A digital edge in Egypt’s upstream

December 8, 2021

Sherif Bayoumy, Schlumberger’s managing director for Egypt, Sudan and the East Mediterranean, talks to The Energy Year about the implementation of the Egypt Upstream Gateway (EUG), the company’s digital solutions and the role of independent E&P players in the Egyptian market. Schlumberger is a global energy technology services company.

This interview is featured in The Energy Year Egypt 2022

Why did the Ministry of Petroleum and Mineral Resources decide to implement the Egypt Upstream Gateway?
The Egypt Upstream Gateway was an initiative by the Ministry of Petroleum, under the leadership of His Excellency Eng. Tarek El Molla, who has a vision to modernise and digitalise the full upstream scope. The objective is to promote the subsurface potential of the country and attract foreign investments, mainly for exploration, then utilise this wealth of data in identifying production enhancement opportunities in existing assets.
Egypt has a lot of untapped potential exploration acreages in the Western Desert and offshore in the Mediterranean, Red Sea and Gulf of Suez. Developing and attracting investments requires a digital platform and now for the first time foreign companies can buy access to Egypt’s subsurface information and analyse it anywhere and anytime through a robust digital platform.

What has been the feedback from the early implementation of the EUG?
The Egypt Upstream Gateway launched with 11 member companies. Today, and within the first year of operation, this number has more than tripled, and it continues to grow and attract new players to the Egyptian upstream sector. In addition, Egypt’s first fully digital bid round represented a key milestone in the Egyptian petroleum sector as interested bidders were able to fully assess the offered blocks online, without the need to travel during the pandemic.
As an EUG member, a company has instant access to ongoing bid round and virtual data rooms to analyse offered data packages, giving potential bidders early insights in block evaluations. Today, we have over 30 member companies, which is an outstanding accomplishment since going live in February 2021.
Additionally, the evergreening studies and reimaging efforts between the Ministry of Petroleum and Schlumberger team in EUG have now vested on-shelf evergreening products available for all clients, those who operate in Egypt or those who do not. These efforts have been a crowning success in attracting new investors to the Egyptian upstream business.

What kind of digital solutions does Schlumberger offer for the upstream companies?
Schlumberger is a technology company. For decades we have been pioneers in the industry by delivering value to our customers through unmatched R&D and differentiated products and services. We believe that digital enablement will bring true value and Schlumberger is focused on providing innovative solutions to digitalise the oil and gas industry.
A key solution to mention is the Schlumberger DELFI cognitive E&P environment, which is a secure, scalable and fully supported cloud-based offering that provides seamless E&P software technology across exploration, development, drilling, production and midstream.
Through our engagements with major IOCs and NOCs globally, we have seen workflows enabled with the DELFI environment to achieve significantly higher levels of performance and efficiency compared to traditional solutions. For example, we have seen improvements in well planning efficiency by more than 50%, well intervention planning reduced by 80%, field development planning accelerated considerably and reservoir engineering workflows completed not in 120 days, but in three.

 

Is Schlumberger investing in hardware in Egypt to support its digital solutions?
We invested in EUG to build a fit for purpose private cloud environment to host EUG data and applications. In principle, we invest in developing digital solutions that leverage our deep domain knowledge and expertise along with advanced AI, machine learning and data analytics, which allows us to better understand our customers’ challenges and solve them with better outcomes.
We collaborate with our partners like Microsoft and IBM/RedHat to host our digital solutions over a wide range of cloud options. The concept of cloud hosting is fast growing and brings cost savings and efficiency gains to our customers and we would like to capitalise on our digital leadership to advance the oil and gas industry to cloud. Additionally, we provide digital platforms like Agora to bring IoT and Edge AI solutions to the industry, which delivers real-time remote operations and intelligent asset solutions towards safer and efficient field operations.

What is your opinion on IOCs divesting assets and the role of independent E&P companies in offsetting the oil production decline in Egypt?
Egypt has many opportunities to consolidate because small, medium-sized and larger IOC clients are all present. The future is going to be mainly for the small and mid-sized companies, focusing on oil production enhancement, leveraging the healthy oil prices and the lower production cost vs other areas globally while major IOCs are highly focusing on gas. Hence it’s a mixed portfolio with multiple opportunities to support such a critical sector.
Easy exploration belongs to the past. The remaining exploration opportunities are frontier developments, in the Red Sea or Egypt’s West Mediterranean, which whenever successful, bring high returns.
The small and mid-sized companies primarily work in the Western Desert, Eastern Desert and Gulf of Suez, which is where we see the divestment and consolidation. There is a lot of demand from local and regional investors to develop these fields. This is a golden opportunity for Schlumberger to work with growing companies, especially for subsurface production enhancement coupled with early production facilities to accelerate the field development phases.

What kind of solutions can Schlumberger provide for E&P companies looking into the early production facility (EPF) segment?
We have heard from many companies the growing need for early production facilities, and we are committed to assisting them in the execution of EPFs as we are preparing for this phase diligently.
Schlumberger’s early production facility activity enables greenfield developments, brownfield modernisation and enhanced recovery programmes to efficiently and sustainably deliver the greatest asset performance for the life of the field.
Our goal is to reduce capital expense and potential for delays, realise full utilisation and meet first oil or gas commitments, achieve economic viability and maximise production uptime and debottlenecking solutions, and all that in an accelerated timeframe. This is what we delivered in the Zohr field, fast-tracking its gas sweetening facility to 14 months from project award using in-house processing technology, engineering and domain expertise to design a robust sweetening process and minimise engineering to reduce time to procurement, leveraging in-country presence to overcome the accelerated delivery challenges.

What opportunities does Schlumberger see in the net-zero and green energy sectors in Egypt?
We are discussing renewables and green energy with all stakeholders, especially with the current drive from the country and the ministry to accelerate pilot projects for this matter.
Furthermore, EGPC is developing its first report on sustainability and Schlumberger is supporting via knowledge transfer in this domain, using the United Nations Sustainable Development Goals as a framework.
This creates more opportunities for us in CCS, where we have over 20 years of expertise. We presented our footprint across the full value chain and discussed what we could do in terms of digital or subsurface studying the CCS workflows and how we can contribute.

What technical challenges does the Egyptian subsurface pose for E&P operations in Egypt?
Egypt has been successful in increasing the exploration activities in the Mediterranean and new frontier areas such as the Red Sea through attracting new international oil companies. Exploration activities always come with challenges related to seismic imaging’s ability to unlock the petroleum system challenges and minimise the exploration risk. Egypt is also focused on the production potential from brownfields, which is usually challenged by the complexity of the depositional plays in the Western and Eastern deserts, besides the ability to define the best possible production optimisation plans to extend the life cycle of those brownfields.

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