Houston-based Apache Corp. focused on growing in U.S. shale plays and selling most of its international holdings. But now that the oil bust is in full bloom, especially in North America, Apache’s chief executive is glad the company held onto its assets in Egypt.
“In a sub-$50 oil world, the international assets really shine through,” said Apache President and CEO John Christmann on Tuesday at Houston’s Offshore Technology Conference at NRG Park. He specifically cited the better cash margins Apache is getting in Egypt compared to the United States.
As with many independent oil and gas producers, Apache faced pressure from investors during the oil boom to divest from its international assets and focus on U.S. shale plays. Apache sold its positions in Australia, Canada and Argentina, but held onto Egypt and the North Sea.
Apache remains Egypt’s largest oil and gas producer, although Italy-based Eni and the United Kingdom’s BP are moving forward with major deep-water gas discoveries. Eni’s offshore Zohr play is considered the largest gas discovery in the Mediterranean.
Egypt has opportunities in both oil and gas, onshore and off, and through both horizontal and unconventional production, Christmann said. Egypt now accounts for 27 percent of Apache’s oil and gas production, he said, after first entering Egypt in 1994 and becoming a major presence in its Western Desert.
“The thing we like about Egypt is, much like the Permian Basin [in Texas], there are many ways to win,” Christmann said.
Other major, offshore gas discoveries like Israel’s Leviathan field are mired in political and regulatory controversies, which is keeping Houston-based Noble Energy from moving forward with the Leviathan’s development.
Such delays in other major gas fields benefit Egypt for now, said Matt Loffman, manager of the Houston office for consulting firm Douglas-Westwood.
“We really do see Egypt growing and growing in importance,” Loffman said, specifically in natural gas. “The willingness of the government to exploit the reserves has been a major part of that.”
(Source: Fuel Fix – Houston Chronicle)