Royal Dutch Shell announced on August 31, 2016, new natural gas discoveries in a concession area of north Alam El-Shawish in Egypt's western desert.
According to Shell Egypt head Aidan Murphy, the discovery is one of the largest in Egypt’s western desert in recent years, with initial reserves of 500 billion cubic feet. He further added that the company had acquired rights for the exploration of oil and natural gas in the area back in 2012.
After winning the tender, the company had inked a deal with the Egyptian General Petroleum Corporation (EGPC) and the Ministry of Petroleum.
Mr. Murphy pointed out that the new field is capable of producing 10–15% of the total output of Badr el-Din Petroleum — which is carrying out the processes on behalf of EGPC and Shell. Murphy added that Shell had used various new technologies to dig one of the deepest wells in the western desert region.
The latest discovery is expected to add to the already oversupplied global energy market. The deteriorating oil and gas prices fueled by weak demand growth and excessive supply have aggravated the situation for the oil major.
Shell posted adjusted earnings per share of $0.26, almost 50% lower than the consensus estimate during the second quarter of fiscal year 2016 earnings results. After adjusting for special and non-recurring items, Shell generated net profit of $1.05 billion, missing consensus opinion of $2.16 billion. Thus, at a time when the company is posting disappointing earnings, discovering new reserves would only add to its worries.
However, Egypt’s lucrative gas sector would be aided by Shell’s new discoveries in the region — positively contributing to the country’s economy.
