20 Dec 2023 20:14

Egypt extends WEEM concession for Lukoil in Eastern Desert - media

MOSCOW. Dec 20 (Interfax) - The House of Representatives of the Egyptian Parliament has agreed to extend for Egyptian General Petroleum Corporation (EGPC) and Lukoil Overseas the concession for oil and gas development of The West Esh El Mallaha (WEEM, Eastern Desert, Hurghada area), Al Arabiya said citing an Egyptian news agency.

The project participants own equal shares, with the Russian company financing 100% of the costs. The block has been producing since 1998, with Lukoil entering the project in 2002. To cover costs, the oil company receives a share of profitable oil from the project. The previous concession expired in December 2022. The parties negotiated a new 10-year concession agreement.

In 2020, Lukoil's share was fixed at 0.6 million barrels (80,500 tonnes) of total production of 1.2 million barrels (172,000 tonnes).

Several facilities were built as part of the project, including a tank farm with a total capacity of 9,000 cubic meters and a 100 km export pipeline that connected the block's fields with oil loading terminals on the western Red Sea coast - Ras El-Bihar and Gebel Az-Zeit.

Lukoil in Egypt also operates the Meleiha concession (24%). Meleiha is one of Lukoil's first foreign production projects; the company entered it in 1995. Active additional exploration, including 3D seismic and exploration drilling, resulted in the discovery of several highly productive fields in the block: Nada North and Gavaher (2007), Arcadia (2010), Emry Deep (2012), Rosa North (2013) and Meleiha West (2014). Commercial production is carried out at the Rosa North field. In December 2020, Eni announced that it had discovered a new oil field on the Meleiha concession on the Arcadia South structure. This added 10,000 bpd to the company's gross oil production in Egypt's Western Desert.

In addition, in February 2009 Lukoil entered the WEEM Extension project (the area closely adjoins the WEEM block from the northeast). The Russian oil company is the operator with a stake of 50% and Tharwa Petroleum controls the other 50%. As part of the contract, obligations were fulfilled for geological exploration of the area, including drilling of exploration wells and 3D seismic. Pilot production started in 2010, with a 20-year development license obtained at the time.