Egypt Signs Three New Oil, Gas Exploration Deals
Egypt has signed three new oil and natural gas explorations contracts worth $47 million, country’s oil ministry said Thursday.
Tunisia’s HBS and France’s Total would explore for hydrocarbons in Western Desert and the Nile Delta.
The ministry pointed out that by signing these three agreements the government has managed to sign 53 new agreements to explore for oil and gas since November 2013 with minimum investments of about $ 2.9 billion.
The Egyptian economy is facing severe gas shortage as local demand has ballooned in recent years amid declining domestic production. For the short term, the government is trying to source LNG from various sources to cater to growing demand.
In December, Algeria and Egypt signed a previously announced natural gas deal. As per the deal Algeria will supply 850,000 cubic meters of LNG in six shipments to Egypt during 2015. The two countries will begin fresh talks shortly regarding supply of Algerian gas during 2016-2020, the ministry said adding that negotiations will start in Cairo and will be completed by February in Algiers.
Cairo is also expected to sign a deal to import LNG from Gazprom. Egypt is likely to buy 35 shipments of LNG over the next five years from the Russian company. Shell is another company likely to begin supplying gas to Egypt this year.
Also, the government is looking to encourage foreign energy firms to boost investment in local hydrocarbon sector. It is in the process of clearing previous dues it owes to foreign firms. The Egyptian government’s total dues owed to foreign oil companies stood at $3 billion by the end of 2014, Khaled Abd El Badee - Chairman of state-run Egyptian Natural Gas Holding Company (EGAS) said earlier this month.
He added that the government has recently paid $2.1 billion of the dues, referring to a clear strategy being set to overcome the challenges blocking the oil and gas industry in Egypt. In recent weeks the government has paid part of the dues to companies such BG Group, Dana Gas and Circle Oil