At around $45/B for Brent, oil prices have doubled from their April lows. But this hasn’t been enough to persuade the independents that dominate much of Egypt’s onshore upstream to reverse swingeing spending cuts instigated earlier this year. This is hardly surprising given that much Egyptian oil output is heavy and trades at a hefty discount to Brent. The need for capital-intensive constant drilling to maintain production means break-even prices are little if at all below current market levels.

With small-to-midcap independents all but halting drilling – and even the country’s largest oil producer Apache slashing activity (MEES, 31 July) – output has also headed south. (CONTINUED - 1048 WORDS)