Petroceltic’s core area of operations in Egypt is in the onshore Nile Delta where it holds a 100% operated interest in 8 producing fields in 14 development concessions in the El Mansoura, South East El Mansoura and Qantara concession areas. The field development operations are managed through a Joint Operating Company called Mansoura Petroleum Company jointly owned by Petroceltic and the Egyptian Government. In addition, Petroceltic has a 37.5% interest in the El Qa’a Plain exploration concession operated by Dana Petroleum.
For several years, the Egyptian economy has had a severe shortage of US dollars leading to international oil & gas companies building up large US dollar receivables in respect of unpaid production revenue. For Petroceltic, this receivable peaked at over USD 150 million in late 2011 but this has been significantly reduced as a result of regular small USD payments from the state oil company EGPC and because Petroceltic was able to accept partial payment in Egyptian pounds to meet local costs.
In November 2016, the International Monetary Fund disbursed the first tranche of a USD 12 billion loan to Egypt with further tranches expected to follow in 2017. This has led to more US dollars circulating in the country’s banking system and an improvement in USD payments from EGPC. At around the same time, the Egyptian pound was floated after having been previously constrained to an official exchange rate much lower (in EGP per USD terms) than the free market rate; this has led to a limited ability to convert EGP into USD locally. In January 2017, Egypt issued a USD 4 billion Eurobond which is expected to provide further USD liquidity to the banking system.
Production and Reserves
In 2016, Petroceltic’s daily production in Egypt averaged 10,300 boepd on a working interest basis, which is equivalent to 6,600 boepd on a net entitlement basis. The working interest production split between hydrocarbon types was 50 MMscfpd of gas and 1,600 bpd liquids (oil, condensate and LPG) representing an 85%/15% split on a volume basis.
Since takeover by Worldview in June 2016, the production in Egypt is up more than 30% and continues to show growth. Petroceltic expects to continue to increase production in Egypt, aiming to double production and regain 2014 average production levels.
Petroceltic’s preliminary estimate of proven plus probable reserves (on a working interest basis) at end 2016 is 24.2 MMboe, split 107 Bcf gas and 5.7 MMb of liquids.