By: Sameh Sabry, Managing Director, Egypt, Wintershall Dea
The start of a new year is always a time to reflect on past achievements and on goals for the future. The start of a new decade, even more so. So, as we gear up for the first EGYPS of the 2020s, it’s appropriate to take stock of the outlook for the sector in Egypt, and for Wintershall Dea.
Wintershall Dea itself is still a new company, formed in 2019 from the merger of Wintershall and DEA, two companies with a long tradition of German engineering and E&P excellence. So, we are a young company, with a long heritage behind us.
And that heritage includes over 40 years of being active in Egypt. Since the 1980s we’ve produced gas and oil in stable and effective partnership with EGAS and the Egyptian General Petroleum Corporation. Today, we are producing gas and oil from brownfields in the Gulf of Suez, gas at Disouq in the onshore Nile Delta, and gas from the offshore West Nile Delta project, with our partner and operator BP.
And in the last three years we have actively increased efforts in our Egyptian assets with the goal of boosting local production. That hard work is yielding results. For our mature assets in the Gulf of Suez, for example, we’ve conducted technical workovers on existing wells and pipelines, and invested in maintaining asset integrity. These measures have achieved our targeted rise in production, while also improving safety and contributing to overall asset life.
Economic reforms and the Egyptian oil and gas sector’s modernisation programme are paying off
So, Egypt plays an important role within Wintershall Dea’s global portfolio, today and in the future. But our investment is only possible because of the significantly improved business environment in the country. As a proud Egyptian myself, I’ve seen first-hand how the sector and investment conditions here have improved in recent years, to the point where Egypt can credibly claim to be forging a new future at the heart of an East Mediterranean Gas Hub.
Important steps have been taken to build investor confidence. Ambitious economic reform, and a modernisation programme for the sector overall have given a clear signal to the world. That Egypt welcomes international investment and is serious about building an effective and attractive environment to operate in.
It’s also promising that the Ministry of Petroleum, the state companies, and all industry parties have shown a desire to work effectively together. One example is improving brownfield performance. While major new discoveries are driving the excitement around Egypt’s energy sector at the moment, extracting maximum value from mature assets is just as important. In particular, as the majority of Egypt’s crude oil production is produced from mature brownfields. So, a joint industry project, run in support of the Ministry of Petroleum’s modernisation programme, has been looking at improving brownfield performance. This sharing of ideas and experience is a reassuring sign of cooperation and a maturing sector in Egypt.
An East Mediterranean Hub with a bright future
Having been a net importer of gas just a few years ago, Egypt can face the 2020s with confidence and excitement. Discoveries of recent years and subsequent production, such as in the West Nile Delta Project, put the country in an excellent position. So, it’s no coincidence that Egypt is progressing towards becoming an East Mediterranean Energy Hub. Egypt has of course a number of important factors that make it ideal as a hub; including its ideal geographical position and strong infrastructure, including the Suez-Mediterranean Pipeline and its LNG export terminals.
At Wintershall Dea we fully support Egypt’s efforts to create a hub. We intend to actively contribute to its development, and we are pleased to now be a member of the East Med Gas Forum’s Advisory Committee.
Set on growth
And while we continue to invest in our existing assets, we will also look into further opportunities in Egypt. That’s in line with our global ambition for growth. Wintershall Dea currently produces around 590,000 barrels of oil equivalent per day. And we intend to increase that to up to 750,000 barrels by 2023. We’ll do so primarily by finding new opportunities in our core regions, of which Egypt is one.
It can be hard to accurately forecast the future in the energy industry. But what we can say, looking ahead, is that all the key ingredients for a successful future in Egypt are there-undeveloped resources, an improving business environment, driven by a modernising, liberalising regulatory regime, an unrivalled geographical location supported by effective infrastructure and an experienced, skilled industry. Those of us involved in building this future have a shared responsibility to grasp this opportunity. Wintershall Dea will play its part.