY 2019/20, EGAS reported achieving a total of 23 natural gas discoveries by the companies operating in Egypt, compared to only 15 natural gas discoveries announced in FY 2018/19, according to EGAS’s Annual Reports 2018/19 and Khalda 2019/20.
The natural gas discoveries were achieved in three main areas; namely the Western BAPETCO Desert, the Mediterranean Sea, and the Nile Delta. In FY 2018/19, the Western Desert had the lion’s share in the total discoveries with 66.7%, while the Mediterranean Sea had a share of one third, and none of the discoveries were achieved in theShell Nile Delta, according to EGAS’s Annual Report 2018/19.
In FY 2019/20, the Western Desert also had the largest share in the discoveredGPC wells with 69.6%, followed by 21.7% for the Mediterranean region, and 8.7% for the Nile Delta, according to EGAS’s Annual Report 2019/20. SDX
NATURAL GAS DISCOVERIES PER AREA FY 2018/19
FY 2019/20
Western Desert
10
16
Mediterranean Sea
5
5
0
2
Nile Delta
15
TOTAL
Nospco
Agiba
Edison
BP
IEOC
(Energean)
23
III. MAIN DISCOVERIES AND ADDED RESERVES
In FY 2018/19, the 15 discoveries were made by seven oil companies. Khalda Petroleum Co. (Khalda) came on the top of these companies with a share of 46.7% The more natural gas fields discovered with substantial potential, the mor of the total discovered wells, that were all located in the Western Desert. North Sinai natural gas reserves added. Yet, the continuous growth of reserves is mainly Petroleum Company (Nospco) came second with a share of 20%, while Badr intensive El Din through exploration campaigns and extensive use of technologi Petroleum Company (BAPETCO), Agiba Petroleum Co. (Agiba), the International FYs 2018/19 to 2019/20, the added reserves averaged at about 1,459 bill Egyptian Oil Company (IEOC), Rashpetco, and HBS International hadfeet a share (bcf)of in the Mediterranean and the Nile Delta, according to EGAS’s A 6.6% each, according to EGAS’s Annual Report 2018/19. Reports 2018/19 and 2019/20. On the other hand, FY 2019/20 witnessed the success of 10 companies in achieving natural gas discoveries in the different areas. Similarly, Khalda had the largest share NATURAL of 39.1%, followed by BAPETCO, Shell, the General Petroleum Company (GPC), SDX, and Nospco with a share of 8.7% each. Furthermore, Agiba, Energean (through Edison), BP, and IEOC had a share of 4.4% each, according to EGAS’s Annual Report 2019/20.
GAS ADDED RESERVES (BCF)
FY 2018/19
NATURAL GAS DISCOVERIES PER COMPANY IN FY 2018/19
FY 2019/20
817
2,100
In FY 2018/19, the added reserves of natural gas outstandingly jumped by 300%. Eight exploratory and appraisal wells were drilled, resulting in three s wells in Mediterranean Sea and Nile Delta with a Success Ratio of 100%. T well also put on five discoveries that added reserves of 598 bcf of natura Two major discoveries contributed alone more than 70% of the total disco amounting to 517 bcf, according to EGAS’s Annual Report 2018/19.
MAIN DISCOVERIES IN THE MEDITERRANEAN SEA IN FY 2018/19 Khalda
Nospco
BAPETCO
Agiba
IEOC
Rashpetco HBS International
Well
Natural Gas Reserves (bcf)
117
Swan East-1 Nour-1 ST
400
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RES E A RC H & A N A LYS I S
In FY 2019/20, the increase in the number of discoveries drove the added reserves WELLS PUT ON STREAM PER TYPE of natural gas to rise by more than 150%. It is worth mentioning that 12 exploratory wells were drilled resulting in four dry and one suspended wells in Mediterranean Sea and Nile Delta with a Success Ratio of 64%. Meanwhile, those drilled wells brought seven discoveries with added reserves of 900 bcf of natural gas; of which, three Wells from Development Projects Development Wells major discoveries added natural gas reserves of 656 bcf, representing 31% of the total added reserves, according to EGAS’s Annual Report 2019/20.
37.5%
79.5%
MAIN DISCOVERIES IN FY 2019/20 FY 2018/19
Region
Well
Mediterranean Sea
Nile Delta
FY 2019/20
Natural Gas Reserves (bcf)
Atoll North-1 ST2
300
Bashrush-2 Dir Bis
331
South Disouq-12
25
62.5%
2. DRILLING AND PRODUCTION ACTIVITIES I. DRILLED WELLS
20.5%
As a result of the wells put on stream, total natural gas production in the reaches 4,920 bcf; total condensates production reaches 62.88 million ba (mmbbl). Natural gas and condensates production decreased separately b 5% in FY 2019/20 compared to FY 2018/19. It is worth noting that natural condensates production was similarly impacted due to the pandemic circum according to EGAS’s Annual Reports 2018/19 and 2019/20.
The total number of drilled wells decreased by 17% in FY 2019/20, reaching 29 wells, As an annual average in the two years, natural gas production reached 2, compared to FY 2018/19. Such decline was particularly due to the circumstances while condensates average production recorded 31.44 mmbbl, according to of COVID-19 prevalence and its impact on different sectors. Annual Reports 2018/19 and 2019/20. Exploration wells are drilled for exploration purposes in new areas. While development or production wells are for production in fields with proven reserves. Thus, in FY NATURAL GAS & CONDENSATES 2019/20, development wells witnessed a decreasing rate of 78%. While exploration wells recorded an increase of about 188%, according to EGAS’s Annual Reports PRODUCTION IN FY 2019/20 2018/19 and 2019/20. Development wells’ share reached 21% of total number of drilled wells in FY 2019/20 instead of 77% in FY 2018/19. On the other hand, the exploration wells’ share massively increased to 79% in FY 2019/20 instead of 23% in FY 2018/19, according Natural Gas 2,400 bcf to EGAS’s Annual Reports 2018/19 and 2019/20.
30.68mmbbl
Condensates
In total, there are three exploration wells in the drilling phase in FY 2019/20, according to EGAS’s Annual Reports 2018/19 and 2019/20. Facing the first wave of the pandemic in H2 FY 2019/20, the Egyptian marke a solid and well-balanced performance. This was mainly due to the extens of the Ministry of Petroleum and Mineral Resources (MoP) and EGAS to kee DRILLED WELLS market safe, and appealing for the international investors. These efforts w on two pillars including enhancing exploration activities which resulted in the number of discoveries through implementing both 2D and 3D seismic Exploration Wells Development Wells Total Drilled Wells in the Mediterranean Sea and the Nile Delta. This is in addition to perform development projects to keep stable levels of production; 11 natural gas de projects were implemented with total investments of $1.116 billion, acco EGAS’s Annual Report 2019/20.
FY 2018/19
2019/20
II. NATURAL GAS AND CONDENSATES PRODUCTION In association with exploration and drilling activities, 39 wells were put on stream in FY 2019/20, declining by 30.4 % compared to 56 wells in FY 2018/19. Development wells put on stream declined by 77% in FY 2019/20 compared to the previous year, while wells from development projects, whether exploration or development wells, put on stream increased by 48% in FY 2019/20.
TOTAL WELLS PUT ON STREAM FY
Wells from Development Projects
Development Wells
2018/19
21
35
2019/20
31
8
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