BP Strikes Oil in East Nile Delta - Analyst Blog


British energy giant BP plc 's ( BP ) unit - BP Egypt - has hit upon a huge gas deposit in the East Nile Delta after drilling the  deepest well ever spud in the region.

The deepwater exploration probe, Salamat, represents the first well in the North Damietta Offshore concession that was granted in Feb 2010. Drilled by the sixth generation semi-submersible rig - Maersk Discoverer - in water depth of 649 meters, the well, touched a total depth of about 7,000 meters.

Per the company, the wireline logs, fluid samples and pressure data established the availability of gas and condensate in 38 meter net of Oligocene sands in Salamat. For the purpose of delineating the field resources and evaluation of alternatives for the development of the discovery, further appraisal is necessary.

The success of Salamat confirmed the presence of hydrocarbons in the centre of a 50-kilometer long structure. Moreover, the discovery with a hydrocarbon column of over 180 meters makes the company confident of the viability of the deep Oligocene play in the East Nile Delta.

Located about 75 kilometers north of Damietta city and merely 35 kilometers to the North West of the Temsah offshore facilities, the Salamat discovery, is operated by BP with equity of 100%. Currently, BP is assessing the standalone and tie-back to the nearby Temsah infrastructure development.

BP has been operating in Egypt for the last five decades and has made investments of over $20 billion. It is the largest foreign investor in the region having produced 40% of Egypt's total oil in partnership with Gulf Suez Petroleum Company and BP's joint venture company with the Egyptian General Petroleum Company. BP's current yield is about 15% of Egypt's annual oil production.

BP carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 (Strong Buy) stocks - Range Resources Corp. ( RRC ), Whiting Petroleum Corp. ( WLL )  and Dril-Quip, Inc. ( DRQ ) - appear attractive for the short term.

BP PLC (BP): Free Stock Analysis Report

DRIL-QUIP INC (DRQ): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

WHITING PETROLM (WLL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BP , DRQ , RRC , WLL



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