Bid round draws strong response

11 November 2002

Egyptian General Petroleum Corporation (EGPC)says it is very pleased with the response to the 38-block exploration bid round that closed on 4 November. 'There were plenty of envelopes submitted,' said a senior EGPC official the day after the deadline. 'I would even say that the response was unprecedented.' He declined to provide further details, but said that the new procedures being applied mean that preliminary awards can be made within two weeks of the bids being opened.

The previous bid round, which closed in February, resulted in the award of six blocks, all in the Gulf of Suez, Egypt's main oil province. Two went to BPof the UK, two to Ocean Energyof the US and one each to Kritiof Greece and Italy's Eni.

Of the new blocks on offer, 14 are in the Gulf of Suez, 10 in the Mediterranean, 10 in the Delta and Western Desert, three in the Red Sea and one in Upper Egypt. Petroleum Ministry officials said that many companies were keen to see the data on the offshore Mediterranean blocks because of their proximity to areas where large amounts of gas have been discovered. The successful start of Egypt's liquefied natural gas (LNG) export programme has also indicated that companies finding gas will be in a good position to secure an export market, analysts say.

The leading foreign operators of new gas fields in Egypt are BG Groupof the UK, BP, Eni, Royal Dutch/Shell Groupand US independent Apache Corporation. BP, Apache and Germany's RWE-Deahave also made significant gas discoveries in offshore Mediterranean blocks since the start of 2002.

Another important entrant into the Egyptian market is Gaz de France (GdF), which has agreed to purchase the entire output of the first train of the Egyptian LNGplant for 20 years. GdF has made clear that it is also interested in becoming involved in upstream activities.

Egypt has proven gas reserves of 55 trillion cubic feet and oil reserves of 2,900 million barrels. Gas production is running at about 2,700 million cubic feet a day; oil output is about 625,000 barrels a day.

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