Tuesday, 19 December 2017
Shell has apparently entered talks with the Oil Ministry to increase its share of gas produced to offset their investment costs from Phase 9B of the West Delta Deep Marine Concession, government sources tell Al Borsa.
The company is looking to recoup the investment costs of developing the concession sooner, they added.
The company plans to complete developing two test wells in Phase 9B in 1Q2018. BG Egypt, before being acquired by Shell, had suspended work on Phase 9A+ and 9B in March 2016 after the government rejected paying USD 7.00 per mmBtu for Phase 9B.
March 24th, 2016
Royal Dutch Shell and the Egyptian government have been at pains to downplay reports this week that talks on developing the West Delta Deep Marine (WDDM) concession 9B have reached an impasse. This comes as Italy's Eni is gearing up to develop an even bigger offshore gas field, Zohr.
Daily News Egypt reported that BG, now part of Shell, had demanded a price of $7/mn Btu from the government for gas to be produced at 9B, whereas the latter had agreed to pay $5.88. Its March 22 report cited a source close to the talks who said that Shell would only resume negotiations if the government gave into its price demand or else immediately paid $1bn back dues owed to BG. If Cairo agreed, the $7 could be negotiated downward once back dues were paid, the source added.
23 March 2016
BG Egypt, a subsidiary of BG Group, a UK company recently taken over by Shell, has reportedly stopped work on some Mediterranean Sea projects, offshore Egypt.
According to a Reuters report on Tuesday, which cited an official at the Egyptian General Petroleum Corp (EGPC), the company couldn’t reach a deal with the Egyptian government on the price of gas. He reportedly said that BG Egypt had abandoned “work at 9A+ and 9B” project and removed the drilling rigs earlier this month.
Offshore Energy Today has reached out to Shell, given that the Anglo/Dutch oil giant now owns assets previously controlled by BG Group.
Tue Mar 22, 2016, By Ehab Farouk
BG Egypt has suspended work at some Egyptian development projects after it failed to agree with the government on the price of gas, an Egyptian General Petroleum Corp (EGPC) official told Reuters on Tuesday.
"BG has stopped work at 9A+ and 9B after failure to reach an agreement on the fixed price to be paid for extracted gas, and it withdrew rigs working on the 9A+ wells on the seventh of March," the EGPC official said.
Egypt's Ministry of Petroleum denied BG Egypt had stopped development as a result of price disagreements and said in a statement that "negotiations over timelines for the projects" are ongoing.
The development areas include several deepwater wells in the West Nile Delta.
Project will only offset the natural decline of fields production, says official
The British Gas Company (BG) has once again postponed linking stage 9B to the Burullus fields to mid-2016 rather than the beginning of 2016, due to delayed repayment of Egyptian debts.
A senior official at the Ministry of Petroleum told Daily News Egypt that BG postponed the project for the second time, when it was agreed in 2013 that the linking will be completed by the beginning of 2015. The first postponement resulted in pushing the deadline for linking 9A to mid-2015.
The official said the total production of stage 9B will be a maximum of 500m cubic feet of gas per day.
The official said stage 9B is the largest project to begin production in 2016, but will not increase Egypt’s total production, as it would offset part of the natural decline of field productivity.
Egypt has recently agreed with BG to raise the price of natural gas produced to stage 9B from $3.95 per million British Thermal Units (BTUs) to $5.88.
The Ministry of Petroleum had earlier promised foreign companies to pay $500m of its total overdue debt, currently at $2.7bn, by the end of 2015. The agreement has yet to be met.
BG’s total production declined to about 850m cubic feet per day during the first quarter of the current fiscal year after linking stage 9A, compared to 1.1bn cubic feet at the beginning of 2014.
Foreign partners in the oil sector have delayed the linking of their gas fields in response to the government’s failure to pay overdue amounts. This is expected to lead gas production to decline until the end of 2016.
The official said total Egyptian gas production is estimated at 4.106bn cubic feet per day, although it is declining by 100m feet every month.
SOURCE
