Egypt revives obsolete oil fields...a $4 billion bet to increase production by 30%

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The Egyptian Ministry of Petroleum and Mineral Resources is betting on reviving obsolete oil fields, through a program aimed at restoring recoverable reserves and increasing production from existing assets by about 30% during the current and next fiscal years, in parallel with the expansion of offering concessions to search for new petroleum discoveries, which require years and greater investments before they enter the production stage.

An official source revealed to Al Arabiya Business that the ministry is working with foreign partners on a comprehensive review of old fields and declining production wells, with the aim of identifying reserves that are still extractable economically, and directing investments towards the areas that achieve the fastest return, within a development program whose investments are close to $4 billion, funded by international oil companies operating in the country.

The new program is not based on restarting all old wells, but rather on a scientific and technical re-evaluation of each field separately.

The evaluation includes a study of the condition of the reservoirs, reservoir pressure, historical production rates, the volume of water accompanying the crude, the condition of the wells and infrastructure, in addition to the cost of producing a barrel compared to the expected return.

According to the source, the criterion for development will not be the age of the field, but rather the volume of extractable oil and its economic feasibility. Some fields that were previously classified as marginal assets may today return to production thanks to technical development and lower costs of utilizing existing facilities.

Land areas account for about 75% of the rehabilitation program, led by the Western Desert, which represents the beating heart of the Egyptian oil industry.

The list of areas under study includes the fields and concessions of Abu Sinan, Al-Alamein, Khaleda, Qarun, Agiba and Al-Wahah, with each field being evaluated separately to determine which wells can be restarted or the need to drill new wells.

The Western Desert is of particular importance as it produces more than 60% of Egyptian crude oil, in addition to about 18% of natural gas production. The results of recent seismic survey work also reinforced expectations of additional opportunities to support production in the region in the coming years.

On the other hand, the Gulf of Suez and the Eastern Desert receive a large share of the development plan, benefiting from their possession of a number of the oldest producing fields in the country, in addition to an existing infrastructure that reduces the cost of revitalization.

The list of targeted areas includes the "Soko", "Osoko", Ras Badran, Gulf of Zeit, Shuqair Bahariya, Jasurina, Ras Al-Esh, East Zeit, Ashrafi, and Wadi Al-Sahel fields.

The Ministry believes that the presence of existing offshore platforms, transportation lines, and processing facilities gives these fields an opportunity to return to production at a faster pace compared to developing entirely new areas.

The Saudi Addis Company's project in the Soko and Osoko fields stands out as a practical model for this trend, as the company aims to raise production from about 7,000 barrels per day to 11,000 barrels per day by the end of 2027, with investments amounting to $66 million.

The Mediterranean receives about a quarter of the revitalization programme, but the nature of maritime development makes investment decisions more cautious.

Restarting marine wells or drilling new wells depends largely on the size of recoverable reserves compared to the cost of offshore platforms and services, which gives priority to projects capable of achieving a quick economic return by taking advantage of existing facilities.

The plan begins by re-evaluating reservoir and well data using modern geophysical recordings and re-modeling oil reservoirs to identify areas that still contain recoverable quantities.

After that, companies implement repair and recompletion programs for old wells, in addition to drilling new wells or side wells within promising reservoirs.

The plan also includes the rehabilitation of production equipment, assembly lines, and processing plants, allowing the cost of development to be reduced compared to creating new fields from scratch.

Water injection will be one of the main tools used to maintain reservoir pressure and push crude towards producing wells, in addition to applying enhanced oil recovery techniques according to the nature of each reservoir.

The Ministry also relies on horizontal drilling and advanced stimulation techniques, as well as employing big data and artificial intelligence to choose the best drilling sites and improve the performance of existing wells.

According to the source, the targeted oil assets are being classified into three main categories:

This approach aims to direct spending towards projects most capable of achieving rapid commercial production.

There are currently 57 research, exploration and production companies operating in Egypt, including 8 of the largest international companies, in addition to more than 12 companies specialized in petroleum and technological services.

Former Vice President of the Egyptian General Petroleum Corporation, Medhat Youssef, believes that the goal is realistic, but it varies from one field to another.

He explained that some fields may achieve increases exceeding 30% if studies prove the presence of unexploited productive layers or previously undeveloped reserves, while the increase may be less in other fields that have reached advanced stages of depletion.

But the most prominent advantage, according to Youssef, is that these fields already possess a large part of the infrastructure necessary for production, processing and transportation, which makes the return much faster than developing a new discovery.

In essence, the Egyptian plan does not aim to discover new fields as much as it seeks to rediscover the old ones themselves.

As exploration costs rise globally and the need to enhance domestic supplies grows, the oil that is already underground has become more attractive than searching for new barrels. Hence, Cairo is betting that an important part of its production growth in the coming years will come from old wells that come back to life with new technology and investments that are less risky and more rapid in achieving returns.