Christopher Coats, CONTRIBUTOR
In hopes of reviving its oil and gas production efforts, Egypt has signed exploration agreements with Cypriot and U.S. firms to assist with onshore projects.
According to media reports, Cairo signed deals with IPR and Cypriot subsidiary Mediterra to help the country reach new production goals, specifically focusing on three exploration wells in sectors 7 and 8 in southern Egypt.
The deals come as Egypt continues to push for a revival of its energy production sector, which largely collapsed following the fall of the Mubarak government in 2011. Since then, Egypt has struggled to meet its rising energy needs, resulting in mounting debt to foreign producers and efforts to curb usage and subsidies to consumers.
The agreements also come after the North African nation got a boost of industry confidence with the apparent discovery of a “super giant” offshore field by Italy’s Eni last year. The field could hold up to an estimated 30 trillion cubic feet of natural gas.
While pre-2011 production efforts include export options to Jordan and Israel, these latest agreements intend to boost output for domestic use, according to a government official quoted by Reuters.
Although the country now appears to be moving towards domestic production of its own, Egypt is still working towards addressing near-term demand with new deals intended to ensure supply. This week, Amira El-Mazni, assistant vice chairperson at the Egyptian Natural Gas Holding Company reported that five companies had sought supply agreements in response to a licensing round.
According to local media reports, EGAS intends to dole out two licenses to supply Egypt with natural gas, though they are not expected to begin operations soon enough to avoid expected shortages seen during the hot summer months.
The licenses arose from a change to the country’s energy laws that would allow private sector to import natural gas from abroad and “deliver it through the national network for a fee paid by these companies, provided that they obtain the license.”
More licenses from EGAS are expected to following the months that follow.
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