Japanese Oil Firm Launches Crude Output in Egypt

Japan’s oil firm AOC Holdings said on Thursday it aimed to start commercial output of crude oil from Egypt’s offshore Northwest October block in the northern Gulf of Suez in April-September 2010, delayed from its previous plan of January-March 2009.

AOC had said the start of output may be delayed. AOC, parent of oil and gas development unit Arabian Oil Co Ltd, also said Arabian Oil had agreed to sell half of its 100% stake in the offshore block to Egypt-based Pico International Petroleum to free up funds to participate in other projects in future. An official with Arabian Oil declined to give information on the value of the stake sale, but added that it had invested a little more than ¥3 billion ($27 million) in exploration-related costs in the block. The official added that the company expected peak output of around 6,000 barrels per day of crude oil from the block.

Under a production-sharing agreement with Egypt, Arabian Oil and Pico will receive between them a little over 40% of the crude output at its peak, the official said.