Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Election Year Cycles – What to Expect? - 4th Jun 20
Why Solar Stocks Are Rallying Against All Odds - 4th Jun 20
East Asia Will Be a Post-Pandemic Success - 4th Jun 20
Comparing Bitcoin to Other Market Sectors – Risk vs. Value - 4th Jun 20
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Energy Analyst Urges New Approach In Egyptian Offshore Natural Gas Production

Commodities / Natural Gas Jun 21, 2010 - 12:56 PM GMT

By: OilPrice_Com

Commodities Best Financial Markets Analysis ArticleAlthough a recent U.S. government survey outlines the rich potential of offshore Egypt's natural gas reserves, the North African country is yet to offer attractive investment terms to companies carrying out broad exploration in deep waters, according to energy analyst Samuel Ciszuk.


“It’s a completely new technology field,” argued Ciszuk, a senior energy analyst for the Middle East and North Africa at IHS Global Insight in London. “It requires a bit of a new approach.”

The U.S. Geological Survey, part of the Interior Department, found that the Nile Delta Basin Province, which encompasses about 250,000 square kilometers of the eastern Mediterranean area, boasts an estimated 223 trillion cubic feet of “undiscovered, technically recoverable natural gas.” These kinds of reservoirs may serve as a “bridging fuel” as the world moves toward a “carbon-constrained global economy,” the study indicates.

When it comes to gas, Egypt, a member of the Gas Exporting Countries Forum, has become an increasingly deepwater play in the Mediterranean and an exporter on par with Europe, Ciszuk told OilPrice.com. The country's efforts include liquefied natural gas projects and a pipeline extending toward Jordan and Syria, he said, adding that it will eventually include Turkey and potentially Europe.

Oil production is still significant for Egypt -- the survey estimated about 1.7 billion barrels of undiscovered oil -- but “exports are almost non-existent,” Ciszuk added.

Siphoning out the energy windfall that the U.S. government appraised last month remains questionable, since assessing the geological potential of the area and actually drilling are “two very different things,” he acknowledged.

Although the Egyptian government can recover these resources “to some extent,” he said, there are financial risks linked to deepwater drilling and also dangers similar to “what happened in the Gulf of Mexico” when an oil rig exploded in April.

Egypt's financial terms -- while “very competitive” -- have been geared toward prospecting and production in shallow waters, a model that has been “slowing down development” over the last few years in other areas, he said.

Under the Egyptian model, one-third of gas reserves are destined for domestic markets, one-third can be exported and the balance must be kept for future generations, he explained. How much the government actually pays firms for the third of production going to the local market is “very, very crucial,” Ciszuk said. These companies “need to get a decent price for the remaining third in order not to spoil the projects, especially when we talk about deepwater and the high cost involved.”

The main players in the offshore Mediterranean arena include British Gas, BP, ENI and RWE, Ciszuk noted.

Cairo, which has realized the downside of its traditional approach, is in the midst of negotiating better compensation for companies to make deepwater production viable, he said. The Egyptian government offered BP improved terms for offshore development in the Nile Delta, wrote Ciszuk last month in a research note. He described the move as a “groundbreaking deal" with Egypt, giving it full production rights in its Mediterranean North Alexandria block and guaranteeing it a "significantly higher oil-indexed price for the gas produced for the government.”

For several years, Egypt has enacted new laws to attract international, regional and domestic investments, according to its government Website. The government has allowed flexibility in choosing the investment field, in transferring projects, and in product price and profits determination, the site states. The government notes that it has also nixed capital limits.

After the survey was issued last month, Refat Khafagy, the Egyptian oil ministry undersecretary, said the estimated natural gas can be exploited using advanced technologies, according to media reports. He did not offer details.

While the study's lead author, geologist Mark Kirschbaum, does not know the specific costs of recovering the resources, he conceded that “a lot of rigs” are needed to “push the limits of what we assessed.” The survey accounts for natural gas that can be recovered technically, “no matter how deep the water, no matter how thick the salt,” Kirschbaum told OilPrice.com.

“I just got an e-mail from a guy from British Gas and he wanted to know pretty much the same questions” regarding the expense associated with drawing up the gas, Kirschbaum said. The company “see[s] our number, but then they realize that a lot of that stuff isn’t on their radar screen because it’s not economic in their terms,” he noted.

British Gas has interests in the Nile Delta, specifically in the Rosetta and West Delta Deep Marine Concessions, and has operated in Egypt for about 20 years, a company spokesman said. He declined to comment on the U.S. government study.

Kirschbaum described the basin as having a “fairly immature” production history similar in scope to the Niger Delta, which has been much more actively explored and is more of an oil and gas region. The Nile Delta was probably not developed earlier because it is mainly a gas province, he added, and it was not economical to produce gas until a few decades ago.

Source: http://oilprice.com/Energy/Natural-Gas/..

By Fawzia Sheikh for Oilprice.com who focus on Fossil Fuels, Alternative Energy, Metals, Crude Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com

© 2010 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules