Egypt announces new oil discovery in Gulf of Suez

Reuters/Amr Abdallah Dalsh

• Concession producing 23,000 bpd
• Kuwait’s Kufpec holds 40% share
• $9bn for new oil and gas projects

Egypt’s Cheiron Energy has announced a new oil discovery in the Geisum and Tawila West Concession in the Gulf of Suez.

The discovery was made by the GNN-11 exploration well, which is currently producing more than 2,500 barrels per day (bpd).

The oil exploration and production company holds a 60 percent interest in the concession through its affiliate PICO GoS Ltd, with Kuwait’s state petroleum company Kufpec holding the remaining 40 percent.

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The gross oil production from the concession has reached 23,000 bpd, compared to 4,000 bpd before the GNN field was developed.

Cheiron and Kufpec are planning to drill at least three additional exploration wells in the northern area of the concession.  

“The discovery demonstrates that while the Gulf of Suez is a relatively mature hydrocarbon province, it still has significant remaining exploration potential,” Kufpec CEO Mohammad Salem Al-Haimer said.

In July Egypt revealed plans to invest $9 billion in building new oil refining and gas projects.

These will be started in Alexandria, Assiut and Suez with an estimated investment of $7.5 billion, and will allow Cairo to maximise the value of its natural resources, according to a ministry statement.

An additional investment of $1.4 billion has been allocated for Behaira, Damietta and New Alamein governorates.

Since the launch of its development strategy in 2016, the ministry has overseen the completion of eight new oil refining projects, worth more than $5 billion. 

The country is facing increasing demand for natural gas from its population of 105 million. Production capacity more than doubled to 4.3 million tonnes in the financial year 2021-2022.

It aims to play a regional supply role, selling its own gas and re-exporting Israeli gas as liquefied natural gas to the Middle East, Africa and Europe.

The government last month announced the start of a $1.8 billion programme to drill natural gas exploration wells in the Mediterranean Sea and Nile Delta. It also revealed the discovery of the Nargis offshore field, which is estimated to hold around 2.5 trillion cubic feet (tcf) of reserves.

Petroleum minister Tarek El Molla told the UAE state-run Wam news agency the aim is to drill 35 exploration wells within two years – 21 in the current 2023-2024 financial year and 14 in the next year.

He said that the Egyptian petroleum sector and its international partners have been exploring for new oil and gas resources over the past five years, discovering 284 new fields, including 217 oil wells and 67 gas wells.

These have added 1.32 billion barrels of oil equivalent to the country’s reserves, the minister added.

Ratings agency Fitch last month revised down its forecast for Egypt’s gas production in 2023, to a 4 percent decline from its previous prediction of 1 percent year-on-year growth. The drop was blamed on a thin project pipeline and high depletion rates at existing fields.