Gas exploration in Mediterranean bid extended by Egypt

Egypt extends tender of natural gas exploration in Mediterranean by two months

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

According to a statement by Egypt’s state gas board, a gas exploration tender in the Mediterranean has been extended by two months and will have four extra search-platforms, Reuters has reported.

The new date of the tender will be on July 30 and the bidding will include 12 offshore search platforms instead of eight, the Egyptian Natural Gas Holding Company (EGAS) said in an advertisement published in the state-run Al Ahram newspaper.

Egypt has been experiencing one of the most serious energy crises in the last decade due increasing demand and decreasing production.

The north African country has tried to tackle energy shortages by raising energy prices, building new power plants, importing liquefied natural gas (LNG) and encouraging more domestic oil and gas production.

Due to lower interest in the bid than hoped and the request of bidders for more time, the tender period was extended by Egypt.

EGAS vice-president Mahfouz El-Buny told Reuters the period was extended at the request of a number of companies who wanted further details on the blocks available, and to give firms time to evaluate the four new blocks up for tender.

The four additional blocks are the Northeast Habi Marine, North Farma Marine, North Tabiya Marine and Northeast Amiriya Marine, EGAS said.

The original eight blocks were the West Arish Marine, East Port Said Marine, North Rumana Marine, North Ras al-Ash Marine, West al-Timsah Marine, South Taneen Marine, North Hammad Marine and East Alexandria Marine.

The 12 blocks together cover a total of 20,548 square km.

Italy’s ENI and Britain’s BP and BG are already searching for oil and gas off of Egypt’s northern coast. 

In February, state-controlled Ganoub El Wadi Petroleum Holding Co. (Ganope) Chairman Abu Bakr Ibrahim told Interfax news agency his company was working to lure energy companies to bid for 10 exploration blocks around the Kom Ombo region of the Nile and in the Red Sea.

Egypt signed six oil and gas exploration contracts worth hundreds of millions of dollars with foreign and Egyptian companies in January for the drilling of some 41 discovery wells in the country’s western desert and Gulf of Suez. Along with Eni, Shell, BP and TransGlobe Energy were among the major companies selected.

However, the Egyptian government has struggled to persuade companies to invest in the biggest finds - which are offshore - because the amount it pays them barely covers the investment costs.

Renewable energy

Egypt - which said it aims to privatise its electricity production, distribution and transmission earlier in February - previously had announced plans to generate 20 percent of its power from renewable sources such as wind and solar by 2020, but such plans have stalled for years mainly due to high costs and lack of investment.

Access Infra Africa, a partnership between the United Arab Emirates' Access Power and France's renewable energy company EREN Developpement, was pre-qualified by Egypt's Ministry of Electricity to develop four solar plants with a total capacity of 200 megawatts and two wind plants with 100MW, Access Power chairman Reda El Chaar previously said. 

UAE-based companies have been capitalising on good relations between the UAE and Egypt's army-backed government.

According to a statement released by the Egyptian cabinet, General Electric (GE) has also expressed interest in constructing renewable energy plants in Egypt, after the company’s vice president met with Egyptian Prime Minister Ibrahim Mahleb and Electricity Minister Mohamed Shaker.

TRTWorld and agencies