Egypt to Auction Offshore Exploration Blocks

Egypt said it will hold an international tender for 11 offshore oil and natural gas blocks in second half of fiscal year 2015-2016 for exploration purposes. The announcement was made by the head of the state-owned company Egas, Khaled Abdel Badie. The blocks that will be auctioned are in the Mediterranean and the Nile Delta.

During the last few years Egypt, despite its huge natural gas reserves became a net gas importer, because of delays in gas fields' development. Egypt subsidized energy and electricity, while the state's debt to foreign energy companies ballooned to almost $10bn and foreign operators curtailed their exploration and development activities in the country.

Last year Egypt, with the help of the Gulf states, began paying off its debt but it still owes $3bn, and a few new contracts were signed with majors, like BP, for the development of new gas deposits. Last August Italian Eni discovered the 30-trillion ft³ Zohr gas field. This discovery might attract new investors as it demonstrated the gas potential in the region.

Badie also said that Egypt will sign three new contracts for Mediterranean Sea development worth a total of $500mn. Egypt also expects to start production of roughly 760mn ft³/day of new gas in financial year 2015-2016 from new projects and development wells.