By OGJ editors
HOUSTON, Dec. 17 -- Apache Corp. has signed a memorandum of understanding (MOU) with Egyptian General Petroleum Corp. and Egyptian Gas Holding Co. for development of the deepwater portion of its Egyptian West Mediterranean Concession. The MOU includes a field development plan and a gas sales agreement for 2.7 tcf or more of natural gas over 25 years. Production is expected to start in 2007.
Apache said that total revenue to all parties under the agreement, net of estimated development and infrastructure costs, is $6 billion.
Apache and its concession partners will supply 400 MMcfd of gas to the Egyptian market during 2007-12 and 375 MMcfd during the following 20 years. "Upon finalization of the agreements, we will have effectively contracted for all of the gas we have found to date in the deep water," said Apache CEO and Pres. G. Steven Farris.
He said Apache would begin appraisal drilling on the concession and start infrastructure construction soon after executing the final agreements. In addition, he said, "We have another five Pliocene-age gas exploratory prospects and eight Miocene-age prospects in the area."
Apache operates the deepwater portion of the concession with a 55% interest. RWE-DEA has a 35% interest, and BP Group holds 10%.
In its first deepwater foray, Apache discovered gas in the deepwater portion of the concession in May 2002 with its Abu Sir-1X well. Three consecutive discoveries and a successful appraisal well followed.
The West Mediterranean Concession is separate from Apache's Khalda Concession, with its two major discoveries, Qasr-1X and Qasr-2X, in which Apache believes it has found 1-3 tcf of gas reserves and 20-70 million bbl of condensate reserves (OGJ Online, Dec. 4, 2003).