The Egyptian General Petroleum Corporation (EGPC) has awarded four exploration blocks to four companies in the latest bid round conducted through the Egypt Upstream Gateway.
Exploration blocks
The exploration blocks include NW El Moghra in the Western Desert, W. Kheir in the Eastern Desert, and E. El-Galalla & E. El-Hammed in the Gulf of Suez.
The awarded companies are CIS Gaz, Aten, Dragon Oil, and Terra Petroleum. The companies will explore the blocks spanning approximately 4,000 square kilometers.
According to Egypt Upstream Gateway, the committed minimum investment for the initial exploration phases amounts to $71 million, with plans to drill at least 14 wells.
This follows an announcement in July by Minister of Petroleum and Mineral Resources Karim Badawi stating that the Ministry will launch international bids via the Egypt Exploration and Production Gateway, providing digital access to data on new exploration areas for partners throughout the year.
In July, Minister Karim Badawi emphasized Egypt’s intention to invest $1.2 billion in drilling 110 exploratory gas and oil wells during the fiscal year 2024/2025. This initiative is part of a broader plan to drill 586 wells by 2030, with a total investment of $7.2 billion.
Oil arrears
The Egyptian government paid $1 billion of its $2 billion in outstanding debts to foreign oil companies, according to Asharq Bloomberg.
This comes while Egypt strives to maximize its natural gas production which currently stands at 4.6 billion cubic feet per day. Egypt targets to increase production to reach 5 billion cubic feet per day by the end of the year. Notably, Egypt’s daily need for natural gas stands at 6.2 cubic feet per day, the report added.
As a result of the production slowdown, Egypt has returned to importing liquefied natural gas after five years as an exporter.
As of last March, the outstanding debts owed to foreign companies accounted for $4.5 billion. Egypt paid $1.3 billion in June, $1.2 billion in September, and $1 billion in November leaving only $1 billion in remaining arrears..
According to Asharq Bloomberg, the Egyptian government aims to revise development and exploration plans with foreign partners by initiating payments of overdue debts according to an agreed-upon schedule. The Egyptian government also aims to implement incentives such as regular payments for partners’ shares to avoid future debt accumulation.
“We are working to rebuild trust with partners by agreeing to settle overdue payments in exchange for continued essential investments in exploration and development activities,” Badawi noted in July.
