Well Evaluation Conference Egypt 1995

7
arlier this century, some Egyptologists
argued that all of the hard black material on
mummies was a plant-based resin pitch, not a
mineral bitumen. However, sophisticated chemi-
cal analysis techniques ended this lengthy
debate by identifying three tell-tale elements -
vanadium, nickel and molybdenum - which only
occur in bitumen.
In addition to the evidence, eye-witness
accounts have survived which testify that bitumen
was used in mummification. Diodorus, a well-
known historian in the time of Julius Caesar,
travelled to Egypt in the 1st century BC. He
describes the export of bitumen to Egypt by the
inhabitants of the surrounding lands, who gath-
ered bitumen found floating on the Dead Sea.
This bitumen was known as Lacus Asphaltites, or
Bitumen of Judea. In the hands of the embalmers,
Diodorus observed, it was mixed with aromatic
spices, and that without it, ...the body cannot be
preserved long from putrefaction.
Ancient Egyptian shipbuilding, large and
small, benefited from the waterproofing proper-
ties of bitumen. Red sea coracles, or Gufa, were
made watertight with pitch (these boats can still
be seen on the Tigris). According to Greek histo-
rians, the Egyptians almost certainly used
bitumen to caulk large sea-faring ships, sealing
the spaces between the planks with bitumen
and papyrus. This technique was being used
almost 3000 years ago.
Apart from such noble use as preserving the
dead and protecting a nations navy, bitumen was
used for eye-paint, and, mixed with fruits and aro-
matic oils, as a perfume. Throughout the Middle
East tar from oil was used as a skin ointment.
Later, bitumen was used in brick making, and
in the mortar of brick structures - it can still be
seen in the remains of the walls of Babylon.
The seepages at Gebel Zeit, (Arabic for oil
mountain) were known and exploited by the
Romans, who named the area Mons Petro-
liferus. The sticky pools of bitumen were used
for domestic light and heat, and in quarrying
and digging for gold.
Little subsequent interest was shown in oil
seepages from the ground until the mining of
sulphur began in the late nineteenth century.
The discovery of oil by those sulphur miners
launched an industry, and a new age.
THE DAWN OF AN INDUSTRY
While mining for sulphur under the Gemsa hills
during the 1860s, the French company Socit
Soufriere des Mines de Jemsah et de Ranga sunk
a 80ft shaft from a 130ft gallery. The shaft, being
below sea-level, filled with sea water and a layer of
oil. A second gallery filled with the same mixture.
The company approached the Egyptian Gov-
ernment for permission to explore for oil. No
doubt appreciating the potential of this find, the
Government refused on the grounds that the 30-
year concession, granted in 1863, was concerned
only with the sulphur mining. The Societe took
the argument to court in 1869. It took the Gov-
ernment 14 years to win the lawsuit.
In 1883, a Belgian specialist, M de Bay was
engaged by the Egyptian Government to explore
for oil at Ras Gemsa. Operations began in
November 1885, the teams drilling with a steam-
driven rig. His moderate success with de Bay
Well Number One - which yielded gas and oil at
a rate of 1.3 tons per day - was not repeated with
well numbers two and three. In the year of their
completion, 1886, de Bays contract was not
renewed.
To replace de Bay, the Egyptian Government
looked further west and appointed an American,
Mr H Tweddle, and a team of drillers to con-
tinue the search. All five of Mr Tweddles Gemsa
wells were considerably deeper than those of his
predecessors and all struck or showed oil.
Also in 1886, American geologist and engineer
L H Mitchell was appointed to carry out a survey
of the area. Mitchells report and recommenda-
tions to drill deeper for oil-bearing sediments
are now considered to be prophetic, considering
that the science of petroleum geology was in its
infancy. He also downgraded Giftun, Shadwan,
Jubal and other islands, as being at too great
depth to contain oil.
Mitchell recommended that drilling should
continue at Gemsa, and also at Ras Dhib to the
north and Abu Durba on the eastern side of the
Gulf. However, after an expenditure of 100,000
the Government withdrew support and drilling
stopped in July 1888.
Oil has played an
important role in
Ancient Egyptian
culture. Long before its
commercial value as an
energy source was
known, oil was found in
seepages in Egypt and
the surrounding region,
and was attributed with
magical properties.
Egyptologists are now
agreed that bitumen
was used in
embalming, and the
word mummy is
thought to have come
from a Parsee word
mummia, meaning
bitumen. The Ancient
Egyptians also poured
bitumen over the coffin
for protection. A
sarcophagus from the
12th Dynasty (3700
years ago) was found to
be sealed with molten
bitumen.
E
Egypt 1995 Well Evaluation Conference
8
Fig. 1.1: Two barrels of oil per minute: In 1909 The Egyptian Oil Trust Ltd. discovered a
Gemsa gusher on the Red Sea coast.
GEMSA OIL AT LAST
The dawn of the twentieth century saw little or
no prospecting in Egypt. However, the catalyst
for new drilling at Gemsa - and the resulting find
of Egypts first commercial oil well came with the
enactment of mining legislation (see box) and a
report on the mining industry of Egypt for the
year 1905, by Mr John Wells, an inspector of
mines for the Egyptian Government.
In June, 1907, The Egyptian Oil Trust Ltd,was
registered by Messrs Light and Fulton, in Lon-
don. Its obj ecti ves were to acqui re oi l
concessions, explore, develop, drill, refine, store,
supply, distribute and deal in petroleum and
petrol eum products. It had a capi tal of
100, 000, i n 1 shares. Its concessi ons
embraced 100 square miles of territory, immedi-
ately west of the Red Sea, and included waters of
the Suez Canal, including Gemsa.
The Trusts workers began drilling on 1 Jan-
uary 1908, under the supervision of Mr J Josh.
The machinery for the operation had been
shipped from England (most of the oil explo-
ration in the period 1884-1910 was carried out
by shallow cable tool drilling). As the well
descended to a 1000 ft, Mr Josh and his team
reported that a three months delay was caused
owing to the losing of the tools. It was com-
pleted in March 1909 at a depth of 1920ft.
The Petroleum Review reported on 24 April
1909: A most important oil strike has recently
been made by the Egyptian Oil Trust Ltd, in one
of its wells upon the coast of the Red Sea. The
spot had been surveyed and chosen by Mr D A
Sutherland, the companys consulting engineer
and general manager. Oil had been struck by
Sutherland Well Number One, situated between
the well sunk by the unfortunate M de Bay and
that of Tweddle (both of which failed, according
to Sutherland, due to lack of depth and there
being no proper water shut-off). Other wells
were also to prove fruitful. Later that year, the
second ordinary meeting of the Egyptian Oil
Trust Limited, in London, was to hear that Well
Number One had struck large quantities of oil at
a depth of 1287 ft, in porous dolomitic lime-
stone. The well was a gusher, producing two
barrels per minute. Mr Thomas Carter, Secretary
to the Trust, announced that analysis of the oil
proved that it compares equally with the best
Ohio oil, hitherto regarded as the best oil in the
world.
This remarkable chapter in the history of the
Egyptian Oil industry reached a climax in the
spring of 1912. The Petroleum Review of 9
March reported: The commercial era in the
development of the petroleum resources of
Egypt may now be said to have commenced. We
learn that the Anglo-Egyptian Oilfields Ltd, have
received information to the effect that the first
tank steamer with 3000 tons of Gemsah oil on
board has left for the Far East.
In all, 23 wells were drilled at Gemsa, and for
a number of years it was the only source of
Egyptian production. But its output gradually
declined until, in 1927, it became inoperative.
Well Evaluation Conference Egypt 1995
9
troublesome because of large
amounts of water infiltration.
A dehydrati on pl ant was
constructed in 1917, on the
Hurghada Field, to de-emul-
sify and treat the oil before
transport to Suez.
Despite the difficulties of
the war, the Hurghada Field
became what the short-lived
Gemsa Field could never be -
a settled, productive commu-
nity. Secure employment for
1200 Egyptian people had
been created by the industry.
Hurghadas peak production
came i n 1931 when the
annual output total l ed
1,800,000 bbl.
NEW BLOOD: HURGHADA
The Hurghada Field lies about 100 miles south
of where the Gulf of Suez meets the Red Sea. In
1911, Max K Bauermann, a geologist who had
worked for the Royal Dutch-Shell Group in
Romania since 1909, was sent to Egypt on a
short exploratory assignment. He discovered the
West Hurghada structure - Cretaceous and Car-
boniferous (Nubian) sand formations below the
Miocene - recommended drilling, and the first
well encountered oil at 631ft. In the same year,
an examination of the Hurghada region was
made on behalf of the Egyptian Government.
Drs J Wanner and H M E. Schrmann examined
the same area for Anglo-Egyptian, and on the
basis of their report, an exploratory well was
drilled. Egypts first commercial oilfield had
been tapped, in Nubian Sandstone at about
2300 ft.
Oil exploration stopped shortly afterwards
because of the First World War, and did not
start again until hostilities ended.
Egypt became a major war base during the
years 1914-1919, with its population and econ-
omy committed to the war effort. During these
years, Hurghada provided the bulk on the Egyp-
tian output, and it was here the Egyptian Oil
Trusts (now known as Anglo-Egyptian Oilfields
Ltd) operations were now concentrated.
Unlike the early days of Gemsa production,
the quality of Hurghada oil became increasingly
Fig. 1.2: In 1939 -
when the going got tough: This
torsian balance couldn't be
moved by car - only a camel
could cope with the terrain.
Egypt 1995 Well Evaluation Conference
10
THE TWENTIES: A LONG, LEAN
DECADE
In 1919, the Petroleum Research Laboratory was
established in Cairo as a branch of the govern-
ment Chemical Department - later to become
part of the Mines Department. A small refinery
was proposed to handle the oil anticipated from
government exploration. In addition, the gov-
ernment was also able to receive royalties in oil
instead of cash, under a clause in the agreement
with Anglo-Egyptian Oilfields Ltd. The refinery
was erected at Suez in 1922 and then closed for
six months to sort out the technicalities of han-
dl i ng sal t- water emul si fi ed crude from
Hurghada. Operations restarted in 1924.
Peacetime brought new codes of licensing and
leasing procedures from the government. But
despite hopes of fresh discoveries, the only real
success came in 1921 at Abu Durba on the west
coast of Sinai. During the years 1918-1923, the
Government drilled 10 wells at Abu Durba near
outcrops of oil-bearing Nubian Sandstone. The
field was small, and output low, and two years
later the Government handed operations over to
a local company, the Egyptian Oil Syndicate.
Out of 15 wells drilled, three produced oil, and
the field was abandoned after producing a total
of 5000tons of crude oil.
The 1920s were lean years for the oil industry
in Egypt, and were to be littered with disap-
pointments for companies and syndicates alike.
Government petroleum policy lacked cohesion,
and attempts to impose strict storage regula-
ti ons on pri vate European compani es
prospecting for oil in the area added to their
problems. By 1923 the Eastern Petroleum
Finance Company and Oilfields of Egypt had
both drilled wells - some of which reached
3000 ft - on the coast and Egyptian islands, and
had abandoned operations. Anglo-Persian oil
company took licenses for large areas of Sinai,
drilled, and had similarly given up by 1923.
Other attempts to extract oil from the Sinai
coasts and islands were fruitless.
New technology began to be exploited during
this otherwise barren decade. In 1923 Anglo-
Egyptian Oilfields Ltd introduced the Etvs
torsion balance into Egypt, and Gemsa and
Hurghada were surveyed. This was the first time
the technique had been used outside Europe,
and came before its first use in the USA.
The world economic upheaval in 1930-1932
threatened another crisis for the industry in
Egypt. Luckily, the industry was out of its
infancy, and firm structures and technology were
in place. Oil production and the Suez refinery
continued. However, until the late 1930s, only
the activities of the Anglo-Egyptian Oilfields Ltd
gave any positive results, and Hurghada
remained the only producing oilfield. Egyptian
domestic production gradually declined.
Fig. 1.3: A concession
map of the southern Gulf of Suez
and northern Red Sea in 1938.
Fig. 1.4: Oil concessions in northern Egypt (1938).
Well Evaluation Conference Egypt 1995
11
A SECOND RUSH FOR BLACK GOLD
Earl y i n 1937, the Egypti an Government
responded to growing pressure to find fresh oil
reserves with a massive redefinition of mining
regulations. Under the new rules, provision was
made for the granting of prospecting licenses
over area of not less than four square kilometres,
for one year, subject to renewal. The effect was
immediate and startling. Companies in the UK
and the USA scrambled to apply for licenses,
and within a year some were drilling (figure
1.3). The five international groups holding the
majority of permits were; Anglo-Iranian Oil,
Royal Dutch-Shell Group (which included
Anglo-Egyptian Oilfields), Socony-Vacuum Oil
Co Inc, Standard Oil Co, of California, and Stan-
dard Oil Co, of New Jersey. However, because
only 40 permits could be granted to any one
company, the Big Five applied for blocks in the
names of their subsidiaries. This resulted in no
less than 23 companies prospecting by 1939.
By 20 October that year, 8.5% of Egypts terri-
tory was being probed for oil, with extensive
geological and gravimetric surveys. In 1938,
Anglo-Egyptian Oilfields pipped its competition
to the post, identified a promising structure, and
struck oil in basal Miocene limestone at Ras
Gharib, a barren stretch of desert about half way
between Hurghada and Suez. The well was
spudded on 1 December 1937, and was com-
pleted in April of the following year at a depth of
2560 ft. It produced 150 tons per day. Tanks
and loading facilities were quickly built, and the
first shipment of Ras Gharib crude was made on
18 August 1938. A spectacular rise in produc-
tion was reported in 1939, with a total output of
5,100,000 bbl exceeding the previous years
yield by 207%.
This was to prove a very fortunate discovery.
Production from the new field sustained almost all
of Egypts oil industry during the extraordinary
years to follow. Egyptian oil output almost dou-
bled during the the Second World War (figure
1.7). It met the demands of the Allied forces, par-
ticularly during the Western Desert Campaigns.
Fig. 1.5: South
Mediterranean Oilfields Ltd,
unloading seismic equipment at
Suez - 1939.
Egypt 1995 Well Evaluation Conference
12
The end of the war brought renewed activities
from a narrowed - down field of three major
compani es; Anglo- Egypti an Oi lfi elds Ltd,
Socony Vacuum Oil Co, and Standard Oil Co, of
Egypt (a subsidiary of Standard Oil Co, New Jer-
sey). Between them they held 718 exploration
permits, scattered through northern Egypt from
the Libyan to the Palestine borders. The compe-
tition was for rich prizes: any substantial oil
discovery at this time was worth more, barrel for
barrel, than those in the Persian Gulf. The north
Egyptian ports on the Mediterranean Sea meant
any prospective find was close to the markets of
Europe, bypassing the expensive pipeline or
tanker routes taken by most Middle Eastern oil.
Political Change: Frustration and
Survival
The first success of the post-war exploration
came in 1946 when Anglo-Egyptian Oilfields
Ltd, in partnership with Socony-Vacuum Oil Co,
struck oil in a wildcat well at Sudr, on the east
coast of the Sinai Peninsula. The oil was found
at the base of the Miocene, in a sandstone reser-
voir at a depth of between 2675 ft and 2826 ft.
Production from Sudr in 1948, at around
3.5 million bbl, was enough to raise the total
years output for Egypt to an new all-time high
of over 13 millionbbl.
Exploration activity in the Sinai Peninsula was
busy during 1947. The Standard Company of
Egypt (Standard Oil, New Jersey), drilled several
wildcats, and a Socony-Vacuum/Anglo-Egyptian
partnership drilled at Hamra, northeast of Suez.
Exploration began in northeast Sinai, and after
the mines had been cleared from the Western
Desert, test wells were sunk within four miles of
the Great Pyramids.
During 1948 the Standard company discov-
ered its first new oil field. The strike was made at
Wadi Feiran, about 155 miles south of Suez on
the Sinai Peninsula. Initial reports of production
ranged from 3000bbl per day to a more cautious
150bbl per day. Sadly, for Standard Oil of Egypt,
its productivity was to become immaterial.
In the same year, a new Mines and Quarries
Law was passed by the Egyptian government.
This dictated that, with exceptions judged by the
government, all exports from the nation would
have to be in the form of products refined within
the nation. The policy prohibited exports of
crude oil, allowing only products refined in
Egyptian plants to be sold abroad. The request of
the Shell Group to expand its Suez refinery to
increase throughput was refused, unless the
company handed over a 51% share in the refin-
ery to the government.
Shortly after striking oil for the first time in
12 years of expl orati on, Standard Oi l
announced its decision to withdraw from all
operations in Egypt. The provisions of the new
oil law were regarded as too restrictive to allow
efficient operation. The company had spent
more than $12.5 million looking for oil in
Egypt. Its concessions were returned to the
government.
Meanwhile, the bottleneck of crude oil inside
Egypt, together with the low morale of the
European and American companies, effectively
curbed exploration until 1953, when a new,
more liberal oil law was enacted. In the wake of
increasing exploration activity, a new field was
discovered at Belayim, about 8 miles south of
Feiran, by the Southern California Petroleum
Corporation, on behalf of the governments
Fig. 1.6: The World
Petroleum report of the Ras
Gharib 'oil rush' - 1939.
Well Evaluation Conference Egypt 1995
13
International Egyptian Oil Company. Standard
Oil of Egypt had carried out reflection seismic
surveys during the late 1940s, and Compagnie
Orientale des Ptroles dEgypte (COPE) followed
up with detailed land and marine reflection seis-
mic surveys. The discovery well yielded 1150bbl
per day. Development of the Belayim Field passed
to the National Petroleum Company (American)
in 1956.
The General Petroleum Authority (GPA) was
created by the Egyptian Government in 1956.
GPA founded the General Petroleum Company
(GPC) in 1956 and awarded it 63 prospecting
licenses in the Gulf of Suez and the Eastern
Desert. Old wells yielded new oil finds for the
company: at Ras Bakr, from Eocene and Creta-
ceous beds, and at Khreim, 8 miles south of Ras
Gharib, from Eocene and basal Miocene beds.
Between them, the new fields were to eventually
contain over 90 wells by the end of the 1960s.
Egypt History 1967- present
Field completions in 1967 comprised 30 oil
wells, 1 gas well and 2 dry wells, representing an
increase of 200% on previous years. The most
active operator was Gulf of Suez Petroleum Com-
pany (GUPCO) which drilled 12 oil wells and one
dry well in the Morgan Field.
The outbreak of war in June 1967 resulted in
loss of the Sinai coast of the Gulf of Suez to Israel.
Despite these losses and uncertainties brought
about by the war, production increased by 57.5%
on the previous year.
During 1973 the state-owned Egyptian General
Petroleum Corporation (EGPC) and the Egyptian
Government began a 10 year programme which
was intended to increase Egyptian crude produc-
tion to 1.2 million bbl per day by 1983. This plan
was interrupted by the Yom Kippur War during
October 1973. Although the target of 1.2 MBOPD
was not met, an impressive increase in daily oil
production was achieved through this interval.
October Field, the third largest oilfield in
Egypt (after El Morgan and Belayim fields) was
discovered in 1977. The northernmost of the
giant oilfields in the Gulf of Suez, it is penetrated
by 45 wells from eight separate platforms. The
October Field comprises at least six separate
reservoirs in four different stratigraphic hori-
zons. Cumulative production from the October
reservoirs, since discovery in 1977 until January
1991, has exceeded 420 million bbl of oil. New
benefits continue to emerge from this huge
discovery.
In 1989, after an intensive interdisciplinary
effort, the Asl reservoir was discovered. This oil
accumulation, located in an unusual, off-block
trap, contains reserves believed to be in excess
of 70MMBO.
Overall Egypt produced approximately 5 bil-
lion bbl of oil between 1911 and 1991. Daily
production has increased dramatically since
1975 (figure 1.7), but now appears to be stabil-
ising at approximately 870,000 BOPD (early
1991).
Egypts share of world oil production has
been stable in recent years. However, despite a
long and extensive exploration history, there
remains considerable scope for new discoveries.
Future exploration, in regions such as the West-
ern Desert and North Sinai, will almost certainly
identify major new oil and gas reserves and may
lead to a significant rise in oil output.
1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1993
0
100
200
300
400
500
600
700
800
900
A
v
e
r
a
g
e

B
O
P
D

(
x
1
0
0
0
)
1914
Fig. 1.7: Eighty
Years of oil: Since the 1970s
Egyptian oil production has
risen dramatically.
Summary and results of exploration activities (1886 end 1993)
Exp. Area 1000km
2
GOS W.DES
DELTA
(Medit.)
Onshore
SINAI
NILE
VALLEY
RED
SEA
TOTAL
(ave.)
Early
1900s
Mid
1950s
Early
1960s
Early
1980s
Early
1990s
Mid
1970s

BASIN
Start of active
exploration
Seismic (1000km)
Number of explo. wells
Footage (million ft)
Ft drilled / (km
2
)
Discovered fields
Reserves
Avg. daily
production
25
90
794
6.3
252
290
186
417
4.4
15
35
141
121
1.4
40
45
14
28
0.2
4
56
23
13
0.1
<2
559
457
1386
12.5
(21)
108
3
13
0.1
<1
76 33 1 1 111
Assoc. 11 19 30
8 0.6 8.6
3 3.5 6.5 13
790 100 890
300 350 750 1400
Oil (Bbbl)
Oil
Oil (Mbbl)
Gas
Gas (TCF)
Gas (MMCF)