The Nile Delta: Oil & Gas Exploration Hot Spot of North Africa
For minnow and supermajor alike, the various plays of the Nile Delta continue to attract investment for major exploration campaigns through the downturn. The government of Egypt, along with the parastatal operators Tharwa and EGAS, have managed over time to maintain sufficient interest in the exploration upside via reasonable investment terms and a vibrant operating environment. Since the beginning of 2019 around 15 wells have been drilled onshore and seven offshore, mostly wildcat or near-field exploration, and ten large exploration licenses have been awarded offshore.
Deepwater Campaign Disappoints
In the 2000s Shell (partly with Petronas) carried out a major wildcat campaign on what was then the NEMED block, with at least seven wells coming up dry or with very thin gas pay. Comparing the Nile Delta to other mega-river deltas with very thick sedimentary columns, the supermajors expected a bonanza to be delivered in the deep water, in a similar vein to the Niger and US Gulf of Mexico (GoM). The Oligo-Miocene play does, of course, continue – perhaps as far as southern Israel and into the waters of southern Cyprus – but the charge and seal mechanism too often fails, at least at the scale required for commercial discoveries. The major exception to this was the 2015 Zohr discovery, which proved that source was not the main issue; up to 30 Tcf gas was trapped in a major Miocene carbonate reef build-up.
This discovery was enough to galvanize the large companies to remap the area for new leads. Interestingly, the acreage around Zohr – comprising the Shorouk Block (hosting Zohr itself) and the West and South Zohr Blocks – was not immediately drilled up. In fact, the North Port Fouad and Thekah concessions south-east of Zohr were ultimately relinquished. All of these blocks are yet to be evaluated with the drill bit, while carbonate reef build-up style traps have been tested, with mixed results, in Cypriot waters, namely, Glaucus and Delphyne (ExxonMobil), Onesiphorous (Total) and Calypso (Eni). This may be partly due to the high commercial value of the acreage post-Zohr, with new joint ventures taking too much time, but also the lessons from the NEMED campaign meant the non-reef play was still likely to disappoint.
Not to be put off , the supermajors did continue their efforts in 2019 and 2020 further east. At least three wells were drilled in the deepwater blocks, all failing to extend the deepwater/ distal delta play, perhaps stymied by a lack of major structuration there, although gentle compressional rollovers do exist. Similar size deltas have benefited from a major décollement surface, such as shale in the Niger Delta and salt in the GoM, creating many large structures. Energean’s Ameeq well recovered some gas but Nigma (Eni) and Merak (Dana Gas) were dry. Dana Gas’ next well, on the North El Arish block, will, however, test a large carbonate build-up: the Thuraya prospect.
Onshore and Shallow Water Win
Since these campaigns, the industry has firmly refocused on the onshore delta and the shallow water acreage in the offshore western Nile Delta. SDX Energy and Dana Gas have carried out successful campaigns onshore in the South Disouq and Balsam concessions respectively. Offshore, the 2019 Licensing Round finally delivered a huge payday for the government, with ten awards to the majors and supermajors. Winners include ExxonMobil, BP, Shell, Chevron/Noble and Apache.
Given the existing large gas developments nearshore at Temsah, Baltim, Nidoco, Rosetta, Burullus and North Alexandria, exploration companies are keen to extend the shallow water topset/proximal Oligo-Miocene delta play to the west. Recent reserves additions by Eni at Baltim SW and Bashrush (see article: Success for Shallow Water Bashrush Gas Discovery, Offshore Egypt) serve to reinforce this strategy for low risk exploration adjacent to established developments in the shallow and onshore Nile Delta.