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BP on Track with the Atoll Phase One Project Development

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Oil giant BP plc (BP - Free Report) , in association with the Egyptian Natural Gas Holding Company (“EGAS”), has given consent for the development of the Atoll Phase One project.

The project is an early production scheme (EPS) that is expected to generate about 300 million cubic feet a day (mmcfd) gross of gas for the Egyptian domestic gas market. This is estimated to begin from the first half of 2018. BP has a 100% interest in the concession.

Recently, BP completed several transportation and processing agreements to ramp up the development of the Atoll field. The field is anticipated to hold 1.5 trillion cubic feet (tcf) of gas and 31 million barrels (mmbbl) of condensates. The existing West Harbour gas processing facilities will be responsible for handling onshore processing.

The Atoll field, which was discovered by BP in Mar 2015, was drilled using the 6th generation semi-submersible rig – Maersk Discoverer. The Atoll-1 deepwater exploration discovery well is located in the North Damietta Offshore concession in East Nile Delta. The exploration well reached a depth of 6400 meters and penetrated about 50 meters of gas pay in high quality sandstones. The Atoll Heads of Agreement was signed in Nov 2015, just eight months after the discovery.

Recompletion of the existing exploration well as a producing well, spudding of two additional wells and installation of the requisite tie-ins and facilities to start production from the field are part of Atoll Phase One. The rig, DS-6, which arrived in Egypt last month will be used to drill the Atoll wells. The drilling will commence in August and is likely to extend over the next two years. Depending on the success of the Atoll Phase One EPS, further investments would be made in the Atoll Phase Two full-field development.  

BP currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are CVR Refining, LP , FutureFuel Corp. (FF - Free Report) and ReneSola Ltd. (SOL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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