EGYPT PULSE

New oil, gas field in Egypt promises more discoveries

ARTICLE SUMMARY
Egypt’s successive governments have largely ignored drilling of oil and gas in the Western Desert given the high cost of such an operation, although the area is rich.


Ahmed Youness January 2, 2020

REUTERS/Amr Abdallah Dalsh
A car crosses the Western Desert and the Bahariya Oasis
 in Siwa, Egypt, May 15, 2015.


CAIRO — Egypt announced Dec. 19 the discovery of a new oil and gas field in the Abu Senan area in the Western Desert. The Egyptian Ministry of Petroleum and Mineral Resources said in an official statement that the new oil and gas field was discovered after excavation work by Borg El-Arab Petroleum Company, a government-affiliated company.

The statement indicated that the new field’s production is expected to reach an average of 7,000 barrels of crude oil per day, as well as 10 million cubic meters of gas. It added, “New discoveries in the Western Desert are proof that this region is still characterized by its high oil and gas possibilities, especially in the deep layers, in light of modern technologies contributing to achieving several promising discoveries in the area.”

On Dec. 12, Russia Today quoted Adel al-Bahnasawy, a journalist specializing in energy affairs, as saying that the new oil and gas field discovered in the Western Desert was a huge field compared to previous discoveries in the same area, stressing that this discovery will open the door to the possibilities of finding new oil fields in the Western Desert.

Bahnasawy told Al-Monitor over the phone that several discoveries have been made in the Western Desert, and that government officials believe the area is rich in undiscovered oil and gas fields.
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He said that in October 2008 oil and gas wells in the Western Desert were discovered; at that time, a major petroleum discovery in the West Kalabsha concession area was announced, with a daily production capacity of 5,000 barrels in the US Apache concession area for oil and gas exploration.

Bahnasawy added that Apache Corporation CEO John Christmann said Oct. 17 during a meeting with Prime Minister Mustafa Madbouly that his company envisions a promising future for the Egyptian oil sector in light of the great developments over the past years. He added that the company plans to increase activities in Egypt.

In addition, Bahnasawy noted that David Chi, regional vice president and general manager of Apache Egypt, said in a press statement that there are large potential oil and gas discoveries in Egypt, especially in the Mediterranean and Western Desert.

Bahnasawy added that these recent discoveries attracted the attention of officials toward the Western Desert, which prompted the government to reassess the area and explore the presence of oil and gas fields.

Hamdi Abdel Aziz, spokesman for the Ministry of Petroleum and Mineral Resources, told Al-Monitor, “The new petroleum discovery in the Western Desert is great proof that this area is very promising in terms of oil and gas discoveries, and that the government should take care of it and support it in the coming period, which the ministry is already planning to do.”

He explained that these discoveries were the culmination of the development plans of the Egyptian government — represented by the Ministry of Petroleum and Mineral Resources — with Minister Tarek El-Molla signing three agreements for oil and gas exploration in the Western Desert on Aug. 26, 2017.

Abdel Aziz said that these agreements were signed between the Egyptian General Petroleum Corporation on the one hand, and Apache Corporation and the American Merlon Petroleum Company on the other, with investments of about $79 million and plans to drill 17 new exploration wells to search for oil and gas.

He noted that the Ministry of Petroleum is working to promote these successes to attract more foreign investors and motivate international companies to expand their activities in this area, as well as to conduct more research and exploration operations.

Abdel Aziz stressed that the Egyptian government is currently working on assessing gas and oil reserves in the Western Desert. The average oil production in the area has increased from 150,000-165,000 barrels per day in 2000 to 240,000 barrels per day currently.

Abdel Khalek Farouk, economic expert and head of the Nile Center for Economic and Strategic Studies, told Al-Monitor over the phone that this new discovery is a major event, especially since it is located in a very important area that officials had not been paying attention to for many years.

Farouk explained that successive governments in Egypt never bothered to focus on exploring for gas and oil in the Western Desert, in particular due to the large financial cost of such an endeavor, as well as the need for advanced technology to explore large quantities of oil and gas and to enable companies to know the expected economic return from drilling operations.

He pointed out that there are several other factors that have hindered the state from exploring gas and oil in the Western Desert, the most prominent of which is that the area is scattered with mines from World War I and World War II, which makes the excavation process difficult and increases its cost as mines must be removed in some areas first before the drilling process can begin.

Farouk denounced Egypt's import of gas from Israel — under an agreement signed between the two countries in 2018 — despite the recent large discoveries, especially the Zohr and Nour fields in the Mediterranean, and the recent discoveries in the Western Desert.
Found in:OIL AND GAS



Ahmed Youness is an Egyptian writer and journalist covering foreign and regional affairs. He writes for a variety of regional media outlets, including Al-Hayat, Aawsat and Raseef22.
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