BP starts gas production at Egypt's Fayoum-4 well two years ahead of schedule

BP has commenced natural gas production from its Fayoum-4 well in Egypt's West Nile Delta, a project finished roughly two years early. The Egyptian Ministry of Petroleum and Mineral Resources reported the well came online earlier than planned, highlighting a broader initiative to accelerate field development and expedite new well connections.

BP achieved this gas output by drilling a secondary production line, or sidetrack, to an existing wellbore down to approximately 3,000 meters. This method tapped new geological layers identified as Messinian-age reservoirs, avoiding the need for a separate well or new subsea infrastructure and significantly reducing the time to bring gas online.

The gas is now being delivered to West Nile Delta's processing plants via the Giza-Fayoum pipeline. BP owns an 82.75 percent stake in the West Nile Delta, with Harbour Energy controlling the remaining 17.25 percent. This 17.25 percent stake is held by the Egyptian state through royalties and a production-sharing agreement with National Egyptian Gas Holding Company (EGAS).

The newly produced gas comes as Egypt continues to face a prolonged decrease in domestic gas production, which has dropped by around 30 percent since 2021. Production averaged under 4.4 billion cubic feet per day in the fiscal year ending in June, according to industry estimates. Meanwhile, demand for gas has risen, potentially peaking at 7.2 billion cubic feet per day during summer months.

Egypt has been closing this supply-demand gap by importing liquefied natural gas (LNG) and pipeline supplies from Israel, importing about 985 billion cubic feet in the last fiscal year, with projections rising to 1,000 billion cubic feet in the current year. While Fayoum-4's contribution is modest at 80 million cubic feet per day, it is a step towards reducing Egypt's dependence on LNG imports.

The government's efforts to boost production include a five-year plan aiming for a 20 percent increase in exploration and production activity, and EGAS's $117 million initiative to drill 36 new wells. Despite these advancements, officials expect to rely on LNG imports until at least 2029 or possibly 2030, even as new fields like Fayoum-4 start producing.