3rd draft-Apache Egypt Newsletter
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January 2017<br />
Good bye 2016, welcome 2017<br />
IN THIS<br />
ISSUE<br />
‣ TWO BLOCKS IN THE<br />
2016 BID ROUND<br />
‣ PETROLEUM<br />
MINISTER’S VISIT TO<br />
QARUN BASE<br />
‣ QPC 2016<br />
HIGHLIGHTS<br />
‣ KPC 2016 HIGHLIGHTS<br />
‣ APACHE EGYPT 2016<br />
ACHIEVEMENTS<br />
‣ APACHE’S PEOPLE<br />
‣ APACHE EGYPT<br />
EVENTS<br />
‣ END OF YEAR<br />
MESSAGE<br />
As another successful year draws to a<br />
close, it is remarkable to realize how<br />
much has been achieved by the<br />
employees, <strong>Apache</strong>, and our joint<br />
ventures. In this newsletter, it is<br />
worth highlighting what made this<br />
year a success. One of the key<br />
highlights of 2016 was <strong>Apache</strong>’s<br />
achievement of winning two new<br />
blocks in EGPC bid round. It is also<br />
important to acknowledge how our<br />
joint ventures contributed in the<br />
company’s overall production<br />
activities. There was an increase of<br />
9,080 BOEPD in <strong>Apache</strong>’s gross<br />
production, which is 3% above plan.<br />
This year witnessed many important<br />
events: the visit to QPC’s Qarun Base by<br />
the Minister of Petroleum and Mineral<br />
Resources, Khalda's success in drilling and<br />
completing two wells at North East Abu<br />
Gharadiq, and the USBEC Mission event<br />
where <strong>Apache</strong> had a chance to meet many<br />
government representatives. This<br />
newsletter includes information about last<br />
quarter’s Town Hall, the 5th Fun<br />
Run/Walk/Cycle Day, and Springboard<br />
Schools graduation ceremony. It is also a<br />
channel to recognize the employees who<br />
worked hard to achieve 2016 goals and<br />
welcome those who are new onboard. It is<br />
the New Year, and this newsletter is all<br />
about what has been accomplished and<br />
what is new for 2017!<br />
EGPC 2016 Bid Round Success<br />
<strong>Apache</strong> has won two blocks in the 2016 bid round. Winning these blocks (Block 6<br />
– NW Razzak and Block 7 – S Alam El Shawish) will provide <strong>Apache</strong> the opportunity<br />
to further grow the <strong>Egypt</strong> Region and build on the success the company has<br />
achieved to date. The two blocks provide significant running room and a drilling<br />
inventory for years to come. They are prospective acreages that can fuel <strong>Apache</strong>’s<br />
growth. “Our success in securing these blocks would not be possible without the<br />
hard work and effort from our employees across departments. I personally would<br />
like to thank members of the Exploration, Commercial, Reservoir, Finance, and<br />
KPC/<strong>Apache</strong> Operations departments. This was a true ‘Team of Teams’<br />
accomplishment. I would also like to thank our Sinopec partners for their<br />
confidence and support in <strong>Apache</strong> <strong>Egypt</strong>. The winning of these two blocks further<br />
underscores the importance of the <strong>Egypt</strong> Region, the momentum we’ve gained<br />
throughout the year in growing and maintaining production with lower capital and<br />
in driving our costs down. I’m proud of each of you and your dedication to <strong>Apache</strong>,”<br />
said Mr. David Chi, Vice President & General Manager.
Commitment to<br />
operational<br />
excellence,<br />
safety,<br />
environmental<br />
and social<br />
responsibility<br />
Eng. Tarek el Molla’s VisiT To Qarun base<br />
Minister of Petroleum and Mineral Resources, Eng. Tarek El Molla, visited QPC’s Qarun Base on November 24th to<br />
celebrate the completion of Petroshahd’s storage facilities at Qarun Base. The visit also celebrated the completion of<br />
QPC’s new 50,000 BPD separator, new accommodation facilities, and security arrangements at Qarun Base3. <strong>Apache</strong><br />
<strong>Egypt</strong> Regional VP, David Chi, and EGPC CEO, Eng. Tarek El Hadidi, visited along with MD’s and senior management<br />
from QPC, Petroshahd, Petroleum Ministry, and shareholder companies, EGPC, Kuwait Energy, and Sipetrol. Both QPC<br />
and Petroshahd made presentations of ongoing company activities and recent accomplishments. Following the<br />
presentations, Eng. Tarek El Molla gave special recognition to the significant progress made by QPC on cost reduction<br />
and production optimization.<br />
QPC 2016 Highlights<br />
<strong>Apache</strong>’s joint venture, Qarun Petroleum Company (QPC), has accomplished many great milestones in 2016.<br />
West of Nile (WON) area marks a very important location for QPC as it continues to exceed expectations. It has<br />
achieved a production record of 6,729 BOPD and improved waterflood performance with ESP-powered<br />
dumpfloods. QPC has also drilled 16 new wells and succeeded in reducing costs through reduced diesel and<br />
chemical consumption and the innovation of the ESP-powered dumpflood. The extension of the Misaada Field<br />
resulted in an increase of 5 mmbbl STOIIP this year. The facilities were also expanded in the following areas:<br />
Qarun CPF, SWQ WF and WON A. From January 2016 until November 2016, QPC achieved a total of 275 mmbbls<br />
oil produced. 2016 successes set a high bar for 2017. In 2017, QPC will continue drilling in Karama and WON<br />
areas and exploring in Basha and Azhar areas. QPC doesn’t only focus on continuing its projects, but also on<br />
sustaining and improving the company’s performance. QPC 2017 plans include: improve the facilities that serve<br />
the Karama area, evaluate the pipeline options for the WON area, focus on reducing produced water, and other<br />
activities to improve performance and reduce costs.
KPC 2016 Highlights<br />
<strong>Apache</strong>’s other joint venture, Khalda Petroleum Company (KPC), has also had a great year. KPC<br />
2016 undertakings varied from high-rate wells from all basins to high-rate wells from all major<br />
reservoirs. Also KPC focused on early field development, step-out opportunities, infill locations,<br />
and waterflood optimization. This focus has led to a continued development at Ptah, WKAL-A,<br />
Herunefer, and Razzak. An additional 12 wells at Salam will result in an expansion of the<br />
waterflood. KPC successfully drilled and completed two Apollonia horizontal wells and is proud to<br />
advise that <strong>Apache</strong> and Khalda are the first companies to introduce the frac horizontal technology<br />
to <strong>Egypt</strong>. This technology will increase production of unconventional gas and decrease uncertainty<br />
for drilling. KPC’s success established a positive reputation at the Ministry of Petroleum. It also<br />
advanced EGPC’s confidence in <strong>Apache</strong> and KPC.<br />
2016 success in a nutshell
New Hires<br />
Marta Roushdy<br />
Deputy Contracts<br />
General Manager<br />
KPC<br />
Robert Bobo<br />
Deputy Material<br />
General Manager<br />
KPC<br />
Dr. Dina Salah<br />
Legal Counsel<br />
<strong>Apache</strong><br />
Jared Blake<br />
HSE Region Manager<br />
<strong>Apache</strong><br />
The Fire in the belly Award<br />
aPaCHe’s<br />
PEOPLE<br />
Sara Mikhael<br />
Senior Production<br />
Engineering Data Expert<br />
KPC<br />
Mariam Moheb<br />
Commercial Advisor for<br />
Governmental Affairs,<br />
<strong>Egypt</strong> Commercial Services<br />
<strong>Apache</strong><br />
Sonya Darwish<br />
Assistant Material<br />
Department<br />
<strong>Apache</strong><br />
The Fire In the Belly Award recognizes a team member who goes the extra mile and works hard to achieve goals.<br />
This well-deserved recognition was given to 3 remarkable employees: Sara Mikhael, Mariam Moheb and Sonya<br />
Darwish. Here is a glimpse of their hard work: Sara Mikhael for her commitment in Wepco agreement that lead to<br />
substantial savings, Mariam Moheb for her determination in finalizing the Khalda offset amendments and Sonya<br />
Darwish for her relentless support of KPC projects. Congratulations Sara, Mariam and Sonya!<br />
The best answers win award<br />
Ahmed Saad<br />
Traffic Permits<br />
Administrator<br />
<strong>Apache</strong><br />
Mohamed Rabie<br />
Tax and Audit Manager<br />
<strong>Apache</strong><br />
Mostafa Mahmoud<br />
Senior Auditor<br />
<strong>Apache</strong><br />
The Best Answers Win Award<br />
recognizes a team member who<br />
provides ideas, takes initiatives,<br />
enhances workflow and optimizes<br />
performance. This award was<br />
given to Ahmed Saad, Mohamed<br />
Rabie and Mostafa Mahmoud for<br />
their contribution in obtaining<br />
sales tax exemption for mobile<br />
phones.
The Team behind the scenes<br />
Ashraf Ghaly Walaa Salama Heba Askar Mohamed El Ghawaby Sameh Hussein<br />
Geophysical Advisor Geologist III Geologist I Geological Prospects Supervisor Petrophysicist Senior Staff I<br />
Wael Abd El Razek Hani Nasr Ahmed Arafa Mohamed Saher Mohamed Hafez<br />
Petrophysicist Senior Staff I Prospect Team Manager Geophysicist II Senior Staff Petrophysicist II Senior Data Center Supervisor<br />
“<strong>Apache</strong> <strong>Egypt</strong> was recently awarded 2 new exploration concessions in the<br />
Western Desert by EGPC, NW Razzak and South Alan El Shawish, with both blocks<br />
combined totaling almost 1.57 MM gross acres (6356 km2). This award follows a<br />
concerted technical effort during the summer by a focused team within the<br />
<strong>Apache</strong> <strong>Egypt</strong> Exploration Department, together with key individuals in <strong>Apache</strong><br />
<strong>Egypt</strong>'s Reservoir and Commercial Departments.<br />
Mostafa Hussein<br />
Geophysical<br />
Advisor<br />
These awards will need to be negotiated to final Petroleum Sharing Contracts<br />
(PSC's) acceptable to <strong>Apache</strong>, EGPC, and the Ministry of Petroleum before being<br />
reviewed and approved by the <strong>Egypt</strong>ian Parliament to become ratified into law.<br />
This is expected by sometime during the summer of 2017. Exploration activities<br />
should start later in 2017.<br />
The <strong>Apache</strong> <strong>Egypt</strong> Bid Round team was supported by many individuals within the<br />
<strong>Apache</strong> <strong>Egypt</strong> Exploration Department, which also frequently supports all <strong>Apache</strong><br />
departments and our 2 joint ventures, Khalda and Qarun, in many ways (data,<br />
licenses, scout, maps, <strong>draft</strong>ing, etc). This bid round effort could not have been<br />
possible without all support within the Exploration Department, but also<br />
Reservoir and Commercial. Additionally, key prior studies by <strong>Apache</strong> Exploration<br />
and several together with EPT technology group in Houston made this evaluation<br />
and successful bid possible. Finally, support from RVP David Chi and Houston<br />
Executives made <strong>Apache</strong>'s effort successful. <strong>Apache</strong> <strong>Egypt</strong> can now look forward<br />
to new and exciting value-add activity in the years to come. This was truly a 'Team<br />
of Teams' effort,” mentioned Mr. Joe Versfelt, <strong>Apache</strong> <strong>Egypt</strong> Region Exploration<br />
Manager.<br />
The team who worked on the 2016 EGPC Bid Round received The Team of Teams<br />
Award this past December at the Town Hall. The Team of Teams Award recognizes<br />
a team member who provides a helping hand to others, supports the team and<br />
focuses on team results over personal achievements. The team members are:<br />
Ashraf Ghaly, Walaa Salama, Heba Askar, Mohamed El Ghawaby, Sameh Hussein,<br />
Wael Abd El Razek, Hani Nasr, Ahmed Arafa, Mohamed Saher, Mohamed Hafez,<br />
and Mostafa Hussein.
A new Deputy HR & Public Relations Manager<br />
on board<br />
Tell us about your background and how you got involved in Human resources?<br />
My name is Rehab El Sawy. I graduated from the Faculty of Commerce, Cairo University<br />
in 1986. I also hold a Masters of Business Administration in Human Resources<br />
Management from the German University in Cairo. My first job was at Sahara Group; I<br />
was part of the company’s finance team. There was no HR department at the company<br />
while I was there however I was responsible for the payrolls and the employees’ benefits.<br />
After 7 years at Sahara group, I moved to the finance department at British Gas. We were<br />
only 30 employees when I first joined. After British Gas’ expansion in <strong>Egypt</strong> and the<br />
number of employees started to increase, the company decided to start developing an<br />
HR department. I also took the decision to move from the finance department to the HR<br />
department. I was thankful to grow with British Gas and I was honored to be part many<br />
successful projects. After 15 years at British Gas, I joined Citadel Capital and I contributed<br />
in providing HR consultancy to several companies. I also joined <strong>Egypt</strong>ian Liquefied Natural<br />
Gas after 3 years at Citadel Capital. I had a long journey in Human Resources and I am<br />
glad I finally landed in a great company like <strong>Apache</strong>.<br />
Ms.Rehab El Sawy<br />
Deputy HR &<br />
Public Relations<br />
Manager<br />
What was your first impression of <strong>Apache</strong>?<br />
From the first day, people are very sweet and welcoming.<br />
What is the first wish on your list? Why?<br />
I will try as much as I can to automate all the manuals to save everybody’s time.<br />
How do you define company culture? What would you do to help to maintain it as the<br />
company grow?<br />
I think the most important thing is employees’ engagement. The employees shouldn’t be<br />
isolated with their computers. I think I will focus on solutions to improve the employees’<br />
engagement and involvement.<br />
What else do you want <strong>Apache</strong> employees to know about you?<br />
I appreciate the employees who are eager to learn. I think each employee should be open<br />
to learn from another employee no matter what is her/his age or position. Employees<br />
should also focus on improving themselves; what they need to improve in their skills,<br />
how they can be more efficient. I also believe in the power of Team work. Team work<br />
makes wonders!<br />
Final message?<br />
I am very proud that <strong>Apache</strong> won the 2016 bid. I hope the new two concessions bring<br />
more success to the company.
We work hard and play harder!<br />
Events<br />
<strong>Apache</strong> <strong>Egypt</strong>’s Town Hall was held on December<br />
14th. Upon entering, each employee received a<br />
gift that contained an oil drop from <strong>Apache</strong>’s<br />
biggest discovery, Alpine High. The purpose of<br />
this town hall meeting was to celebrate the<br />
company’s achievements throughout the year<br />
and hear employees’ ideas and concerns. After<br />
welcoming remarks, <strong>Apache</strong> <strong>Egypt</strong> Vice President<br />
and General Manager, Mr. David Chi, presented<br />
<strong>Apache</strong>’s 2016 highlights and expressed his<br />
thanks for this year’s achievement. He also<br />
shared the <strong>Apache</strong> business plan for 2017.<br />
Khalda’s general manager, Mr. Mark Konecki, and<br />
Qarun’s general manager, Mr. Jeff Wedgewood,<br />
presented an overview of the joint ventures’ 2016<br />
achievements. Mr. Jonathan Kurtz, Human<br />
Resources and Administration Manager, took the<br />
opportunity to welcome the new hires and<br />
acknowledge outstanding employees. The Town<br />
Hall wasn’t all work, though. At the end of the day,<br />
the employees were divided into teams to play a<br />
game of Jeopardy and have a chance to win prizes.<br />
The game brought energy to the event, was great<br />
for team building, and created a positive<br />
competitive spirit between employees.<br />
The 5th Fun Run/Walk/Cycle Day<br />
This year marks the fifth anniversary of the Fun<br />
Run/Walk/Cycle event and was organized by the Wellness<br />
Program and Springboard team. The goal was not only to<br />
promote a healthy lifestyle for <strong>Apache</strong>s and their families, but<br />
also to raise funds for the Springboard schools. The event took<br />
place at the Wadi Degla Protectorate on November 17th<br />
where participants gathered to walk, run and cycle. They<br />
covered a cumulative distance of 640 kilometers allowing the<br />
<strong>Apache</strong> Schools team to purchase 16 computers for the<br />
Springboard Schools.<br />
<strong>Apache</strong> <strong>Egypt</strong> women network 2 nd session<br />
Dr. McKenna Eastment was guest speaker at the second session of <strong>Apache</strong> Women Network.<br />
Dr. Eastment is a physician specializing in infectious diseases through the University of Washington in<br />
Seattle, Washington. Currently residing in Nairobi, Kenya with her husband and 3-year old daughter,<br />
she is conducting research on HIV. The session’s topic was “Thoughts For a Successful Career and a<br />
Fulfilling Life.” Dr. Eastment talked about her beliefs for setting personal and professional goals. “The<br />
first step in setting short and long term goals is to write them down. It is hard to achieve them but<br />
always try your best,” stated Dr. Eastment. She also stressed that it is important to have a mentor to<br />
help in achieving goals and inspire to do better. The <strong>Apache</strong> <strong>Egypt</strong> ladies found it to be a very<br />
interesting session.
Springboard Graduation<br />
Ceremony<br />
October 5th, 2016, marked a very special day for <strong>Apache</strong>. It is the day<br />
<strong>Apache</strong> honored 70 graduates from 35 Springboard schools in Fayoum<br />
who are currently enrolled in high schools to continue their education.<br />
The celebration commemorated the road that <strong>Apache</strong>’s Springboard<br />
schools project team, students and teachers have traveled together.<br />
The ceremony was attended by Mr. Adel Abd El Moneim, the<br />
Undersecretary of the Ministry of Education- Fayoum Governorate,<br />
officials from the Ministry of Education, our partners at the National<br />
Council for Childhood and Motherhood, and Mr. David Chi, Vice<br />
president and General Manager of <strong>Apache</strong> <strong>Egypt</strong> along with other<br />
guests from <strong>Apache</strong>, Sinopec, Khalda, and Qarun. Mr. Chi presented<br />
the awards and certificates to the students and their teachers. Mr. Chi<br />
also handed awards to Fayoum’s educational administration team<br />
appreciating their efforts towards the schools and the students.<br />
“<strong>Apache</strong> know that you have big dreams and aspirations, we saw that when we honored some of the students from<br />
Minya earlier this year, we were surprised how ambitious they are and of course you are not different, which gives me<br />
the opportunity to tell you that <strong>Apache</strong> will try to help you achieve your dreams even after your graduation from the<br />
Springboard schools as long as you chase those dreams,” mentioned Mr. Chi.<br />
Upcoming events<br />
Visit <strong>Apache</strong>’s Booth at<br />
one of the biggest<br />
petroleum events<br />
14-16 February 2016<br />
Cairo International Convention & Exhibition<br />
Centre<br />
The final word<br />
From apache <strong>Egypt</strong> Vice President and general manager<br />
Our vision for 2017 can be summed up in 3 strategies: to respond to market<br />
changes through maintaining operational flexibility, to actively manage the<br />
portfolio through further streamlining, to focus on capital budgeting that is<br />
based on conservative price assumptions. We will be able to accomplish these<br />
strategies through several ways. In North America onshore projects, we will<br />
work on growing the production. We will strive hard to increase development<br />
activity in Midland and Delaware core. We will also continue delineation and<br />
ramp production in Alpine High with 4-6 rigs. Along with these activities, we will<br />
focus on cost optimization and the funding of SCOOP, Montney and Duvernay.<br />
Regarding the international & offshore projects, we will aim to invest more to<br />
sustain the production and the free cash flow in <strong>Egypt</strong> and the North Sea. We<br />
will continue lowering the risks and developing high impact exploration in<br />
Suriname area. Our strategic goals for <strong>Apache</strong> <strong>Egypt</strong> are to sustain and<br />
maximize production and cash flow in a concession-based regime while<br />
operating in a safe and environmentally prudent way and to have an impact on<br />
our share price by increasing investor’s confidence in <strong>Egypt</strong>’s asset value.<br />
David Chi<br />
<strong>Apache</strong> <strong>Egypt</strong> Vice<br />
President and General<br />
Manager<br />
2<br />
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