Egypt attracts new exploration interest from oil and gas giants: IHS Markit
Despite tighter fiscal conditions than neighboring riparian states, Egypt is attracting new exploration interests from oil and gas giants, according to the latest research note released by IHS Markit.
He explained that Egypt has retained interest from majors such as Eni, BP and Shell and has attracted new exploration interest from majors such as Chevron, TotalEnergies and ExxonMobil, all of which are keen to explore the deposits. pre-salt clastic and carbonate from the Basins off the eastern Mediterranean. Many leading players have been reassured by regional political collaboration to the point of taking interregional positions focused on exploration.
Research indicated that the Eastern Mediterranean region has proven to be remarkably resilient to broader industry pressures ahead of energy transition and portfolio concentration – attracting significant interest from integrated global oil companies. (GIOC) for the award of offshore exploration licenses – as well as a new entry of smaller E&P. players focused on coastal areas and shallow water. The region currently generates gas production of around 7.8 Gcf / d from recoverable resources discovered totaling 144 Tcf, with significant upward exploration potential located off Egypt, Cyprus and South Africa. ‘Israel.
The region’s upstream growth prospects are promising, with the establishment of the Eastern Mediterranean Gas Forum (EMGF) by the host states, the recovery of global gas markets, the transition of the region’s energy sector to sources. cleaner energy and the continued success of deepwater exploration efforts that have been delayed by pressures from COVID-19, but are expected to reappear in earnest from 2022.
Egypt’s gas balance, however, is on the razor’s edge, according to IHS Markit, as long-term production prospects for mature assets in the Nile Delta Basin are declining. He said the demand for electricity in Egypt has increased dramatically over the past decade thanks to a growing population, urbanization and an expanding economy; and despite major advances in renewables with more than 16 GW of projects underway, natural gas is expected to remain the dominant fuel for power generation until at least 2040.
He added that the big gas discoveries in the emerging phase of the Levantine Basin and Eratosthenes Carbonate Platform have proven to be critical for the region, and that Israel, which once depended on Egypt for gas , now has surplus gas to offer to both Egypt and Jordan.
IHS Markit pointed out that while 2021 saw a significant recovery in the market for LNG exports, with an increase in spot prices allowing Egypt to restart its second LNG export facility at SEGAS in February 2021 and re-establish large volumes of exports during the year, production reliability becomes an issue and Egyptian LNG plants could again risk a potential shutdown, unless short-cycle supply and the addition of new ones resources are secured, whether they come from Egypt or the wider region.
The research note mentioned that regional dynamics may change again with new discoveries, noting that six high-impact wells are planned in neighboring basins in Cypriot, Israeli and Lebanese waters over the next two years.
He added that competing forces such as conflicting national policies, border disputes, competing business interests and a changing gas demand landscape all have the potential to influence development strategies and timetables.
Even so, a significant new gas discovery could be a game-changer as riparian states explore mutually beneficial marketing avenues for the eastern Mediterranean offshore gas resources beyond the current focus on regional demand and Egyptian export facilities, âthe research concluded.