Lukoil signs agreement for exploration, production at South Wadi El-Sahl block in Egypt's Eastern Desert

MOSCOW. June 25 (Interfax) - Lukoil Overseas Egypt, a subsidiary of PJSC Lukoil , and its partner South Valley Egyptian Petroleum Holding Company have signed a concession agreement with Egypt's Ganope petroleum holding company for oil exploration and production at the South Wadi El-Sahl block in Egypt's Eastern Desert.

The work program includes conducting 200 square kilometers of 3D seismic surveys and drilling six exploration wells, the Egyptian Petroleum and Mineral Resources Ministry said.

The contract area shows promise due to its proximity to existing development projects with established infrastructure and processing facilities, which will help reduce costs, the ministry said.

In April, Lukoil also won rights to operate the Wadi El-Sahl project.

The new concessions are located adjacent to Lukoil's existing projects - West Esh El Mallaha and Development Extension for West Esh El Mallaha.

Lukoil has been operating in Egypt since 1995. The company's first project in the country was the Meleiha concession, with a 24% stake, while the operator, Italy's Eni, holds 76%. Active exploration, including 3D seismic surveys and exploratory drilling, revealed several highly productive fields - North Nada and Gawaher (2007), Arcadia (2010), Emri Deep (2012), Rosa North (2013) and Meleiha-West (2014). Commercial production is carried out at the Rosa North field.

In December 2020, a new oil field was discovered in the Arcadia South structure.

In 2002, Lukoil joined the West Esh El Mallaha (WEEM) concession in the Eastern Desert, near Hurghada, where production has been ongoing since 1998. In 2009, the company joined the WEEM Extension (an area adjacent to the WEEM block to the northeast). Lukoil holds a 50% stake in both of these projects as operator, with the remaining 50% held by the Egyptian company Tharwa Petroleum. Geological exploration commitments were fulfilled as part of the contract, including drilling exploratory wells and conducting 3D seismic surveys. Test production began in 2010, and a twenty-year development license was obtained at the same time.