The South Valley Egyptian Petroleum Holding Company (Ganope) offered its first international tender for exploration for oil and gas in 10 regions of the Red Sea, where companies will offer their bids by maximum 1 August.
The tender draft agreement, a copy of which was obtained by Daily News Egypt, Ganope has determined that in case a dispute took place with contracting parties, the foreign partner is not entitled to file any case before international arbitration, as the Cairo Arbitration Centre is the only body authorised to settle these cases.
The agreement stipulates that the period of exploration should not exceed nine years, including five years for exploration and four years for development, guaranteeing the company’s right to waive the area at any time.
The terms of the agreement included the right of the Ministry of Petroleum to withdraw the allocated area from the contractor, in case it failed to provide a plan to develop the exploration within two years from the declaration of the exploration.
The agreement specified the development lease period at 20 years, starting from the date the approval of the Minister of Petroleum, requiring the foreign partner to achieve a commercial production within four years from the exploration development date.
If the foreign partner failed to achieve commercial production after four years from the approval date of the development plan, and the Ministry of Petroleum refused to extend the period, it is entitled to withdraw the entire site from the company.
The provisions of the oil and gas exploration agreement in 10 Red Sea sites allowed the extension period for a maximum period of 30 years by obtaining the approval of the Minister of Petroleum for a period of five years.
The results of the collected geophysical data conducted in the Red Sea showed that gas discoveries estimated at more than 70% could be achieved according to the seismic survey carried out by Schlumberger company in cooperation with Ganope.
The two-dimensional seismic data collections were finalised using new techniques after the completion of the project of the seismic survey of the Egyptian Economic Waters in the Red Sea on an area extending over 10,000km at an investment cost estimated at $750m.