Egypt Awards Oil, Gas Contracts to Accelerate Exploration Pace

State-run Egyptian Natural Gas Holding Co. has awarded eight oil and gas prospection projects in the Mediterranean Sea for an overall minimum investment of $1.2 billion as the country seeks to increase its fossil fuel production and reserves.

BP PLC, Ireland's Petroceltic International PLC, Italy's Eni SpA, Edison and IEOC, a subsidiary of Eni group, Canada's Sea Dragon Energy, United Arab Emirates' Dana Gas PJSC and Australia's Pura Vida Energy NL won the blocks, the oil ministry said in a statement posted on its website late Tuesday.

The awards were the result of an international tender which received 13 offers. The winning companies will drill a minimum of 18 wells and will pay $73.2 million for the licenses, it said.

"Issuing international tenders is part of the ministry of oil's strategies to intensify oil and gas exploration activities to secure new energy supplies...and encourage international firms to pump more investments in research, exploration and development," energy minister Osama Kamal said in the statement.

Mr. Kamal has previously said that investments in oil and gas exploration are expected to reach $8.6 billion this year.

Egypt has seen its oil and gas exploration activities slowing over the past couple of years due the continuing unrest since the ousting of former president Hosni Mubarak. The country has been paying hefty premiums for its crude supplies due to the weaker Egyptian pound and difficulties in securing letters of credit for its transactions, while a shortage of state-subsided diesel has already paralyzed transportation in many parts of the country.

Last year, Mr. Kamal allowed private firms to imports gas to meet the country's soaring energy demand.

The civil unrest has also led to a risky economic mix of dwindling foreign-exchange reserves, declining tourism revenue and costly price subsidies, economists said. To prop up the Egyptian currency, the central bank has gone through nearly two-thirds of its foreign-currency reserves, pushing the country to the brink of a liquidity crisis.

Egypt is in the throes of trying to secure a $4.8 billion loan from the International Monetary Fund, a move viewed as critical to rescuing its economy and mending its reputation as a place to do business.

People close to the talks say the IMF wants to see Egypt reduce its subsidy spending as part of a reform plan for the loan. But any subsidy changes will likely only enrage further the legions of poor who rely daily on cheap fuel, making the already uncomfortable summer months all that more unbearable.

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Egypt Says It Will Invest To Raise Oil Output

DUBAI - Cash-strapped Egypt will spend $18 billion over coming years to build new refineries and modify existing plants in a move to increase its annual fuel output, the country's oil minister said in an interview with Al Tahrir Television.

"There are some urgent measures to be taken this fiscal year to operate some refineries safely ... and there are measures in the next couple of years to lift the output of the existing refineries from the current 25-26 metric tons a year to more than 30 million tons," Osama Kamal told the Egyptian channel.

Overall "we have decided in November to invest $18 billion until 2017 to build new refineries and upgrade the existing refineries we have," he said.

Egypt has been paying hefty premiums for its crude deliveries for its refineries due to a weaker pound and difficulties in securing letters of credit for its transactions, while a shortage of state-subsided diesel has paralyzed transportation in many parts of the country.

Continuing unrest in the country since the ousting of former President Hosni Mubarak has led to a risky economic mix of dwindling foreign-exchange reserves, declining tourism revenue and costly price subsidies, economists said. To prop up the Egyptian currency, the central bank has gone through nearly two-thirds of its foreign-currency reserves, pushing the country to the brink of a liquidity crisis.

Egypt is trying to secure a $4.8 billion loan from the International Monetary Fund, a move viewed as critical to rescuing its economy and mending its reputation as a place to do business.

The IMF wants Egypt to reduce its subsidy spending, as part of a reform plan for the loan, say those close to the talks. But any subsidy changes would likely only enrage the legions of poor who rely on cheap fuel.

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Egypt Says It Will Invest To Raise Oil Output

DUBAI - Cash-strapped Egypt will spend $18 billion over coming years to build new refineries and modify existing plants in a move to increase its annual fuel output, the country's oil minister said in an interview with Al Tahrir Television.

"There are some urgent measures to be taken this fiscal year to operate some refineries safely ... and there are measures in the next couple of years to lift the output of the existing refineries from the current 25-26 metric tons a year to more than 30 million tons," Osama Kamal told the Egyptian channel.

Overall "we have decided in November to invest $18 billion until 2017 to build new refineries and upgrade the existing refineries we have," he said.

Egypt has been paying hefty premiums for its crude deliveries for its refineries due to a weaker pound and difficulties in securing letters of credit for its transactions, while a shortage of state-subsided diesel has paralyzed transportation in many parts of the country.

Continuing unrest in the country since the ousting of former President Hosni Mubarak has led to a risky economic mix of dwindling foreign-exchange reserves, declining tourism revenue and costly price subsidies, economists said. To prop up the Egyptian currency, the central bank has gone through nearly two-thirds of its foreign-currency reserves, pushing the country to the brink of a liquidity crisis.

Egypt is trying to secure a $4.8 billion loan from the International Monetary Fund, a move viewed as critical to rescuing its economy and mending its reputation as a place to do business.

The IMF wants Egypt to reduce its subsidy spending, as part of a reform plan for the loan, say those close to the talks. But any subsidy changes would likely only enrage the legions of poor who rely on cheap fuel.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Foster Wheeler Wins Technical Consultancy Contract in Egypt

Foster Wheeler AG (FWLT) announced that subsidiaries of its Global Engineering and Construction Group have been awarded contracts by Apache Khalda Corporation LDC (Apache Khalda) for the provision of technical consultancy services to oversee the engineering, procurement and construction (EPC) phase of the Qasr Compression Project in Egypt. The Qasr Compression Project will provide additional compression to the existing facilities at the Qasr gas condensate field, in the Western Desert, approximately 326 miles (525 kilometers) west of Cairo.

The Foster Wheeler contract value was not disclosed and will be included in the first-quarter 2013 bookings.

Foster Wheeler will assist Apache Khalda in the management and administration of the EPC phase of the project as part of a joint project management team. The EPC phase is expected to be completed in the first- quarter 2015.

The company also provided project management consultancy services to Apache Khalda during the front-end engineering design phase.

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Sea Dragon Boosts Output in Egypt

Sea Dragon Energy Inc. announced the following operational update for its recent work activities in Egypt.

The company's net production in Egypt averaged 1,526 barrels of oil per day (bopd) in the month of January 2013 and has now reached 1,840 barrels of oil equivalent per day (boepd) or 1,720 bopd and 120 boepd in gas and NGL's. In NW Gemsa, oil production is averaging 9,900 bopd gross (990 bopd net), while gas and NGL's are adding another 1,200 boepd gross (120 boepd net). In Kom Ombo, production is averaging 500 bopd gross (250 bopd net); while in Shukhier Marine the company is producing 480 bopd.

Over the past two months, Sea Dragon has also been able to collect a significant percentage of its aging receivables thus enabling it to reduce the receivables amount to $4.63 million and the age of its receivables to two months based on current production.

Current production from the Al Amir SE and Geyad fields is approximately 9,900 bopd gross (990 bopd net). Total production, including solution gas and natural gas liquids, is approximately 11,100 boepd gross (1,110 boepd net). The concession has eight current oil producers at Al Amir SE field, two at Al Ola and five at Geyad. Cumulative production from the NW Gemsa Concession has now exceeded 10.6 million barrels of 42 degree API Crude oil.

Water injection is ongoing with three injectors currently operating at Al Amir SE Field and one injector at Geyad Field. Current total injection rates are approximately 17,800 bopd. Cumulative injection to date is 6.9 million barrels at Al Amir SE and 1.7 million barrels at Geyad.

Al Amir SE-16 Well

This well is now being completed as a Shagar water injector. The well was spud Feb. 28 and successfully drilled to its total depth of 11,000 feet in the Upper Rudeis Formation. It encountered 27 feet of good quality wet sand in the shagar member of the Karim Formation in the interval 10,807.5 to 10,834.5 feet. This well will add another water injection point in the field, which will improve sweep efficiency and maximize oil recovery.

Future Plans

Beyond the completion of Al Amir SE-16, future plans at NW Gemsa include the drilling of two additional water injectors, one producer and one exploration well in 2013.

The NW Gemsa concession is located onshore on the west side of the Gulf of Suez, approximately 186 miles (300 kilometers) southeast of Cairo. Two main oil fields are producing light oil, the Al Amir SE field along with the Al Ola extension to the south and the Geyad field to the north. Sea Dragon has a 10 percent working interest in the NW Gemsa Concession with Vegas oil and gas at 50 percent, as operator and Circle Oil PLC with 40 percent.

The Shukheir Marine Concession contains both the Shukheir Bay and Gamma development leases.

Current production from the concession is 480 bopd. Sea Dragon is the sole owner and operator of the concession.

Shukheir Bay #5 Well Work-Over

Following the successful completion of work-over operations on this well, it has now recovered its kill fluid and restored its pre work-over production of 380 bopd. The SHB-5 well produces from the Upper and Lower Rudeis sands within the Shukheir Bay field. The well began production in 2006 and has produced over 1.1 million barrels of oil to date.

Future Plans

The company continues to plan an acid stimulation treatment in the Gamma #1 well which may add 100 bopd.

Exploratory drilling opportunities also exist in the Gamma lease, prospecting the prolific Nubia Formation and in the Shukheir Bay lease in the Upper and Lower Rudeis Formations. The Company is currently re-mapping its 3-D seismic coverage in the area to evaluate these opportunities.

The Shukheir Marine Concession is located in the shallow offshore waters of the Gulf of Suez approximately 186 miles (300 kilometers) southeast of Cairo. Following the acquisition of 100 percent interest in the concession which contains both the Shukheir Bay and Gamma oil fields, Sea Dragon began a comprehensive review of the upside potential believed to still exist in both fields.

Current production from the Al Baraka field is approximately 500 gross (250 net) bopd.

Future Plans

Plans are to monitor production from West Al Baraka-2 and then if warranted commence an appraisal/development drilling program which could involve the drilling of up to three new wells.

The Kom Ombo Concession is located onshore in the southern part of Egypt some 621 miles (1,000 kilometers) south of Cairo. It contains the Al Baraka and the newly discovered W. Al Baraka oilfields, producing light oil from multiple reservoirs. Sea Dragon owns a 50 percent working interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50 percent.

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Sea Dragon Boosts Output in Egypt

Sea Dragon Energy Inc. announced the following operational update for its recent work activities in Egypt.

The company's net production in Egypt averaged 1,526 barrels of oil per day (bopd) in the month of January 2013 and has now reached 1,840 barrels of oil equivalent per day (boepd) or 1,720 bopd and 120 boepd in gas and NGL's. In NW Gemsa, oil production is averaging 9,900 bopd gross (990 bopd net), while gas and NGL's are adding another 1,200 boepd gross (120 boepd net). In Kom Ombo, production is averaging 500 bopd gross (250 bopd net); while in Shukhier Marine the company is producing 480 bopd.

Over the past two months, Sea Dragon has also been able to collect a significant percentage of its aging receivables thus enabling it to reduce the receivables amount to $4.63 million and the age of its receivables to two months based on current production.

Current production from the Al Amir SE and Geyad fields is approximately 9,900 bopd gross (990 bopd net). Total production, including solution gas and natural gas liquids, is approximately 11,100 boepd gross (1,110 boepd net). The concession has eight current oil producers at Al Amir SE field, two at Al Ola and five at Geyad. Cumulative production from the NW Gemsa Concession has now exceeded 10.6 million barrels of 42 degree API Crude oil.

Water injection is ongoing with three injectors currently operating at Al Amir SE Field and one injector at Geyad Field. Current total injection rates are approximately 17,800 bopd. Cumulative injection to date is 6.9 million barrels at Al Amir SE and 1.7 million barrels at Geyad.

Al Amir SE-16 Well

This well is now being completed as a Shagar water injector. The well was spud Feb. 28 and successfully drilled to its total depth of 11,000 feet in the Upper Rudeis Formation. It encountered 27 feet of good quality wet sand in the shagar member of the Karim Formation in the interval 10,807.5 to 10,834.5 feet. This well will add another water injection point in the field, which will improve sweep efficiency and maximize oil recovery.

Future Plans

Beyond the completion of Al Amir SE-16, future plans at NW Gemsa include the drilling of two additional water injectors, one producer and one exploration well in 2013.

The NW Gemsa concession is located onshore on the west side of the Gulf of Suez, approximately 186 miles (300 kilometers) southeast of Cairo. Two main oil fields are producing light oil, the Al Amir SE field along with the Al Ola extension to the south and the Geyad field to the north. Sea Dragon has a 10 percent working interest in the NW Gemsa Concession with Vegas oil and gas at 50 percent, as operator and Circle Oil PLC with 40 percent.

The Shukheir Marine Concession contains both the Shukheir Bay and Gamma development leases.

Current production from the concession is 480 bopd. Sea Dragon is the sole owner and operator of the concession.

Shukheir Bay #5 Well Work-Over

Following the successful completion of work-over operations on this well, it has now recovered its kill fluid and restored its pre work-over production of 380 bopd. The SHB-5 well produces from the Upper and Lower Rudeis sands within the Shukheir Bay field. The well began production in 2006 and has produced over 1.1 million barrels of oil to date.

Future Plans

The company continues to plan an acid stimulation treatment in the Gamma #1 well which may add 100 bopd.

Exploratory drilling opportunities also exist in the Gamma lease, prospecting the prolific Nubia Formation and in the Shukheir Bay lease in the Upper and Lower Rudeis Formations. The Company is currently re-mapping its 3-D seismic coverage in the area to evaluate these opportunities.

The Shukheir Marine Concession is located in the shallow offshore waters of the Gulf of Suez approximately 186 miles (300 kilometers) southeast of Cairo. Following the acquisition of 100 percent interest in the concession which contains both the Shukheir Bay and Gamma oil fields, Sea Dragon began a comprehensive review of the upside potential believed to still exist in both fields.

Current production from the Al Baraka field is approximately 500 gross (250 net) bopd.

Future Plans

Plans are to monitor production from West Al Baraka-2 and then if warranted commence an appraisal/development drilling program which could involve the drilling of up to three new wells.

The Kom Ombo Concession is located onshore in the southern part of Egypt some 621 miles (1,000 kilometers) south of Cairo. It contains the Al Baraka and the newly discovered W. Al Baraka oilfields, producing light oil from multiple reservoirs. Sea Dragon owns a 50 percent working interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50 percent.

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Circle Oil Reports New Egypt Well Put on Production

Middle East-focused junior energy firm Circle Oil reported Thursday that its infill production well, AASE-14X ST, on the Al Amir SE field, Egypt, has been put on production. The stabilized rate of the well was 1,333 barrels of oil per day (bopd) March 5 and 1.4 million standard cubic feet of gas per day (MMscf/d).

The production start-up of the well came after drilling encountered two oil-bearing sands (Rahmi and Shagar) that had 16 feet and 13 feet of net pay respectively. The initial test rate was 3,486 bopd and 3.18 (MMscf/d).

AASE-14X ST is located centrally on the Al Amir SE field, between AASE-1X ST and AASE-12X ST.

The rig used to drill the well has now been released and moved to start drilling the AASE-16X well – a water-injector located in the central western area of the field.

Gross production from the AASE and Geyad fields, where Circle is active, currently stands at 9,600 bopd and 10 MMscf/d.

Circle CEO Professor Chris Green commented in a company statement:

"Circle is very pleased with the positive flow rates from the Rahmi sands of the AASE-14X ST well, where the upside of the Shagar sands remains a target for future production. The rig has been moved to drill the AASE-16X water injector well, which was spud in early March."

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Circle Oil Updates Production Activities in Egypt

Circle Oil Plc announced the following update regarding the Al Amir SE field ("AASE") and the Geyad field.

Infill production well AASE -14X, located centrally in the field midway between AASE-1X ST1 and AASE-12X ST1 was spud Nov. 26, 2012. The well was planned as a Shagar and Rahmi sand producer and was sidetracked for geological reasons Jan. 4 as AASE-14X ST1. The well has encountered 20 feet measured depth (MD) of gross Shagar sand (9,610-9,630 feet MD) with 16 feet MD net pay, plus 15 feet MD of gross Rahmi sand (9,680-9,695 feet MD) with 13 feet MD net pay, with a total depth of 10,000 feet MD. The well is now planned to be completed as a producer and an update will issue once flow testing is completed.

Production from the AASE and Geyad fields averaged 9,091 barrels of oil per day (bopd) (gross) through January 2013. Cumulative production from the NW Gemsa Concession has now exceeded 10.4 million barrels of 42 degree API Crude oil.

The 12 inch gas pipeline has now been tied in and gas production started up Feb. 12. The initial flow rate at start-up was 8 million square cubic feet per day (MMscf/d), or 1,456 barrels of oil equivalent per day (boepd), and is currently 9 MMscf/d (1,638 boepd). The gas is rich in extractable liquids that will add significantly to the income stream for Circle. Gas processing is expected to provide an additional 140 - 150 bocd and 35 tonnes (c. 400 boepd) of LNG per day.

Work on finalizing the development and day to day operations of the AASE and Geyad fields will continue through 2013. The 2013 work program includes the drilling of 4 further wells (1 producer and 3 injectors) in the first half of the year.

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 100 square miles (260 square kilometers), lies about 186 miles (300 kilometers) southeast of Cairo in a partially unexplored area of the Gulf of Suez Basin.

The concession agreement includes the right of conversion to a production license of 20 years, plus extensions, in the event of commercial discoveries. The NW Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest) and Sea Dragon Energy (10% interest).

Prof Chris Green, CEO, said:

"Circle is very pleased that the AASE-14X ST1 well has encountered pay intervals as prognosed in the Shagar and Rahmi sands and will be completed as a producer to complement the production levels from the AASE field.

The start up of gas flow through the 12" pipeline from our Geyad and AASE fields is another significant step forward as this production is expected to add approximately 2,000 boepd to the daily gross production."

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