Cairo (Bloomberg) – Egypt signed nine crude oil and natural-gas exploration agreements with companies including Royal Dutch Shell Plc as the country struggles to revamp an economy battered by almost three years of political turmoil.
The contracts, the first such awards since 2010, will require minimum investment of $470 million, the country’s oil ministry said in an e-mailed statement today. The contract winners agreed to drill 15 wells in the Gulf of Suez, the Sinai and the eastern and western deserts, the ministry said.
Egypt is “still able to attract petroleum investments,” Oil Minister Sherif Ismail said in the statement. “Egypt’s potential for new petroleum finds,” helped bring companies to seek the exploration deals, he said.
The Arab world’s most populous nation is struggling to expand oil and gas exploration and attract international companies to help meet surging domestic demand and declining output after the toppling of President Hosni Mubarak in 2011 triggered an economic slowdown. The north African country, a gas exporter, is also seeking bids to import liquefied natural gas through a tender whose results have not yet been announced.
Pico International Petroleum, a unit of Pico Holdings Inc., Greystone Oil and Gas LLP and Petzed Investment and Project Management Ltd. were also among the winners of the exploration contracts, who will receive total signing bonuses of $50 million, the Cairo-based ministry said today.
Egyptian state oil and gas companies owe foreign partners around $6 billion for past fuel supplies that haven’t yet been paid for, Ismail said in a phone interview yesterday.
Is Egypt signing these contracts to pay up it debts?