Dutch company Shell has completed the drilling of three vertical wells through limestone layers in the Apollonia field in the Western Desert, to collect necessary information for the design of horizontal wells and methods of hydraulic fracturing, where expenditures are estimated at $4.5m.
A senior official at the Egyptian General Petroleum Corporation (EGPC) told Daily News Egypt that Shell aimed to dig 40 wells to develop gas production from Apollonia. However, he added, the decline in the Brent price forced the company to reduce the number of wells planned.
The cost of drilling one vertical well in Apollonia ranges from $1m to $1.5m, and produces about 2m cubic feet of gas a day. Shell is specialised in drilling these types of wells.
The official said Apache will drill horizontal wells in Apollonia with an estimated cost of $5m to $6m per well, as it has expertise in this field from its concession areas in the US.
An official at the Egyptian Natural Gas Holding Company (EGAS) estimated the accessible gas reserves in the limestone layers in Apollonia to be about 700bn cubic feet.
The official said Shell and Apache are the first companies to research and explore for gas in new layers using unconventional technology in the Apollonia field. He added that Shell and Apache target expanding their search, after the inauguration of the Apollonia field.
He said the cost of producing 1m BTUs of gas from the limestone layers in the Apollonia field will be between $3 and $4, which is a good price compared to the cost of importing gas, which ranges between $8 and $9 per million BTUs. He said Apache will drill three more horizontal wells in Apollonia through limestone layers, and conducting hydraulic fracturing for them.
The approved budget for this joint venture stands at $23m, where operations are conducted by Khalda Petroleum Company and Badr Petroleum Company.
The official said Shell and Apache will start producing gas from Apollonia by next February.
He pointed out that surface facilities will be completed by December, and the first well be connected to them by the beginning of January.
Minister of Petroleum Tarek El-Molla signed last December the first contract for the production of gas from limestone layers in the Western Desert with Apache and Shell with estimated investments ranging between $30m and $40m. The Shale gas drilling contract provides for the drilling of three horizontal wells up to 14,000 feet deep in the Western Desert fields.