The Egyptian Natural Gas Holding Company (EGAS) and Chevron have signed a new agreement with a minimum investment of $88m to explore and exploit natural gas and crude oil in the Mediterranean Sea’s offshore Lotus block.
The agreement, signed by EGAS Executive Managing Director Sayed Selim and Chevron’s Exploration Manager for the Middle East, North Africa and the Mediterranean Andrew Deegan, includes the drilling of two exploration wells and the reprocessing of 3D seismic data.
The Lotus block is located approximately 200 km off the Mediterranean coast in water depths ranging between 2,000 and 2,800 metres. The area has not previously been subject to deep exploration drilling.
Minister of Petroleum and Mineral Resources Karim Badawi, who witnessed the signing alongside Chevron Egypt Country Manager Channa Kurukulasuriya, said expanding exploration is a primary axis in the ministry’s strategy to increase local oil and gas production.
Badawi stated that the state’s steps to pay arrears to investment partners have enhanced confidence in the Egyptian petroleum sector, prompting companies to increase investments, resume exploration programmes, and accelerate production projects. He noted that President Abdel Fattah al-Sisi’s remarks at the Egypt Mining Forum regarding the state’s commitment to the success of investments in mining and other economic sectors serve as a message to investors regarding state support.
The petroleum ministry is proceeding with a plan to offer more investment opportunities in the Mediterranean, the Western Desert, the Delta, the Gulf of Suez, Sinai, and southern Egypt, alongside ongoing and planned seismic survey programmes, Badawi added.
Chevron currently invests in six offshore exploration blocks in the Mediterranean: Nargis, North El Dabaa, Lotus, North West Atoll, North Simian, and North Cleopatra, where it partners with Shell.
Chevron’s previous operations in its Mediterranean concessions have included the Nargis gas discovery, while recent drilling at the Philox well in the North Cleopatra area showed indications of crude oil.
The signing was also attended by Ministry Undersecretary for Safety, Environment, Energy Efficiency and Climate and Official Spokesperson Mahmoud Nagi; Head of the Central Administration for Legal Affairs Mohamed El Bagoury; General Manager of Contracts and Petroleum and Mining Agreements Youssef Marwan; EGAS Vice President for Production and Field Development Abdel Nasser Khafagy; and EGAS Vice President for Agreements and Exploration Ibrahim Abdo.
