Mubadala Lands Egyptian Concession Stake
The UAE's Mubadala Petroleum has secured a 27% stake in the Shell-operated Red Sea Block 4 off Egypt, the company announced on January 21.
Mubadala has signed a concession agreement for the share with Egypt's petroleum ministry. The 3,084-km2 Block 4 lies in the Northern Red Sea, adjacent to the prolific Gulf of Suez basin, Mubadala said, adding that the concession had "the potential to unlock substantial new prospects." Work commitments cover subsurface studies and a 3D seismic shoot over an initial three-year term.
The block is operated by Shell with a 63% interest and Egypt's Tharwa with 10%.
"The addition of Red Sea Block 4, marks a further extension of our Egypt portfolio with a new high impact growth opportunity alongside a world class partner in Shell," Mubadala CEO Bakheet Al Katheeri said. "This new exploration block will support our strategy of finding and, if successful, developing hydrocarbons for Egypt’s expanding market and delivering organic growth opportunities to add to our existing business in the country."
Mubadala also has a 10% interest in the Shorouk concession, containing the large Zohr gas field, and a 20% interest in the Nour concession. Both projects are in the Mediterranean and operated by Italy's Eni, which is spearheading offshore exploration in Egypt.
France's Total also won an operating stake in the North Ras Kanayis block in the Egyptian Mediterranean earlier this month. Its partners are Shell, Kuwait's Kufpec and Egypt's Tharwa.
Gas production in Egypt has been rising since Zohr's launch in 2017. Several more large gas fields have been discovered by Eni and others since then, ensuring that the country will retain a surplus in supply for many years to come. Egyptian authorities want to expand the role of gas at home, in areas like power generation, heating and vehicle fuel. But they are also looking to ramp up LNG exports.
Eni reached agreements with Spain's Naturgy and its Egyptian partners in December that should pave the way for the relaunch of the Damietta LNG plant, which has been idle since 2012. It was closed because at the time Egypt was running short of gas for the domestic market, triggering a dispute with the operators of the plant.