The Egyptian subsidiary of UAE natural gas company, Dana Gas, has been awarded two onshore exploration blocks in the Nile Delta.

Dana Gas Egypt, has been awarded the North el-Salhiya (Block 1) and El Matariya (Block 3), according to a statement released by the company on 29 September.

The company has a 100 per cent stake in Block 1 and says it will use its existing infrastructure to exploit any discoveries within the area.

It will participate in the Block 3 Concession Area on a 50 per cent basis with BP as partner and operator. Under the terms of the agreement, BP will fund all of the cost of one exploration well up to an agreed maximum limit.

If gas is found in commercial quantities BP has the option to back into 50 per cent of the deep potential of Dana Gas’ adjacent development leases.

BP also has the option to back into 50 per cent of the deep potential of Dana Gas Egypt’s other Development Leases and Block 1 Concession Area by drilling and funding all of the costs of a second exploration well in either the Development Leases or Block 1 up to an agreed maximum limit.

Speaking about the new concessions Dana Gas CEO Patrick Allman-Ward says he had high expectations.

“The area is particularly well known to Dana Gas, given its long-term commitment to the Nile Delta. We believe there is significant upside potential from continued exploration and development in these concessions,” he says.

The two blocks are located adjacent to the company’s existing development leases.

Dana Gas says it is looking to explore the multi-TCF gas potential of the area’s Oligocene reservoirs.

The first Oligocene exploration well is scheduled to be drilled in 2016. In case of exploration success, an early development system is envisaged to allow rapid production of the wells located close to the existing El-Wastani plant.

The two blocks have a 6-year exploration period, comprised of two 3-year phases. A 20-year development lease period will be granted to each block, based on approved commercial discovery.

The two concessions cover 1,527 km² and 960 km² respectively and were awarded as part of the Egas international bid round in August 2014.

Ratification of the two new concessions is expected to take place following the completion of the necessary approvals.

The announcement by Dana Gas is the latest in a string of awards. Italian oil and gas company Eni has been awarded two blocks offshore in the Mediterranean and one block in the Western Desert.

On 19 September Egypt awarded seven other oil and gas exploration blocks in deals worth a total of $187m, which should see 29 new wells drilled in the country.

Five of the blocks are located in Egypt’s Western Desert and were awarded to Tunisian oil company HBS, Canada-based TransGlobe and Italy’s Edison.

German oil and gas company RWE won two offshore exploration blocks in the Gulf of Suez.