Three global companies have won Egypt’s first international bid to explore oil and gas in the Red Sea.
Egypt said on Sunday it awarded oil and gas exploration concessions in the Red Sea to US’s Chevron, Dutch Royal Dutch Shell and UAE’s Mubadala in an international tender.
Chevron was awarded the first block, Shell a second block, and a third block was awarded jointly to Shell and Mubadala with a total exploration area of around 10,000 square km (3,860 square miles) and with a minimum investment of $326 million, the petroleum ministry said in a statement.
Petroleum Minister Tarek al-Mulla said this is the first time Egypt benefits from the oil wealth in its economic waters in the Red Sea.
This move “comes as a result of strong political will and full support from President Abdel Fattah El Sisi in this regard,” he added.
Egypt has earlier signed an agreement with Saudi Arabia to demarcate the sea borders, allowing its petroleum sector to launch the first global bidding in the Red Sea region.
Awarding global companies in the field of oil constitutes a positive and important indication of the attractive investment climate Egypt enjoys, the Minister explained.
He said these companies possess the latest global technologies and accumulated experiences to work in areas such as the Red Sea.
This Sea is known for its deep water and needs a large volume of investments for research, exploration, and development in the upcoming stages, he said, “not to mention the lack of production facilities.”
Mulla pointed out that these results are positive at this stage, adding that the area will now witness greater demand from international companies.
Commenting on its acquisition of the exploration concession, Shell said that it comes “in light of the company’s plan to increase its strategic investments in Egypt, especially in the marine concession areas, deep waters and the value-added chain of natural gas.”
In a statement on Sunday, the Royal Dutch company added that the bidding results were in line with (Shell's) growth strategy, which aims to expand its operations and enhance its leading position in the Egyptian market.