State-run Egyptian Natural Gas Holding Co. has awarded eight oil and gas prospection projects in the Mediterranean Sea for an overall minimum investment of $1.2 billion as the country seeks to increase its fossil fuel production and reserves.
State-run Egyptian Natural Gas Holding Co. has awarded eight oil and gas
prospection projects in the
Mediterranean Sea
for
an overall minimum investment of $1.2 billion as the country seeks to increase
its fossil fuel production and reserves.
BP PLC (BP), Ireland's Petroceltic International PLC (EG5.DB), Italy's Eni SpA
(E), Edison and IEOC, a subsidiary of Eni group, Canada's Sea Dragon Energy
(SDX.V), United Arab Emirates' Dana Gas PJSC (DANA.AD) and Australia's Pura
Vida Energy NL (PVD.AU) won the blocks, the oil ministry said in a statement
posted on its website late Tuesday.
The awards were the result of an international tender which received 13 offers.
The winning companies will drill a minimum of 18 wells and will pay $73.2
million for the licences, it said.
"Issuing international tenders is part of the ministry of oil's strategies
to intensify oil and gas exploration activities to secure new energy
supplies...and encourage international firms to pump more investments in
research, exploration and development," energy minister Osama Kamal said
in the statement.
Mr. Kamal has previously said that investments in oil and gas exploration are
expected to reach $8.6 billion this year.
Egypt
has
seen its oil and gas exploration activities slowing over the past couple of
years due the continuing unrest since the ousting of former president Hosni
Mubarak. The country has been paying hefty premiums for its crude supplies due
to the weaker Egyptian pound and difficulties in securing letters of credit for
its transactions, while a shortage of state-subsided diesel has already
paralyzed transportation in many parts of the country.
Last year, Mr. Kamal allowed private firms to imports gas to meet the country's
soaring energy demand.
The civil unrest has also led to a risky economic mix of dwindling
foreign-exchange reserves, declining tourism revenue and costly price
subsidies, economists said. To prop up the Egyptian currency, the central bank
has gone through nearly two-thirds of its foreign-currency reserves, pushing
the country to the brink of a liquidity crisis.
Egypt
is in
the throes of trying to secure a $4.8 billion loan from the International
Monetary Fund, a move viewed as critical to rescuing its economy and mending
its reputation as a place to do business.
People close to the talks say the IMF wants to see
Egypt
reduce its subsidy spending as part of a reform plan for the loan. But any
subsidy changes will likely only enrage further the legions of poor who rely
daily on cheap fuel, making the already uncomfortable summer months all that
more unbearable.
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