Egypt’s Ministry of Petroleum and Mineral Resources signed three agreements on September 14 – with UAE-based Dragon Oil, and French independent Perenco Egypt and its US peer Apache Egypt – on investments worth more than $121mn.

The ministry “signed three new agreements to explore for oil and gas in the Western Desert, Gulf of Suez and North Sinai,”, it said in a statement (in Arabic) dated September 14. 

The first agreement reassigns the North Sinai offshore area to Perenco Egypt (spelt 'Brenco Egypt' in the ministry note), with $46mn of investments to drill three wells and a signing bonus of $1mn.

The second one awards the East El-Hamd (Gulf of Suez) concession to drill three wells to Dragon Oil, fully owned by Emirates National Oil Co. (ENOC), following an Egyptian General Petroleum Corporation (EGPC) bid. The project entails $40.5mn in investment and $4.5mn signing bonus.

The third agreement, with Apache Egypt, for the integrated exploration and development area in the Western Desert, adds five new exploration blocks with a total investment of $35mn, covering the drilling of 14 wells, and a signing bonus of $25mn. Apache Egypt is the local arm of US independent oil & gas company APA Corporation.

Historically, East El-Hamd in the Gulf of Suez is oil-weighted with associated gas; Offshore North Sinai has tended to be gas-prone; and the Western Desert is mixed, varying by block.

East El-Hamd, Offshore North Sinai, Western Desert deals at a glance:

• Perenco Egypt (Perenco S.A., France) — Offshore North Sinai (reassignment): $46m; 3 wells; $1m signing bonus. (Spelled “Brenco Egypt” in the ministry statement.)
• Dragon Oil (UAE; wholly owned by Emirates National Oil Company, ENOC) — East El-Hamd, Gulf of Suez: $40.5m; 3 wells; $4.5m signing bonus; awarded via EGPC bid.
• Apache Egypt (USA; part of APA Corporation) — Western Desert (integrated area): adds 5 exploration blocks; $35m; 14 wells; $25m signing bonus.

Following the signing, Minister of Petroleum and Mineral Resources Karim Badawi said that the three agreements indicate growing confidence from international companies in Egypt’s petroleum investment climate. He added that attractive bidding rounds and incentive policies have opened new opportunities for exploration and development.

Days earlier, the Egyptian Natural Gas Holding Company (EGAS) signed a memorandum of understanding (MoU) with energy supermajor BP to explore five new wells in the Mediterranean Sea at depths ranging from 300 to 1,500 metres, according to Al Ahram.

The programme aims to accelerate gas reserve development by leveraging existing infrastructure in the West Nile Delta, reducing both time and costs if drilling is successful.

International oil firms (IOCs) are speeding up investments in Egypt. On August 26, Shell (UK) announced it is close to securing the development licence for the Rahmat offshore natural gas field in the deep waters of the Mediterranean northeast of Egypt’s coast, Asharq Business reported.