BP flows first oil from Egypt's North Shadwan concession

BP has started first oil production from a delayed project to develop Egypt's shallow-water North Shadwan concession in the Gulf of Suez, its Australia-based field partner Beach Energy said Tuesday.

Oil production from the NS377 field in the concession has begun flowing via a tie-in pipeline to the Petrobel-owned Ras Ghara onshore processing facility at an initial, restricted rate of 1,000 b/d of oil, Beach said.

The crude is being piped to the main Petreco oil center and export terminal at Abu Rudeis in the Gulf of Suez, 120 km (74 miles) to the north, the company said.

The North Shadwan concession contains three undeveloped oil discoveries, the first two of which are close to shore and are being developed from onshore drilling sites.

BP and its partners had initially expected first oil from NS377 in mid-2010 at rates over 1,500 b/d. But the project was held up due to delays to equipment delivery and processing and transport agreements, according to filings from Beach.

"Further production from the NS377 field will be handled via a trucking operation, which is expected to commence in the second quarter of 2012," the company said without giving further details.

BP declined immediate comment on the North Shadwan development.

Beach said planning is also underway for the drilling of the first development well at the nearby NS385 oil field, the second discovery in the block to be brought on stream. The well is expected to spud before the end of the second quarter of this year.

By the first quarter of 2013, Beach expects NS385 to be in production, taking the North Shadwan concession's gross output from the two fields as high as 5,000 b/d, it said.

The North Shadwan partners have also applied for a development lease over the NS394 oil discovery, with work expected to begin in 2013. Production from NS394 is forecast to begin in 2014 at gross rate of up to 7,000 b/d, Beach said.

Beach acquired a 20% interest in the North Shadwan block in 2008. The other partners are operator BP Exploration (Delta) Ltd (50%) and Egypt's privately held TriOcean Energy (30%).