Egypt is offering eleven blocks in the Western Desert and Gulf of Suez, two of the most well developed basins in the region. The licensing round closes on 31 August 2016 with awards expected to be made in early 2017. Blocks will be awarded as production sharing contracts with 13 biddable parameters. Cost recovery ceiling, excess cost recovery share and profit share will primarily dictate government share.
Onshore Egypt remains attractive for exploration with low finding and development costs. The Western Desert in particular has seen high success rates in recent years, with discoveries quickly tied in to the existing pipeline network. Egypt is a net importer of oil and gas, and any new discoveries will help to meet rising demand. However, key concerns for potential bidders will be Egypt’s long-term ability to pay for profit oil and gas, given the country’s ongoing scarcity of US dollars, and the low price offered for onshore gas.
This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.
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Insight | Jul 2016
Egypt 2016 EGPC licensing round launch
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