Dana Gas has announced another gas discovery in Egypt, capping a string of drilling successes this year in the North African country. The Sharjah company said its El Basant-2 exploration well had struck "significant" reserves of gas and condensate in the Nile Delta. "We are very pleased and encouraged by this latest discovery," said Hany Elsharkawi, Dana's country director in Egypt. "It shows that our 2008 drilling campaign was correctly conceived and implemented, and therefore we plan to continue with further drilling in this concession."
Due to the area's proximity to existing pipelines and gas-processing facilities, Dana has been able to bring its previous Nile Delta gas discoveries into production quickly, and at reasonable cost. Mr Elsharkawi predicted production from the new discovery would start by the end of March. Dana's gas finance director, Neeraj Agrawal, said the company had a "healthy" cash position, following the completion of major fund-raising late last year, putting it in a strong position to finance project spending. He said gas sales at fixed prices contributed nearly 70 per cent to Dana's Egyptian revenues, limiting the impact on the company of the recent steep drop in oil prices.
"The fundamentals of the natural gas industry in the Middle East region remain strong, since it is a core long-term sector in the region's growth," Mr Agrawal said. Dana earlier this year also discovered oil in southern Egypt and started producing gas in the Kurdistan region of northern Iraq. Only a lack of progress on a project to import Iranian gas to the UAE has marred what has otherwise been a stellar year for the company. An undersea pipeline built for the gas by Dana's major shareholder, Crescent Petroleum, has sat empty for the past three years.