Egypt's Oil Minister has inked three offshore oil and gas exploration and production deals worth about $220 million, per a news report.
The agreements are signed with supermajor BP plc BP , France's Total SA TOT and a subsidiary of Italy's Eni SpA E for exploration blocks in the Egyptian Mediterranean Sea. The agreements also include a signing bonus of $9 million and are the result of a tender called by Egyptian state gas board (EGAS).
Per the ministry, the deal is for six new wells to be drilled for offshore areas of North El Hammad, North El Tabya, and North Ras El Esh.
Yesterday, Eni confirmed two deals for blocks - North El Hammad and North Ras El Esh - but did not reveal their value.
Per Eni, the block North El Hammad spans across an acreage of 1,927 square kilometers and is located to the west of the Abu Madi West and Baltim-Baltim South development areas, where Eni recently made the major discoveries of Nooros and Baltim South West. The Nooros well was brought online in Aug 2015. Eni, the operator of the North El Hammad block has equity of 37.5%. Other partners in the block are BP and Total, holding 37.5% and 25%, respectively. The deal is estimated to be worth about $80 million.
The block North Ras El Esh spans across an acreage of 1,389 square kilometers and is located southwest of the development areas of Temsah and Port Fouad. Eni has a stake of 50% in the block, while the remaining is held by BP, the operator of the block. The deal is estimated to be worth about $75 million.
The third agreement is for North El Tabya with BP, wherein the company would make investments of $65 million.
Currently, Egypt has become a net importer as domestic output has failed to keep pace with rising demand from being an exporter of energy earlier.
Last month, Saudi Arabia informed Egypt that consignments of oil products anticipated under a $23 billion aid deal has been stopped indefinitely. The government is pursuing options to help the country cope with energy deficit. Egypt wanted to import crude oil directly from Iraq and the ministry wished to finalize the deal by the first quarter of 2017.
The oil sector in Egypt has inked 73 oil and gas exploration deals with international oil companies in the past three years, worth about $15 billion so far, and signing bonuses of over $1 billion for the drilling of 306 wells.
Last week, an EGAS official informed Reuters that the board has decided that Egypt required about 100 shipments of liquefied natural gas worth $2.2 billion in 2017 and has already secured 60 shipments.
Eni currently has a Zacks Rank #4 (Sell).
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