EDITOR’S LETTER
EGYPT’S LEADING OIL & GAS MONTHLY PUBLICATION
Research & Analysis Manager MAHINAZ EL BAZ Exploring Egypt’s Petroleum Geology One of the most famous quotes of the explorer is that of Wallace Pratt: “Where oil is first found is, in the final analysis, in the minds of men.” This is certainly true in Egypt, where exploration has had several periods of spectacular growth owing to new concepts and acquisition of data. H.E Eng. Tarek El Molla highlighted in many occasions that there are different areas still need to be explored by both national and international companies, especially the western desert. This leads to the importance of petroleum geology in exploring new and untapped areas in Egypt. Our September issue is dedicated to discuss the importance of petroleum geology, mainly in the upstream sector activities. In our industry insights section, we highlighted the potential of the unexplored geological sites in Egypt. Our Research and Analysis team prepared a full report analyzing the Egyptian Jet Fuel market performance. While our overview tackled Egypt’s rich rocks.
We conducted an interview with Ahmed Nooh, Head of Geophysics Lab at the Egyptian Petroleum Research Institution “EPRI” and the Professor of Drilling at the British University in Egypt (BUE). He shared with us his opinion about how to tap the potentials of Egypt’s petroleum geology to achieve such a goal. In addition, our energy economics section discussed the economic value of the shale gas and how it is changing the rules of the energy economic game.
Managing Editor IHAB SHAARAWY Senior Editors RANA AL KADY DOAA ABDEL MONEIM Senior Writers SARAH SAMIR JASMINE SHAHEEN Staff Writers FATMA AHMED
Wish you all informative read!
Senior Research Analyst AMINA HUSSEIN Research Analysts REHAM GAMAL TASNEEM MADI
MAHINAZ EL BAZ Acting Editor-In-Chief Research & Analysis Manager
Statistician NADA ABBAS Junior Research Analyst DALIA IHAB Chief Reporter WAEL EL-SERAG Business Development Director AYMAN RADY Marketing Manager TAMARA EWISS
PROUDLY THE OFFICIAL PUBLICATION
Creative Art Director OMAR GHAZAL Art Director MAGED KHATTAB Senior Graphic Designer MARIAN WAEL
CONTENTS
3D Visualizer TAMER GAMAL Photographer AMIR WILLIAM
DELVING INTO EGYPT’S JET FUEL MARKET PERFORMANCE
Operations & Financial M. ABDALLAH ELGOHARY
10
Web Master OLFAT KAMEL
14
RESEARCH EFFORTS “INEVITABLE” FOR EGYPT’S PETROLEUM GEOLOGY DVANCEMENT
16
DIGGING DEEPER FOR EGYPT’S RICH ROCKS
18
SHALE GAS NEW GAME-CHANGER FOR ENERGY ECONOMY
19
POTENTIAL OF PETROLEUM IN UNEXPLORED GEOLOGICAL SITES
20
LEGAL DEMARCATION OF MARITIME BORDERS AND EGYPTIAN NATIONAL SECURITY
22
HYDRAULIC FRACTURING UNCERTAINTY-BASED MODEL USING MONTE CARLO TECHNIQUE
Web Developer AYMAN ELASH Administration TAGHREED MOUNIR
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info@egyptoil-gas.com
2 | EGYPT OIL & GAS NEWSPAPER
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SEPTEMBER 2021 - ISSUE 177 | 3
EGYPT UPDATES
TOP 5 EGYPT MOST GROWING ARAB LNG EXPORTER IN Q2 2021: REPORT Egypt was the most growing liquefied natural gas (LNG) exporter in the Arab world during the Q2 of 2021, according to a report issued by the Organization of Arab Petroleum Exporting Countries (OAPEC). The report showed that Egypt has exported LNG estimated at $1.4 million tons during Q2 compared to non-exports during the same period in 2020 due to the decline of international market prices. The report attributed this growth to the restarting of Damietta LNG Plant at the capacity of 5 million tons per year (mmt/y). This is besides the continuous operation of Idku LNG plant at a capacity of 7.2 mmt/y.
EGPC, SCHLUMBERGER – SENSIA INAUGURATES EGYPT PRODUCTION DIGITAL CENTER The Egyptian General Petroleum Corporation (EGPC), Schlumberger and Sensia (Rockwell automation + Schlumberger JV) inaugurated the Egypt Production Digital Center (EPDC) during an event hosted by Petrojet at its headquarters in Cairo. Schlumberger and Sensia were selected as the performance partner of choice throughout Egypt’s oil and gas digital journey and to bring the digital transformation vision to reality. The EPDC project is a key enabler for the Ministry of Petroleum and Mineral Resources’ Modernization Project, Karim Badawi, Enterprise Digital Performance Director at Schlumberger, remarked. He added that Schlumberger’s partnership with Sensia promotes Egypt’s digital transformation journey for the benefit of everyone.
EGYPT INCREASES FUEL PRICES BY EGP 0.25 IN Q3 2021 Egypt’s Fuel Automatic Pricing Committee adjusted the fuel prices and increased them by EGP 0.25 per liter for Q3 2021. As of July 23, the prices per liter are as follows; octane 80 at EGP 6.75; octane 92 at EGP 8; and octane 95 at EGP 9. As for diesel and mazut fuel, prices remained at EGP 6.75 per liter and EGP 3,900 per ton respectively.
A BLAST
This decision was driven by the average prices of Brent crude in the global energy market and the value of the Egyptian pound against the US dollar.
EL MOLLA HONORS PETROJET FOR OBTAINING GUINNESS WORLD RECORDS CERTIFICATE Minister of Petroleum and Mineral Resources, Tarek El Molla, honored the Petroleum Projects and Technical Consultations Company (PETROJET) for obtaining the Guinness World Records certificate. The certificate was obtained for the company’s implementation of the crude oil storage warehouse in Ras Badran area. The warehouse broke the records as the largest floating storage warehouse in the world with a capacity of 175,000 cubic meters, which is equivalent to around 1.1 million barrels of crude oil. The company was also awarded the certificate for implementing the project using unprecedented techniques and methods, which are considered the first and largest of their kind in the execution of warehouse work globally.
EMRA, BARRICK GOLD SIGN $8.8 M CONTRACTS FOR GOLD EXPLORATION El Molla witnessed the signing of four contracts for gold exploration between the Egyptian Mineral Resources Authority (EMRA) and Barrick Gold company, with investments worth $8.8 million. According to the terms included in the contracts, Barrick will invest in 19 new areas in the Eastern Desert. This came after winning in the first round in the international gold bid conducted in 2020. The contracts were inked by the Khaled AlShishtawy, Chairman of EMRA and Joel Holliday, the Vice President Global Exploration of Barrick Gold, via videoconference. El Molla highlighted the reforms the mining sector is witnessing, which succeeded in maximizing the Egyptian and foreign investments in gold exploration in Egypt.
NUMBER OF THE MONTH
FROM THE PAST In September 2018, the Minister of Petroleum and Mineral Resources, Tarek El Molla, announced Egypt's self-sufficiency of natural gas. Back then, Egypt stopped importing liquefied natural gas (LNG) after receiving the last cargo in late September. Self-sufficiency was achieved thanks to Egypt's major gas discoveries as well as rising natural gas production. In the fiscal year (FY)2018/19, the country's natural gas output recorded 6.8 billion cubic feet per day (bcf/d), compared to 3.8 bcf/d in 2012. Therefore, natural gas became the main power source for many Egyptian industries, and Egypt launched initiatives to replace butane with natural gas in households. Moreover, Egypt encouraged business owners to link factories to the national gas grid. Egypt is further exerting efforts to make compressed natural gas (CNG) an alternative fuel and spread its fueling and services stations all over the country. Egypt's natural gas performance has kept enhancing ever since, and the country now exports LNG. During Q4 2020, Egypt exported 17 cargoes of LNG via the Shell-operated Idku liquefaction plant. Additionally, the country shipped seven cargoes in January 2021. Meanwhile, Egypt reopened the Damietta liquefaction plant after eight years of being closed and two cargoes were shipped from there by Italian Eni in February.
4 | EGYPT OIL & GAS NEWSPAPER
Egypt’s LNG Exports in Q2 2021
1.4 mmt
Egypt’s growth rate of liquefied natural gas (LNG) exports came on the top of the Arab countries during Q2 2021, according to the Organization of Arab Petroleum Exporting Countries (OAPEC) report. The OAPEC report showed that the exports in Q2 2021 remarkably increased from zero in Q2 2020 due to the decline of international market prices. The growth in LNG exports is attributed to the reoperation of Damietta LNG Plant. The Damietta plant exported seven cargos amounting 0.63 million tons (mmt) in Q2 2021. This increased the total LNG exports from the plant since the beginning of 2021 to 12 cargos amounting 0.93 mmt. India came on the top of the countries importing Egypt’s LNG with 0.3 mmt, followed by Pakistan with 0.19 mmt, while China came third with imports of 0.15 mmt.
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SET NEW LONGEST RUN RECORD IN
EGYPT
The 8 ½” GTD65DRHO bit designed with our latest JuggernautTM Cutter Platform, set a historical longest run record in Egypt drilling 10,055 ft. in a single-directional run. This run broke the previous longest run record in Egypt by 8.5%.
Omar AbdelBaset
Product Line Lead Halliburton Drill Bits Services
SEPTEMBER 2021 - ISSUE 177 | 5
EGYPT UPDATES
DRILLING
NOCS UPDATES
GPC DRILLS 11 WELLS IN EASTERN, WESTERN DESERTS IN Q3 2020/21 The General Petroleum Company (GPC) drilled three exploratory wells and eight developmental wells in the Eastern and Western Deserts during Q3 of FY2020/21 with a cost of about $16 million and a 100% success rate. The company’s total investments amounted to $50 million during the same quarter. The company said that it put the HH 83/2 offshore discovery to work in record time with a production amounting to about 3,500
barrels per day (bbl/d), announcing that it will continue the project by constructing a 13 kilometers (km) pipeline with a 6-inch diameter. This comes in parallel as GPC almost completed the construction of the 170 km shipping pipeline in the Abu Sennan, reaching Al-Hamra port at a cost of approximately $56 million. The pipeline aims to serve all sister companies located in the Western Desert.
DATA CENTER
CONNECT-PS COLLABORATES WITH SCHNEIDER ELECTRIC FOR DELIVERING EGPC A STATE-OF-THE-ART DATA CENTER CONNECT-PS, one of the nationally leading IT service providers in the Egyptian market, announced its successful delivery of Data Center renovation project for the Egyptian General Petroleum Corporation (EGPC). Such strategic project aligns with the state’s vision to consolidate the pillars of information technology, fast-track digital transformation, and achieve smooth transmission and
information security to support the decisionmaking process and face crises. The project is a part of the numerous recent successes across different sectors of the Oil&Gas industry aiming at reaching optimum economic returns from all potentials and natural resources to support the sustainable development and transformation of the country to become the regional hub for O&G trade
AGREEMENTS
PETROMAINT, CNCEC INK NEW MOU Alexandria Petroleum Maintenance Company (Petromaint) has signed a memorandum of understanding (MoU) with China National Chemical Engineering Company (CNCEC) as a part of the new policies to strengthening joint cooperation with major international companies in various fields of work. The MoU was signed at Petromaint ’s headquarters in Cairo, in the presence of Zhang Bo, acting General Manager of the Northwest Africa region at CNCEC, and Khaled Maatouk, Managing Director of Octa International.
Ahmed Fouad, Chairman of the Board of Directors and Managing Director of Petromaint and Mabrouk Amer, Chairman of the Board of Directors of APRC, have signed the agreement
6 | EGYPT OIL & GAS NEWSPAPER
El Molla expressed the sector’s keenness to establish a successful partnership with AFC and to work together for a constructive cooperation in the new projects and contributing to achieve its objectives and investment plans. It was agreed to coordinate joint efforts, El Molla said, adding that AFC’s team will have meetings with the heads of the Natural Gas Holding Company (EGAS), and the Mineral Resources Authority, to find out investment opportunities and projects that can receive contributions.
at APRC’s headquarters in attendance of officials from the two companies.
El Molla met with a delegation from Siemens Egypt, headed by Mostafa El Bagoury, CEO of Siemens Egypt, to discuss ways of cooperation in areas of digital transformation.
This agreement, the company said, came as a part of the cooperation between the two entities and reflects the desire to continue this cooperation in different fields in the future.
The two sides also discussed ways of applying advanced technological solutions for the Petroleum projects management.
MINISTRY OF PETROLEUM TESTS FUEL SAMPLES FROM CAIRO STATIONS
This comes as a part of the ministry’s efforts to follow up on all distribution systems across the country.
During the meeting, El Molla highlighted the recent success stories in the oil and gas industry as well as the ongoing and the targeted projects in the fields of petroleum infrastructure, petrochemicals, and mining.
Following the signing, both companies discussed ways to enhance joint cooperation going forward through participating in different projects inside Egypt or abroad.
FUEL
El Molla assigned working groups to check fueling supply and service stations and bring samples of the available and ready-forconsumers fuel for testing.
El Molla met with Samaila Zubairu, the President and CEO of Africa Finance Corporation (AFC)’s, and the accompanying delegation to discuss cooperation opportunities.
EL MOLLA, SIEMENS DISCUSS COOPERATION IN DIGITAL TRANSFORMATION
PETROMAINT, APRC SIGN EGP 100 M AGREEMENT TO SUPPLY RADAR TANK GAUGING Petromaint Company has signed an agreement worth EGP 100 million with Amreya Petroleum Refining Company (APRC) to supply, install and operate radar tank gauging.
EGYPT, AFC, EXPLORE PETROLEUM COOPERATION OPPORTUNITIES
Samples were taken from several fueling stations in Cairo. The test results showed that the samples are meeting the standards. Meanwhile, the minister assigned a central operations team of the ministry, EGPC, and all the petroleum products’ distribution companies, to be responsible for following up on the consumption of petroleum products.
During the meeting, El Molla highlighted the continuous success achieved in the sector as a result of digital transformation adoption across the oil and gas sector’s activities since 2016 through a project to develop and modernize the sector. The sector has successfully implemented several practical initiatives in this field, El Molla said, adding that this project covers all stages of the petroleum industry, from the well to the end consumer.
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NATURAL GAS
PETROCHEMICALS
MOP CONNECTS NATURAL GAS TO 88 NEW AREAS Egypt has successfully connected 88 new areas in 14 governorates to natural gas grid during 2021. This brings the total number of households that use natural gas to 12.32 million units across Egypt since the onset of the activity until the end of June 2021, thus, saving about 222 million butane cylinders a year and their cost.
The new areas include the 15 May extension area in Cairo, 9 areas in Giza, two areas in Alexandria, 11 areas in Sharqia, 7 areas in Gharbia, 8 areas in Dakahlia, 11 areas in Menoufia, 11 areas in Beheira, 8 areas in Qalyubia, 3 areas in Beni Suef, two areas in Minya, and one area in Assiut, 9 areas in Sohag, and 5 areas in Qena.
EGYPT PLANS TO CONNECT NATURAL GAS TO 1.2 M HOUSES IN FY2021/22: EL MOLLA Minister of Petroleum and Mineral Resources, Tarek El Molla, has announced that Egypt seeks to connect natural gas to 1.2 million housing units during the current FY2020/21. This comes as a part of the state’s program to expand the usage of natural gas and install prepaid meters for industrial, commercial and housing purposes. El Molla highlighted the importance of implementing the program within the planned schedule.
El Molla stated that the first phase includes 1,413 villages, where 59 villages have already been connected with natural gas system and 17 villages are underway.
During a meeting to follow up on natural gas billing and payments, El Molla elaborated that the prepaid meters will facilitate payment for natural gas consumption,
This comes as a part of the ministry’s efforts to avail new CNG fueling stations across the governorates since the start of the presidential
Egyptian Petrochemicals Holding Company (ECHEM) production of petrochemicals, through its subsidiaries, exceeded 4 million tons during FY2020/2021, which concluded in June, the company’s head, Saad Hilal, said.
He added that 426,000 prepaid meters have been installed, so far, which will control the consumption rates. The minister affirmed the priority of this project under the presidential initiative of “Decent Life”.
He added that there are 1,337 villages scheduled to be connected with natural gas at a cost of more than EGP 16 billion. Out of which 245 villages have completed sanitation works and 423 villages are already included in the sanitation plan, where natural gas will be delivered to them as soon as the sanitation works are completed.
indicating that 426,000 prepaid meters were installed so far. The meeting tackled new ways for payment and registering the readings of consumption, including registering the readings of consumption on the website of Petrotrade company and paying through phone cash services such as Jumia, myfawry, credit cards, as well as through landlines.
CNG-FUELING STATIONS RAISED TO 400 Egypt has around 400 fueling stations providing compressed natural gas (CNG) as vehicles’ fuel, as the number of stations multiplied in few months, El Molla stated.
The minister highlighted that the Egyptian petrochemicals industry will witness a leap in light of the new projects that are currently being executed with investments estimated at $8 billion.
EL MOLLA REVIEWS MAJOR PETROCHEMICAL PROJECTS
MOP CONSIDERS NEW NATURAL GAS BILLING SYSTEMS E l M o l l a s a i d t h a t s eve ra l alternatives systems for paying natural gas consumption bills are on the table, indicating that the new systems will rely on digitalization to facilitate the payment methods for the clients.
El Molla stated that Egypt has completely developed a national petrochemicals plan until 2040 that will have a positive impact on maximizing the added value of the natural resources.
The company marketed 390,000 tons of products, which is 13% higher than the marketed products in FY 2019/2020, Hilal noted.
MOP TO EXPEDITE NATURAL GAS DELIVERY FOR “HAYAT KAREEMA” PROJECT The Ministry of Petroleum and Mineral Resources plans to expedite the natural gas delivery project for citizens involved in Hayat Kareema “Descent Life” initiative.
EGYPT DEVELOPS NATIONAL PETROCHEMICAL PLAN THROUGH 2040
initiative to expand the usage of CNG as vehicles’ fuel. The ministry aims to boost the number of CNG stations to reach 1000 across the country. The ministry added 170 new stations and it is completing operating 45 other ones, El Molla noted.
The Egyptian petroleum sector is currently implementing five major petrochemical projects worth $14 billion; including expansion of Midor refinery in Alexandria, Red Sea petrochemical project in the economic zone in Suez Canal, Assiut National Oil Processing (ANOPC) diesel complex in Assiut, asphalt production unit in Suez and coking complex in Suez. El Molla said that these investments come as a part of the ministry’s integrated program for updating petrochemical and refinery system in Egypt to leverage the operational efficiency and adding new units for achieving petroleum products sustainability and reduce imports bill.
EL MOLLA INSPECTS ASSIUT’S HIGH-OCTANE COMPLEX El Molla inspected the high-octane complex in Assiut that has investments of $450 million and a production capacity of 800,000 tons of octane. This came during the minister’s visit to the petroleum geographical zone in Assiut, which includes Assiut Oil Refining Company (ASORC), Petroleum Pipelines Company (PPC), Petrogas Company, Petroleum Arrows Company, Assiut National Oil Processing Company (ANOPC). El Molla affirmed the continuous efforts to update and leverage the efficiency of the zone, as well as adding new investments in order to secure fuel supplies for the domestic market, particularly in the Upper Egypt. He added that this complex reflects success of the national refining plan, as it will reduce petroleum imports bills.
SEPTEMBER 2021 - ISSUE 177 | 7
CORPORATE NEWS
SCHLUMBERGER SCHLUMBERGER, ENPPI SIGN COOPERATION MOU Minister of Petroleum and Mineral Resources, Tarek El Molla, witnessed the signing of cooperation Memorandum of Understanding (MoU), between Schlumberger, and the Engineering for petroleum and process industries (Enppi). The MoU aims at developing joint potentials in executing projects of exploration and production (E&P), as well as pipelines. Enppi’s Chairman, Ashraf Bahaa, and Schlumberger’s Egypt & East Mediterranean Managing Director, Karim Badawi, signed the MoU.
The MoU touches cooperation in developing and modernizing the oil and gas facilities in and out of Egypt, Bahaa noted. Moreover, it involves securing business opportunities and exchanging experience, as well as other available opportunities to cover the needs of oil, gas, and water projects in Egypt and abroad, Bahaa added.
Schlumberger that included President Middle East & North Africa at Schlumberger, Tarek Rizk. The meeting discussed areas of cooperation between the oil and gas sector and Schlumberger, one of the best providers of digital solutions and modern technologies in the oil and gas industry globally, in addition to its role as a major contributor to plans for developing fields, improving production and training human cadres.
Before the signing, El Molla held talks with the two energy leaders, as well as a delegation from
UNITED OIL AND GAS UNITED OIL & GAS ANNOUNCES PRODUCTION UPDATES US-headquartered United Oil & Gas (UOG) announced production updates as the company’s average output reached 2,937 barrels of oil equivalent per day (boepd) in the Q2 of 2021, making the average of the H1 of the year 2,730 boepd. This comes as the company had a
successful drilling campaign at the Abu Sennan License. Accordingly, the ASH-3 Development Well came on stream with gross rate production exceeding 4,000 boepd on March 5, while the ASD1-X –
Commercial discovery achieve test gross rate production at more than 1,200 bopd. Meanwhile, workover of ASH-1ST2 was completed, boosting the well’s production from 200 bopd to over 1,200 bopd.
UOG’S AJ-8 WELL SIGNALS MAXIMUM FLOW RATE OF 2,093 B/D United Oil and Gas Company (UOG) announced that its tests on Al Jahraa-8 (“AJ-8”) development well, located in the Abu Sennan concession, showed signals of maximum flow rate of production of 2,093 barrels per day of oil (b/d)
and 3.63 million standard cubic feet per day (mmscf/d). The company elaborated that this appraisal exceeded the pre-drill expectations indicating that the well will link to the production line from
the Lower Bahriya reservoir in the coming days. Moreover, UOG declared that the EDC-50 rig will now move 7km to the north of the Al Jahraa Field, where drilling of the ASX-1X exploration well is due to commence in the coming days.
UOG SPUDS NEW EXPLORATION WELL IN ABU SENNAN United Oil and Gas Company (UOG) announced the spudding of the ASX -1X exploration well in Abu Sennan Concession. UOG owns a 22% working interest in the concession’s licence, which is operated by Kuwait Energy Egypt.
UOG elaborated that the well is located c. 7 km to the north of Al Jahraa field and it will test a number of stacked reservoir targets. It is expected to be drilled, tested and completed in 54 days. ASX-1X is prioritized for UOG as ASX prospect is
highly ranked for the company among exploration targets in Abu Sennan. It is expected to be the last well in the company’s 2021 drilling campaign.
WINTERSHALL DEA WINTERSHALL DEA DELIVERS ADDITIONAL GAS FROM EGYPT, RUSSIA FIELDS Wintershall Dea, European Oil and Gas Company, announced results of Q2 2021. The company reported additional gas from its newest
development area, Raven in Egypt and Achim Area 4A/5A in Russia. The company’s Q2 production reached 613 million barrels of oil equivalent per day (mboe/d),
reaching output average of 636 mboe/d in H1 2021.Accordingly, the company’s net income increased by 93% Year-on-Year (Y-o-Y), hitting around $198 million, while its EBITDAX grow by 140% Y-o-Y recording around $750 million.
DANA GAS DANA GAS WINS ARBITRATION ON SALE OF EGYPT ASSETS The London Court of Arbitration (LCIA) has ruled in favor of Dana Gas against IPR Wastani Petroleum’s arbitration on IPR’s Sale and Purchase Agreement (SPA) for the oil and gas assets in Egypt. The LCIA ruled in Dana Gas’ favor on all key points, concluding that Dana Gas’ termination of the
SPA was valid. Thus, the assets will continue to be operated by Dana Gas. Dana Gas terminated its SPA agreement with IPR Wastani on April 22, 2021, due to the parties’ inability to fulfill a number of transaction-related
conditions precedent by the long-stop date of April 14 2021. IPR Wastani disputed Dana Gas’ right to terminate the SPA and filed a request for arbitration.
DANA GAS EGYPT’S OPERATIONAL CASH FLOW UP 175% IN H1 2021 Dana Gas Egypt’s operational cash flow jumped by 175% in 1H 2021, reaching $80 million. The company attributed the hike in the cash flow to the oil price increase as well as the higher collection during H1 2021. According to the statement this
8 | EGYPT OIL & GAS NEWSPAPER
hike also “reinforces the correctness of the Board decision not to sell the assets.”
company’s overall operational cash flow increased by 97%, recording $146 million.
In April 2021, Dana Gas terminated its agreement for the sale of its Egyptian assets and will therefore continue to own and operate them in order to maximize returns for its shareholders. Meanwhile, the
The Company’s average production in H1 2021 was 64,000 boepd, slightly higher than 63,250 in H1 2020, driven by increased production in the KRI (Kurdistan Region, Iraq).
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SDX SDX ANNOUNCES DRILLING UPDATES ON IY-2 WELL SDX Energy announced drilling updates regarding its Ibn Yunus-2 well, located in the South Disouq Permit onshore Egypt’s Nile Delta. The company owns 55% working interest in the permit. The IY-2 well was drilled at a depth of 8,025 feet, encountering around 40.5 feet of high-quality
gas-bearing sands. The well has a 23.4%, average porosity, near the Kafr El Sheikh (KES) formation base. The company is waiting for the test results, which are anticipated to be released in few weeks.
The well is expected to maximize Ibn Yunus Field recovery and to help maintaining current c.45 million standard cubic feet equivalent of gas per day (mmscfe/d) gross production levels from the South Disouq central facility.
SDX SPUDS HANUT-1 EXPLORATION WELL IN SOUTH DISOUQ SDX company announced the spudding of the Hanut-1 exploration well “HA- 1X” in South Disouq as a part of the Company’s 2021 drilling campaign
after the successful drilling of IY-2 well announced in July. SDX elaborated that the Hanut prospect is estimated to contain gross un-risked mean
recoverable volume of 139 billion cubic feet (bcf) with a 33% chance of success. It added that the well is expected to complete drilling within a month.
SDX’S PRODUCTION EXCEEDS EXPECTATIONS FOR H1 2021 SDX Energy company has achieved production of 5,931 barrels of oil equivalent per day (boe/d) during H1 2021, 3% higher than the midpoint guidance of 5,770 boe/d. The company elaborated that these production rates, however, is lower than what was recorded in H1 2020, when reached 6,980 boe driven by the natural decline, well workovers and expected sand and
water production in two of the five wells at South Disouq. SDX has produced 4,422 boe/d from South Disouq during the first six months of 2021 compared to 4,825 boe/d during the same months in 2020.
647 boe/d in 2020. The company meanwhile produced 993 boe/d in H1 2021 from its assets in Morocco. In addition, SDX announced that it has achieved net revenues of $27.1 million during H1 2021 compared to 21.9 million during the same period in 2020.
Moreover, its production from West Gharib declined to 516 boe/d in H1 2021 compared to
TAQA ARABIA TAQA ARABIA, MAN ENERGY SIGN MOU ON EGYPTIAN GREEN HYDROGEN PROJECT TAQA Power, TAQA Arabia’s subsidiary in Egypt, signed a memorandum of understanding
(MoU) with MAN Energy for a green hydrogenproducing project to provide fuel for tourist busses. According to the MoU, MAN Energy will provide
technical information on employing electrolysis for a hydrogen-plant solution, due to run until autumn 2022.
EXXONMOBIL EXXONMOBIL, TRELLA COOPERATE ON TRUCKING INDUSTRY IN EGYPT ExxonMobil Egypt announced that it has signed a collaboration and framework agreement with Trella, a technology platform connects shippers to carriers, aiming to bring a new digital technology
to the freight industry in Egypt and provide it with innovative solutions. This agreement is the first direct investment for ExxonMobil with a tech startup in MENA region,
coming as a part of ExxonMobil Egypt’s mission to empower new digital solutions and support young and ambitious innovators beyond the energy industry.
SAUDI ALDREES PETROLEUM SAUDI ALDREES PETROLEUM EYES ACQUIRING SERVICE STATIONS IN EGYPT Saudi Aldrees Petroleum Company filed official requests to obtain information as it eyes acquiring service stations in Egypt. The company announced its intention to open around 60 fuel
stations during H2 2021. The plan will raise the total number of Aldrees’ stations to 644. Thanks to the increased number of stations and customers of electronic fueling systems, Aldrees has achieved a 24% net profit growth during Q2
2021, recording around $560 million, compared to around $450 million in Q2 2020.Meanwhile, the company’s transport segment reported an almost 8% revenue increase, recording $20 million in Q2 2021, compared to $18.6 million in Q2 2020.
ATON ATON’S RODRUIN SAMPLES TEST SIGNALS 51.4%-84.2% GOLD RECOVERIES Aton Resources Company announced that the test results for ten composite samples from its Rodruin exploration project, located in Abu Marawat Concession, have shown final gold recoveries ranging between 51.4% and 84.2%. Moreover, silver recoveries reached 25.7% up to 65.8%
It added that four samples were selected for additional fine grind whole ore leach tests that showed higher gold and silver recoveries for the finely ground samples compared to their unground equivalents. The company stated that gold recoveries from three finely ground oxide samples ranged
between 87.5% and 89.5%, with silver recoveries between 52.7% and 73.6%. The finely ground sulphide sample had gold and silver recoveries of 81.5% and 55.8% respectively. Aton clarified that construction of the new exploration camp at Rodruin is well underway, and is expected to be completed in early September.
SEPTEMBER 2021 - ISSUE 177 | 9
RESEARCH & ANALYSIS
Delving Into Egypt’s Jet Fuel MARKET PERFORMANCE BY: AMINA HUSSEIN, REHAM GAMAL, AND TASNEEM MADI
JET FUEL PRODUCTION
REFINERIES PRODUCING JET FUEL
JET FUEL ANNUAL PRODUCTION (MMT)*
REFINERIES PRODUCING JET FUEL Refinery
2.63
2.34 12.4%
Cairo Oil Refining Company (Mostorod)
8
Nasr Petroleum Company
6.5
FY 2017/18
2018/19
Crude Oil Distillation Unit Capacity (mmt/y)*
Alexandria Petroleum Company
5
MIDOR
5
Amerya Petroleum Refining Company
4
*Including Kerosene
JET FUEL SHARE IN TOTAL PETROLEUM PRODUCTS PRODUCTION (%)
Suez Oil Processing Company
Assuit Oil Refining Company
FY 2017/18
9.36
FY 2018/19
10.22
2.5
Cairo Oil Refining Company (Tanta) Egyptian Refining Company *Units that refine crude oil to high quality products
10 | EGYPT OIL & GAS NEWSPAPER
3
2 0.6 (JET FUEL ALONE)
WWW.EGYPTOIL-GAS.COM
JET FUEL SHARE IN TOTAL PETROLEUM PRODUCTS EXPORTS (%)
MIDOR JET FUEL PRODUCTION (MMT)
FY
FY 2018/19
FY 2019/20
0.898
0.825
Value
2017/18
13.43
16.51
2018/19
12.85
16.18
JET FUEL DOMESTIC SALES
1.723
Total
Volume
JET FUEL DOMESTIC SALES
JET FUEL DOMESTIC CONSUMPTION
FY
2017/18
JET FUEL CONSUMPTION (MMT)
2018/19
FY 2017/18
FY 2018/19
0.43
Rate of Change (%)
0.55
27.9%
Volume (mmt)
Value ($ million)
0.624
465
0.718
585
15.06
25.81
JET FUEL SHARE IN TOTAL PETROLEUM PRODUCTS SALES (%) JET FUEL SHARE IN TOTAL PETROLEUM PRODUCTS CONSUMPTION (%)
Volume
Value
FY
FY 2017/18
FY 2018/19
1.25
1.78
87.57 89.54
2017/18
2018/19
61.9 74.9
JET FUEL EXPORTS
THE MAIN DISTRIBUTORS/SUPPLIERS
JET FUEL EXPORTS VOLUME & VALUE
COMPANIES MANAGING FUEL & SERVICE STATIONS PROVIDING JET FUEL
FY
Volume (mmt)
Value ($ million)
2017/18
0.164
108
2018/19
1.229
792
National Companies
International Companies
Misr Petroleum Company
ExxonMobil Total SEPTEMBER 2021 - ISSUE 177 | 11
RESEARCH & ANALYSIS
OTHER COMPANIES SUPPLYING FUEL TO AIRPORTS (WORLDWIDE & IN EGYPT)
A. MISR PETROLEUM COMPANY (MPC) MPC IN AVIATION & JET FUEL
Number of Airports Provided Incentives for Customers
Role
Air BP
613
Owns an insurance policy of $ 1 billion worth
Largest marketing channel for Jet fuel
Chevron Aviation
+45
191
Provide highest level of service & safety
IOCs’ Agent to sell jet fuel
Countries
-
OiLibya Aviation
+50
GazpromneftAero
15
260
B.TOTAL
66
TOTAL AVIATION BACKGROUND Status in Market
Spread in over 300 airports
Supplied Products
Consumers
Present in 280 Airlines
Spread in 72 countries
JET FUEL SUPPLIERS FOR IMPORTANT EGYPTIAN AIRPORTS Airport
Suppliers
Cairo International
Air BP Chevron Aviation ExxonMobil Aviation OiLibya Aviation
Jet A-1, AVGAS UL 91 & AVGAS 100LL
Jet A-1: World
AVGAS UL 91: Europe
AVGAS 100LL: Europe
Hurghada International
TOTAL AVIATION BACKGROUND IN EGYPT
Cairo Hurghada
Alexandria Luxor
Air BP Total Aviation Gazpromneft-Aero
Luxor International
Jet A-1
Supplied Fuel
Supplied Airports
Alexandria Borg El Arab
Aswan Daraw Aswan
Sharm El Sheikh
Sharm El Sheikh International
Borg El Arab
TABA
Marsa Alam
Alexandria El Nouzha Air BP Total Aviation
El Arish Taba International
C. EXXONMOBIL
Marsa Alam International
Total Aviation Chevron Aviation
Assiut
Air BP
EXXONMOBIL AVIATION BACKGROUND
Status in Market
Spread at over 450 airports Has 7 offices worldwide
Supplied Product
Jet A & Jet A-1
Consumers
Jet A: US Jet A-1: Egypt & Outside US
EXXONMOBIL AVIATION BACKGROUND IN EGYPT
Jet A-1
SERVICES PRESENCE
+ 350 service stations SUPPLIED FUEL
+ 40 Mobil 1 centers + 50 vehicles for direct customer shipments and transshipments between terminals
12 | EGYPT OIL & GAS NEWSPAPER
Cairo Mostorod Alexandria Suez Assiut SERVICES LOCATIONS
JET FUEL TRANSPORTATION JET FUEL TRANSPORTED BY RAILWAYS TANKS (T) FY 2018/19
FY 2019/20
Total
79,205
161,951
82,746
JET FUEL RAILWAYS TANKS Number of Tanks
Average Load per Tank
Net Load per One Time
83
37.5 t
3,113 t
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SEPTEMBER 2021 - ISSUE 177 | 13
INTERVIEW
RESEARCH EFFORTS
“INEVITABLE”
FOR EGYPT’S PETROLEUM
GEOLOGY ADVANCEMENT
BY DOAA ABDEL MONEIM
A
s Egypt eyes to be a regional energy hub, the petroleum geology sector plays an inevitable role to achieve this objective with the support of the research and academic community.
EOG discussed with Ahmed Nooh, Head of Geophysics Lab at the Egyptian Petroleum Research Institution “EPRI” and the Professor of Drilling at the British University in Egypt (BUE), how to tap the potentials of Egypt’s petroleum geology to achieve such a goal. HOW CAN PETROLEUM GEOLOGY STUDIES SUPPORT EGYPT’S EXPLORATION EFFORTS? The Petroleum geology studies support, to great extent, the exploration efforts. These studies provide various subsurface data about the reservoir porosity, permeability, hydrocarbon potentialities, traps, reservoir type (gas or oil, reservoir characterization, quick calculation about production index, thickness and permeability), flow units reservoir characterization, formation pressure to prevent blow out and the reserve estimation (GIP, IOIP). TO WHAT EXTENT DOES THE NATURE OF PETROLEUM GEOLOGY PLAY A ROLE IN SUPPORTING EGYPT’S STRATEGY TO BE AN ENERGY HUB? The nature of the Egyptian petroleum geology backs such efforts, hence these petroleum geology nature characterized by the simplest structure (folding and faulting) and most of them homogeneous reservoir (except some locations in the Gulf of Suez where there is a complex structure and reservoir heterogeneity) and most of the reservoir present in a considerable depth (3500 m to 5000 m). All these nature aspects support the production operations and production facilities, as the easy to get the pay zone, the easy to design production equipment. WHAT ARE THE HIDDEN POTENTIALS OF THE EGYPTIAN WESTERN DESERT? The Western Desert produces 25% of the country’s total production, so the exploration activity at the Western Desert of Egypt is characterized by high activity and most of the concessions are covered and became very clear from the exploration, drilling and Production operation perception. Most of the exploration operations should be directed to deeper depths than the conventional reservoir ( Abu Roach : A, B, C, D, F and G also Kharetta, Shushan) as Bany sweef basin, which is considered as a new reservoir, especially for the applied drilling technology (Gesturing and RSS). Also, the newely discovered area present in Abu Senan ( ASH-2 ) for Bor El Arab Co (7000 Bbls/day), and the new geological structure at Gysum and Magor areas are among these promising potentials.
14 | EGYPT OIL & GAS NEWSPAPER
HOW CAN YOU DESCRIBE THE SCENE OF PETROLEUM GEOLOGY RESEARCH IN EGYPT? I believe that it is very promising, as there is plenty of researches, which shed good light on the most probable new discovered areas, determine the reservoir delineation and extension for further development for more production as directing drilling and provide very useful data about reservoir quality and reservoir characterization (porosity, Permeability, Oil saturation). It also determines the pore pressure value to prevent the well blow out. Meanwhile, all these data could build a static and dynamic model for further studies by the reservoir engineers. IN YOUR OPINION, DO THE CURRENT TRAINING PROGRAMS IN THE PETROLEUM GEOLOGY SECTOR ENHANCE EMPLOYEES' AND STUDENTS' SKILLS AND PREPARE THEM TO ENGAGE IN THE MARKET? The current training programs in the sector need more development to enhance employees' and students’ skills. Oil companies' employees need practical and professional training. Moreover, they need applied and advanced training courses, particularly in the fields of geosteering, manage pressure drilling, migration path
THE WESTERN DESERT PRODUCES 25% OF THE COUNTRY’S TOTAL PRODUCTION, SO THE EXPLORATION ACTIVITY AT THE WESTERN DESERT OF EGYPT IS CHARACTERIZED BY HIGH ACTIVITY
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detection, 3D reservoir modeling, real time modeling, and advanced core analysis (SCAL). In this regard, EPRI is a pioneer institute in offering such training programs. We have both a training administration and a training committee for enhancing the training operation for the oil sector employees. Also, we have a good experience in training operations across several countries, including Sudan, Saudi Arabia and Chad for example. For the students, the training programs need to be adapted with their level, and should be applied and fitted to the market needs, especially in mud logging, well site geology, Petrophysics and Geosteering, and core analysis areas. The new technologies also needed to be applied in their training programs, including the nano application and the artificial intelligence (AI). In this regard, we are proud that EPRI provides electronic learning for more than 12 universities (500 students) daily as online courses (theoretical and practical alike) due to the Covid-19 pandemic and its related challenges. HOW CAN WE ESTABLISH REAL COOPERATION AND PARTNERSHIPS BETWEEN THE RESEARCH COMMUNITY AND THE PETROLEUM SECTOR? Real cooperation and partnerships could be established between the two sides through a number of pillars, as both of them need the support of each other. On the petroleum sector side, it should financially support the research activity to get precise results to make the right decisions. It should also provide the required data for the projects and the researches, as this is the essential tool for the research efforts. Furthermore, the industry has common problems that need the research sector to figure out and reach proper solutions to overcome them, such as clay swilling , formation damage and Bacterial activities. For the research sector, it should focus on further applied and updated researches, as well as using new technologies and software. They also need to go further through projects that deal with the oil sector to solve the common problems (such as production decrease due to formation damage) and EPRI could provide this project. Moreover, they need to use highly experienced cadres in research sector as a consultant for oil sector to benefit from their significant experiences. WHAT DO THE RESEARCH INSTITUTIONS IN EGYPT NEED TO PUSH THE PETROLEUM GEOLOGY SECTOR FORWARD?
THE EXPLORATION SHOULD HAVE A MISSION AND VISION TO SUPPORT THE PETROLEUM GEOLOGY SECTOR Meanwhile, EPRI has a core lab as a distinguished unit to address rock analysis, which is very useful for petroleum sector, as it provides the sector with all kinds of rock analyses (routine and special). Furthermore, EPRI supports the new researches and accepts the pioneer papers to be published in EPRI’s Egyptian Journal of Petroleum. We also encourage the protocols signed with different universities to share the new researches and establish a good relation between the exploration sector and oil companies. In addition, we try to engage the AI and the nano-technologies in the new researches and to provide the petroleum sector with the necessary researches on several petroleum-related topics (structure, reservoir characterization, geophysical analysis, formation evaluation, mud logging), which help them to make the right decisions. Besides that, we drew several maps for the reservoir pressure, in addition to interoperating and writing reports for the oil companies. EPRI Provides the oil sector with several analyses as well, especially on source rock, core analysis, soil analysis, XRD and XRF for the mineralogist identification, as well as tapping the latest technologies; such as the satellite technology in the oil industry through a protocol inked with the Egyptian Space Agency. We also provided the oil industry with a complete field study (starts from exploration to production ) with the assistance of other EPRI’s departments. WHAT ABOUT THE RESEARCH YOU SAID THAT YOU ARE CURRENTLY WORKING ON? Well productivity decline has been widely observed in the Western Desert for oil and gas wells producing the reservoir fines. The phenomenon has been explained by the lifting, migration and subsequent plugging of the pores by the fine particles, finally resulting in permeability decrease. It has been observed in numerous core flood tests and field cases. This project concentrate on the formation damage by drilling fluids. It focuses on the impact of damage on well productivity, the major mechanisms of formation damage by drilling fluids, assessment and testing of damage, outlines considerations for mud selection and optimization, and removal of mud damage.
In my point of view, the exploration should have a mission and vision to support the petroleum geology sector.
We define formation damage for the purposes of this report as any process that impairs the permeability of reservoir formations such that hydrocarbon production (in production wells) or injectivity (in injector wells) is reduced. While formation damage can occur at all stages of well construction, during remedial treatments and during production, this paper is concerned only with damage caused by drilling fluids.
BASED ON THAT, WHAT IS THE LATEST EFFORT MADE BY EPRI CONCERNING ENHANCING THE PETROLEUM GEOLOGY FIELD IN EGYPT?
Work in progress in oil companies, service companies and academic institutions will continue to improve our knowledge, which in turn will increase the efficiency with which we produce oil and gas.
EPRI, under the chairmanship of Pro. Yasser Mostafa, enhances the petroleum geology field as well as the other sectors in Egypt’s oil field through supporting the projects that concentrate on petroleum geology.
Laboratory core flood tests had been used to determine the causes, degree, and extent of the damage. Scanning electron microscopy (SEM) was used to analyze the rock samples used for the core flood test before and after the test. A core flood test had been done to evaluate the effect of acid on damaged cores. Matrix acid stimulation on a case study from the studied field was evaluated.
Egypt has several research institutions and many of them have a petroleum geology department, such as the exploration department at EPRI.
For Example, In the Exploration department, we work on a project provided to the oil industry with an aim to increase oil production through mitigating formation damage. Also, EPRI provides new equipment to solve the petroleum industry sector’s problems; including the earth survey unit and soil analysis) in the exploration department.
Also, it was found that Bed- 15 field case study was subjected to formation damage led to a decrease in oil production by 10 to 40%.
SEPTEMBER 2021 - ISSUE 177 | 15
OVERVIEW
DIGGING DEEPER FOR EGYPT’S RICH ROCKS BY FATMA AHMED
E
gypt is blessed with featured geological nature that has allowed it to have different compositions that host various minerals and petroleum resources. The geology of Egypt consists of three layers, according to report issued by University College London. Most of the surface of modern Egypt is covered by a layer of limestone; under this, lies a bed of sandstone. While this sandstone layer is the surface rock in Nubia and southern Upper Egypt. The oldest layer includes outcrops of metamorphic and igneous rocks. The Nile River passes through sandstones and limestones from Sudan to the North of Egypt. These sandstones and limestones are forming the sedimentary rocks from which oil and gas are produced.
SEDIMENTARY ROCKS: MAIN PETROLEUM RESOURCE Sedimentary rocks are formed from the accumulation of pre-existing rocks or pieces of organisms. Most of these rocks are characterized by porosity, which are suitable for petroleum formation. Sedimentary rocks consist of three types. Clastic sediments are one type which is formed from accumulation and lithification of mechanical weathering debris. United States Geology Survey Agency (USGS) elaborated that this phenomenon occurs when the pieces of rocks are loosened by weathering, then transported to some basin or depression where sediment is trapped. If the sediment is buried deep, it becomes compacted and cemented, forming sedimentary rock. Clastic rocks classified according to their sizes or clast. The smallest grains are called clay, then silt, then sand. Grains larger than 2 millimeters are called pebbles. While shale is a rock made mostly of clay, siltstone is made up of silt-sized grains, sandstone is made of sand-sized clasts, and conglomerate is made of pebbles surrounded by a matrix of sand or mud. The porosity of this type often become excellent reservoirs for oil or natural gas. Chemical sediments are another type which are formed by chemical and organic reprecipitation of the dissolved products of chemical weathering that are removed from the weathering site, according to Britannica website. There are two types of chemical rocks including allochemical and orthochemical rocks. Allochemical rocks consist of solid precipitated nondetrital fragments (allochems) that undergo a brief history of transport and abrasion prior to deposition as nonterrigenous clasts. Limestone and cherts are examples of allocehmical rocks. Orthochemical rocks, on the other hand, consist of dissolved constituents that are directly precipitated as solid sedimentary rock and thus do not undergo transportation. These rocks include some limestones, bedded evaporite deposits of halite, gypsum, and anhydrite, and banded iron formations. The third type of sedimentary rocks are biological or organic rocks. This type is formed as a result of the accumulation of large numbers of living things. Organic rocks include chalk, coal, diatomite, dolomites and some limestones.
16 | EGYPT OIL & GAS NEWSPAPER
EGYPT’S OIL-PRODUCING ROCKS Geology of Egypt book stated that Egypt’s geological history is complex, with multiple phases of basin formation resulting in working petroleum systems from Paleozoic through Pliocene strata. According to Moqatel website, oil is produced from the Nubian sandstones, which sedimented during the middle and lower Cretaceous, Miocene and Carboniferous periods. The most oil-productive regions in Egypt are the Gulf of Suez, Western Desert and Nile Delta, where sandstones of high porosity and permeability are found. There are additional potentials in Red Sea, Upper Egypt and Western Desert. The Gulf of Suez area has the most significant oil fields in Egypt as it includes the biggest petroleum reserves. Gulf of Suez fields produce from pre-rift Eocene through Paleozoic strata on large fault blocks and syn-rift Miocene strata on both structural highs and flank traps, according to the Geology of Egypt book. Western Desert basins have a mix of oil and gas, mostly in fault-related closures. By far the deepest basin is the Abu Gharadig, which has deep, untested traps below established Mid-Cretaceous reservoirs. Consequently, the Nile Delta is a tertiary gas province and contains some of the largest fields in Egypt. Regarding Upper Egypt, it has established pays in Lower Cretaceous rifted sandstones of the poorly defined Kom Ombo Basin. The Red Sea has yet to be found productive, but good shows of recoverable oil types to Miocene source rocks have been tested by Amerada Hess Corporation.
EXPLORATION HISTORY IN EGYPT GULF OF SUEZ It is one of the oldest hydrocarbon provinces in the world. A study entitled “Brief History of the Exploration History of the Gulf of Suez” reported that the first exploration success achieved there was in 1868. It was made by a French mining company digging for sulfur. Also, commercial oil well (Gemsa D-1) was discovered there by the Egyptian government in 1886. In 1908, another commercial oil was developed by Anglo Egypt company and the Egyptian Oil Trust with the establishment of Gemsa Field. By the end of 2020, the Gulf of Suez oil production reached 43.13 mmbbl
and its natural gas production reached 33.02 bcf as well as 0.7 mmbbl of condensates, according to data from Egyptian General Petroleum Corporation (EGPC).
NILE DELTA AND MEDITERRANEAN In 1967, the first gas field discovery (Abu Madi Field) was achieved in Nile Delta at the northeastern portion, according to Egyptian Natural Gas Holding company (EGAS). Then it is followed by the discovery of Abu Qir gas field offshore Mediterranean Sea in 1967. Then, the major Abu-Gharadig gas field was discovered in 1971 onshore in the North Western Desert of Egypt. EGPC data states that the total oil production from the Nile Delta in 2020, amounts to 0.05 mmbbl in 2020, while the natural gas production reached 260 bcf in addition to 2.85 mmbbl of condensates. Moreover, the Offshore Mediterranean Deep Water was initially explored in 1975, EGAS reported. Starting from 1995, an intensive exploration campaign was started resulted in drilling 689 wells so far. The most significant achievement is the discovery of the Zohr field made by Eni in 2015. Mediterranean’s natural gas production reached 1,441 bcf while its condensates production reached 12.55 mmbbl in 2020, according to EGPC data.
WESTERN DESERT In 1962, exploration activities commenced in the western desert. During the period from 1963 to 1973, companies of Amoco (currently BP), Phillips and General Petroleum Company (GPC) drilled more than 125 wells through which they discovered the Alamein oil field in 1966, Abu Gharadig oil field in 1969, and Umbarka Field in 1969; all of which produced from Lower and Middle Cretaceous reservoirs. EGPC data reveals that the total oil production in this region until 2020 reached 102.7 million barrels (mmbbl), while natural gas production amounts to 419 billion cubic feet (bcf) in addition to 13.06 mmbbl of condensates. The geology of Egypt is compromised of the eras in which oil and gas rocks were formed. However, it can be noted that there is still a lot more that remains to be unexplored; the way to discover new resources would require efficient technological advancements and investment opportunities. This will push Egypt to discover its true overall potential.
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SEPTEMBER 2021 - ISSUE 177 | 17
ENERGY ECONOMICS
SHALE GAS
NEW GAME-CHANGER FOR ENERGY ECONOMY BY SARAH SAMIR AND AMINA HUSSEIN
P
roducing natural gas from shale has increased significantly over the past years. Shale gas was expected by the Energy Information Administration (EIA) to account for 30% of the global natural gas output by 2040.
EIA estimated the world’s total recoverable resources of shale gas at 7,299 trillion cubic feet (tcf) and estimated shale gas production to reach 168 billion cubic feet per day (bcf/d) by 2040. As several countries are using the latest technologies to extract oil and gas from unconventional resources, shale gas has become a game-changer in these countries' production and economy.
SHALE GAS EXPLORATION PERFORMANCE & EFFECTS ON PETROLEUM PERFORMANCE In 2016, natural gas accounted for 22% of the world's overall energy demand, according to the energy mix report published by the United Nations Conference on Trade and Development (UNTCAD) in 2018. The report mentioned that the demand for coal was higher than natural gas, as it recorded 27%. However, as the world is going green, people's awareness of CO2 emissions is increasing. Therefore, people are starting to adopt a more environment-friendly low-carbon lifestyle by shifting to natural gas in many applications, including factories, households, and vehicles. Natural gas consumption grew by 4.6% in 2018, accounting for half of the global demand increase in this year, according to EIA. Meanwhile, UNTICAD expected the world's natural gas consumption to be 25% of the global energy demand by 2040. In order to meet the rising demand for natural gas the world is shifting its attention into producing from unconventional shale formations and several countries have already taken steps towards producing shale gas. These countries include China, with the highest recoverable reserves recording 1,115.2 tcf, Argentina, 801.5 tcf, and Canada, 572.9 tcf, the EIA said. The countries that began their shale exploration activities further include the United Kingdom (UK), Algeria, Poland, South Africa, and Egypt. The country with the hugest shale exploration success is the US.
Thanks to the American shale revolution, the US has more energy than what is in use, and therefore it became a liquefied natural gas (LNG) supplier. “Growing LNG supply from the US means more competition, liquidity and supply diversity that will make global gas markets more flexible, efficient and secure,” Jason Bordoff, energy expert at Columbia University, stated in a report on financing clean energy transition. “Gas will trade more like oil, meaning market forces will determine price and where supply flows,” he added. An HIS report published in October 2012, reported the actual and expected economic impacts of shale gas exploration on the American economy, noting that shale gas is expected to provide 2.1 million job vacancies in 2035. Meanwhile, unconventional energy activity is expected to have value-added contributions to the US gross domestic product (GDP) reaching $475 billion per annum in 2035. Furthermore, shale gas exploration contributed to the economy of several countries. In the UK, for example, it led to an increase of up to 7% in the level of employment supported by the UK oil and gas industry sector, according to Redacted 'Rural Community Policy Unit' report published in March 2014.
SHALE EXPLORATION IN EGYPT Egypt has potential for shale gas production in four basins, Naturn, Abu Gharadig, Shoushan-Matruh, and Alamein, located in the Western Desert. The four basins are located in the Khatatba formation, which dates back to the M.Jurassic geological age. The Khatatba reservoir has around 535 tcf of shale gas in place, with approximately “100 tcf risked, technically recoverable shale gas resources,” EIA said. Egypt has already started tapping its shale gas reserves. In February 2017, Schlumberger and Khalda Petroleum Company held a presentation to showcase the success of the unconventional completion operation of the Apollonia JD gas field, located in the Abu Gharadig basin.
The US is the largest shale gas contributor since 2009, as it produced 80% of the world's shale from 2009 to 2018, according to UNTCAD.
Egypt achieved natural gas self-sufficiency in 2019. However, in fiscal year (FY) 2019/20, the country faced a petroleum trade deficit of $421 million, according to the Central Bank of Egypt (CBE).
Moreover, it is projected to be producing 2/3 of the world shale by 2040. The US owns huge shale reserves recording 662.5 tcf, according to EIA’s report.
Accordingly, Egypt exported $8.5 billion worth of petroleum products and natural gas, and imported $8.9 billion worth of petroleum to meet the high consumption.
Shale production has been widely affecting oil and gas world. It does not only affect the gas production, but it also contributed to different fields that play a role in the economy. Exploring shale gas affects other sectors like the petrochemicals sector, energy generation, transportation sector, and the liquefied petroleum gas (LPG) market.
The country is still using huge amounts of petroleum products as a fuel for industries, households, and vehicles, therefore it needs to import petroleum to meet the domestic demands.
EXPLORING SHALE TURNS THE TABLES Shale gas exploration has significantly affected the economy and turned the tables in many countries. In the US, the country has been a net exporter of natural gas for years thanks to its shale exploration. Also, its production growth is dominated by shale gas, which grows at a rate of almost 4% per year, four times faster than conventional gas, EIA estimated.
18 | EGYPT OIL & GAS NEWSPAPER
Producing natural gas from shale could help the country produce more than its current natural gas needs and eventually replace other petroleum products and decrease the petroleum trade deficit. This can also reinforce the governmental approach to use more natural gas in households and industries and the presidential initiative to use compressed natural gas (CNG) as an alternative fuel for vehicles. Exploring shale gas opens new scopes for the economy to grow, as it has helped nations to shift their fuel strategies and it will still help more nations to achieve their economic plans. Shale gas will further empower countries in their green initiatives as they increase natural gas output and lead the world to a low-carbon economic future.
INDUSTRY INSIGHTS
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POTENTIAL OF PETROLEUM IN UNEXPLORED GEOLOGICAL SITES BY RANA AL KADY
T
o begin with, the oil and gas industry has uncovered about 15.5 billion barrels of oil equivalent (bboe) of reserves since the first discovery of oil in the Eastern Desert during the late 19th century. Therefore, it is crucial to understand the future potential for multiplying Egypt's oil reserves by looking at the tectono-stratigraphic past of each significant basin, as well as drilling record and field size allocations. Additionally, the Egyptian government has continued to promote international oil firms to invest in Egypt since 1970, resulting in the ongoing and intense exploration in Egypt’s untapped unique geological makeup.
GENERAL OVERVIEW Nevertheless, before identifying Egypt’s untapped potential in unexplored geological sites, it is crucial to understand the past and current geological scene. Egypt's petroleum geology, including previous exploration history, dynamic concepts, shifting paradigms, and technological developments have nearly quadrupled the nation's reserves in the last couple of decades. Growth of current petroleum reserves that plays into Mediterranean gas patterns will be a major source of reserve replacement. Accomplishments with 3D seismic technologies in deep pool studies all across established fields, as well as for fresh stratigraphic plays off-structure, will lead to significant reserve expansion. This development potential is demonstrated by experiences from the Western Desert, the Gulf of Suez, and the Mediterranean. The Komombo, among other basins in Upper Egypt, as well as the northern end of the Red Sea rift, are far more distant new exploration regions that are presently being re-evaluated by a variety of multinational oil firms. To prove the profundity of Egypt’s potential, it was found that over 1,000 exploration wells have been drilled in the Gulf of Suez oil basin, which resulted in 240 oil finds in more than 80 oil fields, with reserves varying from 1,350 to less than 1 million barrels of oil (mboe) in reservoirs spanning from different periods. Notwithstanding its complicated history, Egypt's geological structure is well adapted to oil and gas development.
CHALLENGES FOR DISCOVERING UNTAPPED POTENTIAL
have recently been shown to possess light hydrocarbons. The extensive incursions that occurred during the Cretaceous lacustrine period resulted in an additional layer of rich source rocks and seals covering vast swaths of land. Additional source and seal layers can be found in Paleocene and Eocene incursions. Therefore, it can be noted that rifting in the Gulf of Suez and the Red Sea resulted in an international drilling operation that is now in its prime exploration phase in the Gulf of Suez while still offering a border discovery opportunity in the Red Sea. Related to the latest allocation of gas concessions in these areas, the Nile Delta and Mediterranean region are in the early stages of exploration. The large proportion of huge fields found since 1990 asserts the exploration potential of these areas. The vast amount of undrilled geology and large aerial area of this pattern imply that gigantic field breakthroughs will take a long time, with most of them being in gas prospects, but there is extra oil potential. The Geology Expert also explained that “Egypt's geology implies that commercial amounts of oil and gas might be found there. The nation's economy and the existence of millions of Egyptians depend on discovering and using such resources.” To summarize, there is an overall emphasis on petroleum systems and insights from future modeled mapping, geochemical, and seismic data in question that Egypt's producing regions offer and exciting oil and gas prospective, and we to hope for further gas finds in the Upper region, where we want to ramp up our exploratory efforts.
ex p l o r i n g d e e p e r geological regional Egypt. There is no tremendous continue Egypt
Recognizing the geological background and difficulties is necessary for discovering new oil and natural gas fields and putting them into operation. The worldwide rate of success for prospective drilling operations is about one in three, indicating that there remains a chance that an exploratory endeavor may falter. As suggested by a Geology Expert in the oil and gas field, who preferred anonymity, “Egypt is on the verge of realising untapped, or at least undiscovered, potential. The country didn't realise what's beneath the surface until geologists and oil firms conduct mandatory tests.” Reducing these risks necessitates a plan that emphasizes proven oil basins – substantial exploration in emerging economies (50%) and intense exploration in mature geological sites (25%) – while also ensuring that new reservoir exploration obtains considerable interest (25%). When approaching territory, multinational organizations must cooperate with partners to promote risk-sharing. Another challenge associated with untapping petroleum potential is that the figures for yet-to-be discovered resources are hard to measure with any precision. However, the absent field size distributions, the vast aerial expanse of rich source geology, various play and basin types, and very scarce exploration in several trends all point to a brighter tomorrow.
FUTURE WORK Exploration for oil and gas currently has to contend with resources that are more difficult to locate and describe than in the past. Engineers and geologists are continuously improving and redesigning exploration strategies in order to better predict the presence of possibilities and steer oil exploration towards the most prospective locations. In order to be able to estimate the amount of hydrocarbon resources and the geological hazards, all accessible accumulating and scholarly data, as well as geo-petroleum professional evaluations, are utilized to ensure that the prospects fulfill all of the essential requirements for hydrocarbon exploration. During the Mesozoic, Egypt's placement along the proto-Mediterranean Tethyan boundary provided plentiful hydrocarbon potential in rifts throughout the Western Desert, Nile Delta, and North Sinai. Non-marine fissures formed in Upper Egypt as a result of a possible Afro-Arabic plate separation that is still inefficiently controlled, releasing additional rock types in broad geographic regions that are still underexplored but
SEPTEMBER 2021 - ISSUE 177 | 19
LEGAL
LEGAL DEMARCATION OF MARITIME BORDERS AND EGYPTIAN NATIONAL SECURITY BY Mohamed El Haythem, M.Phil., DBA, MBA - General Manager, Foreign Companies’ Control, EGPC
T
he concept of national security is one of the most difficult and complicated concepts that are widely used, not only in Arab political discourses, but also in the political discourses around the world.
It dates back to the 17th century, specifically after the signing of the Treaty of Westphalia in 1648, which ended the religious wars in Europe. The usage of this concept spread after World War II when the United States established the National Security Council in 1947. Protecting national security is the objective of any political system that seeks to achieve internal stability. However, this is an elusive objective, and it is difficult for many countries to achieve this goal due to many internal or external security threats that it may face. For example, Egypt – the owner of the oldest civilization in history that has plenty of wealth and resources compared to other countries across the world - had been subjected to many invasions and violations that threatened its national security and internal stability. Perhaps the most recent of these threats is the encroachment on its territorial water. In the wake of the agreement signed between Turkey and Libya on the demarcation of the maritime borders, several questions were raised about maritime border demarcation in the Eastern Mediterranean as well as its impact on Egypt’s national security, especially in light of Egypt's official rejection to the agreement due to its negative impact on Egypt's political and economic interests. In December 1982, the United Nations Convention on the Law of the Sea (UNCLS) drafted a clarification that includes that coastal states may exercise sovereignty over their territorial water, but not exceeding 12 nautical miles. The territorial sea is considered to be within national borders, allowing these countries to respond to any infiltration or violation. With the discovery of oil and natural gas in deep water and beyond territorial water, as well as the huge fishery wealth there, UNCLS formulated regulations that divide the oceans and ocean water outside the territorial water of coastal countries into Exclusive Economic Zones (EEZs) bounded by 200 nautical miles from the coasts of these countries. Therefore, coastal states have the right to explore oil and gas in these EEZs, however, they have no right to control maritime navigation there since they are not considered as territorial water). In the case that the distance between two countries exceeds 400 nautical miles from the coasts, there will be no problem, because all countries set the distance at 200 nautical miles. However, if the distance between relative coastal states is below 400 nautical miles, two parties must agree to divide their maritime boundaries according to the median line between them. The most complex case is associated with the process of delimiting
20 | EGYPT OIL & GAS NEWSPAPER
the maritime border in the Eastern Mediterranean, especially that the region is witnessing historical conflicts between Turkey, Greece and Cyprus, in addition to the Arab-Israeli conflicts. In an effort to find a foothold in the Mediterranean gas cake, Turkey took advantage of the Libyan conflict to sign a memorandum of understanding (MoU) with the Libyan Government of National Accord on the demarcation of the maritime borders, an agreement that drew criticism from the European Union (EU), and repeated denunciations by the rest of the basin countries for not guaranteeing the rights of the rest of the countries of the Eastern Mediterranean. In an important step, Egypt and Greece signed the maritime border demarcation agreement during a visit Greek Foreign Minister Nikos Dendias had paid to Cairo, which represented a strong blow to Turkey that has interest over the Mediterranean’s bounties. According to the agreement, the EEZs between Egypt and Greece were set, in a step similar to what Athens had done with Rome earlier. The agreement, in accordance to the Law of The Sea between Egypt and Greece, comes on the backdrop of understandings between the two countries in the light of continuous coordination and in a proactive step by Egypt to eliminate the Turkish endeavor to expand exploiting the Libyan card for the conflict over gas in the Eastern Mediterranean. The agreement prevents Turkey from exploring for gas in the Eastern Mediterranean and it pushes the Turkish side to demarcate the maritime borders with Greece, taking into consideration that there is no common maritime border with Egypt unless Ankara swallows the island of Cyprus, which the EU is confronting and its response was strong. However, under this demarcation, Egypt will be able to explore for oil and gas in the western economic zones that overlook the maritime border with those of Greece. Moreover, Egypt and Greece will confront the illegal Turkish movements in the Mediterranean and open the way for a new phase in bilateral and regional cooperation to benefit from the wealth of the Eastern Mediterranean on the one hand and confront terrorism on the other. Actually, the strategy of the Egyptian regime in managing the Eastern Mediterranean file is not based on the vision of achieving economic interests only, but rather on reaching a consensus to appease its global and regional allies, which enhances Egyptian national security. In a nutshell, Egypt's strategy for managing the state of the Eastern Mediterranean should focus on Egypt's interests and puts Egyptian National Security achievements before pursuing economic benefits.
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SEPTEMBER 2021 - ISSUE 177 | 21
TECHNOLOGY
HYDRAULIC FRACTURING UNCERTAINTY-BASED MODEL USING MONTE CARLO TECHNIQUE BY SARAH SAMIR
L
ooking at the nature of Egypt, the country has two thirds of its oil in brownfields. Therefore, using techniques like hydraulic fracturing and horizontal drilling is unavoidable. Hydro-fracturing is not only implemented to stimulate brownfields production, but it is also used when it comes to unconventional oil and gas exploration. However, there are several uncertainties when it comes to the process.
During the fracking process, a huge amount of fluid made mainly from water, sand, and chemicals, is injected in a high pressure to stimulate the wells. Hence, it can sometimes go wrong. If the responsible operator did not study and plan carefully, hydro-fracturing can use a lot of water and affect the water level. Additionally, it can harm groundwater and the flow back can pollute rivers and streams. Therefore, it is highly recommended to use mathematical thinking and to plan ahead of the process.
considered the "gold standard for design," imaging system assessment and optimization. It helps in optimizing the acquisition parameters and estimating the performance "to design reconstruction algorithms," as discussed by IOPscience.
MONTE CARLO TECHNIQUE
USING MONTE CARLO IN FRACKING
The Monte Carlo simulation technique is a mathematical approach that is usually used to estimate the outcome of uncertain variables. It "is a stochastic method that generates random numbers to make a sample population of the system or different statistical state of variable parameters in order to achieve statistically different materials properties," according to an article published on Science Direct.
Hydraulic fracturing operations can be affected by many factors including, fluid properties, pumping rate, proppant, rock properties, and reservoir fluid. Based on these factors, the process can have many uncertainties, which can lead to wrong predictions and unprofitable outcomes. Therefore, designing an uncertainty-based model has been suggested by scholars and geologists to be used in the hydraulic fracturing process.
Monte Carlo technique helps its user in drawing a realistic analysis of risks through specialized software. The technique is used in many fields including risk management, nuclear-based imaging systems, electrical conductivity in composites, pharmaceutical manufacturing, medical physics, and more. When it comes to fields and systems like emission tomography, the Monte Carlo technique is
As the Monte Carlo technique has succeeded in many fields, papers discussed and suggested the ways in which it will be beneficial in predicting the uncertainties in the hydraulic fracturing process.
The Monte Carlo technique, which is considered a numerical analysis of the variables, can be used to identify the main parameters affecting the hydraulic fracturing process. Hence, it can help operators mitigate the risks caused by these uncertain factors and achieve better results, according to Awad Ahmed Quosay's paper, entitled 'Hydraulic Fracturing: New uncertainty-based modeling approach for process design using Monte Carlo simulation technique'. Using the Monte Carlo technique, operators can "apply uncertainty-based values on the designing analytical formulas," Quosay discussed, suggesting more emphases to "be directed to rheological modeling of the fracturing fluid." In his paper, he analyzed different parameters using the Monte Carlo numerical method. The numerical equations found out that some variables in one equation can affect another one despite the lack of direct relation. Therefore, designing an uncertaintybased model can help in enhancing the analytical model's quality. In order to achieve better results during the hydro-fracturing work, it is of great significance to consider the uncertainties around the process. Therefore, using mathematical approaches, like the Monte Carlo technique, is important. The numerical equations throughout the Monte Carlo method help the applier to identify the uncertain parameters and create a model to avoid or mitigate these uncertainties, leading to better performance and eventually high profit.
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SEPTEMBER 2021 - ISSUE 177 | 23
POLITICS
NO TIME TO WASTE AS UN REPORT SIGNALS CODE RED FOR HUMANITY BY IHAB SHAARAWY
A
new landmark UN report warned this month that human activity is changing the climate in unprecedented and, in many cases, irreversible ways.
The Intergovernmental Panel on Climate Change (IPCC) Working Group 1 report was described as a code red for humanity as it introduces what UN Secretary-General António Guterres described as irrefutable evidence that “greenhouse gas emissions from fossil-fuel burning and deforestation are choking our planet and putting billions of people at immediate risk.”
Similar events also affected China, India and more recently Turkey, where floods, triggered by torrential rain, caused some buildings to collapse, smashed bridges, blocked streets with wrecked cars and cut power supplies.
The major scientific study left no room for climate skeptics this time as it was released on the backdrop of a dramatic string of severe weather events that wreaked havoc across the world.
According to experts, climate change has been also a key factor in increasing the risk and extent of wildfires. Researches show that changes in climate create warmer, drier conditions, increasing drought and thus boost increases in wildfire risk.
The study has warned that there is no time for delay or excuses as the scorching heatwaves, wildfires, floods and drought that hit many regions across the world in recent weeks are just going to get worse if the world failed to act in a proper way as soon as possible.
Recent heatwaves and wildfires around the world have caused alarm as we watched fires consuming forests, killing wildlife from Turkey to Brazil, and from Russia to the US. Wildfires also devastated Algeria, Lebanon and Syria.
The catastrophic weather events are expected to strengthen the impact of the new report on the political decisions as it could increase pressure on governments and industries to boost their environmental-friendly measures.
However, some of the unexpected climate news comes from Greenland, where rain has fallen on the summit of its ice sheet for the first time in recorded history, increasing fears about the already precarious condition of its ice.
The report’s findings that were approved by 195 world governments are based on over 14,000 research papers that were examined by 200 scientists from across the world. The report is expected to form the basis for upcoming talks at the UN Climate Change Conference (COP26), scheduled to be held in November, where world leaders are supposed to commit to tangible policies on tackling climate change consequences.
With more than two trillion tones of water locked up in its enormous blanket of ice, it would cause sea levels around the world to increase by an average of seven meters in case of melting.
WHAT’S FUELING EXTREME WEATHER?
According to the US National Oceanic and Atmospheric Administration (NOAA), 2021 is "virtually certain" to be one of the top 10 hottest years on record.
The landmark study warns of increasingly dangerous heatwaves, flooding and droughts, and a key temperature limit being broken in just over a decade. The claim can easily be supported by different pieces of news describing the devastating impact of what used to be rare weather phenomena, but have become the norm during the last decade. Recent floods in Germany, Belgium and other areas that killed at least 220 people as towns and villages were swamped were a direct result of human-induced warming, according to researchers. A research paper that was published by the World Weather Attribution (WWA) service affirmed that global heating made rainfall events like this up to nine times more likely in Western Europe as downpours in the region are 3-19% more intense today.
24 | EGYPT OIL & GAS NEWSPAPER
The recent rainfall is a clear indication that Greenland is really warming at an unprecedented pace.
DIFFERENT SCENARIOS The past five years on our planet have been the warmest ever recorded in history, according to Guinness World Records as 1.2 trillion tones of ice are now melting each year, whilst the Atlantic Ocean unleashes more hurricanes than ever before. Unfortunately, the Middle East is one of the most vulnerable regions to climate change as it’s warming at twice the global average and by 2050 will be 4 degrees Celsius warmer as compared with the 1.5-degree mark that scientists have vied for to save humanity. According to experts, extreme climatic conditions may turn parts of this region uninhabitable before the end of this century.
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The IPPC report found that global surface temperature was 1.09C higher in the decade between 2011-2020 than between 1850-1900. It also indicates that human influence is the main driver of the global retreat of glaciers and the decrease in Arctic ice. One important indication was that consequences will continue to get worse for every bit of warming and many of these consequences are irreversible. The report says that under all the emissions scenarios considered by the scientists, targets to keep the rise in global temperatures well below 2C this century will be broken unless huge carbon cuts take place.
MORE DECARBONIZATION PRESSURE The findings, by the IPCC report, are seen as a stern wake-up call for politicians, business leaders and policymakers, who are going to meet for the Glasgow COP26 climate talks in November to address what can be seen as one of the major existential challenges in human history. However, the mission is still difficult even with all these threats on the table as a net-zero economy should involve renewable energy transition, restructuring infrastructure, employing new technologies and rethinking jobs and entire industries. Many countries around the world still can't afford such changes. Reacting to the report, many activists and politicians issued statements about the need to curb carbon emissions by eliminating the use of coal, investing in renewable energies and putting new taxes on fossil fuels. As usual in such events, fossil fuel was under fire as the UN Chief indicated that the report "must sound a death knell" for coal, oil and gas, warning that fossil fuels were destroying the planet.
Guterres also referred to the enormous financial risk to investment managers, asset owners and businesses due to the climate crisis. “These risks should be measured, disclosed and mitigated. I am asking corporate leaders to support a minimum international carbon price and align their portfolios with the Paris Agreement,” he said. Former US Vice President Al Gore called for immediate climate action, insisting that “we cannot rely on vague pledges with distant deadlines. We need concrete plans to phase out fossil fuels in the near term. As the scientists at the IPCC make clear: there is no time left to waste.” However, many experts saw the new report as a remainder for many big companies that their climate pledges to cut their emission to net-zero by 2050 are still insufficient to avert climate change effects. Many of these companies are poised to more pressure not just from governments but also from employees, customers and investors. As the new report can serve as a new tool for climate litigation, even insurance companies are starting to take climate change more seriously. One of the report’s recommendations is for the public and private sector to work together to ensure a just and rapid transformation to a net-zero global economy. Among its gloomy facts, the IPPC report also kept a sliver of hope with scientists indicating that a catastrophe can be avoided as climate systems would respond well to carbon removal. With that, there is hope that deep cuts in emissions of greenhouse gases could stabilize rising temperatures. Planting more trees, expanding carbon capture and using new technology can indeed limit the warming and its consequences. However, the question now is whether leaders will meet the moment and learn from the mistakes of the past.
SEPTEMBER 2021 - ISSUE 177 | 25
EVENT
EPDC: UNLOCKING COMPLEXITY
OF E&P OPERATIONS IN EGYPT BY FATMA AHMED
S
chlumberger and Sensia have celebrated the inauguration of the Egypt Production Digital Center (EPDC) during an event hosted by Petrojet at its headquarters in Cairo on July 14. The new digital center came as a part of Egypt’s Petroleum Sector Modernization Program, where a digitalization pillar aims to provide solutions that enable taking proper decisions across E&P operations.
EPDC aims to digitize production data from Egypt’s producing assets. Now, through EPDC, the Egyptian General Petroleum Corporation (EGPC) and all its joint ventures (JVs) are interconnected with a strong production data management system covering all Egypt’s assets. The opening ceremony was led by Abed Ezz El Regal, Chairman of EGPC and was attended by Karim Badawi, Enterprise Digital Performance Director at Schlumberger, Alan Rentcome, CEO of Sensia, Andrea Monte, VP of operations of Sensia in addition to senior officials in the petroleum sector and chairmen of national oil companies (NOCs). In his inauguration remarks, Ezz El Regal stated that “it is an honor to reflect our ultimate goal to have a fully automated process for all activities of EGPC and the whole sector.” He declared a similar plan for the refineries as well. EGPC’s chairman said that the corporation has projects such as EPG and GPS to control and audit all the production processes. Ezz El Regal expressed his wish to have a full image for each individual well from the downhole which will allow evaluating all reservoirs and the remaining reserves. During his opening note, Badawi highlighted that “Schlumberger’s purpose is that together we can create amazing technology that unlocks access to energy for the benefit of all. Schlumberger has been in Egypt for almost 84 years and we feel very proud to be a strategic partner for the sector.” Badawi noted that “EPDC is a key enabler for the Modernization Program.” He described it as a good example for how the teams connected together to bring forward the modernization of the sector for many years to come.
on a daily basis.” He Indicated that Senisa has a strong belief in the importance of data for the petroleum sector to provide technical analytics and performance insights. Also, Sherief Hassaballah, Undersecretary of Production at Ministry of Petroleum and Mineral Resources, expressed his pride in this project.
DELVING INTO EPDC
Badwai added “EPDC is one of the key enablers to bring up the visibility in terms of production in Egypt to help realize the success of the selfsufficiency in terms of gas and to bring this in terms of oil as well.” For his part, Mohamed Baydoun, Deputy of Production at EGPC, asked the chairmen of the companies to support their teams to leverage this fully integrated tool, as he described. Monte, the VP of operations of Sensia, opened the speech expressing his pleasure for participating in such an event. He praised the project as it is important for EGPC and the joint ventures (JVs).
During the ceremony, a presentation was introduced to give more information about the EPDC project. It was provided by Toufik Djeradi, Global PMO Manager and EPDC manager from Sensia and Mohamed Abbas, EPDC Project Manager from EGPC. Toufik started the presentation saying that “We teamed up towards a common goal through a shared vision and a culture of collaboration to successfully deliver the full Integrated EPDC project in a fraction of its initial planned schedule where we reduced it from 18 months to only 5 months allowing an early value creation and recovery 4000+ hours of NPT back to EGPC as well as laying down a foundation for overall Egypt oil sector digital transformation and training more than 500 engineers”
Rentcome, CEO of Sensia, said that “It is really interesting to understand more about the complexities of Egypt’s oil and gas operations. With 39 JVs and more than 5,000 wells, huge amounts of data being produced
The presentation included a quick introduction about Sensia, the business drivers behind this initiative, the journey of implementing this project with its milestones and its value. Abbas explained that
26 | EGYPT OIL & GAS NEWSPAPER
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this project started in 2016. In 2017, they started to study how JV’s will interact with this platform and how their role will look like in the future. In 2018, they started a strategic collaboration with Sensia by gathering two teams from EGPC and Schlumberger to start designing and analyzing the future platform. In 2019, they started to build the EPDC data hub software. They also, audited and evaluated the process they are going through. Then, they started their project data hub focusing on enhancing the data. Abbas noted that this process took a lot of time as they have to customize this software to fit EGPC. He declared that this platform will change the workflows within the Egyptian petroleum sector. “Now, we have the capability to supervise all the assets [across] Egypt and we have an integrated workflow between the departments of EGPC”, Abbas stated.
AWARDS AND OPTIMISM AT THE END The presenters also, introduced a demo for how the platform is working. At the end of the celebration, EGPC’s Chairman, Abed Ezz Regal has honored the team, who developed this project. He also toured an exhibition that showcased another two projects developed by Sensia. The first project is OFM software which offers quick and easy access to important information about the well. It performs production analysis and forecasting. The second solution is Avocet Expansion which provides users with technical insight into the reasons for production interruptions and shortfalls. On the sidelines of the event, Chairman of Rashid Petroleum Company (Rashpetco), Mohamed Samir, expressed his pleasure for this software noting to Egypt Oil and Gas (EOG) that “the achievement will benefit upstream companies and JV’s especially in determining the policies and plans. The integration will facilitate business for all companies.” Operation General Manager for South Dabaa of Qarun Petroleum Company, Ahmed Abdel Wahab, told EOG that “we have already applied this technology in Qarun in cooperation with Khalda petroleum Company and Schlumberger and its generalization across the sector will be a great milestone.” Also, Chairman Assistant for Operations and Board Member at Pharaonic Petroleum Company, Sayed Selim, said “This platform will facilitate decision-making process. Pharaonic has already started to link the wells to this system.” The guests expressed their pleasure for attending the event, which was the first physical event since the start of the pandemic, praising at the same time the precautionary measures that were taken during the event.
SEPTEMBER 2021 - ISSUE 177 | 27
CHOICE OF WORDS
In particular, our Egyptian assets continue to perform beyond expectations, with production averaging 2,730 boepd; consistent with full year guidance range of between 2,500 to 2,700 boepd. Further, through our H1 drilling program, we have not only been able to increase production, but also identify new growth opportunities within the license.
In Egypt, we are going to continue to operate our onshore producing assets in a way to maximize value for the benefit of all our stakeholders and to prepare to drill our material offshore exploration well as soon as practicably possible.
PATRICK ALLMAN-WARD
BRIAN LARKIN
CEO of Dana Gas
UOG’s CEO
This came when United Oil and Gas (UOG) announced its production updates in Egypt during H1 2021.
Shell Egypt is keen on offering opportunities to the Egyptian youth, and perhaps “Imagine the Future” competition is a concrete proof of this keenness, as we are creating a platform that allows a huge number of students to apply their innovative ideas to build a better future for Egypt.
KHALED KACEM
This came during Dana Gas’ announcement for its operation results of the H1 2021.
We [TAQA Power] plan to achieve that by complying with the state’s strategies for energy sustainability, while supporting the Ministry of Environment’s endeavors towards reducing emissions. We aspire to contribute to a Net-zero carbon future..
SAMY ABDELKADER Managing Director TAQA Arabia - Power Group
VP Egypt Country Chairman and Managing Director of Shell Egypt This came during Shell Egypt’s announcement of the winning team in the final phase of “Imagine the Future” competition local version
28 | EGYPT OIL & GAS NEWSPAPER
This came in the occasion of signing MoU between TAQA Power and MAN Energy for establishing Egyptian green hydrogen project
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IT + OT = IOT
A
s Oil & Gas was one of the hard-affected industries in 2020 by covid-19 pandemic crisis, the whole world has been forced to fight for economic sustainability, spotting the light on the importance of new technologies and digital transformation plans to secure business stability.
Challenges complexity, increasing day by day in oil and gas industry, is raising up the urgency of taking serious actions towards digital transformation plans to meet business needs and goals. On the top of these goals is to adopt data-driven decision-making strategies, controlling the data over all the business islands which will be achieved by integrating them over one platform, so let’s go through Information Technology (IT) and Operation Technology (OT), which represent the two main islands in any manufacturing industry. Both IT & OT used to act independently as separate islands talking different languages, as IT focuses on Enterprise Resource Planning (ERP), including financial, supply chain & HR…. Etc., Networking and security, while OT concentrates on operations and production from the engineering perspective; Scada systems, control heads and meters. Etc. Linking both islands is not a smooth project by any means. It can be considered a challenging scope, starting from security constraints passing by acquiring the best tools and platforms that can handle the huge data collected from different data sources communicated in different formats in unstructured format to be utilized efficiently Here we can refer to the Internet of Things (IoT) for playing a significant role acting as a bridge between both islands connecting them up by creating a communication channel translating their different languages (data formats) floating between sensors from the OT side to transfer and transact over the ERP in the IT side in real-time manner without human interference. let’s take maintenance as an example. It used to be applied in either preventive manner or corrective manner, therefore, the maintenance work orders used to be scheduled as per the periodical maintenance plan meanwhile, there might be untracked critical changes on the ground that need proactive actions to handle any unplanned production downtime cases which considered one of the dramatic loss factors that can affect the business progress and profit severely. The only way to overcome such scenarios is utilizing the power of data to monitor your production on the spot (Realtime) to be able to act proactively applying data-driven decisions controlling your business which will change the scene entirely. Hopefully, now we can agree on the value of applying IT / OT integration scope to achieve digital transformation goals which defiantly will improve the production efficiency, optimize the cost and plugging the wasted gains into your Return of Investment (ROI) projections. On the other hand, the top management will have full visibility over their investments by tracking all the factors affecting their profit and loss (P&L), productivity metrics and milestone monitoring presenting all elements in dynamic user-friendly dashboards accessible either through their laptops, Pads, or even their cell phones to help them to lead the present and the future 24/7. Last but not the least, Top Management support and Change Management engagement are imperative factors to lead such projects to success as it should be driven by a top-down approach to grantee teams’ cooperation and interactive response and to handle any individual stakeholder’s resistance that may hinder the success of the project as well.
SAMA AHMED Sales Manager Khwarizm Consulting
ASSET INTEGRITY MANAGEMENT AS CORNERSTONE OF SAFE, EFFICIENT PETROLEUM INDUSTRY
T
he oil and gas business is a multidisciplinary industry that is full of challenges, involving the high risk of investment in assets, operation, and working near vast supplies of hazardous substances, equipment and processes besides the environmental challenges. The integrity of oil and gas wells, as crucial assets, has to be ensured during their lifespan to sustain a successful oil and gas business. Asset integrity management system (AIMS) is a worldwide term usually used to define the asset's capacity to run effectively, accurately, and is utilized to maintain both the processes and equipment in a manner appropriate for its intended application to raise its degree of flexibility and the overall process efficiency during the asset's life cycle whilst also protecting the wellbeing of all personnel with whom it interacts. The petroleum industry needs AIMS in both upstream and downstream operations to be implemented effectively and efficiently starting from design, construction, decommissioning, and operation throughout the different levels of the asset lifecycle. Wells are the main and most crucial upstream assets. To demonstrate how this industry can go seriously dangerous, there are many possible effects of a well failure either during drilling, like the Deepwater Horizon oil spill and Montara oil spill or during production like the Piper Alpha platform. Such serious accidents placed a great emphasis on possible risks during well life cycle operations and they are key reasons behind the increasing interest in assets and well integrity enhancement. Well Integrity Management System (WIMS) establishes standardized criteria to guarantee that integrity of all wells is preserved during their lifespan in order to fulfill the expected production and injection demands, ensuring a sustained annulus pressure, which implies an existing leakage path from the reservoir. These leaks cause many severe problems regarding corrosion failure of completion strings, casing, wellhead, X-tree valves, and offshore conductors, therefore, the hydrocarbons have to be kept in their designated route through the well construction, operation, and abandonment. Risk management systems allow oil companies to assess the emerging problems and risks of drilling and exploration, challenges concerning the status and safety of critical equipment within well barrier envelope, the reasons, probability, and consequences of any possible risk, and the proper risk classification of the well status where appropriate mitigation can be advised. Applying these effective integrity procedures at all times and throughout all well drilling phases reduces the frequency of major integrity failures in HSE, assets, and production plus preserving the local and public image of the company. The major elements of accountability and responsibility are well operations procedures, well intervention procedures, tubing and casing integrity program, wellhead and X-tree maintenance, degrading problems such as casing wear, corrosive fluids, and drag forces taking into consideration that servicing would get harder as the asset matures. I consider that a successful well integrity management system should include WIM Philosophy, accountable qualified person, qualified procedures, monitoring, and maintenance program and intervention policy. I strongly believe that a vision of obtaining effective AIM throughout the asset lifecycle of oil and gas assets requires a set of tools to deliver this vision, which includes assurance and verification, control and monitoring, competence management, planning, maintenance management, and compliance with the HSE requirement for a safe operation. An effective response to the asset integrity challenges requires a committed and adaptable leadership that adopts the culture of change to ensure sustainable implementation. A perceptible interest is given for asset integrity over last years under the guidance of the Minister of Petroleum and Mineral Resources who launched a program for asset integrity management and capacity building as a part of petroleum sector modernization and development plan, which reflects the governmental interest in developing and investing in the human factor and youth empowerment in accordance with the long term sustainable development plan and Egypt’s Vision 2030.
BY MOHAMED ALI AMER Petroleum engineer (Subsurface operations and production) Al Mansoura Petroleum Company
SEPTEMBER 2021 - ISSUE 177 | 29
ECONOMIC SNAPSHOT
VALUE AND VOLUME OF SHARES TRADED FOR OIL & GAS SECTOR IN JULY 2021
MAIN ECONOMIC INDICATORS
VALUE TRADED (EGP BILLION) ENERGY & SUPPORT SERVICES
0.28
TOTAL
24.67
June 2021
ANNUAL INFLATION HEADLINE CPI (%)
% OF TOTAL VALUE TRADED
0.081
NET INTERNATIONAL RESERVES ($ BILLION)
40.609
40.584
% OF TOTAL VOLUME TRADED
1.09
7.49
TOTAL
5.4
4.9
1.13
VOLUME TRADED (BILLION SHARES) ENERGY & SUPPORT SERVICES
July 2021
NON-OIL PRIVATE SECTOR PMI (POINTS)
49.9
49.1
PERFORMANCE OF PETROLEUM COMPANIES IN THE EGYPTIAN EXCHANGE IN JULY 2021
£
$
EXCHANGE RATES
€
British Pound
NATIONAL DRILLING CURRENCY
CLOSE PRICE
YTD PRICE CHANGE (%)
USD
4.69
-
21.92
21.83
21.72
18.60
18.70
18.49
18.50
15.74
15.75
15.75
15.75
Week 1
Week 2
Week 3
JULY
CURRENCY
CLOSE PRICE
YTD PRICE CHANGE (%)
EGP
3.57
14.42
USD
21.79
Week 4
ALEXANDRIA MINERAL OILS CO.
EUR
AUGUST
CAPITAL MARKET INDICATORS EGX 30
EGYPT GAS CURRENCY
CLOSE PRICE
YTD PRICE CHANGE (%)
EGP
42.23
3.08
CLOSE PRICE
YTD PRICE CHANGE (%)
EGP
12.35
32.65
Source of Raw Data: CBE, CAPMAS, Egyptian Exchange, IHS Markit
30 | EGYPT OIL & GAS NEWSPAPER
10,809
10,723
2,764 3,742
CURRENCY
EGX 100 EWI
10,855 10,742
SIDI KERIR PETROCHEMICALS
EGX 70 EWI
25 - 29 JULY
2,824 3,805
1- 5 AUG
2,871 3,847
8 - 11 AUG
2,908
3,870
15 - 19 AUG
WWW.EGYPTOIL-GAS.COM
EGYPT STATS
UOG EGYPT LATEST UPDATES
TRANSGLOBE EGYPT OPERATIONAL & FINANCIAL UPDATES IN 2021
PRODUCTION UPDATES IN 2021
OPERATIONAL HIGHLIGHTS Average Production (boe/d)
2021
2,937
Q2 H1 (Actual)
2,730
H1 (Guidance)
2,300-2,500
Full Year (Guidance)
2 Drilled Wells
Q2: 10,727 boe/d
Type: Development
July: 11,308 bbl/d
Location: West Bakr
FINANCIAL HIGHLIGHTS IN Q2
2,500-2,700
H1 2021 DRILLING CAMPAIGN IN ABU SENNAN Well
Average Production
Production Start
Production Rate (boe/d)
Net Production to UOG (boe/d)
ASH-3
March
4,000
880
ASD1-X
May
600
132
ASH1ST2
May
1,200
256
AJ- 8
August
2,819 (initial)
620
Sales to EGPC
366.3 mmbbl
Net Proceeds
$22.2 million $60.27/bbl
Average Realized Price
PETROLEUM GEOGRAPHIC ZONE IN ASSIUT HIGHLIGHTS High-octane Complex
ANOPC Diesel Complex Project
$450 million
$2.9 billion
Investments Production Capacity : 800,000 t
SDX SPUDS HA-1X EXPLORATION WELL IN SOUTH DISOUQ
Spudding Date
4 August
Targeted Prospect
Basal Kafr El Sheikh
Gross Unrisked Mean Recoverable Volume
Chance of Success
139 bcf
33%
SDX Working Interest
55%
Investments
CNG STATIONS EXPANSION PLAN
Drilling Duration
Stations
Number
Before the Presidential Initiative
208
Recently Added
185
To Enter Service
71
Initiative Plan
1,000
1 month
INTERNATIONAL OIL PRICES BRENT PRICES 10 June
72.52
70.90 75.13
30 June 16 July
OPEC BASKET PRICES
72.84 76.33
30 July
3.15 73.60
73.59
71.29
70.34
17 August
69.03
69.40
3.65 3.67
74.98
5 August
NATURAL GAS PRICES
3.91 4.14 3.84
SEPTEMBER 2021 - ISSUE 177 | 31