Texan energy firm expands Egyptian oil and gas footprint

Apex International Energy

Apex International Energy has announced the acquisition of interests in four additional concessions in Egypt’s oil-producing Western Desert region.

Purchased from IEOC Production, a unit of Italian energy firm Eni, the new concessions will increase Apex’s production capabilities by 65 percent — up to 11,500 barrels per day.

Apex, who are based in Houston, Texas, also expects to complete two additional concessions in early 2023, following parliamentary approval of extensions on the sites.

The company will now own interests in eight Western Desert concessions — six of which are currently producing. The acquisitions place Apex as the eighth largest oil producer in Egypt. 

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The Texan company also expects to commence its first natural gas production in Egypt during the second quarter of 2023.

Roger Plank, Apex’s chairman and founder said: “Acquiring interests in these six concessions from IEOC is a significant step in Apex’s ongoing growth strategy to become a leading independent Western Desert exploration and production company.

“We look forward to commencing Apex’s first gas production in 2023 and becoming part of the exciting Egyptian natural gas success story.”

Egypt is attempting to position itself as a regional energy hub and has found itself among the potential beneficiaries of the EU’s mass-scale transition away from reliance on Russian gas.

The North African country exported eight million tonnes of liquefied natural gas, worth over $5 billion, to European markets in the first eight months of 2022 — up 14.3 percent year-on-year.

Sizable discoveries of gas reserves in the latter part of 2022 could aid Egypt’s push for energy export.

In September, state-owned Egyptian Natural Gas Holding Company reportedly discovered five new gas fields in the Mediterranean sea and the Nile Delta, with an estimated reserve of about 317 billion cubic feet of gas.

Then, in December, offshore exploration block Nargis, which California-based oil giant Chevron owns holdings in, was said to have found a new well with even larger deposits in the eastern Mediterranean — reserves estimated by the Middle East Economic Survey at 3.5 trillion cubic feet.

In November 2022, Martijn Murphy, principal analyst for upstream North Africa at consultants Wood Mackenzie, told AGBI that Egypt could struggle to increase exports to Europe substantially.

He said: “The biggest challenges are flat-to-declining production for Egypt itself in the short and medium term, along with growing domestic demand, which takes precedence over exports.”

“The outlook for production, notwithstanding new finds, is one of decline. There are no big new material projects in Egypt’s maturation funnel — nothing comparable to some of the mega projects of the past few years like Zohr or West Nile Delta.”

Despite the sizeable findings made last year, Murphy said that any new discoveries will take at least three to four years to develop — by which time, according to a report by Deloitte, natural gas prices are expected to have fallen.