Back to the complete issue
Monday, 11 March 2019

Egypt announces Red Sea oil and gas bid rounds for 10 offshore blocks

The scramble to drill for oil and gas in the Red Sea just got underway: The South Valley Egyptian Petroleum Holding Company (Ganope) has launched a tender for 10 oil and gas exploration blocks off the Red Sea coast under a new production sharing contract, according to a company statement (pdf). There is detailed information (pdf) on the bid round available on Ganope’s website. The launch of the tender came following the completion of seismic scans in the area by Schlumberger, Norway’s TGS and three other oil companies. Schlumberger’s data suggests there is a high probability of natural gas discoveries, noting that the seafloor resembles the gas-rich terrain of neighboring Saudi Arabia.

Just in time: The tender was expected back in December but was delayed just long enough to take place under new production sharing contracts, which took effect this quarter. The new friendlier terms would see companies bear the cost of exploration and production in return for a share of the output, which will vary from one concession to another based on the cost of investment. They also allow companies to sell their share of production to any entity of their choosing, as opposed to the current system, which gives them only one-third of output and allows the government to buy the producer’s entire share at predetermined prices.

This is clearly not the time for a company to pursue LNG imports: On the natural gas front,private sector companies seeking to import LNG for the local market have put their plans on hold now that Egypt is exporting surplus gas, according to a domestic press report citing an oil ministry official. The Natural Gas Regulatory Authority, which issued 18 licenses for gas import and distribution last week, has not handed a single import license to a private sector company. The ministry has signalled it is willing to extend preliminary import approvals for companies including BB Energy, Fleet Energy, and Qalaa Holdings’ TAQA Arabia.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.