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Wednesday, 18 April 2018

Possible EU agreement next? Shell resumes EastMed ops and more from Med Offshore Conference

Is this it? Are we going to be the energy export hub to the EU next week? Egypt is expected to sign a new oil and gas agreement with the EU next week, Oil Minister Tarek El Molla said yesterday, without providing further details. While he framed the announcement as a “cooperation agreement,” he added that this is part of plans to turn Egypt into a natural gas export hub for the East Mediterranean basin. Cypriot Foreign Minister Nicos Christodoulides had said earlier this month that Egypt and Cyprus would be ready to sign the contracts for a pipeline “in the near future” and that the different parties involved “are in the process of negotiating the terms of the natural gas sale and the purchase agreements.” The two countries were also waiting to hear back from the EU on their preliminary framework for the agreement as of March.

El Molla also said yesterday that the Oil Ministry is also planning to issue tenders for 10-11 oil and gas exploration blocks, as well as other drilling tenders in the Red Sea by the end of the year, according to Reuters.

Remarks at major industry gathering: The minister’s statements were but the most high-profile of a number of significant sector announcements coming out of the 9th Mediterranean Offshore Conference. Highlights:

Shell is planning to resume deepwater oil and gas exploration in the eastern Mediterranean, Executive Vice President Sami Iskander told reporters at the conference yesterday, Reuters reports. Reports had emerged last month that Shell was among several international oil companies planning to invest in exports and exploration in the East Med. The company is also reportedly nearing a USD 25 bn agreement to bring gas from Israel and Cyprus to its liquefaction plants in Egypt, as we noted last month.

Meanwhile, Italy’s Edison is planning to drill its inaugural exploratory well in the North Thekah offshore concession in the eastern Mediterranean, Edison’s Executive Vice President Nicola Monti said, Al Shorouk reports.

We cannot speak of East Med without mentioning Eni, which is also looking to ramp up production from the Zohr gas field to 1.2 bcf/d by May, and 2 bcf/d by the end of 2018, Eni JV IEOC General Manager Fabio Cavanna said, according to Reuters. El Molla had said last month that Egypt is planning to raise Zohr’s output to 700 mcf/d in May.

This comes as Egypt’s overall crude oil output rose 4.3% y-o-y to 657k bbl/d, EGPC boss Abed Ezz El Regal said, Al Mal reports.

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