Western Desert Is Egypt’s Treasure

Hot Setting, Hot Play

There’s an undeniable historical and cultural mystique about Egypt – but for geoscientists, the allure goes far deeper.

Egypt’s oasis-dotted Western Desert, which covers about one million square miles, or two-thirds of the country, has become a destination not only for tourists but for oil and gas operators as well.

The whole of Egypt is comprised of three desert regions: the Western Desert and Eastern Desert – separated by the Nile – and the Sinai peninsula, which juts out into the Red Sea.

In the late 1990s, oil production in the Western Desert accounted for close to 16 percent of Egypt’s total daily oil production, according to a study conducted at the University of Manchester. The region’s gas fields kicked out about 30 percent of the country’s total gas production.

Egypt’s demand for natural gas as an energy source is growing right along with its expanding population. Consequently, the big story today is the increasing focus on the natural gas potential in the gas-rich Western Desert, according to AAPG member Fred Wehr, deputy exploration manager for Khalda Petroleum Company/Apache.

An Active Role

Apache recognized the region’s hydrocarbon promise early on, establishing its role as an operator in Egypt in 1996.

“We’re the largest producer of liquid hydrocarbons and natural gas in the Western Desert, which is our primary focus,” said Bill Mintz, director of public and international affairs at Apache. “We’re also the most active driller.”

At the end of 2006, the company’s Egypt portfolio included approximately 10.2 million gross acres in 19 separate concessions. Development leases within concessions generally have a 25-year life with extensions possible for added commercial discoveries.

Image Caption

The big story in Egypt lies in its gas-rich Western Desert.
Photo courtesy of Apache Corporation

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There’s an undeniable historical and cultural mystique about Egypt – but for geoscientists, the allure goes far deeper.

Egypt’s oasis-dotted Western Desert, which covers about one million square miles, or two-thirds of the country, has become a destination not only for tourists but for oil and gas operators as well.

The whole of Egypt is comprised of three desert regions: the Western Desert and Eastern Desert – separated by the Nile – and the Sinai peninsula, which juts out into the Red Sea.

In the late 1990s, oil production in the Western Desert accounted for close to 16 percent of Egypt’s total daily oil production, according to a study conducted at the University of Manchester. The region’s gas fields kicked out about 30 percent of the country’s total gas production.

Egypt’s demand for natural gas as an energy source is growing right along with its expanding population. Consequently, the big story today is the increasing focus on the natural gas potential in the gas-rich Western Desert, according to AAPG member Fred Wehr, deputy exploration manager for Khalda Petroleum Company/Apache.

An Active Role

Apache recognized the region’s hydrocarbon promise early on, establishing its role as an operator in Egypt in 1996.

“We’re the largest producer of liquid hydrocarbons and natural gas in the Western Desert, which is our primary focus,” said Bill Mintz, director of public and international affairs at Apache. “We’re also the most active driller.”

At the end of 2006, the company’s Egypt portfolio included approximately 10.2 million gross acres in 19 separate concessions. Development leases within concessions generally have a 25-year life with extensions possible for added commercial discoveries.

During 2006, Apache completed 140 wells out of 163 drilled, and production tallied 34 MMboe, with estimated proved reserves pegged at 282 MMboe. Current daily production stands at 120,000 barrels of oil and condensate and 525 MMcfg.

Apache drilled the largest discovery in its history in 2005 at the Qasr Field on its Khalda Concession in the Western Desert. The discovery had gross proved reserves of two Tcf of gas and 65 MMbo of condensate.

Production from Qasr to date totals more than 115 Bcf and 6.3 MMbo of condensate from the Jurassic Lower Safa formation, which is a thick package of amalgamated braided fluvial sandstones having good to excellent reservoir characteristics, Wehr noted.

Qasr has additional production from the shallower Cretaceous Alam el Buieb formation.

Seismic Coverage

Three-dimensional seismic data play a prominent role in Apache’s operations.

In fact, the company has acquired 24,000 square kilometers of seismic over its Egyptian holdings.

“We’ve been very aggressive about getting 3-D seismic coverage across the desert,” Mintz said. “There had been some earlier problems with 3-D imaging in the desert, but we kind of solved that mystery and opened up a lot of opportunities there.”

But at the end of the day it’s all about the geology.

“What’s important about where we’ve been successful in Egypt is the geology is favorable,” said AAPG member Rod Eichler, president of Apache Egypt Companies. “One of the criteria for finding an entry point into Egypt was finding … favorable petroleum systems.

“In the Western Desert, the stratigraphy is a significant series of stacked sandstone sequences,” Eichler noted.

“Predominantly, the reservoirs we look at are in the Cretaceous and Jurassic – the Jurassic is largely gas and gas condensate, very rich.”

Still, there’s no such thing as a slam-dunk when dealing with hydrocarbon reservoirs.

“In the Jurassic and especially the Cretaceous, you see a tidal influence through the section, and it makes the reservoir geometry when you get down to a development scale quite complicated,” Wehr said. “You have a complex pattern of nested estuarine deposits that can be a challenge to produce.

“Most of our targets are multiple targets,” he said, “and especially in the Cretaceous reservoirs this has allowed us to use the lower risk target as a kind of safety net and try some interesting and kind of risky things. You couldn’t justify trying this with a single objective, and if these things work they can be used in other wells.

“We don’t have seismic support for things like incised valley channels,” Wehr added. “This is onshore and there aren’t the impedance properties we need, so we tend to use a lot of well-based correlations to find by-passed pay in these fields.

“By being able to stack up targets, this is one of the ways over the last five years we really grew production in the Khalda Concession – going into existing fields and really jerking them hard with a lot of infill drilling.”

Wehr noted the younger (Cretaceous) reservoirs typically are oil and require waterflood support in the youngest members due to lack of a strong aquifer.

“Overall the succession in the Western Desert is quite sandy, and the limiting factor on hydrocarbon accumulation is top seal,” Wehr said. “A lot of times you’re drilling through 500 feet of sand to find a 30-foot oil column, but you’re not looking for a sand in a sea of shales; you’re trying to find that one top seal juxtaposed with the sand right under the top seal.

“Typically what we’re prospecting for in oil exploration and development are these top seals.”

Apache clearly has high aspirations for its future in this region.

The company struck an MOU with the Egyptian government to double its production by year-end 2010, according to Mintz.

The program, which is referred to in-house as “two times production,” or 2X, is focused on the company’s existing concessions for the most part.

The five-year project involves about $3.2 billion in capital expenditures to be divvied up among gas processing and distribution facilities, exploitation (primarily waterflood activities) and high potential exploration activity.

In return for this ramped-up effort, Apache is asking the Egyptian government to help by streamlining the bureaucratic processes of procurement and permitting to enable the company to work at the pace required to accomplish its goal.

The effort has the potential to pump considerable sums of money into the Egyptian treasury in addition to providing jobs and energy resources to help develop the economy.

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