CAIRO: Egypt’s General Petroleum Corporation and Natural Gas Holding Company announced yesterday an international auction for 22 concessions for oil and gas exploration in accordance with production-sharing agreements.
The concessions are for areas in the Suez Canal, Egypt’s western desert, the Mediterranean sea and the Nile Delta, the state-owned firms said in an advertisement placed under the banner of the Oil Ministry in state-run newspapers.
Exploration companies have been hesitant to develop untapped gas finds in Egyptian waters partly because the amount the government pays them barely covers their investment costs.
Egypt pays offshore gas producers on average around $2-$3 per million British thermal units, according to industry estimates. Comparable payments for gas in Britain are currently above $10 and for Asian supply above $17.
Egyptian officials have suggested pricing arrangements should be changed to reflect the high costs of offshore exploration in deep water, arguing that such reform would spur new investments.
The auction will end on May 19, the announcement said. An Oil Ministry spokesman said the time was sufficient for companies to prepare their offers but gave no further details. Egypt has started repaying some of its debt to foreign oil companies, which had reached more than $6bn this year.
Reuters
