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New oil and gas bid round launched: International energy companies are being invited to search for new oil and gas fields in Egypt as the Madbouly government looks to reverse declining production and draw new investment into the sector. The Oil Ministry is offering 23 blocks in an international bid round launched yesterday that will see foreign companies work with the state-owned Egyptian South Valley Petroleum Holding Company (Ganope) and the Egyptian General Petroleum Corporation to explore for new hydrocarbons, it said in a statement. Companies have until 25 February 2024 to submit offers.
What’s up for grabs: The ministry is offering 10 blocks in the Western Desert, seven in the Gulf of Suez, four in the Red Sea, and two in the Eastern Desert. Thirteen of the zones are under the control of Ganope and the other 10 are managed by EGPC. Firms can bid for exploration licenses of up to seven years and will be granted 20-year extendable development leases if they make a discovery, according to the term sheet (pdf).
Egypt needs new discoveries: Falling domestic oil and gas production is increasing Egypt’s reliance on imported energy and putting pressure on supply. Lower gas output — which fell to a three-year low in 2Q 2023 — has contributed to the ongoing electricity shortages, which have caused rolling blackouts across the country since July.
Key int’l partners have pledged bns of USD of new investment: BP, Chevron and Eni have recently pledged to invest a combined USD 14.2 bn in exploration and production operations in Egypt in the coming years. The ministry recently raised its investment forecast to USD 8.5-9 bn this fiscal year, up from USD 7.7-8 bn previously. Foreign oil and gas companies invested USD 5.7 bn in the sector in FY 2022-2023.
Radio silence on the other bid rounds: EGPC and EGAS are yet to announce the results of the brownfield and exploration bid rounds that closed a bit more than two months ago. The ministry launched an international bid round to develop eight mature oil fields in the Gulf of Suez and Eastern Desert in March, and later extended the deadline by a month to mid-July citing the Eid Al Adha holiday.
