Oilsands Review - September 2006

UP AND COMING IN EGYPT

Junior Canadian company initiates the country’s first thermal program

The Middle East is well known for its vast reserves of premium, light gravity oil, but its energy potential does not stop there. In Egypt, a Canadian company is ramping up production from a substantial deposit of unconventional oil, using a technology the jurisdiction has never seen before.

”We are really
accelerating what we
are doing in Egypt.”

~ Abby Badwi,

Rally Energy

Operating in Egypt means operating in the desert.

We are the first and only company using steam in Egypt,” says Abby Badwi, president and chief executive officer of Calgary-based Rally Energy. He explains that in the last two years the company has become increasingly aggressive in its approach to unconventional oil development. Rally reports that proved and probable reserves— assessed by third-party engineering— have increased more than 450 per cent, from eight million barrels of oil equivalent in 2004, to 45 million barrels of oil equivalent in 2005.

“We are really accelerating what we are doing in Egypt,” Badwi says.

What Rally is doing is harvesting the Issaran oilfield, located on the west shore of the Gulf of Suez. There is an estimated 500 million barrels of

original oil in place, which Rally gained access to through the 2002 acquisition of Scimitar Hydrocarbons.

“The recognition was that there was a massive amount of resource in this particular area. The challenge was to get it out of the ground,” explains Ian McMurtrie, Rally’s vice-president of exploration. “[The field] had been ignored because of the challenge, and the economic considerations that were obviously paramount years ago when oil was so cheap.”

Badwi says Egypt has been producing oil from as far back as the early 1900s, offshore in the Gulf of Suez. However, as with many other deposits in the world, production is slowing down.