ERC signs US$2.6 billion debt package to finance oil refinery construction

The Egyptian Refining Company (ERC) has signed a debt package of US$2.6 billion to finance construction of a US$3.7 billion second-stage oil refinery in the Greater Cairo Area.

The refinery is expected to produce over 4 million tonnes of refined products per annum, including over 2.3 million tonnes of EURO V diesel.

ERC's production will be sold to the Egyptian General Petroleum Corporation (EGPC) under a 25-year agreement.

ERC is a partnership between Citadel Capital, the leading private equity firm in the Middle East, and the EGPC.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Dana discovers new oil field onshore, Gulf of Suez

Dana's Fin-1X exploration well has discovered a new oil field, in the North Zeit Bay Production Sharing Contract (PSC) area onshore in the Gulf of Suez. The new discovery follows the finding of the Lorcan oil field, made last month in the same PSC area. The Fin-1X well drilled to a depth of 10,038 ft, approximately 3km from the Lorcan discovery, promises good quality oil bearing sands in the Kareem formation.

The Fin discovery together with Lorcan, which flowed at 4,714 b/d confirms that the area will be lucrative in terms of development and production. A preliminary development chart has been submitted to the Egyptian General Petroleum Corporation (EGPC) for approval, and according to Dana's estimates that these two discoveries have proven up initial reserves of 10-12 million barrels of oil.

Once all the plans are approved by the EGPC, and the Egyptian Ministry of Petroleum and Mineral Resources, Dana intends to negotiate early oil production with EGPC. The full development plan is to tie production from this PSC area back to the East Zeit oil and gas processing plant, which is situated just 15km to the south east of the Lorcan and Fin oil fields. Drilling on the North Zeit Bay concession will also continue in 2011.

To find out more about Dana Petroleum please visit Dana Petroleum's, web site which you can find here.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Eni begins onshore production from Arcadia field

Eni has begun oil production from Arcadia field, in the western desert of Egypt, 45 days after its discovery. The Arcadia 1X well, located in Meleiha concession has been put into production from the Alam El Bueib formation with the nearby operated facilities of Meleiha.

Eni owns 56 per cent participating-interest in the Meleiha concession, through its fully owned affiliate Ieoc, with the remainder owned by LUKOIL and Mitsui, 24 per cent and 20 per cent respectively. The operator of Arcadia project is a joint venture owned equally by Ieoc and the Egyptian General Petroleum Corporation (EGPC).

Eni has stated that in order to fully develop the new discovery, it will drill four more wells in 2010 and 2011, expected to produce up to 3000 b/d. The drilling of the Arcadia 1X well is expected to significantly increase Eni's equity production, estimated at 230 kb/d in 2009.

To find out more about Eni please visit Eni's web site, which you can find here.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

Eni begins operations in Tuna field off the coast of Egypt

Eni has begun gas production in the Tuna field, within the Temsah concession, located in the Mediterranean sea off the coast of Egypt. It is expected that by September, the project will yield around 4.5 million scm/day, and will contribute approximately 8,500 be/day to Eni's equity share production.

Eni owns a 50 per cent of the Temsah concession with the remaining 50 per cent owned by BP. Petrobel, a joint operating company owned by International Egyptian Oil Company (IEOC) and Egyptian General Petroleum Corporation (EGPC), is the operator of the Tuna project. The project consists of a new 4 leg platform in approximately 80 meters of water, three producing wells and 14km of 24" pipeline connecting to an existing infrastructure.

Eni's activities in the Temsah concession, one of the most lucrative in Egyptian waters, with production in excess of 170,000 b/d, continue with ongoing campaign of infill drilling in Temsah, and development of the Denise B field, which is expected to begin production in 2011.

To find out more about Eni please visit Eni's web site, which you can find here.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates

RWE signs $3.6 billion gas project deal with Egypt

RWE has signed a $3.6 billion deal with the Egyptian government for developments in the North Alexandria and West Mediterranean Deep Water concessions. The agreement was approved by the Egyptian Cabinet and the Egyptian Parliament, in Cairo, was signed together with the Egyptian Petroleum minister, Sameh Fahmy, the Egyptian state-owned company EGPC and the operator BP.

RWE's share of the North Alexandria and West Mediterranean Deep Water concessions equates to around 50 billion cubic metres of natural gas, and is the largest single investment for the upstream company to date.

“Our aim is to proceed with this field development at a rapid pace, so that we can go into production by 2014. Amongst other field development projects of RWE Dea, such as Breagh in the United Kingdom and Gjøa in Norway, North Alexandria will make a substantial contribution to the company's growth target, which is to double production over the next five years,” said Thomas Rappuhn, chief executive officer of RWE.

The concessions located in the offshore region of the West Nile Delta, some 40km off the coast of Egypt, include the Raven natural gas fields in the high-temperature and high-pressure depth domain which extends into the West Mediterranean Deep Water concession. A majority of the total investment, around $ 9 billion, will be spent in the North Alexandria concession. The investment will be split between BP (60 per cent) and RWE (40 per cent) respectively.

To find out more about RWE please visit RWE's web site, which you can find here.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

© 2010 Menas Associates