In September 2021, the company together with consortium partner Cheiron, acquired a portfolio of upstream oil and gas production, development and exploration interests from Shell in the Western Desert onshore Egypt.
The producing fields are split over four distinct areas, each with different characteristics and geographies:
The Obaiyed Area (Capricorn 50% WI) contains Egypt’s largest onshore gas field and includes the Obaiyed Concession and other producing concessions
Badr El Din (BED) (Capricorn 50% WI) comprises five producing concessions, both oil and gas
North East Abu Gharadig (NEAG) (Capricorn 26% WI) comprises the concession covering the NEAG Tiba area and the NEAG Extension area
Alam El Shawish West (AESW) concession area (Capricorn 20% WI)
Egypt H1 2022 Capricorn working interest production averaged ~35,500 boepd, with a focus on successfully maximising liquids recovery. The joint venture secured additional rig capacity in Q4 2021 to allow a ramp-up in investment following completion of the acquisition in September 2021, in order to take the number of rigs active on the licences from two to five.
A ramp-up in H2 2022 drilling activity is underway following initial delays of the fourth and fifth rigs into Egypt.
3D seismic acquisition was safely completed in Q2 2022 in the non-operated North Um Baraka concession (Capricorn 50% WI), with further 3D acquisition expected over the Capricorn-operated concessions from Q3 2022. These high-resolution surveys will provide significantly improved imaging in prospective areas. Capricorn will begin drilling operations in our South Abu Sennan concession (Capricorn 50% WI, Operator) later in 2022.
The objective of the exploration programme is to discover new commercial volumes to replace the producing reserves in order to sustain Capricorn Egypt production from 2025 onwards.
Environmental Management in Egypt
Alongside our partner Cheiron, Capricorn completed the purchase of Shell’s Western Desert assets in September 2021. Ahead of this acquisition, due diligence was undertaken based on International Finance Corporation (IFC) Standards and good international industry practice references.
The process concluded that the assets have been managed well, with a focus on integrity, major hazard management, and health and safety. We will work with Cheiron, the Egyptian General Petroleum Corporation (EGPC) and other partners to ensure the safety culture established by BADR Petroleum Company (Bapetco) is built upon.
Alongside Cheiron and Bapetco, we undertook a baseline study to assess our GHG emissions impact and identify reduction opportunities. The audit, conducted in late 2021, was the start of our baselining activity for these assets, with a detailed inventory of emissions planned for early 2022. The audit reviewed the accuracy of reporting in the Western Desert operating fields, the protocols used for reporting and any areas of uncertainty that need closing in 2022.
Committed to the World Bank’s Zero Routine Flaring by 2030 initiative, we are working towards eliminating routine flaring from our operations by the end of this decade. Flare-reduction projects are progressing well and additional opportunities have been identified. We are also replacing diesel generators with cleaner-burning gas equipment, and integrating solar power to reduce our reliance on diesel and gas. We will explore other options, including carbon capture and storage and the wider application of renewable power.
Managing water risks effectively is important in the Western Desert, an area of considerable water scarcity. We will focus on using freshwater efficiently and managing water discharge responsibly. This will involve enhanced understanding of water demand; quality and availability of sources; users and stakeholder vulnerabilities; environmental linkages; and discharges or abstractions affecting water resources to inform improvements.