Door still open for East Med-Egypt gas - PETROLEUM ECONOMIST

24 November 2017

Gina Cohen

Despite the country's natural gas sector booming, it could eventually need to import the fuel again

On 14 November, Egypt's oil minister Tarek El-Molla, told Bloomberg that "Egypt will stop importing liquefied natural gas in 2018 and may eventually export gas". This statement appeared to signal an end to the prospect of Eastern Mediterranean gas exports—from Israel and Cyprus—finding a market in Egypt. In Israel, much of the media interpreted his remarks as a sign that the country's hopes of exporting gas from the offshore Leviathan and Tamar gas fields to Egypt were dead.

At present, it's hard to imagine a day when Egypt would again be looking abroad for supplies. The second half of 2018 will be a golden moment, with its legacy gasfields still producing strongly, and the first phase of the mega-giant offshore Zohr field ramping up towards full production of around 76m cubic metres a day.

On the export front, even today, despite the shortage of gas supply for the local market, Egypt has allowed small volumes of liquefied natural gas sales, via Shell's Idku facility (0.8bn cm/d in 2016 and an expected 1.2bn cm/d in 2017).

Italian firm to drill 2 wells off Cyprus in next 2 months - ASSOCIATED PRESS / YAHOO FINANCE

November 24, 2017Menelaos Hadjicostis

NICOSIA, Cyprus (AP) -- The top executive of ENI said Friday that the Italian oil and gas company will drill two exploratory wells off Cyprus over the next two months, expressing confidence that significant reserves can be found for possible export to Europe.

ENI CEO Claudio Descalzi described Cyprus as a "natural bridge" linking existing and potential gas deposits in the eastern Mediterranean with Europe, which is looking to diversify its energy sources amid increasing gas consumption.

"We believe in Cyprus," Descalzi said after talks with Cypriot President Nicos Anastasiades. "Cyprus is a natural bridge to Europe and Europe is importing more than 70 percent of its gas and gas consumption is growing."

Gas consumption rose 5 percent in Europe last year and it will increase annually by 100 million cubic meters (3.5 billion cubic feet) each of the next two years, said Descalzi.

The first exploratory well will be drilled in partnership with France's Total next month in an area off the island's southwest. ENI and South Korea's Kogas will start drilling for the second well in January in the island's southeast.

Descalzi said ENI has a "strategic" interest in the region as waters around Cyprus remain largely unexplored. ENI has invested 450 million euros ($533 million) in exploratory drilling, seismic and geological surveys.

He said Italy is in talks with Cyprus, Egypt and Greece to possibly create a new energy corridor to Europe, with options including processing newly found gas at Egypt-based plants for export to the continent. Another option is to supply Cyprus' domestic needs.

Previous drilling had failed to locate sizeable gas deposits off Cyprus, but that hasn't disheartened companies licensed to drill in Cypriot waters. Descalzi said companies drilled 11 times in nearby Egyptian waters and found nothing before ENI discovered Zohr, the largest gas deposit ever found in the Mediterranean.

"You have to continue, and Cyprus is still a virgin area because we didn't drill a lot of wells, just 2-3 wells, so we're optimistic," said Descalzi.

Earlier, Texas-based Noble Energy discovered a field off Cyprus estimated to contain over 4 trillion cubic feet in reserves.

ExxonMobil said it will go ahead with drilling two wells in the second half of next year.

SOURCE

Medserv’s interim statement highlights delays in Q4, strong 2018 - TIMES OF MALTA

Friday, November 24, 2017, 07:49

Medserv’s update issued to the market highlights that the group’s business pipeline remains robust with a strong outlook for 2018, while earnings for the second half of the reporting year are lower than forecast due to delays in projects both in integrated logistics support services (ILSS) and oil country tubular goods (OCTG).

Further to the company announcement, Edison Investment Research also issued an update where they state that although the project delays will see H217 miss expectations, contracted projects underpin their FY18 estimates and for this reason this remains unchanged. The DCF-based fair value provided by Edison currently stands at €1.64 per share. The full Edison report may be viewed on the company’s website.

The group reported that the second ILSS base recently opened in Cyprus will become fully active in the coming month. Four to five wells are expected to be drilled in the waters offshore Cyprus in the next 12 months. Medserv Cyprus will support the upcoming exploratory drilling campaign planned by ENI Cyprus from both its shore bases in Limassol and Larnaca.

The group’s Cypriot subsidiary has also recently participated in a tender for the provision of ILSS to a second International Oil Company (IOC) which is planning to drill next year.

ENI announces exploratory drills in next couple of months (updated) - CYPRUS MAIL

NOVEMBER 24, 2017

George Psyllides

Italian energy firm ENI is planning two exploratory drills for natural gas in the island’s exclusive economic zone in the next couple of months, officials said on Friday.

The announcement was made by Energy Minister Giorgos Lakkotrypis and ENI CEO Claudio Descalzi after a meeting with the president.

The first drill will take place in a field in block six named Kalypso in December, followed by a one in Cuttlefish, in block three in January.


“We have agreed on the drilling only nine months after licensing and this is record time,” Descalzi said.

Asked if he was optimistic, the CEO said his company was investing €150m and that meant it believed in the prospect and the geology of Cyprus.

“We are optimistic, we are present, and we are investing a lot,” he said.

Hellenic Petroleum sees adjusted EBITDA above $947 MM euros this year - HYDROCARBON PROCESSING

 11/23/2017

Reporting by Angeliki Koutantou; Writing by Michele Kambas

ATHENS (Reuters) — Greece’s largest oil refiner Hellenic Petroleum expects its core profit to exceed $947.84 MM this year, Chairman Efstathios Tsotsoros said on Thursday.

Tsotsoros was speaking at an energy conference in Athens. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA), which strips out oil inventory holdings, came in at 731 MM euros in 2016.

Egypt Starts Talks With Cyprus on Natural Gas Pipeline as Prospects for Israeli Exports Dim - HAARETZ

Nov 22, 2017 10:41 PMEran Azran

Some have proposed that Israel, Egypt and Cyprus combine their offshore Mediterranean gas reserves to create a giant gas hub and sell to Europe, but progress has been halting
Egypt and Cyprus have agreed to start talks next month towards an agreement to build a pipeline to deliver natural gas to Egypt from Cyprus’ Aphrodite gas field, Xinhua news agency reported, citing Cypriot news sources.

The agreement, which came during a visit by Egyptian President Abdel-Fattah al-Sissi on Monday, calls for making use of an existing pipeline system from depleted Egyptian gas fields to liquefaction plants at Idku and Damietta.

The news comes amid warnings from Egyptian officials in recent weeks that the prospects for Israeli or other gas exports to Egypt are getting slimmer. Some have proposed that Israel, Egypt and Cyprus combine their offshore Mediterranean gas reserves to create a giant gas hub and sell to Europe, but progress has been halting.

Cabinet approves purchase of land from UK for new port - CYPRUS MAIL

The power plant in the Vasilikos area

NOVEMBER 22, 2017

Evie Andreou

Cabinet approved on Wednesday a proposal by Transport Minister Marios Demetriades to sign an agreement with the United Kingdom to acquire a piece of land near Vassilikos, in Limassol to construct an industrial and energy port that could be used by the hydrocarbon industry.

Following the cabinet meeting, Demetriades said that the approval of his proposal was “of great importance” for the country, and opened great prospects for development. He said the decision is part of the government-integrated plan for port infrastructure and the wider policy of making Cyprus a regional infrastructure management centre.

SDX announces completing a number of projects in Egypt in 3Q2017, attributes rise in profit to Circle Oil acquisition - ENTERPRISE

Wednesday, 22 November 2017

SDX Energy announced completing a number of projects in Egypt during 3Q2017. The company concluded a twelve-well program at North West Gemsa, which should allow it to achieve its 5,000 boepd target for the year, in addition to finalizing the expansion of a processing facility at its Meseda project by increasing treatment capacity to 20,000 bfpd from 10,000. In South Disouq, SDX is in talks with Natural Gas Holding Company to drill an additional two wells and add 10 km of pipe to the main export line, which it hopes to complete in 1H2018. SDX has also completed development plans for its South Ramadan concession and should begin moving forward on the project soon. The company attributed the rise in its 3Q2017 net revenues to USD 10.1 mn, from USD 2.9 mn in 3Q2016 to “the acquisition of the Egyptian and Moroccan businesses of Circle Oil” in January this year.

SDX assessing commercial potential of Gulf of Suez permit - OFFSHORE MAGAZINE

11/21/2017

LONDON – SDX Energy expects to soon conclude a commercial evaluation of the South Ramadan development concession in the Gulf of Suez offshore Egypt.

It follows approval this summer of an extension to the drilling commitment by the General Petroleum Co. until October 2018.

SDX has assessed the prospectivity of the area and completed development plans.

Once it has finished its commercial evaluation it expects to hold a meeting with the authority to discuss the way forward in the concession.

The 26.2-sq km (10.1-sq mi) South Ramadan concession, in 27 m (88.6 ft) of water, contains two proven productive horizons in the Eocene age Thebes and Senonian age Matulla carbonates.

Its location is between the 550-MMbbl Ramadan oil field 5 km (3 mi) to the northwest, and the 1.5-Bbbl Morgan field 6 km (4 mi) to the southeast, both of which produce light oil from Lower Cretaceous age Nubia sandstones.

Cyprus, Egypt to start work on agreement to construct gas pipe - XINHUA

2017-11-21 00:27:20

Mu Xuequan

NICOSIA, Nov. 20 (Xinhua) -- Cyprus and Egypt have agreed to start discussions in December on an agreement to build a gas pipe from a Cypriot natural gas field to take gas to Egypt, Cypriot state radio reported on Monday.

It said the agreement came during talks when Egypt's President Abdel Fattah al-Sisi made an official visit to Cyprus on Monday.

The gas pipe will make use of an already existing pipe system from depleted Egyptian gas fields to liquefaction plants at Idku and Damietta.

State radio also reported that a four-party meeting of Cyprus, Greece, Egypt and Italy will be held on early December to sign a memorandum of understanding for building a gas pipe from gas fields in the eastern Mediterranean to Italy via Cyprus and Greece, a project supported by the European Union.

Egypt, Cyprus agree in to build natural gas pipeline, connect electricity grids - ENTERPRISE

Sisi, Anastasiades, Tsipras, Nicosia, 21 Nov 2017

Tuesday, 21 November 2017

Egypt and Cyprus agreed to begin talks in December on a natural gas pipelineconnecting the two countries, Xinhua reports, citing Cypriot state radio. The new connection will use an existing pipeline connecting “depleted Egyptian gas fields to liquefaction plants at Idku and Damietta.” Egypt will also be inking an agreement with Greece, Cyprus, and Italy in early December over an EU-sponsored gas pipeline connecting eastern Mediterranean fields to Italy via Cyprus and Greece, according to the radio report. “These gas discoveries can contribute to the European continent’s search for alternative energy sources, taking advantage of the position of Egypt and Cyprus,” President Abdel Fattah El-Sisi said after talks with his Cypriot counterpart President Nicos Anastasiades in Cyprus yesterday, the Associated Press reports.

The Electricity Ministry is also conducting a feasibility study on linking the electricity grids of Egypt, Cyprus and Greece, chairman of the Egyptian Electricity Holding Company (EEHC) Gaber El Desouki said on Monday. He added that the project (in the same vein as the Egypt-Saudi electricity grid interconnection project) would become part of a larger power linkage project between Europe and Africa, the local press reports.

Two new FSRU facilities to be launched in Turkey - ANADOLU AGENCY

20.11.2017

Ebru Şengül

Ankara - Two new Floating Storage Regasification Units (FSRU) will be put into operation in Turkey, one in Hatay/Dortyol in southern Turkey and the other in Saros Bay on the Gallipoli peninsula in the northwest, Turkey's Energy and Natural Resources Minister Berat Albayrak said on Monday.

Speaking at the Turkish Grand National Assembly [Parliament] Plan and Budget Commission, Albayrak said the Hatay FSRU will have a regasification capacity of 29 million cubic meters (mcm) per day and will become operational by the end of the year.

Turkey's natural gas storage capacity will rise to 10 billion cubic meters (bcm), or equal to 20 percent of annual natural gas consumption, he said.

Egypt Says Gas Discoveries Can Be EU's New Energy Source - NEW YORK TIMES

Sissi hosted by Anastasiades, Nicosia, 20-11-2017

NOV. 20, 2017, 8:27 A.M. E.S.T.

NICOSIA, Cyprus — Newly discovered gas deposits in the eastern Mediterranean can offer Europe the alternative sources of energy that it's searching for, Egypt's president said Monday.

President Abdel-Fattah el-Sissi said that Europe can take advantage of the proximity of both Egypt and Cyprus to the continent in that energy search.

"These gas discoveries can contribute to the European continent's search for alternative energy sources, taking advantage of the position of Egypt and Cyprus," El-Sissi said after talks with his Cypriot counterpart.

Cyprus President Nicos Anastasiades said his country will promote closer relations between Egypt and the European Union, calling Egypt an "absolutely necessary strategic partner" for the 28-member bloc on issues like energy, migration and combating extremism.

Egypt, Cyprus and Greece: Consolidating a Mediterranean alliance - AL AHRAM

Monday 20 Nov 2017
Dina Ezzat

“We cannot be exploring the potential fields without reaching an agreement on the demarcation with Greece,” explained an Egyptian official.

President Abdel-Fattah El-Sisi is expected to arrive Monday afternoon in Cyprus' capital Nicosia for talks with his counterpart Nicos Anastasiades.

During his visit to Egypt’s northern Mediterranean neighbour, El-Sisi is also expected to meet with Alexis Tsipras, the prime minister of Greece, considered in Egyptian diplomacy circles as one of the closest possible allies of Egypt in the European Union and in the Mediterranean zone.

The three leaders of Egypt, Cyprus and Greece were expected to hold a three-way summit to discuss their planned two-path cooperation: energy and security.

A top issue for the Egyptian president in Nicosia is the conclusion of a process to define maritime borders between Egypt and Greece. According to Egyptian and Greek sources, this process was launched a few years ago with firm support form both El-Sisi and Tsipras, who both wish to see this demarcation as a beginning for the full exploitation of the eastern Mediterranean's natural gas reserves.

Parliament approves extending SUMED work for 27 years - DAILY NEWS EGYPT

November 20, 2017 

Mohamed Farag

Company executes oil projects with investments of $415m

The Energy and Environment Committee of the House of Representatives, headed by MP Talaat Al-Suwaidi, approved on Sunday a draft law of the government to extend the term of the Arab Petroleum Pipelines Company (SUMED).

Hisham Lutfi, representative of the Ministry of Petroleum, said that the company has established a port for liquefied natural gas vessels in Ain Sokhna, in the context of maintaining relations with investors.

During the meeting, Al-Suwaidi said that under the proposed draft law, SUMED’s terms are lengthened by 27 years, starting from the end of the term in Law No. 10 for 1992.

Is the World Bank telling us to get a sovereign wealth fund of our own? - ENTERPRISE / AL AHRAM

Monday, 20 November 2017

Is the World Bank telling us to get a sovereign wealth fund of our own? World Bank Group Senior Vice President Mahmoud Mohieldin reportedly suggested that it “was imperative” for Egypt to benefit from the revenues of the Zohr gasfield by establishing a sovereign wealth fund, Al Ahram reports. Mohieldin’s comments came at an AmCham talk held yesterday. Last we heard on the Ismail cabinet’s plans to form such a fund was in November of last year, with the economic group approving the drafting of a law to establish a EGP 5 bn sovereign fund dubbed Amlak. Ashraf Al Araby, the planning minister at the time, had even narrowed down the sectors the fund would be investing in, including industry, agriculture, mining, and tourism. Al Araby had been the sole voice behind the move, and we haven’t heard peep about it since he was replaced in the last cabinet shuffle.

NPCC Signs a Memorandum of Understanding (MoU) with Petrojet of Egypt - NPCC

19, Nov 2017

NPCC, part of Senaat Abu Dhabi, signed a memorandum of understanding (MoU) with Petrojet of Egypt, to partner and cooperate for identification and execution of new projects in Egypt and wider region.

NPCC was founded in 1973 in Abu Dhabi, UAE, and has delivered Offshore & Onshore Oil & Gas EPC projects for National and International Oil Companies in the region. It has over 1200 Engineers in 4 Engineering Centres across Europe and Asia, a fleet of 22 Offshore Construction Vessels and the largest yard of 1.3 Million square meters in MENA region.

The MoU was signed by Mr Aqeel A. Madhi, MD & CEO of NPCC and Mr Salah Ismail, Chairman and MD of Petrojet, in presence of senior members of the management team, at ADIPEC in Abu Dhabi. MoU will come into effect immediately and both parties plan to enhance cooperation to win and execute new projects.

Mr. Aqeel A. Madhi, MD & CEO of NPCC said “This partnership, with an established organization in Egypt, is a golden opportunity for NPCC to win and execute projects in Egypt and near-by markets. It will help us grow in new markets, Egypt in specific and other markets in general. This strategic partnership and cooperation will also support our strategy of growing in new markets.

Investors to discuss solution for rising natural gas bills for industry with MPs on Tuesday - ENTERPRISE

Gas tanks at Suez city north of Cairo. (Reuters)

Sunday, 19 November 2017

Industrialists to discuss rising natural gas bills with House on Tuesday: A delegation from the Union of Egyptian Investors Association (UEIA) will meet with the House of Representatives’ Industry Committee on Tuesday to discuss challenges they’re facing due to rising natural gas bills, UEIA boss ad Oriental Weavers founder Mohamed Farid Khamis said on Thursday, Al Shorouk reports. 

Natural gas supply has been interrupted at a number of factories that fell behind on bill payments, which they say they are unable to make, Khamis said. We had heard last week that the House was looking into repricing gas for industry and canceling real estate taxes on factories following complaints from industry figures. Egypt’s manufacturing sector has been pushing for years to lower gas prices, but officials had hinted in August that it was unlikely the Ismail Cabinet would follow through on the decision.

Fugro deploys vessel for coring at Zohr - ENTERPRISE / OFFSHORE MAGAZINE

Sunday, 19 November 2017

Geotechnical and survey services provider Fugro is sending its vessel MV Kobi Ruegg on it first project in the Egyptian sector of the Mediterranean, Offshore Magazine reports. 

“The three-year-old, 58-m (190-ft) long vessel, contracted by Saipem, will deploy a large diameter piston core system to obtain soil samples from the ultra-deepwater Zohr gas field. 

Its next assignments will be geophysical surveys for Pico and Shell… From its new home port of Abu Qir, it will undertake marine site characterization services for Fugro’s clients in the Eastern Mediterranean and Red Sea.” 

The values of the contracts were not disclosed.