Egypt has signed US $934 million contract across eight gas exploration and research agreements, following a push to attract new entrants to develop its mushrooming gas market.
The agreements were signed by state-owned Egyptian Natural Gas Holding Company (EGAS).
Since its adoption of a framework to develop and monetize natural gas over a half-decade ago, the North African producer has witnessed increasing levels of gas production, translating to domestic gas self-sufficiency and the export of gas within the region.
According to Magdy Galal, Director of EGAS, US $65 million in grants were signed in addition to the investments in research and exploration. Furthermore, the company is finalizing six other agreements that encompass up to US $731 million in investments.
EGAS currently holds a stake in 37 other exploration agreements. The Ministry of Petroleum and Mineral Resources announced that a total 8 gas exploration contracts were signed in the 2019 and 2020 financial years.
The total size of investments indicated in the eight contracts is worth $934 million bringing the total number of active deals to 37.
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Sixth others – worth US $731 million – are underway. The total value of signing bonus for the companies involved is US $14 million.
According to the ministry, certain companies – including Exxon Mobil and Chevron Corporation – entered Egypt’s gas exploration market for the first time while others – like Total, Shell andBP – expanded their investments.
Over the aforementioned period, 12 exploratory fields were drilled in the Mediterranean and Delta giving rise to seven discoveries. The successful drilling of four production wells raised the total to 31with a primary production of 1.7 billion cubic meters in addition to 19,000 natural-gas condense barrels.
The capital costs of gas projects accomplished in the second half of 2019 and 2020 until present are worth US $1.1 billion. The projects encompass the launching and expansion of several oil fields and gas pipelines.
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Oil production in Egypt has recorded 7.2 billion cubic meters per day, while the daily local consumption stands at 5.8 billion cubic meters. 60% is used to generate electricity, 23% consumed by the industrial sector, 11% enter petrochemical industries, and 6% go to households and vehicles.
Egypt’s output has remained notably steady with an oil production of about 630,000 barrels per day in 2019. The largest oil producer in Africa, though not a member of OPEC, witnessed a remarkable stability between 2014 and 2019. Government’s pro-market reforms reduced subsidies for the oil industry.
