Multiple targets lower risk

Gas Success Fuels Interest in Egypt

A lot of countries promise big potential for the coming exploration season, but only one could head the list.

According to those who responded to Fugro Robertson’s annual New Ventures Survey, the 2008 winner is…

Egypt.

Those who have been following the international scene won’t be surprised.

The hot resource there is natural gas – in fact, it is forecasted to be the primary growth engine of Egypt’s energy sector for the foreseeable future, according to the Energy Information Administration (EIA).

Major recent discoveries are the driving force for this growth.

The EIA pegs Egypt’s estimated proven gas reserves at more than 58 Tcf, which is about 1 percent of world reserves. The country exported about 68 Bcf during fiscal 2006 – a huge jump above the eight Bcf exported in 2003.

The Egyptian General Petroleum Authority reportedly has announced plans to implement a program for hydrocarbon exploration and development in fiscal year 2008-09 with total foreign investments of $7 billion.

Natural gas may be the big-draw resource, but it’s not the only one.

The country’s crude oil and condensate reserves are said to have tallied 4.2 billion barrels at the end of June. Crude oil output reportedly reached 690,000 bopd.

Multiple Targets

Most current exploration and production is focused in the Nile Delta region and the Western Desert, according to the EIA.

Specifically, the most important natural gas fields in the Western Desert are located in the Obeiyed and Khalda areas, according to the agency, because they have lower development and operating costs than fields in the Mediterranean region thanks to an expanding network of pipelines and processing plants that enable quick transport to Alexandria via a 180-mile pipeline.

Apache Corp. lays claim to being the largest acreage holder and most active driller in Egypt. Its acreage position tallied 18.9 million gross acres in 23 separate concessions (19 producing concessions) at the end of 2007.

The company is the third largest producer of liquid hydrocarbons and natural gas in the country, and it maintains a major presence in the Western Desert, where it’s the top producer as well as the most active driller.

In fact, Apache drilled the largest discovery in its history in 2003 at the Qasr field on its Khalda concession in the Western Desert. The discovery had gross proved reserves of 2.5 Tcf of gas and 80 MMbo of condensate.

Qasr production is from the Jurassic Lower Safa formation, which is a thick package of amalgamated braided fluvial sandstones having good to excellent reservoir characteristics, according to AAPG member Fred Wehr, deputy exploration manager for Khalda Petroleum Company/Apache.

Wehr noted that Qasr has additional production from the shallower Cretaceous Alam el Bueib formation.

“Most of our targets (in the Western Desert) are multiple targets,” Wehr said, “and, especially in the Cretaceous reservoirs, this has allowed us to use the lower risk target as a kind of safety net and try some interesting and kind of risky things.

“You couldn’t justify trying this with a single objective,” he added, “and if these things work they can be used in other wells.”

Their ‘Really Good Story’

Being able to stack up targets is one of the ways over the last five years his company “grew production in the Khalda concession,” Wehr noted, “going into existing fields and really jerking them hard with a lot of infill drilling.”

The company struck an MOU with the Egyptian government to double its production by year-end 2010. The program – referred to in-house as “two times production,” or 2X – is making great strides, according to Wehr.

“We’re meeting our targets, which is extremely gratifying,” he said. “We’re increasing our drilling and have a very aggressive exploration program coming up.

“The really good story this year is the infill drilling and full implementation of the waterflood patterns in the Bahariya (formation),” Wehr said. “Our surge in liquids growth in 2008 has been driven largely by that program.

“We’re doing a lot of black oil development drilling,” he noted, “and our exploration program is shifting more and more to deep gas exploration to replace reserves we’re beginning to produce from Qasr and our other gas fields, as we increase (infrastructure) capacity.

“We’re waiting on the infrastructure to really turn the gas on,” Wehr said.

In fact, new processing trains will soon come on at Salam (Khalda) to handle Qasr and other deep gas, according to Bill Mintz, director of public affairs at Apache.

Salam Plant Trains 3 and 4 are scheduled for completion in the last quarter of 2008 and will add 200 MMcf/d capacity, with net to Apache being approximately 100 MMcf/d and 5,000 barrels of condensate.

Plant Train 5, set for mid-2010 completion, will add 100 MMcf/d of processing capacity (50MMcf/d and 2,500 barrels of condensate net).

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Emphasis: International