In Oil & Companies News 21/04/2015
Italy’s Eni said it has doubled its oil production in Egypt’s Western Desert over the last three years to 70,000 b/d as it looks to consolidate its position as the country’s biggest foreign oil and gas operator.
Most of the output increase has come from the Melehia lease, located 290 km west of Alexandria, where Eni said it is now producing 54,000 b/d after developing deeper reservoir plays.
The remaining production boost from the area came from three development leases: Ras Qattara, Raml and West Razzak, Eni said.
In January, Eni signed a framework agreement with Egypt for an estimated value of $5 billion for the development of the country’s oil resources.
The deal included a new concession agreement to operate in the South-West Melehia block in the Western Desert of Egypt, as Cairo continues to look to international operators to boost its flagging production.
The block covers an area of 2,058 sq km (1,276 sq miles) and is immediately south of the Melehia license, operated by Agiba, a joint venture of Eni and EGPC, which manages Eni’s operations in the Western Desert.
“Eni deems this concession a key element for the sustainability of future production growth in the Egyptian Western Desert,” the company said in a statement Monday.
Egypt’s oil production has stagnated in recent years, with production averaging 700,000 b/d last year, down from some 730,000 b/d in 2013, according to the International Energy Agency.
Eni has been present in Egypt since 1954 and is the main producer in the country with an equity of some 210,000 b/d of oil equivalent.
Eni’s output represents around 28% of Egypt’s annual oil production and 27% of the country’s annual gas output.
