What is your opinion on Egypt’s upstream momentum and its goal to increase production to 700,000 bopd and 225 mcm (7.95 bcf) of gas per day?

Egypt’s recent achievement of gas self-sufficiency, coupled with the entry into production of major discoveries in the East Med, presents a significant opportunity for the country’s economic recovery after a decade of uncertainties. The operating fields and new discoveries, along with the projected consumption rates, indicate that Egypt can ensure nearly 20 years of gas supply. In my view, this period should be utilized to reshape the oil and gas market, fostering a competitive environment throughout the energy chain and promoting efficiency and competitiveness.

What steps do you believe are necessary for Egypt to establish itself as a leading player in the East Mediterranean Basin?

Egypt has the potential to play a leading role in the East Mediterranean Basin due to its size, position, and capacities. However, it is crucial to establish an operating and transparent domestic market with equal access to resources and infrastructure for investors and operators. Building confidence in the stability and competitiveness of the environment is essential. If successful, Egypt can become a transportation hub for regional gas, arbitrating prices between imports, exports, and local consumption. Ongoing exploration and attracting investment in the upstream sector will continue, adapting to the competitive market conditions.

How many concessions does Edison currently have in Egypt, and what are the development plans for those?

 Edison has been actively contributing to Egypt’s energy development for decades, including oil and gas as well as power generation. We operate the Abu Qir concession in a joint venture with EGPC since 2011, producing around 245 mcf (6.94 mcm) per day of gas and 4,500 barrels of condensate. With a recent investment of approximately USD 300 million in new infrastructure and wells, we have doubled the production, contributing to Egypt’s energy self-sufficiency. Currently, our focus is on the development of two new concessions, North Idku and North El Amriya, with proven reserves. The completion of these projects in 2021 will add 50 mcf (1.42 mcm) per day of gas through the Abu Qir infrastructure.

In terms of exploration, Edison is involved in three concessions: South Idku, located onshore in the Nile Delta, with ongoing drilling; North Thekka, a deepwater offshore target in the East Med, with final preparations for drilling expected by the end of 2019; and North East Hap’y, in which Edison has a 30% participation alongside Eni as the operator, with drilling anticipated in December 2019. In total, Edison has committed nearly USD 100 million for exploration activities in Egypt this year.

How has Edison contributed to the Eastern Mediterranean gas hub?

Edison has been actively involved in the Mediterranean undersea pipeline project, which aims to connect Israeli and Cypriot reserves to Europe. While this is one scenario for exporting regional gas to markets, there are other complementary or competitive options that should be carefully considered. Utilizing existing LNG facilities in Egypt, along with undersea pipelines connecting Cyprus and reinforcing the connection with Israel, could be a viable alternative. However, clear commercial rules of access to liquefaction services would be necessary. Egypt, with its mature gas industry and available infrastructure, has the potential to serve as a gas transit hub and a significant market in the region. With low international gas prices and abundant global supply, the local demand for gas is expected to increase, making the market valuable.

What is Edison’s strategy regarding mature fields?

As a general principle, it is most economical to extend the life of existing assets by leveraging the infrastructure and knowledge already acquired. This approach becomes even more relevant during periods of low international oil prices that discourage new investments. In the case of the Abu Qir field, which has been in operation for over 40 years, we continue to develop and explore. The northern area of the concession and deeper geology still hold promising potential. Our efforts will focus on these areas, alongside workovers and extensions of existing wells and reservoirs. The ongoing developments in North Idku and North El Amriya follow the same principle, benefiting from existing Abu Qir facilities and the expertise in a similar geological area. These projects will involve connecting four wells to increase gas and condensate production by 25%.

How do you plan to connect the new wells to the existing infrastructure?

To connect the isolated wells to the extensive Abu Qir infrastructure, we will pursue a subsea development approach, where subsea wells will be connected and remotely operated from the Abu Qir platforms. For the implementation, we have decided to seek a competitive FEED-plus-turnkey contract, allowing the selected provider to execute the project with their engineering expertise. While this approach is not common in Egypt, we believe it is the most cost-effective, secure, and time-saving option.

What aspects of Egypt’s energy scenario should be prioritized?

The increasing possibilities for regional cooperation and energy trade are driving international interest in exploring and developing more hydrocarbon resources. Interconnecting national markets and infrastructure reduces the risk of bottlenecks between upstream and downstream operations, making investment decisions more favorable. Positive steps have been taken recently by countries in the region, such as the gas delivery contract between Israel and Egypt, the intergovernmental agreement to connect Cyprus gas to Egypt, and the Eastern Mediterranean Gas Forum initiative. Similar progress is also evident in the electricity sector, with Egypt surpassing its electricity deficiency and becoming oversized in power generation capacity, particularly with the installation of new efficient combined-cycle gas plants. With grid reinforcement and interconnections, Egypt could potentially export its own gas or re-export imported gas as efficient electricity. This regional approach encourages further investment and benefits the Mediterranean region and neighboring countries. Edison’s strategic decision to focus on low-carbon power generation, energy sales, and services aligns with the EDF Group’s commitment to assist energy customers in transitioning towards more sustainable consumption.

What challenges do you face in implementing energy efficiency projects in Egypt?

Implementing energy-saving projects in Egypt comes with a range of challenges as there are no precedents for such an approach. The lack of dedicated regulations and the unequal competition with conventional power generation units make it necessary to overcome various obstacles. We are working to convince all stakeholders of the long-term benefits and viability of this innovative win-win cooperation. From securing gas at a competitive price to obtaining the required licenses and authorizations, there is a complex process involved. Currently, we are developing two pilot projects to demonstrate the feasibility and benefits of these initiatives. Institutional and multilateral organizations, as well as private funds and investors, are closely observing our progress and are ready to provide equity and financing if the projects succeed. Success in this endeavor would benefit the Egyptian economy and society while promoting energy efficiency and reducing environmental impact.

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