Awards are expected by early October for 12 on- and offshore blocks in the Nile Delta, North Sinai and the Mediterranean. Egyptian Natural Gas Holding Company (EGAS) received bids from international oil companies (IOCs) in July for the blocks.
Awards are expected by early October for 12 on- and offshore blocks in the Nile Delta, North Sinai and the Mediterranean. Egyptian Natural Gas Holding Company (EGAS) received bids from international oil companies (IOCs) in July for the blocks.Petroleum Minister Sameh Fahmy said in mid-September that EGAS had received numerous offers from IOCs for the acreage.'The bid round is still under assessment, but I think we will announce the winners by the end of September or early October,' he was reported as saying by the weekly Upstream magazine. 'We have received lots of proposals and many major companies are bidding. We expect to award 80-90 per cent of the blocks.'Some IOCs were said to be reluctant to bid for the blocks under the terms of the concessions production sharing agreement (PSA), which stipulates a gas sale price cap of $2.65 a million British thermal units (BTU). 'As the cost of exploring has risen steadily, selling gas for a price so far below a global market price is simply not attractive,' said one senior IOC official.Other recent bid rounds by EGAS and Egyptian General Petroleum Corporation (EGPC) have attracted strong interest, as the hydrocarbons sector has drawn in about $15,000 million of foreign investment over the last five years.The government is committed to encouraging a programme of exploration that will increase Egypts proven gas reserves to more than 120 trillion cubic feet (tcf) in five years from 68 tcf. Fahmy said that EGAS was likely to launch another licensing round in 2007 (MEED 25:8:06).
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