Egypt signs offshore oil & gas exploration, production deals worth US$220 mn
Egyptian Petroleum Minister, Tareq el Molla, has signed three offshore oil and gas exploration and production agreements with major international oil and gas companies – UK’s BP Plc, France’s Total SA, and Italy’s Eni SpA.
Worth around US$220 million, the signed deals are for exploration blocks in the Egyptian Mediterranean Sea. The agreements also include a signing bonus of US$9 million and are the result of a tender called by Egyptian State Gas Board (EGAS).
According to Egypt’s Ministry of Petroleum, the deal is for six new wells to be drilled for offshore areas of North El Hammad, North El Tabya, and North Ras El Esh.
Eni has also recently confirmed two deals for blocks – North ElHammad and North Ras El Esh – but did not reveal their value.
The company said the block North El Hammad spans across an acreage of 1,927 sq km and is located to the west of the Abu Madi West and Baltim-Baltim South development areas, where Eni recently made the major discoveries of Nooros and Baltim South West.
The Nooros well was brought online in August 2015. Eni, the operator of the North El Hammad block, has equity of 37.5%. Other partners in the block are BP and Total, holding 37.5% and 25%, respectively. The deal is estimated to be worth about US$80 million.
The block North Ras El Esh spans across an acreage of 1,389 sq km and is located southwest of the development areas of Temsah and Port Fouad. Eni has a stake of 50% in the block, while the remaining is held by BP, the operator of the block. The deal is estimated to be worth about US$75 million.
The third agreement is for North El Tabya with BP, wherein Eni would make investments of US$65 million.
Currently, Egypt has become a net importer as domestic output has failed to keep pace with rising demand from being an exporter of energy earlier.
The Egyptian government is pursuing options to help the country cope with energy deficit, which is due to the postponement of oil consignments anticipated under a US$23 billion aid deal from Saudi Arabia. Egypt also wants to import crude oil directly from Iraq and the ministry wishes to finalize the deal by the first quarter of 2017.
The oil sector in Egypt has inked 73 oil and gas exploration deals with international oil companies in the past three years, worth about US$15 billion so far, and signing bonuses of over US$1 billion for the drilling of 306 wells.
An EGAS official recently said that the board has decided that Egypt required about 100 shipments of liquefied natural gas worth US$2.2 billion in 2017 and has already secured 60 shipments.