Egyptian Minister of Petroleum Tarek El-Molla signed three oil and gas exploration deals for 16 new fields in the Western Desert worth at least $81.4m in total with Royal Dutch Shell and US-based Apex Oil Company, according to a statement issued on Tuesday.
The Petroleum Ministry said that the first deal would see Shell invest $35.5m. The two others would see Apex, which is operating in Egypt for the first time, invest a combined $45.9m on two projects.
Egypt, which used to be a net energy exporter, has become a net importer in recent years as consumption increased and production fell.
The government has been on a drive to lure back foreign investors to its energy sector in an effort to address a squeeze on public finances.
After signing the deals, El-Molla said that the ministry’s strategy aims to attract more foreign investments in the field of oil and gas exploration, which will contribute to exploiting the oil and gas potential of several regions in the country.
The minister pointed out that Egypt witnessed a large flow of investment from international oil companies in the wake of the 30 June revolution.
El-Molla added that the oil sector succeeded in finishing 79 new agreements for oil and gas exploration, with a minimum investment of $15.3bn. He stressed that the oil sector prioritised expediting agreement procedures and concluding them for speedy implementation.
He explained that American companies are an important partner and a key player in the production of oil and gas in Egypt and that the Western Desert region is one of the most important areas of interest to US companies, which contributed to the continued outstanding results for oil activity in that region.
Apex International Energy, an independent oil and gas exploration and production company focused on Egypt, said in a separate statement that it signed two concession agreements for 1.7m acres encompassing the West Badr el Din (4,180 sq km) and South East Meleiha (2,535 sq km) concessions.
Both are located in the prolific Abu Gharadig Basin in Egypt’s Western Desert. Apex was awarded the two blocks as part of the Egyptian General Petroleum Corporation (EGPC) 2016 bid round.
Roger Plank, the founder and CEO of Apex International Energy, said, “we are very pleased to finalise these concession agreements and officially establish Apex’s foothold in Egypt.”
He added, “we thank Tarek El-Molla … for his support during this transaction and for encouraging investments like ours in Egypt’s attractive oil and gas market.”
“We look forward to advancing our partnership with the Egyptian Ministry of Petroleum and Mineral Resources,” Plank said.
Raed Saba, the deputy general manager and exploration manager in Apex International Energy Egypt, said, “these blocks provide promising opportunities for value creation in the Western Desert, where we have extensive experience and look forward to building a long-term presence.
He added that the company is “eager to get started on drilling wells to maximise the full potential of these blocks, while pursuing additional opportunities to grow business in Egypt.”