Apache With Shell to Produce Egyptian Unconventional Gas in June

Apache Corp. and Royal Dutch Shell Plc plan to start producing unconventional gas from their joint venture in Egypt’s Western Desert by the end of June as the country seeks to bolster output of the fuel to meet increasing domestic needs.

The partners will start drilling the North African country’s first unconventional gas well in a pilot project by the end of March, Apache Egypt Region Vice President and General Manager Thomas Maher said in an interview in Cairo. Apache and Shell will drill two additional wells before talking with the government about full development of the field using horizontal drilling and fracking, he said.

Shell, the contract operator, holds a 52 percent interest in the project, and Apache has 48 percent. The operation lies within Egypt’s Northeast Abu Gharadig licensing area, in which Apache and Shell together have a 50 percent stake and state-run Egyptian General Petroleum Corp. holds the remainder.

The country’s government is seeking new investments in natural gas to help alleviate an energy shortage that has led to lower production at factories, and to reduce bills for imported liquefied natural gas.

Before the 2011 uprising that ousted President Hosni Mubarak, Egypt shipped gas by pipeline to Jordan and Israel. Eni SpA discovered a gas field off the Egyptian coast -- the Zohr Prospect -- that is the largest find in the Mediterranean Sea, the Italian energy company said in August.

To contact the reporter on this story: Tamim Elyan in Cairo at telyan@bloomberg.net. To contact the editors responsible for this story: Tarek El-Tablawy at teltablawy@bloomberg.net, Bruce Stanley, Namitha Jagadeesh

By: Tamim Elyan

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