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ODAC Guest Commentary BP Egypt gas discovery

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SATIS - Egypt (offshore) announced in January 2008
Another gas discovery in a proven area
Egyptian oil liquids production peaked in 1993 at just under 950,000 barrels per day, mostly from the Gulf of Suez and the Western Desert. It has been declining by an average of 2.5% per year ever since, despite increasing condensate and natural gas liquids production from its newly developed offshore shallow and deep water gas fields located in the gas-prone Nile Delta. Gas production has grown very rapidly in recent years, almost all as a result of these Nile Delta discoveries and LNG exports from a plant at Damietta began at the end of 2004. New finds are regularly announced.

In January 2008 BP announced a gas discovery in this Nile Delta region, which it described as "significant". The Satis field, in the North El Burg Concession, is said by BP to "demonstrate the potential of the deeper reservoirs within the Nile Delta and will require further appraisal." There is little here to suggest that it is an exceptionally large find, and it will certainly require further wells before BP will contemplate announcing a reserves number. It is probably "significant" in that it has located a new deep gas play, which could itself be large, although this is hardly surprising in such a geological basin.

Satis appears to lies nearby to other developed and developing gas fields on the east of the delta but it will still be a challenge to develop with its Oligocene reservoir reported to lie at a depth of over 6,000 metres below sea level. It is defined as high pressure/high temperature (HP/HT) and will require expensive and specialised equipment to exploit. The Satis find certainly once again confirms the excellent gas potential of this region and there is little doubt that other deep reservoir accumulations will eventually be discovered on trend with this one. However its impact, in an already important region for meeting future global LNG and pipeline gas demand, will be very long term.

Dr Michael R. Smith – www.energyfiles.com

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