Shell Discovers 500 Billion Cubic Feet of Natural Gas in Egypt’s Western Desert

19 Comments on "Shell Discovers 500 Billion Cubic Feet of Natural Gas in Egypt’s Western Desert"

makati1 on Sun, 4th Dec 2016 10:54 pm 



500B cu.ft = less than 2 months world’s use.

http://www.eia.gov/outlooks/ieo/nat_gas.cfm

A nice find ($$$) for Egypt, but not even a smell in world terms.

(And, yes, the numbers come from an untrustworthy source, the EIA.)

brough on Mon, 5th Dec 2016 3:49 am 



Very nice, but what Egypt needs at this moment in time,is oil and lots of it. Without cheap vehicle fuel that comes with home produced oil, the Egyptian government is going find it increasingly difficult to stave off civil unrest.

Davy on Mon, 5th Dec 2016 5:59 am 



Egypt is a failed state kind of like a death row inmate or a dead man walking. Every metric of a successful civilization is wrong in Egypt. From its overpopulation to its reliance on a river going into climate change surrounded by a desert. I pity Europe that will have to deal with that migration once the place self-destructs which is around the corner.

Anonymous on Mon, 5th Dec 2016 6:12 am 



Thats right exceptionalist, Egypt is so screwed! (Can you locate Egypt on a map w/o assistance?). Sounds a lot like California, Nevada New Nex, and all those places as well doesn’t it? Thought you were talking about your own exceptionally arid and overpopulated desert for a moment. Cept I guess when its time to migrate out the exceptional desert, ya know, cuz of ‘overshoot and depletion’ and all that jazz, where are 30 million calimexicans going to migrate to? Maybe they will join you there in your cracker, hillbilly state perhaps? Got room in your sheep pen for your quota of refugees?

.5mt on Mon, 5th Dec 2016 6:21 am 



I luv the collegial atmosphe of this blog. Honest discussion always cheers me up.. thanks kooks.

Davy on Mon, 5th Dec 2016 6:25 am 



Boy wonder, go back downstairs with the Xbox. Is this article about the US or Egypt dumbass. We all know all the problems about the US because extremist like you make it a daily routine. You need to grow up and accept responsibility for what is going on in your stupid Canada instead of spending your days blaming everyone else but yourself. What a pathetic representation of Canadian 20 something. Boy wonder have you ever stepped foot out of Toronto? I doubt it. Have you ever lived in Europe? I have. Have you ever been to the Middle East? I have and no it was not on vacation and not in a group. I went alone and on business. Go get your cum rag out and relive your stress.

makati1 on Mon, 5th Dec 2016 6:40 am 



Anon, most in the U$ are blind to their own situation. They are saturated with so much bullshit, it is crowding out the last two brain cells that work. The desert is moving East at a fantastic rate. Perhaps even the drying up Mississippi will not stop the trend.

Davy on Mon, 5th Dec 2016 6:54 am 



Try most of the world makati and many like you are in your own different delusion that you are an exception. When was the last time you were on your fantasy farm? You are here every day and by your own admission have no internet on the farm. I find it amusing the way you talk about your farm but are never there. Someday you will realize farming means getting your hands dirty? I remember when you went to the States a few months ago you were offline for two weeks. I know why you were offline because of your fear of being drone or being sent to Gitmo. LMFAO

brough on Mon, 5th Dec 2016 8:52 am 



You’re right Davy, anybody in Europe who is concerned about the future, is worried that the middle east and particularly Egypt, is in an enconomic death spiral. Even here in the UK, well away from the Med, there is a feeling of being sucked-in. As I said above, Egypt needs cheap oil. The Saudis have recently cut supplies. Maybe the Russians will come to the rescue in exchange for keeping the NG in the ground and out of Europe.

OFT on Mon, 5th Dec 2016 8:59 am 



0.5 TCF of gas (if that is what is eventually the producible reserve) is a reasonable addition to Egypt’s resources. The Western Desert is an established province and relatively easy to bring to market, quickly. Egypt is in a short-term (~1 year) rush to bring gas to market to keep keep industry and the populace sated.
The recent super-giant offshore Zohr gas discovery will be the real game-changer though. With reserves of 10-30 TCF (depending upon your sources), it is scheduled to be supplying a significant portion of domestic demand in about 1 year.
http://petroglobalnews.com/2016/12/bp-buys-stake-in-enis-super-giant-zohr-gas-field/

penury on Mon, 5th Dec 2016 9:35 am 



Gee, U wonder if that is why Russia is putting bases in EGYPT? Any guesses? You think maybe Syria has anything to do with it? And isn’t it interesting that Turkey is joining the movement away from the dollar and into local currencies? I wonder if they are aware of what happened to Libya and Irag when they tried to de-dollar?

Rockman on Mon, 5th Dec 2016 10:09 am 



p – Great point. And I wonder how many folks understand that Egypt has the potential to be a bigger choke point for ME oil then the Straights of H? Between the Canal and the Sumed oil pipelines the EU could easily be held hostage by political/military powers in Egypt. The Egyptian army is no obstical. But who is going to attack Russian troops “protecting” Egypt’s sovereignty? Given interferance with oil transiting would increase oil prices and make Russia a lot more revenue it can afford those new bases.

Bob Inget on Mon, 5th Dec 2016 11:24 am 



Issue #1 Egypt needs a democratic, secular government.

Saudi Arabia can no longer afford to supply free oil or hard currency for imported food.
(Egypt refused to send troops into Yemen)
Islam comes in many flavors.

Nat gas, a temporary help at best. Shell’s find would be classified as ‘stranded gas’ about as useful as it were on the moon. No one will finance a pipeline or electrical power station at the well-heads under current conditions. Higher OP’s only make matters worse.

Egypt is going dry. Desalination, powered by renewables (wind solar) could solve some water
problems… But.. Again who or what will finance
two trillion infrastructure in such an unstable
nation.
Which BTW, takes us back to issue # 1

Cloggie on Mon, 5th Dec 2016 12:50 pm 



Issue #1 Egypt needs a democratic, secular government.

Why not just a democratic government?

Oh wait, Western vassal al-Sissi toppled the last one, comparable to what happened in Kiev in 2014.

Dredd on Mon, 5th Dec 2016 2:00 pm 



They probably discovered it 50 years ago, but did not disclose it so as to keep the hounds at bay.

Local reserves should be preserved for local use because (Invasion of The Port Snatchers).

rockman on Mon, 5th Dec 2016 2:29 pm 



As usual the dynamics are too complex to cover in a few short quips. Will take a good number of years to see where it all finally settles down. In the meantime a good bit of foreign capex is landing in Egypt:

“A string of sizable natural gas discoveries has been made in the eastern Mediterranean Sea over the past decade, and Egypt is working to ensure that it reaps the benefits. Cairo signed a preliminary deal with Cyprus on Aug. 31 to build an underwater pipeline linking Cyprus’ Aphrodite gas field with the Egyptian coastline. If the project overcomes the considerable hurdles in its path, including uncertain funding, the pipeline could be operational by 2020, enabling Cyprus to finally begin producing from its largest known natural gas deposit.

For Egypt, though, the deal is but one small part of a much broader strategy. As the promise of eastern Mediterranean energy draws in significant amounts of foreign investment, Cairo hopes to become the center of regional natural gas development. And it will no doubt be successful, since without Egypt’s infrastructure and massive consumer market, many of the projects under consideration would be neither economical nor feasible.

Rebuilding Its Own Base
But as Egypt well knows, it cannot become a regional natural gas hub until its own house is in order. In the mid-2000s, Egypt became a net exporter of natural gas thanks to the discovery of several deposits off its coast. After peaking at 20 billion cubic meters (bcm) in 2009, however, Egyptian natural gas exports fell sharply as declining exploration, investment and upstream activity took their toll on the country’s output. By 2015, Egypt had largely shuttered its two natural gas liquefaction facilities and its pipeline to Israel, once again becoming a net natural gas importer.

For Egypt’s energy sector, as for the rest of its economy, the problem was primarily the massive subsidies driving up domestic demand and dragging down production. Since 2008, Cairo had fixed the price of natural gas at $2.65 per million British thermal units (mmbtu), a boon for Egyptian consumers but a hindrance to outside investment. In an effort to rein in runaway consumption, President Abdel Fattah al-Sisi began implementing price reforms and paying energy firms more for their natural gas in 2014. Not only do industrial users now pay $7 per mmbtu, but Cairo has also begun to pay down its debts to international oil companies for the oil and natural gas they have already produced. (Those debts totaled $6.3 billion at the end of 2013.) Moreover, in the wake of the discovery of Egypt’s massive Zohr field, Cairo struck a deal with Italian firm Eni, pledging to pay $4.00-$5.88 per mmbtu of natural gas — a price in line with the going rates on the global market.

Though al-Sisi’s energy reforms have met resistance, energy companies have returned to Egypt with a vengeance. In exchange for higher prices, Eni has agreed to fast-track the development of the Zohr field, which remains the Egyptian energy sector’s crown jewel. It alone is expected to yield 10 bcm a year when it comes online in 2017, and 28 bcm a year when its second phase is completed in 2019. Eni is not the only firm ramping up its activities in Egypt, either. BP has accelerated two of its own projects, the $12 billion West Nile Delta project and the Atoll project. They are expected to add 12.4 bcm and 3.1 bcm, respectively, to Egypt’s total output as they come online over the next three years.

Yet even in spite of these ventures, Egypt is unlikely to become the major natural gas exporter that it once was. The country’s annual consumption, currently at around 50 bcm, is on track to keep rising — perhaps by as much as 20 bcm — in the coming decade. At the same time, Egypt will have to continue raising energy prices, including by hiking up electricity costs for households, so that it can afford to keep buying natural gas from producers. In August, the government did just that, increasing household electricity prices by as much as 40 percent.

Because Cairo has mandated that any new Egyptian output must first be put toward feeding the country’s own ever-expanding market, little will be left to fill the 20 bcm of export capacity that the country’s liquefied natural gas facilities still have available. Consequently, most of the natural gas Egypt exports in the future will have to come from the stocks it buys from beyond its borders. And for two of its neighbors, Cyprus and Israel, making use of Egypt’s existing LNG facilities is a far better option than sinking the capital required to build new ones.

All Pipelines Lead to Egypt: Prior to the revival in Egypt’s exploration activity, Israel and Cyprus had some luck of their own in stumbling across the gigantic Aphrodite, Tamar and Leviathan offshore fields. Israel considered the windfalls an opportunity to build closer relationships with neighboring Egypt and Jordan by reaching mutually beneficial energy deals that would rest on Israeli natural gas. But its plans were thwarted by the newfound Egyptian deposits and by its own cumbersome bureaucratic process for approving the natural gas agreements. (Because Noble Energy and its partners are developing both of Israel’s major blocks, many were concerned that the deals would grant the companies an effective monopoly over the country’s natural gas market.)”

Hubert on Mon, 5th Dec 2016 4:36 pm 



I doubt this is going to help very much. Egypt has bigger problem, like 82 million people.

Davy on Mon, 5th Dec 2016 5:38 pm 



It doesn’t help that 90% of population in Egypt live on 5% of the only habitable land.

rockman on Mon, 5th Dec 2016 9:04 pm 



Hubert – “Egypt has bigger problem, like 82 million people.” Even though many $billions in potential revenue sounds like a lot but when divided amongst 82 million…not so much. But it won’t be spread around anyway: the govt and military will be the primary beneficiaries. Which is exactly why it will happen IMHO.