Drilling Increases in the North Africa Region

Interest in the North Africa region from the upstream oil and gas industry has been growing in recent years. Companies that have been prevalent in the region for decades are stepping up their drilling activities and looking to new, unconventional reserves.

The first annual Africa Oil and Gas Survey 2010, produced by PricewaterhouseCoopers, suggests that by next year the continent could surpass North America and join the ranks of the world's three largest oil producers.

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This growth is being driven in particular by discoveries in Uganda and Ghana, reported Engineering News, but the impact of the drilling moratorium currently in place in the United States following the BP oil leak is also likely to be felt in region.

New Discoveries and Exploration Projects

Eni, the largest foreign company operating in the Egyptian upstream oil and gas sector, has been operating in Egypt since the 1950s but has recently further stepped up its commitment to the region.

Egypt's minister of petroleum, Amin Sameh Samir Fahmy, and Paolo Scaroni, chief executive officer of Eni, signed a memorandum of understanding in July to look at joint initiatives for the exploration, production and transportation of hydrocarbons.

Also in July, the company began production from the Arcadiafield, in the desert in western Egypt, just 45 days after the original discovery was made. The company plans to drill four additional wells in 2010 and 2011, which will be capable of producing 3,000 barrels of oil equivalent a day.

"The drilling of the Arcadia 1X well is part of Eni's strategy to refocus exploration activities in Egypt by targeting deeper layers in the Western Desert as well as better appraising already discovered volumes," the company explained.

Another player within the Egyptian upstream oil and gas industry, the Apache Corporation, has also been using significant resources for drilling in the country.

So far in 2010, the company has drilled eight exploration wells in the Faghur basin, five of which have led to discoveries. Drilling is also underway on the WKAL I-3X and Nebra-1X wells, while five more are planned.

In August, Apache announced two new oil discoveries, Pepi-1X and Buchis South-1X, capable of producing 4,216 barrels of oil and 1,647 barrels of oil per day respectively. Further development was carried out on Faghur-8X, which produced "a number of follow-up development drilling opportunities."

Tom Voytovich, vice president of Apache's Egypt region, said: "These recent discoveries support the multi-pay potential of this oil-prone area of the Western Desert."

The Discovery of Shale Gas in North Africa

Shale gas discoveries are already having an impact on the upstream oil and gas industry in the United States, Poland and Turkey. And this year, Tunisia became the first country in the North Africa region where fracturing for the unconventional reserves took place.

Perenco Tunisia carried out two successful fracturing operations on the El Franig fieldin March, as part of its programme of enhanced recovery in the region.

Results from the first well suggest the potential to double production of oil from the Hamra Quarzite reservoir, while the second was used to determine the possibility of developing unconventional reserves from the field.

"Six months of preparation with Perenco's drilling, production and completion experts, our partner ETAP and a special division from Schlumberger, have all been integral to the significant success of this very important operation," the company said.

Cygam, which owns the nearby Sud Tozeur, recently finished carrying out a detailed seismic interpretation of the area.

"Seismic has indicated the presence of one structure with conventional and unconventional Silurian and Ordovician potential immediately north of the El Franig field plus several other structures on the permit," the company explained.

The Canadian company also has interest in more conventional reserves in Tunisia in the Sud Remada, Fridaand Bazma permits, where it plans to carry out further drilling activity in the coming months.

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