Work to start on Apache, Shell fracking project in Egypt

Drilling rig in the desert
Source: DollarPhotoClub

Following a $30-$40 million deal signed in December last year, Royal Dutch Shell Egypt and American Apache are ready to start exploring for shale in the Abu al-Ghardeeq region of the Western Desert, about 200 km west of Cairo. The early exploratory work will be carried out by The Khalda Petroleum Co. on behalf of the two companies.

Tarek El Molla, Chairman of the Egyptian General Petroleum Corporation (EGPC), said in an interview with Daily News Egypt that drilling operations will begin by the end of this month. Two experimental data and pilot wells will be drilled in the Apollonia field, with core sample and logging taken to study and evaluate the field.

Royal Dutch Shell and American Apache will then move in to undertake horizontal drilling, with the first well scheduled to be horizontally drilled in November.

The construction work on the surface facilities will take place between September and December 2015, and the first well will be linked to the facilities in January next year. The two companies expect to commence production form the first well in February 2016.

In total, the Shale / Apache deal consists of drilling and stimulating three shale wells in the Apollonia field and constitutes Egypt’s first contract for the production of unconventional gas. But even before any work has begun, the economic feasibility of shale exploration in the Western Desert is being questioned.

Back in December, a source at the petroleum ministry told Reuters that unconventional gas extraction in the Western Desert will require the operators to drill to depths of 14,000 feet. By comparison, an average Marcellus Shale well is around 9,000 feet deep. The depths of the Egyptian shale wells suggests that the exploration will be costlier than in the U.S., which might not be supported by the still low oil prices.

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