Egypt's government secures funding for payments to foreign partners in petroleum sector

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Egyptian Prime Minister Mostafa Madbouly convened a meeting on Wednesday to address the needs of the petroleum sector and efforts to boost petroleum product output. Attendees included Central Bank of Egypt’s Governor Hassan Abdalla, Finance Minister Ahmed Kouchouk, and Petroleum and Mineral Resources Minister Karim Badawi.

The Prime Minister emphasized the importance of securing necessary funding for the petroleum sector until the end of the current fiscal year, while continuing efforts to meet local market demands.

Cabinet spokesperson Mohamed El-Homsani stated that the meeting focused on procedures for ensuring monthly payments to foreign partners, crucial for sustaining increased exploration and production activities. The government aims to maintain these payments to uphold production levels and ongoing explorations.

Incentive measures to boost production were also discussed, including allowing the export of a portion of new gas production, with revenues allocated to cover required payments. Additionally, the price for foreign partners’ share of new gas production will be adjusted according to the economic model.

The Egyptian Natural Gas Holding Company (EGAS) plans to issue a new international bid for 2024, targeting 12 blocks in the Mediterranean and Nile Delta—10 offshore and 2 onshore. This initiative, managed through the Egypt Upstream Gateway (EUG), aims to attract new investments.

The strategy seeks to capitalize on promising opportunities in gas and oil exploration, particularly in the Mediterranean, recognized as a significant gas basin.

El-Homsani noted that the Petroleum Minister had meetings with officials from Shell Egypt, Apache Egypt, Chevron, BP, Eni, and Petronas. These global partnerships have a long history of success, and the Egyptian government is leveraging these relationships to steadily increase production.

The Petroleum Minister conveyed to foreign partners the government’s commitment to addressing investment challenges, particularly regarding payment of dues. The government supports foreign companies’ efforts to intensify exploration and discovery activities, leading to new discoveries and increased production and reserves.

The meeting also reviewed the current operational status of drilling rigs, with over 47 rigs and 55 maintenance units in use. This is part of the ministry’s efforts to boost production and reserves to meet local market needs for petroleum products.