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Egypt Dangles Incentives to Draw More Oil and Gas Investors

Monday 11 February 2019 10:18 PM

Egypt’s oil minister Tarek El-Molla
Egypt’s oil minister Tarek El-Molla


Egypt is finalizing details of a new type of oil and gas contract to attract even more foreign investment than the $10 billion already coming into its energy industry this year.

The contract will provide investors with incentives to explore for fossil fuels in undeveloped areas, Egypt’s oil minister Tarek El-Molla said in an interview. He didn’t provide details of the changes to the contract.

“We’re improving the cost-recovery process to be faster, less bureaucratic and more efficient,” El-Molla said. The government will launch a new bid round in the Red Sea this quarter, he said.

Egypt plans to award on Tuesday more than a dozen concessions to explore for oil and gas, El-Molla said during a conference in Cairo attended by Total SA Chief Executive Officer Patrick Pouyanne and BP Plc’s Bob Dudley.

The most populous Arab nation, wants to become a gas re-exporting hub on the doorstep of Europe, and the contract overhaul is part of a broader plan to liberalize its energy industry. Italian firm Eni SpA’s discovery of the giant offshore Zohr gas field in 2015 reignited waning investor interest in Egypt’s oil and gas industry, the country’s biggest single magnet for foreign direct investment.