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Egypt is developing a new model
for future oil and gas production contracts in its undeveloped areas to stimulate exploration and help achieve energy self-sufficiency, according to Bloomberg News in Cairo on October 17.
The most populous Arab country is seeking to transform itself into a gas re-export hub on Europe's doorstep in energy-hungry Europe, and planned contract reforms are part of
an overall strategy to liberalize the country's energy sector.
In 2015, Italy's Eni discovered a huge field of Zohr off the coast of Egypt, rekindling investor interest
in Egypt's oil and gas industry.
The officials, who requested anonymity, said that under the new policy, companies will bear the cost of exploration and production in exchange for a portion of production, and they will be free to sell their production
to whoever they want to sell.
The officials said the production share would vary
depending on the investment.
Egypt's oil ministry did not immediately respond to a request
for comment.
Egypt's existing production-sharing agreement entitles investors to about one-third of a project's production to help pay for exploration and production
.
The remaining production is divided equally between the enterprise and the Egyptian government, which has the right to purchase all the
shares of the producer at a predetermined price.
IOCs have long complained that Egypt's existing contracts are too bureaucratic, while Egypt, which has been exporting gas to neighboring countries for years, struggled before the Zor field found it attracting significant new energy investment
.
After the 2011 uprising against former President Hosni Mubarak, Egypt's production-sharing agreement came under greater scrutiny
.
Egypt was beginning to experience fuel shortages and power
outages.
Egypt is developing a new model
for future oil and gas production contracts in its undeveloped areas to stimulate exploration and help achieve energy self-sufficiency, according to Bloomberg News in Cairo on October 17.
The most populous Arab country is seeking to transform itself into a gas re-export hub on Europe's doorstep in energy-hungry Europe, and planned contract reforms are part of
an overall strategy to liberalize the country's energy sector.
In 2015, Italy's Eni discovered a huge field of Zohr off the coast of Egypt, rekindling investor interest
in Egypt's oil and gas industry.
The officials, who requested anonymity, said that under the new policy, companies will bear the cost of exploration and production in exchange for a portion of production, and they will be free to sell their production
to whoever they want to sell.
The officials said the production share would vary
depending on the investment.
Egypt's oil ministry did not immediately respond to a request
for comment.
Egypt's existing production-sharing agreement entitles investors to about one-third of a project's production to help pay for exploration and production
.
The remaining production is divided equally between the enterprise and the Egyptian government, which has the right to purchase all the
shares of the producer at a predetermined price.
IOCs have long complained that Egypt's existing contracts are too bureaucratic, while Egypt, which has been exporting gas to neighboring countries for years, struggled before the Zor field found it attracting significant new energy investment
.
After the 2011 uprising against former President Hosni Mubarak, Egypt's production-sharing agreement came under greater scrutiny
.
Egypt was beginning to experience fuel shortages and power
outages.