Egypt launches licensing round for Red Sea oil and gas exploration

Saudi Arabia said last week that it had found "large volumes" of gas offshore

Egypt in February tendered 10 blocks offshore the Red Sea,.  AFP

Egypt has tendered 10 blocks offshore the Red Sea as it looks to duplicate its successes in the Eastern Mediterranean, which led to a gas bonanza ending the country’s imports for the fuel.

The South Valley Egyptian Petroleum Holding Company (Ganope) invited companies on Sunday to review and purchase technical data, with August 1 set as the closing date for bids.

The announcement follows Egypt's successful closing of one it largest ever bid rounds, which saw the award of 12 licences and marked the entry of US major Exxon in the search for the country's hydrocarbons. Egypt, the Arab world's most populous state struck gold in recent years thanks to the discovery of the massive Zohr field by Italian energy major Eni in 2016 in the Eastern Mediterranean. The find sparked search for more hydrocarbon resources along the Nile Delta and western desert as the North African state looked to leverage these discoveries to become a net exporter of gas, particularly to markets in Europe.

Following the award of exploration licenses to concessions in the western and eastern desert regions, the Nile Delta as well as the Gulf of Suez, Egypt had announced intention to launch a new round that included blocks in the Red Sea.

"Red Sea exploration will be part of a new bid round, which will be launched very soon. This year, definitely. It's ready but we'll launch after we announce award winners for the 2018 bid round," Abed Ezz El Regal told The National in an interview in Cairo.

Egypt will look to incentivise exploration in the Red Sea area, which is expected to include unconventional resources.

The North African country will this year see production from its Zohr resource increase to more than 3 billion cubic feet per day. The country will also ramp up output from the North Alexandria West Nile Delta concessions operated by BP in April. Production is expected to reach 700 million cubic feet per day with the coming on stream of 400 million cubic feet per day, he said.

Saudi Arabia announced last week that it had discovered large quantities of gas in the Red Sea. The kingdom will conduct an investment feasibility study on the scheme and intensify exploration over the next two years, according to Saudi energy minister Khaled Al Falih.