Egypt to Offer Tenders on New Oil and Gas Blocks Shortly

Published on : 2021-01-28

Egypt will offer more oil and gas blocks for tender in a new bid in the coming weeks, its minister of petroleum and mineral resources said.

In an interview with Gulf Intelligence on Wednesday, Tarek El Molla said the offshore blocks are in Nile Delta and Eastern Mediterranean areas, while the onshore blocks are in Western and Eastern deserts.

He added that the blocks would be offered by Egyptian General Petroleum Corporation (EGPC) and Egyptian Natural Gas Holding Company (EGAS).

In January, Egypt awarded nine offshore oil and gas concessions in the Mediterranean Sea and the Red Sea to six international and local companies.

"We were able to, for the first time, have some super major oil companies like Exxon Mobil and Chevron," said El Molla.

He said in the upstream, in terms of greenfield investments, Egypt will prioritize the development of offshore gas assets. In downstream, several government-led strategic refinery projects are underway to fulfil the needs of the domestic market.

"We will continue on refining projects till we reach self-sufficiency by 2023," he said, adding that two major projects were completed in Cairo and Alexandria last year.

El Molla said Egypt is expanding its MIDOR refinery, which has a capacity of 100,000 barrel/day in Alexandria by 60 percent, and the new capacity is expected to go onstream by mid-2023. Additionally, a significant hydrocracker project in Assiut [by the Assiut National Oil Processing Company] is scheduled to be completed by end-2023.

"We have [also] started commissioning a project in Assiut for gasoline products [Assiut Oil Refining Company's high-octane plant] so that we would be able to meet South Egypt's needs and avoid transportation from north to south."
"At the same time, we are also focusing on petrochemical projects, where we see the added value as Egypt imports a lot of petrochemical products."

Meanwhile, Egypt's LNG export capacity is expected to increase to 12.5 million tonnes in the first quarter.

"We have a capacity of up to eight million tonnes currently. Our export capacity is expected to grow by 4.5 million tonnes by the end of February with the re-opening of the Damietta plant," he said.

El Molla said the company is working with international energy to build the outlook for 2021 after a tough 2020, which saw capital expenditure cuts by all the companies.

"We were stretching our operations in order not to get hurt from the reduction in capital expenditure, but you could not do this for a long time, so we are sitting with them for 2021. We need to have our input in their outlook because we need them to continue investment and exploration and production."

He added that the focus would be on more of less risky opportunities for them.

"Our vision is not only for the domestic market but also regional," he said, noting that Egypt's efforts over the past few years had culminated in the founding of East Mediterranean Gas Forum (EMGF) in September last year.

(Writing by Anoop Menon; Editing by Seban Scaria © ZAWYA 2021)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy.

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