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Well Evaluation Conference Egypt 1995

7

arlier this century, some Egyptologistsargued that all of the hard black material onmummies was a plant-based resin pitch, not amineral bitumen. However, sophisticated chemi-cal analysis techniques ended this lengthydebate by identifying three tell-tale elements -vanadium, nickel and molybdenum - which onlyoccur in bitumen.

In addition to the evidence, eye-witnessaccounts have survived which testify that bitumenwas used in mummification. Diodorus, a well-known historian in the time of Julius Caesar,travelled to Egypt in the 1st century BC. Hedescribes the export of bitumen to Egypt by theinhabitants of the surrounding lands, who gath-ered bitumen found floating on the Dead Sea.This bitumen was known as Lacus Asphaltites, orBitumen of Judea. In the hands of the embalmers,Diodorus observed, it was mixed with aromaticspices, and that without it, ‘...the body cannot bepreserved long from putrefaction’.

Ancient Egyptian shipbuilding, large andsmall, benefited from the waterproofing proper-ties of bitumen. Red sea coracles, or Gufa, weremade watertight with pitch (these boats can stillbe seen on the Tigris). According to Greek histo-rians, the Egyptians almost certainly usedbitumen to caulk large sea-faring ships, sealingthe spaces between the planks with bitumenand papyrus. This technique was being usedalmost 3000 years ago.

Apart from such noble use as preserving thedead and protecting a nation’s navy, bitumen wasused for eye-paint, and, mixed with fruits and aro-matic oils, as a perfume. Throughout the MiddleEast tar from oil was used as a skin ointment.

Later, bitumen was used in brick making, andin the mortar of brick structures - it can still beseen in the remains of the walls of Babylon.

The seepages at Gebel Zeit, (Arabic for ‘oilmountain’) were known and exploited by theRomans, who named the area ‘Mons Petro-liferus’. The sticky pools of bitumen were usedfor domestic light and heat, and in quarryingand digging for gold.

Little subsequent interest was shown in oilseepages from the ground until the mining ofsulphur began in the late nineteenth century.The discovery of oil by those sulphur minerslaunched an industry, and a new age.

THE DAWN OF AN INDUSTRY

While mining for sulphur under the Gemsa hillsduring the 1860s, the French company ‘SociétéSoufriere des Mines de Jemsah et de Ranga’ sunka 80ft shaft from a 130ft gallery. The shaft, beingbelow sea-level, filled with sea water and a layer ofoil. A second gallery filled with the same mixture.

The company approached the Egyptian Gov-ernment for permission to explore for oil. Nodoubt appreciating the potential of this find, theGovernment refused on the grounds that the 30-year concession, granted in 1863, was concernedonly with the sulphur mining. The Societe tookthe argument to court in 1869. It took the Gov-ernment 14 years to win the lawsuit.

In 1883, a Belgian specialist, M de Bay wasengaged by the Egyptian Government to explorefor oil at Ras Gemsa. Operations began inNovember 1885, the teams drilling with a steam-driven rig. His moderate success with de BayWell Number One - which yielded gas and oil ata rate of 1.3 tons per day - was not repeated withwell numbers two and three. In the year of theircompletion, 1886, de Bay’s contract was notrenewed.

To replace de Bay, the Egyptian Governmentlooked further west and appointed an American,Mr H Tweddle, and a team of drillers to con-tinue the search. All five of Mr Tweddle’s Gemsawells were considerably deeper than those of hispredecessor’s and all struck or showed oil.

Also in 1886, American geologist and engineerL H Mitchell was appointed to carry out a surveyof the area. Mitchell’s report and recommenda-tions to drill deeper for oil-bearing sedimentsare now considered to be prophetic, consideringthat the science of petroleum geology was in itsinfancy. He also downgraded Giftun, Shadwan,Jubal and other islands, as being at ‘too greatdepth’ to contain oil.

Mitchell recommended that drilling shouldcontinue at Gemsa, and also at Ras Dhib to thenorth and Abu Durba on the eastern side of theGulf. However, after an expenditure of £100,000the Government withdrew support and drillingstopped 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 orno prospecting in Egypt. However, the catalystfor new drilling at Gemsa - and the resulting findof Egypt’s first commercial oil well came with theenactment of mining legislation (see box) and areport on the mining industry of Egypt for theyear 1905, by Mr John Wells, an inspector ofmines for the Egyptian Government.

In June, 1907, The Egyptian Oil Trust Ltd,wasregistered by Messrs Light and Fulton, in Lon-don. Its objectives were to acquire oilconcessions, explore, develop, drill, refine, store,supply, distribute and deal in petroleum andpetroleum products. It had a capital of£100,000, in £1 shares. Its concessionsembraced 100 square miles of territory, immedi-ately west of the Red Sea, and included waters ofthe Suez Canal, including Gemsa.

The Trust’s workers began drilling on 1 Jan-uary 1908, under the supervision of Mr J Josh.The machinery for the operation had beenshipped from England (most of the oil explo-ration in the period 1884-1910 was carried outby shallow cable tool drilling). As the welldescended to a 1000 ft, Mr Josh and his teamreported that ‘a three months’ delay was causedowing to the losing of the tools’. It was com-pleted in March 1909 at a depth of 1920ft.

The Petroleum Review reported on 24 April1909: ‘A most important oil strike has recentlybeen made by the Egyptian Oil Trust Ltd, in oneof its wells upon the coast of the Red Sea’. Thespot had been surveyed and chosen by Mr D ASutherland, the company’s consulting engineerand general manager. Oil had been struck bySutherland Well Number One, situated betweenthe well sunk by the unfortunate M de Bay andthat of Tweddle (both of which failed, accordingto Sutherland, due to lack of depth and therebeing no proper water shut-off). Other wellswere also to prove fruitful. Later that year, thesecond ordinary meeting of the Egyptian OilTrust Limited, in London, was to hear that WellNumber One had struck large quantities of oil ata depth of 1287 ft, in porous dolomitic lime-stone. The well was a ‘gusher’, producing twobarrels per minute. Mr Thomas Carter, Secretaryto the Trust, announced that analysis of the oilproved that it ‘compares equally with the bestOhio oil, hitherto regarded as the best oil in theworld’.

This remarkable chapter in the history of theEgyptian Oil industry reached a climax in thespring of 1912. The Petroleum Review of 9March reported: ‘The commercial era in thedevelopment of the petroleum resources ofEgypt may now be said to have commenced. Welearn that the Anglo-Egyptian Oilfields Ltd, havereceived information to the effect that the firsttank steamer with 3000 tons of Gemsah oil onboard has left for the Far East.’

In all, 23 wells were drilled at Gemsa, and fora number of years it was the only source ofEgyptian production. But its output graduallydeclined until, in 1927, it became inoperative.


9

troublesome because of largeamounts of water infiltration.A dehydration plant wasconstructed in 1917, on theHurghada Field, to de-emul-sify and treat the oil beforetransport to Suez.

Despite the difficulties ofthe war, the Hurghada Fieldbecame what the short-livedGemsa Field could never be -a settled, productive commu-nity. Secure employment for1200 Egyptian people hadbeen created by the industry.Hurghada’s peak productioncame in 1931 when theannual output totalled1,800,000 bbl.

NEW BLOOD: HURGHADA

The Hurghada Field lies about 100 miles southof where the Gulf of Suez meets the Red Sea. In1911, Max K Bauermann, a geologist who hadworked for the Royal Dutch-Shell Group inRomania since 1909, was sent to Egypt on ashort exploratory assignment. He discovered theWest Hurghada structure - Cretaceous and Car-boniferous (Nubian) sand formations below theMiocene - recommended drilling, and the firstwell encountered oil at 631 ft. In the same year,an examination of the Hurghada region wasmade on behalf of the Egyptian Government.Drs J Wanner and H M E. Schürmann examinedthe same area for Anglo-Egyptian, and on thebasis of their report, an exploratory well wasdrilled. Egypt’s first commercial oilfield hadbeen tapped, in Nubian Sandstone at about2300 ft.

Oil exploration stopped shortly afterwardsbecause of the First World War, and did notstart again until hostilities ended.

Egypt became a major war base during theyears 1914-1919, with its population and econ-omy committed to the war effort. During theseyears, Hurghada provided the bulk on the Egyp-tian output, and it was here the Egyptian OilTrust’s (now known as Anglo-Egyptian OilfieldsLtd) 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.


10

THE TWENTIES: A LONG, LEANDECADE

In 1919, the Petroleum Research Laboratory wasestablished in Cairo as a branch of the govern-ment Chemical Department - later to becomepart of the Mines Department. A small refinerywas proposed to handle the oil anticipated fromgovernment exploration. In addition, the gov-ernment was also able to receive royalties in oilinstead of cash, under a clause in the agreementwith Anglo-Egyptian Oilfields Ltd. The refinerywas erected at Suez in 1922 and then closed forsix months to sort out the technicalities of han-dling salt-water emulsified crude fromHurghada. Operations restarted in 1924.

Peacetime brought new codes of licensing andleasing procedures from the government. But

despite hopes of fresh discoveries, the only realsuccess came in 1921 at Abu Durba on the westcoast of Sinai. During the years 1918-1923, theGovernment drilled 10 wells at Abu Durba nearoutcrops of oil-bearing Nubian Sandstone. Thefield was small, and output low, and two yearslater the Government handed operations over toa local company, the Egyptian Oil Syndicate.Out of 15 wells drilled, three produced oil, andthe field was abandoned after producing a totalof 5000 tons of crude oil.

The 1920s were lean years for the oil industryin 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-tions on private European companiesprospecting for oil in the area added to theirproblems. By 1923 the Eastern PetroleumFinance Company and Oilfields of Egypt hadboth drilled wells - some of which reached3000 ft - on the coast and Egyptian islands, andhad abandoned operations. Anglo-Persian oilcompany took licenses for large areas of Sinai,drilled, and had similarly given up by 1923.Other attempts to extract oil from the Sinaicoasts and islands were fruitless.

New technology began to be exploited duringthis otherwise barren decade. In 1923 Anglo-Egyptian Oilfields Ltd introduced the Eötvöstorsion balance into Egypt, and Gemsa andHurghada were surveyed. This was the first timethe technique had been used outside Europe,and came before its first use in the USA.

The world economic upheaval in 1930-1932threatened another crisis for the industry inEgypt. Luckily, the industry was out of itsinfancy, and firm structures and technology werein place. Oil production and the Suez refinerycontinued. However, until the late 1930s, onlythe activities of the Anglo-Egyptian Oilfields Ltdgave any positive results, and Hurghadaremained the only producing oilfield. Egyptiandomestic 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).


11

A SECOND RUSH FOR BLACK GOLD

Early in 1937, the Egyptian Governmentresponded to growing pressure to find fresh oilreserves with a massive redefinition of miningregulations. Under the new rules, provision wasmade for the granting of prospecting licensesover area of not less than four square kilometres,for one year, subject to renewal. The effect wasimmediate and startling. Companies in the UKand the USA scrambled to apply for licenses,and within a year some were drilling (figure1.3). The five international groups holding themajority of permits were; Anglo-Iranian Oil,Royal Dutch-Shell Group (which includedAnglo-Egyptian Oilfields), Socony-Vacuum OilCo Inc, Standard Oil Co, of California, and Stan-dard Oil Co, of New Jersey. However, becauseonly 40 permits could be granted to any onecompany, the Big Five applied for blocks in thenames of their subsidiaries. This resulted in noless than 23 companies prospecting by 1939.

By 20 October that year, 8.5% of Egypt’s terri-tory was being probed for oil, with extensive

geological and gravimetric surveys. In 1938,Anglo-Egyptian Oilfields pipped its competitionto the post, identified a promising structure, andstruck oil in basal Miocene limestone at RasGharib, a barren stretch of desert about half waybetween Hurghada and Suez. The well wasspudded on 1 December 1937, and was com-pleted in April of the following year at a depth of2560 ft. It produced 150 tons per day. Tanksand loading facilities were quickly built, and thefirst shipment of Ras Gharib crude was made on18 August 1938. A spectacular rise in produc-tion was reported in 1939, with a total output of5,100,000 bbl exceeding the previous year’syield by 207%.

This was to prove a very fortunate discovery.Production from the new field sustained almost allof Egypt’s oil industry during the extraordinaryyears to follow. Egyptian oil output almost dou-bled during the the Second World War (figure1.7). 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.


12

The end of the war brought renewed activitiesfrom a narrowed - down field of three majorcompanies; Anglo-Egyptian Oilfields Ltd,Socony Vacuum Oil Co, and Standard Oil Co, ofEgypt (a subsidiary of Standard Oil Co, New Jer-sey). Between them they held 718 explorationpermits, scattered through northern Egypt fromthe Libyan to the Palestine borders. The compe-tition was for rich prizes: any substantial oildiscovery at this time was worth more, barrel forbarrel, than those in the Persian Gulf. The northEgyptian ports on the Mediterranean Sea meantany prospective find was close to the markets ofEurope, bypassing the expensive pipeline ortanker routes taken by most Middle Eastern oil.

Political Change: Frustration andSurvival

The first success of the post-war explorationcame in 1946 when Anglo-Egyptian OilfieldsLtd, in partnership with Socony-Vacuum Oil Co,struck oil in a wildcat well at Sudr, on the eastcoast of the Sinai Peninsula. The oil was foundat 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 around3.5 million bbl, was enough to raise the totalyear’s output for Egypt to an new all-time highof over 13 million bbl.

Exploration activity in the Sinai Peninsula wasbusy during 1947. The Standard Company ofEgypt (Standard Oil, New Jersey), drilled severalwildcats, and a Socony-Vacuum/Anglo-Egyptianpartnership drilled at Hamra, northeast of Suez.Exploration began in northeast Sinai, and afterthe mines had been cleared from the WesternDesert, test wells were sunk within four miles ofthe Great Pyramids.

During 1948 the Standard company discov-ered its first new oil field. The strike was made atWadi Feiran, about 155 miles south of Suez onthe Sinai Peninsula. Initial reports of productionranged from 3000 bbl per day to a more cautious150 bbl per day. Sadly, for Standard Oil of Egypt,its productivity was to become immaterial.

In the same year, a new Mines and QuarriesLaw was passed by the Egyptian government.This dictated that, with exceptions judged by thegovernment, all exports from the nation wouldhave to be in the form of products refined withinthe nation. The policy prohibited exports ofcrude oil, allowing only products refined inEgyptian plants to be sold abroad. The request ofthe Shell Group to expand its Suez refinery toincrease throughput was refused, unless thecompany handed over a 51% share in the refin-ery to the government.

Shortly after striking oil for the first time in12 years of exploration, Standard Oilannounced its decision to withdraw from alloperations in Egypt. The provisions of the newoil law were regarded as ‘too restrictive to allowefficient operation’. The company had spentmore than $12.5 million looking for oil inEgypt. Its concessions were returned to thegovernment.

Meanwhile, the bottleneck of crude oil insideEgypt, together with the low morale of theEuropean and American companies, effectivelycurbed exploration until 1953, when a new,more liberal oil law was enacted. In the wake ofincreasing exploration activity, a new field wasdiscovered at Belayim, about 8 miles south ofFeiran, by the Southern California PetroleumCorporation, on behalf of the government’s

Fig. 1.6: The World

Petroleum report of the Ras

Gharib 'oil rush' - 1939.


13

International Egyptian Oil Company. StandardOil of Egypt had carried out reflection seismicsurveys during the late 1940s, and CompagnieOrientale des Pétroles d’Egypte (COPE) followedup with detailed land and marine reflection seis-mic surveys. The discovery well yielded 1150 bblper day. Development of the Belayim Field passedto the National Petroleum Company (American)in 1956.

The General Petroleum Authority (GPA) wascreated by the Egyptian Government in 1956.GPA founded the General Petroleum Company(GPC) in 1956 and awarded it 63 prospectinglicenses in the Gulf of Suez and the EasternDesert. Old wells yielded new oil finds for thecompany: at Ras Bakr, from Eocene and Creta-ceous beds, and at Khreim, 8 miles south of RasGharib, from Eocene and basal Miocene beds.Between them, the new fields were to eventuallycontain over 90 wells by the end of the 1960s.

Egypt History 1967- present

Field completions in 1967 comprised 30 oilwells, 1 gas well and 2 dry wells, representing anincrease of 200% on previous years. The mostactive operator was Gulf of Suez Petroleum Com-pany (GUPCO) which drilled 12 oil wells and onedry well in the Morgan Field.

The outbreak of war in June 1967 resulted inloss of the Sinai coast of the Gulf of Suez to Israel.Despite these losses and uncertainties broughtabout by the war, production increased by 57.5%on the previous year.

During 1973 the state-owned Egyptian GeneralPetroleum Corporation (EGPC) and the EgyptianGovernment began a 10 year programme whichwas intended to increase Egyptian crude produc-tion to 1.2 million bbl per day by 1983. This planwas interrupted by the Yom Kippur War duringOctober 1973. Although the target of 1.2 MBOPDwas not met, an impressive increase in daily oilproduction was achieved through this interval.

October Field, the third largest oilfield inEgypt (after El Morgan and Belayim fields) wasdiscovered in 1977. The northernmost of thegiant oilfields in the Gulf of Suez, it is penetratedby 45 wells from eight separate platforms. TheOctober Field comprises at least six separatereservoirs in four different stratigraphic hori-zons. Cumulative production from the Octoberreservoirs, since discovery in 1977 until January1991, has exceeded 420 million bbl of oil. Newbenefits continue to emerge from this hugediscovery.

In 1989, after an intensive interdisciplinaryeffort, the Asl reservoir was discovered. This oil

accumulation, located in an unusual, off-blocktrap, contains reserves believed to be in excessof 70 MMBO.

Overall Egypt produced approximately 5 bil-lion bbl of oil between 1911 and 1991. Dailyproduction has increased dramatically since1975 (figure 1.7), but now appears to be stabil-ising at approximately 870,000 BOPD (early1991).

Egypt’s share of world oil production hasbeen stable in recent years. However, despite along and extensive exploration history, thereremains considerable scope for new discoveries.Future exploration, in regions such as the West-ern Desert and North Sinai, will almost certainlyidentify major new oil and gas reserves and maylead to a significant rise in oil output.

1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 19930

100

200

300

400

500

600

700

800

900

Ave

rage

BO

PD

(x10

00)

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 1000km2

GOS W.DESDELTA (Medit.)

Onshore SINAI

NILE VALLEY

RED SEA

TOTAL (ave.)

Early 1900s

Mid 1950s

Early 1960s

Early 1980s

Early 1990s

Mid 1970’s

– –

BASIN

Start of active exploration

Seismic (1000km)

Number of explo. wells

Footage (million ft)

Ft drilled / (km2)

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)

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