Dragon Oil looks at new growth for Egypt

In an exclusive interview with Pipeline Magazine’s Nadia Saleem, UAE’s Dragon Oil CEO Ali Al Jarwan speaks about the company’s operations and plans for Egypt

Dragon Oil just acquired shares in Egypt’s Gulf of Suez Petroleum Company’s concession. What plans do you have to boost production there?

The strategy to enhance production from the concession underpins improving delivery from existing wells, drilling of new wells and improving the overall on-stream processes. Dragon Oil is mobilising a sufficient number of capable rigs to fulfil its work-programme. For improving the success factor of new wells, we have launched the acquisition of 3D seismic data and its analysis. Major machinery overhauls are also being expedited and integrity maintenance programs are being enhanced to ensure a very high level of safety and smooth operation. In addition to the above, Dragon Oil plans to drill exploration wells in new areas, where we hope to add production from.

How does this fit in with the company’s Egypt strategy?

Our entry into the Egypt’s energy sector was in 2014 with the acquisition of East Zeit Bay exploration block. Now, we want to partner with Egyptian General Petroleum Corporation (EGPC) in their quest to sustain and increase the domestic production of hydrocarbons. So the acquisition of Gulf of Suez assets fits in very well with strategic growth objectives of Dragon Oil in Egypt. Additionally, we are delighted to work with GUPCO (Gulf of Suez Petroleum Company) to achieve improved recovery from mature fields.

What plans do you have to further your footprint and investment in Egypt?

We will continue to explore opportunities to further enhance our partnerships and footprint in Egypt. We shall focus on acquiring working interest in producing fields and in promising prospects for exploration.

What is your market outlook for the country?

The current crude production is fully consumed locally due to the country’s needs. The demand remains high for the country and the government is supporting additional investments to increase production and satisfy local market needs.

How do you think Dragon Oil can help Egypt’s ambitions for becoming a regional energy hub/reaching self-sufficiency in petrochemical sector?

Dragon Oil’s ambitions are very much aligned with Egypt’s – that is to grow production for satisfying domestic demand and eventually becoming a net exporter following self-sufficiency.

Are you looking at new partnerships or taking part in concession awards?

Dragon Oil is open to exploring all opportunities and we track the bids offered by the government and we are willing to have partners as long as Dragon Oil can hold operatorship.

What is your business outlook for Egypt’s energy sector?

Egypt has become a hub in Africa as it develops its oil and gas reserves -this provides new project opportunities for oil and gas companies to tap into. That’s why companies are looking to invest and develop these projects to further expand their portfolios and market position. This is evident from the successful annual Egypt Petroleum Show (EGYPS) where ENOC and Dragon Oil participate – this helps us stay connected with the country and the existing investor to share experiences and knowledge from Egypt’s energy sector.

What challenges do you think need to be addressed to help Egypt’s growth in the energy sector?

Egypt has a significant upside potential when it comes to energy sector development opportunities. However, there are some key issues, which if resolved or improved, will be able to help propel Egypt’s growth swiftly.

One of the key issue is that the country still has fuel subsidies, which pose pressure on pricing and profitability of producers. Additionally, there is much room for improvement in available financing for energy projects. Also, new players coming into the Egypt market need facilitation so they can take advantage of the many opportunities present in order to boost the country’s competitiveness.

How important is the country for your regional growth plans?

UAE has a long-standing relationship with Egypt, which has geo-political stability and a proven history of working well with international partners. So it is very natural for us to assign very high priority to Egypt in our ambition to increase our regional production portfolio.