Chevron, Shell, and Mubadala have been awarded oil and gas exploration concessions in the Egyptian Red Sea area in an international tender, the Ministry of Petroleum announced on Sunday.
Minister of Petroleum Tarek El-Molla affirmed that Egypt will start exploiting its oil and gas wealth in its Red Sea economic waters for the first time.
In February, the results of the geophysical data analysis in the Red Sea, carried out by Schlumberger in cooperation with Ganope, pointed out that there is a 70% chance for new natural gas discoveries.
The Red Sea is one of the most promising areas in Egypt, as no exploration activities were undertaken before the agreement on the demarcation of the maritime border with Saudi Arabia in 2017.
The first concession block was awarded to Chevron, the second to Shell, while a third block was awarded jointly to Shell and Mubadala with a total exploration area of around 10,000 square km and with a minimum investment of $326m, the ministry explained in the statement
Egypt’s oil and gas sector has been one of the top receivers of foreign direct investments (FDIs) in 2019. In the third quarter of 2019 net inflows for oil and gas sector investments rose by $256.4m to $744.2m.
Egypt has finalised a new form of petroleum agreements for the first exploration tender in the Red Sea. The agreements include new incentives, such as increasing the partner’s share and reducing the expense recovery period, in a bid to encourage foreign companies to further invest in Egypt’s oil and gas sector.