Kuwait Energy has discovered oil in Egypt’s eastern desert after reassessing seismic data that identified drilling opportunities, just after it sold part of its interest in Iraq’s Block 9.
The oil and gas exploration and production company, which has ten oil and gas assets across Egypt, Iraq, Yemen and Oman, spud the South Kheir-1X (SK-1X) well in the Area A of the concession in December, Kuwait Energy said in a statement.
It tested on Jan. 28 an initial oil flow rate of 2,452 barrels of oil per day (bopd) from the Hamman Faraun MBR/Belayim formation at 128/64-inch choke size. On 6 February 2018 the well stabilised at an oil rate of 1,900 bopd on 64/64-inch choke size.
The oil discovery is a direct result of the technical team reprocessing old 2D/3D seismic and identifying drillable exploration opportunities, Abby Badwi, chief executive officer of Kuwait Energy said. “The Area A concession has been producing since the 1960s and this discovery demonstrates Kuwait Energy’s ability to continue to find hydrocarbons in mature fields.”
He said the company has a track record of around 50 per cent exploration success rate in Egypt.
Kuwait Energy holds a 70 per cent revenue interest and is the operator of the Area A concession under a service agreement with Egypt’s General Petroleum Company GPC while Petrogas holds 30 per cent.
Earlier in the week, Kuwait Energy signed a farm-out deal with Dragon Oil for 15 per cent of its participating interest in Iraq’s onshore Block 9.
An 8.57 per cent of the interest was exchanged for US$100 million, while a 6.43 per cent interest in the block was used to as settlement of a dispute with Dragon Oil in relation to a non-controlling interest in the block, Kuwait Energy said in a statement.
Pending government approvals, Kuwait Energy will remain the operator with a reduction in participating interest from 60 per cent to 45 per cent, Dragon Oil participating interest will increase from 30 per cent to 45 per cent with the remaining 10 per cent participating interest being held by Egyptian General Petroleum Company.
“Both companies can work as equal equity partners on the concession allowing us to best utilise our joint technical expertise in delivering the submission of the Block 9 full field development plan to the Iraqi government,” Badwi said.
“The reduction in future Block 9 capital expenditure exposure coupled with the material cash injection strengthens Kuwait Energy liquidity position going forward.”