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Egypt: BP Awarded New Offshore Exploration Block in Western Mediterranean

A map showing the concession area Egypt granted to BP to explore for gas in the western Mediterranean. (Asharq Al-Awsat)
A map showing the concession area Egypt granted to BP to explore for gas in the western Mediterranean. (Asharq Al-Awsat)
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Egypt: BP Awarded New Offshore Exploration Block in Western Mediterranean

A map showing the concession area Egypt granted to BP to explore for gas in the western Mediterranean. (Asharq Al-Awsat)
A map showing the concession area Egypt granted to BP to explore for gas in the western Mediterranean. (Asharq Al-Awsat)

BP has won gas exploring rights in Egypt's offshore King Mariout concession in the western Mediterranean, the British-based company said in a statement on Tuesday.

This comes following its successful participation in 2021’s limited bid round organized by the Egyptian Natural Gas Holding Company.

The concession area is located approximately 20 kilometers west of the Raven field in the Mediterranean Sea within western Nile Delta area. It offers potential for material gas discoveries that could be developed using existing infrastructure.

The area covers around 2,600 square km at a depth of between 500 and 2,000 meters.

BP owns 100% of the exploration rights area there, which enhances the chances of developing future gas discoveries by utilizing the existing infrastructure, the statement added.

It quoted BP’s North Africa Regional President Karim Alaa as saying that the new award, following EGY-MED-E5 block award in early 2022 to an equally owned partnership between BP and Eni, will leverage existing infrastructure to continue delivering hydrocarbons for Egypt’s growing gas market.

BP has been active player in the Egyptian energy industry since 60 years investing more than $35 billion.

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Oil Edges Up ahead of US Fed Rate Decision, 2025 Outlook

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Edges Up ahead of US Fed Rate Decision, 2025 Outlook

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil edged up on Wednesday as a drop in US crude inventories offered some support, although investors stayed cautious ahead of a potential interest rate cut by the US Federal Reserve and its projections for 2025.

Brent futures rose 53 cents, or 0.7%, to $73.72 a barrel at 1436 GMT, while US West Texas Intermediate crude climbed 54 cents, or 0.8%, to $70.62.

The Fed is expected to cut rates by a quarter point, but to signal a cautious approach to loosening monetary policy next year.

"A quarter-point cut itself is unlikely to shake markets much. Investors may focus more on hints and clues on how likely a January pause is, as well as on how many rate cuts policymakers are contemplating throughout 2025," said Charalampos Pissouros, senior investment analyst at brokerage XM, Reuters reported.

The US central bank will release its policy statement at 2 p.m. ET (1900 GMT), followed by remarks from Chair Jerome Powell.

Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.

"Oil prices ought to see more of a reaction to the crude inventory draw seen in the API data overnight... however, such is the diverting power of central bank rate decisions that investors in all of the trading mediums are taking a very light touch to proceedings" said John Evans, analyst with oil broker PVM.

In the US, American Petroleum Institute data on Tuesday showed that crude stocks fell by 4.69 million barrels in the week ended Dec. 13, a source said. Gasoline inventories rose by 2.45 million barrels, and distillate stocks rose by 744,000 barrels, according to the source.

Analysts projected US energy firms pulled about 1.6 million barrels of crude from storage during the week ended Dec. 13, according to a Reuters poll on Tuesday.

The US Energy Information Administration will release its oil storage data on Wednesday.

"Trade war fears and uncertainty on how aggressively the US Fed will cut interest rates next year is likely capping the upside for now," UBS analyst Giovanni Staunovo said.