Egypt to issue international tender to explore oil in Red Sea

CAIRO – 11 March 2018: Minister of Petroleum Tarek el-Molla said that a global tender will be issued before the end of 2018 to explore petroleum wealth, including new sectors of the Red Sea after providing international research companies with geophysical data from Egypt's economic zone in the Red Sea.

Molla observed on Saturday the geophysical data collection process from Egypt's economic zone in the Red Sea. The project is being implemented by an alliance between “Western Gecko – Schlumberger” and "TGS," with an total investment of $750 million.

The minister emphasized the project's importance in attracting global digging companies in order to make new discoveries that would help to increase Egypt’s reserves and production of petroleum.

South Valley Egyptian Holding Company would be enabled to offer international bids for oil exploration in the Egypt's economic waters in the Red Sea, something that was not possible without the demarcation of the maritime border with the Kingdom of Saudi Arabia, Molla clarified.

He stated that the companies have collected 95 percent of the data that was outlined in the project's plan; around 9500 kilometers have been covered so far.

Border Demarcation Deals

In April 2016, Egypt and Saudi Arabia signed a border demarcation deal that hands over the two Red Sea islands of Tiran and Sanafir to Saudi Arabia.

The Egyptian-Saudi deal faced a number of legal challenges by opponents and led to disputes over which the courts have jurisdiction.

Egypt's Supreme Constitutional Court ruled in June to suspend the execution of all previous court verdicts regarding the deal.

In January 2017, Egypt’s High Administrative Court upheld an earlier decision by an administrative court that voided the deal and affirmed Egyptian sovereignty over Tiran and Sanafir.

In April 2017, the Cairo Court for Urgent Matters ruled that the country's High Administrative Court had no jurisdiction over the matter.

The Egyptian Parliament voted in favor of the deal, which was followed by President Abdel Fatah al-Sisi's ratification of the deal.

Meanwhile, Egypt signed a deal in 2013 with Cyprus, allowing both states to explore oil and gas in their economic zones.

Italian company Eni in 2015 discovered Zohr gas field that was officially inaugurated in January and is expected to produce 2.7 billion cubic feet of gas a day by the end of 2019.

Global Outbidding

An official at Egyptian Natural Gas Holding Company (EGAS) announced in February that the company intends to issue an international tender to explore natural gas and crude oil in 11 concession areas during the first half (H1) of the current year, including eight sea areas and three land areas.

In January 2018, EGAS Chairman Osama al-Bakly announced that the company is planning to issue an international tender to explore for natural gas and crude oil in the Mediterranean Sea and the Nile Delta in H2 of 2017/2018.

Egypt will achieve natural gas self-sufficiency before the end of 2018, with gas production amounting to six billion cubic feet of gas a day, Petroleum Minister Molla announced in 2017.