Egypt: US Chevron to Drill First Exploration Well in Eastern Mediterranean

Egypt’s state-owned gas company and Chevron Corp sign a preliminary agreement to explore sending natural gas from offshore Mediterranean fields to Egypt for processing and export. (Asharq Al-Awsat)
Egypt’s state-owned gas company and Chevron Corp sign a preliminary agreement to explore sending natural gas from offshore Mediterranean fields to Egypt for processing and export. (Asharq Al-Awsat)
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Egypt: US Chevron to Drill First Exploration Well in Eastern Mediterranean

Egypt’s state-owned gas company and Chevron Corp sign a preliminary agreement to explore sending natural gas from offshore Mediterranean fields to Egypt for processing and export. (Asharq Al-Awsat)
Egypt’s state-owned gas company and Chevron Corp sign a preliminary agreement to explore sending natural gas from offshore Mediterranean fields to Egypt for processing and export. (Asharq Al-Awsat)

Egypt’s state-owned gas company and United States-based Chevron Corp signed on Monday a preliminary agreement to explore sending natural gas from offshore Mediterranean fields to Egypt for processing and export, the petroleum ministry stated on Monday.

The memorandum of understanding signed by Egyptian Natural Gas Holding Company (EGAS) and Chevron will consider transport, import, liquefaction and export of natural gas from the eastern Mediterranean, the ministry explained.

It added that Chevron plans to drill its first exploration well in a concession area in the eastern Mediterranean in September.

They agreed to form a negotiation committee through which both parties can reach agreements on future natural gas projects in the East Mediterranean.

Under the MoU, the two companies will assess opportunities for transmission of natural gas in the East Mediterranean to Egypt to maximize its value by liquefaction before re-exporting and selling thereof.

The two companies will also conduct studies on low-carbon natural gas.

Petroleum Minister Tarek El Molla held talks with Chairman and CEO of Chevron Corporation Michael Wirth and his accompanying delegation.

Discussions touched on bilateral cooperation and Chevron’s activities in the field of research and exploration.

Molla said Egypt boasts strong infrastructure that can be linked to the gas producing fields in the region, in addition to its good relations with partners in the eastern Mediterranean.

Wirth, for his part, revealed that his company has plans to drill the first exploratory well in its concession area in East Mediterranean next September, adding that seismic studies are good.

He revealed that seismic works in Chevron’s concession in the Red Sea have seen progress and the hydrocarbon potential in the region is great.



Oil Slumps 3% as Trump's Tariffs Expected to Impede Demand

FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo
FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo
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Oil Slumps 3% as Trump's Tariffs Expected to Impede Demand

FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo
FILE PHOTO: An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. REUTERS/Turar Kazangapov/File Photo

Oil prices fell by over 3% on Thursday after US President Donald Trump announced sweeping new tariffs which investors worry will enflame a global trade war that will curtail economic growth and limit fuel demand.

Brent futures were down $2.66, or 3.55%, to $72.29 a barrel by 0918 GMT US West Texas Intermediate crude futures were down $2.69, or 3.75%, to $69.02.

Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the United States, the world's biggest oil consumer, with much higher duties on products from dozens of countries, initiating a global trade war that threatens to drive up inflation and stall US and worldwide economic growth, Reuters reported.

"The US tariff announcement clearly caught markets off guard. Pre-announcement speculation suggested a flat 15-20% tariff, but the final decision was more hawkish," Yeap Jun Rong, market strategist at IG, said in an email.

"For oil prices, the focus now shifts to the global growth outlook, which is likely to be revised downward due to these higher-than-expected tariffs," he added.

Imports of oil, gas and refined products were exempted from the new tariffs, the White House said on Wednesday.

UBS analysts on Wednesday cut their oil forecasts by $3 per barrel over 2025-26 to $72 per barrel, citing weaker fundamentals.

Traders and analysts now expect more price volatility in the near term, as the tariffs may change as countries try to negotiate lower rates or impose retaliatory levies.

"Countermeasures are imminent and judging by the initial market reaction, recession and stagflation have become terrifying possibilities," said PVM analyst Tamas Varga.

"As tariffs are ultimately paid for by domestic consumers and businesses, their cost will inevitably increase impeding the rise in economic wealth."

In other news, US Energy Information Administration data on Wednesday showed US crude inventories rose by a surprisingly large 6.2 million barrels last week, against analysts' forecasts for a decline of 2.1 million barrels.

Market participants are also awaiting the outcome of an OPEC+ meeting on Thursday, which will discuss Kazakh output.