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Wednesday, May 27, 2015
Egypt is getting closer to adding shale gas to its energy mix with the news that Shell and Apache Corp. will start production from the Apollonia field in the Western Desert early next year, with a second coming onstream in H2 2016.
Apache’s JV in Egypt, the Khalda Petroleum Co., is carrying out operations for both companies.
Khalda Petroleum will start drilling two experimental wells, data and pilot wells, in the Apollonia field. Core samples and logging will be taken to study and evaluate the field, said Tarek El Molla, Chairman of the Egyptian General Petroleum Corp. (EGPC), in an interview with Daily News Egypt.
Drilling operations are expected to start on the first well by the end of May, with the second well to start upon completion of the first if the study of core samples and well logs indicate positive results. The two companies will start drilling the horizontal wells in November. The first well will be drilled and completed and the same will take place for the second one by H2 2016, according to El Molla.
The deal for the two firms to take on shale gas exploration was signed with EGPC in December.
Construction works of surface facilities will start in September and last through December, while the first well will be linked to the facilities by the beginning of January 2016.
Shell and Apache may be the first to strike the shale gas bell in Egypt, but there is little doubt that they will not be the only ones involved in this sector of the industry that is so new to the country. While unconventionals are not the latest fad in the majority of MENA countries, Egypt has a different economic situation than other countries in the region as it has gone from a net exporter to a net importer of gas (as well as oil a number of years ago). The importation of gas is proving to be a budget buster for the government, and while shale gas exploration and extraction is more expensive than conventional resources, the economics, or the breakeven of shale extraction make more sense for Egypt than it would for the majority of its fellow MENA region countries.
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