Egypt's Oil Hopes NEW ACTIVITY IN THE SINAI FIELDS

Press, Volume XCVI, Issue 28359, 19 August 1957, Page 10

Egypt's Oil Hopes NEW ACTIVITY IN THE SINAI FIELDS

[Bv a Special Correspondent of the "Financial Times” recently tn the Sinai Desert] (Reprinted by ‘ Arrangement]

• For something like 70 .years i Sinai has been on«£ of the most tantalising of the world’s oil-bear-ing areas. Everything tends to indicate that there must be oil beneath the sand and rock of this desolate, moon-like peninsula. There are many oil seepages and in the days of the Pharaohs bitumen had many uses in Egypt, including the preparation of mummies. The first attempts in Sinai started before the turn of the century. Many of the world’s major oil companies, from Shell and Standard of New Jersey, Standard of California and Texas Company to Socony Vacuum, as we’l as many smaller enterprises, have tried their luck in Sinai. The first strike was made in 1921 at Abu Durba, on the west coast of the peninsula. Two years later the field, which had a small output of low quality oil, was leased to an Egyptian company for exploitation. Abandoned Wells Fifteen wells x irOre sunk at Abu Durba. Only three were productive. A total of 5000 tons of crude had been produced by the time the field was abandoned. The sand track from Suez south, along the coast to Al Thor and to the tip of Sinai, at Abu Durba goes through a desert petroleum cemetery: two ancient percussion drilling machines half buried in the sand, rusty bits of pipe and iron strewn among the rocks, an empty' office building rotting in the sun. An occasional bubble cm still be seen .where the wells used to be. : A Bedouin has dug a ditch a few inches deep from

an old well to a ’ 4 -tle pond where, after weeks, a few gallons of oil accumulate Shortly after the wa-, Shell and Socony struck oil at Sudr and Asl, a few miles south of Suez on the Sinai coast Leases for the exploitation of these fields were granted in 1948, but they were the last to be granted under the old laws as the Egyptian Government introduced new. legislation under which only companies with .' a 51’’ g>er cent Egyptian Shareholding could take out oil mining leases. Americans Withdraw Before the new laws came into force Standard of New Jersey had struck oil at Wadi Feiran, again on the west coast, north of Abu Durba. But the new laws were so restrictive that Standard decided to withdraw from all exploration activity in Egypt rather than bow to them. In 1952 the laws were amended to allow foreign oil companies to operate again, as oil prospecting had practically come to a standstill throughout Egypt. In 1953 a lease for Wadi Feiran was granted to the Egyptian Oil Co-operative in association with a Swisa bank and with minor American interests. The Swiss asked the Belgian group, Petrofina, to join the enterprise. Petrofina brought in Mr Mattei’s EniAgip, the Italian State oil corporation. After going through different stages and names—the National Petroleum Company of Egypt, the

: pany, etc.—earlier this year the : new arrangement was completed i with the establishment of the Oril ental Oil Company of which 4t i per cent, is Egyptian (29 per cent • the Egyptian Government and 20 I per cent, the Egyptian Co-opera- ■ tive) and 51 per cent belongs to the International Egyptian Oil Company in which the Italian, hold a controlling interest. AU the leases and permits formerly held by the National Petroleum, the ' Co-operative, etc., are being 1 transferred to the Oriental Cckq. pany. ' The management and almost all 1 the technicians of the new com. 1 pany are young Italians trained la the Po Valley gas fields. There. are about 40 of them in Sinai now. ; Starting from Wadi Feiran they have discovered three new fields, at Belayim, Abu Rudeis (whera Standard had drilled 10 years ago) and Ekma. Belayim tnd Abu Rudeis are more than promising. At Belayim 20 productive wells ■ have already been sunk. The : structure is large, but most of it 1 is offshore in the Gulf of Suez, as at Wadi Feiran and Abu Hudeis. Production tests at the recently completed first well at Abu Rudeis have given an average daily output of over 200 tons at a depth of 9212 feet. Offshore Drilling Operations The Italians are now planning to driU a much larger number of wells at Belayim. Wadi Feiran, and Abu Rudeis. Several obUque wells from shore with a 40 degree inclination under the sea bed have already been dsilled at Belayim.

Offshore drilUng platforms are to be built in the near future. The Italians are talking of an output of over 10 million ions in three or four years’ time. Operations have been delayed by last year’a fighting between the Egyptians and Israelis when a great deal of equipment stored at Abu Rudeis was lost One of the major technical difficulties ! which had to be overcome in' reaching oil in an four of the fields was the piercing of thick salt strata. It was achieved by using mud fluids with a high salt content. At present the only sea lines are at Wadi Feiran, but new sea lines will have to be built soon. Temporary Camp The Italians have now got to face the problem of turning their temporary oilrprospecting camp at Abu Rudeis into something permanent. The present camp, with about 40 Italians, a few technicians of other nationalities, and an Egyptian labour force of 800, is primitive when compared with oil settlements in Saudi Arabia, Kuwait, and even Qatar. Employees cannot have their families with them and in the whole camp there is not a single air-conditioning unit. A radio set and two small aircraft belonging to the company are the only links between the camp at Abu, Rudeis and Cairo. .. - But Mr Mattei'says: "The other oil compaiues, started this way, too; only when they became rich and powerful did conditions change. We have got to foUow the same path.”