EXCLUSIVE: Egypt gas blocks have significant hydrocarbon potential

18 June 2018
Cairo has offered 27 oil and gas exploration blocks in total in a massive licensing round

Egypt has offered 16 natural gas blocks in its new upstream licensing round, all of which contain "significant hydrocarbon potential", a source close to the exercise tells MEED.

In its latest licensing round launched on 21 May, Egypt offered a total of 27 oil and gas exploration blocks – 11 oil blocks managed by state-run Egyptian General Petroleum Corporation (EGPC), and 16 gas blocks operated by state-owned Egyptian Natural Gas Holding Company (EGAS).

“Most of these [gas] blocks lie adjacent to nearby fields and discoveries," the source says. "These are prolific basins in the Nile Delta as well as the offshore parts of the Mediterranean. Some of those are close to the recently discovered giant gas field in the Mediterranean – the Zohr gas field, operated by [Italy’s] Eni.

“From the technical point of view this is an indication that there is a hydrocarbon system in the area.”

The last date for submitting bids for the EGPC oil blocks is 1 October, while the deadline for submitting bids for the EGAS licensing round is 8 October.

The source says the EGAS deadline can be extended by “up to three months” if bidders request more time.

Of the 16 gas blocks, 13 are located offshore and 3 onshore, the source says. Most of the blocks are located in moderate to ultra-deep levels, although a few are in shallow sandstone formations.

When asked for an estimate of the total combined gas reserves of the 16 blocks, the source said: “All exploration blocks in our total acreage gives us recoverable volumes. The reserves have to be proved by [the explorers by] drilling the wells.”

However, Eni’s discoveries of the giant Zohr field in 2015 and the Calypso gas development in Cyprus’ waters announced in February, significantly raises the hydrocarbon potential of EGAS’ East Mediterranean and Nile Delta blocks, the source says.

“The good news is that on the Cyprus side they have recently announced the Calypso gas discovery. Having Zohr and Calypso is good news, as we may find the same play again."

While EGAS’ blocks are predominantly rich in gas and condensates, Block 1 or the offshore shallow-water West El Arish block, which is bordered by Egypt’s Mediterranean coastline on the south, also has some potential oil deposits, the source says.

“This well encountered oil play in the lower position sandstone, this well could have 10,000 barrels of oil," the source tells MEED. "The discovery has never been developed. There were two appraisal wells drilled afterwards … (but) there was minor volume in this accumulation, so it has never been developed."

The details about the blocks and the licensing round in general are available on the EGAS website. Principal and optional data packages, consisting of the 2D and 3D seismic data respectively, along with other exclusive information can be purchased or bought for review from the entity.

With regards to the oil blocks, phone calls to EGPC went unanswered, while the firm is yet to respond to an e-mailed request from MEED for information on the oil blocks.

The 11 oil exploration blocks are located in the Gulf of Suez, the Western Desert and the Eastern Desert sedimentary basins.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.