Egypt signs $220 mln of oil and gas deals

CAIRO-Reuters

Egyptian Oil Minister Tarek El Molla has signed three offshore oil and gas exploration and production deals worth a total of at least $220 million with France’s Total, Britain’s BP, and Italian oil major ENI’s Egyptian subsidiary IEOC, the ministry said on Dec. 28.

The deals include drilling for six wells and a signing bonus of $9 million, the ministry said in a statement, and are the result of a tender called by Egyptian state gas board EGAS. They are all in exploration blocks in the Egyptian Mediterranean Sea.

The first deal, with a consortium of BP and IEOC, is worth $75 million for an exploration block in the North Ras El Esh block; the second, with a consortium of all three companies, is in the North El Hammad block and is worth $80 million, and the third, with BP alone, is in the North Tabia block and worth $65 million.

Egypt has gone from exporting energy to being a net importer as domestic output has failed to keep pace with rising demand.

Saudi Arabia informed Egypt last month that shipments of oil products expected under a $23 billion aid deal had been halted indefinitely.

The government is seeking ways to help the country cope and Molla said last week that Egypt wanted to import crude oil directly from Iraq and he hoped to finalize the deal by the first quarter of 2017.

The oil sector in Egypt has signed 73 oil and gas exploration deals with international oil companies in the past three years worth at least $15 billion so far, Molla said in Dec. 28 statement, and signing bonuses of over $1 billion for the drilling of 306 wells.

Earlier on Dec.28, an EGAS official told Reuters the board had determined Egypt needed around 100 shipments of liquefied natural gas worth $2.2 billion in 2017 and had already secured 60 shipments.